A. General Description of Advisory Firm
Kingsway Capital Partners Limited (“Kingsway Capital”) is a private limited company incorporated under the laws
of England and Wales on February 28, 2017. Kingsway Capital commenced business on February 1, 2018.
Kingsway Capital’s registered office address is Eighth Floor, 6 New Street Square, New Fetter Lane, London EC4A
3AQ, United Kingdom and its principal place of business is 9th Floor, Smithson Tower, 25 St. James’s Street,
London, SW1A 1HA, United Kingdom.
Kingsway Capital was founded by Manuel Stotz, who through its UK incorporated holding entity, Koenigsweg
Holdings Limited, is its principal owner and sole controller. Manuel Stotz is also Kingsway Capital’s Chief
Executive Officer (“CEO”) and Chief Investment Officer (“CIO”).
Kingsway Capital has been authorised and regulated by the Financial Conduct Authority in the United Kingdom
(the “FCA”) since January 16, 2018 as an Alternative Investment Fund Manager (“AIFM”) and complies with
applicable rules and capital requirements with respect to the Alternative Investment Fund Manager Directive
(“AIFMD”) and applicable FCA Rules. As of January 31, 2018, pursuant to a corporate restructuring, Kingsway
Capital succeeded to the business of Kingsway Capital LLP, which had been operating in the United Kingdom as
an FCA regulated AIFM since May 1, 2015.
Kingsway Capital’s investment staff is organized into two separate teams, each specializing in a distinct investment
(1) the Kingsway Team specializing in frontier markets consumer franchise investments, both publicly listed
and private asset securities in the consumer sector (“Frontier Consumer Franchises Strategy”) and private
asset securities in the consumer internet sector (“Private Consumer Internet Strategy”); and
(2) the Ash Park Team specializing in global consumer franchise publicly listed investments in the consumer
staples sector (“Global Consumer Staples Strategy”).
Kingsway Capital Advisors LLP – Participating Affiliate
Kingsway Capital is a member of, and receives advisory services and operational support services from, Kingsway
Capital Advisors LLP (“KCA LLP”). KCA LLP is a limited liability partnership incorporated under the laws of
England and Wales on April 4, 2017. KCA LLP is authorised to act as “Appointed Representative” to Kingsway
Capital by the FCA. KCA LLP is also a “Participating Affiliate” of Kingsway Capital. The services provided by
KCA LLP to Kingsway Capital include investment research, marketing, client servicing, compliance and risk
management support, operations, secretarial services and other miscellaneous business support. See Item 10. C -
Material Relationships or Arrangements with Industry Participants for additional information about services
provided by KCA LLP staff to Kingsway Capital’s clients. KCA LLP does not have any discretionary authority to
make investment decisions for or undertake discretionary trading on behalf of Kingsway Capital’s clients, but may
provide investment advice to Kingsway Capital and its clients. All discretionary investment management and
advisory decisions in relation to and trading for Kingsway Capital clients is undertaken by Kingsway Capital staff.
The policies and procedures of Kingsway Capital are applied to KCA LLP members, employees and, as relevant,
their related persons. In the remainder of this document references to Kingsway Capital’s staff includes KCA LLP
B. Description of Advisory Services
Kingsway Capital offers discretionary investment management and advisory services.
Discretionary investment management services are provided to Kingsway Capital pooled investment funds
domiciled in Europe, the Cayman Islands and the U.S.A. (the “Kingsway Capital Funds”). Kingsway Capital Funds
are offered to US persons. Please refer to Section 7.B. of Schedule D to Kingsway Capital’s Form ADV Part 1 for
a details of Kingsway Capital Funds to which Kingsway Capital provides investment management services. In
addition, the Ash Park Team provides discretionary investment management services to institutional separately,
managed accounts, including to ERISA accounts. The Kingsway Team also offers advisory services to
sophisticated, professional investors, who may subsequently co-invest alongside certain Kingsway Capital Funds
in an investment opportunity.
An investor or prospective investor in a Kingsway Capital Fund will be expected to refer to the confidential private
placement memorandum (“PPM”), limited liability company agreement, articles of association and other governing
documents for such pooled investment fund (together the “Governing Documents”) for more complete information
about the investment objectives and investment restrictions applicable to such pooled investment fund. Persons
reviewing this Brochure should not construe this as an offering of any of the Kingsway Capital Funds described
herein, which will only be made pursuant to the delivery of relevant Governing Documents to prospective investors.
There is no assurance that any client account’s investment objectives will be achieved.
Kingsway Capital may in the future provide investment management or advisory services to other pooled
investment vehicles, and/or separately managed accounts.
Please see Item 8 for additional information related to methods of analysis, investment strategies and risk of loss.
C. Availability of Tailored Services for Individual Clients
Kingsway Capital may agree to tailor advisory services to the individual needs of clients including creating new
investment strategies in response to specific client requests. Kingsway Capital may agree to investment restrictions
or guidelines with respect to the types or amounts of securities or other financial instruments that may be transacted
and held for the client’s account or advised for an advisory client account.
Kingsway Capital will not enter into “side letters” or similar agreements with investors in the Kingsway Capital
Funds granting the investor certain specific rights, benefits, or privileges that are not made available to other
D. Wrap Fee Programs
Kingsway Capital does not participate in wrap fee programs.
E. Assets under Management
As of July 31, 2019, Kingsway Capital had 13 investment management clients with an aggregate $1,909,483,175
of discretionary regulatory assets under management (“RAUM”).
ITEM 5: FEES AND COMPENSATION
A. Advisory Fees
An investor and prospective investor in a Kingsway Capital Fund should review the Governing Documents of each
such Kingsway Capital Fund in conjunction with this Brochure for more complete information on the fees and
compensation payable. A summary only is provided below.
With respect to discretionary investment management clients investing in the Frontier Consumer Franchises
Strategy or the Global Consumer Staples Strategy, Kingsway Capital is generally paid or allocated a management
fee, payable quarterly or monthly, up to 1.5% per annum of the aggregate net asset value of each investor’s capital
account or series of shares, as applicable. In the case of side pockets or, if in issue, liquidating share classes
management fees are only paid on disposition of the relevant underlying asset or assets.
With respect to discretionary investment management clients investing in the Private Consumer Internet Strategy,
Kingsway Capital is generally paid or allocated a half yearly management fee of up to 1.5% per annum of the total
committed capital, called capital invested (at cost).
To date, no management fees have been payable in respect of the Kingsway Capital Funds that provide “overflow”
or “co-investment” investment opportunities alongside investments by other Kingsway Capital Funds.
Performance-Based Allocations or Fees
There are no performance-based fees payable in respect of clients managed pursuant to the Ash
Certain Kingsway Capital Funds managed by the Kingsway Team charge performance-based charges which are
payable to carried interest vehicles (“Carry Vehicles”) that are affiliates or other related persons of Kingsway
Capital. The Carry Vehicles are more fully described under Item 10:C. Material Relationships or Arrangements
with Industry Participants.
The Kingsway Capital Funds that follow the Frontier Consumer Franchises Strategy generally allocate to the
relevant Carry Vehicle an annual performance-based fee of between 10% to 20% of the net gain earned by each
investor over a 3 year period in excess of a cumulative hurdle rate which may be subject to a high water mark.
Payment relating to performance-based fees applicable to share classes, that are not private asset securities or
liquidating, in these funds is in arrears at the end of the 3 year period or upon redemption. Regarding assets held in
private asset share classes or when in issue, liquidating share classes, performance related payment is made only on
the disposition of relevant underlying assets. Out-performance paid related to the sale of assets held in private asset
share classes is subject to clawback.
The Kingsway Capital Funds that follow the Private Consumer Internet Strategy generally allocate to the relevant
Carry Vehicle or paid a performance-based allocation or fee of 20% to 25% of the proceeds realised upon the
disposition of relevant underlying assets; subject to the return of capital contributions and a preferred return to
investors followed by catch-up allocations to Kingsway Capital. In certain cases, clients pay Kingsway Capital a
portion of its performance-based allocation or fee prior to the disposition of relevant underlying assets and may be
subject to adjustment upon liquidation of the fund.
Certain investors in Kingsway Capital Funds that are connected to Kingsway Capital or investment made by a
Kingsway Capital Fund in another Kingsway Capital Fund may be eligible to invest in classes of shares or interests
that bear reduced investment management fees and/or reduced performance-based charges.
Advisory fees are charged to advisory clients as negotiated and agreed between the parties.
B. Payment of Fees
Investment management fees and performance-based charges are deducted directly from the assets of the relevant
Kingsway Capital Fund, or separately managed account clients, by the relevant administrator and are not deducted
by Kingsway Capital. Where payable, investment management fees are generally paid monthly, quarterly or semi-
annually in arrears. The performance-based fee is payable annually or upon withdrawal of capital from any
Kingsway Capital Fund in accordance with the PPM.
Discretionary investment management fees paid by separately, managed account clients, are typically invoiced to
the client quarterly in arrears or as agreed with the client.
Advisory fees paid by investment advisory clients are typically invoiced to the advisory client quarterly in arrears
or as agreed with the client.
C. Other Fees and Expenses
In addition to paying investment management fees, clients of Kingsway Capital are typically responsible for all
costs and expenses incurred in connection with the investment activity in their discretionary accounts, including
custodial charges; brokerage commissions; interest expenses; taxes, duties and other governmental charges; transfer
and registration fees or similar expenses; costs associated with foreign exchange transactions; other portfolio
expenses; and costs, expenses and fees associated with products or services that may be necessary or incidental to
such investments or accounts.
Client assets may be also invested in money market mutual funds (“External Funds”). In these cases, the client will
bear its pro rata share of the investment management fee and other fees and expenses of the External Fund, which
are in addition to the investment management fee paid to Kingsway Capital.
Certain Kingsway Capital Funds may invest in other Kingsway Capital Funds in “overflow” or “co-investment”
opportunities. As noted above, no additional management fees are payable for these types of investments.
Kingsway Capital Funds
In addition to the expenses described above, each of the Kingsway Capital Funds also pay legal fees, research fees
and expenses, fees charged by accountants, attorneys, auditors and administrators for their professional services and
other expenses related to the relevant Kingsway Capital Fund as described in greater detail in the Kingsway Capital
Fund’s PPM. In particular, an investor may bear some or all of the following costs and expenses:
- investment expenses (e.g., expenses that are related to the investment activity of the Kingsway Capital
Fund's assets, whether or not such investments are consummated, such as expenses relating to clearing and
settlement charges, custodial fees, bank service fees and interest expenses);
- professional fees (including expenses of consultants, operating partners, investment bankers, attorneys,
accountants and other experts) relating to investments and research expenses;
- organisational expenses;
- costs and expenses of maintaining the Kingsway Capital Fund including the operations of the Kingsway
Capital Fund paid by it or on its behalf, determined on a cash basis, including, without limitation, legal,
regulatory, auditing, consulting, custody, administration and accounting fees and expenses;
- expenses associated with the Fund's information, communication and reporting costs, including investor
annual meeting expenses (excluding expenses of individual investors);
- expenses of any third-party advisory committees of the Kingsway Capital Fund such as expenses of an
Advisory Board, if any;
- the costs of preparation of the Kingsway Capital Fund’s financial statements;
- fees of the directors/managing members of the Kingsway Capital Fund or its General Partner, as applicable;
- insurance, interest and other expenses incurred in respect of borrowings of the Kingsway Capital Fund;
- the costs and expenses of any litigation involving the Kingsway Capital Fund and the amount of any
judgments or settlements paid in connection therewith; and any entity level taxes, fees or other
governmental charges levied against the Kingsway Capital Fund.
The Kingsway Capital Funds will reimburse Kingsway Capital for any expenses paid by Kingsway Capital that are
expenses to be properly borne by the Kingsway Capital Funds.
The allocation of expenses between Kingsway Capital Funds and, as relevant, Kingsway Capital, such as research
costs, are allocated based on clients’ agreement with Kingsway Capital and research budget disclosure, restricted
to the relevant Kingsway Capital Fund benefitting from the service and typically based on pro-rata assets under
management at the beginning of each quarter. Subject to the approval of the Chief Compliance Officer, Kingsway
Capital may deviate from its standard allocation method if it determines that an expense disproportionately benefits
a particular client.
Item 12 below describes the factors that Kingsway Capital considers in selecting or recommending broker-dealers
and determining the reasonableness of their compensation.
Expenses will be charged as agreed in the applicable Advisory Agreement and may include research, legal fees and
other disbursements as agreed between the parties.
D. Prepayment of Fees.
There is no prepayment of fees on Kingsway Capital Funds. Prepayments of fees on investment advisory accounts
may be made as agreed with the client. Please see responses to Item 5: A. Advisory Fees above.
E. Additional Compensation and Conflicts of Interest.
Kingsway Capital, its related persons, any of their employees or officers (including any supervised person) do not
receive any form of compensation as broker or agent for the sale of securities or other investment products by any