As a UK investment firm undertaking activities within the scope of the UK Markets in Financial Instruments Directive (“MIFID”), Polunin Capital Partners Limited (“PCP” or the “Firm”) (FRN: add) is subject to the prudential requirements of the Investment Firms Prudential Regime (“IFPR”) contained in the MIFIDPRU Sourcebook of the Financial Conduct Authority (“FCA”) Handbook. PCP is required to publish disclosures in accordance with the provisions and guidance outlined in MIFIDPRU 8 of the IFPR. Under the IFPR’s firm categorisation, PCP is categorised as a small non-interconnected firm (“SNI”) MIFIDPRU investment firm.

Basis of Disclosure

This report has been prepared on an individual entity basis. The information disclosed is proportionate to PCP’s size and organisation, and to the nature, scope and complexity of PCP’s business.

MIFIDPRU 8 disclosures are published annually concurrently with PCP’s annual financial statements. The Firm’s financial statements are prepared in accordance with UK GAAP.

Unless otherwise stated, all figures are as at 31 December 2023, which is the Company’s financial year end.

This is PCP’s first MIFIDPRU disclosure statement.

Firm Overview

PCP is a private limited company registered in England and Wales and is authorised and regulated by the FCA as a Full Scope Alternative Investment Fund Manager as well as being registered as an Investment Adviser with the United States Securities and Exchange Commission. PCP is categorised by the FCA for prudential regulatory purposes both as a Collective Portfolio Management Firm (“CPMI”), formerly a BIPRU firm, and a SNI MIFIDPRU Investment Firm. The Firm is a wholly owned subsidiary of Polunin Capital Partners Pte. Ltd. (“PCP Singapore”), a Singaporean company regulated by the Singapore Monetary Authority.

PCP offers investment management services in global Emerging Markets to per se professional investors and eligible counterparties.


The Firm operates a risk management framework that sets out the responsibilities and escalation procedures for the identification, monitoring, and management of operational and business risks. Capital planning takes these identified risks into account.

As part of its control and corporate governance arrangements the Board has established an Operational Risk Committee which meets quarterly to collectively consider the individual risks and mitigating controls as identified in the Firm’s Risk Map and to ensure that all identified risks are adequately mitigated. Specific personnel are assigned responsibility for managing the risks across the Firm.

Where risks are identified which fall outside of the Firm’s risk tolerance levels, or where the need for remedial action is identified in respect of identified weaknesses in the Firm’s mitigating controls, then actions are taken to improve the control framework.

The Senior Management of PCP determines the Firm’s business strategy and risk appetite together with the design and implementation of a risk management framework.  To further strengthen risk monitoring and management, since 2010 Senior Management has commissioned Deloitte to perform an independent, annual audit of the company’s systems and controls. This was an SSAE18 type II audit in 2023.

The Firm’s Chief Executive takes overall responsibility, with the assistance of all the other Directors for identifying material risks to the Firm and putting appropriate mitigating controls in place. The Board also has ultimate responsibility for the preparation and contents of the Firm’s Internal Capital and Risk Assessment.

Although the Senior Management of the Firm believes that the risk management framework outlined herein is appropriate for the size and complexity of the Firm and that the Firm’s capital is adequate to meet the risks assessed, it cannot guarantee that this will actually be the case in the event any particular risk arises.

Internal Capital and Risk Assessment (“ICARA”)

The provisions of MIFIDPRU require PCP to maintain sufficient capital and liquid resources. The Firm documents its assessment of the adequacy of its capital and liquid resources to support its current and future objectives within an ICARA document that is reviewed and approved by the Board at least annually but may be updated more frequently if a material change occurs in the risk or business profile of the Firm.

PCP is primarily a long-only asset manager that invests client assets in publicly traded emerging markets equities. As such the Firm is exposed to operational risk and market risk and to a lesser extent general business risk and credit risk. These risks are discussed in more detail below, but are typical for an asset management business.

The Firm’s ICARA process identifies material risks; stress tests the business against these risks; calculates the amount of liquid resources that the Firm is required to maintain; provides an orderly wind-down plan; and determines PCP’s minimum regulatory Own Funds requirement.

Risk categories and analysis

As a result of its business activities, PCP is exposed to a variety of risks, the most significant of which are outlined below:

Operational risk

This is defined as the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events, including legal risk. The Firm seeks to minimize operational risk through a controls framework, particularly when engaging in new business ventures or trading new products. The Firm considers risks which may impact the Firm directly or indirectly. The systems and controls that the Firm is currently reliant upon as an advisor/arranger and Investment Management firm are considered adequate and the Firm considers its operational risks to be minimal.

Business risk

Business risk arises from external sources such as changes to the economic environment or one-off economic shocks, and also from internal sources such as poor decisions or suboptimal allocation of capital resulting in poor performance and damage to the Firm’s reputation. 

An extreme scenario has been modelled in order to assess the impact of adverse economic conditions on our financial position.  This enables the Firm to monitor its business risk and to assist in its capital planning.

Credit risk

The Firm’s credit risk is limited to fees receivable and cash held on deposit at large international credit and regulated institutions. Fees are drawn down monthly on activity in the month, and are received by the Firm in arrears. Credit risk arising in respect of prepaid expenses is not deemed to be material.

Market risk

The Firm’s exposure to Market Risk is limited to foreign exchange risk in respect of its accounts receivable and cash balances held in currencies other than GBP.

Concentration risk

PCP’s focus on emerging markets or material redemptions could result in losses. PCP’s business could suffer from either a decline in its investment performance relative to benchmark indices, or if a significant demographic of investors such as US institutional investors collectively were to redeem their investments managed by PCP.

Insurance risk

The risk of failure of insurance cover. The Firm maintains a range of insurance policies including professional indemnity, fraud, directors’ and officers’ liability insurance (which includes a cyber coverage sublimit) and an ERISA Bond at levels which PCP considers appropriate to its business. The Firm uses a broker to purchase its program of insurance only from well capitalised insurance firms to minimise residual insurance risk.

Own Funds

Under MIFIDPRU, PCP is required to disclose the composition of its Own Funds and provide a description of any material aspects of its Own Funds.

Composition of PCP’s regulatory Own Funds as at 31st  December 2023:




Amount (£’000)


Own Funds



Tier 1 Capital



Common Equity Tier 1 Capital



Fully paid-up capital instruments



Share premium



Retained earnings



Accumulated other comprehensive income



Other reserves



Adjustments to CET1 due to prudential filters



Other funds



Total deductions from Tier 1 Capital



CET1: Other capital elements, deductions and adjustments



Additional Tier 1 Capital



Tier 2 Capital


PCP’s Own Funds comprises two components:

  • Capital provided by PCP Singapore that is permanent in nature and not repayable except in extraordinary circumstances. It is included in Own Funds as provided by FCA rules; and
  • Cash reserves, held in multiple currencies and at multiple banking institutions.

PCP must hold Own Funds in sufficient quantity and quality in accordance with MIFIDPRU to absorb certain losses and meet specific regulatory requirements, known as the ‘Own Funds Threshold’ requirement. PCP’s Own Funds Requirement is the higher of the following:

  • Permanent Minimum Capital – this is defined by FCA rules and is £75,000 for PCP;
  • Fixed Overhead Requirement (“FOR”) – this is approximately equal to a quarter of PCP’s annual overheads and as at 31 December 2023 was £2.81m; and
  • ‘K’ Factor requirement – defined as the sum of the K-factors as defined within MIFIDPRU 4 that apply to the Firm. Given the nature and scale of its business, the only K-factor that applies to PCP is K-AUM, which is calculated as 0.02% of the Firm’s average MIFID assets under management. As at 31st  December 2023 PCP’s K-AUM figure is £0.17m.
  • Where a MIFIDPRU investment firmis also subject to another prudential regime for its non-MiFID business, its own funds threshold requirement can be no lower than the total financial resources requirement under that prudential regime.

The Own Funds requirement is increased if additional amounts need to be retained in order to meet costs related to an orderly wind down. Using reasonable assumptions, PCP has determined that £1.74m of excess costs would be incurred in a wind down situation. As this is less than the Firm’s FOR, PCP considers that its Own Funds Requirement is equal to its FOR of £2.81m, providing an excess of £25.76m.

Remuneration Disclosures

PCP has adopted a remuneration policy and procedures that comply with the requirements of MIFIDPRU and SYSC 19, with consideration given to the qualitative, quantitative and all of the proportionality elements within the FCA guidance.

PCP does not have and is not required to establish a Remuneration Committee and all remuneration decisions are taken by the PCP Board, the Firm’s governing body. Salaries are benchmarked against the industry practice.

Given its SNI status, PCP is not required to identify any Material Risk Takers for the purposes of the MIFIDPRU Remuneration Code. The Firm’s board has identified eight persons as ‘Code Staff’, being persons holding significant influence roles, investment and other senior managers whose actions could have a material impact on the risk profile of the Firm. The aggregate remuneration for PCP Code Staff for the year ended 31st December 2023 was £3,685,452, of which £1,626,625 was fixed, and £2,058,827 was variable remuneration.

PCP’s compensation arrangements are designed to keep key investment professionals’ interests aligned with those of investors, encourage long term planning and minimise staff turnover. Remuneration of the Firm’s employees comprises a basic salary and an annual discretionary bonus. Salaries are commensurate with seniority, experience and qualifications. The Board of Directors has sought to set the fixed element of remuneration at a level that is sufficient to provide staff with comfortable living standards, in an attempt to avoid over reliance on any variable element of remuneration. Salaries are benchmarked annually against an asset management remuneration study.  The bonus process involves annual staff reviews with clearly documented objectives and performance appraisals for each employee.

PCP operates an employee Share Award Scheme designed to act as part retention mechanism and part succession plan. Any employee with more than three years’ service may elect to receive part of their performance related bonus in non-redeemable preference shares. To date approximately 13.3% of the company’s equity has been distributed to employees under this scheme.

Risk is considered when setting goals and objectives for staff and PCP Board when making decisions on individual remuneration and policy in general. Any variable