STORK FUND A Luxembourg Investment Fund (Fonds Commun de Placement - Specialised Investment Funds)

Transcription

1 Audited annual report as at 31st December 2012 STORK FUND A Luxembourg Investment Fund (Fonds Commun de Placement - Specialised Investment Funds) Management Company: CIGOGNE MANAGEMENT S.A. R.C.S. Luxembourg B

2 The Fund is organised in Luxembourg pursuant to the law of 13th February 2007 regarding specialised investment funds. The Units are offered solely on the basis of the information contained in the prospectus and in the reports referred to in the prospectus. The distribution of the prospectus is not authorised unless it is accompanied by the most recent annual and semi-annual report(s) of the Fund, if any. The Fund has not been authorised by the French "Autorité des Marchés Financiers" for distribution in and from France in accordance with the French legal and regulatory provisions and accordingly, the Units may not be offered or distributed in or from France.

3 STORK FUND Contents Organisation... 2 General information... 4 Report on activities of the Board of Directors... 6 Report of the réviseur d'entreprises agréé... 8 Consolidated statement of net assets Consolidated statement of operations and other changes in net assets STORK FUND - Dynamic Multi-Strategies Statement of net assets Statement of operations and other changes in net assets Statistical information Statement of investments and other net assets Industrial and geographical classification of investments STORK FUND - Protective Multi-Strategies Statement of net assets Statement of operations and other changes in net assets Statistical information Statement of investments and other net assets Industrial and geographical classification of investments Notes to the financial statements

4 STORK FUND Organisation The Management Company CIGOGNE MANAGEMENT S.A. 9, Boulevard Prince Henri L-1724 LUXEMBOURG (since 16th February 2012) 22-24, Boulevard Royal L-2449 LUXEMBOURG (until 16th February 2012) Board of Directors Chairman Directors Philippe VIDAL Directeur Général Adjoint CIC 6, Avenue de Provence F PARIS Hervé BRESSAN Directeur Financier CIC 6, Avenue de Provence F PARIS Christian KLEIN Directeur BANQUE FÉDÉRATIVE DU CRÉDIT MUTUEL 6, Avenue de Provence F PARIS Fernand REINERS Membre du Comité de Direction BANQUE DE LUXEMBOURG Société Anonyme 14, Boulevard Royal L-2449 LUXEMBOURG Georges VANDERMARLIERE CM-CIC MARCHÉS 31, Rue Jean Wenger Valentin F STRASBOURG Managing Directors Guillaume BINNENDIJK CIGOGNE MANAGEMENT S.A. 9, Boulevard Prince Henri L-1724 LUXEMBOURG Joffrey CZURDA CIGOGNE MANAGEMENT S.A. 9, Boulevard Prince Henri L-1724 LUXEMBOURG Custodian, Domiciliary and Corporate Secretary, Paying Agent, Registrar, Transfer and Administrative Agent BANQUE DE LUXEMBOURG Société Anonyme 14, Boulevard Royal L-2449 LUXEMBOURG 2

5 STORK FUND Organisation (continued) Cabinet de révision agréé DELOITTE AUDIT Société à responsabilité limitée 560, Rue de Neudorf L-2220 LUXEMBOURG 3

6 STORK FUND General information STORK FUND (the "Fund") was established on 29th June 2007 for an unlimited period and is organised in Luxembourg pursuant to the amended Law of 13th February 2007 relating to the Specialised Investment Funds (the "SIF Law"). The Fund is an unincorporated mutual investment fund ("Fonds Commun de Placement") with different portfolios of assets, each constituting a Compartment. The Fund is governed by the Management Regulations effective as of 25th June 2007, published in the Mémorial C, Recueil des Sociétés et Associations (the "Mémorial"). Investors in STORK FUND are advised that offering is restricted to Well Informed Investors only and that the Management Company will not permit the issuance and transfer of Units to persons who may not be considered as Well Informed Investors within the meaning of article 2 of the amended Law of 13th February For the avoidance of doubt, Well Informed Investors shall mean an institutional investor, a professional investor, or any other investor who answer to the following conditions: (i) has confirmed in writing her/his/its adherence to the well informed investor status and (ii) has invested a minimum of EUR 125,000 in the specialized fund, or has received a confirmation from a credit institution within the meaning of Directive 2006/48 EC or from an investment company within the meaning of Directive 2006/39 EC or from a management company within the meaning of Directive 2001/107 EC according to which she/he/it has adequate experience and knowledge to appreciate in a proper manner the investment in a specialized investment fund. The above conditions do not apply to managers or any other persons intervening in the management of a specialized fund. The Fund is managed by CIGOGNE MANAGEMENT S.A., a public limited company ("société anonyme") organised under the laws of the Grand Duchy of Luxembourg, whose shareholder is Crédit Mutuel - CIC Group. Its share capital amounts to EUR 125,000. The Management Company was established on 6th July 2004 for an undetermined period. Its Articles of Incorporation were published in the Mémorial of 16th July The Management Company may, at any time, amend existing Compartments and classes and create additional Compartments for an undetermined or determined period, whose investment features will differ from those of the Compartments existing at the present time and may also create, at any time, additional Classes of Units within each Compartment. The Compartments are represented by several Classes of Units and all the Units of each Class have the same rights. The Units shall, in principle, accumulate their results. Capital appreciation in the net assets existing at the end of the financial year of the Compartment will remain, in principle, invested in the Compartment. The Class of Units entitled "A" Units are dedicated to a single Well Informed Investor. The Management Company issues Class "O" Units or other Classes with different set of rights, each Class composed of different Series according to Units issue dates. Units are issued as of the last Bank Business Day of every month at a Subscription Price based on the relevant Net Asset Value per Unit as of the Subscription Day. Each Compartment constitutes a separate pool of assets and liabilities and is represented by specific class or classes of Units. For the purposes of relations with creditors, each Compartment is treated as a single entity. The assets of one Compartment are only responsible for all debts, engagements and obligations attributable to this Compartment. In this regard, if the Management Company incurs a liability, which relates to a particular Compartment, the creditor s recourse with respect to such liability shall be limited solely to the assets of the relevant Compartment. For the purposes of relations with the Unitholders, each Class is treated as a single entity. Therefore the Net Asset Value of its Units fluctuates according to the net assets to which they relate. 4

7 STORK FUND General information (continued) No general meeting of Unitholders will be held and no voting rights are attached to the Units. If the Management Regulations are amended, such amendments will be filed with the "Registre du Commerce et des Sociétés" of Luxembourg and published in the "Mémorial". The consolidated accounts of the Fund are expressed in EUR being the currency of the Fund. The financial statements relating to the various Compartments are expressed in the reference currency of the relevant Compartment. At the date of the report, the following Compartments are operational: - STORK FUND - Dynamic Multi - Strategies in EUR - STORK FUND - Protective Multi - Strategies in EUR Copies of the following documents may be obtained during usual business hours on any Business Day in Luxembourg at the registered office of the Fund: (i) (ii) (iii) the Management Regulations of the Fund; the agreements on services referred to under section "Custodian Bank, Administrative and Registrar and Transfer Agent"; the reports and accounts referred to under section "Reports to Unitholders". The Net Asset Value as well as the issue and redemption prices are available to the Unitholders for effect on each Valuation Day at the registered office of the Fund. 5

8 STORK FUND Report on activities of the Board of Directors The Board of Directors of the CIGOGNE MANAGEMENT S.A., the Management Company of the Fund, examined STORK FUND s financial statements for In a still turbulent year, marked primarily by the severe crisis of confidence in the Eurozone, STORK FUND successfully achieved its objectives. In the extension of 2011, the first half of 2012 s economic and financial environment was heavily affected by the Eurozone crisis and financial markets were extremely volatile driven by twists in the resolution of the crisis. During the second half of 2012, financial markets turned out to be much less stressed thanks to the measures taken by the European Central Bank in the context of its LTRO and OMT programs, which brought back financial stability to the Eurozone. With Mario Draghi s pledging to do whatever it takes to save euro, investors gained back confidence into the financial system. Financial markets therefore bounced back in the second half of Concerning the Hedge Fund industry, it has changed a lot since the 2008 financial turmoil. As at the end of 2012, more than hedge funds were operating. Total assets under management (AUM) reached USD 2.19 trillion (source Preqin), surpassing the pre-financial crisis figures. Furthermore, most of the investments in Hedge Funds now come from institutional investors (up to 65% according to Preqin). The Hedge Fund industry behaved rather well in 2012 as evidenced by the HFRX Global Hedge Fund EUR Index, a diversified asset weighted based hedge fund index designed to be representative of the overall composition of the hedge fund universe, which finished the year up 3.05%. In this very context, STORK FUND s results were impressive. Over 2012, the assets under management reached EUR 817M (+12.2%). The performance of the Compartment STORK FUND - Dynamic Multi - Strategies, the most diversified and representative portfolio managed by CIGOGNE MANAGEMENT S.A., was up 15.87% a much better performance than its comparable with an excellent 12-month standard deviation of 4.4%. Following 2011, the main objective throughout 2012 has been to increase diversification of the portfolios by developing new specialties and multiplying individual positions, with a view to further decease performance volatility, while de-correlating the latest from traditional market movements. In the breakdown of the strategies figures, most Compartments, posted strong performances with decreasing volatility: The very high quality and the low duration of the ABS/MBS portfolio allowed the Compartment CIGOGNE FUND - ABS / MBS Arbitrage to finish the year with a strong performance above 15% and an incredible 12-month standard deviation of 1.8%. Liquidity problems that have encountered European banks at the end of 2011 have faded with the introduction of two refinancing operations 3 years in December 2011 and February 2012 by the ECB. With these injections of liquidity, investors are quickly directed to covered bonds and securitization of high quality, leading to a significant tightening of spreads of the portfolio s papers. Following a difficult year 2011, the Compartment CIGOGNE FUND - Convertible Arbitrage closed the year 2012 with an outstanding performance. Market conditions - lowest interest rates levels, stock markets at their highest annual and return of liquidity - have been particularly beneficial for convertible bonds. In this very context, positions on financial and peripheral issuers, who had particularly suffered last year, have been the main drivers of performance. The Management Company is still confident about the potential of the portfolio, and expects high returns for The Compartment CIGOGNE FUND - Credit Arbitrage has benefited from the return of liquidity, due to the two long term refinancing operations and unconventional measures taken by the ECB, to print a very good performance (+11.81%). The spreads have narrowed significantly, as shown by the Itraxx index that shrank by more than 50 bps. In parallel, gains realized on the correlation portfolio have strengthened the overall fund performance. 6

9 STORK FUND Report on activities of the Board of Directors (continued) After a very difficult year 2011, the Compartment CIGOGNE FUND - Fixed Income Arbitrage posted an encouraging performance (+6.69%). The answers provided by the ECB, especially around vehicles OMT, ESM and the two unlimited refinancing operations, have indeed helped ease tensions on peripheral issuers and calmed down the assumption of a blow-up of the euro zone. These positive signals were welcomed by financial markets and resulted in an important tightening in European sovereign spreads, beneficial to the long positions on French and Italian bonds of the compartment. The high volatility also helped to make significant gains on all relative value strategies and the Management Company will continue to develop this specific part of the portfolio. The Compartment CIGOGNE FUND - Long-Short Arbitrage ended 2012 with a strong performance. The neutral market exposition allowed the Management Company not to be disturbed by the middle year tense market environment. Besides the sector philosophy the Management Company sat up since the launch of the Compartment strengthened the yearly result by taking advantage on defensive stocks in some part of the year and at other times on more volatile names. This result has also been possible through a moderate leverage. The Compartment CIGOGNE FUND - M&A Arbitrage ended 2012 at positive +2.54%. While deals rose in the fourth quarter, the full-year total, USD 2.23 billion, was down 7.8% from The main industries concerned by these operations were financial services, consumer noncyclical and energy companies. In this context, around 80 deals were traded in the compartment. The Compartment was especially invested in the largest deal of the year, Xstrata/Glencore, and most of the top 50 deals of 2012, such as Nexen, Cooper Industries/Eaton or NYSE Euronext/Intercontinental Exchange. Looking forward to 2013, while there are some positive signs of economic recovery, particularly in the US, and increasing clarity on regulation, the global macro-economic, political and regulatory environment remains uncertain and the Management Company must again expect a challenging environment for the next year. As far as the strategic development is concerned, CIGOGNE MANAGEMENT S.A. expects to assist in 2013 to a sustained growth in STORK FUND s assets under management by further diversifying the investor base. Luxembourg, 8th May 2013 The Board of Directors of the Management Company Note: The information in this report represents historical data and is not an indication of future results. 7

10 Report of the réviseur d'entreprises agréé Deloitte Audit Société à responsabilité limitée 560, rue de Neudorf L-2220 Luxembourg B.P L-1011 Luxembourg Tel: Fax: To the Unitholders of STORK FUND Following our appointment by the general meeting of the Board of Directors of the Management Company, we have audited the accompanying financial statements of STORK FUND and of each of its Compartments, which comprise the statement of net assets and the statement of investments and other net assets as at 31st December 2012 and the statement of operations and other changes in net assets for the year then ended, and a summary of significant accounting policies and other explanatory notes to the financial statements. Responsibility of the Board of Directors of the Management Company for the financial statements The Board of Directors of the Management Company is responsible for the preparation and fair presentation of these financial statements in accordance with Luxembourg legal and regulatory requirements relating to the preparation of the financial statements and for such internal control as the Board of Directors of the Management Company determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Responsibility of the réviseur d entreprises agréé Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing as adopted for Luxembourg by the Commission de Surveillance du Secteur Financier. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the réviseur d entreprises agréé s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the réviseur d entreprises agréé considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. Société à responsabilité limitée au capital de EUR RCS Luxembourg B

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12 STORK FUND Consolidated statement of net assets (in EUR) as at 31st December 2012 Assets Securities portfolio at market value 625,042, Total assets 625,042, Liabilities Bank liabilities 119,986, Interest on bank liabilities and expenses payable 524, Prepaid subscriptions 26,898, Total liabilities 147,408, Net assets at the end of the year 477,633, The accompanying notes are an integral part of these financial statements. 10

13 STORK FUND Consolidated statement of operations and other changes in net assets (in EUR) from 1st January 2012 to 31st December 2012 Income Interest on bank accounts Total income Expenses Management fees 640, Custodian fees 92, Central administration costs 48, Professional fees 13, Other administration costs 5, Interest paid on bank liabilities 2,395, Total expenses 3,195, Net investment loss -3,195, Net realised gain/(loss) - on securities portfolio 537, Realised result -2,657, Net variation of the unrealised gain/(loss) - on securities portfolio 66,973, Result of operations 64,316, Subscriptions 130,038, Redemptions -196,711, Total changes in net assets -2,356, Total net assets at the beginning of the year 479,990, Total net assets at the end of the year 477,633, The accompanying notes are an integral part of these financial statements. 11

14 STORK FUND - Dynamic Multi-Strategies Statement of net assets (in EUR) as at 31st December 2012 Assets Securities portfolio at market value 519,030, Total assets 519,030, Liabilities Bank liabilities 96,599, Interest on bank liabilities and expenses payable 320, Prepaid subscriptions 26,898, Total liabilities 123,817, Net assets at the end of the year 395,212, Class "A" Units outstanding 23, Net asset value per Class "A" Units 16, Class "O" Units outstanding 2, Net asset value per Class "O" Units 10, The accompanying notes are an integral part of these financial statements. 12

15 STORK FUND - Dynamic Multi-Strategies Statement of operations and other changes in net assets (in EUR) from 1st January 2012 to 31st December 2012 Income Interest on bank accounts Total income Expenses Management fees 561, Custodian fees 76, Central administration costs 28, Professional fees 6, Other administration costs 4, Interest paid on bank liabilities 1,857, Total expenses 2,535, Net investment loss -2,535, Net realised gain/(loss) Realised result -2,535, Net variation of the unrealised gain/(loss) - on securities portfolio 56,862, Result of operations 54,326, Subscriptions 130,038, Redemptions -196,711, Total changes in net assets -12,345, Total net assets at the beginning of the year 407,558, Total net assets at the end of the year 395,212, The accompanying notes are an integral part of these financial statements. 13

16 STORK FUND - Dynamic Multi-Strategies Statistical information (in EUR) as at 31st December 2012 Total net assets - as at ,212, as at ,558, as at ,352, Number of Class "A" Units - outstanding at the beginning of the year 29, issued 7, redeemed -13, outstanding at the end of the year 23, Net asset value per Class "A" Units - as at , as at , as at , Number of Class "O" Units - outstanding at the beginning of the year issued 2, redeemed outstanding at the end of the year 2, Net asset value per Class "O" Units - as at , as at , as at The accompanying notes are an integral part of these financial statements. 14

17 STORK FUND - Dynamic Multi-Strategies Statement of investments and other net assets (in EUR) as at 31st December 2012 Currency Number / nominal value Description Cost Market value % of total net assets Investments in securities Open-ended investment funds Investment funds (UCI) EUR 5, Cigogne Fd ABS/MBS Arbitrage A1 Cap 57,734, ,379, EUR 7, Cigogne Fd Conv Arbitrage A Ser 1 Units Cap 92,548, ,012, EUR 6, Cigogne Fd Cred Arbitrage A1 Cap 70,624, ,170, EUR 8, Cigogne Fd Fixed Income Arbitrage A Ser 1 Cap 105,042, ,387, EUR 2,000 Cigogne Fd Long Short Arbitrage A1 EUR Cap 20,000, ,721, EUR 2, Cigogne Fd M&A Arbitrage A Ser 1 Cap 64,413, ,358, Total investments in securities 410,363, ,030, Bank liabilities -96,599, Other net assets/(liabilities) -27,218, Total 395,212, The accompanying notes are an integral part of these financial statements. 15

18 STORK FUND - Dynamic Multi-Strategies Industrial and geographical classification of investments as at 31st December 2012 Industrial classification (in percentage of net assets) Investment funds % Total % Geographical classification (by domicile of the issuer) (in percentage of net assets) Grand Duchy of Luxembourg % Total % The accompanying notes are an integral part of these financial statements. 16

19 STORK FUND - Protective Multi-Strategies Statement of net assets (in EUR) as at 31st December 2012 Assets Securities portfolio at market value 106,012, Total assets 106,012, Liabilities Bank liabilities 23,386, Interest on bank liabilities and expenses payable 203, Total liabilities 23,590, Net assets at the end of the year 82,421, Class "O" Units outstanding 7, Net asset value per Class "O" Units 11, The accompanying notes are an integral part of these financial statements. 17

20 STORK FUND - Protective Multi-Strategies Statement of operations and other changes in net assets (in EUR) from 1st January 2012 to 31st December 2012 Income Total income - Expenses Management fees 78, Custodian fees 15, Central administration costs 20, Professional fees 6, Other administration costs 1, Interest paid on bank liabilities 537, Total expenses 659, Net investment loss -659, Net realised gain/(loss) - on securities portfolio 537, Realised result -122, Net variation of the unrealised gain/(loss) - on securities portfolio 10,111, Result of operations 9,989, Subscriptions - Redemptions - Total changes in net assets 9,989, Total net assets at the beginning of the year 72,432, Total net assets at the end of the year 82,421, The accompanying notes are an integral part of these financial statements. 18

21 STORK FUND - Protective Multi-Strategies Statistical information (in EUR) as at 31st December 2012 Total net assets - as at ,421, as at ,432, as at ,523, Number of Class "O" Units - outstanding at the beginning of the year 7, issued redeemed outstanding at the end of the year 7, Net asset value per Class "O" Units - as at , as at , as at , The accompanying notes are an integral part of these financial statements. 19

22 STORK FUND - Protective Multi-Strategies Statement of investments and other net assets (in EUR) as at 31st December 2012 Currency Number / nominal value Description Cost Market value % of total net assets Investments in securities Open-ended investment funds Investment funds (UCI) EUR Cigogne Fd ABS/MBS Arbitrage A2 Cap 7,847, ,944, EUR 500 Cigogne Fd ABS/MBS Arbitrage O Units Cap 5,774, ,350, EUR 1, Cigogne Fd Conv Arbitrage O Units Cap 18,245, ,376, EUR 1, Cigogne Fd Cred Arbitrage A2 Cap 11,149, ,316, EUR Cigogne Fd Fixed Income Arbitrage A2 Cap 6,239, ,546, EUR 1, Cigogne Fd Fixed Income Arbitrage O Units Cap 19,546, ,663, EUR 500 Cigogne Fd Long Short Arbitrage O Cap 5,000, ,229, EUR Cigogne Fd M&A Arbitrage O Units Cap 22,210, ,583, Total investments in securities 96,012, ,012, Bank liabilities -23,386, Other net assets/(liabilities) -203, Total 82,421, The accompanying notes are an integral part of these financial statements. 20

23 STORK FUND - Protective Multi-Strategies Industrial and geographical classification of investments as at 31st December 2012 Industrial classification (in percentage of net assets) Investment funds % Total % Geographical classification (by domicile of the issuer) (in percentage of net assets) Grand Duchy of Luxembourg % Total % The accompanying notes are an integral part of these financial statements. 21

24 STORK FUND Notes to the financial statements as at 31st December 2012 Note 1 - Significant accounting policies a) Presentation of the financial statements The financial statements of the Fund are established in accordance with the Luxembourg legal and regulatory requirements concerning Specialised Investments Funds. The value of the Fund assets is determined as follows: b) Valuation of assets The securities instruments and other assets as well as liabilities are valued at fair market value as determined in good faith pursuant to procedures established by the Management Company and the valuation shall be made according to the following guidelines: 1. The value of any cash on hand or on deposit, bills and demand notes and accounts receivable, prepaid expenses, cash dividends and interest declared or accrued as aforesaid and not yet received is deemed to be the full amount thereof, unless in any case the same is unlikely to be paid or received in full, in which case the value thereof is arrived at after making such discount as the Management Company may consider appropriate in such case to reflect the true value thereof. 2. The value of units or shares issued by open-ended funds is valued at their last official net asset value, as reported or provided by such open-ended funds or their agents or, should the Management Company consider it better reflects the fair value, at their latest unofficial or estimated net asset values (i.e. estimates of net asset values may be provided by a pricing source - including the investment manager of the target open-ended fund - other than the administrative agent of the target fund if more recent than their official net asset values). The Net Asset Value calculated on the basis of unofficial net asset values of target open-ended funds may differ from the Net Asset Value which would have been calculated, on the relevant Valuation Day, on the basis of the official net asset values determined by the administrative agents of the target open-ended funds. Subject to the right of the Management Company provided by the Management Regulations, such Net Asset Value is final and binding notwithstanding any different later determination. 3. The value of any security or unit/share of a closed-end funds which is listed on any securities exchange or similar electronic system and regularly traded thereon is valued based on the current market value or if no market value is available at its last closing price on the relevant Valuation Day or at the last available closing price under the condition that this valuation reflects the most adequate price. c) Acquisition cost of securities in the portfolio The acquisition cost of the securities held by each Compartment that are denominated in currencies other than the reference currency of the Compartment is converted into this currency at the exchange rate prevailing on the date of purchase. d) Net realised gain (loss) on sales of securities The realised gains and losses on sales of securities are calculated on the basis of the average acquisition cost. 22

25 STORK FUND Notes to the financial statements (continued) as at 31st December 2012 e) Investment income Dividend income is recorded at the ex-date, net of any withholding tax. f) Formation expenses The costs and expenses incurred in connection with the formation of the Fund and the initial issue of Units by the Fund, including those incurred in the initial preparation and publication of the Prospectus, all legal and printing costs, certain launch expenses (including advertising costs) and preliminary expenses are paid by the Management Company. g) Conversion of foreign currencies Assets and liabilities denominated in currencies other than that of the Compartment are converted into the currency of the Compartment at the exchange rate in application on the accounting cut off date. Transactions in foreign currencies are converted at the exchange rate in application on the day of the transaction. Realised and unrealised foreign exchange gains and losses resulting from valuation are booked to operating results. h) Consolidation The consolidated financial statements of the Fund are expressed in EUR and are equal to the sum of the corresponding captions in the financial statements of each Compartment. i) Bank liabilities The caption "Bank liabilities" is mainly composed of loans granted by CIC Paris. These loans amounted at the date of the report to: - STORK FUND - Dynamic Multi - Strategies EUR 96,599, STORK FUND - Protective Multi - Strategies EUR 23,375, Note 2 - Management fee Each Compartment will disburse to the Management Company a fee (in EUR, annualised using an actual/365 day count) of the Net Assets valued at the Valuation Date of such month, accruing every month in proportion to the value of the Net Assets over the month, after adjustment for the new subscriptions. The management fee is paid to the Management Company whether or not the Compartment generates a profit. The effective annual rate for the Sub-Funds offered are as follows: Sub-Funds Effective annual rate - STORK FUND - Dynamic Multi - Strategies 0.15% - STORK FUND - Protective Multi - Strategies 0.10% As STORK FUND invests in Compartments of CIGOGNE FUND, its investors pay management fees at the level of the Fund as well as at the level of the underlying Compartments. 23

26 STORK FUND Notes to the financial statements (continued) as at 31st December 2012 Note 3 - Performance fees For each calendar year, the Management Company may receive a performance fee calculated as described in the prospectus. The performance fee is calculated on a high water mark basis, which means that, if there are net losses in Units during a calculation period, such losses are carried forward in the following calculation period(s), and must be recovered before a further performance fee may be paid, taking into account the gains and losses attributable to subscribed and redeemed Units occurred in previous calculated periods. The Performance Index is not taken into account for the purpose of calculating the high water mark. The applicable formula for the calculation of the performance fee shall be agreed to by the Management Company and the Custodian, it being understood that no performance fees is calculated on investments in CIGOGNE FUND. At the date of the report, no performance fee was recorded for the Compartments. Note 4 - Subscription, redemption and conversion fees The subscription price per unit is based on the net asset value per Unit for the subscription day of the relevant Compartment. The subscription price may be increased by a placement fee of maximum 5% of the net asset value, such fee to be disbursed to the Management Company, as described in the Prospectus. The redemption price per unit is based on the net asset value per unit for the redemption day of the relevant Compartment. The redemption price may be reduced by application of a redemption fee of maximum 5% of the net asset value, such fee to be disbursed to the Management Company, as described in the Prospectus. Note 5 - Subscription duty ("taxe d abonnement") The Fund is governed by Luxembourg law. Pursuant to the legislation and regulations in force the Fund is subject to an annual subscription duty ("taxe d abonnement") of 0.01% which is payable quarterly and calculated on the basis of the net assets of each Compartment on the last day of each quarter. Pursuant to Article 68 (2) of the amended Law of 13th February 2007 the net assets invested in undertakings for collective investments already subject to the "taxe d abonnement" are exempt from this tax. 24