Stewardship Code and Shareholder Engagement

Introduction

Argonaut Capital Partners LLP ("Argonaut" or the "Firm") is authorised and regulated by the Financial Conduct Authority ("FCA") (FCA Reg. No. 433809) and acts as investment manager to the YFS Argonaut Absolute Return Fund and the YFS Argonaut Flexible Fund (the "Funds"), sub-funds of a UK UCITS scheme for which Yealand Fund Services Limited is the authorised corporate director. The Firm manages European and US listed equities on an active, high-conviction basis, employing both long and short positions in pursuit of the Funds' objectives.

This statement is published to meet two disclosure obligations: the requirement under COBS 2.2.3R to disclose the nature of the Firm's commitment to the UK Stewardship Code or, where it does not commit to the Code, its alternative investment strategy; and the requirement under COBS 2.2B to disclose a shareholder engagement policy, or a clear and reasoned explanation for not doing so, under the UK implementation of the revised Shareholder Rights Directive ("SRD II").

UK Stewardship Code 2026 Statement 

The Financial Reporting Council's UK Stewardship Code 2026 took effect on 1 January 2026, replacing the 2020 Code. It is a voluntary code comprising 'apply and explain' principles for asset managers, with signatories submitting a Policy and Context Disclosure and an annual Activities and Outcomes Report to the FRC.

Argonaut regards good stewardship as the responsible allocation, management and oversight of capital to create long-term value for clients and beneficiaries, intrinsically linked to its fiduciary duty to preserve and enhance the value of client capital within its risk framework and the FCA's best interests rule (COBS 2.1). The Firm supports the aims of the Code and naturally adheres to much of its substance. However, the Firm has chosen not to seek signatory status: Argonaut pursues a fundamental strategy across multiple jurisdictions with a core focus on Europe, taking a consistent approach to issuer engagement across all markets in which it invests, and does not consider it appropriate to commit to a voluntary code of practice specific to one jurisdiction. In addition, as a boutique manager of concentrated, actively traded long/short portfolios whose holdings are generally modest relative to investee companies, the Firm judges the Code's reporting infrastructure disproportionate to its scale and unlikely to improve outcomes for investors in the Funds.

The Firm's alternative approach is active, research-led ownership: stewardship is exercised through deep fundamental analysis, frequent direct engagement with the management of investee and prospective investee companies, and ultimately through capital allocation itself, including reducing, divesting or taking short positions where the Firm loses confidence in a company's management, governance or prospects. The Firm keeps its position on signatory status under review and will update this statement if it changes.

Shareholder Engagement Policy (SRD II)

In accordance with COBS 2.2B.5R, the Firm has adopted the following engagement policy, which describes how shareholder engagement is integrated into its investment approach.

Integration of engagement in the investment strategy. Engagement is inherent to the Firm's investment process rather than a separate activity. Investment decisions rest on proprietary fundamental research, and dialogue with company management is a routine input to initiating, sizing, maintaining and exiting positions.

Monitoring of investee companies. Primary research and continuous monitoring of investee companies are central to the Firm's investment process. The Firm monitors investee companies on relevant matters including strategy, financial and non-financial performance and risk, capital structure, capital allocation, and social, environmental and corporate governance factors where financially material to the investment case. Monitoring typically includes meetings with senior management, analysis of annual reports and financial statements, independent third-party and broker research, and attendance at company meetings, drawing on the investment team's decades of experience engaging with European corporate management teams.

Dialogue with investee companies. The investment team conducts regular meetings and calls with the management of investee companies, both before investment and during the holding period. Concerns identified through monitoring are raised directly with management where the Firm judges this to be in the interests of the Funds.

Exercise of voting and other shareholder rights. The Firm's voting policy is set out under "Voting Policy" below.

Cooperation with other shareholders. The Firm is willing to act collectively with other investors, for example in engagement with issuers or in the protection and enforcement of shareholder rights, where it judges, case by case, that collaboration is in the best interests of the Funds and consistent with applicable law, including the market abuse and acting-in-concert regimes.

Communication with relevant stakeholders. Where relevant to an investment, the Firm may communicate with other stakeholders of investee companies, including brokers, advisers and other shareholders, subject at all times to the constraints of applicable law.

Management of conflicts of interest in engagement. Actual and potential conflicts of interest arising from engagement are identified and managed in accordance with the Firm's Conflicts of Interest Policy, as described below.

Voting Policy

The Firm exercises voting rights attaching to the Funds' holdings where it believes, taking into account the size and nature of the holding and the matter to be decided, that doing so is in the interests of investors in the Funds. In practice this means the Firm prioritises votes where its holding is meaningful, where the outcome is contested or material to the investment case, or where a resolution raises significant governance concerns. The voting decision may involve abstaining or voting against management, and the Firm may hold positions in derivative form, in which case it may not be eligible to vote.

Votes are directed by the portfolio managers, informed by the Firm's research. The Firm does not currently retain a proxy advisor. The Firm treats detailed voting records as confidential to its clients: they are available on request, directly from the Firm or via the Funds' custodian. In accordance with COBS 2.2B, the Firm discloses annually a general description of its voting behaviour, an explanation of the most significant votes cast (if any), and its use (if any) of proxy advisor services; votes that are insignificant relative to the Funds' holdings or the subject matter are excluded from that disclosure. 

Conflicts of Interest

As an independent, owner-managed boutique whose only clients are the Funds, the Firm's exposure to stewardship-related conflicts is limited: it does not provide corporate broking, lending or advisory services to issuers and manages no balance-sheet positions of its own. Where a potential conflict does arise, for example where an investee company is connected to a service provider, counterparty or research provider of the Firm, it is identified, recorded on the Firm's conflicts register and managed in accordance with the Conflicts of Interest Policy, with the interests of the Funds' investors taking precedence. Where a conflict cannot be adequately managed, the Firm will abstain from the relevant engagement or voting activity and document the rationale.

Disclosure and Review

This statement replaces the Firm's previous UK Stewardship Code statement and incorporates the Firm's shareholder engagement policy under SRD II. The Firm discloses annually how its engagement policy has been implemented, including the voting disclosures described above. For further information on the Firm's approach, please contact the Compliance Officer via the contact details on this website.

This statement is reviewed at least annually, or sooner where there is a material change in the Firm's business or in the legal and regulatory framework, including any decision to seek signatory status under the UK Stewardship Code 2026.