Armen’s remuneration policy complies with regulations, in particular Directive 2011/61/EU on alternative investment fund managers (the AIFM Directive). Member States shall require AIFMs to have remuneration policies and practices for those categories of staff, including senior management, risk takers, those performing control functions, and any employees receiving total remuneration that takes them into the same remuneration bracket as senior management and risk takers, whose professional activities have a material impact on the risk profiles of the AIFMs or of the AIFs they manage, that are consistent with and promote sound and effective risk management and do not encourage risk-taking which is inconsistent with the risk profiles, rules or instruments of incorporation of the AIFs they manage.
Armen therefore observes its transparency requirements in the annual reports on the AIFs it manages, by providing the following details: the qualitative and quantitative criteria on which its remuneration policy is based; The number of beneficiaries; The total amount of annual gross fixed and variable remuneration over the year; The amount of annual gross variable remuneration over the year paid to staff members whose activities have a material impact on the risk profiles of the AIFs they manage.
Armen also observes its transparency requirements in the company’s annual reports, by providing the following details: the number of beneficiaries; The total amount of annual gross fixed and variable remuneration over the year.
Armen has a procedure for handling any complaints made by its clients reasonably and rapidly, involving a mechanism that allows it to process investor complaints in a fair and standardized manner. As per AMF instruction n°2012-07, a complaint is a statement declaring the client’s dissatisfaction with the asset management company. A request for information, notices, clarification, service or performance is not a complaint.
Any complaint must be sent by post to Armen for the attention of Renaud Tourmente at 6, Place de la Madeleine – 75008 Paris France. The company can also be contacted by email at the address rtourmente@armen.eu. Armen undertakes to handle complaints within eight working days after the date the complaint letter is sent, free of charge. However, if Armen is unable to handle the complaint within this time-frame, it will send acknowledgement of receipt within eight working days after the date the complaint letter is sent and handle the complaint within at most two months, except in the event of special circumstances duly justified, between the date the complaint is received and the date it sends its reply to the client.
Armen records complaints received in a log, applies official procedures to follow up and resolve incidents, and takes corrective measures if an irregularity has been identified.
If a complaint is rejected or not resolved in full or in part, the person may submit the case to the AMF ombudsman. The AMF ombudsman is the relevant mediator for any disputes concerning a financial instrument, investment service or, more generally, any matter falling within the AMF’s jurisdiction. It is the relevant public mediator, within the meaning of paragraph 7 of article L. 611-1 of the French Consumer Code, if a dispute arises between a financial professional (asset management company) and a consumer, that is a natural person acting for a purpose that does not fall within the domain of their commercial, industrial, self-employed or agricultural activity.
All consumers have the right to refer, free of charge, to a consumer ombudsman within the meaning of Title I of Book VI of the French Consumer Code. The AMF ombudsman can also handle a dispute that falls within the AMF’s jurisdiction if the dispute concerns a financial professional (asset management company) and a client who is a legal person or natural person acting for a purpose that falls within the domain of their commercial, industrial, self-employed or agricultural activity, as a saver or investor.
The client can submit a complaint to the AMF ombudsman:
Therefore, in the course of managing its funds, Armen takes all reasonable steps to detect potential conflicts of interest:
Such conflicts may include any of the following situations:
Armen upholds and applies provisions with a view to taking all reasonable steps to detect, avoid, manage and monitor conflicts of interest in order to prevent them from compromising the interests of its funds and investors in these funds. For this purpose, Armen maps potential conflicts of interest, updates the map regularly and keeps a list of all the cases that have arisen and how they were resolved.
In addition, if it cannot with any reasonable degree of certainty rule out the risk of compromising the interests of investors in its funds, Armen will inform these investors clearly, before taking any action on their behalf, of the general nature or cause of these conflicts of interest, and establish appropriate policies and procedures.
Note that Armen has a compliance and internal control department that controls its activities independently and is responsible for ensuring that the policy for managing conflicts of interest is up to date and applied. Employees may inform the Head of Compliance and Internal Control of any potential or proven conflicts of interest.
Monitoring strategy, financial and non-financial performance, risks, capital structure, social and environmental impact, and corporate governance
ARMEN is a French Portfolio Management Company that primarily invests in European alternative asset managers and supports their development through GP stakes transactions.
ARMEN is committed to exercising its responsibilities as a shareholder in the exclusive interest of its investors (LPs), investing with a long-term perspective and analysing companies in depth with the objective of creating value.
Before investing, the investment teams systematically assess the financial performance of target companies. This involves conducting financial, legal, strategic, and compliance due diligence, as well as holding in-depth discussions with the management teams of target companies.
ARMEN also analyses environmental, social and governance (ESG) risks and potential adverse impacts. Beyond exclusion policies, the management company assesses sustainability risks, opportunities, and potential principal adverse impacts prior to any investment. This analysis is supplemented by a full ESG due diligence carried out by an external provider.
During the investment period, ARMEN conducts regular monitoring of the financial and non-financial performance of each portfolio company. This includes regular meetings with management teams, participation in board meetings, and review of documents such as reports, financial statements, budgets, and audited accounts.
An annual portfolio review is also conducted to identify risks, opportunities and areas for improvement. Based on this assessment, action plans are developed in collaboration with the management teams.
Throughout the investment period, ARMEN ensures that ESG and sustainability considerations are systematically integrated into decision-making and monitoring processes. ARMEN representatives actively participate in governance bodies, either as board members or observers, to oversee strategic orientations and ensure effective implementation of ESG action plans. Depending on the nature of the investment, ESG and business performance topics are addressed during meetings with management.
Dialogue with portfolio companies
Dialogue with portfolio companies is maintained through regular contacts with management teams, control bodies, and, where applicable, co-shareholders.
ARMEN’s managers stay as informed as possible regarding communications from portfolio companies, participating regularly in general meetings, board meetings, and numerous conference calls to ensure up-to-date information.
ARMEN typically invests in unlisted equity or quasi-equity as a minority shareholder and generally holds a board seat.
ARMEN also promotes and maintains an ESG approach with management teams to create value and help companies improve their extra-financial performance.
Exercise of voting rights and other shareholder rights
General principles for analysing resolutions
The Management Company applies the following principles:
In line with these principles, ARMEN examines resolutions submitted to a vote on a case-by-case basis, including:
The voting process is carried out through the monitoring and analysis of resolutions submitted to general meetings, in line with good governance principles.
Organisation of voting rights
Voting rights are exercised by members of the investment team (or former members for specific reasons) responsible for reviewing and analysing resolutions proposed by the management of companies held in ARMEN’s funds.
These members also organise and report on the exercise of voting rights.
Votes are systematically cast on behalf of the funds managed by ARMEN, except in duly justified circumstances.
Conditions for exercising voting rights
Shareholders may attend general meetings by any means, with a priority given to voting in person. Investment team members may, however, vote by mail or electronically when available, in accordance with applicable laws and regulations.
Any vote cast contrary to ARMEN’s voting policy must be documented and justified.
The Head of Compliance and Internal Control periodically reviews the voting process as part of the permanent control framework.
Minimum holding threshold
Voting rights are exercised without any minimum holding requirement.
Cooperation with other shareholders
ARMEN regularly engages with other shareholders, including when participating in joint initiatives addressing systemic issues such as climate change or more specific concerns related to a given company and shared among a group of investors.
Communication with relevant stakeholders
ARMEN may interact with various stakeholders, including shareholders and co-investors, directors, management teams, banks, lawyers, consultants, and in some cases, certain clients or suppliers.
Prevention and management of conflicts of interest
In accordance with the Management Company’s conflict-of-interest prevention policy, investment team members must, when exercising voting rights:
• act loyally and in the interest of shareholders;
• perform their duties with competence, care and diligence in the interest of investors;
• comply with all applicable regulations to protect investors and market integrity;
• ensure that information provided to them is used solely for the benefit of clients.
Investment team members must immediately inform the Head of Compliance and Internal Control of any situation that could affect the free and impartial exercise of voting rights.
The Management Company then assesses whether voting is appropriate, based on the prior opinion of the Head of Compliance and Internal Control.