Pillar 3 Disclosure

Disclosure policy

Tages Capital LLP (“the Firm”, or “Tages”) is authorised by the Financial Conduct Authority (“FCA”) as a full-scope UK Alternative Investment Fund Manager and is categorised by the FCA for prudential regulatory purposes both as a Collective Portfolio Management Investment Firm (“CPMI Firm”) and a BIPRU Firm. The regulatory capital framework applicable to Tages is that which has been established by both of the Capital Requirements Directive (‘CRD’) and the Alternative Investment Fund Managers Directive (“AIFMD”).

The Pillar 3 disclosure of Tages is set out below as required by the Financial Conduct Authority’s (“FCA”) “Prudential Sourcebook for Banks, Building Societies and Investment Firms” (BIPRU) specifically BIPRU 11. The regulatory aim of the disclosures is to improve market discipline.

The prudential framework for investment management firms consists of three “pillars”:
• Pillar 1 – sets out the minimum capital requirements for the investment manager;
• Pillar 2 – deals with the Internal Capital Adequacy Assessment Process (“ICAAP”) undertaken by the Firm to assess the adequacy of capital held in relation to its material risks; and
• Pillar 3 – requires the Firm to publicly disclose its policies on risk management, capital resources and capital requirements.

Tages makes Pillar 3 disclosures annually, via the Firm’s annual financial statements. The information contained in this disclosure is accurate as of 31st December 2019 and has not been audited by any external auditors and does not constitute any form of financial statement.

Certain information relating to BIPRU 11.5 has been omitted on the basis that it has been deemed to be immaterial or confidential. The Firm regards information as material if its omission or misstatement could change or influence the assessment or decision of a user relying on that information for the purpose of making economic decisions.

The Firm regards information as proprietary/confidential if sharing that information with the public would undermine its competitive position. Proprietary/confidential information may include information on products or systems which, if shared with competitors, would render the Firm’s investments therein less valuable. Further, the Firm must regard information as confidential if there are obligations to customers or other counterparty relationships binding the Firm to confidentiality.


The Firm is authorised and regulated by the FCA and as such is subject to minimum regulatory capital requirements. The Firm is categorised by the FCA, for capital purposes, as a Collective Portfolio Management Investment (“CPMI”) firm. It is an investment management firm and has no trading book exposures. The Firm is not required to prepare consolidated reporting for prudential purposes.

Capital Resources Requirement

As a CPMI firm, the Pillar 1 capital requirement is calculated as the higher of the:

• Fixed Overhead Requirement (“FOR”);
• Base Capital Requirement of €125,000; or
• The funds under management requirement (the sum of the Firm’s base own funds requirements of €125k plus 0.02% of the amount by which the Firm’s funds under management (related to Alternative Investment Funds) exceed €250m); and

Whichever is the applicable of:

• The professional negligence capital requirement (“additional own funds requirement”); or
• The professional indemnity insurance (“PII”) capital requirement

As a CPMI firm Tages must also maintain capital resources in excess of the variable capital requirement (being the higher of the FOR and the sum of the credit risk and market risk capital requirements) as they relate to the Firm’s non-AIFMD business. Tages calculates the credit risk applicable to its non-AIFM activities under the simplified approach.

The Firm has deemed the FOR to be the higher and this is therefore used for the Pillar 1 calculation.

Pillar 2 – Internal Capital Adequacy Assessment Process (“ICAAP”)

The Firm’s ICAAP includes an assessment of the design and performance of the internal controls in place to mitigate risks, the probability of the risk occurring, the potential financial and reputational impact, and the adequacy of the Firm’s capital base.

The ICAAP is the process through which Tages determines that it is able to identify and manage its key risks on an ongoing basis and that it has sufficient capital in respect of such risks. The process is forward-looking and is an integral part of the management of the Firm. The Executive Committee of the Firm (“ExCom”) owns the ICAAP process. The Chief Financial Officer is responsible for the ICAAP and consulted with other senior management to ensure the accuracy of the findings.

The Firm’s ExCom formally reviews and approves a finalised ICAAP document on at least an annual basis (or more frequently if there are material changes to the Firm’s business model and risk exposures. The ICAAP is a standing agenda item at the monthly Risk, Operations and Compliance Committee (“ROCC”). The ExCom, as part of its review of the ICAAP, sets the Firm’s risk appetite, validates that the Firm’s key material risks have been considered and assessed and validates the stress testing scenarios.

If necessary the Firm would allocate extra capital to the relevant risk, but this has not been deemed necessary. The Firm has concluded that its Tier 1 capital is sufficient to cover its Pillar 1 and Pillar 2 requirements.

Capital resources

The main features of the Firm’s Capital Resources are as follows:

Capital Item €’000s
Tier 1 capital less innovative tier 1 capital 2,500
Tier 2 capital 0
Tier 3 capital 0
Total capital resources, net of deductions 2,500

Risk management objectives and policies

Given the dynamic nature and breadth of risk issues impacting the LLP, an enterprise risk management (“ERM”) framework has been implemented by the ExCom to manage risk in a structured and coordinated manner which seeks to implement good practice principles of risk management in a way which is proportionate to the size, nature and structure of Tages’ business.

The framework covers all levels of the enterprise, including at entity level, departmental level and activity level (detailed processes and systems).

The full spectrum of risks impacting Tages is considered by the ExCom, including business/strategy risk, operational risk, and investment risks.

Tages’ risk management objective is to protect the assets both of its clients (i.e. the funds and the investors of the funds) and the Firm. The ExCom has delegated the function for ensuring the effective implementation of the ERM framework to the Risk, Operations and Compliance Committee (ROCC) and its members.

The ExCom has delegated the function for the oversight of investment risk management to the Risk Manager.

The ExCom retains responsibility for and oversees the activities of the Compliance Officer, the Risk Manager, the ROCC and the Investment Committee (InvCom) in “establishing, implementing and maintaining risk management policies and procedures, including effective procedures for risk assessment, which identify the risks relating to the firms’ activities, processes and systems…and monitors the level of compliance by the firm with risk management arrangements, processes and mechanisms.” (SYSC 7.1.2R, 7.1.3R)

The ROCC is responsible for ratifying the overall ERM framework. The specific responsibilities of the ROCC are outlined within its Terms of Reference.

The InvCom is responsible for ensuring that the level of risk is appropriate and consistent with the investment guidelines and restrictions (investment risk management).

The RM provides monitoring on all fund restrictions (including internal risk guidelines); any breach of investment guidelines and restrictions are reported by the Risk Manager to the InvCom, the CEO and the Compliance Officer. A review is conducted at least annually on the effectiveness of Tages’ system of internal controls. The review covers all material controls, including financial, operational and compliance controls.

Tages has clearly documented policies and procedures, which are designed to minimise risks to the Firm and all staff are required to confirm that they have read and understood them.


Tages must comply with the remuneration rules as set out in Article 14 of the Alternative Investment Fund Managers Directive (“AIFMD”) and SYSC 19B of the FCA Handbook (“the AIFM Remuneration Code), as well as SYSC 19C (“the BIPRU Remuneration Code”). The purpose of the Code is to ensure that firms have risk focused remuneration policies, which are consistent with and promote effective risk management and do not expose themselves to excessive risk. The Firm has reviewed all existing employment contracts to ensure they comply with the Code.

The Remuneration Committee of Tages is responsible for setting the Remuneration Policy Statement for all staff.

The Remuneration Code can (subject to certain conditions being met) be applied in a proportionate way. As such it has been determined that the following rules are not proportionate to Tages and the Firm has not implemented these detailed rules:

• SYSC 19B.1.14 – The ratio between fixed and variable components of total remuneration;
• SYSC 19B 1.17 – Retained units, shares and other instruments;
• SYSC 19B.1.18 – Deferral; and
• SYSC 19B.1.19, 19B 1.20 – Performance adjustment

Variable remuneration is not based solely on the financial performance of the individual. The Management Committee also considers individuals’ overall (non-financial) performance and contribution to the whole team and the overall results of the Firm. The performance of individuals is assessed over the entire year.

FCA guidance makes clear that for a firm such as Tages, which is a full-scope UK AIFM that is also a BIPRU firm, that where it complies with the requirements of SYSC 19B it will also comply with SYSC 19C and that the FCA will not require the firm to demonstrate compliance with SYSC 19C separately.

Quantitative information

The Firm only operates one business unit – investment management.

Remuneration was split between senior management and risk takers as follows:

  Senior Management, €000 Risk Takers, €000
Total remuneration for the year 955 1,492

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