UK Stewardship Code


PIMCO Europe Ltd (the “Company”) is authorised and regulated by the Financial Conduct Authority (“FCA”) in the United Kingdom. Under Rule 2.2.3R of the FCA's Conduct of Business Sourcebook, the Company is required to disclose on its website the nature of its commitment and level of compliance to the UK Financial Reporting Council's Stewardship Code dated September 2012 (the “Code”) or, where it does not commit to the Code, its alternative investment strategy.

The Code is a voluntary code and sets out seven principles relating to the engagement by investors with UK issuers of shares. Investors that commit to the Code can either comply with it in full or choose not to comply with aspects of the Code, in which case they are required to explain their non-compliance. The Code is directed primarily at institutional investors with shareholdings in UK listed companies.

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 UK shares - and shares more broadly – form only a small proportion of the PIMCO Group’s overall assets under management.

Where the Company manages accounts which include shares issued by UK issuers and does not delegate its portfolio management, the account 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.

Therefore, the Code’s relevance has limited applicability to the Company’s investment activities and, while the Company has chosen not to formally commit to the Code, it generally supports the spirit of good stewardship and principles set out in the Code. Further, the Company’s broad approach to engagement with issuers and their management is determined at a global level although the exact approach taken will vary depending on the nature of a particular investment strategy.

The PIMCO Group, in line with principles 2 and 6 respectively of the Code, has a policy on proxy voting and managing conflicts of interest, further details of which are set out below.

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.

Conflicts of Interest

The PIMCO Group manages the investments of a large number of clients and therefore potential conflicts of interest may arise in a number of areas. In line with applicable regulatory requirements, the Company has a conflicts of interest policy which sets out the circumstances which may constitute actual or potential conflicts of interest and the measures adopted by the Company to manage these conflicts.

This statement will be reviewed annually and, if applicable, updated to reflect changes in circumstances and practice. The Company expects the revised Code – which will be extended to cover all asset classes rather than just shares in UK issuers – to be published later this year. Accordingly, the Company will review and update this statement in line with such revised Code when appropriate.

June 2019