Schroder Alternative Investments. Schroder Active Strategies Portfolio Prospectus

Transcription

1 Schroder Alternative Investments Schroder Active Strategies Portfolio Prospectus Dated: 3 March 2011 Valid till: 2 March 2012

2 SCHRODER ALTERNATIVE INVESTMENTS SCHRODER ACTIVE STRATEGIES PORTFOLIO (constituted in the Republic of Singapore pursuant to a Deed of Trust dated 12 March 2004 as amended by the First Amendment Deed dated 11 March 2005, the Second Amending and Restating Deed dated 10 March 2006, the Third Amending and Restating Deed dated 19 February 2010 and the Fourth Amending and Restating Deed dated 30 September 2011) SUPPLEMENTARY PROSPECTUS DATED 30 SEPTEMBER 2011 A copy of this Supplementary Prospectus has been lodged with the Monetary Authority of Singapore (the MAS ) who takes no responsibility for its contents. This Supplementary Prospectus is lodged with the MAS pursuant to Section 298 of the Securities and Futures Act, Chapter 289 of Singapore and is supplemental to the prospectus relating to Schroder Alternative Investments Schroder Active Strategies Portfolio registered by the MAS on 3 March 2011 (the Prospectus ). Terms used in this Supplementary Prospectus will have the meaning and construction ascribed to them in the Prospectus. This Supplementary Prospectus should be read and construed in conjunction and as one document with the Prospectus. This Supplementary Prospectus sets out the amendments made to the Prospectus to, inter alia, incorporate the additional requirements prescribed under the revised Code on Collective Investment Schemes issued by the MAS in April In this connection, the Prospectus will be amended as follows: 1. The following amendments will take effect from the date of this Supplementary Prospectus: (a) (b) Paragraph of the Prospectus The existing paragraph of the Prospectus is deleted in its entirety and replaced with the following paragraph 1.3.1: The Fund is constituted as a unit trust by way of a deed of trust dated 12 March 2004, as amended by the following supplemental and amending and restating deeds (collectively referred to as the Deed ), all entered into between the Manager and HSBC Institutional Trust Services (Singapore) Limited (the Trustee ): (a) the First Amendment Deed dated 11 March 2005; (b) the Second Amending and Restating Deed dated 10 March 2006; (c) the Third Amending and Restating Deed dated 19 February 2010; and (d) the Fourth Amending and Restating Deed dated 30 September Paragraph 4.1 of the Prospectus The existing first paragraph of paragraph 4.1 of the Prospectus is deleted in its entirety and replaced with the following paragraphs: Prior to 31 October 2011, the Registrar for the Fund is RBC Dexia Trust Services Singapore Limited. The Register of the Fund can be inspected at 20 Cecil Street, #28-01 Equity Plaza, Singapore during usual business hours subject to such reasonable closure of the Register and such restrictions as the Manager or the Trustee may impose. With effect from 31 October 2011, the Registrar for the Fund will be Schroder Investment Management (Luxembourg) S.A. ( SIMLUX ). SIMLUX will in turn delegate its duties in relation to the Register to Schroder Investment Management (Hong Kong) Limited. The Register of the Fund may be inspected at 65 Chulia Street, #46-00 OCBC Centre, Singapore during usual business hours subject to such reasonable closure of the Register and such restrictions as the Manager or the Trustee may impose. The Register is conclusive evidence of the number of Units held by each Holder..

3 (c) Paragraph of the Prospectus The following shall be inserted as a new paragraph of the Prospectus: Investors should note that the Underlying Funds intend to use or invest in financial derivatives and that the net asset value of each of the Underlying Funds is likely to have a high volatility due to its investment policies or portfolio management techniques.. (d) Paragraph 6.5 of the Prospectus The existing paragraph 6.5 of the Prospectus is deleted in its entirety and replaced with the following paragraph 6.5: 6.5 Product Suitability The Sub-Fund is suitable for investors who: seek long-term capital growth; understand that the Sub-Fund s investment in hedge funds may carry a high degree of risk which is different from other forms of collective investment schemes and that an investment in the Sub-Fund involves a high degree of risk, and are able and willing to take such a risk; and are comfortable with the greater volatility of a fund of hedge funds. Investors should consult their financial advisers if in doubt whether the Sub-Fund is suitable for them.. 2. The following amendments will take effect from 1 October 2011: (a) (b) Cover Page of the Prospectus The existing first and third paragraphs on the cover page of the Prospectus are deleted in their entirety and replaced with the following paragraphs respectively: The Schroder Active Strategies Portfolio (the Sub-Fund ) which is being offered for subscription in this Prospectus is a fund of hedge funds. The Sub-Fund complies with Appendix 3 of the Code on Collective Investment Schemes (the Code ) issued by the Monetary Authority of Singapore (save to the extent waived or allowed by the Monetary Authority of Singapore), which sets out guidelines for hedge funds. Unlike other types of collective investment schemes, the Code does not prescribe investment guidelines for hedge funds. The Sub-Fund will invest in funds of hedge funds established outside Singapore, namely, Natural Resources Fund ( NRF ) and Advantage Multi-Strategy Fund ( AMSF ) and, subject to the approval of the Monetary Authority of Singapore, such other fund of hedge funds that fit the investment objective of the Sub-Fund. NRF and AMSF are each a sub-fund of the Permal Multi-Manager Funds (Lux), which is organised as an umbrella SICAV, a company with limited liability registered under Part II of the Luxembourg Law of 20 December 2002 relating to undertakings for collective investments, as amended. Most hedge funds are subject to minimal regulation and some of the underlying investments of the hedge funds may also not be actively traded. There might be uncertainties involved in the valuation of the hedge funds and their underlying investments. The performance of the Sub-Fund may be heavily dependent on the skills of the individual fund managers and relatively little information on how the underlying hedge funds of the Sub-Fund are managed will be available in comparison with other types of collective investment schemes. Investors should refer to paragraph 8 of this Prospectus for the disclosure of the risks of investing in the Sub-Fund.. Paragraph of the Prospectus The existing paragraph of the Prospectus is deleted in its entirety and replaced with the following paragraph : Notwithstanding paragraph above, PIMSL and/or PAMI will have in place strategies to achieve adequate diversification such that the Sub-Fund would at all times, on a consolidated portfolio basis, be diversified across at least 15 Portfolio Managers and have not more than 8% of its assets allocated to a single Portfolio Manager. In addition, the Sub-Fund is also subject to the borrowing restriction that it may borrow only on a temporary basis for a borrowing period not exceeding 3 months, for the purpose of meeting redemptions and bridging requirements. Aggregate borrowings for such purposes should not exceed 25% of the deposited property of the Sub-Fund at the time the borrowing is incurred..

4 (c) (d) (e) Paragraph 8.2.1(h) of the Prospectus The existing paragraph 8.2.1(h) of the Prospectus is deleted in its entirety and replaced with the following paragraph 8.2.1(h): (h) the Underlying Funds may invest in hedge funds which are unregulated and which will not provide a level of investor protection equivalent to schemes authorised under Singapore laws and subject to regulation by the Authority. The hedge funds will not be subject to any investment guidelines in the Code on Collective Investment Schemes issued by the Authority as amended by the Authority from time to time (the Code ). Instead, the Sub-Fund and the Underlying Funds will comply with Appendix 3 of the Code (save to the extent waived or allowed by the Authority) which imposes a lower level of prudential requirements on the management of funds of hedge funds compared to other authorised schemes. Further, as the Sub-Fund will invest in hedge funds via the Underlying Funds, there is no contractual relationship between the Sub-Fund and the hedge funds and the Manager is not in a position to control the actions of the hedge fund managers or check the net asset value of the hedge funds. Consequently, compared to traditional unit trusts there is a higher risk of the Underlying Funds suffering from fraud or mismanagement by the hedge fund managers;. Paragraph of the Prospectus The existing paragraph of the Prospectus is deleted in its entirety and replaced with the following paragraph 8.4.6: The Manager has, prior to selecting the Underlying Funds as the funds of hedge funds in which the Sub-Fund would invest, undertaken a due diligence on PIMSL as the investment manager of the Underlying Funds and their procedures, processes and controls on the selection of the hedge fund managers and funds, and for the ongoing monitoring of the Portfolio Managers management of the Portfolio Funds. At the time of completion of the due diligence exercise, it was the Manager s belief that PIMSL s or its affiliate s procedures, processes and controls are adequate for the management of the Underlying Funds in accordance with their investment objectives. In addition, the Manager will, on an ongoing basis, continue to undertake due diligence on PIMSL and its affiliates to ensure that their procedures, processes and controls on the selection of hedge fund managers and hedge funds are adequate for the management of the Underlying Funds in accordance with their respective investment objectives. The Manager has the necessary expertise to control and manage the risk of the Sub-Fund and will ensure that the risk management and monitoring procedures as well as internal controls for the Sub-Fund are adequate.. Paragraphs 12.1 and 12.2 of the Prospectus The existing paragraphs 12.1 and 12.2 of the Prospectus are deleted in their entirety and replaced with the following paragraphs 12.1 and 12.2: 12.1 Subject to the provisions of the Code, the Manager or the Trustee may, with the prior written approval of the other, suspend the issuance and realisation of Units in relation to the Sub-Fund during: (i) (ii) (iii) any period when the Recognised Stock Exchange 9 on which any authorised investments forming part of the deposited property of the Sub-Fund or the Fund for the time being are listed or dealt in is closed (otherwise than for public holidays) or during which dealings are restricted or suspended; the existence of any state of affairs which, in the opinion of the Manager and the Trustee constitutes an emergency as a result of which disposition by the Sub-Fund of its investments is not reasonably practicable or might seriously prejudice the interests of the Holders as a whole or of the deposited property (whether of the Sub-Fund or the Fund); any breakdown in the means of communication normally employed in determining the price of any of such authorised investments or the current price on that Recognised Stock Exchange or when for any reason the prices of any of such authorised investments cannot be promptly and accurately ascertained (including any period when the fair value of a material portion of the authorised investments cannot be determined); 9 Recognised Stock Exchange means any stock exchange, futures exchange and in relation to any particular investment shall be deemed to include any responsible market maker and authorised dealer in the market in which the investment is traded and any over the counter or electronic or telephone market of repute and any responsible firm, corporation or association in any part of the world dealing in the investment and any responsible mutual fund or subsidiary thereof or unit trust scheme issuing and redeeming participations or Units (as the case may be) so as to provide in the opinion of the Manager with the approval of the Trustee a satisfactory market for the investment and in such a case the investment shall be deemed to be the subject of an effective permission to deal or listing on a Recognised Stock Exchange deemed to be constituted by such person, firm, corporation, association, mutual fund, subsidiary thereof or unit trust scheme.

5 (iv) (v) (vi) (vii) (viii) (ix) (x) (xi) any period when remittance of money which will or may be involved in the realisation of such authorised investments or in the payment for such authorised investments cannot, in the opinion of the Manager and the Trustee, be carried out at normal rates of exchange; any period when, in the opinion of the Manager, the transfer of funds which will or may be involved in the realisation of any material proportion of the investments for the time being constituting the deposited property of the Sub-Fund cannot be effected promptly at normal rates of exchange; any period when in the opinion of the Manager, there is a breakdown in the means of communication normally employed in determining the value of any of the investments or the amount of any cash for the time being comprised in the deposited property of the Sub-Fund or the amount of any liability of the Trustee for account of the Sub-Fund or when for any other reason the value of any such investments or the amount of any such cash or liability cannot be promptly and accurately ascertained (including any period when the fair value of a material portion of such investments or the amount of any cash or liability cannot be determined); any period when the dealing of Units is suspended pursuant to any order or direction issued by the Authority; any 48 hour period (or such longer period as may be agreed between the Manager and the Trustee) prior to the date of any meeting of Holders (or any adjourned meeting thereof); any period when the business operations of the Manager or the Trustee in relation to the operations of the Sub-Fund are substantially interrupted or closed as a result of or arising from pestilence, acts of war, terrorism, insurrection, revolution, civil unrest, riots, strikes or acts of God; any period of suspension of dealings in the Underlying Funds; or such circumstances as may be required under the provisions of the Code Such suspension shall take effect forthwith upon the declaration in writing thereof to the Trustee by the Manager (or, as the case may be, to the Manager by the Trustee) and subject to the provisions of the Code, shall terminate on the day following the first Business Day on which the condition giving rise to the suspension shall have ceased to exist and no other conditions under which such suspension is authorised under the Deed shall exist upon the declaration in writing thereof by the Manager (or, as the case may be, the Trustee).. (f) Paragraph 16 of the Prospectus The existing paragraph 16 of the Prospectus is deleted in its entirety and replaced with the following paragraph 16: 16. REPORTS The financial year-end of the Sub-Fund is 31 December. The annual audited report, annual audited accounts and the auditor s report on the annual accounts will be prepared and sent or made available to the Holders within 3 months of the financial year-end (or such other periods as may be permitted by the Authority). The semi-annual report and semi-annual accounts will be prepared and sent or made available to the Holders within 2 months of the financial half-year end i.e. 30 June (or such other periods as may be permitted by the Authority)..

6 BOARD OF DIRECTORS OF THE MANAGER Signed: Signed: SUSAN SOH SHIN YANN THAM EE MERN LILIAN Signed: Signed: TAN JUI TONG GWEE SIEW PING SCHRODER ALTERNATIVE INVESTMENTS SCHRODER ACTIVE STRATEGIES PORTFOLIO SUPPLEMENTARY PROSPECTUS LODGED ON OR ABOUT 30 SEPTEMBER 2011

7 SCHRODER ALTERNATIVE INVESTMENTS SCHRODER ACTIVE STRATEGIES PORTFOLIO PROSPECTUS The Schroder Active Strategies Portfolio (the Sub-Fund ) which is being offered for subscription in this Prospectus is a fund of hedge funds. The Sub-Fund complies with Appendix 4 of the Code of Collective Investment Schemes (the Code ) issued by the Monetary Authority of Singapore, which sets out guidelines for hedge funds. Unlike other types of collective investment schemes, the Code does not prescribe investment guidelines for hedge funds. Investors should note that an investment in a fund of hedge funds carries risks of a different nature from other types of collective investment schemes which invest in listed securities and do not engage in short selling. The Sub-Fund may therefore not be suitable for persons who are averse to such risks. Investors may lose all or a large part of their investment in the Sub-Fund. The Sub-Fund will invest in funds of hedge funds established outside Singapore, namely, Natural Resources Fund ( NRF ) and Advantage Multi-Strategy Fund ( AMSF ) and, subject to the approval of the Monetary Authority of Singapore, such other fund of hedge funds that fit the investment objective of the Sub-Fund. NRF and AMSF are each a sub-fund of the Permal Multi-Manager Funds (Lux), which is organised as an umbrella SICAV, a company with limited liability registered under Part II of the Luxembourg Law of 20 December 2002 relating to undertakings for collective investments, as amended. Most hedge funds are subject to minimal regulation and some of the underlying investments of the hedge funds may also not be actively traded. There might be uncertainties involved in the valuation of the hedge funds and their underlying investments. The performance of the Sub-Fund is dependent substantially on individual fund managers and relatively little information on how the underlying hedge funds of the Sub-Fund are managed will be available in comparison with other types of collective investment schemes. Investors should refer to paragraph 8 of this Prospectus for the disclosure of the risks of investing in the Sub-Fund. Investors should note that an investment in the Sub-Fund is not intended to be a complete investment programme for any investor and prospective investors should carefully consider whether an investment in the Sub-Fund is suitable for them in the light of their own circumstances, financial resources and entire investment programme. Units in the Sub-Fund ( Units ) are of limited liquidity in that unlike traditional unit trusts, investors may redeem their Units only once every calendar month, on the last Business Day (as defined in the section on Redemption of Units in this Prospectus) of every month (the Redemption Date ). In addition, there is no secondary market for the Sub- Fund. To redeem Units, unitholders are required to submit a redemption request to Schroder Investment Management (Singapore) Ltd (the Manager ) or its appointed distributors by the redemption deadline of each month which is normally 5 p.m. on the 9 th calendar day of the month (the Redemption Deadline ). Where the 9 th calendar day is not a Business Day, the Redemption Deadline will be 5 p.m. on the preceding Business Day. Redemption requests received by the Redemption Deadline shall be deemed received on the Redemption Date of that month. Redemption requests received after the Redemption Deadline shall be deemed received on the Redemption Date of the next month. Investors should refer to the redemption schedule available from the Manager or its appointed distributors for the exact Redemption Date and Redemption Deadline of each month. Units will be redeemed at a price calculated based on the net asset value of the Sub-Fund as at the last Business Day (please see paragraph 10.3 of this Prospectus). Investors should be aware that the redemption price of Units may be affected by fluctuations in value of the underlying investments of the hedge funds from the time a redemption request is submitted and the date the redemption price is determined. The Manager shall effect payment of the realisation proceeds within 40 calendar days from the relevant Redemption Deadline (or such other period as may be agreed between the Manager and the Trustee). Investors should refer to the section on Redemption of Units in this Prospectus for further details. NEITHER THE SUB-FUND NOR THE UNITS ARE SPONSORED, ENDORSED, SOLD OR PROMOTED BY PERMAL INVESTMENT MANAGEMENT SERVICES LIMITED ( PIMSL ) OR ANY AFFILIATE THEREOF. NEITHER PIMSL NOR ANY AFFILIATE THEREOF NOR ANY OF THEIR DIRECTORS, OFFICERS, EMPLOYEES AGENTS, OR PERMITTED ASSIGNS MAKES ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, TO ANY PERSON INCLUDING, BUT NOT LIMITED TO, INVESTORS OR POTENTIAL INVESTORS IN THE UNITS REGARDING THE ADVISABILITY OR SUITABILITY OF A POTENTIAL INVESTMENT IN THE UNITS OR ANY OTHER SECURITY. PIMSL, ITS AFFILIATES AS WELL AS THEIR DIRECTORS, OFFICERS, EMPLOYEES AGENTS AND PERMITTED ASSIGNS DISCLAIM ANY LIABILITY INCURRED BY ANY PERSON OR ENTITY FOR ANY LOSS, DAMAGES, COSTS, CHARGES, EXPENSES OR OTHER LIABILITY HOWSOEVER CAUSED ARISING IN CONNECTION WITH ONE OR MORE INVESTMENTS IN THE UNITS.

8 SCHRODER ALTERNATIVE INVESTMENTS - SCHRODER ACTIVE STRATEGIES PORTFOLIO MANAGER Schroder Investment Management (Singapore) Ltd (Company Registration Number: H) 65 Chulia Street #46-00 OCBC Centre Singapore DIRECTORS OF MANAGER Susan Soh Shin Yann Tham Ee Mern Lilian Tan Jui Tong Gwee Siew Ping TRUSTEE HSBC Institutional Trust Services (Singapore) Limited (Company Registration Number: R) 21 Collyer Quay #14-01 HSBC Building Singapore AUDITORS PricewaterhouseCoopers LLP 8 Cross Street #17-00 PWC Building Singapore SOLICITORS TO THE MANAGER Allen & Gledhill LLP One Marina Boulevard #28-00 Singapore SOLICITORS TO THE TRUSTEE Shook Lin & Bok LLP 1 Robinson Road #18-00 AIA Tower Singapore

9 SCHRODER ALTERNATIVE INVESTMENTS - SCHRODER ACTIVE STRATEGIES PORTFOLIO Important Information Schroder Investment Management (Singapore) Ltd (the Manager ) accepts full responsibility for the accuracy of the information contained in this Prospectus of the Schroder Alternative Investments (the Fund ) and confirms, having made all reasonable enquiries, that to the best of its knowledge and belief, there are no facts the omission of which would make any statement herein misleading. Investors should refer to the relevant provisions of the trust deed (as amended or supplemented) relating to the Fund (the Deed ) and obtain professional advice in the event of any doubt or ambiguity relating thereto. A copy of the Deed is available for inspection at the Manager s office at all times during usual business hours (subject to such reasonable restrictions as the Manager may impose). All capitalised terms and expressions used in this Prospectus shall, unless the context otherwise requires, have the same meanings ascribed to them in the Deed. This Prospectus does not constitute an offer or solicitation to anyone in any jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation and may only be used in connection with the offering of units ( Units ) in the Schroder Active Strategies Portfolio (the Sub-Fund ) as contemplated herein. Investors should seek professional advice to ascertain (a) the possible tax consequences, (b) the legal requirements; and (c) any foreign exchange transactions or exchange control requirements which they may encounter under the laws of the countries of their citizenship, residence, domicile and which may be relevant to the subscription, holding or disposal of Units in the Sub-Fund and shall inform themselves of and observe all such laws or regulations in any jurisdiction that may be applicable to them. In particular, the legal and regulatory infrastructure and accounting, auditing and reporting standards in certain countries in which investment may be made by the underlying funds of the Sub- Fund may not provide the same degree of investor protection or information to investors as would generally apply in major securities markets. Investors should carefully consider the risks of investing in the Sub-Fund which are set out in paragraph 8 of this Prospectus. No application has been made for the Units of the Sub-Fund to be listed on any stock exchange. Units in the Sub- Fund can be purchased from or sold through the Manager or any agent or distributor appointed by the Manager in accordance with the provisions of the Deed. As the Fund is not registered under the United States Securities Act of 1933 (the Securities Act ) or under the securities laws of any state of the United States of America ( US ), the Fund may not be offered or sold to or for the account of any US Person (as defined in Rule 902 of Regulation S under the Securities Act). Rule 902 of Regulation S under the Securities Act defines a US Person to include, inter alia, any natural person resident in the US and with regard to investors other than individuals (i) a corporation or partnership organised or incorporated under the laws of the US or any state thereof; (ii) a trust: (a) of which any trustee is a US Person except if such trustee is a professional fiduciary and a co-trustee who is not a US Person has sole or shared investment discretion with regard to trust assets and no beneficiary of the trust (and no settlor if the trust is revocable) is a US Person or (b) where a court is able to exercise primary jurisdiction over the trust and one or more US fiduciaries have the authority to control all substantial decisions of the trust; and (iii) an estate: (a) which is subject to US tax on its worldwide income from all sources or (b) for which any US Person is executor or administrator except if an executor or administrator of the estate who is not a US Person has sole or shared investment discretion with regard to the assets of the estate and the estate is governed by foreign law. The term US Person also means any entity organised principally for passive investment (such as a commodity pool, investment company or other similar entity) that was formed: (a) for the purpose of facilitating investment by a US Person in a commodity pool with respect to which the operator is exempt from certain requirements of Part 4 of the regulations promulgated by the United States Commodity Futures Trading Commission by virtue of its participants being non-us Persons or (b) by US Persons principally for the purpose of investing in securities not registered under the Securities Act, unless it is formed and owned by accredited investors (as defined in Rule 501 (a) under the Securities Act) who are not natural persons, estates or trusts.

10 United States means the United States of America (including the States and the District of Columbia), its territories, its possessions and any other areas subject to its jurisdiction. If you are in doubt as to your status, you should consult your financial or other professional adviser. All enquiries in relation to the Fund or the Sub-Fund should be directed to the Manager, Schroder Investment Management (Singapore) Ltd, or any agent or distributor appointed by the Manager.

11 SCHRODER ALTERNATIVE INVESTMENTS - SCHRODER ACTIVE STRATEGIES PORTFOLIO TABLE OF CONTENTS 1. BASIC INFORMATION 6 2. THE MANAGER 7 3. THE TRUSTEE AND CUSTODIAN 7 4. OTHER PARTIES 7 5. STRUCTURE OF THE SUB-FUND 8 6. INVESTMENT OBJECTIVE, FOCUS AND APPROACH 8 7. FEES & CHARGES RISKS AND CONTROLS SUBSCRIPTION OF UNITS REDEMPTION OF UNITS OBTAINING PRICES OF UNITS SUSPENSION OF DEALINGS PERFORMANCE OF THE SUB-FUND CASH REBATES AND SOFT DOLLAR COMMISSIONS/ARRANGEMENTS CONFLICTS OF INTEREST REPORTS QUERIES AND COMPLAINTS OTHER MATERIAL INFORMATION 33 APPENDIX 1 38 APPENDIX 2 40

12 6 SCHRODER ALTERNATIVE INVESTMENTS - SCHRODER ACTIVE STRATEGIES PORTFOLIO The collective investment scheme offered in this Prospectus is an authorised scheme under the Securities and Futures Act (Chapter 289) of Singapore (the SFA ). A copy of this Prospectus has been lodged with and registered by the Monetary Authority of Singapore (the Authority ). The Authority assumes no responsibility for the contents of this Prospectus. The registration of this Prospectus by the Authority does not imply that the SFA, or any other legal or regulatory requirements have been complied with. The Authority has not, in any way, considered the investment merits of the collective investment scheme. The meaning of terms not defined in this Prospectus can be found in the deed of trust (as amended) constituting Schroder Alternative Investments (the Fund ). 1. BASIC INFORMATION 1.1 Schroder Alternative Investments The Fund The Fund is an open-ended umbrella unit trust constituted in Singapore. There is currently one sub-fund, namely the Schroder Active Strategies Portfolio (the Sub-Fund ), established under the Fund. Other sub-funds may from time to time be established under the Fund and each sub-fund will represent a separate portfolio of securities or obligations The Sub-Fund The manager of the Fund, Schroder Investment Management (Singapore) Ltd (the Manager ), is currently offering units in the Sub-Fund (each a Unit and collectively the Units ). 1.2 Date of registration and expiry date of Prospectus The date of registration of this Prospectus is 3 March This Prospectus shall be valid for 12 months after the date of registration (i.e., up to and including 2 March 2012) and shall expire on 3 March Trust Deed and Supplemental Deeds The Fund is constituted as a unit trust by way of a deed of trust dated 12 March 2004, as amended by the following supplemental and amending and restating deeds (collectively referred to as the Deed ), all entered into between the Manager and HSBC Institutional Trust Services (Singapore) Limited (the Trustee ): (a) the First Amendment Deed dated 11 March 2005; (b) the Second Amending and Restating Deed dated 10 March 2006; and (c) the Third Amending and Restating Deed dated 19 February The terms and conditions of the Deed are binding on each unitholder (each a Holder and collectively the Holders ) and all persons claiming through such Holder as if such Holder and person had been a party to the Deed and as if the Deed contains covenants on the part of each Holder to observe and be bound by all the terms and conditions of the Deed and an authorisation by each Holder to do all such acts and things as the Deed may require the Manager or the Trustee (as the case may be) to do A copy of the Deed is available for inspection at the office of the Manager at 65 Chulia Street #46-00, OCBC Centre, Singapore at all times during usual business hours (subject to such reasonable restrictions as the Manager may impose) and shall be supplied by the Manager to any person on application at a charge of S$50 per copy of the document (or such other amount as the Trustee and the Manager may from time to time agree in writing), such charge being payable to the Manager.

13 7 1.4 Reports and Accounts A copy of the latest annual and semi-annual accounts, annual and semi-annual reports and the auditor s report on the annual accounts of the Fund, when available, may be obtained from the Manager upon request, at 65 Chulia Street, #46-00, OCBC Centre, Singapore Please refer to paragraph 16 of this Prospectus for details of accounts and reports of the Sub-Fund. 2. THE MANAGER 2.1 Name and address of the Manager The Manager of the Fund is Schroder Investment Management (Singapore) Ltd whose registered office is at 65 Chulia Street, #46-00, OCBC Centre, Singapore Track Records Track record of the Manager The Manager was incorporated in Singapore in 1992 and has been managing collective investment schemes and discretionary funds in Singapore since The Manager is a member of the Schroder group ( Schroders ). Schroders has been managing collective investment schemes and discretionary funds in Singapore since the 1970s. Schroders is a leading global asset management company, whose history dates back over 200 years. The group s holding company, Schroders Plc is and has been listed on the London Stock Exchange since Schroders aims to apply its specialist asset management skills in serving the needs of its clients worldwide, through its large network of offices and over 300 portfolio managers and analysts covering the world s investment markets Track record of the Sub-Manager The Manager has appointed Permal Investment Management Services Limited ( PIMSL 1 ) as submanager of the Sub-Fund. PIMSL is domiciled in the United Kingdom and was established in 1998 primarily to manage, sponsor, oversee and distribute collective investment schemes and discretionary funds. PIMSL has been managing collective investment schemes and discretionary funds in London since PIMSL is an affiliate of Permal Asset Management Inc. ( PAMI ) and a member of the Permal Group 2. In 2005 Legg Mason, Inc. acquired a controlling interest in the Permal Group, which is now a standalone business within the Legg Mason s Wealth Management Division. The Permal Group is a pioneer of multi-manager hedge funds and has been managing alternative investments since With approximately US$ 21 billion in assets under management as at 31 December 2010 the Permal Group is one of the largest fund groups in its field. Investors should note that the past performance of the Manager or PIMSL is not necessarily indicative of future performance of the Manager or PIMSL. 3. THE TRUSTEE AND CUSTODIAN The Trustee and custodian of the Fund is HSBC Institutional Trust Services (Singapore) Limited whose registered office is at 21 Collyer Quay, #14-01, HSBC Building, Singapore OTHER PARTIES 4.1 The Registrar The Registrar for the Fund is RBC Dexia Trust Services Singapore Limited. The Register of the Fund can be inspected at 20 Cecil Street, #28-01 Equity Plaza, Singapore during usual business hours subject to such reasonable closure of the Register and such restrictions as the Manager or the Trustee may impose. The Register is conclusive evidence of the number of Units held by each Holder. 1 Permal Investment Management Services Limited (PIMSL) is also the investment manager of the Underlying Funds in which the Sub-Fund invests. 2 The Permal Group is an international financial group of companies.

14 8 The Register shall be conclusive evidence as to the persons respectively entitled to the Units of the Sub-Fund entered therein and no notice of any trust, expressed, implied or constructive shall be entered on the Register in respect of any Unit. In the event of discrepancies, the entries in the Register shall prevail unless the Holder proves, to the satisfaction of the Manager and the Trustee, that the Register is incorrect. 4.2 The Auditors The auditors of the Fund are PricewaterhouseCoopers LLP whose registered office is at 8 Cross Street, #17-00, PWC Building, Singapore STRUCTURE OF THE SUB-FUND The Sub-Fund is constituted in Singapore under the umbrella Fund. The Sub-Fund is established as an openended fund of hedge funds and denominated in U.S. dollars. The Manager is currently offering 2 classes of Units in the Sub-Fund, namely the Schroder Active Strategies Portfolio S$ class ( S$ Units ) and the Schroder Active Strategies Portfolio US$ class ( US$ Units ). There are no material differences between S$ Units and US$ Units save for the currency of denomination, and save that S$ Units may be subject to foreign exchange risk and an additional currency hedging cost component (see paragraph below). 6. INVESTMENT OBJECTIVE, FOCUS AND APPROACH 6.1 The Schroder Active Strategies Portfolio The investment objective of the Sub-Fund is to achieve long-term capital appreciation through a diversification of investments with multiple investment managers who adopt different investment strategies. The Sub-Fund is a fund which invests in funds of hedge funds. Its assets will be invested in a diversified group of independent hedge fund managers across different asset classes, including, but not limited to global equities, natural resources and commodity based companies and/or global fixed income securities as well as currencies, futures, options and other derivative markets through underlying funds of hedge funds. The current investment policy of the Sub-Fund is to invest all or substantially all of its assets into the class A shares of the following 2 sub-funds of the Permal Multi-Manager Funds (Lux), an open ended investment company with limited liability registered under Part II of the Luxembourg Law of 20 December 2002 relating to undertakings for collective investments, as amended (referred hereinafter as the Underlying Funds or each an Underlying Fund ): (a) (b) Natural Resources Fund ( NRF ); and Advantage Multi-Strategy Fund ( AMSF ). The Sub-Fund s current structure 3 is illustrated in the diagram below: Schroder Active Strategies Portfolio (A Sub-Fund of the Schroder Alternative Investments) Advantage Multi-Strategy Fund Natural Resources Fund Focus: Alternative strategies Focus: Natural resources/ Commodity based companies 3 Investors should note that (i) the Sub-Fund currently invests in the class A shares of NRF and AMSF and (ii) the Sub- Fund may subsequently invest in the class A shares of such other fund of hedge funds as may be approved by the Authority. Please also refer to paragraph 18.3 of this Prospectus.

15 9 6.2 The Underlying Funds The primary objective of each of the Underlying Funds is to achieve long-term capital appreciation with moderate volatility and risk. To achieve this objective, PAMI selects for each Underlying Fund high-quality investment managers ( Portfolio Managers ) and invests its assets in investment vehicles ( Portfolio Funds ) managed by such Portfolio Managers The country of domicile and the investment manager of the Underlying Funds are Luxembourg and PIMSL, respectively. PIMSL has delegated the day-to-day management of the Underlying Funds to its affiliate PAMI. All activities engaged in by PAMI on behalf of the Underlying Funds are subject to the overall supervision of PIMSL The investment focus of each of the Underlying Funds is as follows: (i) Natural Resources Fund PAMI believes that the loose monetary policy of the world s central banks to stimulate growth and fight deflation may eventually damage the value of the relevant currencies. The beneficiary of such policies may be natural resources companies, which profit from changes in prices of natural resources, and commodity based economies (including emerging markets). As such, PAMI will seek to capitalize on this theme by investing at least two thirds (on a consolidated basis) of NRF s total assets in Portfolio Funds managed by Portfolio Managers who invest in commodity futures and other commodity related financial instruments, in commodity based companies, and in commodity based economies using alternative investment strategies (Please refer to Appendix 1 for information on alternative investment strategies). For example, Portfolio Managers may engage in long/short selling in equities and/or debt of natural resource related companies. These companies may be engaged in the discovery, development, production and/or distribution of natural resources or may be companies that develop technologies and furnish energy and other natural resource supplies and services to these companies. Subject to the general investment restrictions applicable to the Underlying Funds, other Portfolio Managers may invest and/or trade in commodity futures and physical commodities and/or may seek to capitalize on arbitrage opportunities that may arise from price changes in underlying commodities that have not been reflected in stock prices of users/producers of such commodity. NRF, through its investments in the Portfolio Funds, may invest in any asset class and any geographic region. The investment universe of the Portfolio Funds will generally include energy (e.g., oil, gas, coal, utilities, etc), precious metals (e.g., gold, silver, etc.), base metals (e.g., steel, aluminium, etc.), forest products (e.g., paper/pulp, etc.) and agricultural products (e.g., wheat, corn, coffee, soybeans). On an ancillary basis, PAMI may, on behalf of NRF, invest in Portfolio Funds investing in transferable securities (i.e. pursuing non alternative strategies). NRF may also hold ancillary liquid assets. (ii) Advantage Multi-Strategy Fund In respect of AMSF, PAMI will select Portfolio Managers pursuing various types of alternative strategies on a global basis, as discussed more fully below, provided that a maximum of 40% of AMSF s total assets may be managed pursuant to the same investment strategy. (Please refer to Appendix 1 for further information on alternative investment strategies). AMSF will seek to achieve attractive absolute returns (meaning net positive returns that are not measured against or dependent on a benchmark) while maintaining a low level of portfolio volatility and low correlation with equity markets. AMSF will seek to participate in up markets, preserve capital in down or volatile markets, and outperform general equity market indices over a full market cycle with lower volatility. In seeking to achieve its investment objective, AMSF will invest in selected Portfolio Managers that implement a variety of investment strategies across different asset classes. Portfolio Managers will manage their portfolios in order to achieve returns that are not highly correlated to the market. It is anticipated that, under normal circumstances, AMSF will have diversified global exposure to a variety of geographical markets. Exposure to different asset classes and markets will be closely monitored by PAMI. AMSF intends to invest primarily in Portfolio Funds which are special purpose funds that have

16 10 been specifically structured and are managed for the Permal Group ( SPF ). It is intended that AMSF will invest its gross assets in SPFs that have no minimum investment period and at least monthly liquidity. The directors of AMSF believe that this investment strategy will provide greater transparency and will generally enable Portfolio Managers to engineer strategies of the SPFs to enhance exposure to particular sectors and investments, as well as reducing the risks of liquidity restrictions, (i.e., gates, side pockets and suspension of redemption). In addition, AMSF s ability to redeem its investments from the SPFs, specifically structured for investment by the Permal Group only, should not be constrained by liquidity needs of investors other than the Permal Group. PIMSL s increased ability to rapidly redeploy capital between Portfolio Managers and investment strategies is designed to allow greater flexibility for PIMSL to express its top down views. AMSF, during its investment in each SPF, indirectly bears a pro rata portion of any establishment costs expensed by such SPF. Such costs amount to approximately US$3,000. On an ancillary basis, PAMI may, on behalf of AMSF, invest in Portfolio Funds investing in transferable securities (i.e. pursuing non-alternative strategies). AMSF may also hold ancillary liquid assets. 6.3 PIMSL s Responsibilities in respect of the Sub-Fund The responsibilities of PIMSL in respect of the Sub-Fund include the following: (i) (ii) To determine the asset allocation of the Sub-Fund; and To monitor and analyse the asset allocation between the Underlying Funds: portfolio allocation among the Underlying Funds and performance of the Underlying Funds are monitored and analysed to optimise the portfolio risk/reward profile of the Underlying Funds As the investment manager of the Underlying Funds, PIMSL and its affiliates are responsible for manager searches, due diligence, asset allocation, as well as performance monitoring and risk management. In performing its duties, PIMSL and its affiliates: (a) (b) (c) (d) (e) (f) interview managers and prepare due diligence reports (over new managers are interviewed each year, a detailed proprietary database of over 2,100 managers and ongoing monitoring of over 200 active managers is currently undertaken; perform ongoing analysis of the markets and economies; allocate the portfolio among managers, strategies and regions; analyse the correlation of managers performance to control the portfolio risk/reward profile, with an ongoing focus on risk control and controlling exposure to outperforming sectors; diversify risk among managers, strategies, styles, regions and sectors; and analyse managers for adherence to stated strategies, reporting and risk control systems. 6.4 Investment approach - Multi-manager strategy Each of the Underlying Funds invests its assets in Portfolio Funds managed primarily by independent Portfolio Managers acting pursuant to separate investment management contracts with the individual Portfolio Funds. PAMI will select the Portfolio Managers of the Portfolio Funds. PAMI seeks to identify and invest the assets in Portfolio Funds having established records that have historically been able to generate consistent superior returns at which it believes to be acceptable risk levels. Both quantitive and qualitive factors are considered in evaluating prospective Portfolio Managers / Portfolio Funds, including: general type of strategy employed; risk control policies and history; duration and speed of recovery from drawdowns; depth of experience; organisation infrastructure; fee levels; and reputation in the industry In general, the Portfolio Funds may invest and trade primarily in quoted common and preferred stocks, warrants, debt securities, convertible securities, options and futures. In addition, the Portfolio Funds may

17 11 conduct transactions in markets for currencies, commodities, futures, forwards and other derivatives. Each Portfolio Fund may also invest in securities that are not publicly traded Each Underlying Fund will seek to diversify its investment exposure through investments in a broad range of Portfolio Funds, and may rely on a single investment strategy within any given number of Portfolio Funds as well as a variety of investment strategies within a variety of Portfolio Funds. The Underlying Funds may invest assets in Portfolio Funds (including Portfolio Funds managed by PIMSL and/or PAMI or other affiliated companies of the Permal Group) that are not rated or graded by any rating agency PAMI aims to moderate volatility and risk by diversifying the portfolio of an Underlying Fund within the overall objectives of such Underlying Fund. As such, PAMI may seek to diversify among manager styles, geographic regions, sector and market cap biases. The combination of Portfolio Funds that utilize alternative investment strategies and which are less correlated to the market than traditional funds is expected to produce a portfolio that is less volatile than the general market in which the Underlying Fund invests and less correlated to such market than traditional funds investing in the same markets. The control of manager-specific risks will be regulated through PAMI s due diligence, manager selection process and subsequent ongoing monitoring of appointed Portfolio Managers (Please refer to Appendix 2 for further information on PAMI s management process in respect of the Underlying Funds) PAMI will review the performance of each Portfolio Fund and each Portfolio Manager in order to assess whether to make changes in the allocation of the Underlying Funds assets among the various Portfolio Managers. In assessing the ongoing performance of the Portfolio Managers, a variety of factors relating to the Portfolio Managers performance will be reviewed. Trade execution or soft dollar practices will generally not be reviewed. PAMI may determine to redeem an Underlying Fund s position in a Portfolio Fund or allocate assets away from a particular Portfolio Fund on short notice if among other reasons PAMI has reason to believe that the Portfolio Manager of the Portfolio Fund is deviating from historical strategies or violating its risk management policies From time to time the portfolio of an Underlying Fund may be rebalanced by purchasing investments from or selling investments to another Underlying Fund or another fund that is managed or advised by PIMSL and/or PAMI ( Interfund Transactions ) or its connected persons 4. Interfund Transactions will be effected in instances where there is no detriment to either the purchaser or seller, the transactions are in the best interest of both parties and such transactions will occur at fair market value. No commissions or other services fees will be charged or received by PIMSL or its connected persons for Interfund Transactions To the extent that an Underlying Fund s assets are not fully invested in Portfolio Funds, it is intended for such Underlying Fund to hold ancillary liquid assets, principally U.S. Treasury bills or short-term deposits with banks and other financial institutions. Underlying Funds may, (within the limits contained in the investment restrictions) borrow money on a temporary unsecured basis from another fund which is managed or advised by PIMSL, PAMI or their connected persons ( Interfund Loans ) in order to provide short-term financing with respect to securities purchased or to meet redemption requirements. Interfund Loans can only be effected if they (i) are operationally more efficient and (ii) provide lower financing costs than loans available from banks and similar credit institutions In addition, many Portfolio Managers with whom the Underlying Funds invest may utilise leverage techniques. The use of leverage techniques, which may include borrowing on margin by a Portfolio Fund, may increase the volatility of the value of an Underlying Fund s shares. While the use of leveraging techniques, which may include the use of short sales, may reduce the potential loss resulting from a general market decline, their use also may restrain maximum capital growth in times of a general market rise. 4 Connected person in relation to a company means: (a) any person or company beneficially owning (directly or indirectly) 20% or more of the ordinary share capital of that company or able to exercise (directly or indirectly) 20% or more of the total votes in that company; or (b) any person or company controlled by a person who or which meets one or both of the descriptions given in (a) above; or (c) any member of the group of which that company forms part; or (d) any director or officer of that company or any of its connected persons as defined in (a), (b) or (c) above.