Knight Frank Staff Pension
Fund
Statement of Investment Principles

September 2023

Contents
Introduction ............................................................................. 2
Fund background .............................................................................. 2
Regulatory requirements and considerations .................................... 2

Statement of Investment Principles ......................................... 3
Introduction ....................................................................................... 3
Key investment principles.................................................................. 3

Appointments & Responsibilities ............................................. 91

Introduction
Fund background•This Statement of Investment Principles (the “Statement”) details the principles
governing investment decisions for the Knight Frank Staff Pension Fund (the“Fund”) by the Trustee Directors (the “Directors”) of Knight Frank Pension Trustees
Limited (the “Trustee”) of the Fund.

•The Fund:–operates for the exclusive purpose of providing retirement and death benefits toeligible participants and beneficiaries,–

provides benefits calculated on a defined benefit (DB) basis, and–has been closed to future accrual since 31 December 2005.

•In August 2023 the Trustee entered into a bulk annuity contract (the “buy-in policy”)
in the name of the Trustee with Standard Life Assurance Limited (“Standard Life”)
that will meet members’ benefits in full.

•Buck are investment consultants to the Trustee.

Regulatory requirements and considerations•

This statement covers the requirements of, and the Fund’s compliance with, theprovisions of the Pensions Act 1995 (as amended) and the Occupational Pension
Schemes (Investment) Regulations 2005 (as amended) and reflects The Pensions
Regulator’s investment guidance for trustees running pension schemes that offer
defined benefits issued in March 2017 and subsequently updated in September
2019.

•In respect of the additional voluntary contribution (AVC) arrangements provided on amoney-purchase basis within the Fund, the Trustee has taken into account therequirements and recommendations within The Pensions Regulator’s current codeof practice 13: Governance and administration of occupational trust-based schemes
providing money purchase benefits, including regulatory guidance.

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Statement of Investment
Principles
Introduction•This section of the Statement covers the requirements of the Pensions Act 1995 (asamended) and the Occupational Pension Schemes (Investment) Regulations 2005
(as amended).

•In accordance with section 35 of the Pensions Act 1995, the Trustee has reviewed
and considered written advice from the investment consultant prior to thepreparation of this Statement and has consulted Knight Frank LLP (the “SponsoringEmployer”).

•The Trustee will review this Statement, in consultation with the investment
consultant and the Sponsoring Employer, at least once every three years, or more
frequently if there are any significant changes in the Fund’s circumstances.
However, ultimate power and responsibility for deciding investment policy lies solelywith the Trustee.

Key investment principles
Investment decisions•

All investment decisions are taken by the Trustee Board as a whole. The Trustee
believes that collective responsibility is the appropriate structure, given the size ofthe board, except for specific projects when an investment sub-committee may be
set up. The Trustee will examine regularly whether additional investment training isdesirable for any individual Director.

•All investment decisions relating to the Fund are under the Trustee’s control without
constraint by the Sponsoring Employer. The Trustee is obliged to consult with theSponsoring Employer when changing this Statement.

•All day-to-day investment decisions are delegated to properly qualified andauthorised investment managers of pension scheme portfolios and the buy-in policy
provider. Investment management agreements or insurance contracts have been
exchanged with the investment managers or the buy-in policy provider, and arereviewed from time-to-time to ensure that the manner in which they makeinvestments on the Trustee’s behalf is suitable for the Fund, and appropriately
diversified.

Investment objectives and suitability of investments•The Fund’s investment strategy has been agreed by the Trustee having taken
advice from the investment consultant and takes due account of the Fund’s liabilityprofile.

•The Trustee’s primary objectives are:–to provide appropriate security for all beneficiaries,3–to achieve an appropriate balance between risk and return with regards to thecost of the Fund and the security of the benefits.

•In accordance with the Financial Services & Markets Act 2000, the Trustee isresponsible for setting the general investment policy, but the responsibility for all
day-to-day investment management decisions has been delegated to investment
managers authorised under the Act.

•The Trustee is responsible for reviewing both the Fund’s asset allocation andinvestment strategy as part of each actuarial valuation in consultation with theFund’s investment consultant. The Trustee may also reconsider the asset allocationand the investment strategy outside the triennial valuation period where necessary.

•The agreed investment strategy involves the pensioner and deferred member
liabilities being secured by the buy-in policy.

•In addition, the Trustee holds the surplus amount left after the buy-in in a cash fundas it is a more secure way to hold a large amount of cash than the trustee bankaccount and at the same time earns more interest on the investment.

Kind of investments to be held•

The Trustee has full regard to their investment powers under the Trust Deed andRules and the suitability of the various types of investments, the need to diversify,
the custodianship of assets and any self-investment.

•The Fund may invest in quoted and unquoted securities of UK and overseas
markets including insurance policies, equities, fixed interest and index-linked bonds
and cash or via pooled investment vehicles considered appropriate for tax-exempt
registered occupational pension schemes. The Trustee has considered theattributes of the various asset classes, these attributes being:–security (or quality) of the investment,–

yield (expected long-term return),–spread (or volatility) of returns,–term (or duration) of the investment,–

exchange rate risk,–

marketability/liquidity (i.e., the tradability on regulated markets),–taxation.

•The Trustee has invested in the buy-in policy to insure all economic and longevity
risk associated with the liabilities of all members covered by the policy with aninsurance company that is financially strong.

•The majority of the Fund’s assets are invested in the buy-in policy, with any surplus
to be held in the cash fund.

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Diversification•Subject to their respective benchmarks and guidelines the investment managers of
the assets are given full discretion over the choice of underlying assets and areexpected to maintain diversified portfolios.

•The Trustee is satisfied that the investments selected are consistent with itsinvestment objectives.

•Given the size and nature of the Fund, the Trustee has decided to invest the Fund’sassets on a pooled fund basis. Any such investment is effected through a direct
agreement with the investment managers and/or through an insurance contract.

Risk•

In determining its investment strategy, the Trustee received advice from theinvestment consultant to proceed with the buy-in policy and on the disinvestment ofthe Fund’s residual assets.

•Although the buy-in policy removes many of the risks, the Trustee recognises somerisks remain, namely the risk:–

Of the buy-in policy provider failing to provide the desired benefit payments.

–

The potential for an additional premium to be paid to the buy-in policy provider
in the event material changes are required to the data or benefits insured within
12 months of the policy inception date.

–

Of the residual cash held by the Fund being insufficient to meet residualobligations.

–

Of a failure of the Fund’s Sponsoring Employer to meet its obligations.

•The Trustee manages and measures these risks on a regular basis via actuarial andinvestment reviews, and in the setting of investment objectives and strategy.

•The Trustee undertakes monitoring of the investment managers’ performanceagainst their targets and objectives on a regular basis.

•The fund in which the Fund invests has a stated performance objective by whichinvestment performance will be measured.

Expected return on investments•

The investment strategy is believed to be capable of meeting the Trustee'sobjectives.

Realisation of investments•

The buy-in policy is an illiquid investment and cannot be surrendered, sold or“cashed-in” in the future. It is an asset that will be held in perpetuity until the last
payment is made or such time as it is converted to individual buy-out policies for
insured members on buy-out.

•The Fund’s remaining investments are secure, of high-quality and of sufficientliquidity.

Investment manager monitoring

5•The Trustee will assess the performance, processes and cost effectiveness of theinvestment managers in consultation with the investment consultant.

•All investment decisions, and the overall performance of the investment managers,
are monitored by the Trustee with the assistance of the investment consultant.

•The investment managers will provide the Trustee with quarterly statements of theassets held along with a quarterly report on the results of the past investment policy
and the intended future policy, and any changes to the investment processes
applied to their portfolios. The investment managers will also report orally on
request to the Trustee.

•The investment managers will inform the Trustee of any changes in the internal
performance objective and guidelines of any pooled funds used by the Fund as andwhen they occur.

•The Trustee will assess the quality of the performance and processes of theinvestment managers by means of a review at least once every three years inconsultation with the investment consultant.

•Appropriate written advice will be taken from the investment consultant before thereview, appointment or removal of the investment managers.

Investment manager policy•

In detailing below the policies on the investment manager arrangements, the overriding approach of the Trustee is to select investment managers that meet theprimary objectives of the Trustee. As part of the selection process and the ongoing
review of the investment managers, the Trustee considers how well each
investment manager meets the Trustee’ policies and provides value for money overa suitable timeframe.

•The Trustee has delegated the day to day management of the Fund’s assets toinvestment managers. The Fund’s assets are invested in pooled funds which havetheir own policies and objectives and charge a fee, agreed with the investment
manager, for their services. Such fees incentivise the investment managers toadhere to their stated policies and objectives.

•The Trustee, in conjunction with its investment consultant, appoints its investment
managers and chooses the specific pooled funds to use in order to meet specificFund policies. The Trustee expects that its investment managers make decisions
based on assessments about the financial performance of underlying investments,
and that they engage with issuers of debt or equity to improve their performance(and thereby the Fund’s performance) over an appropriate time horizon.

Evaluating manager performance•The Trustee expects its investment managers to invest the assets within theirportfolio in a manner that is consistent with the guidelines and constraints set out intheir appointment documentation. The Trustee reviews the investment managers
periodically. These reviews incorporate benchmarking of performance and fees.
Reviews of performance focus on longer-term performance (to the extent that isrelevant), e.g. looking at five years of performance.

•If the Trustee determines that an investment manager is no longer managing theassets in line with the Trustee’s policies, it will make its concerns known to theinvestment manager and may ultimately disinvest.

6•The Trustee pays its investment managers a management fee which is a fixed
percentage of assets under management.

•Prior to agreeing a fee structure, the Trustee, in conjunction with its investment
consultant, consider the appropriateness of this structure, both in terms of the feelevel compared to that of other similar products and in terms of the degree to which
it will incentivise the investment manager.

Turnover costs•

The Trustee, in conjunction with its investment consultant, has processes in place toreview investment turnover costs incurred by the Fund on an annual basis. TheTrustee receives a report which includes the turnover costs incurred by theinvestment managers used by the Fund.

•The Trustee expects turnover costs of the investment managers to be in line with
their peers, taking into account the style adopted by the investment manager, theasset class invested in and prevailing market conditions.

•The Trustee does not explicitly monitor turnover, set target turnover or turnoverranges. The Trustee believes that the investment managers should follow theirstated approach with a focus on risk and net return, rather than on turnover. Inaddition, the individual mandates are unique in nature and there is the potential formarkets to change significantly over a short period of time.

Duration of manager appointments•The Trustee does not in general enter into fixed long-term agreements with theirinvestment managers and instead retains the ability to change investment manager
should the performance and processes of the investment manager deviate from theTrustee’s policies. However, the Trustee expects their manager appointments tohave a relatively long duration, subject to the manager adhering to its statedpolicies, and the continued positive assessment of its ability to meet its performanceobjective.

•The buy-in policy cannot be surrendered and is an asset that will be held until thelast benefit payment is made or such time as it is converted to individual buy-out
policies for insured members on buy-out.

Performance monitoring•

Each of the funds in which the Fund invests has a stated performance objective
against which the performance is measured.

•The Trustee will review the performance of the investment managers from time totime, based on the results of their performance and investment process.

•The investment managers are expected to provide written reports on a quarterlybasis.

Financially material considerations•

Given the Fund’s assets are invested in the buy-in policy, the Trustee does not havean influence on the provider’s investment decisions.

7Non-financial matters•

The financial interests of the Fund members are the Trustee’s first priority whenchoosing investments. The Trustee does not currently take non-financial factors
into account.

Stewardship•

The Trustee has a fiduciary duty to consider their approach to the stewardship of theinvestments, to maximise financial returns for the benefit of members andbeneficiaries over the long term.

•The Trustee’s policy is to delegate responsibility for engaging and monitoring
investee companies to the buy-in policy provider.

•The Trustee’s policy is to delegate responsibility for the exercising of rights(including voting rights) attaching to investments to the buy-in policy provider and toencourage the buy in policy provider to exercise those rights.

•The Trustee recognises that the investment strategy provides only limited potential
to influence engagement due to the nature of the assets held.

Additional Voluntary Contributions (AVCs)•The Trustee has full discretion as to the appropriate investment vehicles madeavailable to members of the Fund for their voluntary contributions. Only investment
vehicles normally considered suitable for voluntary contributions will be consideredby the Trustee, having taken appropriate written advice from properly qualified andauthorised financial advisers.

•The Trustee makes available the following range of investment options for themembers’ AVCs:•AVC Provider

Investment Options

ZurichVarious Unit-Linked

ZurichWith-Profits

Utmost Life and Pensions

Various Unit Linked

In selecting this range of funds offered, the Trustee has taken advice from theirprofessional advisers on:–

the risks faced by members in investing on a money purchase basis, and–the Trustee’s responsibilities in the selection and monitoring of the investment
options offered.

•

The Trustee will continue to manage the AVC arrangements having taken
professional advice on these matters.

•The Trustee will monitor the performance of AVC providers periodically.

•Members are directed to seek independent financial advice when considering theirAVC arrangements.

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Appointments &Responsibilities
This section sets out the key appointments and responsibilities with respect to theinvestment aspects of the Fund.

Trustee
The Trustee’s primary responsibilities include:•Preparation of this Statement, reviewing its contents and modifying it if deemed
appropriate, in consultation with the Sponsoring Employer and the investment
consultant, at least every three years. The Statement will also be reviewed
following a change to investment strategy and/or the investment managers,•Appointing investment consultants and investment managers as necessary for thegood stewardship of the Fund’s assets,•

Reviewing the investment strategy as part of each triennial actuarial valuation,
and/or asset liability modelling exercise, and/or significant changes to the Fund’sliabilities, taking advice from the investment consultant,•

Assessing the processes (and therefore the performance) of the investment
managers by means of regular, but not less than annual, reviews of information
obtained (including investment performance),•

Monitoring compliance of the investment arrangements with this Statement on aregular basis.

Investment consultant
The main responsibilities of the investment consultant include:•Assisting the Trustee in the preparation and periodic review of this Statement inconsultation with the Sponsoring Employer,•Undertaking project work including reviews of investment strategy, investment
performance and manager structure as required by the Trustee,•

Advising the Trustee on the selection and review of the investment manager(s),•Providing training or education on any investment related matter as and when theTrustee sees fit, and•

Monitoring and advising upon where contributions should be invested or disinvested
on a periodic basis.

9Buy-in policy provider
The buy-in policy provider’s main responsibilities include:•Updating Fund data and benefits as agreed with the Trustee under the terms of thepolicy, and•

Providing monthly payments to the Trustee of Specified Benefits in respect ofInsured Beneficiaries and Dependants covered under the terms of the policy.

Investment managers
The investment managers’ main responsibilities include:•

Investing assets in a manner that is consistent with the objectives set,

•Ensuring that investment of the Fund’s assets is compliant with prevailing legislationand the constraints detailed in this Statement,•Providing the Trustee with quarterly reports including any changes to theirinvestment process and a review of the investment performance,•Attending meetings with the Trustee as and when required,•Informing the Trustee of any changes in the fee structure, internal performance
objectives and guidelines of any pooled fund used by the Fund as and when theyoccur, and•Exercising voting rights on shareholdings in accordance with their general policy.

Administrator
The administrator’s primary responsibilities are the day to day administration of the Fundand the submission of specified statutory documentation, as delegated by the Trustee.
The Fund’s administrator is Buck.

Scheme Actuary
The Scheme Actuary’s main responsibilities in respect of investment policy include:•Commenting on the suitability of the Fund’s investment strategy given the financial
characteristics of the Fund; and•

Performing the triennial (or more frequently as required) actuarial valuation andadvising on the Fund’s funding level and therefore the appropriate level ofcontributions in order to aid the Trustee in balancing short-term and long-term
investment objectives.

The Scheme Actuary is Gary Cameron of Buck.

10Signed on behalf of Knight Frank Trustees Limited as Trustee of the Fund:…………………………………………….

…………………………………………..

Name

Signature…………………………………………..
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