Best possible results
An AIFM authorized to provide discretionary portfolio management services regarding financial instruments shall take all reasonable steps to achieve the ‘best possible result’ when placing orders for the alternative investment funds and discretionary portfolios managed by the company. In Lynx’ case, this obligation is mainly about choosing the right counter party (broker) taking into account a number of regulatory considerations such as price, cost, speed, probability of execution, settlement and other conditions that are essential for the execution. Other essential conditions can be, for example, the broker’s access to specific marketplaces or knowledge of the nature of the markets. In summary, the choice of broker is based on the broker’s ability to deliver a satisfactory order execution service.
As for the choice of marketplace, the financial instruments included in the Lynx’ investment strategies – e.g. exchange traded futures – are rarely traded on more than one marketplace. If so, however, it is the company’s opinion that the best possible result in this context is usually the market that offers the best liquidity for the instrument in question at any given time. Consequently, when choosing between different marketplaces, Lynx will, as a rule, choose the most liquid.
- List of traded markets
- Lynx’ Board of Directors has adopted a policy to ensure best execution. The policy is available for investors upon request.
Principles for EXERCISE OF VOTING RIGHTS
In accordance with the Commissions Delegated Regulation (EU) No 231/2013, Lynx is required to develop appropriate and effective strategies to determine when and how voting rights in the AIFs it manages are to be exercised exclusively for the benefit of the AIFs and their investors. Since Lynx does not deal with financial instruments that carry voting rights, the Company has not established any such strategies. In the event that the Company changes its investment strategy, and thus includes instruments that carry voting rights in the Lynx Program, Lynx will adopt such strategies in the form of an ownership policy. A summary description of the policy, including information on the measures taken on the basis of these strategies, will be sent to the unit holders upon request.
CONFLICTS OF INTEREST
An AIFM shall take all reasonable steps to avoid conflicts of interest and to identify, handle and disclose those that nevertheless arise. If these measures are not sufficient to prevent the investors’ interests from being damaged, the AIFM shall clearly inform the investors of the nature or cause of the conflicts of interest before the AIFM performs any services on their behalf. It is Lynx assessment that there are currently no unmanaged conflicts of interest in the business that may harm the investors’ interests.
Pursuant to Chapter 9, Section 2, paragraph 3 of the Swedish Act on Alternative Investment Fund Managers (Sw: lagen (2013:561) om förvaltare av alternativa investeringsfonder), Lynx is also obliged to report the conflicts of interest identified by the depositary for the funds Lynx and Lynx Dynamic, “the funds”. The funds’ depositary, Skandinaviska Enskilda Banken AB (publ), has identified the following current and potential conflicts of interest, as well as how these are handled and monitored, in the following document: Routines for Conflicts of Interest Trustee Services (pdf)
Lynx Asset Management AB (the ”Company”) manages special funds and provides discretionary portfolio management services. According to current incentive rules, based on EU directives, the Company may, in connection with these services, only pay or receive a fee or commission or grant or receive a non-monetary benefits (incentives) under certain conditions. If incentives are paid or given to or by a third party, the fee, the commission or the non-monetary benefit must be designed to raise the quality of the business concerned and not prevent the Company from acting honestly, fairly and professionally and thus in the interests of the investors. Below is a summary of the incentives and related expenses that occur in the business.
Research and third party non-monetary benefits
The Company receives some analysis / research material from a few selected counterparties. The costs for this is covered by the Company’s own funds. There may also be minor non-monetary benefits such as shorter market updates, market price data and trading volumes, general non-substantial macro analysis, and third-party conferences and seminars. However, such minor non-monetary benefits do not entail any additional cost to investors, nor do they restrict the Company’s ability to act in the interests of investors.
Incentives to third parties (Lynx Dynamic)
Essentially, the following applies. The Company has entered into agreements with a number of financial companies regarding distribution of the special fund Lynx Dynamic. These companies receive remuneration in an amount corresponding to a percentage of the holding’s market value and currently amounts to 0.8 per cent. In addition, the Company has chosen to allow certain companies to receive a discount on the fixed management fee in the fund. This form of remuneration is also based on an amount corresponding to a percentage of the holding’s market value and currently amounts to 0.5 per cent. The compensation / discount that these financial companies receive does not result in any additional cost for the end customer.
Incentives to third parties (Lynx Active Balanced Fund Class D)
Essentially, the following applies. The Company has entered into an agreement with a number of financial companies regarding the distribution of the fund Lynx Active Balanced Fund. These companies can receive a remuneration that is based on an amount based on a percentage of fixed fee (currently between 0-60%). The compensation / discount that these financial companies receive does not lead to any additional cost for the end customer.
Compensation to B & P Fund Services AB
The Company has also entered into a service agreement with B & P Fund Services AB (“BFS”), a wholly owned subsidiary of Brummer & Partners AB (“B&P”), which includes distribution of the Company’s special funds. The remuneration model applied here does not, in the Company’s opinion, give rise to any incentives. In addition, B&P receives part of the financial surplus from the Company’s operations in proportion to its shareholding in the Company (currently 40 percent). Additional information on incentives is provided free of charge to investors upon request. Company contact information.
Use of benchmark indices
The Swedish special funds, Lynx and Lynx Dynamic (“the Funds”), are actively managed funds. The Funds are hedge funds and differ significantly from traditional equity and bond funds. The Funds‘ goals are to give unit-holders a low correlation to global stock and bond markets over time. Since the Funds are not aiming to perform better than a specific benchmark index, it is not appropriate to compare the Funds’ developments in relation to the development of a specific benchmark index in order to assess the level of active management of the Funds.