Statement in Relation to the Shareholder Rights Directive II
PIMCO Deutschland GmbH (the “Company”) is authorised and regulated by the Bundesanstalt für Finanzdienstleistungsaufsicht (“BaFin”). The Company is required to comply with applicable German rules, including those transposing aspects of Article 3g of the Shareholder Rights Directive (SRD II) ((EU) 2017/828) (the “Article 3g Requirements”).
The Company is part of the PIMCO group (the “PIMCO Group”), one of the world’s premier fixed income investment advisors. As of 31 March 2019, the PIMCO Group had overall assets under management of US$1.76 trillion. As an investment advisor of primarily fixed income based products, investments in shares form only a small proportion of the PIMCO Group’s overall assets under management.
General Approach to Engagement
The PIMCO Group seeks to enrich and preserve client assets by providing high quality investment management services to its clients. The PIMCO Group’s engagement with issuers on behalf of its clients facilitates the responsible allocation and management of capital consistent with its clients’ investment objectives. Engagement activities may include, amongst other things, monitoring companies, assets and service providers, engaging companies and holding them to account on material issues and co-operating with other stakeholders. As an investment advisor of predominantly fixed income based products, the PIMCO Group typically engages with companies on behalf of clients that are bondholders.
Environmental, Social and Governance Matters
The PIMCO Group believes in investing in corporations that have demonstrated a sustainable framework for dealing with environmental, social and governance (“ESG”) matters. The PIMCO Group recognises that ESG-related issues are an increasingly critical factor in understanding global economies and has an ESG Investment Policy statement available at https://pim.co/y5eww and publishes an annual report on the PIMCO Group’s ESG activities. The most recent copy of the PIMCO Group’s ESG Investing Report is available at https://pim.co/acln8.
Where the Company manages accounts which include shares with a listing on an EEA market or on a comparable market outside the EEA, the level of shareholder engagement will depend on a number of factors. While the Company may, in certain limited circumstances, actively engage with management on strategy, financial and non-financial performance and risk, capital structure, corporate governance or other issues, typically the level of the Company’s shareholder engagement is limited to the responsible exercise of voting rights in accordance with PIMCO’s Global Proxy Voting Policy. The level of the Company’s shareholder engagement is generally limited to the responsible exercise of voting rights because an account that includes shares typically (i) has an exclusively macro, top-down investment strategy (which, for example, may result in an account investing in a basket of shares to obtain exposure to an industry sector without selecting individual shares); (ii) acquired those shares as part of a restructuring; (iii) holds an insignificant shareholding in relation to their portfolio; or (iv) holds an insignificant holding of the issuer’s outstanding shares. As a result, the Company has chosen at this stage not to implement an engagement policy pursuant to the Article 3g Requirements.
PIMCO’s Global Proxy Voting Policy
The PIMCO Group has a proxy voting policy that describes its approach to exercising voting rights and other rights attached to shares. The PIMCO Group has engaged Institutional Shareholder Services Inc. (“ISS”), a proxy voting advisory firm, to provide research recommendations and vote execution services.
This statement will be reviewed annually and, if applicable, updated to reflect changes in circumstances and practice.