1. Introduction and Business Principles
This policy sets out Chikara Investments LLP (“Chikara” or the “Firm”)’s commitment and approach to Responsible Investment (“RI”) as well as our approach to sustainability across the culture and operations of the firm.
2. Responsible Investment Oversight and Responsibilities
Chikara’s RI and Sustainability culture has been developed by its senior management and the partnership, who maintain oversight and accountability of Chikara’s approach to RI. Chikara has established a Responsible Investment Committee whose members consist of key senior individuals.
In addition, members of the investment team and other Chikara staff are invited to participate at RI Committee meetings on an ad hoc basis, for example to discuss specific RI factors that arise in the investment process.
The RI Committee is responsible for general oversight of RI and sustainability at Chikara, and for Chikara’s RI strategy (in conjunction with the Partners).
3. Responsible Investment Approach
This RI Policy covers the approach to responsible investing for all assets under management of Chikara.
Chikara has a structured yet flexible approach to responsible investment. Additional guidelines on sustainability factors are provided in a separate Chikara RI Guidelines Document.
Using negative screening, integration and stewardship techniques, the investment teams seek to consider how sustainability-related risks and opportunities may have a financial impact on investment opportunities.
This aligns with the overall investment objective of the funds that Chikara manages as well as our objective to maximise returns for clients. In addition, considering these factors helps Chikara to develop a deeper understanding of sustainability issues and potentially reduces detrimental sustainability outcomes.
3.1 Negative Exclusion List (Screening)
Negative exclusions are based on legal requirements (such as those required by domestic/international law, bans, treaties or embargoes).
The exclusion list is implemented as a pre-trade compliance check which prevents trades in excluded names.
3.2 Research Process
Sustainability factors are integrated into the firm’s bottom-up investment process and these issues are considered alongside financial and strategic issues during assessment and engagement with companies. These risks are qualitative factors rather than quantitative inputs on a financial model.
The investment team conducts its own research which may be complemented by third party research from time to time.
A key component to our RI process is engagement with companies, which is explained in greater detail in the next section. Engagement serves three main purposes for us as it relates to RI: due diligence, education and action.
3.3 Climate-Related Risks and Opportunities
We recognise there can be potential financial impacts of climate-related risks and opportunities to our investments and, if considered material and relevant, these factors are considered alongside financial and strategic issues during assessment and engagement with companies. These risks are qualitative factors rather than quantitative inputs on a financial model.
3.4 Stewardship
Stewardship is typically implemented through tools including engagement and proxy voting.
The RI Committee is responsible for oversight of stewardship activities and acts as a point of escalation if necessary.
Chikara’s commitments to the Japan Stewardship Code and UK Stewardship Code are set out on our website: https://www.chikarainvestments.com/legal-disclosures
3.4.1 Engagement
Chikara’s investment philosophy emphasises fundamental, proprietary research, to identify potential companies, supported, where possible, by direct company meetings conducted by the dedicated and experienced Indian and Japanese teams at Chikara. As well as review and assessment of third party research and engagement with country and industry experts, members of the investment team engage in one-on-one meetings and telephone calls with senior management or Investor Relations representatives of companies.
The Portfolio Manager is responsible for engagement on sustainability matters and monitoring is carried out via investment reviews.
Our research incorporates company-specific data and analysis as well as ad hoc reviews of third party research.
We also have a proprietary system which allows us to record and track engagements and assists us in reporting this activity to our clients and other reporting obligations.
In the event that a company does not respond to engagement, or fails to act on the points raised, the investment team considers whether to reduce exposure or exit the position.
Public Engagement
Aside from engagement with portfolio companies, Chikara contributes, when appropriate, to relevant and important industry consultations and we discuss wider market issues in industry media.
Collaborative Engagement
We generally engage with companies on an individual basis but subject to any regulatory considerations/constraints, once an investment is made, Chikara may participate in collective engagement with other institutional investors over matters which could have a material impact on shareholder value, when required.
3.4.2 Proxy Voting
The primary voting policy of Chikara is to protect or enhance the economic value of its investments on behalf of its clients. Chikara will vote against any agenda that threatens this position, in particular concerns over inappropriate incentives, changes in capital structure and mergers or acquisitions which are seen as detrimental to the creation of business value.
All voting decisions are made in consultation with, and approval by, the portfolio managers. Once the proxy votes are submitted, they are recorded by Chikara. Proxy voting records are available at http://www.chikarainvestments.com/voting-summary.
4. Reporting
We provide a high level of transparency to investors and produce a monthly factsheet (quarterly Indian strategies) containing information covering our top positions, an extensive exposure summary, and commentary on what has worked and what has not, as well as future strategy. Full disclosure of the portfolio is available on a monthly basis to investors.
In addition, we provide:
- Proxy Voting Reporting
- Stewardship Reporting
- PRI Reporting
5. Memberships of Industry Bodies
Chikara believes that participation in industry bodies demonstrates our commitment to responsible investing, helps us to be active owners, promotes appropriate RI disclosures and helps us to learn and enhance our effectiveness in RI. To this end, Chikara is affiliated with the following organisations:
- Principles for Responsible Investment (PRI)
- Association of Investment Companies (AIC)
- Alternative Investment Management Association (AIMA)
6. Chikara Firm Sustainability Procedures
In addition to the RI approach deployed within the investment process, Chikara believes it is important to operate its own business in line with good sustainability practices. As such, Chikara has implemented the following sustainability and business integrity related initiatives. The RI Committee is responsible for sustainability initiatives at the management company level and is constantly seeking to improve and enhance Chikara’s own sustainability culture.
7. RI Training
The RI landscape is constantly evolving, and Chikara is keen to ensure that all staff are educated and aware of RI developments across the investment universe. To that end, employees receive regular training and regularly collaboratively engage on a wide range of issues, including RI, sustainability, climate change and the importance of stewardship and their integration into the investment decision-making process.
8. Policy Maintenance
The RI Policy is reviewed at least annually.
The last review of the RI Policy was completed in March 2025.