Pillar III Disclosures


The Pillar III disclosures in this document are in relation to Lothbury Investment Management Limited (Lothbury).

The Basel II Accord, implemented in the European Union through the Capital Requirements Directive (CRD) requires firms to implement a framework which relates capital to risks. In the United Kingdom CRD has been implemented by the Financial Conduct Authority (FCA) in its regulations through the General Prudential Sourcebook (GENPRU) and the Prudential Sourcebook for Banks, Building Societies and Investment Firms (BIPRU).

The CRD framework consists of 3 pillars:

  • Pillar I sets out the minimum capital that a financial services firm is required to maintain to support the business
  • Pillar II requires the firm to assess whether any additional capital should be maintained against any risks not adequately covered under Pillar I, and the FCA then to supervise this process
  • Pillar III specifies the disclosures which the firm is required to make about its capital, its risk exposures and its risk assessment procedures.

Frequency of Publication

These disclosures will be reviewed on an annual basis as a minimum and, if appropriate, more frequently. This is considered appropriate given the nature and scale of Lothbury’s activities.

Corporate Governance Processes

Lothbury is governed by its Board of Directors, who oversee an ongoing capital assessment process in order to ensure the continuing capital adequacy of Lothbury. The overall governance of the firm is based upon the high level decision making and control framework, key controls and strategic and capital planning.

Risk Management and Internal Controls

There is an ongoing process for identifying, evaluating and managing the significant risks faced by the Firm. The processes are designed to manage rather than eliminate the risk. As such, they can provide only reasonable, not absolute assurance against material mis-statement or loss.

The Board is responsible for determining the Firm’s risk appetite and for ensuring that the Firm’s risk management processes are appropriate and operating effectively. Management of risk is delegated to the Risk, Compliance, Audit and Oversight Committee which meets quarterly and reports to the Board.

Principal Risks and Controls

Lothbury has taken the approach to be risk averse and the firm takes reasonable steps to manage its risks. This is reflected in their low appetite for taking on risk in any of its activities. Lothbury has little to no tolerance for engaging in activity that adversely influences its risk profile. All risks of any significance are identified, assessed and controlled on an ongoing basis. Lothbury does not trade on its own account and therefore is not exposed to principal market risk.

The critical material capital adequacy risks for Lothbury are operational, reputational and business risk, relating to a significant decrease in revenue arising from a decrease in the value of assets under management.

Operational Risk

The key risks arising in Lothbury’s business include:

  • Poor investment performance
  • Damage to reputation
  • Loss of key staff
  • Business disruption
  • Regulatory breaches/failures
  • Legal action

Processes and procedures are in place to monitor, manage and reduce these risks as appropriate and the Risk and Compliance Committee reviews these procedures regularly.

Counterparty Risk

Lothbury manage and mitigate counterparty risk by dealing with reputable counterparties and actively managing relationships with material counterparties.

Credit Risk

Lothbury’s credit risk arises mainly from management fees. Lothbury manage and mitigate this risk by ensuring that fees are invoiced and collected promptly. There is no history of losses on third party debtors, as they are carefully monitored and are low risk by nature. A capital buffer is maintained against credit risk.

Liquidity Risk

Lothbury monitors liquidity risk on an ongoing basis. Monthly management accounts, containing cash flow forecasts, are prepared and circulated to the Board. Lothbury holds excess cash to cover at least three months overheads and the company is cash generative.

Capital Resources

Lothbury is defined by the Rules of the FCA as a Limited Licence Firm. The fixed overhead requirement forms the basis for the Pillar I capital requirement for Lothbury, being significantly in excess of market and credit risks requirements.

A summary of Lothbury’s capital resources at 31 December 2017 is presented below.

Total Tier One  £5,529,356

TIER 1 As at 31/12/2017
Share Capital £12,000
Share premium at 31/12/2017 £693,000
Audited reserves at 31/12/2017 £4,824,356
TOTAL CAPITAL £5,529,356

Internal Capital Adequacy Assessment

Lothbury perform an internal capital adequacy assessment (ICAAP) annually and this is reviewed and signed off by the Board. The ICAAP is an ongoing assessment of the types and magnitude of risks faced by Lothbury and the amount of current and future capital which the Firm believes is appropriate to hold to mitigate those risks. Stress and scenario testing has been developed in order to test the robustness of Lothbury’s regulatory capital against a variety of events and changes both to Lothbury and the financial markets as a whole. The ICAAP is challenged and approved by the Lothbury Board.


Lothbury’s senior management is responsible for determining the remuneration policy of the firm and reviews the policy at least annually.

Lothbury’s senior management have determined that variable remuneration is to be paid on the basis of performance. Due to its size and nature Lothbury does not operate a share or other non-cash scheme.

Remuneration by Business Area

To 31st December 2017
Directors and Senior Management £1,991,624
Other Staff £3,315,688

Senior Management and Material Staff

To 31st December 2017
Fixed Remuneration £1,081,788
Variable Remuneration Cash £909,836
Other Nil
Number of Beneficiaries Four

Important notice

This is the website of Lothbury Investment Management Limited of 155 Bishopsgate, London EC2M 3TQ, United Kingdom, a company registered in England with registered number 04185370. Lothbury Investment Management Limited (or “LIM”) is authorised and regulated by the Financial Conduct Authority in the United Kingdom.

Lothbury Investment Management Limited is the manager of the Lothbury Property Trust (the “Fund”). Lothbury Property Trust is a sub-fund of the Lothbury Global Institutional Funds, which is regulated by the Central Bank of Ireland. The Fund is an alternative investment fund (“AIF”) for the purposes of the Alternative Investment Fund Managers Directive (2011/61/EU) (the “Directive”). LIM has been appointed and acts as alternative investment fund manager (“AIFM”) in respect of the AIF. For these purposes, LIM is authorised and regulated in the United Kingdom by the Financial Conduct Authority (or any successor body responsible for the regulation of alternative investment fund managers) (the “FCA”) for the purposes of managing unauthorised AIFs. The Fund is also an unregulated collective investment scheme for the purposes of the United Kingdom Financial Services and Markets Act 2000 (the “Act”).

Restrictions on Access

Certain jurisdictions may restrict by law access by their residents or nationals to the information on this website. The contents of this website are not intended to be accessed by, distributed to or used by residents or nationals of such jurisdictions. It is the responsibility of any person accessing this website to satisfy itself that its use of the website complies with the laws of any relevant jurisdiction.

Under United Kingdom legislation, the promotion of units by Lothbury Investment Management Limited in the European Economic Area (the “EEA”) is restricted by section 238 of the Act. The promotion of units by the Fund itself or by its trustees in the EEA is restricted by section 21 of the Act. Accordingly, the information on this website is directed only at:

  1. persons who are outside the EEA;
  2. persons having professional experience of participating in unregulated collective investment schemes, that is persons within Article 14 of the Financial Services and Markets Act 2000 (Promotion of Collective Investment Schemes) (Exemptions) Order 2001 (the “CIS Exemptions Order”) and Article 14 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Financial Promotion Order”); and/or
  3. high net worth organisations to whom Article 22 of the CIS Exemptions Order and Article 49 of the Financial Promotion Order apply (broadly, companies or partnerships with net assets of £5m sterling or more and trustees of trusts with assets of £10m or more); and
  4. others to whom it may lawfully be directed,

all such persons being “exempt persons”. Units in the Fund may only be promoted to exempt persons. Persons other than exempt persons should not rely or act upon the information on this website.


The purpose of this website is to provide general information about Lothbury Investment Management Limited and the Fund. The only clients of Lothbury Investment Management Limited are the Fund and its affiliates. Nothing on this website is investment, tax or legal advice, nor is anything on this website an offer to buy or sell units or any other investment. You should take your own independent investment, tax and legal advice as you think fit.

Please be aware that ultimately the interests in the Fund, as an AIF, may only be acquired by professional investors. A professional investor (for these purposes), is every investor that is considered, or may be treated based on a request to LIM (as the AIFM), as a professional client within the meaning of Annex II of the Markets in Financial Instruments Directive (2004/39/EC).

Any marketing (within the meaning of the Directive) in the European Economic Area is carried out pursuant to LIM’s rights as an AIFM under Articles 31 and 32 of the Directive. The European Economic Area comprises of the Member States of the European Union (Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Spain, Sweden and the United Kingdom) plus Iceland, Liechtenstein and Norway. Potential investors can request from LIM details of jurisdictions where notifications of the exercise of such rights has been given to the FCA.


The information available on this website is updated regularly, however it is provided “as is” and “as available” and Lothbury Investment Management Limited does not represent or warrant that the website will be made available uninterrupted or error-free, that the information provided on the website is accurate, suitable or complete or that defects will be corrected. All information on the website is provided without warranty of any kind, either express or implied.

Lothbury Investment Management Limited assumes no responsibility for any error, omission, interruption, deletion, defect, delay in operation or transmission, communication line failure, theft, destruction or unauthorised access to or alteration of entries posted to this website.

Lothbury Investment Management Limited is not responsible for and assumes no liability for any problem or technical malfunction of any telephone network or computer on-line system, server or provider, computer equipment, software, failure of e-mail on account of technical problem or traffic congestion on the Internet or at any website, or any combination thereof, including damage to any person’s computer related to, or resulting from access to, or downloading material from this website.

Lothbury Investment Management Limited accepts no liability for infections by computer virus, bug, tampering, unauthorised intervention, fraud, technical failure or any other cause beyond the control of Lothbury Investment Management Limited.

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