Coppin Collings Funds plc. Coppin Collings Global Emerging Markets Fund

Transcription

1 Coppin Collings Funds plc (the Company ) An open-ended investment company with variable capital incorporated in Ireland with registered number established as an umbrella fund with segregated liability between sub-funds. Coppin Collings Global Emerging Markets Fund (the Fund ) SUPPLEMENT TO PROSPECTUS 3 October 2016 CFRG\

2 Coppin Collings Global Emerging Markets Fund is a Fund of Coppin Collings Funds plc, an investment company with variable capital established pursuant to the Regulations as an umbrella fund with segregated liability between Funds, in which different Funds may be created from time to time, with the prior approval of the Central Bank. Thirteen classes of Shares in the Fund are offered through this Supplement, the Euro I Accumulation Shares, the Euro I Distribution Shares, the Sterling I Accumulation Shares, the Sterling I Distribution Shares, the US Dollar I Accumulation Shares, the US Dollar I Distribution Shares, the Euro A Accumulation Shares, the Euro A Distribution Shares, the Sterling A Accumulation Shares, the Sterling A Distribution Shares, the US Dollar A Accumulation Shares, the US Dollar A Distribution Shares and the US Dollar S Accumulation Shares. Application has been made to the Irish Stock Exchange for all of the Shares issued and to be issued in the Fund to be admitted to listing on the Official List and trading on the Main Securities Market of the Irish Stock Exchange. No application has been made for the Shares to be listed on any other stock exchange. Neither the admission of the Shares to listing on the Official List and trading on the Main Securities Market of the Irish Stock Exchange nor the approval of the Prospectus pursuant to the listing requirements of the Irish Stock Exchange shall constitute a warranty or representation by the Irish Stock Exchange as to the competence of service providers to or any other party connected with the Company, the adequacy of information contained in the Prospectus or the suitability of the Company for investment purposes. A description of Coppin Collings Funds plc, its management and administration, taxation and risk factors is contained in the Prospectus. This Supplement relates to Coppin Collings Global Emerging Markets Fund and forms part of the Prospectus. This Supplement must be read in the context of and together with the Prospectus. In particular, investors should read the risk factors set out in the Prospectus. The Prospectus together with this Supplement constitutes listing particulars ( Listing Particulars ) for the purpose of admission of the Shares of the Company to listing on the Official List and trading on the Main Securities Market of the Irish Stock Exchange. The information contained in this Supplement should be read in the context of, and together with, the information contained in the Prospectus, and distribution of this Supplement is not authorised unless accompanied by or supplied in conjunction with a copy of the Prospectus. The other current Fund of the Company is Coppin Collings Hempshill Hall Global Income Fund. Shareholders should note that all/ part of fees and expenses (including the investment management fees) and other fees payable by the Fund will be charged to the capital of the Fund. This will have the effect of lowering the capital value of a Shareholder s investment. Thus, on redemptions of holdings Shareholders may not receive back the full amount invested due to capital reduction. Due to the higher than average degree of risk attached to investment in the Fund because of its ability to invest in Emerging Markets securities, an investment in the Fund should not constitute a substantial proportion of an investment portfolio and may not be appropriate for all investors. The Directors may in their discretion charge a redemption fee of up to 3% of the redemption price in respect of a redemption of Shares by a Shareholder at any time where it is in the interests of the Fund to do so. The Directors of the Company, whose names appear on page IV of the Prospectus, accept responsibility for the information contained in this Supplement. To the best of the knowledge and belief of the Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this Supplement is in accordance with the facts and does not omit anything likely to affect the import of such information. The Fund may also invest substantially in Cash Deposits and Money Market Instruments. Investors should note the difference between the nature of a direct investment in a Cash Deposit 1

3 or Money Market Instrument and the nature of an investment in the Fund and, in particular, the risk that the principal invested in the Fund is capable of fluctuation. Unless otherwise stated, all capitalised terms shall have the same meaning herein as in the Prospectus. CFRG\

4 Contents SECTION I: GENERAL Definitions 5 The Fund 9 Investment Objective 9 Investment Policy 9 Investment and Borrowing Restrictions 11 Investment Manager 11 Investment Management Agreement 11 Dividend Policy 11 Risk Factors 11 Taxation 13 Subscriptions 13 Redemptions 13 Establishment Expenses 14 Administration Fee 15 Depositary Fee 15 Performance Fee 15 Dilution Levy 15 Miscellaneous 16 SECTION II: EURO I SHARES Definitions 17 Offer 17 Investment Management Fee 17 SECTION III: STERLING I SHARES Definitions 18 Offer 18 Investment Management Fee 18 SECTION IV: US DOLLAR I SHARES Definitions 19 Offer 19 Investment Management Fee 19 SECTION V: EURO A SHARES Definitions 20 Offer 20 Investment Management Fee 20 SECTION VI: STERLING A SHARES Definitions 21 Offer 21 Investment Management Fee 21 SECTION VII: US DOLLAR A SHARES Definitions 22 Offer 22 Investment Management Fee 22 SECTION VIII: US DOLLAR S SHARES Definitions 23 3

5 Contents Offer 23 Investment Management Fee 23 Performance Fee 23 4

6 Section I: General DEFINITIONS The following definitions apply throughout this Supplement unless the context requires otherwise: Accumulation Share Classes Business Day Central Bank Central Bank UCITS Regulations Dealing Day Developed Markets means the Euro I Shares, the US Dollar I Shares, the Sterling I Shares, the Euro A Shares, the Sterling A Shares, the US Dollar A Shares and the US Dollar S Shares in respect of which it is proposed not to pay dividends and which are identifiable by the use of the word Accumulation in their title; means, unless determined by the Directors, a day excluding Saturday or Sunday on which commercial banks are normally open for business in Dublin and London; means the Central Bank of Ireland or any successor regulatory authority thereto; means the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Undertakings for Collective Investment in Transferable Securities) Regulations 2015, as may be amended, supplemented or modified from time to time and any other regulations, rules conditions, notices, requirements or guidance of the Central Bank issued from time to time applicable to the Company pursuant to the UCITS Regulations and the Delegated Regulations or either of them as the case may be; means any Business Day or such other days as may be specified by the Directors provided there shall be one Dealing Day per fortnight and all Shareholders will be notified in advance. Notwithstanding the foregoing, it will not be a Dealing Day for the Fund where either as a result of public holidays or market/stock exchange closures in any jurisdiction, it makes it difficult (i) to administer the Fund or (ii) value a portion of the Fund s assets, provided that the Fund shall give reasonable notice of five Business Days of such change to the Shareholders in the Fund and to the Central Bank in such manner as shall be approved by the Depositary. means Australia, Austria, Belgium, Canada, Cyprus, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Japan, Italy, Luxembourg, Malta, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, UK and USA; Distribution Share Classes means the Euro I Shares, the US Dollar I Shares, the Sterling I Shares, the Euro A Shares, the Sterling A Shares and the US Dollar A Shares in respect of which it is proposed to 5

7 Section I: General pay dividends and which are identifiable by the use of the word Distribution in their title; Emerging Markets Euro A Shares Euro I Shares means Argentina, Brazil, Bulgaria, China, Chile, Colombia, Croatia, Czech Republic, Egypt, Hungary, India, Indonesia, Jordan, Korea, Malaysia, Mexico, Morocco, Pakistan, Peru, the Philippines, Poland, Romania, Russia, South Africa, Sri Lanka, Taiwan, Thailand, Turkey, Venezuela and Vietnam; means the Euro A Accumulation Shares and the Euro A Distribution Shares in the Fund, which are denominated in Euro and which are intended for purchase by investors who can invest 2,500 in the Fund (or such other amount as the Directors may in their absolute discretion determine); means the Euro I Accumulation Shares and the Euro I Distribution Shares in the Fund, which are denominated in Euro and which are intended for purchase primarily by institutions or individuals who can invest 3,000,000 in the Fund (or such other amount as the Directors may in their absolute discretion determine); Fund means Coppin Collings Global Emerging Markets Fund comprising thirteen classes of Shares, the Euro I Accumulation Shares, the Euro I Distribution Shares, the US Dollar I Accumulation Shares, the US Dollar I Distribution Shares, the Sterling I Accumulation Shares, the Sterling I Distribution Shares, the Euro A Accumulation Shares the Euro A Distribution Shares, the Sterling A Accumulation Shares, the Sterling A Distribution Shares, the US Dollar A Accumulation Shares, the US Dollar A Distribution Shares and the US Dollar S Accumulation Shares; Index Investment Management Agreement means the MSCI Emerging Markets (Total Return) Index, which is a free float-adjusted market capitalisation index that is designed to measure equity market performance of emerging markets. As of 3 October 2016 the MSCI Emerging Markets Index consisted of the following 23 emerging market country indices: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Peru, Philippines, Poland, Russia, Qatar, South Africa, Taiwan, Thailand, Turkey and United Arab Emirates means the investment management agreement dated 3 October 2016 between the Company and the Investment Manager; 6

8 Section I: General Investment Manager MSCI means Coppin Collings Limited of Octagon Point, London, EC2V 6AA United Kingdom or such other person or persons from time to time appointed by the Company as Investment Manager in accordance with the Central Bank UCITS Regulations; means Morgan Stanley Capital International Inc.; Prospectus means the prospectus of the Company dated 3 October 2016 and all relevant supplements and revisions thereto; Recognised Markets Redemption Date Shares Sterling A Shares Sterling I Shares Subscription Date Supplement US Dollar A Shares means any regulated stock exchange or market which is provided for in the Constitution, details of which are set out in Appendix II of the Prospectus; means every Business Day; means the Euro I Accumulation Shares, the Euro I Distribution Shares, the US Dollar I Accumulation Shares, the US Dollar I Distribution Shares, the Sterling I Accumulation Shares, the Sterling I Distribution Shares, the Euro A Accumulation Shares, the Euro A Distribution Shares, the Sterling A Accumulation Shares, the Sterling A Distribution Shares, the US Dollar A Accumulation Shares, the US Dollar A Distribution Shares and the US Dollar S Accumulation Shares; means the Sterling A Accumulation Shares and the Sterling A Distribution Shares in the Fund, which are denominated in Sterling and which are intended for purchase by investors who can invest 2,500 in the Fund (or such other amount as the Directors may in their absolute discretion determine); means the Sterling I Accumulation Shares and the Sterling I Distribution Shares in the Fund, which are denominated in Sterling and which are intended for purchase primarily by institutions or individuals who can invest 3,000,000 in the Fund (or such other amount as the Directors may in their absolute discretion determine); means every Business Day; means this supplement; means the US Dollar A Accumulation Shares and the US Dollar A Distribution Shares in the Fund, which are denominated in US Dollar and which are intended for purchase primarily by institutions or individuals who can invest US$2,500 in the Fund (or such other amount as 7

9 Section I: General the Directors may in their absolute discretion determine); US Dollar I Shares US Dollar S Shares Valuation Date Valuation Point means the US Dollar I Accumulation Shares and the US Dollar I Distribution Shares in the Fund, which are denominated in US Dollar and which are intended for purchase primarily by institutions or individuals who can invest US$3,000,000 in the Fund (or such other amount as the Directors may in their absolute discretion determine); means the US Dollar S Accumulation Shares in the Fund, which are denominated in US Dollar and which are intended for purchase primarily by institutions or individuals who can invest US$20,000,000 in the Fund (or such other amount as the Directors may in their absolute discretion determine); means every Business Day. For the avoidance of doubt, there will be a Valuation Date in respect of each Dealing Day; and means 10:40 pm (Dublin time) on each Valuation Date at which the Net Asset Value of a Fund is calculated using the closing market prices in the relevant market available as at the Valuation Date. For the avoidance of doubt, the Valuation Point for a particular Dealing Day shall not be before the dealing deadline relevant to such Dealing Day. 8

10 Section I: General The Fund This Supplement is issued in connection with the offer of the Coppin Collings Global Emerging Markets Fund which has thirteen classes of Shares, namely the Euro I Accumulation Shares, the Euro I Distribution Shares, the Sterling I Accumulation Shares, the Sterling I Distribution Shares, the US Dollar I Accumulation Shares, the US Dollar I Distribution Shares, the Euro A Accumulation Shares, the Euro A Distribution Shares, the Sterling A Accumulation Shares, the Sterling A Distribution Shares, the US Dollar A Accumulation Shares, the US Dollar A Distribution Shares and the US Dollar S Accumulation Shares. The Directors of the Company may create new classes of Shares in the Fund from time to time, provided that the creation of any such new class of Shares is notified, and cleared in advance with the Central Bank. A separate pool of assets will not be maintained for each class of Shares. The Fund is denominated in Euro. Profile of a Typical Investor A typical investor in the Fund may be an investor with a medium to long-term investment horizon who considers an investment in the Fund as a convenient way to achieve growth of capital through an exposure to Emerging Market companies and who is prepared to accept a moderate to high level of volatility. Investment Objective The investment objective of the Fund is to achieve long-term capital growth. Investment Policy The investment policy of the Fund is to invest predominantly in a concentrated portfolio of approximately stocks of companies incorporated in Emerging Markets, and whose stocks and bonds are listed or traded on a Recognised Market. The Fund will be actively managed with its investments spread across Emerging Markets with a focus on companies with the prospect of yielding the highest capital gains. The Fund is not constrained by any index weightings and does not concentrate on any particular country, region, sector or industry but invests from a broad range of stocks of companies in Emerging Markets although there is no limit to the proportion of assets that may be invested in any one country. The Investment Manager will aim to achieve long term capital growth (and mitigate the risks to the Fund) through a fundamental analysis of Emerging Markets and by gaining an understanding of the underlying businesses and the macro environment in which they operate. The investment decisions of the Investment Manager will be influenced by the due diligence conducted in respect of underlying companies and markets. Investments should not be determined by a fixed notion of either growth or value. Growth at a reasonable price is regarded as the most optimal solution. The Investment Manger will also seek to exploit any short-term market inefficiencies by constantly stress-testing its investment convictions and the fundamentals of stocks and markets. For the avoidance of doubt, investment in an Emerging Market may also include an investment in Russia. Although investment in Russian equities is not the principal focus of the Fund, the Fund may hold more Russian equities than equities from any other single Emerging Market if the Investment Manager identifies more investment opportunities in Russia than in other Emerging Markets. Nevertheless, investment in Russia will not constitute a major sector of the Fund s investments. All investments in Russian equities will be achieved by investment in ADR s or GDR s or by investing in equities listed or traded on level 1 or level 2 of the RTS stock exchange and/or MICEX. The Fund may invest in companies whose revenue derives substantially from Emerging Markets or whose assets are substantially in Emerging Markets. These companies will be listed or traded on Recognised Markets. Subject to the Investment Restrictions set out in Appendix I to the Prospectus, the Fund may also invest up to 10% of the Net Asset Value of the Fund in Collective Investment Schemes (including exchange 9

11 Section I: General traded funds registered under the US Investment Companies Act, 1940 as amended (the 1940 Act )) providing exposure to Emerging Market equities and in equities of (or interests in) other Collective Investment Schemes, the investment objective of which is to invest in Emerging Markets. In order to aid diversification, the Investment Manager may invest in fixed and floating rate corporate bonds (both Investment Grade and non-investment Grade) issued by companies (within any sector) incorporated in Emerging Markets and in each case traded on a Recognised Market, whose revenue derives substantially from Emerging Markets or whose assets are substantially in Emerging Markets and government bonds (both investment grade and non-investment grade) issued by governments of Emerging Market countries. Not more than 30% of the net asset value of the Fund will be invested in non-investment Grade bonds. As a general aid to liquidity and to assist in achieving the investment objective of the Fund, the Fund also has the ability to invest extensively in assets such as American Depositary Receipts ( ADR s ) and Global Depositary Receipts ( GDR s ) listed or traded on a Recognised Market and providing exposure to stocks of companies incorporated in Emerging Markets. The Fund may also invest in unapproved securities (as described in 2(a) of Appendix I of the Prospectus as Transferable Securities and Money Market Instruments other than those referred to in paragraph 1 ) such as MSCI Opals (single securities listed on the Luxembourg Stock Exchange that are engineered to track the performance of specific Emerging Market equity indices). The Fund s exposure to unapproved securities will be limited to no more than 10% of its net asset value. To aid liquidity, the Fund may also invest a lesser part of its portfolio in securities of companies incorporated in Developed Markets and whose securities are listed or traded on a Recognised Market. It is anticipated that the Fund s investment in Developed Markets will not constitute a substantial part of the Fund s portfolio. In order to obtain access to a wider range of stocks of companies, the Fund has the ability to invest in assets such as Participation Notes (equity linked securities issued by major financial institutions) listed or traded on the Luxembourg Stock Exchange. Participation Notes will be securitised, freely transferable and the Fund will not be leveraged as a result of investing in them. These instruments may be listed or traded on a Recognised Market but, if not, they will be classed as unapproved securities. The Fund s exposure to unapproved securities will be limited to no more than 10% of its Net Asset Value. Although the Investment Manager will pursue the investment policy of the Fund as set out above, in the event that the Investment Manager is unable to identify suitable investments, it may also invest, on a temporary basis, up to 100% of its net assets in Cash Deposits and Money Market Instruments issued in the UK with a minimum rating of AAA (such as commercial paper, floating rate notes and / or Cash Deposits denominated in such currency or currencies as the Investment Manager may determine and listed or traded on the London Stock Exchange). The Investment Manager may also invest in fixed income securities such as government and corporate bonds, treasury bills, commercial paper, promissory notes (which shall be freely transferable), fixed interest and floating rate and zero coupon notes and certificates of deposit, all of which are listed or traded on Recognised Markets and are of Investment Grade or higher. Equity-Linked Notes The Fund may utilise equity linked notes providing economic exposure to underlying equities when it is considered to be impracticable or not in the best interests of the Fund to invest directly in those equities. In particular the Investment Manager expects the Fund s investments to include Participation Notes in order to gain economic exposure to equities consistent with the investment policy of the Fund. Participation Notes are equitylinked notes issued by a third party broker, typically with a three-year duration and denominated in US Dollars, providing long-only exposure to underlying equities (which may be listed or unlisted) and being cleared through Euroclear and marked to market on a daily basis. Any dividends or capital gains collected from the underlying equities are paid to the holders of the Participation Notes. The Fund will not be leveraged through the use of Participation Notes. The Participation Note is an unleveraged "Delta 1" note, whereby the Participation Note simply gives a 1 to 1 exposure to the underlying stock. 10

12 Section I: General Stock Lending Subject to the conditions and limits set out in the Central Bank UCITS Regulations, the Fund also has the ability to use stock lending for efficient portfolio management purposes. Stock lending is the temporary transfer of securities by a lender to a borrower, with agreement by the borrower to return equivalent securities to the lender at pre-agreed time. These agreements will generally be used to increase and enhance overall returns to the Fund through the Fund receiving a fee in consideration of lending such securities. Investment and Borrowing Restrictions The Fund is subject to the investment and borrowing restrictions as set out in Appendix I of the Prospectus and as provided for in the Central Bank UCITS Regulations. Dividend Policy Accumulation Shares The Directors do not anticipate paying a dividend in respect of the Shares of the Accumulation Share Classes. All income and profits earned by the Fund attributable to the Accumulation Share Classes will accrue to the benefit of those classes of Shares and will be reflected in the Net Asset Value attributable to the relevant classes of Shares. Distribution Shares Owing to the fact that the expenses of the Fund are in the first instance payable out of income, it is not anticipated that the net income of the Fund or any dividends will be significant. The Directors may elect to charge expenses out of the capital of the Fund, should they wish to generate distributable profits. The rationale for charging to capital is to maximise the amount distributable to investors. Investors should note that by charging the investment management fees and expenses of the Fund to capital, the effect of this is that capital may be eroded and income will be achieved by foregoing the potential for future capital growth. The net amount of all realised and unrealised gains (less unrealised and realised losses) arising on the disposal of investments shall not be distributed but shall form part of the assets of the Fund. If sufficient net income after expenses is available in the Fund, the Directors intend to make a single distribution to Shareholders in the Distribution Share Classes of substantially the whole of the net income of the Fund attributable to such Distribution Share Classes. The Directors applied to HM Revenue and Customs ( HMRC ) for each Distribution Share Class to be recognised as a UK reporting fund for the purposes of the UK the Offshore Funds (Tax) Regulations 2009 (the Regulations ). Each relevant Distribution Share Class remains a reporting fund provided it complies with the ongoing requirements of the regime, including reporting 100 per cent of reportable income on an annual basis to investors. A class of Shares will only leave the reporting fund regime if either the Directors notify HMRC prospectively that that class of Shares is withdrawing from the reporting fund regime, or through serious or persistent breaches of the Regulations. Unless a Shareholder in the Distribution Share Classes elects otherwise, any distributions will be applied in the purchase of further Shares of the relevant Distribution Share Classes (or fractions thereof) as applicable. Shareholders may write to the Administrator to elect to receive distributions in cash. Any such cash payments to Shareholders in the Distribution Share Classes will be payable to the account specified by Shareholders on the application form. Accordingly, since it is the intention to reinvest distributions by way of acquisition of further Shares, it is unlikely that any investment management fees or expenses charged to capital will have the effect of eroding a Shareholder s investment. Risk Factors Investors attention is drawn to the risk factors set out in the Prospectus and to the following additional risk factors. 11

13 Section I: General Many of the Fund s investments will be denominated in currencies other than the currency of the Share class purchased by the investor and, therefore, the Net Asset Value of the Fund may be affected by currency movements. Shareholders should note that the investment management fees and expenses incurred by the Fund will as far as possible be deducted from the income of the Fund. If there is insufficient income, the balance will be charged to the capital of the Fund. This may have the effect of lowering the capital value of the Shareholder s investment. Shareholders should note that where the Fund invests in Emerging Markets these investments may carry risks with failed or delayed settlement and with registration and custody of securities. Companies in Emerging Markets may not be subject to accounting, auditing and financial reporting standards or be subject to the same level of government supervision and regulation as in more developed markets. Government involvement in the economy may affect the value of investments in certain Emerging Markets and the risk of political instability may be high. The reliability of trading and settlement systems in some Emerging Markets may not be equal to that available in more developed markets which may result in problems in realising investments. Lack of liquidity and efficiency in certain stock markets or foreign exchange markets in certain Emerging Markets may mean that from time to time the Investment Manager may experience difficulty in purchasing or selling holdings of securities. It is possible that the volatility of the Net Asset Value of the Fund will be high as a result of investing in Emerging Markets. There are also other risks associated with investment in Emerging Markets, particularly in Russia. Such risks include a potentially low level of investor protection; poor or opaque corporate governance; legislative risk (that laws may be changed with retrospective and/or immediate effect); and political risk (that the interpretation or method of enforcement of laws may be changed with a consequent and adverse effect on the Fund). The Fund may invest in Participation Notes, providing economic exposure to underlying shares or securities, when it is considered to be in the best interests of the Fund or impracticable to invest directly in those shares or securities. The Company will be exposed to risk of loss in the event of default or insolvency of any issuer of the Participation Notes. A performance fee will be paid to the Investment Manager (in respect of certain Share Classes) on the basis of the performance of the Fund. Further, the performance fee is based on net realised and net unrealised gains and losses as at the end of each performance period and, as a result, performance fees may be paid on unrealised gains which may subsequently never be realised. This may create an incentive for the Investment Manager to cause the Fund to make investments that are riskier or more speculative than would be the case if there was no performance fee in place. The philosophy of the Investment Manager, however, is to maximise the wealth of Shareholders at all times. Performance fee equalisation ensures that any performance fee is charged only to those Shares which have appreciated in value, that all Shareholders of the same class have the same amount per Share at risk and that all Shares within the same class have the same Net Asset Value per Share. The lack of performance fee equalisation in the Fund may mean that, in certain circumstances, some Shareholders may pay a higher or lower performance fee than they should, based on the performance of their Shares. Fixed income securities are subject to the risk of an issuer's ability to meet principal and interest payments on the obligation (credit risk), and may also be subject to price volatility due to such factors as interest rate sensitivity, market perception of the creditworthiness of the issuer and general market liquidity (market risk). The fixed income securities in which the Fund may invest are interest rate sensitive. An increase in interest rates will generally reduce the value of fixedincome securities, while a decline in interest rates will generally increase the value of fixedincome securities. The performance of the Fund will therefore depend in part on the ability to anticipate and respond to such fluctuations on market interest rates, and to utilise appropriate strategies to maximise returns, while attempting to minimise the associated risks to investment capital. 12

14 Section I: General Taxation Any change in the Fund s tax status or in taxation legislation could affect the value of the investments held by the Fund and could affect the return to investors. Potential investors and Shareholders should note that the statements on taxation, which are set out herein are based on advice which has been received by the Directors regarding the law and practice in force in the relevant jurisdiction as at the date of the Prospectus. As is the case with any investment, there can be no guarantee that the tax position or proposed tax position prevailing at the time an investment is made in the Fund will endure indefinitely. The attention of potential investors is drawn to the tax risk associated with investing in the Fund. See section headed Taxation in the Prospectus. Subscriptions Offer The price of Shares during the Initial Offer is set out below. Monies subscribed for each class should be in the denominated currency of the relevant share class. During the Initial Offer investors should complete and sign the Application Form (available from the Administrator or the UK Facilities Agent) and send it by post, delivery or fax (with the original form and supporting documentation in relation to anti-money laundering checks to follow without delay) to the Administrator or the UK Facilities Agent for onward transmission to the Administrator at their respective addresses to be received no later than 11.00am and 10.00am (Dublin time) respectively on the Closing Date. Subscription monies must be received by the Administrator, for the account of the Fund on the Closing Date. If payment in full has not been received by the relevant times stipulated above, the application may be refused and the Shares provisionally allotted will be cancelled. In accordance with the Central Bank UCITS Regulations and in consultation with the Administrator, subscriptions may also be accepted electronically as well as by facsimile and post. Following the relevant Closing Date, Shares will be available for subscription at the Net Asset Value on each Subscription Date. Applicants must subscribe the relevant Minimum Subscription (in the case of an applicant s first subscription into the Fund) or in the case of a Shareholder applying for further Shares, the Minimum Subsequent Subscription as set out herein. The completed Application Form must be received by post, delivery or fax (with the original to follow as soon as is possible) by the Administrator or the UK Facilities Agent for onward transmission to the Administrator at their respective addresses no later than 11.00am and 10.00am (Dublin time) respectively on the relevant Subscription Date. Applications received by the UK Facilities Agent must be sent to the Administrator to be received no later than 11.00am. Subscription monies must be received by the Administrator, for the account of the Fund, by the third Business Day after the relevant Subscription Date. If payment in full has not been received by the relevant times stipulated above, the application may be refused and the Shares provisionally allotted will be cancelled. Applications not received or incorrectly completed applications received by the Administrator or the UK Facilities Agent by 11.00am and 10.00am (Dublin time) respectively on the relevant Subscription Date shall be, subject to the discretion of the Directors, which will be exercised only where the application has been received prior to the Valuation Point, held over and applied on the next following Subscription Date or until such time as a properly completed Application Form is received by the Administrator or the UK Facilities Agent on the date on which it is processed. The Directors may, in exceptional circumstances, accept Application Forms after the dealing deadline (11.00am (Dublin time) on the relevant Subscription Date) provided that they are received before the Valuation Point. The Directors will determine whether the circumstances are exceptional and the rationale for this decision will be documented. Redemptions Shares will be redeemable at the option of the Shareholder on each Redemption Date except in the circumstances described herein and in the Prospectus (see sections headed Deferral of Redemptions and 13

15 Section I: General Suspension of Subscriptions, Transfers, Conversions and Redemptions on pages 25 to 35 of the Prospectus for further details. Following the relevant Closing Date, Shares may be redeemed at the Net Asset Value on each Redemption Date. Requests for redemption may be made by post, delivery, fax or electronically to the Administrator or the UK Facilities Agent for onward transmission to the Administrator so as to be received by no later than 11.00am and 10.00am (Dublin time) respectively on the relevant Redemption Date on which the Shares are to be redeemed. Redemption requests received by the UK Facilities Agent must be sent to the Administrator to be received no later than 11.00am. Shares will be redeemed at the Net Asset Value as calculated on the relevant Redemption Date. In accordance with the Central Bank UCITS Regulations and in consultation with the Administrator, redemptions may also be accepted electronically. Redemption requests not received by this time shall be held over and applied pro rata on the next following Redemption Date. Redemption requests for less than the Minimum Redemption will be refused. A request for a partial redemption of Shares will be refused, or the holding may be redeemed in its entirety, if, as a result of such partial redemption, the aggregate Net Asset Value of the Shares maintained by the Shareholder would be less than the Minimum Holding specified in the relevant section herein. The Directors may, in exceptional circumstances, accept redemption requests after the dealing deadline (11.00am (Dublin time) on the relevant Redemption Date) provided that they are received before the Valuation Point. The Directors will determine whether the circumstances are exceptional and the rationale for this decision will be documented. Settlement for redemptions will normally be made by telegraphic transfer or other form of bank transfer to the bank account of the Shareholder specified in the Application Form (at the Shareholder s risk) three Business Days from receipt by the Administrator of the correct repurchase documentation and in any event within ten business days of the Redemption Date on which the redemption request has been processed. No payments to third parties will be effected. Redemption proceeds will not be remitted until the Administrator has received the original Application form and all documentation required by the Administrator including any documents in connection with anti-money laundering procedures have been received. As set out in the Prospectus, the Directors also reserve the right to the compulsory redemption of all Shares held by Shareholder if the aggregate Net Asset Value of the Shares held by the Shareholder is less than the Minimum Holding specified herein. Prior to any compulsory redemption of Shares, the Administrator will notify the Shareholders in writing and allow such Shareholder thirty days to purchase additional Shares to meet this minimum requirement. The Prospectus further provides that in the event of delay or failure by an investor or applicant to produce any information required in order to verify the identity of an investor and, where applicable, the beneficial owner of an investor, the Administrator or the Company may refuse to accept the application and subscription monies and/or return all subscription monies or compulsorily repurchase such Shareholder's Shares and/or payment of repurchase proceeds may be delayed (no repurchase proceeds will be paid if the Shareholder fails to produce such information). None of the Company, the Directors or the Administrator shall be liable to the subscriber or Shareholder where an application for Shares is not processed or Shares are compulsorily repurchased or payment of repurchase proceeds is delayed in such circumstances. Establishment Expenses The fees and expenses incurred in the connection with the creation of the Fund, the preparation and publication of this Supplement and all legal costs and out-of-pocket expenses did not exceed 234,056. The Fund may, at the absolute discretion of the Directors, be allocated such portion of the formation expenses of the Company as the Directors consider to be fair in the circumstances. Such expenses will be amortised on a straight-line basis over the first 60 months of operations or such shorter period as the Directors may determine. 14

16 Section I: General Administration Fee The Administrator will be entitled to an annual fee payable by the Fund of up to 0.1% of the Net Asset Value and to a minimum monthly fee of 5,500. The Administrator shall also be entitled to charge an annual fee for the preparation of annual and semi-annual financial statements for the Company which will be charged at normal commercial rates. Such fees will be accrued monthly and are payable monthly in arrears. The Administrator will also be entitled to the payment of fees for acting as Registrar and Transfer Agent and transaction charges (which are charged at normal commercial rates), which are based on transactions undertaken by the Fund, the number of subscriptions, redemptions, exchanges and transfer of Shares processed by the Administrator and time spent on company shareholder servicing duties and to the reimbursement of operating expenses. The Administrator shall also be entitled to be repaid for all its out-of-pocket expenses incurred on behalf of the Fund, which shall include reasonable legal fees (agreed by the Directors), courier fees, telecommunications and expenses. The Administrator shall also be entitled to be paid for compliance with its obligations in respect of FATCA and the Common Reporting Standards, as set out in more detail in the Prospectus. Depositary Fee The Depositary shall be entitled to receive an annual depositary fee payable by the Fund of up to 0.025% of the Net Asset Value. In addition, the Depositary shall be entitled to the payment of certain charges (at normal commercial rates) based on transactions undertaken by the Fund and for subdepositary fees. Such fees shall accrue daily and be payable monthly in arrears. The fees and expenses of any sub-depositary appointed by the Depositary shall be paid out of the assets of the relevant Fund and will be at normal commercial rates. The Depositary shall also be entitled to be reimbursed for reasonable out-of-pocket expenses properly incurred by it including telephone and fax charges, stamp duties and registration fees. Further charges and expenses of the Fund are set out in the Fees and Expenses section of the Prospectus on page 42. The charges and expenses apply to the Fund, save as set out herein. Performance Fee No performance fee will be charged in respect of the Fund without approval on the basis of a majority of votes cast at a general meeting of Shareholders. In addition a reasonable notification period shall be given to Shareholders to enable them, if they choose to do so, to redeem their Shares in the Fund prior to the implementation of the performance fee. For the avoidance of doubt, a performance fee may be charged in respect of a newly established Share Class without the need for prior approval of existing Shareholders provided the performance fee operates in respect of the new Share Class only and does not prejudice existing Shareholders. Details of any performance fee applicable to a particular Share Class will be set out in the relevant Share Class-specific disclosures set out below. Dilution Levy Subscriptions During any period of net subscriptions, a charge of up to one per cent. of the Net Asset Value per Share may be added, at the discretion of the Directors, to the purchase price per Share and deducted directly from the subscription proceeds, to cover the dealing costs involved in purchasing investments in the underlying investments of the Fund. The charge is intended to protect existing and continuing Shareholders against the dilution of the value of their investment on account of these charges. Redemptions During any period of net redemptions, the redemption price per Share may be reduced, at the discretion of the Directors, by a charge of up to one per cent. of the Net Asset Value per Share in respect of each Fund to cover the dealing costs involved in redeeming investments in the underlying investments of the Fund. The charge is intended to protect existing and continuing Shareholders against the dilution of the value of their investment on account of these charges. 15

17 Section I: General Miscellaneous As at the date hereof: (i) (ii) (iii) (iv) none of the Directors, their spouses or any connected person has any interest in the share capital of the Company or any options in respect of such capital; none of the Directors or any connected person has any interest, beneficial or non-beneficial, in the share capital of the Company or any options in respect of such capital; the Fund does not have any loan capital (including term loans) outstanding or created but unissued, or any outstanding mortgages, charges, debentures or other borrowings or indebtedness in the nature of borrowings, including bank overdrafts liabilities under acceptance (other than normal trade bills) or acceptance credits, obligations under finance leases, hire purchase commitments, guarantees or other material contingent liabilities; and none of the Director has (i) any unspent convictions in relation to indictable offences; or (ii) been bankrupt or the subject of an involuntary arrangement, or has had a receiver appointed to any of his assets; or (iii) been a director of any company which, while he was a director with an executive function or within 12 months after he ceased to be a director with an executive function, had a receiver appointed or went into compulsory liquidation, creditors voluntary liquidation, administration or company voluntary arrangements, or made any composition or arrangement with its creditors generally or with any class of its creditors; or (iv) been a partner of any partnership, which while he was a partner or within 12 months after he ceased to be a partner, went into compulsory liquidation, administration or partnership voluntary arrangement, or had a receiver appointed to any partnership asset; or (v) had any public criticism by statutory or regulatory authorities (including recognised professional bodies); or (vi) been disqualified by a court from acting as a director or from acting in the management or conduct of affairs of any company. 16

18 Section II: Euro I Accumulation Shares & Euro I Distribution Shares Definitions The following definitions apply throughout this section of the Supplement unless the context requires otherwise: Minimum Holding Minimum Redemption Minimum Subscription Minimum Subsequent Subscription means, in relation to the Euro I Shares, a minimum holding of 3,000,000 or such lesser amount as may be agreed by the Directors; means, in relation to the Euro I Shares, a minimum redemption of 1,000 or such lesser amount as may be agreed by the Directors; means, in relation to the Euro I Shares, a minimum subscription of 3,000,000 or such lesser amount as may be determined by the Directors in their absolute discretion in any particular case; and means, in relation to the Euro I Shares, the Minimum Subsequent Subscription of 1,000 or such lesser amount as may be agreed by the Directors. Offer Shares may be subscribed for in the manner set out in Section I herein. Investors, in the case of an initial subscription into the Fund, must subscribe for at least the Minimum Subscription amount and existing Shareholders will be required to subscribe for at least the Minimum Subsequent Subscription amount. The Directors may, in their absolute discretion, charge a subscription fee, payable to introducing agents and intermediaries (which may include the Investment Manager) of up to 5 per cent. of the gross cash amount subscribed. Where the amount subscribed for Euro I Shares is not equivalent to an exact number of Euro I Shares, fractions of Euro I Shares may be issued rounded to the third decimal place. Redemption requests for amounts less than the Minimum Redemption will be refused. The Euro I Accumulation Shares were admitted to listing on the Official List and trading on the Main Securities Market of the Irish Stock Exchange on 3 May The Euro I Accumulation Shares will not be listed on any other stock exchange. The Directors do not expect that an active secondary market will develop in the Euro I Accumulation Shares. Investment Management Fee Under the provisions of the Investment Management Agreement, the Fund will pay the Investment Manager a fee of 0.75 per cent. per annum of the Net Asset Value of the Euro I Shares as of the relevant Valuation Date. The investment management fee will accrue daily and will be payable monthly in arrears (and pro rata for lesser periods). The Company will pay all out-of-pocket expenses incurred by the Investment Manager (including VAT thereon). Such out-of-pocket expenses may include transaction charges provided that they are charged at normal commercial rates and incurred by the Investment Manager in the performance of its duties under the Investment Management Agreement. 17

19 Section III: Sterling I Accumulation Shares & Sterling I Distribution Shares Definitions The following definitions apply throughout this section of the Supplement unless the context requires otherwise: Minimum Holding Minimum Redemption Minimum Subscription Minimum Subsequent Subscription means, in relation to the Sterling I Shares, a minimum holding of 3,000,000 or such lesser amount as may be agreed by the Directors; means, in relation to the Sterling I Shares, a minimum redemption of 1,000 or such lesser amount as may be agreed by the Directors; means, in relation to the Sterling I Shares, a minimum subscription of 3,000,000 or such lesser amount as may be determined by the Directors in their absolute discretion in any particular case; and means, in relation to the Sterling I Shares, the Minimum Subsequent Subscription of 1,000 or such lesser amount as may be agreed by the Directors. Offer Shares may be subscribed for in the manner set out in Section I herein. Investors, in the case of an initial subscription into the Fund, must subscribe for at least the Minimum Subscription amount and existing Shareholders will be required to subscribe for at least the Minimum Subsequent Subscription amount. The Directors may, in their absolute discretion, charge a subscription fee, payable to introducing agents and intermediaries (which may include the Investment Manager) of up to 5 per cent. of the gross cash amount subscribed. Where the amount subscribed for Sterling I Shares is not equivalent to an exact number of Sterling I Shares, fractions of Sterling I Shares may be issued rounded to the third decimal place. Redemption requests for amounts less than the Minimum Redemption will be refused. The Sterling I Accumulation Shares and the Sterling I Distribution Shares were admitted to listing on the Official List and trading on the Main Securities Market of the Irish Stock Exchange on 3 May The Sterling I Shares will not be listed on any other stock exchange. The Directors do not expect that an active secondary market will develop in the Sterling I Shares. Investment Management Fee Under the provisions of the Investment Management Agreement, the Fund will pay the Investment Manager a fee of 0.75 per cent. per annum of the Net Asset Value of the Sterling I Shares as of the relevant Valuation Date. The investment management fee will accrue daily and will be payable monthly in arrears (and pro rata for lesser periods). The Company will pay all out-of-pocket expenses incurred by the Investment Manager (including VAT thereon). Such out-of-pocket expenses may include transaction charges provided that they are charged at normal commercial rates and incurred by the Investment Manager in the performance of its duties under the Investment Management Agreement. 18