Stakeholder reporting
Engaging with our
stakeholders
The Board is committed to understanding and taking account of our stakeholders’ views in Board discussions, decision-making and reporting, recognising that these views may at times diverge.
Our key stakeholder groups
Committed to stakeholder engagement
The Board is committed to understanding our stakeholders’ views and considering their interests in Board discussions, decision-making and reporting. This includes considering the effect of decisions in the long term, the fostering of the Company’s business relationships with service providers, the impact of the Company’s operations on the community and environment and maintaining a reputation for high standards of business conduct.
How the Board engages
Below are examples of key topics of relevance to the stakeholder group and how their interests have been considered in decision-making.
Stakeholder group
Shareholders
z
The support of our current and future shareholders is critical to the continued success of the business. We believe our shareholders are interested in our continued strong financial performance, our ability to continue delivering for them for the long term and the maintenance of high standards of conduct and corporate governance. The Board places a high degree of importance on engagement with shareholders, endeavouring to communicate clearly and regularly with existing and potential shareholders and act upon their feedback, and actively considering their feedback.
How the Board engages
Capital Markets Day: This annual event consists of presentations to institutional shareholders and analysts by members of the Board, senior managers from Oakley and management of underlying portfolio investment companies.
Shareholder engagement: The Board directs the Investment Adviser’s Investor Relations Team and receives regular updates on its discussions with shareholders, and Board members also meet or connect with individual shareholders from time to time.
Publications: OCI’s Annual Report and Accounts, along with the Half-yearly Report and Accounts, and other stock exchange releases, are published on our website. Further, the Company engages market analysts and commentators both proactively and reactively to support its ongoing commitment to transparency.
Key topics during the year
The quarterly trading and NAV updates provided throughout 2023 set out the highlights during each period, including but not limited to:
- Increasing the Company’s credit facility to £175 million with an option to increase the facility by £50 million subject to agreement by all parties
- Commitment of $100 million to Touring Capital Fund I
- Commitment of €190 million to Origin II.
Considering stakeholder interests
In addition to the Company continuing to issue quarterly NAV updates, regular RNS announcements are made to inform shareholders of key transactions both at OCI and within the Oakley Funds, increasing transparency and facilitating greater shareholder engagement.
The Board continues to believe that digital format Annual Report and Accounts, along with the Company’s website, support its transparency aims and help to inform stakeholders about OCI and broader private equity market activity.
The resolution that the Company ceases to continue as constituted was rejected at the 2023 AGM, in line with the Board’s recommendation that the continuation of the Company continues to be in the best interests of the Company and its shareholders as a whole.
Further, all members of the Board are shareholders of OCI, which we believe strongly aligns their interests with other shareholders.
The Company’s share buyback programme accounts for more than 25% of the £200 million of share buybacks completed by listed private equity firms over the last three years. Although OCI has repurchased shares to the value of £57 million in the last three years, no share buybacks were made during the year. The Board still continues to proactively assess share buyback opportunities in conjunction with other aspects of capital and liquidity.
Stakeholder group
The community and environment
R
Being a responsible investor and taking into consideration ESG topics are key matters for the Board and are central to the way both OCI and Oakley operate.
The Directors believe that ensuring appropriate and robust assessment of ESG-related opportunities and risks by Oakley will lead to more sustainable business, creating long-term, ongoing value.
How the Board engages
Regular updates: OCI invests solely in funds and direct investments managed or advised by the Oakley group, with Oakley being committed to engagement on ESG topics. The Board receives regular updates from Oakley’s Head of Sustainability and has been fully engaged with Oakley in its progress throughout the year.
Key topics during the year
Throughout the period the Directors considered the Company’s approach to equality, diversity and inclusion, its carbon footprint assessment and reports from the Investment Adviser on the underlying portfolio companies ESG programmes and progress.
See the ESG section of this report.
The Financial Conduct Authority introduced new sex or gender identity and ethnic diversity disclosure obligations from 31 December 2023 for companies listed on the London Stock Exchange. The Directors, and in particular the members of the Nomination Committee, have noted these new measures relating to the composition of the Board. See the Nomination Committee report.
Considering stakeholder interests
During the year, OCI continued to further develop its social responsibility programme, which was launched in 2022. The financial commitments in 2022 have resulted in supporting the youth sailing programme and the establishment of the Aquaponics Lab, both in Bermuda. In 2023 the Board looked to identify socially beneficial initiatives that also have an environmental benefit. As a result, OCI is now sponsoring the development of solar panels at registered charities across Bermuda, helping to provide a steady source of renewable energy and decrease their operating costs.
Stakeholder group
Oakley Capital
£
OCI invests in the Oakley Funds and Oakley is OCI’s Investment Adviser, Administrator, and Operational Services Provider. Maintaining a strong, collaborative relationship is critical to the delivery of OCI’s strategy of delivering above market returns and democratising access to private equity.
How the Board engages
Regular reporting: OCI receives regular reports (at least quarterly) from the Investment Adviser on the performance of the Funds, performance of Direct Investments, potential new investments and strategies and a range of other matters, including compliance and risk matters, financial performance and valuations, capital allocation and planning proposals.
Continuous dialogue: The Board maintains open and constructive dialogue, engaging on key matters impacting both OCI and Oakley Capital.
Face-to-face meetings: The Board invites representatives from the Investment Adviser to present in person regularly, both at planned Board meetings at least four times per year as well as for ad hoc matters as appropriate.
Key topics during the year
The Management Engagement Committee conducts an annual review of the performance of Oakley Capital against the activities set out in the service level agreements between the parties, as discussed in greater detail within the Management Engagement Committee report.
The Board engaged with Oakley in relation to the liquidation of Oakley’s Fund I, which reached the end of its investment period in December 2023. As part of the liquidation of the fund, OCI now holds a direct interest of 38% of Time Out, representing 6% of the Company’s Net Asset Value as of 31 December 2023.
Considering stakeholder interests
Oakley continued to strengthen its risk reporting through enhanced management information (MI), fostering transparency in risk reporting, cultivating an internal risk culture and facilitating proactive discussions on risks.
The Board also heavily engaged with Oakley on the restructuring project in relation to the North Sails group. This restructuring saw OCI’s debt positions in North Sails converted into preferred equity, mitigating OCI’s credit risk and crystallising the Company’s previous equity position
Three key initiatives were implemented during the year:
Risk software implementation: A firm-wide risk software was introduced, enabling precise reporting and comprehensive tracking of risks and controls.
Third-party assessment of risk policies and protocols: An external assessment was conducted of Oakley's risk policies, protocols and procedures, continuing to drive them towards excellence.
Counterparty credit assessment: A credit assessment was conducted of all banking counterparties associated with Oakley's portfolio companies. This initiative diversified the banking pool and mitigated the impact of any potential banking crisis.
These measures collectively contribute to Oakley's robust risk management framework and proactive risk mitigation efforts.
Stakeholder group
Service providers
K
OCI engages a range of service providers other than Oakley, as appropriate. Ensuring continued effective working relationships with these counterparties is key to delivering on our strategy and ensuring that we continue to operate effectively.
How the Board engages
The Board as a whole, and the Management Engagement Committee specifically, ensures regular dialogue, engagement and oversight of its key service providers, including Oakley.
Key topics during the year
The appointment, remuneration and performance of all key service providers were considered during the year. During 2023, OCI continued to develop the administration and operational services provided by Oakley and extended its credit facilities.
During the year, OCI extended the RCF for a further two years and increased commitments from lenders to £175 million. There is an option to increase the commitments by a further £50 million subject to agreement by all parties.
Considering stakeholder interests
The Company engages with Oakley under a consolidated administration and operational services agreement to enhance efficiency and operational effectiveness.
During 2023 the Management Engagement Committee conducted its annual review of Oakley against the service provisions and the agreed key performance indicators. The results were satisfactory, and progress has been made in addressing feedback provided in previous years.
In addition, the Board and its committees held regular discussions throughout the year, which focused on the service levels provided to the Company by its other service providers.
Board commitment
Section 172 of the Companies Act 2006
As set out in the Association of Investment Companies Code of Corporate Governance, OCI has complied with Section 172 of the UK Companies Act 2006 (‘Section 172’). The Board is committed to promoting the long-term success of the Company while conducting its business in a fair, ethical and transparent manner. The Board recognises the intention and importance of Section 172 of the UK Companies Act 2006 (‘Section 172’), which requires Directors to act in good faith and in a way that is the most likely to promote the success of the Company and has chosen to adopt the provisions accordingly. Accordingly, the Directors consider the interests of the Company’s stakeholders (as laid out above) and pay due regard to the:
(a) likely consequences of any decision in the long term;
(b) interests of the Company’s employees;
(c) need to foster the Company’s business relationships with suppliers, customers and others;
(d) impact of the Company’s operations on the community and the environment;
(e) desirability of the Company maintaining a reputation for high standards of business conduct; and
(f) need to treat stakeholders fairly.