Charme Capital Partners launches in LondonPost

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Charme Capital Partners launches in London

Charme Capital Partners launches in London

18 November 2015

Milan-based Charme Capital Partners opens London office, partnering with Julian Huxtable, Christopher Fielding and Francisco Churtichaga, former Doughty Hanson executives
Charme Capital Partners combines an experienced European mid-market private equity team with leading institutional and industrialist backers
The London office will work alongside the existing team in Milan to invest Charme III, a closed-end fund

London, 18 November 2015: Matteo di Montezemolo, Founder and Managing Partner of the Charme Funds, announces the launch of Charme Capital Partners¹ in London, with a team of senior former Doughty Hanson executives Julian Huxtable, Christopher Fielding and Francisco Churtichaga. The London team will invest Charme III working alongside the existing team in Milan, which has successfully deployed the Charme I and Charme II Funds.

Charme III, as with Charme I and Charme II, is backed by a strategic and longstanding group of institutional LPs, prominent global families and industrialists. Charme III’s exceptional investor base enhances the combined team’s deal pipeline.

Charme Capital Partners will target mid-market companies with an enterprise value between €100m and €500m. It will seek opportunities across a range of business sectors where it can partner with shareholders and management teams to unlock potential and deliver transformational growth, both organically and through M&A. This will allow companies to reinforce their market positioning and in many cases to expand internationally. Charme Capital Partners will invest across Europe from its Milan and London offices.

The London team have many years of combined experience in pan-European private equity, with a proven track record of investing in fast growing companies, working on successful realised investments such as Vue Entertainment in the UK, Quiron/USP Hospitales in Spain, and Tumi in the USA. In Italy, the Milan-based team, which has been in place since 2003, has generated strong returns through realised investments such as the Poltrona Frau Group and Octo Telematics.

Matteo di Montezemolo, Luigi Sala, Tommaso Beolchini and Simone Cavalieri will be joined on the Charme III Investment Committee by Julian Huxtable, Christopher Fielding and Francisco Churtichaga. Julian and Christopher will focus on the UK market based in London and Francisco will focus on Spain.

Matteo di Montezemolo said:

“We are delighted to welcome to Charme Capital Partners such an experienced team that have worked on many successful investments together over the years. With Julian and Christopher in the UK market, Francisco the Spanish market and the Milan team the Italian market, combined with the precious support of all our longstanding LP’s, we have the ideal platform and are now ready to invest Charme III, building on the success of Charme I and Charme II.”

Julian Huxtable, Christopher Fielding and Francisco Churtichaga, Partners of Charme Capital Partners, said:

“Charme Capital Partners offers a rare combination of proven mid-market specialism backed by some of the most respected industrialists in the world. With our investment experience and the deep local networks of our partners and investors, we believe we are ideally placed to source attractive opportunities in Europe and work together with ambitious management teams to grow companies internationally.”

Further announcements on the development of Charme Capital Partners, including additional team members, will be made in due course.

Media Contacts

Greenbrook Communications
Andrew Honnor, Alex Jones, Matthieu Roussellier
+44 (0)207 952 2000

Background to the Charme Funds

The Charme Funds were founded in 2003 by Luca and Matteo di Montezemolo and are backed by a unique mixture of institutional LPs and prominent global industrialists. Since inception the Charme Funds have raised capital of approximately €1bn and invested in companies with strong growth and internationalisation prospects.

Charme I, a €186m fund focused on investments in the consumer and luxury sector in Italy, was raised in 2003 and generated returns of 2.0x. Prominent investments include the Poltrona Frau Group, with a build-up strategy through the acquisitions of Poltrona Frau, Cassina and Cappellini to create the global leader in high-end design furniture.

Charme II was raised in 2009 with total commitments of €340m and generated returns of 2.5x. Prominent investments include Octo Telematics, world leader in the supply of telematics services for the insurance sector, and Bellco, which is active in the business of blood filtration for chronic, acute and newborn patients.

Charme III was launched in 2015 with a broader pan-European investment strategy focused on mid-market investments across a range of business sectors in Europe, with a particular focus on UK, Spain and Italy. It targets fast growing mid-market companies with an enterprise value of €100m to €500m, where it can partner with shareholders and management teams to unlock potential and deliver transformational growth, both organically and through M&A. This will allow companies to reinforce their market positioning and in many cases to expand internationally.

Charme Capital Partners will be based in London and in Milan: the senior team includes Matteo di Montezemolo, Luigi Sala, Tommaso Beolchini, Simone Cavalieri, Matteo Facoetti and former Doughty Hanson executives Julian Huxtable, Christopher Fielding and Francisco Churtichaga. It will manage Charme III, a closed-end private equity fund.

¹Subject to Financial Conduct Authority (FCA) approval, Charme Capital Partners will become the investment manager of Charme III alongside the existing Italian management company.

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CORPORATE INFORMATION

Charme Capital Partners SGR S.p.A. - Registered office: Milan (Italy), Via Santa Margherita no. 4. Share Capital €1.000.000. Enrolled under number 119 with the Bank of Italy’s register of asset management companies, AIFs’ section. Tax Code and VAT number: 07140121000.

Charme Capital Partners Limited is registered in England and Wales with number 09487131. Its registered office at 7th Floor, 3 St James’s Square, London, SW1Y 4JU, United Kingdom. Charme Capital Partners Limited is authorised and regulated by the Financial Conduct Authority in the United Kingdom with firm registration number 706086. See the Financial Services Register for more details.

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15. Other Disclosures

Charme Capital Partners SGR S.p.A. has not adopted a Commitment Policy pursuant to article 124-quinquies of the Consolidated Law on Finance, since, even though the investment policy of the managed funds envisages the possibility of investing in listed financial instruments, as at the date of publication of this announcement, the funds themselves have no shareholdings in companies with shares listed on an Italian or other EU member state regulated market.

It will be the care of the SGR to draw up and publish a Commitment Policy if in the future the conditions occur.

CHARME CAPITAL PARTNERS LIMITED COMMITMENT TO THE UK STEWARDSHIP CODE

Under Rule 2.2.3R of the FCA's Conduct of Business Sourcebook, Charme Capital Partners Limited (the "Firm") is required to include on this website a disclosure about the nature of its commitment to the UK Financial Reporting Council's Stewardship Code (the "Code") or, where it does not commit to the Code, its alternative investment strategy. The Code is a voluntary code and sets out a number of principles relating to engagement by investors with UK equity issuers. Investors that commit to the Code can either comply with it in full or choose not to comply with aspects of the Code, in which case they are required to explain their non compliance. We have detailed below the reasons why the firm has chosen not to commit to the Code.

The Firm pursues a strategy that involves it advising on investing in unlisted European Private Equity investments. The Code is not therefore relevant to the Firm's strategy. While the Firm generally supports the objectives that underlie the Code, the Firm has chosen not to commit to the Code.

Shareholder Rights Directive (SRD II)

SRD II aims to promote effective stewardship and long-term investment decision making, in respect of shares traded on EEA regulated markets and comparable regulated markets outside the EEA. It came into effect on 10 June 2019.

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Publish their shareholder engagement policy (or explain why they don't have one) – COBS 2.2B.5R.
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CHARME CAPITAL PARTNERS LIMITED – REMUNERATION POLICIES AND PRACTICES

1.1 Introduction

As a MIFIDPRU investment firm, we must establish, implement and maintain gender neutral remuneration policy and practices that are appropriate and proportionate to the nature, scale and complexity of the risks inherent in the business model and the activities of the Firm. Our remuneration policy and practices are gender neutral and do not discriminate employees on the basis of gender or other characteristics.

1.2 Governance

Given the size, internal organisation and the nature, scope and complexity of the activities of the Firm it does not have a separate Remuneration Committee. Therefore, the Remuneration policy’s supervisory function is undertaken by the Firm’s Governing Body.

1.3 Performance period

The Firm’s performance period is from 1 January 2023 to 31 December 2023[FB2] [RK3].

The Firm has adopted a Remuneration Policy that complies with the requirements of Chapter 19G of the FCA’s Senior Management Arrangements, Systems and Controls Sourcebook.

1.4 Approach to remuneration for employees

The Firm’s remuneration approach is designed to support individual and corporate performance, encourage the sustainable long-term financial health of the business and promote sound risk management for the success of the Firm and to the benefit of its customers, counterparties and the wider market. Our remuneration approach promotes long-term value creation through transparent alignment with the agreed corporate strategy.

The Board believes the Firm’s remuneration structure is appropriate for the business and the industry it operates in and is efficient and cost-effective in delivering its long-term strategy.

Undeserved and excessive remuneration sends a negative message to all stakeholders, including the Firm’s workforce, and causes long term damage to the Firm and its reputation.

1.5 Financial incentives objectives

The objectives of the Firm’s remuneration practices are as follows:

The Firm undertakes to reward all employees fairly, regardless of job function, race, religion, colour, national origin, sex, sexual orientation, marital status, pregnancy, disability or age;
It is the policy of the Firm to operate competitive remuneration policies to attract, retain and motivate an appropriate workforce for the Firm;
The Firm is also committed to ensuring that its remuneration practices encourage high standards of personal and professional conduct, support sound risk management and do not encourage risk taking that exceeds the level of tolerated risk of the Firm, and are aligned with the Firm’s regulatory requirements;
Rewards for all staff will be aligned to financial and non-financial performance criteria and risk profile, and in all cases will be in line with the business strategy, objectives, values, culture and long-term interests of the Firm;
The Firm will not allow any unfair or unjust practices that impact on pay;
The Firm undertakes that it will not award remuneration using vehicles or methods the aim of which is to attempt to avoid application of the relevant FCA’s Remuneration Code.

The Firm uses the following financial incentives:

bonuses;
extra allowances;
salary raises;
wage incentives;
professional development opportunities;

Our financial incentives are designed to:

raise employee satisfaction;
recognise individual performance;
attract and retain talent;
encourage collaborative teamwork; and
motivate staff to achieve Firm-wide objectives.
1.6 Governance

As a SNI, the Firm is not required to establish a Remuneration Committee. Given the size, internal organisation and the nature, scope and complexity of the activities of the Firm it has not formed a Remuneration Committee. Therefore, the Remuneration policy’s supervisory function is undertaken by the Firm’s Board.

The Board is responsible for reviewing and approving remuneration, and to ensure remuneration policies across the Firm are consistent with the promotion of effective risk management. [KR5] The Board is responsible for reviewing and approving salary amendments and the Firm’s bonus pool arising from the annual compensation.

The Board meets regularly and is composed of:

Matteo Cordero di Montezemolo
Francisco G. Churtichaga
Julian Huxtable
Massimo Paolo Gentili
Luigi Sala
Tommaso Beolchini
Matteo Facoetti

1.7 Components of remuneration

The Firm makes a clear distinction between the fixed and variable remuneration.

Fixed remuneration primarily reflects a staff member’s professional experience and organisational responsibility as set out in the staff member’s job description and terms of employment; and is permanent, pre-determined, nondiscretionary, non-revocable and not dependent on performance.

Variable remuneration is based on performance and reflects the long-term performance of the staff member as well as performance in excess of the staff member’s job description and terms of employment. In exceptional cases, variable remuneration is based on other conditions. Variable remuneration includes discretionary pension benefits.

The Firm will ensure that the fixed and variable components of an individual’s total remuneration are appropriately balanced. In determining this balance, the Firm considers the following factors:

The Firm’s business activities and associated prudential and conduct risks;
The role of the individual in the Firm;
The impact that different categories of staff have on the risk profile of the Firm or of the assets it manages;
No individual must be dependent on variable remuneration to an extent likely to encourage them to take risks outside the risk appetite of the Firm;
It may be appropriate for an individual to receive only fixed remuneration, but not only variable remuneration; and
Variable remuneration must not affect the Firm’s ability to ensure a sound capital base.

When assessing individual performance to determine the amount of variable remuneration to be paid to an individual, the Firm takes into account financial as well as non-financial criteria. Non-financial criteria should:

form a significant part of the performance assessment process;
override financial criteria, where appropriate;
include metrics on conduct, which should make up a substantial portion of the non-financial criteria; and
include how far the individual adheres to effective risk management and complies with relevant regulatory requirements.
1.8 Financial and non-financial performance criteria

The Firm must take into account both financial and non-financial criteria when assessing the individual performance of its staff. This aims not only to discourage inappropriate behaviours but also to incentivise and reward behaviour that promotes positive non-financial outcomes for the Firm.

The Firm uses the following financial performance criteria:

Overall results of the firm;
The business line results;
The individual contribution to financial performance.

The Firm uses the following non-financial performance criteria:

measures relating to building and maintaining positive relationships and outcomes with the Italian Management Company;
performance in line with firm strategy or values, for example by displaying leadership, teamwork or creativity;
adherence to the firm’s risk management and compliance policies;
diversity and inclusion.

The criteria outlined above are used for the assessment of the performance of:

THE FIRM

Financial performance criteria

Overall results of the Firm

Business line results

Non-financial performance criteria

Italian Management Company Satisfaction

INDIVIDUALS

Financial performance criteria

Individual contribution to financial results

Non-financial performance criteria

Performance in line with firm strategy or values

Adherence to the firm’s risk management and compliance policies;

1.9 Total amount of remuneration awarded

Under MIFIDPRU 8.6.8R(2), the Firm must disclose the total amount of remuneration awarded to all staff, split into:

fixed remuneration; and
variable remuneration.

Remuneration type	£
Fixed remuneration	£3,580,462
Variable remuneration	£386,773
Total amount	£ 3,967,235