Exercise of voting rights

Voting rights are actively exercised by LFS or its delegates whenever sustainable investor interests are affected, and are used to monitor the companies in which the managed funds are invested in terms of strategy, financial and non-financial performance and risk, capital structure, social and environmental impact (sustainability) and corporate governance.

In the event of any delegation of asset management activities, LFS shall inform its delegates contractually that they are authorised, but not obliged, to exercise the rights arising from the investments as shareholder, co-owner, creditor, etc., and that LFS reserves the right to exercise the corresponding rights itself.

In principle, voting rights are exercised when the share of voting rights in a company, consolidated at LFS level, exceeds one per cent of the voting capital. Depending on the situation, voting does not take place if other factors, such as the free tradability of the position, are weighted higher in the interests of investors.

If the share of votes is less than one per cent of the voting capital, it is at the discretion of LFS or its delegates to nevertheless exercise their voting rights accordingly in the interests of investors. If the delegate wishes to exercise membership and creditors’ rights, they shall inform LFS in advance. 

If the voting rights are not actively exercised by LFS or its delegates, they will also not be exercised on the part of the custodian, and will thus remain unaffected in the voting at the relevant meeting.

Communication with companies and other shareholders

Within the framework of the General Meetings, LFS or its delegates decides, depending on the occasion and the need, and exclusively in the interests of investors, the extent to which it will enter into a dialogue with the companies or their stakeholders, for example on matters relating to certain agenda items, or cooperate with other shareholders with a view to coordination in the case of certain votes. The latter will only take place in individual cases and after weighing up all of the circumstances.

Conflicts of interest

In the event of any conflicts of interest that may arise, LFS takes special care to ensure that only the interests of the investors are taken into account, and not the interests of delegates, when the voting decision is made.

Proxy voting advisor

Among other things, LFS uses the system of an external proxy voting service provider to implement voting rights and bases its decisions on the voting policies of this provider, which also take aspects such as sustainability criteria into account.

If the proxy voting service provider does not issue a voting recommendation, LFS generally votes in accordance with the proposals of the Board of Directors of the respective company, while taking sustainability criteria into account. If a vote is cast against such a proposal in individual cases and in the interests of investors, the reasons for this vote will be recorded in writing.

Publication

Based on Art. 367h (2) of the Liechtenstein Persons and Companies Act and Directive (EU) 2017/828, LFS publishes on its website details of the way in which voting rights were exercised in General Meetings of companies with a registered office in a member state of the European Economic Area (EEA), and whose shares are admitted for trading on a regulated market located or operating within an EEA member state. This does not apply to votes that were not significant due to the size of the shareholding in the company. In this context, investments not considered to be significant are those that are not subject to reporting obligations under stock exchange law.