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MIFIDPRU Public Disclosure
Overview and summary
Kryger Capital Limited (“Kryger” or the “Firm”) is authorised and regulated by the Financial Conduct Authority (“FCA”) as a Collective Portfolio Investment Firm (“CPMI”), holding a regulatory license under the Alternative Investment Fund Manager Directive (“AIFMD”) with top-up permissions to conduct Markets in Financial Instruments Directive (“MiFID”) activities.
Kryger has been authorised and regulated by the FCA as a full-scope Alternative Investment Fund Manager (“AIFM”). The Firm’s regulatory permissions allow it to provide investment management services to Alternative Investment Funds (“AIFs”).
As an AIFM with MiFID top-up permissions, Kryger has to maintain regulatory capital and liquidity at all times in compliance with both AIFMD and the Investment Firm Prudential Regime (“IFPR”).
For the purposes of MIFIDPRU, the Firm has been classified as a small non-interconnected (“SNI”) firm.
The Firm has produced this Public Disclosure Document in line with the rules and requirements of MIFIDPRU 8, as applicable to SNI firms.
This Public Disclosure Document has been prepared based on the audited financials as at 31 December 2022, covering the financial period 1st January 2022 to 31 December 2022.
Risk management objectives and policies
The Firm has implemented a risk management framework, including policies and procedures across all relevant risk areas of the Firm. The Board of Directors sets the risk appetite statement of the Firm, which flows through to the risk management framework of the Firm.
In line with the Firm’s business strategy, risk appetite and risk management framework the Firm identifies and further assesses key risks within the Firm’s Internal Capital and Risk Assessment (“ICARA”) process.
The Firm maintains a risk register, which includes a risk assessment and rating methodologies in accordance with its risk appetite statement. Key risks are reported to the Board of Directors.
Own funds requirements – MIFIDPRU 4
As an SNI firm without permissions for dealing as principle or holding client money or client assets, the Firm is subject to a Permanent Minimum Requirement of £75,000.
The Firm calculates its own funds requirements based on the Fixed Overhead Requirement (“FOR”) calculation and is not subject to any K-factor requirements.
The Firm has further assessed any risks facing its business operations within its ICARA and quantified additional own funds and liquidity, where required.
Concentration risk – MIFIDPRU 5
The Firm does not conduct any trading on its own account and does not have regulatory permissions for dealing as principal. The Firm therefore does not have any concentration risks on or off balance sheet and does not operate a trading book.
Liquidity – MIFIDPRU 6
The Firm maintains the minimum liquidity requirement at all times in compliance with the Basic Liquid Asset Requirement (BLAR), being at least 1/3 of its FOR.
The Firm does not provide any client guarantees and therefore its entire liquidity requirement is driven by its expenses, as captured by the FOR.
As part of the ICARA, the Firm also maintains liquidity to satisfy its net wind-down costs and any additional liquidity requirements which the Firm’s ICARA identified for supporting the ongoing business activities of the Firm.
Own funds
Own funds resources
In line with MIFIDPRU 8.4 the Firm has prepared the reconciliation of its own funds in line with MIFIDPRU 8 Annex 1 as follows:
| Composition of regulatory own funds | |||
|---|---|---|---|
| # | Item | Amount (GBP thousands) | Source |
| 1 | Own funds | ||
| 2 | Tier 1 capital | ||
| 3 | Common equity tier 1 capital | ||
| 4 | Fully paid up capital instruments | 750,001 | |
| 5 | Share premium | ||
| 6 | Retained earnings | 300,646 | |
| 7 | Accumulated other comprehensive income | ||
| 8 | Other reserves | ||
| 9 | Adjustments to CET1 due to prudential filters | ||
| 10 | Other funds | ||
| 11 | (-) TOTAL DEDUCTIONS FROM COMMON EQUITY TIER 1 |
||
| 19 | CET1: Other capital elements, deductions and adjustments | ||
| 20 | ADDITIONAL TIER 1 CAPITAL | ||
| 21 | Fully paid up, directly issued capital instruments | ||
| 22 | Share premium | ||
| 23 | (-) TOTAL DEDUCTIONS FROM ADDITIONAL TIER 1 | ||
| 24 | Additional Tier 1: Other capital elements, deductions and adjustments | ||
| 25 | TIER 2 CAPITAL | ||
| 26 | Fully paid up, directly issued capital instruments | ||
| 27 | Share premium | ||
| 28 | (-) TOTAL DEDUCTION FROM TIER 2 | ||
| 29 | Tier 2: Other capital elements, deductions and adjustments | ||
| Own funds: reconciliation of regulatory own funds to balance sheet in the audited financial statement GBP (thousands) | ||||
|---|---|---|---|---|
| a | b | c | ||
| Item | Balance sheet as in audited financial statement | Under regulatory scope of consolidation | Cross reference to own funds table | |
| Assets – Breakdown by asset classes according to the balance sheet in the audited financial statements | ||||
| 1 | Tangible Assets | 26,300 | ||
| 2 | Debtors: more than 1 year | 131,886 | ||
| 3 | Debtors: less than 1 year | 5,720,517 | ||
| 4 | Cash | 1,723,566 | ||
| Total Assets | 7,602,269 | |||
| Liabilities – Breakdown by liability classes according to the balance sheet in the audited financial statements | ||||
| 1 | Creditors: less than 1 year | 6,551,622 | ||
| 2 | ||||
| 3 | ||||
| Total Liabilities | 6,551,622 | |||
| Shareholders’ Equity | ||||
| 1 | Share Capital | 750,001 | ||
| 2 | Retained earnings | 300,646 | ||
| 3 | ||||
| Total Shareholders’ equity | 1,050,647 | |||
Own funds requirements
The Firm calculates its own funds requirements as an SNI firm in line with the rules and requirements in MIFIDPRU 4.3 for SNI firms.
The Fixed Overhead Requirement at 31 December 2022 is £499,321. In addition, the Firm has completed its ICARA and analysis to determine its net wind-down requirements and any additional own fund requirements to fund its on-going operations.
The Firm’s risk appetite statement and assessment of risks through its risk management framework and risk register form the basis of its ICARA and assessment of the overall financial adequacy rule in line with MIFIDPRU 7.4.7.
The Board of Directors reviews, challenges and approves the ICARA and conclusions of own funds requirements.
Remuneration arrangements
The Firm has adopted a remuneration policy and associated procedures that comply with the requirements of chapter 19B of the FCA's Senior Management Arrangements, Systems and Controls Sourcebook (“SYSC”), and in accordance with ESMA’s Guidelines on sound remuneration policies.
The Firm has considered all the proportionality elements in line with the FCA Guidance.
Remuneration is designed to ensure that the Firm does not encourage excessive risk taking and staff interests are aligned with those of the Firm’s clients (clients being the funds and managed accounts under management).
The Directors are responsible for the overall remuneration policy which will be reviewed annually. Variable remuneration is adjusted in line with capital and liquidity requirements as well as the Firm’s performance. The Directors will review the remuneration strategy on an annual basis together with its Code Staff. Kryger classifies its “Code Staff” as being senior managers and members of staff whose actions have a material impact on the risk profile of Kryger and are therefore deemed Material Risk Takers (“MRT”). “Non-Code Staff” are all other employees of Kryger.
The Firm ensures that its remuneration structure promotes effective risk management and balances the fixed and variable remuneration components for all Code and Non-Code Staff. Total Remuneration is based on balancing both financial and non-financial indicators together with the performance of the Firm and the staff member’s business unit. The Firm will monitor the fixed to variable compensation to ensure SYSC 19B is adhered to with respect to Total Compensation where applicable.
The Firm has identified the following components of remuneration:
| Fixed Remuneration | Variable Remuneration |
| Salary | Discretionary Bonus |
| Pension | Private Healthcare |
In accordance with SYSC 19B, the Firm makes the following quantitative remuneration disclosure:
Code Staff Quantitative Remuneration
The Firm is required to disclose aggregate information on remuneration in respect of its Code Staff, broken down by business area and by senior management and other Code Staff. Senior management and members of staff whose actions have a material impact on the risk profile of the Firm are classified as Code Staff. The relatively small size and lack of complexity of the Firm’s business is such that Kryger only has the one business area, investment management, and does not regard itself as operating, or needing to operate, separate ‘business areas’ and the following aggregate remuneration data should be read in that context:
Quantitative Disclosures
The total amount of fixed remuneration awarded to staff was £795,489 (as at December 2022 year-end).
The total amount of variable remuneration awarded to staff was £499,141 (as at December 2022 year-end).
