FQA

Stefnir Asset Management Company is a well-established Icelandic fund manager with assets of approximately ISK 379 billion under active management at the end of 2024. Stefnir has about 20 specialists in four teams managing a diverse collection of UCITS, alternative investment funds marketed towards the public and institutional investment funds. The company also manages the assets of several partnerships limited by shares that have been established around enterprise investment schemes.

Stefnir was founded in 1996 and its investment team has on average around 10 years' experience on the financial market. The company has from the beginning been at the forefront of the development of new types of funds, both for retail and professional clients. The best interests of the clients are the focus when the developing and managing funds. Stefnir believes that trust and confidentiality are the keys to long-term relationships with its clients. Stefnir therefore places a keen emphasis on open and transparent communications and exchanges of information.

Stefnir’s role is to manage its clients’ assets as best serves their interest. Stefnir’s clients own unit shares in funds managed by Stefnir. Those unit shares are confirmation of ownership in the funds’ asset portfolios. The funds’ assets are therefore wholly owned by its current unit holders (fund members). By law the assets of Stefnir hf. and the assets of funds under management are kept separate in financial statements. The custody of the funds’ assets, along with calculations of the price of the funds, is the responsibility of a separate company, Arion Bank.

Stefnir places special emphasis on security in all its activities. To this end the company has set up sophisticated control and risk management systems based on clear procedures, internal and external auditing, compliance and systems tailored to manage investment strategies. The company also carries out an annual internal risk assessment of major operational risk factors. Stefnir’s UCITS and alternative investment funds marketed towards the public are subject to supervision by the Icelandic Financial Supervisory Authority (FME).

Undertakings for collective investment in transferable securities (UCITS) are portfolios of bonds, stocks and other liquid securities, as well as deposits. The structure of the funds varies. Icelandic UCITS operate in accordance with Act. No. 116/2021 on UCITS. One of the objectives of the Act is to ensure effective consumer protection; the Act imposes various restrictions on the operation of the funds. By law all funds are operated by a management company which is an independent financial company. All supervision and custody of securities in funds managed by Stefnir is handled by a separate financial company, Arion Bank. The custodian is a supervisory body and its responsibilities include ensuring that the price calculation, sale, issuing and redemption of unit shares are conducted in accordance with the law and funds' articles of association.

Redemption refers to when a client redeems unit shares and receives cash in his/her account in return. The amount received by the client is equal to the number of units he/she owns in the fund (redeems) multiplied by the price of the fund on the date of redemption (minus a handling fee).

The investment strategy of Icelandic UCITS is decided in advance and investors can therefore examine the funds' investment authorization before making an investment. The investment strategy of a UCITS may not be changed without the prior consent of the Financial Supervisory Authority (FME) which supervises the activities of the relevant management company and thus the fund.

Alternative Investment funds marketed towards retail investors are licensed forms of funds for collective investment pursuant to Act. No. 45/2020 on Alternative Investment Fund Managers. Alternative investment funds marketed towards the public are governed by different rules to UCITS according to Act no. 30/2003, e.g. with respect to investment limits and the duty to effect redemption.

The investment limits of alternative investment funds marketed towards the public are broader under the law and investments in such funds may involve a greater degree of risk than investments in UCITS. Investors are encouraged to remember the difference between alternative investment funds marketed towards the public and UCITS and to closely examine the investment strategy applicable to the fund in which they have unit shares or in which they intend to invest in the future.

Pursuant to Article 160(2) of Act No. 2/1995 on Public Limited Companies of Iceland, a limited partnership (samlagshlutafélag, slhf.) is a type of partnership in which one or more partners (General Partners) bear direct and unlimited liability for the obligations of the partnership, while one or more other partners (Limited Partners) bear liability limited to their capital contributions forming the share capital of the partnership.

General Partners may also hold an ownership interest as Limited Partners. Under Icelandic law, limited partnerships (slhf.) are governed by the Act on Public Limited Companies.

Stefnir is subject to a wide range of supervision from internal and external bodies. The company is a limited company by law and publishes its annual accounts which are available on its website. It is important to be realize that Stefnir is separate from the funds it operates. Stefnir operates a number of funds; the management and administration of the funds' assets are the responsibility of Stefnir's employees and the holdings of unit holders always represent a proportional claim to the assets of a fund. The custody of the funds’ assets is the responsibility of an independent custodian recognized by the FME.

Article 39 (3) of Act no. 116/2021 defines ownership rights to shares in a fund as follows: All holders of a share in a UCITS, or individual division of the same, shall have an equal claim to the income and assets of the fund or the division in question, in proportion to their share, with the unit share certificates serving as confirmation of a claim to securities held by the fund. This underlines the fact the management company has no claim on a fund’s assets as long as it is not a unit holder in the fund, in which case it has a proportional holding in the fund just as other unit holders do. In the same way, the management company does not bear any operational risk in relation to the funds.

The annual accounts of the management company and funds operated by the company are kept separate; all funds have their own balance sheets and income statements.

The investment strategy of each fund is specified in the relevant fund’s prospectus. The supervisor of the funds follow strict rules of procedure on the funds' investment decisions and the rules of procedure state clearly that investments must fall within the framework set by the funds' investment strategies. Possible deviations from the investment strategy are monitored daily. A breakdown of the assets of UCITS and alternative investment funds marketed towards the public is sent to the FME every quarter. Unit holders can see this breakdown of assets in the factsheets for each fund on Stefnir's website. The information is updated monthly.