ICBC PRIVATE BANKING GLOBAL INVESTMENT FUND SERIES SICAV-SIF

Transcription

1 VISA 2017/ PC L'apposition du visa ne peut en aucun cas servir d'argument de publicité Luxembourg, le Commission de Surveillance du Secteur Financier ICBC PRIVATE BANKING GLOBAL INVESTMENT FUND SERIES SICAV-SIF Société d'investissement à Capital Variable Fonds d'investissement Spécialisé SICAV-FIS Luxembourg PROSPECTUS March 2017

2 IMPORTANT INFORMATION This Prospectus comprises information relating to ICBC Private Banking Global Investment Fund Series SICAV-SIF (the "Company"), which is registered under the Luxembourg law of 13 February 2007 relating to specialised investment funds, as amended. It should be noted that such registration on the list of specialised investment funds does not imply approval by any Luxembourg authority of the contents of this prospectus (the "Prospectus") or of the portfolio of assets held by the Company. Any representation to the contrary is unauthorised and unlawful. Statements made in the Prospectus are based on the law and practice currently in force in Luxembourg and are subject to changes therein. The most recent annual report of the Company is available, once published, at the registered office of the Company and will be sent to Investors upon request. Such report shall be deemed to form part of the Prospectus. The board of directors (the "Board") of the Company is responsible for the information contained in the Prospectus. To the best of the knowledge and belief of the Board (who has taken all reasonable care to ensure that such is the case) the information contained in the Prospectus is at its date in accordance with the facts and does not omit anything likely to affect the import of such information. The Board accepts responsibility accordingly. In accordance with the applicable Luxembourg legislation and regulation, the Board may amend the Prospectus, at its discretion, to the extent that the amendments brought are not detrimental to the rights of the Shareholders as further detailed under the heading "Procedures for amending the Prospectus" in chapter 11. General Information. No person has been authorised to give any information or to make any representations in connection with the offering of shares of the Company ("Shares") other than those contained in this Prospectus and the report referred to above, and, if given or made, such information or representations must not be relied on as having been authorised by the Company. The delivery of this Prospectus (whether or not accompanied by any report) or the issue of Shares shall not, under any circumstances, create any implication that the affairs of the Company have not changed since the date hereof. The distribution of this Prospectus and the offering of Shares in certain other jurisdictions may be restricted. Persons into whose possession this Prospectus comes are required by the Company to inform themselves about and to observe any such restrictions. This Prospectus does not constitute an offer or solicitation to anyone in any jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation. None of the Shares have been or will be registered under the United States Securities Act of 1933, as amended (the "1933 Act") or registered or qualified under applicable state statutes and none of the Shares may be offered or sold, directly or indirectly, in the United States of 2

3 America or in any of its territories or possessions (the "United States"), or to any US Person regardless of location unless otherwise decided by the Board. The term "US Person", as used herein, means any citizen or resident of the United States (including any corporation, partnership or other entity created or organized in or under the laws of the United States or any political subdivision thereof) or any estate or trust that is subject to United States federal income taxation regardless of the source of its income. Shares may not be held by any person in breach of the law or requirements of any country or governmental authority including, without limitation, exchange control regulations or taxation laws and regulations (including but not limited to the Foreign Account Tax Compliance Act ("FATCA"). Each Investor must represent and warrant to the Company that, amongst other things, he/she/it is able to acquire Shares without violating applicable laws. Power is reserved in the articles of incorporation of the Company (the "Articles"), to compulsorily redeem any Shares held directly or beneficially in contravention of these prohibitions. This Prospectus may be translated into other languages. In the event of any inconsistency or ambiguity in relation to the meaning of any word or phrase in any translation, the English text shall prevail to the extent permitted by the applicable laws or regulations, and all disputes as to the terms thereof shall be governed by, and construed in accordance with, the laws of Luxembourg. Each Investor must be aware that subscription for or acquisition of one or more Shares implies his/her/its complete and automatic adherence (i) to the content of the Prospectus and (ii) to the fact that any amendment conveyed to the Prospectus following an acceptable and validly implemented procedure described under the heading "Procedures for amending the Prospectus" in Section 11. General Information shall bind all Shareholders. Any information which the AIFM or the Company is under a mandatory obligation (i) to make available to Investors before investing in the Company, including any material change thereof and updates of this Prospectus's essential elements, or (ii) to disclose (the case being periodically) to Investors (each such information under (i) or (ii) being hereafter referred to as a "Mandatory Information") shall be validly made available or disclosed to Investors via and/or at any of the legally acceptable information means listed in the Articles (the "Information Means"). In principle, this Prospectus mentions the specific relevant Information Means via and/or at which an Investor may access any Mandatory Information that is not available or disclosed in this Prospectus. If this were not the case, Investors acknowledge that the relevant Information Means is available or disclosed at the registered office of the Company. No Investor will be allowed to invoke or claim the unavailability or non-disclosure of any Mandatory Information if this Mandatory Information was contained in this Prospectus or was available or disclosed 3

4 via and/or at the relevant Information Means available or disclosed at the registered office of the Company. Your attention is drawn to the "Risk Warnings" under chapter 2 "Purpose, Investment Objectives and Policies" of the main part of the Prospectus. Investment in the Company should be regarded as a long-term investment. The Company s investments are subject to market fluctuations and the risks inherent in all investments and there can be no assurances that appreciation will occur. There can be no guarantee that the objective of the Company will be achieved. Potential subscribers and purchasers of Shares in the Company should inform themselves as to (a) the possible tax consequences, (b) the legal requirements and (c) any foreign exchange restrictions or exchange control requirements which they might encounter under the laws of the countries of their citizenship, residence or domicile and which might be relevant to the subscription, purchase, holding and disposal of Shares in the Company. If you are in any doubt about the contents of the Prospectus you should consult your stockbroker, bank manager, solicitor, accountant or other financial adviser. Data Protection The Company may hold, store and process personal data in relation to Investors, which may or may not be recorded in the register of Shareholders, and as such the Company may act as data controller(s). This data may be held on computers and may be processed by or transferred or disclosed to the Investment Manager or other investment managers, the Distributors, the Administrative Agent, the Depositary and other third parties such as auditors and the regulators, or their own agents or delegates, or more generally third parties entities entrusted with certain data processing functions, acting, as the case may be, as data processors. The holding, processing, transferring and disclosing of such data may be carried out for the purposes of performing the services of the Investment Manager or other investment managers, Distributors, Administrative Agent or Depositary as prescribed by law. Such services include, but are not limited to, processing subscriptions and redemptions, maintaining registers of Shareholders and providing financial and other information to Investors. In addition, such data may be processed in order to comply with applicable Luxembourg or foreign legal or regulatory obligations (such as anti-money laundering requirements) or for the purposes of maintaining global client records and providing centralised administrative services and shareholder servicing as well as marketing services. 4

5 The Investors' attention is drawn to the fact that in the context described in the above paragraphs, certain data processing may be performed in countries which may not have data protection requirements deemed equivalent to those prevailing in the European Economic Area. Data will only be used for the purpose for which it was collected, unless the consent of the Investor is obtained for its use for a different purpose. Investors may request access to, rectification or deletion of any data supplied by them subject to applicable laws. Investors may also object free of charge to the processing of their data proposed by the data controller for the purposes of marketing. AIFM Law The Company qualifies as an alternative investment fund (AIF) under the law of 12 July 2013 (the "AIFM Law") implementing the 2011/61/UE Directive on the alternative investment fund managers ("AIFMD"). FundRock Management Company S.A. shall act as the appointed alternative investment fund manager ("AIFM") for the Company. 5

6 TABLE OF CONTENTS GLOSSARY OF TERMS STRUCTURE OF THE COMPANY PURPOSE, INVESTMENT OBJECTIVES AND POLICIES RISK WARNINGS INVESTMENT RESTRICTIONS SHARES HOW TO DEAL OFFERING DETAILS INITIAL OFFER MINIMUM INITIAL SUBSCRIPTION AND HOLDING AMOUNTS SUBSEQUENT SUBSCRIPTIONS MINIMUM SUBSEQUENT SUBSCRIPTION AMOUNT SUBSCRIPTION PRICE PER SHARE SUBSCRIPTION IN KIND PAYMENT OF SUBSCRIPTION PRICE ACCEPTANCE OF SUBSCRIPTIONS SUSPENSION OF SUBSCRIPTIONS RESTRICTIONS ON OWNERSHIP ANTI-MONEY LAUNDERING PROVISIONS REDEMPTION REDEMPTION PROCEDURE MINIMUM HOLDING AMOUNT MINIMUM REDEMPTION AMOUNT REDEMPTION CHARGE REDEMPTION PRICE PER SHARE PAYMENT OF REDEMPTION PROCEEDS COMPULSORY REDEMPTION OF SHARES LARGE REDEMPTIONS LACK OF LIQUIDITY SUSPENSION OF REDEMPTIONS REVOCABILITY OF REDEMPTION REQUESTS CONVERSION POSSIBILITY OF CONVERSION REVOCABILITY OF CONVERSION REQUESTS CONDITIONS CONVERSION VALUE CONVERSION FEE DILUTION TRANSFER OF SHARES MARKET TIMING & LATE TRADING NET ASSET VALUE CALCULATION OF NET ASSET VALUE

7 SUSPENSION OF THE CALCULATION OF THE NET ASSET VALUE MANAGEMENT AND ADMINISTRATION OF THE COMPANY THE BOARD ALTERNATIVE INVESTMENT FUND MANAGER DEPOSITARY ADMINISTRATIVE, REGISTRAR AND TRANSFER, PAYING AND CORPORATE AGENT DOMICILIARY AGENT PRIME BROKERS AUDITORS SHAREHOLDERS RIGHTS AGAINST SERVICE PROVIDERS FEES AND EXPENSES ALTERNATIVE INVESTMENT MANAGER FEE MANAGEMENT/ADVISORY FEE DEPOSITARY AND ADMINISTRATIVE FEES OTHER FEES AND EXPENSES FORMATION AND LAUNCHING EXPENSES OF THE COMPANY AND OF NEW SUB-FUNDS DISTRIBUTION POLICY TAXATION GENERAL INFORMATION REPORTS MEETINGS OF SHAREHOLDERS LIQUIDATION OF THE COMPANY LIQUIDATION OR AMALGAMATION OF SUB-FUNDS DOCUMENTATION APPLICABLE LAW AND JURISDICTION PROCEDURES FOR AMENDING THE PROSPECTUS LIQUIDITY RISK MANAGEMENT FAIR AND PREFERENTIAL TREATMENT CONFLICTS OF INTEREST HISTORICAL PERFORMANCES EXECUTION POLICY VOTING STRATEGIES INDUCEMENTS INVESTMENT IN SECURITISATION POSITIONS SUB-FUND PARTICULARS I ICBC PRIVATE BANKING GLOBAL INVESTMENT FUND SERIES SICAV-SIF ICBC CHINA FOCUS STABLE RETURN FUND SUB-FUND PARTICULARS II ICBC PRIVATE BANKING GLOBAL INVESTMENT FUND SERIES SICAV-SIF ICBC ENHANCED GLOBAL DYNAMIC FUND SUB-FUND PARTICULARS III ICBC PRIVATE BANKING GLOBAL INVESTMENT FUND SERIES SICAV-SIF ASIA (EX JAPAN) SMALL MID-CAP EQUITY FUND

8 SUB-FUND PARTICULARS IV ICBC PRIVATE BANKING GLOBAL INVESTMENT FUND SERIES SICAV-SIF ICBCI ABSOLUTE RETURN FUND SUB-FUND PARTICULARS V ICBC PRIVATE BANKING GLOBAL INVESTMENT FUND SERIES SICAV-SIF ICBC-RT ENHANCED INCOME FUND

9 DIRECTORY Registered Office 80, route d Esch L-1470 Luxembourg Grand Duchy of Luxembourg Board of Directors Joseph Ho (Chairman) Jacques Elvinger Bing Li Henry Kwok Depositary Brown Brothers Harriman (Luxembourg) S.C.A. 80, route d Esch L-1470 Luxembourg Grand Duchy of Luxembourg Administrative, Domiciliary, Registrar and Transfer, Paying and Corporate Agent Brown Brothers Harriman (Luxembourg) S.C.A. 80, route d Esch L-1470 Luxembourg Grand Duchy of Luxembourg AIFM FundRock Management Company S.A. 33, rue de Gasperich L-5826 Hesperange Grand Duchy of Luxembourg Investment Manager (unless otherwise specified hereunder) ICBC (Asia) Investment Management Company Limited ("ICBC AIM") Unit 2501, 25/F, ICBC Tower 3 Garden Road, Central Hong Kong 9

10 Investment Manager of the sub-funds ICBC Private Banking Global Investment Fund Series SICAV-SIF-Asia (ex Japan) Small Mid-Cap Equity Fund and ICBC Private Banking Global Investment Fund Series SICAV-SIF ICBCI Absolute Return Fund ICBC International Asset Management Limited 37/F, ICBC Tower 3 Garden Road, Central Hong Kong Investment Advisor (unless otherwise specified in the Sub-Fund particulars) Industrial and Commercial Bank of China, Private Banking Department 6F, No.24, Zhong Shan East Road (E1) Shanghai People s Republic of China Auditors KPMG Luxembourg Société coopérative 39, avenue John F. Kennedy Luxembourg L-1855 Grand Duchy of Luxembourg Legal Advisers as to Luxembourg law Elvinger Hoss Prussen société anonyme 2, Place Winston Churchill L-1340 Luxembourg Grand Duchy of Luxembourg 10

11 GLOSSARY OF TERMS The following definitions apply throughout this Prospectus unless the context otherwise requires: "Administrative Agent" "AIFM" "AIFM Directive" "AIFM Law" "AIFM Regulation" "AIFM Rules" "Application Form" "Articles" "Auditors" "Base Currency" Brown Brothers Harriman (Luxembourg) S.C.A. FundRock Management Company S.A. The Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on alternative investment fund managers. The Luxembourg Law of 12 July 2013 relating to alternative investment fund managers. The Commission Delegated Regulation (EU) No 231/2013 of 19 December 2012 supplementing Directive 2011/61/EU of the European Parliament and of the Council with regard to exemptions, general operating conditions, depositaries, leverage, transparency and supervision. The corpus of rules formed by the AIFM Directive, the AIFM Regulation and any binding guidelines or other delegated acts and regulations issued from time to time by the EU relevant authorities pursuant to the AIFM Directive and/or the AIFM Regulation, as well as by any national laws and regulations (such as the AIFM Law) which are taken in relation to (or transposing either of) the foregoing. Document signed or to be signed by an Investor who desires to subscribe to Shares and by which this Investor irrevocably applies for Shares. The articles of association of the Company as amended from time to time. KPMG Luxembourg Société coopérative The reference currency of each Sub-Fund. 11

12 "Board" "Business Day" "Class" "Company" "Conversion Day" "CSDCC" "CSRC" "CSSF" "Dealing Day" "Depositary" "Distributor" "Eligible Investor" "EU" "Euro" or "EUR" "FATCA" The board of directors of the Company. A full week day on which banks are normally open for business in Luxembourg, in Hong-Kong Special Administrative Region and in China. Each class of Shares within the Company and where the context so requires each Series. ICBC Private Banking Global Investment Fund Series SICAV- SIF. A Business Day with respect to which the Shares are convertible into Shares of another Class of the same Sub-Fund or another Sub-Fund. The China Securities Depositary and Clearing Corporation Limited. The China Securities Regulatory Commission. The Luxembourg Commission de Surveillance du Secteur Financier (Luxembourg Financial Sector Supervisory Authority). Any Business Day preceding the relevant Subscription Day, Redemption Day or Conversion Day. Brown Brothers Harriman (Luxembourg) S.C.A. Any person or entity duly appointed from time to time to distribute or arrange for the distribution or placement of Shares. An investor who qualifies as a well-informed investor within the meaning of the Law, i.e. an Institutional Investor, a Professional Investor, or an Other Well-Informed Investors. The European Union. The legal currency of the European Monetary Union. Means the Foreign Account Tax Compliance Act. 12

13 "Institutional Investor" "Investment Fund" "Investor" "Law" "Mainland China" "Mainland China Custodian" "Mémorial" "Net Asset Value" "Net Asset Value per Share" "OECD" "Other Well-Informed Investor" An investor who qualifies as an institutional investor according to the Regulations. Any regulated or unregulated undertaking the sole objective of which is the collective investment in securities, financial instruments and other assets. An investor who desires to subscribe or has subscribed to Shares. Shares are exclusively restricted to Investors who qualify as Eligible Investors. The Luxembourg law of 13 February 2007 relating to specialised investment funds, as amended. The mainland China excluding the Special Administrative Regions of Hong Kong and Macau. China Construction Bank, Agricultural Bank of China The Mémorial C, Recueil des Sociétés et Associations. The net asset value of the Company, a Sub-Fund or a Class as determined pursuant to chapter 6. "Net Asset Value". The net asset value per Share of any Class within any Sub-Fund determined in accordance with the relevant provisions described in chapter 6. "Net Asset Value". Organisation for Economic Co-operation and Development. An investor who (i) adheres in writing to the status of wellinformed investor and (ii) (a) invests a minimum of Euro 125,000 in the Company or (b) has been the subject of an assessment made by a credit institution within the meaning of Directive 2006/48/EC or an investment firm within the meaning of Directive 2004/39/EC or a management company within the meaning of Directive 2009/65/EC certifying his/her/its 13

14 expertise, his/her/its experience and his/her/its knowledge in adequately appraising an investment in the Company. The conditions set forth above are not applicable to the members of the Board and other persons who intervene in the management of the Company. "Professional Investor" "Prospectus" "PRC" or "China" "QFII" An investor who qualifies as a professional investor according to the Regulations, including notably an investor who qualifies as a professional investor under annex II of Directive 2004/39/EC, as amended. This document, as it may be amended from time to time. The People s Republic of China, including the Special Administrative Regions of Hong Kong and Macau. A qualified foreign institutional investor pursuant to the QFII Regulations. "QFII Eligible Securities" Securities and investments permitted to be held or made by QFIIs under QFII Regulations. "QFII Quota" "QFII Regulations" "QFLP" "QFLP Regulations" "Redemption Day" "Reference Currency" The investment quota granted by SAFE for conversion in RMB and investment in QFII Eligible Securities. The laws and regulations governing the establishment and the operation of the qualified foreign institutional investors regime in the PRC, as may be promulgated and/or amended from time to time. A qualified foreign limited partner pursuant to the QFLP Regulations The laws and regulations governing the establishment and the operation of the qualified foreign limited partner regime in the PRC, as may be promulgated and/or amended from time to time. A Business Day with respect to which the Shares of the Company are redeemable. The reference currency of the Company. 14

15 "Regulations" "Renminbi" or "RMB" or "CNY" or "CNH" "RESA" "RQFII" "RQFII Eligible Securities" "RQFII Regulations" "SAFE" "Shareholder" "Share" "Sub-Fund" "Sub-Fund Particulars" The Law as well as any present or future related Luxembourg laws or implementing regulations, circulars and CSSF s positions. Renminbi, the official currency of Mainland China, is used to denote the Chinese currency traded in the onshore and the offshore markets (primarily in Hong Kong SAR) to be read as a reference to onshore Renminbi (CNY) and/or offshore Renminbi (CNH) as the context requires. For clarification purposes, all references to RMB in the name and/or reference currency of a Class and/or Base Currency must be understood as a reference to offshore RMB (CNH). Recueil électronique des sociétés et associations. A Renminbi qualified foreign institutional investor under the RQFII Regulations. Securities and investments permitted to be held or made by a RQFII under the RQFII Regulations. The laws and regulations governing the establishment and operation of the Renminbi qualified foreign institutional investors regime in the PRC, as may be promulgated and/or amended from time to time. The state administration of foreign exchange of PRC. A shareholder in the Company. Any share in the Company from any Class within any Sub-Fund subscribed by any Shareholder. A specific portfolio of assets and liabilities within the Company having its own Net Asset Value and represented by one or more Classes. Part of the Prospectus containing information relating to each Sub-Fund. 15

16 "Subscription Day" "U.S." or United States" "USD" "Valuation Day" A Business Day with respect to which the Shares of any Class may be subscribed. The United States of America or any of its territories or possessions. The official currency of the United States. The Business Day as at which the Net Asset Value is determined for each Sub-Fund in the relevant Sub-Fund particulars. Words importing the singular shall, where the context permits, include the plural and vice versa. 16

17 1. STRUCTURE OF THE COMPANY The Company is an open-ended investment company organised as a public limited company (société anonyme) under the laws of the Grand Duchy of Luxembourg and qualifies as a société d investissement à capital variable fonds d investissement spécialisé (SICAV-FIS) governed by the Law. The Company is an umbrella fund and as such may operate separate Sub-Funds, each of which is represented by one or more Classes. The Sub-Funds are distinguished by their specific investment policy or any other specific features, as further described in the Sub-Fund Particulars. The Company constitutes a single legal entity, but the assets of each Sub-Fund shall be invested for the exclusive benefit of the Shareholders of the corresponding Sub-Fund and the assets of a specific Sub-Fund are solely accountable for the liabilities, commitments and obligations of that Sub-Fund. The Shares of the Company are currently not listed on a stock exchange. The Board reserves the right to list the Shares of one or several Sub-Funds in the future. In such event, the relevant Sub-Fund Particulars may be amended accordingly. The Board may at any time resolve to set up new Sub-Funds and/or create within each Sub-Fund one or more Classes and this Prospectus will be updated accordingly. The Board may also at any time resolve to close a Sub-Fund, or one or more Classes within a Sub-Fund, to further subscriptions. The Company was incorporated for an unlimited period in Luxembourg on 17 December The capital of the Company shall be equal at all times to the net assets of the Company. The minimum capital of the Company, as prescribed by law, is the equivalent of Euro 1,250,000. The Articles have been published in the Mémorial on 14 January The Company is registered with the Registre de Commerce et des Sociétés, Luxembourg (Luxembourg Register of Commerce and Companies) under number B The Articles have been deposited with the Registre de Commerce et des Sociétés, Luxembourg. Under Luxembourg law and its Articles, the Company is authorised to issue an unlimited number of Shares, all of which are without par value. The Reference Currency is USD and all the financial statements of the Company will be presented in USD. 2. PURPOSE, INVESTMENT OBJECTIVES AND POLICIES The exclusive objective of the Company is to place the funds available to it in accordance 17

18 with the principle of risk spreading in assets of any kind with the purpose of affording its Shareholders the results of the management of its portfolios. Each Sub-Fund shall pursue its own investment policy and the investment restrictions may differ for each of them. The investment policy and, as the case may be, specific investment restrictions are disclosed for each Sub-Fund in the relevant Sub-Fund Particulars. Risk Warnings The investments of the Company are subject to market fluctuations and other risks inherent in any investment. It cannot therefore be guaranteed that the investment objectives will be achieved. Investors must therefore be aware that the value of their investment may fall as well as rise and that past performance is not a guide to future performances. The following risk factors and other considerations together with the specific risk factors relating to a specific Sub-Fund as described in the relevant Sub-Fund Particulars, which notably include a description of all the risks which are associated with the type of assets in which the Sub-Fund can invest and techniques it may use and which have been identified following a reasonable assessment, should be carefully considered by any potential Investor in the Company. Investment in the Company is only suitable for sophisticated Investors for whom an investment in the Company does not represent a complete investment programme and who fully understand and are capable of assuming the risks of an investment in the Company. Potential Investors are advised to consult their own advisors regarding potential risks in investing in the Company. A. General risk warnings Investors are reminded that the value of their investment in Shares can go down as well as up and the value of an Investor s investment may be subject to sudden and substantial falls. An Investor may not be able to get back the amount invested and the loss on realisation may be high and could result in a substantial or complete loss of the investment. Market risk Although it is intended that each Sub-Fund will be diversified, the investments of a Sub-Fund are subject to normal market fluctuations and to the risks inherent to investment activities. Investment Objective Risk Investment objectives express an intended result but there is no guarantee that such a result will be achieved. Depending on market conditions and the macro economic environment, 18

19 investment objectives may become more difficult or even impossible to achieve. There is no express or implied assurance as to the likelihood of achieving the investment objective for a Sub-Fund. Interest Rate Risk The values of bonds and other debt instruments usually rise and fall in response to changes in interest rates. Declining interest rates generally increase the values of existing debt instruments, and rising interest rates generally reduce the value of existing debt instruments. Interest rate risk is generally greater for investments with long durations or maturities. Some investments give the issuer the option to call or redeem an investment before its maturity date. If an issuer calls or redeems an investment during a time of declining interest rates, a Sub-Fund might have to re-invest the proceeds in an investment offering a lower yield, and therefore might not benefit from any increase in value as a result of declining interest rates. Regulatory Risk The Company is domiciled in Luxembourg and Investors should note that all the regulatory protections provided by their local regulatory authorities may not apply. Additionally the Sub-Funds may be registered in non-eu jurisdictions. As a result of such registrations the Sub-Funds may be subject, without any notice to the Shareholders, to more restrictive regulatory regimes. In such cases the Sub-Funds will abide by these more restrictive requirements. This may prevent the Sub-Funds from making the fullest possible use of the investment limits. Risks linked to emerging markets Transactions on emerging markets make the investor take considerable additional risks, as the regulation of these markets does not provide for the same guarantees as far as protection of Investors is concerned. The risks linked to the political-economic situation of the issuer's country of origin must be considered, too. In some countries there is a risk of asset expropriation, confiscation tax, political or social instability or diplomatic developments which could affect investments in those countries. Information on certain securities and certain money market instruments and financial instruments may be less accessible to the public and entities may not be subject to requirements concerning auditing of accounts, accounting or recording comparable to those some investors are used to. While generally increasing in volume, some financial markets have, for the most part, substantially less volume than most developed markets and securities of many companies are less liquid and their prices are more volatile than securities of comparable companies in larger markets. In many of these countries, there are also very different levels of supervision and regulation of markets, financial institutions and issuers, in 19

20 comparison to more developed countries. In addition, requirements and limitations imposed in some countries to investments by foreigners may affect the performance of some Subfunds. Any change in laws or currency control measures subsequent to an investment can make the repatriation of funds more difficult. Risk of loss due to lack of adequate systems for the transfer, pricing, accounting and custody of securities may also occur. The risk of fraud related to corruption and organised crime is significant. Systems to settle transactions in emerging markets may be less well organised than in more developed countries. There is a risk that the settlement of transactions be delayed and that assets or securities of the sub-funds are jeopardised because of the failure of such systems. In particular, market practice may require that payment be made before receipt of the securities purchased or that a security be delivered before the price is received. In such cases, default of a broker or bank through which the transaction was to be made will result in a loss for the Sub-funds that have invested in such securities. Foreign exchange risk Because a Sub-Fund's assets and liabilities may be denominated in currencies different to the Base Currency or to the reference currency of the relevant Class, the Sub-Fund / relevant Class may be affected favourably or unfavourably by exchange control regulations or changes in the exchange rates between the Base Currency (or reference currency of the relevant Class) and other currencies. Changes in currency exchange rates may influence the value of a Sub-Fund's / Class' shares, the dividends or interest earned and the gains and losses realised. Exchange rates between currencies are determined by supply and demand in the currency exchange markets, the international balance of payments, governmental intervention, speculation and other economic and political conditions. If the currency in which a security is denominated appreciates against the Base Currency (or the reference currency of the relevant Class) the value of the security will increase. Conversely, a decline in the exchange rate of the currency would adversely affect the value of the security. A Sub-Fund / Class may engage in foreign currency transactions in order to hedge against currency exchange risk however there is no guarantee that hedging or protection will be achieved. This strategy may also limit the Sub-Fund / Class from benefiting from the performance of a Sub-Fund's / Class' securities if the currency in which the securities held by the Sub-Fund / Class are denominated rises against the Base Currency (or reference currency of the relevant Class). In case of a hedged Class (denominated in a currency different from the Base Currency), this risk applies systematically. 20

21 Liquidity risk A Sub-Fund is exposed to the risk that a particular investment or position cannot be easily unwound or offset due to insufficient market depth or market disruption. The AIFM operates a risk management process effective on a daily basis in identifying, measuring, monitoring and controlling the liquidity risk for all assets classes including, but not limited to financial derivative instruments. However, this will not remove all liquidity risk to which a Sub-Fund is exposed. Equity Securities A Sub-Fund may invest in a wide variety of equity securities, including equity securities issued by established listed companies. In addition, investments may be made in smaller listed entities and unlisted companies, including start-ups, leveraged buy-out companies or more developed companies that are likely to be listed in a near future. Equity investments will be selected in industries and companies that the AIFM/Investment Manager believes are experiencing favourable demand for their products and services, and which operate in a favourable regulatory and competitive climate. A Sub-Fund may invest in securities which are not registered with the appropriate regulators in the country of domicile and which may not be readily marketable. Most of the purchases and sales of securities by the Company will be effected in the primary trading market for the securities but may be effected by private, off exchange trades or by subscription. Loss of Financial Instruments - Depositary liability risk The AIFM Rules provide for a strict liability of the Depositary in case of loss of financial instruments held in custody. In case of loss of these financial instruments, the Depositary shall return financial instruments of identical type of the corresponding amount to the Company or the AIFM acting on behalf of the Company unless it can prove that the loss is the result of an external event beyond its reasonable control, the consequences of which would have been unavoidable despite all reasonable efforts to the contrary or it has delegated part or all of its safe-keeping duties and discharged its liability in accordance with the AIFM Rules. Investors are informed that in certain circumstances financial instruments held by the Company with respect to any Sub-Fund will not qualify as financial instruments to be held in custody (i.e. financial instruments that can be registered in a financial instrument account opened in the Depositary s books and all financial instruments that can be physically delivered to the Depositary). This may in particular be the case for "A" shares or other 21

22 securities held in the PRC under conditions imposed by PRC laws and regulations. In these circumstances, the above referred strict liability will not apply in case of loss of these financial instruments. The Depositary will be liable to the Company or the Shareholders for the loss suffered by them as a result of the Depositary s negligent or intentional failure to properly fulfil its obligations pursuant to the AIFM Directive. Credit risk A Sub-Fund which has exposure to bonds and other fixed income securities is subject to the risk that issuers may not make payments on such securities. An issuer suffering an adverse change in its financial condition could lower the credit quality of a security, leading to greater price volatility of the security. A lowering of the credit rating of a security may also offset the security's liquidity, making it more difficult to sell. Sub-Fund(s) investing in lower quality debt securities are more susceptible to these problems and their value may be more volatile. Volatility of financial derivative instruments The price of a financial derivative instrument can be very volatile. This is because a small movement in the price of the underlying security, index, interest rate or currency may result in a substantial movement in the price of the financial derivative instrument. Investment in financial derivative instruments may result in losses in excess of the amount invested. Futures and options Under certain conditions, the Company may use options and futures on securities, indices and interest rates for different purposes (i.e. hedging and efficient portfolio management). Also, where appropriate, the Company may hedge market and currency risks using futures, options or forward foreign exchange contracts. Transactions in futures carry a high degree of risk. The amount of the initial margin is small relative to the value of the futures contract so that transactions are "leveraged" or "geared". A relatively small market movement will have a proportionately larger impact which may work for or against the investor. The placing of certain orders which are intended to limit losses to certain amounts may not be effective because market conditions may make it impossible to execute such orders. Transactions in options also carry a high degree of risk. Selling ("writing" or "granting") an option generally entails considerably greater risk than purchasing options. Although the premium received by the seller is fixed, the seller may sustain a loss well in excess of that amount. The seller will also be exposed to the risk of the purchaser exercising the option and the seller will be obliged either to settle the option in cash or to acquire or deliver the underlying investment. If the option is "covered" by the seller holding a corresponding position in the underlying investment or a future on another option, the risk may be reduced. 22

23 OTC financial derivative transactions In general, there is less governmental regulation and supervision of transactions in the OTC markets (in which currencies, forward, spot and option contracts, credit default swaps, total return swaps and certain options on currencies are generally traded) than of transactions entered into on organized exchanges. In addition, many of the protections afforded to participants on some organized exchanges, such as the performance guarantee of an exchange clearing house, may not be available in connection with OTC financial derivative transactions. Therefore, a Sub-Fund entering into OTC financial derivative transactions will be subject to the risk that its direct counterparty will not perform its obligations under the transactions and that the Sub-Fund will sustain losses. The Company will only enter into transactions with counterparties which it believes to be creditworthy, and may reduce the exposure incurred in connection with such transactions through the receipt of letters of credit or collateral from certain counterparties. Regardless of the measures the Company may seek to implement to reduce counterparty credit risk, however, there can be no assurance that a counterparty will not default or that a Sub-Fund will not sustain losses as a result. From time to time, the counterparties with which the Company effects transactions might cease making markets or quoting prices in certain of the instruments. In such instances, the Company might be unable to enter into a desired transaction in currencies, credit default swaps or total return swaps or to enter into an offsetting transaction with respect to an open position, which might adversely affect its performance. Further, in contrast to exchange traded instruments, forward, spot and option contracts on currencies do not provide the AIFM or the relevant Investment Manager with the possibility to offset the Company's obligations through an equal and opposite transaction. For this reason, in entering into forward, spot or options contracts, the Company may be required, and must be able, to perform its obligations under the contracts. Debt Securities A Sub-Fund may invest in derivatives of debt securities which will subject the Sub-Fund to credit, liquidity and interest rate risks. Evaluating credit risk for debt securities involves uncertainty because credit rating agencies throughout the world have different standards, making comparison across countries difficult. Convertible Securities Risk Convertible securities are bonds, debentures, notes, preferred stocks or other securities that may be converted into or exchanged for a specified amount of common stock of the same or different issuer within a particular period of time at a specified price or formula. A convertible security entitles the holder to receive interest that is generally paid or accrued on 23

24 debt or a dividend that is paid or accrued on preferred stock until the convertible security matures or is redeemed, converted or exchanged. Convertible securities generally (i) have higher yields than common stocks, but lower yields than comparable non-convertible securities, (ii) are less subject to fluctuation in value than the underlying common stock due to their fixed-income characteristics and (iii) provide the potential for capital appreciation if the market price of the underlying common stock increases. The value of a convertible security is a function of its "investment value" (determined by its yield in comparison with the yields of other securities of comparable maturity and quality that do not have a conversion privilege) and its "conversion value" (the security's worth, at market value, if converted into the underlying common stock). A convertible security generally will sell at a premium over its conversion value by the extent to which investors place value on the right to acquire the underlying common stock while holding a fixed-income security. Generally, the amount of the premium decreases as the convertible security approaches maturity. A convertible security may be subject to redemption at the option of the issuer at a price established in the convertible security's governing instrument. If a convertible security held by the Sub-Fund is called for redemption, the Sub-Fund will be required to permit the issuer to redeem the security, convert it into the underlying common stock or sell it to a third party. Any of these actions could have an adverse effect on the Sub-Fund. Forward Foreign Exchange Contracts A forward foreign exchange contract is a contractually binding obligation to purchase or sell a particular currency at a specified date in the future. Forward foreign exchange contracts are not uniform as to the quantity or time at which a currency is to be delivered and are not traded on exchanges. Rather, they are individually negotiated transactions. Forward foreign exchange contracts are generally effected through a trading system known as the interbank market. It is not a market with a specific location but rather a network of participants electronically linked. Documentation of transactions generally consists of an exchange of telex or facsimile messages. There is no limitation as to daily price movements on this market and in exceptional circumstances there have been periods during which certain banks have refused to quote prices for forward foreign exchange contracts or have quoted prices with an unusually wide spread between the price at which the bank is prepared to buy and that at which it is prepared to sell. Transactions in forward foreign exchange contracts are not regulated by any regulatory authority nor are they guaranteed by an exchange or clearing house. A Sub-Fund is subject to the risk of the inability or refusal of its counterparties to perform with respect to such contracts. Any such default would eliminate any profit potential and compel a Sub-Fund to cover its commitments for resale or repurchase, if any, at the then current market price. These events could result in significant losses. 24

25 Counterparty risk The Company on behalf of a Sub-Fund may enter into transactions in over-the-counter markets, which will expose the Sub-Fund to the credit of its counterparties and their ability to satisfy the terms of such contracts. For example, the Company on behalf of the Sub-Fund may enter into repurchase agreements, forward contracts, options and swap arrangements or other derivative techniques, each of which expose the Sub-Fund to the risk that the counterparty may default on its obligations to perform under the relevant contract. In the event of a bankruptcy or insolvency of a counterparty, the Sub-Fund could experience delays in liquidating the position and significant losses, including declines in the value of its investment during the period in which the Company seeks to enforce its rights, inability to realise any gains on its investment during such period and fees and expenses incurred in enforcing its rights. There is also a possibility that the above agreements and derivative techniques are terminated due, for instance, to bankruptcy, supervening illegality or change in the tax or accounting laws relative to those at the time the agreement was originated. In such circumstances, investors may be unable to cover any losses incurred. Derivative contracts such as swap contracts entered into by the Company on behalf of a Sub-Fund involve credit risk that could result in a loss of the Sub-Fund's entire investment as the Sub-Fund may be fully exposed to the credit worthiness of a single approved counterparty. Conflicts of Interests The members of the Board, the AIFM, the Investment Manager or other investment manager(s), if any, the Investment Advisor or other investment advisor(s), if any, the Depositary, the Administrative Agent and any counterparty may from time to time act as members of the board of directors, AIFM, investment manager, investment advisor, depositary, domiciliary agent, registrar and transfer agent, administrative agent or broker to, or be otherwise involved in, other collective investment schemes which have similar investment objectives to those of the Company or may otherwise provide discretionary fund management or ancillary brokerage services to investors with similar investment objectives to those of the Company. It is, therefore, possible that any of them may, in the course of their business, have potential conflicts of interests with the Company. Each will at all times have regard in such event to its obligations to act in the best interests of the Shareholders as far as practicable, while having regard to its obligations to its other clients. When undertaking any investments where conflicts of interests may arise, each will endeavour to resolve such conflicts fairly. In particular, the AIFM (or the relevant investment manager appointed by the AIFM as the 25

26 case may be) may act as investment manager to other clients or funds and may give advice or take action with respect to them which may be the same or different from the advice given or action taken with respect to a Sub-Fund and a Sub-Fund's investments. The AIFM (or the relevant investment manager appointed by the AIFM as the case may be) shall ensure the fair allocation of investment opportunities between a Sub-Fund and its other clients. However, the AIFM (or the relevant investment manager appointed by the AIFM as the case may be) shall not be obligated to present to a Sub-Fund any particular investment opportunity, even if such opportunity is of a character, which, if presented to a Sub-Fund, could be taken by a Sub-Fund, and the AIFM (or the relevant investment manager appointed by the AIFM as the case may be) shall have the right to take for its own account, or recommend to others, any particular investment opportunity. The Company understands that material, non-public information regarding an issuer may come into the possession of the AIFM (or the relevant investment manager appointed by the AIFM as the case may be) and that the AIFM (or the relevant investment manager appointed by the AIFM as the case may be) may not be entitled to disclose such information to the Company. Persons may in future hold directorship of the Company and other service providers to the Company and which may give rise to additional conflicts of interest. In the event that a conflict arises, the Board, the AIFM, the Investment Manager or other persons concerned will attempt to resolve such conflict in a fair and equitable manner. Effect of Substantial Redemptions Substantial redemptions of the Shares in a Sub-Fund could require the Sub-Fund to liquidate positions more rapidly than would otherwise be desirable and this could adversely affect the value of the Sub-Fund's Shares. The Board may limit redemptions and suspend redemption rights of the Shareholders as set out in chapter 5. "How to Deal" headings "Large Redemption", "Lack of Liquidity" and "Suspension of Redemptions". Any suspension or delay will restrict the ability of Shareholders to liquidate their investment in the Sub-Fund. Hedging Risks In connection with certain Sub-Fund investments the AIFM or the Investment Manager may employ hedging techniques designed to protect the Sub-Fund against adverse movements in for example interest rates. While such hedging transactions may reduce certain risks, such transactions themselves may entail certain other risks. Thus, while the Sub-Fund may benefit from the use of hedging transactions, unanticipated changes in interest rates or currency exchange rates may result in a poorer overall performance of the Sub-Fund than if it had not entered into such hedging transactions. 26