As "software eats the world" and more of the supply chain becomes digitised, integrated platforms that manage enterprise procurement from sourcing through to settlement become more compelling. Basware’s best-of-breed, open ecosystem approach serves customers in 175 countries. It has the largest e-invoicing network in the world: over 2 million organisations connected together in a network that manages EUR 1 trillion in spend.
Bregal Milestone invested in Basware in 2019, during a phase where the company was undergoing its 'cloud transition' as part of an API-first ecosystem as they prepared for global expansion.
With Bregal Milestone's support, Basware were able to accelerate the successful execution of their global strategy. In 2020, the company sailed past €110m in ARR, representing 74% of total revenue. The company also significantly improved profitability, generating positive EBITDA for the first time since 2016. The improved financial performance has seen the share price increase by over 150% from its low during the transition.
With a market capitalisation of over €550m, Basware is now focused on sustainable, profitable growth. We are proud to have partnered with Basware during its successful cloud transition, which has put the company firmly on a path to become an independent global SaaS market leader.
Introduction
The Financial Conduct Authority (“FCA” or “regulator”) in the Prudential sourcebook for MiFID Investment Firms in the FCA Handbook (“MIFIDPRU”) sets out the detailed prudential requirements that apply to Bregal Milestone LLP, (the “Firm”). Chapter 8 of MIFIDPRU (“MIFIDPRU 8”) sets out public disclosure rules and guidance with which the Firm must comply, further to those prudential requirements.
The Firm is classified under MIFIDPRU as a small and non-interconnected MIFIDPRU investment firm (“SNI MIFIDPRU Investment Firm”). As such, the Firm is required by MIFIDPRU 8 to disclose information regarding its remuneration policy and practices.
The purpose of these disclosures is to give stakeholders and market participants an insight into the Firm’s culture and to assist stakeholders in making more informed decisions about their relationship with the Firm.
This document has been prepared by the Firm in accordance with the requirements of MIFIDPRU 8 and is verified by the senior management of the Firm. Unless otherwise stated, all figures are as at the Firm’s 31 December financial year-end.
Remuneration Policy and Practices
Overview
As an SNI MIFIDPRU Investment Firm, the Firm is subject to the basic requirements of the MIFIDPRU Remuneration Code (as laid down in Chapter 19G of the Senior management arrangements, Systems and Controls sourcebook in the FCA Handbook (“SYSC”)). The purpose of the remuneration requirements is to:
The objective of the Firm’s remuneration policies and practices is to establish, implement and maintain a culture that is consistent with, and promotes, sound and effective risk management and does not encourage risk-taking which is inconsistent with the risk profile of the Firm and the services that it provides to its clients.
In addition, the Firm recognises that remuneration is a key component in how the Firm attracts, motivates, and retains quality staff and sustains consistently high levels of performance, productivity, and results. As such, the Firm’s remuneration philosophy is also grounded in the belief that its people are the most important asset and provide its greatest competitive advantage.
The Firm is committed to excellence, teamwork, ethical behaviour, and the pursuit of exceptional outcomes for its clients. From a remuneration perspective, this means that performance is determined through the assessment of various factors that relate to these values, and by making considered and informed decisions that reward effort, attitude, and results.
Characteristics of the Firm’s Remuneration Policy and Practices
Remuneration at the Firm is made up of fixed and variable components. The fixed component is set in line with market competitiveness at a level to attract and retain skilled staff. Variable remuneration is paid on a discretionary basis and takes into consideration the Firm’s financial performance as well as the financial performance of each business unit, and the financial and non-financial performance of the individual in contributing to the Firm’s success. All staff members are eligible to receive variable remuneration.
The fixed and variable components of remuneration are appropriately balanced: the fixed component represents a sufficiently high proportion of the total remuneration to enable the operation of a fully flexible policy on variable remuneration. This allows for the possibility of paying no variable remuneration component, which the Firm would do in certain situations, such as where the Firm’s profitability performance is constrained, or where there is a risk that the Firm may not be able to meet its capital or liquidity regulatory requirements.
Governance and Oversight
The senior management of the Firm are responsible for setting and overseeing the implementation of the Firm’s remuneration policy and practices. In order to fulfil its responsibilities, the Firm’s senior management:
The Firm’s remuneration policy and practices are reviewed annually by the Firm’s senior management.
Quantitative Remuneration Disclosure
For the financial year 1 January to 31 December 2022, the total amount of remuneration awarded to all staff was £7,068,755, of which £4,667,413 comprised the fixed component of remuneration, and £2,401,342 comprised the variable component. For these purposes, ‘staff’ is defined broadly, and includes, for example, employees of the Firm itself, partners or members, employees of other entities in the Bregal Group, and secondees.
