Prestige Alternative Finance. UK / Asset Based Direct Lending. Information Memorandum

Transcription

1 Prestige Alternative Finance UK / Asset Based Direct Lending Information Memorandum For use with all subscriptions after: 30/04/2011 1

2 INFORMATION MEMORANDUM PRESTIGE ALTERNATIVE FINANCE FUND LIMITED (An Exempted Company Incorporated in the Cayman Islands with limited liability) Company registration number: S H Cayman Island Monetary Authority number: Private Offering of USD Participating Shares, EUR Participating Shares, Sterling Participating Shares, CHF Participating Shares and SEK Participating Shares (together "Participating Shares"). Minimum Initial Subscription: USD 100,000 or currency equivalent in EURO or GBP or CHF or SEK (provided that no Minimum Initial Subscription of less than the equivalent of USD 100,000 shall be accepted where the subscription is in another currency). A Listing of the USD Participating Shares, EUR Participating Shares, GBP Participating Shares, SEK Participating Shares and CHF Participating Shares may be sought on the Luxembourg Stock Exchange at some point in the future. Date: April 2011 The securities described in this Information Memorandum have not been registered or qualified for offer or sale to the public or otherwise under the securities laws of any country or jurisdiction. The direct or indirect sale of Participating Shares in the United States or to "U.S. Persons" is prohibited. This Information Memorandum does not constitute an invitation to any member of the public of the Cayman Islands to subscribe for Participating Shares. This Information Memorandum replaces the previous Information Memorandum of the Fund issued on 30 th March 2011 in its entirety which shall no longer have any effect. NOTICE THIS DOCUMENT IS IMPORTANT. IF YOU ARE IN ANY DOUBT ABOUT THE CONTENTS OF THIS DOCUMENT YOU SHOULD CONSULT WITH YOUR ACCOUNTANT, LEGAL ADVISER OR OTHER INDEPENDENT PROFESSIONAL ADVISER. 2

3 TABLE OF CONTENTS 1. SUMMARY ESTABLISHMENT OF PRESTIGE ALTERNATIVE FINANCE FUND LIMITED INVESTMENT OBJECTIVE MANAGEMENT AND SERVICE PROVIDERS Directors Investment Manager Investment Administration & Marketing Support Investment Advisors and Investment Funds Administrator Custodian Auditors Legal Counsel Conflicts of Interest SHARE CAPITAL The Fund's Share Capital Participating Shares Voting Shares SUBSCRIPTION OF SHARES REDEMPTION OF SHARES ELIGIBLE INVESTORS AND RESTRICTIONS ON TRANSFER OF TITLE CALCULATION OF NET ASSET VALUE FEES AND EXPENSES Management Fee Performance Fee Redemption Fee Administration Fee Custody Fee Fees of Directors Ongoing Expenses TAXATION Cayman Islands Shareholder Taxation European Union Savings Directive

4 12. GENERAL AND STATUTORY INFORMATION Cayman Islands Mutual Funds Law Reports and Financial Statements Anti-Money Laundering Measures Material Agreements Registered Office Indemnification Additional Disclosures Side Letters RISK FACTORS General Risks of Investing Liquidity Risks Risk of Leverage Currency Risk Legal Structure, Directors and Affiliates Entities Fees and Indemnities

5 1. SUMMARY NAME REGISTERED OFFICE STRUCTURE Prestige Alternative Finance Fund Limited SH Corporate Services Limited PO Box 61 4 th Floor Harbour Centre Grand Cayman KY Cayman Islands Limited liability exempted company Cayman Islands INVESTMENT OBJECTIVE The investment objective of the Fund is to achieve steady long term capital growth through investments (directly or indirectly) in finance lease and hire purchase contracts ( Finance Contracts ) which are fully securitised against assets. These assets may be highly diversified and often very specialist but typically agricultural, rural or equestrian in nature such as farm machinery, specialist farm vehicles, road going vehicles, food production machinery (including vehicles), contracting and plant machinery, land and buildings, and live stock. The Fund (or specialist dedicated vehicles owned directly or indirectly by the Fund) will enter into Introducer Agreements (each an Introducer Agreement ) with one or more asset finance arrangers in the United Kingdom who specialise in providing finance (often farm and plant machinery) and commercial mortgages for farmers and rural businesses (each an Arranger ). Under the Introducer Agreements, the Arrangers will submit business proposals to the Fund, having used their extensive experience to assess the credit risk and security of each proposal for finance. Provided that the Investment Manager is satisfied, on behalf of the Fund, with the proposal and security, the Fund will take an assignment of the Finance Contracts, including all finance documentation, direct debits and guarantees, as appropriate, prepared by the Arrangers and completed by the relevant customer (Often a farmer or agriculturally related borrower but not limited to). The Fund will target annual total returns, based upon the interest rates achievable on the Finance Contracts equal to or greater than the STERLING LIBOR Index. The Investment Manager will be responsible for the investment process, cooperating with each Arranger for the evaluation of proposed Finance Contracts and monitoring the performance of the Fund. The Investment Manager is granted full discretion over the matters relating to the manner, the method and timing of investments and transactions. DIRECTORS Mr. Craig Reeves Mr. Robert McGregor Mr. Geoff Ruddick INVESTMENT MANAGER Prestige Fund Management Limited S.H. Corporate Services Limited PO Box 61 4th Floor Harbour Centre Grand Cayman KY Cayman Islands E: info@prestigefundmanagement.ky INVESTMENT ADMINISTRATION & MARKETING SUPPORT Prestige Asset Management Limited 33 St. James s Square London, SW1Y 4JS United Kingdom T: +44 (0) F: +44 (0) E: info@prestigefunds.com 5

6 ADMINISTRATOR Butterfield Fulcrum Group (Bermuda) Limited Rosebank Centre 11 Bermudiana Road Pembroke HM 08 Bermuda T: F: CUSTODIAN Butterfield Trust (Bermuda) Limited 65 Front Street Hamilton, HM 12 Bermuda T: F: AUDITORS Deloitte and Touche One Capital Place P.O. Box 1787 Grand Cayman KY Cayman Islands T: F: LEGAL COUNSEL Solomon Harris (Cayman Islands law) PO Box 1990 First Caribbean House George Town Grand Cayman KY Cayman Islands T: F: LEGAL COUNSEL: (English - law) Irvine and Partners 1 & 2 Charterhouse Mews London EC1M 6BB United Kingdom T: + 44 (0) F: +44 (0) CURRENCIES US Dollar, Euro, British Pounds Sterling, Swiss Francs, and Swedish Kronor BASE CURRENCY ANNUAL AUDIT REPORTING MINIMUM SUBSCRIPTION British Pounds Sterling Deloitte and Touche on 31st Dec of each year Annual financial reports to investors The initial minimum investment is USD 100,000 for USD Participating Shares, or currency equivalent in EURO for EUR Participating Shares or currency equivalent in GBP for GBP Participating Shares or currency equivalent in CHF for CHF Participating Shares or currency equivalent in SEK for SEK Participating Shares. The Directors in their discretion may 6

7 agree to lower the minimum initial investment; subject to the combined value of subscriptions in the fund being equal to the currency equivalent of CI$ 80,000 (USD 100,000) or such other amount stipulated by Cayman Islands law from time to time. INITIAL CHARGE BID / OFFER SPREAD None None FEES Management: 1.25% per annum Performance: 10% of Net Profit, payable monthly BUSINESS DAY OFFERING Any day other than a Saturday or Sunday on which banks are open for business in New York, London and Bermuda Continuous offering on a monthly basis. Subscriptions are processed on the first Business Day of each month INITIAL OFFER PERIOD Commencing on 11 December, 2008 and ending on 12 December 2008 SUBSCRIPTION PRICE VALUATION DATE REDEMPTIONS REDEMPTION FEE The net asset value per Participating Share of the relevant class The last Business Day of each calendar month Subject to the 30 day notice requirement mentioned below, redemptions of Participating Shares can be made with effect from the first Business Day after the Valuation Date of every month ( Redemption Day ) at the net asset value per Participating Share of the relevant Class on the Valuation Date immediately preceding such Redemption Day Subscriptions received after July-1 st 2009 will be subject to a Redemption Fee per Participating Share of 5.0% of the redemption proceeds in respect of any Participating Share redeemed within the first year following the date of issue of such Participating Share, 4% of the redemption proceeds for any Participating Share redeemed in the second year, 3% of the redemption proceeds for any Participating Share redeemed in the third year, 2% of the redemption proceeds for any Participating Share redeemed in the fourth year and 1% of the redemption proceeds for any Participating Share redeemed in the fifth year. Thereafter no Redemption Fee will be payable. Subscriptions received from Investors after July-1st 2009 will be entitled to redeem up to 5% of the initial subscription amount without any redemption fee charged after each annual anniversary of the investment (during the initial 5 years). This will be permitted each year on the first, second, third, fourth and fifth anniversary of the investment. No rolling up or aggregation of redemptions fee free entitlement will be permitted if one or several years of redemptions fee free entitlements is not taken. REDEMPTION PRICE DOLLAR OR $ OR USD EURO OR EUR BRITISH POUND STERLING OR GBP SEK OR KRONOR SWISS FRANCS OR CHF Net asset value per Participating Share for the relevant class The lawful currency of the United States of America Euro being the currency of the participating member states of the European Union that have adopted a single currency in accordance with the Treaty on European Union of 7 February 1992 The lawful currency of the United Kingdom The lawful currency of Sweden The lawful currency of Switzerland 7

8 CLASS PARTICIPATING SHARES SHAREHOLDER Each class of Participating Shares in the capital of the Fund created and designated by the Directors from time to time The non-voting participating redeemable shares in the share capital of the Fund, which are the subject of this offering A registered owner of Participating Shares of any Class in the share capital of the Fund from time to time 8

9 2. ESTABLISHMENT OF PRESTIGE ALTERNATIVE FINANCE FUND LIMITED This Information Memorandum ("Information Memorandum") is furnished to each potential investor solely for the purpose of evaluating the investment in Participating Shares of Prestige Alternative Finance Fund Limited ("Fund ). The information contained herein may not be reproduced or used in whole or in part for any other purpose or made available to anyone not directly concerned with the decision regarding such investment. The Fund is an open-ended investment company incorporated as a Cayman Islands exempted company on 2 December, 2008 with registration number SH and its registered office is located at SH Corporate Services Ltd, 4 th Floor Harbour Centre, Grand Cayman KY1 1102, Cayman Islands. The Fund is regulated under the Mutual Funds Law (Revised) of the Cayman Islands (the Law ). The Fund will comply with such Law on the basis that the minimum initial investment per investor in each class of Participating Shares (a "Class") is more than the equivalent of CI$ 80,000 (USD 100,000) and, furthermore, with regard to the Participating Shares of the Fund, will, once and if a Luxembourg listing is sought, comply with the Luxembourg Stock Exchange listing requirements on the basis that the minimum initial investment per investor in such Class is at least USD 100,000 (or the equivalent thereof in any other currency). Minimum subsequent investments for existing investors will be USD 10,000, EUR 8,000, GBP 6,000, SEK 62,000 or CHF 10,000 (or such other amount agreed to at the discretion of the Directors). The Fund is generally subject to the laws of the Cayman Islands. This Information Memorandum has not been approved by any regulatory authority in any country or jurisdiction (including, without limitation, the Cayman Islands Monetary Authority). Application may be made for the Participating Shares of the Fund to be listed on the Official List of the Luxembourg Stock Exchange and this Information Memorandum constitutes Listing Particulars in relation to the listing. Notwithstanding the possible listing it is not anticipated that any active secondary market will develop in the Participating Shares. Neither the admission of the Participating Shares to the Official List nor the approval of the listing particulars pursuant to the listing requirements of the Luxembourg Stock Exchange, once a listing is sought, shall constitute a warranty or representation by the Luxembourg Stock Exchange as to the competence of service providers to or any other party connected with the Fund, the adequacy of information contained in the listing particulars or the suitability of the Fund for investment purposes. The Directors of the Fund, whose names appear in the Directory, accept responsibility for the information contained in this Information Memorandum. 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 Information Memorandum is in accordance with the facts and does not omit anything likely to affect the import of such information. No person has been authorized to make any representations concerning the Fund, or the Participating Shares which are inconsistent with or in addition to those contained in this Information Memorandum and neither the Fund nor the Directors accept responsibility for any representations so made. The distribution of this Information Memorandum and the offering of Participating Shares in certain jurisdictions may be restricted, and accordingly, persons into whose possession this Information Memorandum comes, are required by the Fund to inform themselves about, and to observe any such restrictions. This Information Memorandum does not constitute an offer for sale of shares in the Fund. In particular, it does not constitute, and may not be used for the purposes of an offer or solicitation by any person in any jurisdiction (i) in which such offer or solicitation is not authorised or (ii) in which the person making such offer or solicitation is not qualified to do so or (iii) to any person to whom it is unlawful to make such offer or solicitation. Cayman Islands The Participating Shares may not be offered by public invitation in the Cayman Islands. United States of America The Participating Shares are not registered under the United States Securities Act of 1933 and may not be directly or indirectly offered or sold in the United States of America (including its territories, possessions and areas subject to its jurisdiction) or to or for the benefit of a U.S. Person. The expression "U.S. Person" shall have the meaning given to that expression in section 8 of this Information Memorandum. 9

10 United Kingdom The Fund is not a recognised collective investment scheme for the purposes of the Financial Services and Markets Act 2000 of the United Kingdom (the Act ). The promotion of the Fund and the distribution of this Information Memorandum in the United Kingdom is accordingly restricted by law. Whilst this Information Memorandum may also be issued outside the United Kingdom directly by the Fund, and the Directors of the Fund are responsible for its contents, wherever issued, it is being issued inside and outside the United Kingdom by Prestige Fund Management Limited to and/or is directed at persons who are of a kind to whom the Fund may lawfully be promoted by a person authorised under the Act by virtue of the Financial Services and Markets Act 2000 (Promotion of Collective Investment Schemes (Exemptions) Order 2001) and Annex 5 to Chapter 3 of the FSA's Conduct of Business Sourcebook or as otherwise permitted by applicable law and regulation. This Information Memorandum is exempt from the scheme promotion restriction of section 238 of the Act on the communication of invitations or inducements to participate in unrecognised collective investment schemes on the grounds that it is being issued to and/or directed at only the types of person referred to above. To the extent that this Information Memorandum is issued by Prestige Fund Management Limited, the Participating Shares are only available to such persons and this Information Memorandum must not be relied or acted upon by any other persons. Any recipient of this Information Memorandum who is an authorised person may, if and to the extent it is permitted to do so by the FSA rules applicable to it, distribute it or otherwise promote the Fund in accordance with section 238 of the Act but not otherwise. Any recipient of this Information Memorandum who is not an authorised person may not distribute it to any other person. Since the Fund is not a recognised collective investment scheme under the United Kingdom Financial Services and Markets Act 2000, investors in the Fund will not benefit from the rules and regulations made under that Act for the protection of investors, nor from the Financial Services Compensation Scheme. The Participating Shares are not dealt in on a recognised or designated investment exchange for the purposes of the United Kingdom Financial Services and Markets Act 2000, and it may therefore be difficult for an investor to dispose of his Participating Shares otherwise than by way of redemption or to obtain reliable information about the extent of the risks to which his investment is exposed. Participating Shares sold after the date of this Information Memorandum will be sold on the basis of the information contained in this Information Memorandum and any further information given or made by any dealer, salesman or other persons must be regarded as unauthorised. In particular, no person has been authorised to make any representations concerning the Fund or the Participating Shares which are inconsistent with or in addition to those contained in this Information Memorandum and neither the Fund nor the Directors accept responsibility for any representations so made. This Information Memorandum is based on the law and practice in force in the Cayman Islands at the relevant time, and is subject to changes therein. Persons interested in acquiring Participating Shares should inform themselves as to: (a) (b) (c) the legal requirements within the countries of their nationality, residence, ordinary residence or domicile for such acquisition; any foreign exchange restrictions or exchange control requirements which they might encounter on acquisition or disposal of Participating Shares; and the income tax and other taxation consequences which might be relevant to the acquisition, holding or disposal of Participating Shares. 10

11 3. INVESTMENT OBJECTIVE The investment objective of the Fund is to achieve steady long term capital growth through investments (directly or indirectly) in finance lease and hire purchase contracts ( Finance Contracts ) which are fully securitised against assets. The number of Finance Contracts as well as the number of securitised assets may be highly diversified and often very specialist but typically agricultural, rural or equestrian in nature such as, but not limited to, farm machinery (including specialist farm vehicles), specialist farm power generation, road going vehicles, food production machinery (including specialist vehicles), contracting and plant machinery (including specialist vehicles), live stock (including specialist vehicles), land and buildings. The Fund may also provide short and medium term Finance Contracts to customers wishing to purchase a range of specialist agricultural related insurance policies, which will also be fully securitised against assets. The Fund (or specialist dedicated vehicles owned directly or indirectly by the Fund) will enter into Introducer Agreements (each an Introducer Agreement ) with one or more asset finance arrangers in the United Kingdom who specialise in providing finance (typically but not limited to agricultural, farm, food production, contracting and plant machinery) and commercial mortgages for farmers, rural or equestrian businesses) (each an Arranger ). Under the Introducer Agreements, the Arrangers will submit business proposals to the Fund, having used their extensive experience to assess the credit risk and security of each proposal for finance. Provided that the Investment Manager is satisfied, on behalf of the Fund, with the proposal and security, the Fund will take an assignment of the binding Finance Contracts, including all finance documentation, direct debits and guarantees, as appropriate, prepared by the Arrangers and completed by the relevant customer. At the discretion and evaluation of the Arranger, in addition to Finance Contracts being securitised against assets, individual customers may also be required to provide personal guarantees. The Fund will target annual total returns, based upon the interest rates achievable on the Finance Contracts equal to or greater than the STERLING LIBOR Index. The Finance Contracts will comprise hire purchase arrangements. With hire purchase agreements, the customer (often farmers or agricultural related borrowers, but not limited to) chooses and uses the goods, but pays the finance company for them in installments. Repayment terms are tailored to customers cash flow, whilst the customers can reclaim depreciation allowances, offset interest payments against tax and reclaim Value Added Tax (VAT) on the purchase price. The Investment Manager will be responsible for the investment process, cooperating with each Arranger for the evaluation of proposed Finance Contracts and monitoring the performance of the Fund. The Investment Manager is granted full discretion over the matters relating to the manner, the method and timing of investments and transactions. All currency classes of Participating Shares will invest in the same underlying portfolio, the base currency of which will be GBP. The Fund may invest in derivatives and other financial instruments in an attempt to hedge the currency exposure between the non-gbp denominated classes of Participating Shares and the GBP base reporting currency of the underlying portfolio. All gains and losses arising from the hedging of the currency exposure between the non- GBP denominated classes and the GBP base reporting currency of the underlying portfolio will be attributable to the relevant class. Pending investments of capital of the Fund in accordance with its investment objective, or to facilitate redemptions by its shareholders, the Fund may, among other things, hold cash or invest in cash equivalents. Among the cash equivalents in which the Fund may invest are obligations of the United States Government, its agencies or instrumentalities, commercial paper and certificates of deposit and bankers acceptances issued by the United States banks that are members of the Federal Deposit Insurance Corporation. The Fund may also enter into repurchase agreements and may purchase shares of money market mutual funds in accordance with applicable legal restrictions. Fund may also invest in obligations of the United Kingdom Government, its agencies or instrumentalities, commercial paper and certificates of deposit and bankers acceptances issued by the United Kingdom banks that are authorized and regulated by the Bank of England. The Fund may also enter into repurchase agreements and may purchase shares of money market mutual funds in accordance with applicable legal restrictions. Whilst the investment strategy does not typically use leverage the Fund is authorised to borrow in order to fund redemption requests and to enhance its investment leverage subject to a maximum of 50% of the Fund NAV. There will be no restrictions on the borrowing capacity of the Fund other than limitations imposed by lenders and any applicable credit regulations. Loans generally may be obtained from securities brokers and dealers or from other financial institutions; such loans are secured by securities or other assets of the Fund pledged to such brokers. 11

12 Loans may also be made from or to other investment companies on such terms as are commercially reasonable, including without limitation, from or to investment companies similar to the Fund, or from or to finance companies with respect to which the relevant Investment Advisor has an interest, either as sponsor, manager, administrator, owner or otherwise. THE FUND S INVESTMENT PROGRAM IS SPECULATIVE AND ENTAILS SUBSTANTIAL RISKS. MARKET RISKS ARE INHERENT IN ALL INVESTMENTS TO VARYING DEGREES. THE PRACTICES OF LEVERAGE AND ENGAGING IN FINANCE TRANSACTIONS, CAN, IN CERTAIN CIRCUMSTANCES, INCREASE THE ADVERSE IMPACT TO WHICH THE FUND S INVESTMENT PORTFOLIO MAY BE SUBJECT. NO ASSURANCE CAN BE GIVEN THAT THE FUND S INVESTMENT OBJECTIVE WILL BE REALIZED. AN INVESTOR MAY LOSE SOME OR ALL OF HIS INVESTMENT. (SEE RISK FACTORS. ) 12

13 4. MANAGEMENT AND SERVICE PROVIDERS 4.1 Directors The overall responsibility for the operation of the Fund rests with the Directors. The Directors of the Fund are: Craig Reeves Mr. Reeves is Chief Executive Officer of Prestige Asset Management Ltd., a director of Prestige Asset Distribution Ltd., Prestige Fund Management Ltd., and a director of various Prestige Funds. Mr. Reeves has previously provided retained consultancy services to a major London-based international family office, a London-based international stock broker, a London-based pension consulting group and a London-based international property investment group. Former Managing Director and co-founder of Platinum Capital Management Ltd. (an international asset management group). Formerly Head of Portfolio Management and Asset Allocation at Titan Capital Management Ltd. (an international asset management group). Prior experience as a Proprietary Trader at Gaiacorp Trading Ltd. (an international asset management group); Proprietary Trader at London Currency Exchange Ltd. (a proprietary trading house) and an internship at Bank of America. Mr. Reeves has 16 years of experience as a professional investor in Alternative Investments / Hedge Funds, Capital Markets, and Real Estate. Mr. Reeves has written a number of articles for various financial journals, including AIMA Journal. Mr. Reeves has served on the boards of over 20 international professional investor funds. Mr. Reeves graduated from University of Greenwich with a BTEC HND in Business and Finance and Huddersfield University with a BA (Hons) in Business Administration. Mr. Reeves also attended the New York Institute of Finance where he studied various financial markets and derivative courses. A member of the Chartered Institute for Securities & Investment. Approved in the UK by the Financial Services Authority. Robert McGregor Mr. McGregor a resident of the Cayman Islands, is an Executive Director of Prestige Fund Management Ltd., Prestige Asset Distribution Ltd., and is a Board Director of various Prestige Funds. Mr. McGregor is also a Board Director of City Fund (Cayman) Ltd. (a financial risk management consultancy) and is a non-executive board director and co-founder of City Fund Management Ltd. (an Asset Management firm). Prior to co-founding City Fund Management Ltd., in 1994, Mr. McGregor has previously been involved in managing the finances of companies, the middle and back office and risk functions. Mr. McGregor s background is in international banking as a trader in London, running large proprietary trading books at Bankers Trust (an investment bank), Chemical Bank (an investment bank), Royal Trust Bank (an investment bank), as well as proprietary trading. His experience has been primarily in the bond and interest rate markets. He is now based in Grand Cayman managing risk positions in U.S. time. Approved in the UK by the Financial Services Authority. Geoff Ruddick Geoff Ruddick, B.Comm, CA, CFA, FICA, a resident of the Cayman Islands, is a Chartered Accountant, a member of the Institute of Chartered Financial Analysts, and a fellow of the International Compliance Association. Mr. Ruddick is employed as a Senior Company Manager for International Management Services Ltd. ( IMS ), a firm engaged in the management of offshore corporations. Prior to joining IMS, he was the Managing Director of Hedgeworks Fund Services Ltd. and before that, he was a Director and Compliance Officer with Derivatives Portfolio Management Ltd. (now DPM Mellon). Prior to entering the commercial side of fund management, Mr. Ruddick worked with KPMG in Vancouver auditing mutual funds, banks, and insurance companies and later with KPMG in the Cayman Islands, where he worked in the Corporate Recovery department involving the liquidation of mutual funds and other regulated entities. The services of Mr. Ruddick as a Director of the Fund are provided by IMS. IMS is licensed under the Mutual Funds Law (as amended) of the Cayman Islands. Overall responsibility for the operations of the Fund rests with the Directors all of whom act in a non-executive capacity. The address of the Directors for the purposes of the Fund is the registered office of the Fund. None of the Directors has any unspent convictions in relation to indictable offences, been involved in any bankruptcies, individual voluntary arrangements, receiverships, compulsory liquidations, creditors voluntary liquidations, administrations, company or partnership voluntary arrangements, any composition or arrangement with its creditors generally or any class of its creditors or of any company where they were a partner or director with an executive function, nor has had any public criticisms by statutory or regulatory authorities (including recognised professional bodies) nor has any Director ever been disqualified by a court from acting as a director of a company or from acting in the management or conduct of the affairs of any company. 13

14 The Fund has undertaken to indemnify every director, secretary, officer and servant of the Fund against all costs, losses and expenses (including traveling expenses) that any such indemnified person may incur and become liable for by reason of any contract entered into, or acts done by him in any way in discharge of his duties other than through his willful misconduct, gross negligence, reckless disregard of his duties or as otherwise required by law. The amount for which such indemnity is provided shall immediately attach as a lien on the property of the Fund and have priority as between the Shareholders over all other claims. No director, secretary, officer or servant of the Fund shall be liable for the acts, receipts, neglects or defaults of any other director, secretary, officer or servant of the Fund, for joining in any receipt or other act for conformity or for any loss or expense happening to the Fund through the insufficiency or deficiency of any security in or upon which any of the moneys of the Fund shall be invested or for any loss or damage arising from the bankruptcy, insolvency or tortious act of any person with whom any moneys, securities or effects shall be deposited, or for any loss, damage or misfortune whatever which shall happen in the execution of the duties of his respective office or in relation thereto unless the same happened through his own willful misconduct, gross negligence, reckless disregard of his duties or as otherwise required by law. 4.2 Investment Manager The Fund has appointed Prestige Fund Management Limited as Investment Manager (the Investment Manager ) of the Fund pursuant to an Investment Management Agreement (the Investment Management Agreement ). The Investment Manager was incorporated on the 11th May 2009 as a limited liability company under the laws of the Cayman Islands. Prestige Fund Management Limited is regulated by the Cayman Islands Monetary Authority. The registered office of which is: SH Corporate Services Ltd., PO Box 61, 4 th Floor Harbour Centre, Grand Cayman, Cayman Islands, KY Company registration number Cayman Island Monetary Authority registration number Additional information on the Investment Manager may be found at: and and The Investment Manager will decide periodically on the investments of the Fund in each Class, review the investment process, cooperating with each Arranger for the evaluation of proposed Finance Contracts and monitoring the performance of the Fund. The Investment Manager is granted full discretion over the matters relating to the manner, the method and timing of investments and transactions. The Investment Management Agreement ( Investment Management Agreement ) is for a one-year term, which will be automatically renewed for successive one-year terms, unless terminated at the end of such one-year term or any successive one-year term by either party upon not less than 30 days written notice. Under the terms of the Investment Management Agreement between the Fund and the Investment Manager, neither the Investment Manager nor any of its partners, directors, officers or employees will be responsible to the Fund for any loss or damage which the Fund may suffer as a result of or in the course of the discharge of the Investment Manager s duties under the Investment Management Agreement other than loss or damage arising by reason of the fraud, gross negligence or willful default of the Investment Manager, its partners, directors, officers or employees. The Fund will indemnify the Investment Manager, its partners, directors, officers or employees against all claims and demands which may be made against any of them in respect of any loss or damage sustained by any third party, other than loss or damage arising by reason of the fraud, gross negligence or willful default of the Investment Manager, its partners, directors, officers or employees. Provided that the Investment Manager has used reasonable care in the appointment, supervision and control of any person, firm or corporation to supply services in connection with the Investment Manager s duties under the Investment Management Agreement, the Investment Manager is entitled to rely on any reasonable advice, information or services thereby provided without liability to the Fund for any loss suffered by the Fund as a result thereof. The current Directors of Prestige Fund Management Limited are: Mr. Craig Reeves Mr. Robert McGregor Mr. Raffaele Riva 4.3 Investment Administration & Marketing Support The Investment Manager has appointed Prestige Asset Management Limited ( PAM ) to provide it with Investment Administration and Marketing Support Services pursuant to a Service Agreement ( The Service Agreement ). PAM, was incorporated on the 23 rd October 2007 as a limited liability company under the laws of England and Wales. PAM is authorized and regulated in the UK by the Financial Services Authority ( FSA ). The registered office of which is: 4th Floor, 36 Spital Square, London, E1 6DY, United Kingdom. Company registration number Financial Services Authority registration number Additional information on the 14

15 Sponsor may be found at: and and at: The Service Agreement ( The Service Agreement ) is for a one-year term, which will be automatically renewed for successive one-year terms, unless terminated at the end of such one-year term or any successive one-year term by either party upon not less than 30 days written notice. PAM will perform certain administrative, clerical and marketing support functions for the Investment Manager. These functions will include distributing final fund NAV prices to independent media groups, communicating with shareholders and generating periodic reports. PAM will also prepare regulatory compliant marketing materials for use by third party marketing and distribution. As compensation for its services, the Investment Manager has agreed to pay PAM based on its customary fees for performance of such services. 4.4 Investment Advisors and Investment Funds The Investment Manager may select one or a number of Investment Advisors and or Investment Funds based upon its detailed analysis. The Investment Advisors will, respectively, conduct the trading via a managed account structure or operate Investment Funds and advise thereon. The Investment Manager will have the discretion to add and/or withdraw Investment Advisors and/or Investment Funds and/or investment strategies from the portfolio, without notice to the Shareholders. The Investment Manager will notify the Shareholders of the current Investment Advisors and Investment Funds in the annual reports distributed to Shareholders, and will also include reports on the allocations in its monthly investment reports available from the Investment Manager. Depending on the nature of the relevant Investment Advisor and or Investment Fund, the Investment Manager and/or the Fund may enter into an Investment Advisory Agreement with selected Investment Advisors or may simply subscribe to an Investment Fund in accordance with its subscription procedure without entering into an Investment Advisory Agreement in respect thereto. Investment Funds may restrict redemptions or withdrawals by the terms of the relevant offering or constitutional document or by the terms of the relevant Investment Advisory Agreement. The Fund may also indemnify each Investment Advisor against claims related to the Fund made against the Investment Advisor in respect of any loss or damage suffered by any third party, other than by reason of the fraud, gross negligence or wilful default of the Investment Advisor. The Fund reserves the right to change all and any Investment Advisor and/or Investment Fund at any time at its sole discretion. 4.5 Administrator The Fund has entered into an administration agreement (the Administration Agreement ) with Butterfield Fulcrum Group (Bermuda) Limited (the Administrator ) and pursuant to the Administration Agreement, the Administrator will perform certain administrative and clerical functions for the Fund. These functions will include accepting subscription payments, remitting redemption proceeds, processing subscription and redemption documents, communicating with shareholders, generating periodic reports to investors, payment of the Fund s expenses and other day to day administrative tasks. The Administrator will also be responsible for the calculation of the Fund s net asset value and net asset value per Participating Share, providing periodic reports, maintaining the books and records and will undertake all reporting requirements in respect of the Fund. As compensation for its services, the Fund has agreed to pay the Administrator based on its customary fees for performance of such services. Under the Administration Agreement, the Fund has indemnified the Administrator and its servants or agents, from any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or distributions of any kind or nature whatsoever, other than those resulting from fraud, dishonesty, willful negligence or willful default on its part in performing its obligations or duties. The Administration Agreement provides that the Fund or the Administrator can terminate the Administration Agreement on giving not less than 90 days written notice. Less than 90 days notice may be given if (ii) there is a breach in the obligations along with a failure to rectify within 30 days; or (iii) the Fund or the Administrator goes into liquidation (other than voluntary liquidation). In performing its duties as administrator, the Administrator shall be entitled to rely, and generally will rely, on information provided to it by persons designated by the Fund, including but not limited to the Investment Manager, the Custodian and brokers, and shall not be responsible for errors contained in such information received from such persons. THE ADMINISTRATOR WILL NOT PROVIDE ANY INVESTMENT, ADVISORY OR MANAGEMENT SERVICE TO THE FUND AND THEREFORE WILL NOT BE IN ANY WAY RESPONSIBLE FOR THE FUND S PERFORMANCE. THE ADMINISTRATOR WILL NOT BE RESPONSIBLE FOR MONITORING ANY INVESTMENTS RESTRICTIONS OR COMPLIANCE WITH THE INVESTMENT RESTRICTIONS AND THEREFORE WILL NOT BE LIABLE FOR ANY BREACH THEREOF. 15

16 4.6 Custodian Butterfield Trust (Bermuda) Limited (the Custodian ) has been appointed custodian of certain assets of the Fund pursuant to an agreement between the Custodian and the Fund (the Custodian Agreement ). In its capacity as custodian, the Custodian is responsible for holding any un-invested cash. The Custodian is not responsible for the assets of the Fund, which have been placed in accounts with prime brokers, futures commodities merchants, Co- Custodians or other intermediaries. The Fund reserves the right, in its sole discretion, to change the custodial arrangements described herein without notice, prior or otherwise, to shareholders. The Custodian shall only be responsible for those assets held directly to their order and will not be liable for losses arising from the selection or use of any Co-custodian, any action or omission of any non-affiliated Co-custodian or the bankruptcy, insolvency or receivership of any non-affiliated Co-custodian Under the Custodian Agreement, the Fund has indemnified the Custodian, its servants or agents, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or distributions of any kind or nature whatsoever, other than those resulting from fraud, dishonesty, willful negligence or willful default on its part in performing its duties. The Custodian Agreement provides that the Fund or the Custodian can terminate the Custodian Agreement on giving not less than 90 days written notice. Less than 90 days notice may be given if (ii) there is a breach in the obligations along with a failure to rectify within 30 days; or (iii) the Fund or the Custodian goes into liquidation (other than voluntary liquidation). Pursuant to the Custodian Agreement, the Custodian will receive from the Fund remuneration for services rendered to the Fund at the Custodian s standard rates for such services. The Fund pays to the Custodian a fee as agreed between the Fund and the Custodian pursuant to the Custodian Agreement. The services of the Custodian to the Fund may, amongst other things, be terminated by either the Fund or the Custodian at any time, subject ordinarily to 90 days prior written notice. The Custodian shall have no responsibility to initiate, appear in, prosecute or defend any legal or equitable proceedings relating to the funds, stocks, bonds, other securities or property held by the Custodian under the Custodian Agreement with the Fund. The Custodian shall have no responsibility to initiate any proceeding or engage the services of any third party for the collection of overdue amounts owing to the Fund in connection with any stocks, bonds or other property held by the Custodian under the Custodian Agreement. If, at the request of the Fund, the Custodian agrees to appear in, prosecute or defend any such legal or equitable proceedings, either in the Custodian s name or in the name of its nominee, the Custodian shall first be indemnified to its satisfaction against damages and expenses (including attorney s fees) which may be sustained or incurred by the Custodian in so acting. The Investment Manager is responsible for satisfying itself in relation to the adequacy of the custody arrangement of the Investment Advisors and Investment Vehicles. 4.7 Auditors The Fund has appointed Deloitte and Touche, (Cayman Islands) as the Fund s auditors. The audit will be performed in accordance with International Standards on Auditing. The Fund's audited annual financial reports will be prepared in accordance with International Financial Reporting Standards". 4.8 Legal Counsel The Fund has appointed Solomon Harris, Cayman Islands as the Fund s legal counsel in respect of matters of Cayman Islands law. The Fund has appointed Irvine and Partners as the Fund s legal counsel in respect of matters of English law. 4.9 Conflicts of Interest Potential conflicts of interest exist in the structure and operation of the Fund. The Investment Manager holds all the Voting Shares in the Fund. Only the holder of the Voting Shares can appoint and remove Directors of the Fund and only the Directors may terminate the services of the Investment Manager, the Administrator, the Custodian and other agents of the Fund. Since the creation of the Fund the Investment Manager has acquired a minority shareholding in one of the Fund s counter parties, Eastern Counties Finance (responsible for the procurement and administration of loans). 16

17 Mr. Craig Reeves and Mr. Robert McGregor, directors of the Fund, are also directors of the Investment Manager, and certain directors of the Fund may also be substantial shareholders in the Investment Manager. Because of the above affiliation, the Investment Management Agreement was not negotiated on arms length terms. Notwithstanding these potential conflicts of interest, the Directors have fiduciary duties to the Fund and consequently have exercised and will exercise good faith and integrity in handling all the Fund s affairs. Should a conflict of interest arise the Directors of the Fund will endeavour to ensure that it is resolved fairly. The Administrator and the Investment Manager and their respective affiliates may manage or provide investment management and advisory services in respect of investments and funds other than those of the Fund that may create conflicts between the interests of their other clients and the Fund. In that respect, the Administrator and the Investment Manager and any of their respective affiliates may give advice and take action for their own account in the performance of their duties to other clients that may differ from the timing and nature of action taken with respect to the Fund. Because of different investment objectives and strategies, situations may occur where an asset is bought or sold for one or more managed funds (including the Fund) and accounts, while one or more of the other funds and accounts to which the Administrator and the Investment Manager or any of their respective affiliates is providing services in buying or selling the same assets. Moreover, if the purchases or sales of assets for two or more of such other funds and accounts arise at or about the same time, transactions in such assets will be allocated, insofar as it is feasible, for the respective funds and accounts in a manner determined to be equitable to all. Circumstances may arise when the purchases or sales of assets for one or more of the funds and accounts to which the Administrator and the Investment Manager or any of their respective affiliates is providing services have an adverse effect on other funds (including the Fund) and accounts to which the Administrator and the Investment Manager or any of their respective affiliates is providing services. The Administrator and the Investment Manager in the course of their other business activities may obtain nonpublic information that would be of value to the Fund. However, the Administrator and the Investment Manager will be under no obligation to use and may depending upon the circumstances, be legally prohibited from using such information for the benefit of the Fund. Each will at all times, have regard in such event to its obligations to the Fund and will endeavour to ensure that such conflicts are resolved fairly. When making investments where a conflict of interest may arise, the Investment Manager will act in a fair and equitable manner as between the Fund and its other clients. 17

18 5. SHARE CAPITAL 5.1 The Fund's Share Capital The authorised share capital of the Fund is the aggregate of USD 17,000, EUR 14,000, GBP 8,000, SEK 14,000 and CHF 14,000, with the USD 17,000 divided into 100 Voting Shares of USD 1.00 each and 1,690,000 USD Redeemable Non-Voting Participating Shares of USD 0.01 each, the EUR 14,000 divided into 1,400,000 EUR Redeemable Non- Voting Participating Shares of EUR 0.01 each, the GBP 8,000 divided into 800,000 GBP Redeemable Non-Voting Participating Shares of GBP 0.01 each, the SEK 14,000 divided into 1,400,000 SEK Redeemable Non-Voting Participating Shares of SEK 0.01 each, and the CHF 14,000 divided into 1,400,000 CHF Redeemable Non-Voting Participating Shares of CHF 0.01 each. The USD Redeemable Non-Voting Participating Shares ("USD Participating Shares"), the EUR Redeemable Non- Voting Participating Shares ("EUR Participating Shares"), the GBP Redeemable Non-Voting Participating Shares ("GBP Participating Shares"), the SEK Redeemable Non-Voting Participating Shares ("SEK Participating Shares") and the CHF Redeemable Non-Voting Participating Shares ("CHF Participating Shares") are herein collectively called "Participating Shares". The rights attaching to the Participating Shares and the Voting Shares respectively are as follows: 5.2 Participating Shares Participating Shares are redeemable participating shares without voting rights. The holder of a Participating Share is not entitled to receive notice of, attend or vote at meetings of shareholders (save with respect to such matters that may vary the rights of the Participating Shareholders). In a winding-up, each holder of a Participating Share has a preferential right of return of the paid-up par value and a right to share in surplus assets after return of the paid-up par value on the Voting Shares. The rights attached to the Participating Shares may be varied only with the consent in writing of the holders of three-fourths of the issued Participating Shares or with the sanction of a resolution passed by a three-fourths majority of the votes cast at a meeting of the holders of the Participating Shares. The Participating Shares are redeemable at the election of the holder, subject to the financial ability of the Fund to redeem under the provisions of Cayman Islands law. The liquidity of the Participating Shares may be limited at any particular time. Under certain circumstances, the Fund may suspend redemption rights of the Participating Shares. See Redemption of Shares. Each Class of Participating Shares shall rank pari passu. The Classes of Participating Shares will be segregated for accounting purposes (but not for legal purposes), so there will be a distinct net asset value per Participating Share for each Class. However, because the Classes are not segregated for legal purposes, if losses or liabilities are sustained by one Class of Participating Shares in excess of the assets attributable to that Class, such excess may be apportioned to the other Classes. Accordingly, all of the assets of the Company are available to meet all of its liabilities, regardless of the Class of Participating Shares to which such assets and liabilities are attributable. It is not the intention of the Directors to declare any dividends on Participating Shares. 5.3 Voting Shares Voting Shares may be issued at such price and to such persons as the Directors may determine. They do not carry any right to dividends. The holders of Voting Shares have the right to receive notice of, attend and vote at a general meeting. Accordingly, such holders have the exclusive right to appoint or remove Directors of the Fund. Only holders of Voting Shares are entitled to place the Fund in voluntary liquidation. In a winding up the holder of a Voting Share is entitled only to the return of the paid-up par value of the Voting Share after the paid-up par value of Participating Shares has been returned. Prestige Fund Management Limited, the Investment Manager, holds all the Voting Shares. 18

19 6. SUBSCRIPTION OF SHARES Subscriptions can only be made at the invitation of the Fund. The Directors and or the Administrator reserve(s) the right to reject subscriptions in whole or in part, without giving any reason, in which event subscription payments will be refunded at the applicant's risk, without interest in the same currency in which the application monies were received by telegraphic transfer to the account from which funds were received (at the discretion of the Directors) and at the expense of the applicant. When accepted by the Fund, subscriptions will (save as determined by the Administrator or Directors) be irrevocable. Participating Shares will be available for subscription during the Initial Offering Period at a subscription price of USD 100 per share in the case of USD Participating Shares, at a subscription price of EUR 100 per share in the case of EUR Participating Shares, at a subscription price of GBP 60 per share in the case of GBP Participating Shares, at a subscription price of SEK 100 per share in the case of SEK Participating Shares and at a subscription price of CHF 100 per share in the case of CHF Participating Shares. The Initial Offering Period shall mean the period from 11 December 2008 to 12 December 2008, both dates inclusive. After the close of the Initial Offering Period, Participating Shares will be available for subscription on the first Business Day (as defined below) after the Valuation Date (as defined below) of every month ( Subscription Day ) at the net asset value per Participating Share of the relevant Class on the Valuation Date immediately preceding such Subscription Day. The Directors reserve the right to accept subscriptions on such other dates as they shall determine. The initial minimum investment is USD 100,000 for USD Participating Shares, or currency equivalent in EURO for EUR Participating Shares or currency equivalent in GBP for GBP Participating Shares or currency equivalent in SEK for SEK Participating Shares or currency equivalent in CHF for CHF Participating Shares. The Directors in their discretion may agree to lower the minimum initial investment; subject to the combined value of subscriptions in the fund being equal to the currency equivalent of CI$ 80,000 (USD 100,000) or such other amount stipulated by Cayman Islands law from time to time. Minimum subsequent investments for existing investors will be USD 10,000, EUR 8,000, GBP 6,000, SEK 62,000 or CHF 10,000 (or such other amount agreed to at the discretion of the Directors).. Fractional Participating Shares may be issued up to four decimal places. At the discretion of the Directors Investments received from Qualified Financial Institutions /Nominees Investors may be aggregated to comply with the minimum requirements set down. In order to facilitate prompt and accurate crediting of subscription payments, subscribers must submit to the Fund at the address shown on the Subscription Agreement, prior to remittance, a completed Subscription Agreement in the form provided. During the Initial Offering Period, the completed Subscription Agreement, together with the relevant supporting documents, must be received no later than 5 business days prior to the Initial Offering Period. The full subscription amount in cleared funds must be received by the Administrator not later than one business day prior to the Initial Offering Period. After the Initial Offering Period, the completed Subscription Agreement and the full subscription amount in cleared funds must be received by the Administrator at least 2 Business Days prior to the Valuation Date in the case of USD Participating Shares, at least 2 Business Days prior to the Valuation Date in the case of EUR Participating Shares, at least 2 Business Days prior to the Valuation Date in the case of GBP Participating Shares, at least 2 Business Days prior to the Valuation Date in the case of SEK Participating Shares and at least 2 Business Days prior to the Valuation Date in the case of CHF Participating Shares. Payment in full for the amount subscribed is to be made in US Dollars, Euros, British Pounds Sterling, Swedish Kronor or Swiss Francs, as the case may be, in accordance with the payment instructions set out in the Subscription Agreement. The Directors may in their sole and absolute discretion accept subscriptions received after the stated time or require a completed Subscription Agreement and/or cleared funds at an earlier or later time or date. The Fund may utilise subscription amounts received from investors prior to the allotment of Participating Shares to such investors. In such event, the investor in question will become an unsecured creditor of the Fund until the respective Participating Shares are allotted. Participating Shares will be in registered form only and therefore share certificates will not be issued. However upon the acceptance of the Fund of a duly completed Subscription Agreement, investors will receive written confirmation of the number of Participating Shares held by them ownership of which shall be evidenced by entry in the register or Participating Shareholders of the Fund. No initial charge will be made by the Fund in respect of any subscription and no bid offer spread will be used. Whilst it is not envisioned for the Fund to typically operate this way, the Directors reserve the right to accept subscriptions in kind upon such terms as they shall consider appropriate provided that in no circumstances shall the value of the assets contributed in kind be less than the minimum subscriptions specified in this Information Memorandum. 19

20 A Business Day is any day other than a Saturday or Sunday on which banks are open for business in New York, London and Bermuda. Valuation Date shall be the last Business Day of each month or such other Business Day as the Directors may so determine. 20

21 7. REDEMPTION OF SHARES The Shareholder(s) must sign each request for redemption and, when required by the Fund or the Administrator, verification of the authenticity of the signature must be provided. Redemption requests are deemed received by the Fund on the date they are received by the Administrator. The net asset value per Participating Share at the time of redemption may be more or less than that at the time of subscription. Subject to the 30 day notice requirement mentioned below, redemptions of Participating Shares can be made with effect from the first Business Day after the Valuation Date of every month ( Redemption Day ) at the net asset value per Participating Share of the relevant Class on the Valuation Date immediately preceding such Redemption Day. A redemption request must be received by the Administrator not less than 30 days prior to the relevant Valuation Date. However, the Directors in their discretion may increase or reduce the period of notice generally or in regards to individual redemptions. The Directors also reserve the right to accept redemptions on such other dates as they shall determine. Each redemption request should be in writing in the form provided (by facsimile with the original to follow by mail) and must specify the number of Participating Shares to be redeemed and give payment instructions for the redemption proceeds. In order for a redemption request to be effective, it must be acknowledged by the Administrator on behalf of the Fund. If the Shareholder does not receive an acknowledgement of its redemption request within 5 (five) days of submission to the Administrator, such Shareholder should contact the Administrator to confirm the status of the redemption request. The Administrator and Fund accept no liability for any redemption request which is submitted to the Administrator but in relation to which no acknowledgement has been issued to the redeeming Shareholder. The Administrator will process redemption requests which are initially received by facsimile, but redemption proceeds will not be paid in respect of a redemption by a Shareholder until the Administrator has either confirmed that they have received the duly completed redemption request or they confirm they have received the original redemption request signed by the redeeming Shareholder or by an authorized signatory of the redeeming Shareholder. Neither the Fund nor the Administrator shall be responsible for any mis-delivery or non-receipt of any facsimile if they have not acknowledged receipt of the facsimile or original. The Participating Shares will be redeemed on the relevant Redemption Day and it is intended that payment of proceeds will normally be made in full within 30 Business Days. All payments for redemptions of USD Participating Shares will be in US Dollars, all payments for redemptions of EUR Participating Shares will be in Euros, all payments for redemptions of GBP Participating Shares will be in British Pounds Sterling, all payments for redemptions of SEK Participating Shares will be in Swedish Kronor and all payments for redemptions of CHF Participating Shares will be in Swiss Francs. Redemption proceeds will be effected by wire transfer upon the request and at the expense of the redeeming Shareholder. No interest will be paid on the redemption proceeds between the Redemption Day and the date(s) of actual payment. The Administrator will not make any redemption payouts to third parties. Following redemption the minimum value of an investor's holding of Participating Shares (as determined by reference to the net asset value per Participating Share on the Valuation Date immediately preceding the redemption) must be USD 10,000 in the case of USD Participating Shares, or currency equivalent in EURO in the case of EUR Participating Shares or currency equivalent in GBP in the case of GBP Participating Shares, or currency equivalent in SEK in the case of SEK Participating Shares or currency equivalent in CHF in the case of CHF Participating Shares. Any redemption request that would reduce an investor's holding of Participating Shares below such a minimum value, will be treated as a redemption request for such amount or number of Participating Shares as shall reduce the holding to the minimum value. Notwithstanding the foregoing, the directors shall have the discretion to waive the above minimum value requirement. In the event that the Directors determine that special circumstances have arisen, including, but not limited to, default or delay in payments to the Fund by other persons and or entities, the Fund is entitled to delay payment of redemption proceeds equal to the proportionate part of the net assets of the Fund represented by the sums that are the subject of such default or delay. The Fund may suspend the calculation of the net asset value per Participating Share of any Class, whereupon the issue and redemption of Participating Shares of that Class will be suspended, under any one or more of the following circumstances: (a) a closure of or suspension of trading on any market on which any assets of that Class of Participating Shares of the Fund are traded; or 21

22 (b) (c) (d) a breakdown occurs in any of the means normally employed by the Administrator to ascertain the value of the assets of that Class of Participating Shares of the Fund or when for any other reason the value of the assets of that Class of Participating Shares of the Fund cannot reasonably be ascertained; circumstances exist as a result of which in the opinion of the Investment Manager it is not reasonably practicable for the Fund to realize any assets, which together constitute a material proportion of the overall assets of that Class of Participating Shares of the Fund; or for any other reason that the Directors in their discretion deem is in the best interests of the Fund. No Participating Shares of the relevant Class may be redeemed during a period of suspension. Any such suspension shall terminate when the Directors declare that the suspension is at an end. The Fund may withhold payment to any person whose Participating Shares have been tendered for redemption until after the suspension has been lifted. Notice of any suspension will be given to any Shareholder who has tendered his Participating Shares for redemption and to whom full payment of the redemption proceeds has not yet been remitted. If a redemption request is not withdrawn by a Shareholder following notification of a suspension, the redemption will be completed on the basis of the net asset value per Participating Share of the relevant Class on the Valuation Date immediately following the end of the suspension. The Fund has the right to require, with 30 days notice, the compulsory redemption or transfer of all Participating Shares held by a Shareholder if the Fund determines that the Participating Shares are held for the benefit of any non-eligible Shareholder. The Fund also reserves the right to require compulsory redemption or transfer of all Participating Shares held by a Shareholder if the Directors determine that the ownership of the Participating Shares by the Shareholder is, in the opinion of the Directors, unlawful or may be harmful or injurious to the business or reputation of the Fund, the Investment Manager, the Custodian or the Administrator. The Fund also reserves the right to require, with 30 days notice, the compulsory redemption or transfer of all Participating Shares held by a Shareholder in such other circumstances as the Directors shall determine. Compulsory redemptions will be made on the next Redemption Day after a notice of compulsory redemption is issued to the Shareholder on the basis of net asset value per Participating Share as at the Valuation Date immediately preceding the Redemption Day. If the Fund receives redemption requests for Participating Shares of any Class which in the aggregate exceed 10 per cent of the total outstanding Participating Shares of such class on any Redemption Day, the Directors may elect to restrict the total number of Participating Shares of such Class redeemed on such Redemption Day to 10 per cent of the total outstanding Participating Shares of such Class, in which case all such redemption requests will be scaled down pro rata. If any redemption request is not satisfied in full, in any such case, the balance of all such redemption requests will be dealt with on the next following Redemption Day but subject to further scaling down if the 10 per cent limit is exceeded again. All redemptions are subject to certain restrictions imposed by the Fund s Articles of Association and Cayman Islands law. REDEMPTION FEES MAY APPLY IN RELATION TO REDEMPTION. FOR DETAILS, PLEASE REFER TO SECTION 10.3 BELOW. 22

23 8. ELIGIBLE INVESTORS AND RESTRICTIONS ON TRANSFER OF TITLE It is the responsibility of each investor to ensure that the purchase of Participating Shares does not violate any applicable laws in the investor's jurisdiction of nationality, residence or domicile. The Fund reserves the right to reject any application for Participating Shares in its sole discretion without giving reasons. An investment in the Fund is speculative and not intended as a complete investment programme. Specifically, Participating Shares may not be acquired directly or indirectly for the account or benefit of a U.S. Person. For the purposes of this Information Memorandum a U.S. Person shall mean: (a) (b) (c) (d) (e) (f) (g) (h) any person considered resident or benefiting from any rights of citizenship in the United States of America; any partnership or corporation organized or incorporated whether under federal or state law as constituted under the laws of the United States of America; any estate of which an executor or administrator is a U.S. Person; any trust of which a trustee is a U.S. Person; any foreign entity, including all subsidiary branches or agencies of the said entity, located in the United States of America; any non-discretionary account or other account not being that of an estate or trust held by another, whether or not in a fiduciary capacity, for the benefit of a U.S. Person; any discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated or, if an individual, resident in the United States of America; or any partnership or corporation otherwise organized or incorporated under the laws of any foreign jurisdiction formed by a U.S. person principally for the purpose of investing in securities other than those registered under the United States Securities Act 1933 as amended (the Act ) unless organized, incorporated and owned by accredited investors (as defined in Rule 501(a) of the Act) which investors are not of an individual estate or trust nature (whenever such term is used in this Information Memorandum it shall have the meaning given in the Act). Participating Shares may not be offered for sale by way of an invitation to members of the public of the Cayman Islands to subscribe. However, non-resident and exempted companies or other non-resident or exempted entities established in the Cayman Islands may subscribe. Transfers should be in the form prescribed by the Fund and should be completed and delivered to the Administrator. The Fund reserves the right to require any transferee to execute a Subscription Agreement as if such transferee were an original subscriber for the Participating Shares the subject of the transfer. The Directors may in their absolute discretion decline to register any transfer of Participating Shares to a person of whom they do not approve or if they are not satisfied that such transfer complies with all applicable laws and regulations. Any person becoming entitled to Participating Shares in consequence of the death or bankruptcy of a Shareholder shall, on producing appropriate evidence, at the absolute discretion of the Directors, be entitled to become registered as a Shareholder in respect of the Participating Shares or to make such transfer of the Participating Shares as the deceased or bankrupt person could have made, subject to the Directors having the same right to refuse to register the transfer as they would have had in the case of a transfer by the deceased or bankrupt person before the death or bankruptcy. 23

24 9. CALCULATION OF NET ASSET VALUE The net asset value per Participating Share of each Class will be determined by the Administrator, except when the determination of same has been suspended (in accordance with the Fund s Articles of Association) on each Valuation Date and is calculated to four decimal figures by aggregating the value of the assets owned or contracted for by the Fund attributable to the relevant Class and deducting: (i) all of the liabilities of the Fund attributable to such Class (including accrued liabilities and such provisions and allowances for contingencies as the Administrator considers appropriate in respect of the costs and expenses payable by the Fund in respect of the relevant Class including any accrued performance fees) and (ii) such proportion of the amount paid up on the Voting Shares as the Fund shall determine, converting the resulting sum into the currency of the relevant Class and dividing such sum by the number of Participating Shares of the relevant Class as may be outstanding at the close of business on that Valuation Date. In general, the assets of the Fund will be valued as follows: (a) The value of any investment which is quoted, listed or normally dealt in on a market shall be calculated by reference to the price appearing to the Administrator to be the last available bid price if bid and asked prices are available (or if bid and asked prices are not available, the closing price) on the market on which the investment is quoted, listed or ordinarily dealt in for such amount of such investment as the Administrator may consider in the circumstances to provide a fair criterion, provided that: (i) (ii) (iii) if an investment is quoted, listed or normally dealt in on more than one market, the Administrator shall adopt the last available bid price or, as the case may be, the closing price, on the market which in their opinion provides the principal market for such investment; and in the case of an investment which is quoted, listed or normally dealt in on a market but in respect of which for any reason, prices on that market may not be available at any relevant time, the value therefore shall be certified by a person firm or association making a market in such investment and qualified, in the opinion of the Administrator, to provide such a certificate; and there shall be taken into account interest on interest-bearing investments up to the relevant Valuation Date. (b) The value of any investment, which is not quoted, listed or normally dealt in on a market shall be the value thereof ascertained by the Investment Manager or the Administrator in good faith. For this purpose: (i) (ii) (iii) the initial value of such investment shall be the amount expended in the acquisition thereof (including the amount of the stamp duties, commissions and other expenses incurred in the acquisition thereof and the vesting thereof in the Fund); there shall be taken into account interest on interest-bearing investments up to the relevant Valuation Date; and in valuing such investments the Administrator or Investment Manager may consider, inter alia, the fundamental analytical data relating to the investments, the nature and duration of restrictions on disposition of the investments and the forces, which influence the market in which the investments are purchased and sold. (c) (d) The value of any future contracts, index futures contracts and options which are dealt in on a market shall be calculated by reference to the price appearing to the Administrator or Investment Manager to be the settlement price as determined by the market in question provided that where it is not the practice of the relevant market to quote a settlement price or if such settlement price is not available for any reason, such value shall be calculated in such manner as the Administrator or Investment Manager shall determine; On each Valuation Date, the value of any investment vehicle in which the Fund is invested will be the final net asset value ( Final NAV ) reported by the fund manager or administrator of the investment vehicle on the Valuation Date or, if not available, the most recent estimated net asset value based on preliminary returns reported by such fund manager or administrator ( Estimated 24

25 NAV ). All values assigned to securities and other assets and liabilities by the relevant party shall be final and conclusive as to all holders of the Participating Shares in the Fund. The net asset value per Participating Share of the Fund will be based on Estimated NAV when Final NAV is unavailable. The Fund will obtain confirmation from the managers or administrators of the investment vehicle in which the Fund invests regarding their net asset value calculations (whether they are supplying Estimated or Final NAV) prior to the determination of the net asset value per Participating Share of the Fund. Once the Fund has finalized its net asset value per Participating Share as of any Valuation Date, whether or not based on Estimated NAV, no adjustments or restatements of such net asset value per Participating Share will be performed, even if the Final NAV for particular assets differs from the Estimated NAV used to value such assets. Thus, in the event that there is a difference between Estimated NAV and Final NAV, any necessary adjustments will affect, and be reflected in, the net asset value per Participating Share reported in subsequent periods only. Accordingly, any purchase or redemption of Participating Shares will be at net asset value per Participating Share as of the Valuation Date coinciding with or immediately preceding the redemption date or the purchase date, as the case may be. If there is ultimately a difference between the Estimated NAV and the Final NAV for particular assets that results in an adjustment of net asset value after the redemption date or purchase date, the Fund will not make any adjustment to the dealing price; (e) (f) (g) (h) (i) (j) (k) Currency and futures forwards and currency and futures options shall be valued at bid or offer values (as appropriate) in accordance with procedures determined by the Administrator or Investment Manager, as at such time on the Valuation Date as shall be determined by the Administrator or Investment Manager; Certificates of deposit acquired at their nominal value plus accrued interest (if any) shall be valued at cost plus accrued interest from the date of acquisition on the nominal value at the coupon rate; Certificates of deposit acquired at a discount or premium on the sum of the nominal value and accrued interest at the date of acquisition shall be valued at their cost plus accrued interest from the date of acquisition on the nominal value at the coupon rate, and adjusted by an amount equal to the discount or premium at which they were acquired divided by the number of days unexpired at the date of acquisition and multiplied by the number of days elapsed from the date of acquisition to the relevant Valuation Date; Interest-bearing securities shall be valued at cost plus accrued interest from the date of acquisition and adjusted by an amount equal to any discount or premium on the sum of the nominal value and accrued interest at the date of acquisition divided by the number of days unexpired at the date of acquisition and multiplied by the number of days elapsed from the date of acquisition to the relevant Valuation Date; In the case of any security or other property which in the opinion of the Investment Manager or Administrator it would not be appropriate to value as above provided, the value thereof shall be determined in such manner as the Investment Manager or Administrator shall from time to time determine; In the case of any asset realized or contracted to be realized at a known value the net proceeds, discounted at a rate considered appropriate by the Administrator or Investment Manager, of such realization shall be taken into account in lieu of any other method of determining the value of the asset concerned; The value of any such securities or other assets listed above shall be determined having regard to the full amount of any currency premium or discount which may be relevant. Prospective investors should be aware that situations involving uncertainties as to the valuation of investment vehicles may occur and could have an adverse effect on the Fund's net assets. Absent bad faith or manifest error, the net asset value per Participating Share as determined by the Administrator is conclusive and binding on all Shareholders. The Fund may suspend the calculation of the net asset value per Participating Share of any Class, whereupon the issue and redemption of Participating Shares of that Class will be suspended, under any one or more of the following circumstances: 25

26 (a) (b) (c) (d) a closure of or suspension of trading on any market on which any assets of that Class of Participating Shares of the Fund are traded; or a breakdown occurs in any of the means normally employed by the Administrator or Investment Manager to ascertain the value of the assets of that Class of Participating Shares of the Fund or when for any other reason the value of the assets of that Class of Participating Shares of the Fund cannot reasonably be ascertained; or circumstances exist as a result of which in the opinion of the Investment Manager in consultation with the Directors it is not reasonably practicable for the Fund to realise any investments or other assets owned or contracted for which together constitute a material proportion of the overall assets of that Class of Participating Shares of the Fund; or for any other reason that the Investment Manager in consultation with the Directors in their discretion deem is in the best interests of the Fund. In determining the net asset value per Participating Share, the Administrator will follow the valuation policies and procedures adopted by the Fund as set out above. For the purpose of calculating the net asset value per Participating Share, the Administrator shall, and shall be entitled to, rely on, and will not be responsible for the accuracy of, financial data furnished to it by the Custodian or the Investment Manager. The Administrator may also use and rely on industry standard financial models in pricing any of the Fund s securities or other assets. If and to the extent that the Investment Manager is responsible for or otherwise involved in the pricing of any of the Fund s securities or other assets, the Administrator may accept, use and rely on such prices in determining the net asset value per Participating Share and shall not be liable to the Fund, any investor in the Fund, the Directors, the Investment Manager or any other person in so doing. Notwithstanding any listing of any Class of Participating Shares on the Luxembourg Stock Exchange, it is not anticipated that there will be a secondary market for trading in any Class of Participating Shares. 26

27 10. FEES AND EXPENSES 10.1 Management Fee The Fund pays to the Investment Manager a Management Fee on the aggregate net asset value of the Participating Shares of each Class (prior to accrual of Performance Fee) of 1.25% per annum, payable monthly in arrears. The Investment Manager reserves the right to share with or rebate any part of the Management Fee to the Fund, introducers to the Fund, Shareholders or any other parties Performance Fee The Fund pays to the Investment Manager a performance fee (the "Performance Fee"), calculated monthly and payable as of the end of each month prior to any accruals for, or the payment of, the Performance Fee, in an aggregate amount equal to 10% of the net realized and net unrealized appreciation in the net asset value of each Participating Share of each Class in such month ("Net Profits"), if any; provided, however, that if a Participating Share has a loss chargeable to it during any month or months ("Unrecouped Loss") and during any succeeding months there are Net Profits allocable to the Participating Share, there will be no Performance Fee payable with respect to such Participating Share until the amount of the Unrecouped Loss allocated to such Participating Share has been recouped. If Participating Shares are redeemed during a month, the Unrecouped Loss relating to such Participating Shares will be reduced in the same proportion as the reduction in the aggregate net asset value of such Participating Shares caused by such redemption. The Investment Manager reserves the right to share with or rebate any part of the Performance Fee to the Fund, introducers to the Fund, Shareholders or any other parties. Because of the practical difficulties in utilising an equalisation methodology in the case of a fund of the nature of the Fund, no such methodology will be employed by the Fund. As a result, the allocation of the Performance Fee amongst the Shareholders may not be equitable depending upon when a Shareholder subscribes for or redeems Participating Shares Redemption Fee There will be a redemption fee deducted from each Participating Share and funded by the redemption proceeds per Participating Share ( Redemption Fee ). Subscriptions received after July-1st 2009 will be subject to a Redemption Fee per Participating Share of 5.0% of the redemption proceeds in respect of any Participating Share redeemed within the first year following the date of issue of such Participating Share, 4% of the redemption proceeds for any Participating Share redeemed in the second year, 3% of the redemption proceeds for any Participating Share redeemed in the third year, 2% of the redemption proceeds for any Participating Share redeemed in the fourth year and 1% of the redemption proceeds for any Participating Share redeemed in the fifth year. Thereafter no Redemption Fee will be payable. Subscriptions received prior to July-1 st 2009 will be subject to a Redemption Fee per Participating Share of 6.0% of the redemption proceeds in respect of any Participating Share redeemed within the first year following the date of issue of such Participating Share, 4.8% of the redemption proceeds for any Participating Share redeemed in the second year, 3.6% of the redemption proceeds for any Participating Share redeemed in the third year, 2.4% of the redemption proceeds for any Participating Share redeemed in the fourth year and 1.2% of the redemption proceeds for any Participating Share redeemed in the fifth year. Thereafter no Redemption Fee will be payable. Subscriptions received from Investors after July-1st 2009 will be entitled to redeem up to 5% of the initial subscription amount without any redemption fee charged after each annual anniversary of the investment (during the initial 5 years). This will be permitted each year on the first, second, third, fourth and fifth anniversary of the investment. No rolling up or aggregation of redemptions fee free entitlement will be permitted if one or several years of redemptions fee free entitlements is not taken. The Investor is responsible for stating on any withdrawal request that they wish to take the redemption free entitlement and failure to do so will result in the redemption being redeemed with the prevailing redemption fee applicable to the subscriptions original investment date Administration Fee The Fund will pay to the Administrator an administration fee as specified in the Administration Agreement. In addition, the Administrator will provide certain other services to the Fund which will be charged for at the Administrator s normal commercial rates from time to time. 27

28 10.5 Custody Fee The Fund will pay to the Custodian fees and expenses as specified in the relevant Custodian Agreement Fees of Directors The Fund may pay an annual fee and fees invoiced in relation to particular services to any one or all Directors for their services as Directors of the Fund. In the current financial year it is estimated that the Fund will pay an aggregate fee that is deemed appropriate to any one Director or all the Directors of the Fund. The remuneration of the Directors shall from time to time be determined by the Fund Ongoing Expenses The Fund will bear its own operating expenses, including, but not limited to, fees payable to fund managers and/or investment vehicles, organizational and investment expenses (reasonably determined to be related to the investment of the Fund s assets), administrative expenses, marketing expenses, legal and licensing expenses, government fees, audit, interest and shareholder communication expenses and other expenses associated with the operation of the Fund. The Fund may reimburse the Investment Manager for some of the investment expenses incurred in connection with its rendering investment advice and other services to the Fund (including, without limitation, compensation for operational, systems, research and due diligence charges). Such investment expenses are limited to 0.30% of the net asset value of the Fund. The Investment Manager and the Administrator will be responsible to track the expenses of the Fund. Any of the above costs, charges and expenses that are attributable to the whole Fund will be borne by the Fund and then allocated across the Share Classes. At the discretion of the Investment Manager, Investments received in the Fund may be subject to initial marketing and distribution costs, which will not exceed 6% of funds subscribed / invested which will be paid to the investment manager. Preliminary and ongoing legal, printing and continuous offering memorandum expenses, subject to a maximum of US$200,000, bourne by the Fund in connection with the continuous offering of Participating Shares, will be capitalized and then amortised by writing off equal installments on each Valuation Date over five years (and thereafter as incurred). At the discretion of the Investment Manager, the Fund may pay and continue to pay ongoing marketing and advisor incentives which may not exceed 1.25% per year of the Net Asset Value of the Fund, which will be capitalized and amortised. Whilst the Investment Manager considers that such an accounting policy is appropriate, such policy may conflict with International Financial Reporting Standards and may result in a qualification to the auditors report to the Fund s financial statements if the auditors determine that such costs are material to such financial statements. 28

29 11. TAXATION 11.1 Cayman Islands Under current legislation in the Cayman Islands, no direct taxes will be imposed upon the Fund or its shareholders by the Cayman Islands Government. Under current legislation in the Cayman Islands, there are no exchange control laws or regulations in effect. The Fund has been incorporated under the laws of the Cayman Islands as an exempted company and, as such, has applied for or already received an undertaking from the Governor in Council of the Cayman Islands that for a period of 20 years from the date of the undertaking, no law which is enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciations or any tax in the nature of estate duty or inheritance tax, will be payable on or in respect of the shares, debentures or other obligations of the Fund or by way of the withholding in whole or in part of any relevant payment as defined in Section 6(3) of the Tax Concessions Law (Revised) of the Cayman Islands. The Cayman Islands currently have no income, corporation or capital gains tax and no estate duty, inheritance tax or gift tax Shareholder Taxation Prospective investors should ascertain from their professional advisers the consequences to them of acquiring, holding, redeeming, transferring or selling Participating Shares under the relevant laws of the jurisdictions to which they are subject, including the tax consequences and any exchange control requirements. Prospective investors should note that the Fund may be subject to irrecoverable withholding taxes on investment income in the country of origin European Union Savings Directive Distributions of income made by the Administrator on behalf of the Fund, together with payment of the proceeds of sale and/or redemption of Shares ( Payments ), are not subject to any reporting requirements that arise as a result of the Cayman Islands legislation (the Cayman EUSD Legislation ) implementing measures similar to the EU Council Directive 2003/48/EC of 3 June 2003 on taxation of savings income in the form of interest payments (the EUSD ). For the purpose of the Cayman EUSD Legislation, the Fund is a non-ucits fund therefore Payments by the Fund are out of scope. If an investor is based in the European Union or certain states that have equivalent measures to the EUSD (including Switzerland, Channel Islands, Monaco and the Cayman Islands) and is making an investment in the Fund on behalf of other underlying investors who are individuals or certain unincorporated entities resident in the European Union or certain of the states that have equivalent measures to the EUSD, then the provisions of the EUSD may apply. In such circumstances the investor may become the paying agent for EUSD purposes pursuant to implementary measures in the investor s country of residence and may be required pursuant to such measures to either obtain all relevant information relating to its underlying investors and their indirect investment in the Fund, and make returns to the appropriate tax authorities under EUSD, or withhold tax at applicable rates from any distribution made to an underlying investor in respect of a Payment. 29

30 12. GENERAL AND STATUTORY INFORMATION 12.1 Cayman Islands Mutual Funds Law The Fund is a registered mutual fund under section 4(3) of the Mutual Funds Law and is regulated under the Mutual Funds Law. The Fund is not required to be licensed under the Mutual Funds Law as the minimum initial investment per investor is more than the equivalent of CI$ 80,000 (USD 100,000). However, the fact that the Fund is regulated under the Mutual Funds Law does not imply that the Cayman Islands Monetary Authority (the Authority ) has passed upon or approved the Information Memorandum or the offering of the Participating Shares. The Fund is required to provide the Authority with a copy of this Information Memorandum, a summary of the terms of the offering of the Participating Shares and the details of the Fund s various agents. The Fund is also required to provide its audited financial statements to the Authority filed directly by the Auditors in electronic means approved by the Authority. As a registered mutual fund, the Fund is subject to the supervision of the Authority and the Authority may at any time instruct the Fund to have its accounts audited and to submit them to the Authority within such time as the Authority specifies. In addition, the Authority may ask the Directors to give the Authority such information or such explanation in respect of the Fund as the Authority may reasonably require to enable it to carry out its duty under the Law. The Directors must give the Authority access to or provide at any reasonable time all records relating to the Fund and the Authority may copy or take an extract of a record it is given access to. Failure to comply with these requests by the Authority may result in substantial fines and may result in the Authority applying to the court to have the Fund wound up. The Authority may take certain actions if it is satisfied that a regulated mutual fund is or is likely to become unable to meet its obligations as they fall due or is carrying on or is attempting to carry on business or is winding up its business voluntarily in a manner that is prejudicial to its investors or creditors. The powers of the Authority include, inter alia, the power to cancel the Fund's registration under the Mutual Funds Law, the power to require the substitution of the Directors, to appoint a person to advise the Fund on the proper conduct of its affairs or to appoint a person to assume control of the affairs of the Fund. There are other remedies available to the Authority including the ability to apply to judicial court for approval of other actions. Where a petition for the winding up of a regulated mutual fund is presented by a person other than the Authority, the Authority must be served by the petitioner with a copy of the petition and may appear at the hearing of the petition. The Authority may also appoint a representative to attend a creditors meeting of a regulated mutual fund, a meeting of a committee established to discuss a compromise or arrangement or to make representations at any such meeting. If requested by any relevant regulatory authority (including, without limitation, the Authority), the Fund may pass on information about any investor to any such regulatory authority. It is a term of subscription that any investor will be deemed to have consented to the passing of such information to such authority Reports and Financial Statements The Fund s fiscal year ends on 31 December in each year. Shareholders and, if a Luxembourg listing is effected, the Luxembourg Stock Exchange, will receive audited annual financial reports of the Fund within six months of the end of the Fund s fiscal year. The Fund s audited annual financial reports will be prepared in accordance with International Financial Reporting Standards. The Investment Manager will provide reports to the Fund periodically, but not less than quarterly, for distribution to shareholders and it is expected that the funds reports and performance updates will also eventually be listed on Anti-Money Laundering Measures To ensure compliance with statutory and other generally accepted principles relating to anti-money laundering, the Fund and/or the Administrator may require a detailed verification of a prospective investor's identity. Although the Fund and/or the Administrator reserve the right to request a detailed verification of a prospective investors identity such verification should not be necessary if : (a) the prospective investor makes the subscription payment from an account held in their own name at a Qualified Financial Institution in an approved jurisdiction (a QFI ); or 30

31 (b) the prospective investor is introduced by a QFI in an approved jurisdiction and that QFI provides written assurance to the Fund and/or the Administrator and or the Investment Manager that it has established the identity of the prospective investor and holds evidence of that identity. A QFI in an approved jurisdiction is defined as a Bank or deposit company, investment provider, licensed trust company, insurance company (excludes life, disability or reinsurance), credit union, processor of subscriptions or redemptions related to a collective investment scheme or investment fund, a member of a Stock Exchange or currency exchange servicer that carries on business in Bermuda or in one of the following countries: Australia, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Guernsey, Hong Kong, Iceland, Ireland, Isle of Man, Italy, Japan, Jersey, Luxembourg, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, United Kingdom, United States of America. Prospective investors who DO NOT make the subscription payment from an account held in their own name at a QFI or who are NOT introduced by a QFI will be required to provide the information/ documentation specified in the Anti-Money Laundering Supplement. When making an initial application for Participating Shares, all applicants must complete the Anti-Money Laundering Supplement and submit this to the Administrator together with the information/documentation specified therein and their completed Subscription Agreements. The Administrator reserves the right to request such information as is necessary to verify the identity of an applicant. In the event of delay or failure by the applicant to produce any information required for verification purposes, the Investment Manager in consultation with the Administrator may refuse to accept the application and the subscription monies relating thereto. It is further acknowledged that the Administrator, in the performance of its delegated duties, shall be held harmless by the subscriber against any loss arising as a result of a failure to process the subscription if such information as has been requested by the Administrator has not been provided by the applicant. If any person in the Cayman Islands involved in the business of the Fund has knowledge or suspicion that a payment to the Company (by way of subscription or otherwise) is derived from or represents the proceeds of criminal conduct, that person is required to report such knowledge or suspicion to the Cayman Islands Reporting Authority pursuant to The Proceeds of Criminal Conduct Law of the Cayman Islands. If any person who is resident in Bermuda, including the Fund, its Directors, the Administrator and its servants or agents, knows or has a suspicion that a payment to the Fund (by way of subscription or otherwise) contains the proceeds of criminal conduct, such person is required to report such suspicion pursuant to The Proceeds of Crime Act 1997 (as amended), The Proceeds of Crime Act - Money Laundering Regulations 1998 and The Anti-Terrorism (Financial and Other Measures) Act 2004 of Bermuda, and such shall not be treated as a breach of any restriction upon disclosure of information imposed by law or otherwise. It is further acknowledged that the Administrator, in the performance of its delegated duties, shall be held harmless by the subscriber against any loss arising as a result of a failure to process the subscription if such information as has been requested by the Administrator has not been provided by the applicant. Furthermore, subscriptions will be cross checked against lists held by various international agencies in order to establish that the persons or entities subscribing have not been blacklisted or are wanted in connection with a criminal investigation. Finally, it should be noted that redemption payments will only be paid to a bank account held in the name of the registered owner of the Participating Shares and that any transferee will have to furnish the same information (and enter into a subscription agreement) which would be required in connection with a direct subscription in order for a transfer application to be considered by the Administrator Material Agreements This Information Memorandum is not intended to provide a complete description of the Fund's Memorandum or Articles of Association or any agreements entered into by the Fund. Copies of all such documents are available for inspection by Shareholders and prospective investors during normal business hours at the office of the Administrator at the address set out in the Directory. Copies of the following are available upon written request to the Administrator, subject to reimbursement of reasonable costs and, if a Luxembourg listing is effected, are available for inspection at the offices of the Luxembourg Stock Exchange Listing Sponsor: (a) the Memorandum and Articles of Association of the Fund; 31

32 (b) (c) (d) (e) (f) the Companies Law (Revised) of the Cayman Islands; the Investment Management Agreement; the Administration Agreement; the Custodian Agreement; and the written consent of the Auditor Registered Office The Fund s registered office is located at: 12.6 Indemnification PRESTIGE ALTERNATIVE FINANCE FUND LIMITED C/O S.H. Corporate Services Limited PO Box 61, 4 th Floor Harbour Centre, Grand Cayman KY Cayman Islands The Fund has undertaken to indemnify every director, officer and employee of the Fund against all costs, losses, damages and expenses (including traveling expenses) that any such indemnified person or legal entity may incur and become liable for by reason of any contract entered into, or act or thing done by him as director, officer or employee of the Fund or in any way in discharge of his duties other than through his own willful misconduct, gross negligence, reckless disregard of his duties or as otherwise required by law. The amount for which such indemnity is provided shall immediately attach as a lien on the property of the Fund and have priority over the Shareholders of the Fund and over all other claims. No director, officer or employee of the Fund shall be liable for the acts, receipts, neglects or defaults of any other director, officer or employee of the Fund, for joining in any receipt or other act for conformity or for any loss or expense happening to the Fund through the insufficiency or deficiency of any security in or upon which any of the monies of the Fund shall be invested or for any loss of any of the monies of the Fund which shall be invested or for any loss or damage arising from the bankruptcy, insolvency or tortuous act of any person with whom any monies, securities or effects shall be deposited, or for any other loss, damage or misfortune whatever which shall happen in or about the execution of the duties of his respective office or in relation thereto unless the same happened through his own willful misconduct, gross negligence, reckless disregard of his duties or as otherwise required by law Additional Disclosures (i) (ii) (iii) (iv) (v) (vi) (viii) The Fund is not engaged in any legal or arbitration proceedings and no legal or arbitration proceedings are known to the Directors to be pending or threatened by or against the Fund. There are no service contracts in existence between the Fund and any of its Directors, nor are any such contracts proposed. Except as disclosed in this Information Memorandum, none of the Directors is interested in any contract or arrangement subsisting at the date hereof which is significant in relation to the business of the Fund. None of the Directors or their connected persons has any direct or indirect interest in any Participating Shares. No share or loan capital of the Fund is under option or is agreed conditionally or unconditionally to be put under option. Save as disclosed in this Information Memorandum, no commissions, discounts, brokerage or other special terms have been granted by the Fund in relation to Participating Shares issued by the Fund. As at 30th March 2011, the Fund had no loan capital (including long term loans) outstanding or created but unissued where it has borrowed loan capital and no outstanding mortgages, charges 32

33 or other borrowings, including bank overdrafts and liabilities under acceptances or acceptance credits, finance leases, hire purchase commitments, guarantees or contingent liabilities. (ix) (x) (xi) (xii) (xiii) (xiv) The Auditors to the Fund have given and not withdrawn their written consent to the inclusion of their report in this Information Memorandum in the form and context in which it is included. The objects of the Fund as set out in clause 3 of its Memorandum of Association are unrestricted. Any Directors may be counted in the quorum and vote on a contract or transaction in which he has a material interest provided that the nature of the interest is disclosed at or prior to the consideration of the contract or transaction. There are no age restrictions with regard to Directors. The Directors may exercise all of the borrowing powers of the Fund. The Directors confirm that as of the date of this Information Memorandum, the Fund has not commenced business, no dividends have been paid and no accounts have been prepared Side Letters As a general principle, the Directors and the Investment Manager aim to manage the Fund on similar terms and conditions for all Shareholders. However, the Directors and/or the Investment Manager may, on behalf of the Fund, enter into side letters with one or more Shareholders supplementing the terms of this Information Memorandum and this may or may not involve establishing one or more new classes of Participating Shares for such Shareholders. Any such side letter may set out special terms in relation to the Shareholder s investment but the Directors and/or the Investment Manager will not enter into any side letter which they consider would have a material adverse effect on other Shareholders. 33

34 13. RISK FACTORS As with all investments, risk cannot be eliminated and there can be no assurance or guarantee that the Fund will meet its investment objective. Investment in the Fund is only available to sophisticated investors who fully understand and are willing to assume the risks involved. Below are certain risk factors that must be taken into consideration before investing in the Participating Shares. While the Directors believe the following to be the most significant, this list is not intended to be exhaustive. Prospective investors are urged to consult their financial adviser before investing in the Fund General Risks of Investing An investment in the Fund is subject to all risks incidental to the ownership of securities and other assets, which the Fund may own directly or indirectly. These factors include, without limitation, changes in government rules and fiscal and monetary policies, changes in laws and political and economic conditions throughout the world, and changes in general market conditions. There can be no guarantee that losses will not be realized by a Shareholder in the Fund and a Shareholder may lose some or even all of his investment. Under certain circumstances, the Fund may be unable to liquidate its securities in Investment Vehicles due to the absence of a liquid market, and consequently, may not be able to redeem Participating Shares. Investment Vehicles Risks The Fund may invest in investment vehicles that are not quoted on any recognized securities markets or traded over-the-counter. In those cases the net asset value per share of the investment vehicles as calculated by their administrator is used by the Administrator of the Fund for the purpose of calculating the net asset value per Participating Share. If the information received by the Administrator is erroneous in any way it could have a significant impact on the net asset value per Participating Share calculation of the Fund. Under certain circumstances the Fund may be subject to the actions of other investors in the investment vehicles in which it is invested. For instance, a significant redemption of shares could cause liquidation of assets (See below Liquidity Risks ). Also the Fund is subject to the actions of the service providers to those investment vehicles. An investment by the Fund in an investment vehicle that is a master fund may be affected by an investment by other funds in the master fund. In view of the fact that all expenses of the master fund are shared pro-rata among its investors, if other investors in the master fund redeem their interests, then the possibility exists that the Fund will bear the burden of an increased share of the master fund's expenses. Not a Diversified Investment Fund The Fund is not obliged to utilize common diversification techniques in the proportion of its assets that it may invest, although the Investment Manager may allocate the assets of the Fund to a number of investment vehicles, each of which may or may not be diversified to varying degrees. The investment of a large percentage of the Fund s assets in Finance Contracts may cause the Fund s net asset value per Participating Share to fluctuate more than that of a diversified investment fund. Lack of Operating History The Fund is a recently formed entity and has no operating history upon which prospective investors can evaluate its likely performance. Forward Looking Statements This Information Memorandum contains forward-looking statements. These forward-looking statements reflect the view of the Investment Manager with respect to future events. Actual results could differ materially from those in the forward-looking statements as a result of factors beyond the Fund s control. Prospective investors are cautioned not to place undue reliance on such statements. Counterparty Risk Many of the markets in which the Fund may effect its transactions are "over-the-counter" or "interdealer" markets. The participants in such markets are typically not subject to credit evaluation and regulatory oversight as are members of "exchange based" markets. This exposes the Fund to the risk that a counterparty will not settle a transaction in accordance with or because of a credit or liquidity problem, thus causing the Fund to suffer a loss. In addition, in the case of a default, the Fund could become subject to adverse market movements while replacement transactions are executed. Such "counterparty risk" is accentuated for contracts with longer maturities where events may intervene to prevent settlement, or where the Fund has concentrated its transactions with a single or small group of counterparties. The Fund is not restricted from dealing with any particular counterparty or from concentrating any or all of its transactions with one counterparty. Moreover, the Fund has no internal credit function that formally evaluates the creditworthiness of its counterparties. The ability of the Fund to transact business with any one or number of counterparties, the lack of any meaningful and 34

35 independent evaluation of such counterparties' financial capabilities and the absence of a regulated market to facilitate settlement may increase the potential for losses by the Fund. Non-U.S. Investments The Fund may trade futures, options and forward contracts on exchanges and markets located outside the United States where CFTC regulations do not apply. Some non-u.s. exchanges, in contrast to U.S. exchanges, are "principals' markets" in which performance is the responsibility only of the individual member with whom the trader has entered into a commodity contract and not of an exchange or clearing corporation. In such a case, the Fund is subject to the risk of the inability of, or refusal by, the counterparty to perform with respect to such contracts. In addition, the trading of forward contracts on certain non-u.s. commodity exchanges may be subject to price fluctuation limits. Small and Mid Cap Stocks At any given time, the Fund may have significant investments in smaller and medium-sized capitalized companies of a less seasoned nature than so-called "blue chip" companies, whose securities are traded in the over-thecounter market. These "small cap" or "mid cap" securities often involve significantly greater risks than the securities of larger, better-known companies. Short Selling Short selling involves trading on margin and accordingly can involve greater risk than investments based on a long position. A short sale of a security involves the risk of a theoretically unlimited increase in the market price of the security, which could result in an inability to cover the short position and a theoretically unlimited loss. There can be no absolute guarantee that securities necessary to cover a short position will be available for purchase. Options and Futures Trading is Highly Leveraged The premium normally required in options trading and the low margin deposits normally required in futures trading result in an extremely high degree of leverage. Therefore, a relatively small price movement in an unfavourable direction in a futures contract or in the interest underlying an option contract could result in immediate and substantial losses for the Fund s investment vehicles. Sovereign Debt To the extent the Fund invests in sovereign debt obligations the Fund will be subject to the risk that the issuer of the sovereign debt or the governmental authorities that control the repayment of the debt may be unable or unwilling to repay the principal or interest when due. There are also risks associated with the general political and social environment of a country. These factors may include among other things government instability, poor socioeconomic conditions, corruption, lack of law and order, lack of democratic accountability, poor quality of the bureaucracy, internal and external conflict, and religious and ethnic tensions. High political risk can impede the economic welfare of a country. The risks associated with the general economic environment of a country can encompass, among other things, low quality and growth rate of Gross Domestic Product ( "GDP "), high inflation or deflation, high government deficits as a percentage of GDP, weak financial sector, overvalued exchange rate, and high current account deficits as a percentage of GDP. The risk factors associated with the inability of a country to pay its external debt obligations in the immediate future may include but are not limited to high foreign debt as a percentage of GDP, high foreign debt service as a percentage of exports, low foreign exchange reserves as a percentage of short-term debt or exports, and an unsustainable exchange rate structure. Special situation and distressed Debt Investment Strategies The Fund may invest in obligors and issuers with weak financial conditions, poor operating results, substantial financial needs, negative net worth and/or special competitive problems. The Fund may also invest in obligors and issuers that are involved in bankruptcy or reorganization proceedings. In such situations, it may be difficult to obtain full information as to the exact financial and operating conditions of these obligors and issuers. Additionally, the fair values of such investments are subject to abrupt and erratic market movements and significant price volatility if they are publicly traded securities, and are subject to significant uncertainty in general if they are not publicly traded securities. Furthermore, some of the Fund s distressed investments may not be widely traded or may have no recognized market. The Fund s exposure to such investments may be substantial in relation to the market for those investments, and the assets are likely to be illiquid and difficult to sell or transfer. As a result, it may take a number of years for the market value of such investments to ultimately reflect their intrinsic value as perceived by the Investment Manager Liquidity Risks Liquidity risk is one of the most important risks to consider for an alternative investment. It is not envisioned that the Fund strategy will hold any illiquid securities and or investments, although reserves the right to change this without notice. 35

36 Liquidity risk can be present in the following forms: Limited Transferability and Lack of Liquidity of Participating Shares Since the Participating Shares are transferable only with the prior approval of the Directors, Shareholders may not be able to sell their investments and therefore would have to utilize the Fund's redemption program, which itself may be subject to restrictions see "Redemption of Shares". There is no recognized market for the Participating Shares and Participating Shares will have very limited or no liquidity. Investors should be fully aware of the long-term nature of their investment in the Fund and should have other financial reserves so that they are able to bear the economic risk of the loss of their entire investment. Liquidity of Investments The Fund may invest in Finance Contracts and investment vehicles for which there may not be a readily available market. Difficulties which the Fund may encounter in liquidating such investments may result in the suspension of dealing in the Participating Shares. See Redemption of Shares. As the Fund may invest in shares or units of Investment Vehicles which are unlisted and tradable only with the issuer, delays may occur in obtaining values for such shares or units. As the Fund may invest in Finance Contracts where there is a long repayment or lock-up period, delays may occur in receiving redemption proceeds. All of the above could result in delays in the calculation of the net asset value per Participating Share and/or payment of any redemption proceeds. Effect of Substantial Redemptions Substantial redemptions by Shareholders within a short period of time could require the Fund to liquidate positions more rapidly than would otherwise be desirable, which could adversely affect the value of the Fund s assets. The resulting reduction in the Fund s assets could make it more difficult to generate a positive rate of return or to recoup losses due to a reduced equity base Risk of Leverage The Risk of leverage needs to be considered both at the portfolio level and within the Investments that the Fund invests into. There is a maximum permitted leverage of 50% of the Fund NAV. Portfolio Level The Fund may, at the sole discretion of the Investment Manager, leverage its investment positions by borrowing funds, which will typically be secured by the Fund's securities and other assets, from securities broker-dealers, banks, or others. Borrowing money to purchase securities may provide the Investment Manager with the opportunity for greater capital appreciation but, at the same time, will increase the Fund's exposure to capital risk and higher current expenses. Moreover, if the assets under management are not sufficient to pay the principal of, and interest on, the debt when due, the Fund could sustain a total loss of its investment. As such, the Fund's exposure to capital risk is enhanced. The Fund may chose to manage the Fund assets and liabilities in a single portfolio held by the Fund in an operating account or similar structure. Each share class shall then be allocated a proportion of the assets and liabilities and through this a proportion of the return on the operating account equivalent to that proportion of the operating account assets and liabilities that reflect the investments of each share class. The Investment Manager shall at his sole and absolute discretion determine how such an operating account or other structure shall be put into effect and/or managed and/or controlled Currency Risk Portfolio Level The portfolio of the Fund will include investments which are denominated in a currency other than the currency of the relevant Class and some income will be received by the Class in a currency other than the currency of the relevant Class. Whilst a Class may enter into a forward foreign exchange contract for currency hedging purposes, the relevant forward foreign exchange contract will not constitute a perfect hedge because the performance of the Fund is unknown. Currency Hedging The Fund or an investment vehicle may enter into forward foreign exchange contracts or other financial instruments to seek to hedge against declines in the value of its portfolio as a result of changes in currency exchange rates. The underlying portfolio of investments may be pledged as collateral to secure the relevant forward foreign exchange contracts. Hedging against a decline in the value of a portfolio position does not eliminate fluctuations in the value of the portfolio position or prevent losses if the value of such position declines, but establishes other positions designed to gain from those same developments thus offsetting the decline in the 36

37 portfolio positions value. Such hedging transactions also limit the opportunity for gain if the value of the hedged portfolio position should increase. The Fund is not obliged to enter into currency hedging transactions and may decide not to do so in given circumstances. The success of any hedging transaction depends upon the ability of the Investment Manager to predict correctly movements in currency exchange rates. Consequently, unanticipated changes in currency exchange rates may result in a poorer overall performance for a given portfolio than if the Investment Manager had not engaged in any such hedging transaction. Many of the Fund s international costs and expenses will be charged in US Dollars, which may mean the Fund will benefit or suffer larger or smaller costs and expenses depending on currency fluctuations between the Fund s base currency of British Pounds versus the US Dollar Legal Structure, Directors and Affiliates Entities No Voting Rights Except in relation to a proposed variation of the rights attaching to the Participating Shares, only Voting Shares owned by the Investment Manager have voting rights. Only the Investment Manager therefore can appoint and remove the Directors of the Fund. Only the Directors may terminate the services of the Administrator, Investment Manager, Custodian and other agents of the Fund. Mandatory Redemptions The Fund has the right to require, with 30 days notice, the compulsory redemption or transfer of all Participating Shares held by a Shareholder if the Directors of the Fund determine that the Participating Shares are held for the benefit of any non-eligible Shareholder. The Fund also reserves the right to require compulsory redemption or transfer of all Participating Shares held by a Shareholder if, in the opinion of the Directors, the ownership of the Participating Shares by the Shareholder is, or may be, unlawful or harmful or injurious to the business or reputation of the Fund, the Investment Manager, the Custodian or the Administrator. Changes in Applicable Law The Fund and the Investment Vehicles in which the Fund is invested must comply with various legal requirements, including requirements imposed by the securities laws, tax laws and pension laws in various jurisdictions. Should any of those laws change, the legal requirements to which the Fund the Shareholders and such Investment Vehicles may be subject could differ materially and adversely from current requirements. Taxation Although the Fund and Investment Manager will attempt to structure the investments of the Fund in a manner that is generally tax efficient for the Fund and the Shareholders, there is no assurance that the structure of such investments will be tax efficient for any particular Shareholder or that any particular tax result will be achieved. Prospective investors must consult their own professional advisers with respect to the tax consequences to them of an investment in the Fund under the laws of the jurisdictions in which they are subject to taxation. Importance of the Investment Manager The Investment Manager makes decisions for the Fund in investing the Fund s capital and choosing specific Investment Advisors and Investment Vehicles. The Fund s success depends, to a large extent, upon the Investment Manager s ability to choose appropriate Investment Advisors and Investment Vehicles. In addition, if any of the officers of the Investment Manager cease to participate in the operation of the Investment Manager to the extent they relate to the operations of the Fund for any reason, the operations, objectives and activities of the Fund may be adversely affected. Potential Conflicts of Interests Your attention is drawn to Conflicts of Interest above. Lack of Separate Representation None of the Investment Management Agreement or any of the agreements, contracts and arrangements between the Fund, on the one hand, and the Investment Manager or its affiliates, on the other hand, were or will be the result of arm s-length negotiations. The attorneys, accountants and others who have performed services for the Fund in connection with this offering, and who will perform services for the Fund in the future, have been and will be selected by the Investment Manager. Such attorneys, accountants and other service providers do not represent the separate interests of the Shareholders and have assumed no obligation to do so. Accordingly, the Shareholders have not had the benefit of independent counsel in the structuring of the Fund, or the determination of the relative interests, rights and obligations of the Fund, the Investment Manager and/or the Shareholders. Each prospective investor should consult with its own counsel and other advisors as to all legal, tax, regulatory, financial and related matters concerning an investment in the Participating Shares. 37

38 Side Letters/Additional Classes The Fund may from time to time enter into letter agreements or other similar agreements (collectively, Side Letters ) with one or more shareholders which provide such shareholder(s) with rights and/or terms that are additional to and/or different from the rights granted to other shareholders, in which case a separate class of shares may be issued. In addition, the Fund has the power to create and establish other classes of shares with rights that are additional to and/or different from the rights granted to other shareholders. As a result of such Side Letters and/or the creation of such other classes, certain investors may receive additional benefits (including, but not limited to, reduced fee and/or expense obligations, the ability to withdraw on shorter notice and/or expanded informational rights) which other shareholders will not receive. The Fund will not notify every shareholder of any such Side Letters or any of the rights and/or terms thereof, nor will the Fund be required to offer such additional and/or different rights and/or terms to every shareholder. In addition, the Directors have the right from time to time to amend, supplement or otherwise modify the Articles of Association of the Fund, without the consent or other approval of every shareholder, to reflect the terms and conditions applicable to additional Classes (which terms and conditions shall be determined by the Directors in their sole and absolute discretion), provided that no such amendment, supplement or other modification may change the rights or obligations of other shareholders without their consent. Shareholders will have no recourse against the Fund, the Investment Manager, and /or any of their respective affiliates in the event certain other Shareholders receive additional and/or different rights as a result of such Side Letters and/or the creation of such other Classes. In particular, the Institutional Class, if constituted by the Fund, will provide that, in the case of redemption and distribution on a winding up, the Fund will not have the right to pay any proceeds in specie to the holders of the shares in that Institutional Class. Directors Responsibility The Directors are responsible for the overall management and control of the Fund in accordance with its Memorandum and Articles of Association. However, the Directors are not responsible for the day-to-day operations and administration of the Fund, nor are they responsible for making or approving any investment decisions, having delegated such investment responsibilities to the Investment Manager pursuant to the Investment Management Agreement and the day-to-day administrative functions to the Administrator pursuant to the Administration Agreement in accordance with its powers of delegation as set out in the Articles of Association. The Directors will periodically review the performance of the Investment Manager and Administrator. The Investment Manager and Administrator will provide such information as may from time to time be reasonably required by the Directors to facilitate such review. The Board of Directors is entitled to indemnification in accordance with the Fund s Articles of Association Fees and Indemnities Overall Fees The Fund's Officers, Directors, Investment Manager, Auditors, Custodian(s), Administrator and their respective affiliates, are entitled to be indemnified in certain circumstances. As a result, there is a risk that the Fund's assets will be used to indemnify such persons, companies or their employees or to satisfy their liabilities as a result of their activities in relation to the Fund. Investment Manager Fees The Fund will retain an Investment Manager and will pay to the Investment Manager a management fee and a performance fee. In addition, the Arrangers of the Finance Contracts which comprise the Fund s portfolio may also charge their own fees and these will be in addition to the fees paid directly to the Investment Manager. Performance Fee Risk The Investment Manager's right to receive a performance fee 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 the Investment Manager were paid only a fixed fee. Since the performance fee is calculated on a basis that includes unrealized appreciation of the Fund s assets, such fee may be greater than if it were based solely on realized gains. Dividend Policy No payments of dividends on the Fund's Participating Shares are contemplated. The foregoing list of risk factors does not purport to be a complete enumeration or explanation of the risks involved in an investment in the Fund. Prospective investors should read this entire Information Memorandum and consult their own counsel and advisers before deciding to invest in the Fund. 38

39 39

40 40

41 41

42 42

43 43

44 44