Infrastructure Debt Fund Limited

Transcription

1 Proof 5: A copy of this document, which comprises a prospectus (the Prospectus ) by Infrastructure Debt Fund Limited (the Company ) in connection with the Admission of Shares in the Company to the SFM, prepared in accordance with the Prospectus Rules of the UK Listing Authority made pursuant to section 73A of the Financial Services and Markets Act 2000, has been filed with the Financial Conduct Authority in accordance with Rule 3.2 of the Prospectus Rules. The Shares are only suitable for investors (i) who understand the potential risk of capital loss and that there may be limited liquidity in the underlying investments of the Company, (ii) for whom an investment in the Shares is part of a diversified investment programme; and (iii) who fully understand and are willing to assume the risks involved in such an investment programme. Application will be made to the London Stock Exchange for the entire share capital of the Company, in issue and to be issued in connection with the Issue (the Shares ), to be admitted to the Specialist Fund Market of the London Stock Exchange plc. The Company and the Directors, whose names appear on page 43 of this Prospectus, accept responsibility for the information contained in this Prospectus. To the best of the knowledge of the Company and the Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this Prospectus is in accordance with the facts and contains no omission likely to affect the import of such information. Infrastructure Debt Fund Limited (a non-cellular company limited by shares incorporated under the laws of Guernsey with registered number 58548) Placing and Offer for Subscription of up to 150 Million Shares at an Issue Price of 1.00 per Share Investment Adviser AMP Capital Investors Limited Joint Financial Advisers and Bookrunners Hudnall Capital LLP and Cantor Fitzgerald Europe The attention of potential investors is drawn to the section headed Risk Factors starting on page 22 of this Prospectus. The latest time and date for applications under the Placing is 3.00 p.m. on 15 July The latest time and date for applications under the Offer is 5.00 p.m. on 15 July Further details of the Issue are set out in Part III of this Prospectus. Capitalised terms contained in this Prospectus shall have the meanings set out in Part IX of this Prospectus, save for within the accounts of AMP Capital Infrastructure Debt Fund II (USD), LP included in Part VI of this Prospectus. This Prospectus does not constitute an offer to sell, or the solicitation of an offer to acquire or subscribe for, Shares in any jurisdiction where such an offer or solicitation is unlawful or would impose any unfulfilled registration, qualification, publication or approval requirements on the Company or the Investment Adviser. The offer and sale of Shares have not been and will not be registered under the applicable securities laws of Australia, Canada or Japan. Subject to certain exemptions, the Shares may not be offered to or sold within Australia, Canada or Japan or to any national, resident or citizen of Australia, Canada or Japan. The Company has not been and will not be registered under the US Investment Company Act of 1940, as amended (the US Investment Company Act ) and as such, investors will not be entitled to the benefits of the US Investment Company Act. No purchase, sale or transfer of the Shares may be made except in circumstances in which such purchase, sale or transfer will not result in the Company being required to register as an investment company under the US Investment Company Act. The Shares have not been and will not be registered under the US Securities Act of 1933, as amended (the US Securities Act ) or with any securities regulatory authority of any state or other jurisdiction of the United States. The Shares may not be offered, sold, pledged, or otherwise transferred or delivered within the United States or to, or for the account or benefit of, any US person (as defined in Regulation S under the US Securities

2 c110178pu010 Proof 5: _08:31 B/L Revision: 0 Operator YouG Act, US Person ). In connection with the Issue, the Shares are being offered and sold only outside the United States to, or for the account or benefit of, investors that are not US Persons in offshore transactions within the meaning of, and in reliance upon, the exemption from registration provided by Regulation S under the US Securities Act. There will be no public offer of the Shares in the United States. Neither the US Securities and Exchange Commission (the SEC ) nor any state securities commission has approved or disapproved of the Shares or passed upon or endorsed the merits of the offering of the Shares or the adequacy or accuracy of this Prospectus. Any representation to the contrary is a criminal offence in the United States The Shares may not be acquired by: (i) investors using assets of: (a) an employee benefit plan as defined in Section 3(3) of the United States Employee Retirement Income Security Act of 1974, as amended ( ERISA ) that is subject to Title I of ERISA; (b) a plan as defined in Section 4975 of the United States Internal Revenue Code of 1986, as amended (the US Tax Code ), including an individual retirement account or other arrangement that is subject to Section 4975 of the US Tax Code; or (c) an entity whose underlying assets are considered to include plan assets by reason of investment by an employee benefit plan or plan described in preceding clause (a) or (b) in such entity pursuant to the US Plan Assets Regulations; or (ii) a governmental, church, non- US or other employee benefit plan that is subject to any federal, state, local or non-us law that is substantially similar to the provisions of Title I of ERISA or Section 4975 of the US Tax Code, unless its purchase, holding, and disposition of the Shares will not constitute or result in a nonexempt violation of any such substantially similar law. The Shares are subject to restrictions on transferability and resale in certain jurisdictions and may not be transferred or resold except as permitted under applicable securities laws and regulations. Investors may be required to bear the financial risks of this investment in the Shares for an indefinite period of time. Any failure to comply with these restrictions may constitute a violation of the securities law of any such jurisdictions. For a description of restrictions on offers, sales and transfers of Shares, see Purchase and Transfer Restrictions in Part III of this Prospectus. Hudnall Capital LLP and Cantor Fitzgerald Europe (each of which is authorised and regulated in the United Kingdom by the Financial Conduct Authority) are acting for the Company in connection with the Issue and will not regard any other person (whether or not a recipient of this Prospectus or other information) as its customer in relation thereto. Any prospective purchaser of Shares is recommended to seek its own professional advice. 7 July

3 c110178pu010 Proof 5: _08:31 B/L Revision: 0 Operator YouG CONTENTS Page SUMMARY... 4 RISK FACTORS IMPORTANT NOTICES EXPECTED TIMETABLE PLACING STATISTICS PART I INFORMATION ON THE COMPANY PART II DIRECTORS, MANAGEMENT AND ADMINISTRATION PART III ISSUE ARRANGEMENTS PART IV ADDITIONAL INFORMATION ON THE COMPANY PART V ADDITIONAL INFORMATION ON INFRASTRUCTURE DEBT FUND II PART VI FINANCIAL INFORMATION ON INFRASTRUCTURE DEBT FUND II PART VII TERMS AND CONDITIONS OF THE OFFER PART VIII TERMS AND CONDITIONS OF THE PLACING PART IX DEFINITIONS

4 c110178pu020 Proof 5: :32 B/L Revision: 0 Operator YouG SUMMARY Summaries are made up of disclosure requirements known as Elements. These Elements are in sections A E (A.1 E.7). This summary contains all the Elements required to be included in a summary for this type of securities (i.e. the Shares) and issuer (i.e. the Company). Because some Elements are not required to be addressed, there may be gaps in the numbering sequence of the Elements. Even though an Element may be required to be inserted in the summary because of the type of securities and the Company, it is possible that no relevant information can be given regarding the Element. In this case, a short description of the Element is included in the summary with the mention of not applicable. Element Disclosure requirement Section A Introduction and warnings Disclosure A1 Warning This summary should be read as an introduction to the Prospectus. Any decision to invest in the Shares should be based on consideration of the Prospectus as a whole by the investor. Where a claim relating to the information contained in the Prospectus is brought before a court, the plaintiff investor might, under the national legislation of the member states of the European Union, have to bear the costs of translating the Prospectus before the legal proceedings are initiated. Civil liability attaches only to those persons who have tabled the summary including any translation thereof, but only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of the Prospectus or it does not provide, when read together with the other parts of the Prospectus, key information in order to aid investors when considering whether to invest in the Shares. A2 Consent for Resale Not applicable. The Company has not given its consent to the use of the Prospectus for subsequent resale or final placement of securities by financial intermediaries. Element B1 B2 Disclosure requirement Legal and commercial name Domicile and legal form Section B Issuer Disclosure Infrastructure Debt Fund Limited. The Company is a Guernsey-domiciled, non-cellular company limited by shares with an unlimited life, incorporated under the Companies Law on 3 June 2014 with registered number B5 Group description Not applicable. The Company is not a part of a group and does not have any subsidiaries. B6 Notifiable interests / voting rights Not applicable. No interest in the Companies capital or voting rights is notifiable under the Companies law. As at the date of this Prospectus, insofar as is known to the Company, no person is or will, immediately following the Issue, be directly or indirectly interested in 5 per cent. or more of the Company s share capital. None of the Company s shareholders has voting rights attached to the shares they hold different from the voting rights attached to any other shares in the same class in the Company. As at the date of this Prospectus the Company, insofar as it is aware, will not, immediately following the Issue, be directly or indirectly owned or controlled by any single person or entity and 4

5 c110178pu020 Proof 5: :32 B/L Revision: 0 Operator YouG B7 B8 Key financial information Key pro forma financial information there are no arrangements known to the Company the operation of which may subsequently result in a change of control of the Company. Not applicable. The Company has been recently incorporated, has not commenced operations and no financial statements have been made up. Not applicable. The Company has been recently incorporated, has not commenced operations, no financial statements have been made up and no pro forma financial information is included. B9 Profit forecast Not applicable. No profit estimate or forecast is made. B10 B11 B34 Description of the nature of any qualifications in the audit report on the historical financial information Explanation if working capital not sufficient for present requirements Investment objective and policy Not applicable. The Company has been recently incorporated, has not commenced operations and no financial statements have been made up. Not applicable. The Company is of the opinion that, on the basis that the Minimum Net Issue Proceeds are raised, the working capital available to the Company is sufficient for the present requirements of the Company (that is, for at least the next 12 months from the date of this Prospectus). Investment objective The Company s investment objective is to deliver a stable and attractive interest rate-linked cash yield to investors. Investment policy The Company will pursue its investment objective principally by investing in IDF II (USD), a parallel limited partnership within IDF II, in order to obtain exposure to subordinated debt of infrastructure businesses headquartered in Europe, North America, Australia and other Organisation for Economic Co-operation and Development ( OECD ) member countries. The Company intends to commit approximately 98 per cent. of the Net Issue Proceeds to IDF II (USD) prior to IDF II s final closing. Pending investment of the Company s capital in IDF II (USD) the Company will invest in a managed portfolio of Sterling-hedged listed bonds issued by infrastructure-related companies (the Listed Bond Portfolio ) or cash and cash equivalents. Amounts returned to the Company and any amounts not otherwise invested in IDF II may also be invested in the Listed Bond Portfolio or cash and cash equivalents from time to time over the life of the Company until returned to Shareholders. Listed Bond Portfolio The objective of the Listed Bond Portfolio is to provide income returns, with some potential for capital gain, by investing in a portfolio of global infrastructure-related corporate bonds and hybrid securities of investment grade and sub-investment grade issued by companies which provide essential services (such as utility, communications, energy or transportation) in OECD member countries. Only Sterling, US Dollar and Euro denominated bonds will be held in the Listed Bond Portfolio. The Investment Adviser will typically target liquid issues of investment grade and high yield bonds rated 5

6 c110178pu020 Proof 5: :32 B/L Revision: 0 Operator YouG B- or above (unless the rating results from a downgrade of securities purchased while they were B- grade or above) with call dates or final maturities of up to 12 years. The Listed Bond Portfolio will have an investment limit in respect of a single issuer equal to 10 per cent. of the overall value of the Company s total assets as at the time of investment. The Investment Adviser intends to hedge the currency exposure of the Listed Bond Portfolio to Sterling, and it is anticipated that futures will be used to reduce duration risk by converting fixed interest rate risk to a floating rate exposure. Co-investment opportunities The Company may take advantage of co-investment rights available to investors in IDF II. Co-investments will follow the same strategy as IDF II. The Company s possible exposure to coinvestment opportunities will be subject to the availability of suitable co-investment opportunities. Investment period Following Admission, the Company s investment period will reflect that of IDF II (which is to end on 23 August 2017, being four years from the anniversary of IDF II s first closing on 23 August 2013) (the Investment Period ). Following the end of the Investment Period, cash which has not been drawn down or committed and is surplus to the Company s working capital requirements will be returned to Shareholders as soon as practicable, save that where one or more transactions are in process and the Directors have determined that it would be in the best interests of Shareholders to complete such transaction(s) (and notwithstanding that such completion will fall outside of the Investment Period), the cash in respect of such transaction(s) will not be returned to Shareholders unless and until the relevant transaction aborts. Changes to Investment Policy The Directors will keep the investment policy under review taking into account market conditions and the size of the Portfolio. Any material change to the investment policy of the Company will be made only with the approval of Shareholders by ordinary resolution. B35 Borrowing limits The Company may from time to time use cash borrowings. Borrowing by the Company will be restricted to 10 per cent. of the NAV of the Company (at the time of draw down or the borrowings being incurred). Borrowings may be used for short term liquidity purposes. It is not expected that the Company will use borrowings to finance acquisition of assets held in the Listed Bond Portfolio or to meet its initial commitment in IDF II, although it may draw down to fund acquisitions of investments to enhance returns to investors, and to finance outstanding investment obligations. B36 Regulatory status The Company is a non-cellular company limited by shares incorporated in Guernsey and has been registered by the GFSC as a registered closed-ended collective investment scheme. The Company is regulated by the GFSC. The Company is not regulated by any regulator other than the GFSC. B37 Typical investors An investment in the Shares is suitable only for persons: (i) who understand and can bear the potential risk of a substantial or entire capital loss of their investment and who can accept that there may be limited liquidity in the Shares and the underlying investments of the Company; (ii) for whom an investment in the Shares is part of a diversified investment programme; and (iii) who fully understand 6

7 c110178pu020 Proof 5: :32 B/L Revision: 0 Operator YouG and are willing to assume the risks involved in such an investment programme. Accordingly, typical investors in the Company are expected to be institutional investors, private client fund managers and private client brokers. B38 B39 B40 Investment of 20 per cent. or more in single underlying asset or investment company Investment of 40 per cent. or more in single underlying asset or investment company Applicant s service providers Please see B39 below. The Company intends to invest over time the majority of its assets in IDF II. Please see the summary for IDF II below. Joint Financial Advisers and Bookrunners Pursuant to the Placing and Offer Agreement dated on or around the date of this Prospectus between the Company, the Directors, the Investment Adviser, Hudnall and Cantor Fitzgerald have agreed, as agents for the Company, to use their reasonable endeavours to procure subscribers for up to 150 million Shares under the Issue at the Issue Price. In consideration for their acting as Joint Financial Advisers and Bookrunners in the Issue, the Company has agreed to pay Hudnall and Cantor Fitzgerald a Placing commission. Investment Adviser and General Partner of IDF II All fees relating to the Company s investment in IDF II (USD) will be incurred at the level of that fund and will not be subject to double charging. (a) IDF II General Partner s profit share and carried interest The General Partner of IDF II (USD), an associated company of the Investment Adviser, is entitled to a profit share of 1 per cent of Total Invested Capital per annum, and (following the return of capital to limited partners) a performance-related return, known as a carried interest, in relation to IDF II (USD). Taking into consideration a rebate of 0.3 per cent. agreed on the basis that the Company will invest greater than US$100 million in IDF II (USD), a profit share equal to 0.7 per cent. per annum of Total Invested Capital, will be payable to the General Partner quarterly in advance. Following the return of capital to IDF II s limited partners (in repayment of the limited partners capital commitments) and the achievement by limited partners of a Preferred Return, capital returned will be applied 100 per cent. to the General Partner until amounts distributed to the General Partner represent 15 per cent. of the aggregate amounts distributed to the relevant limited partner and the General Partner in respect of such limited partner in excess of the return of capital to such limited partner. Capital will then be applied in the ratio of 15 per cent. to the carried interest participant (being the General Partner) and 85 per cent. to the limited partners. Carried interest may be subject to clawback, calculated at the end of the term of IDF II (USD). While the General Partner will be entitled to charge portfolio companies or other parties fees directly referable to the making of IDF II investments, including arrangement, underwriting, subunderwriting, agency and/or establishment fees (collectively Upfront Fees ), such Upfront Fees will be credited to IDF II or offset in full against the General Partner s profit share. 7

8 c110178pu020 Proof 5: :32 B/L Revision: 0 Operator YouG Any other amounts received by the General Partner or AMP Capital (in its capacity as the manager of IDF II) in connection with its management of IDF II will be credited to IDF II or offset in full against the General Partner s profit share. (b) Listed Bond Portfolio The Investment Adviser shall be entitled to a fee (such fee to accrue daily in arrear) at a rate of 0.35 per cent. of the value of authorised investments assets under management in respect of the Listed Bond Portfolio. (c) Other assets No fee will be payable on co-investments or cash held by the Company. Other service providers (i) Administrator and Company Secretary IPES (Guernsey) Limited, which is regulated by the GFSC, has been appointed as administrator and company secretary of the Company pursuant to the Administration Agreement. The Administrator will be responsible for the Company s general administrative functions such as the calculation and publication of the Net Asset Values and maintenance of the Company s accounting and statutory records. The Administrator may, with the consent of the Company and subject to compliance with the GFSC guidance note on oursourcing, delegate the provision of administrative functions and other services to a third party. Under the terms of the Administration Agreement, the Administrator is entitled to various fees, which are expected to be approximately 85,500 in aggregate per annum, and reasonable out of pocket expenses. Investors should note that it is not possible for the Administrator to provide any investment advice to investors. (ii) Custodian BNP Paribas Securities Services (the Custodian ) is expected to be appointed pursuant to the Custody Agreement with the Company (or a subsidiary thereof), further details of which are set out in paragraph 6.7 of Part IV of this Prospectus, to act as custodian of the Company s investment in the Listed Bond Portfolio, together with cash and cash equivalent assets. The Custodian will ensure segregation in its books and registers between the securities held on its own account from those securities held on behalf of its clients, and the securities held on the Client s account from those securities held on behalf of its other clients. The fees payable to the Custodian pursuant to the Custody Agreement are expected to be approximately 20,000 to 35,000 per annum; such fee only to be payable as long as there are assets held in the Listed Bond Portfolio. It is expected that the Company (or a subsidiary thereof) will give certain market standard indemnities to the Custodian in respect of the Custodian s potential losses in carrying on the services it is to provide under the Custody Agreement. 8

9 c110178pu020 Proof 5: :32 B/L Revision: 0 Operator YouG B41 B42 Regulatory status of investment adviser and custodian Calculation of Net Asset Value (iii) Registrar The Registrar has been appointed to act as registrar of the Company pursuant to the Registrar Agreement dated on or around the date of this Prospectus between the Company and the Registrar. The Registrar will be responsible for the maintenance of the Company s register of members, dealing with routine correspondence and enquiries and the performance of all the usual duties of a registrar in relation to the Company. The Registrar will be entitled to an annual fixed fee from the Company equal to 6,500. Other registrar activity will be charged for in accordance with the Registrar s normal tariff as listed in the Registrar Agreement. Other operational expenses Other ongoing operational expenses of the Company will be borne by the Company including travel, Directors costs, accommodation, printing, D&O insurance, third party valuer, website maintenance, and audit and legal fees. All out of pocket expenses of the Administrator, the Registrar, and the Directors relating to the Company will be borne by the Company. These other operational expenses will be deducted from the assets of the Company and, although they may vary, are estimated to be in the region of 0.15 million per annum, excluding any non-recurring or extraordinary expenses. AMP Capital Investors Limited, the Investment Adviser, ABN is regulated by the Australian Securities and Investments Commission and holds an Australian Financial Services Licence AFSL BNP Paribas Securities Services, the Custodian, is a société en commandite par actions (S.C.A.) incorporated under the laws of France, registered with the Registre du Commerce et des Sociétés of Paris under number , with its registered office is at 3, rue d Antin Paris, France and is acting through its Luxembourg branch whose office is at 33, rue de Gasperich, L Hesperange, Grand Duchy of Luxembourg and registered with the Luxembourg Register of Commerce and Companies under number B Valuation of the Company s assets (i) Investment in IDF II The Investment Adviser will provide the Company with an audited valuation of the Company s investment in IDF II (USD) as at 31 December of each year and an unaudited valuation as at 31 March, 30 June and 30 September of each year. These valuations will be on a fair value basis and used to calculate the NAV that is reported by the Company. The valuation processes applied in fair valuing assets held by IDF II is governed by AMP Capital s asset valuation policy. This policy outlines the asset valuation methodologies and processes applied to measure non-exchange traded assets which have no regular market price, including illiquid debt securities. Following receipt of a valuation from AMP Capital Investors and, with the assistance of an independent valuation agent, the Company will review the fair valuation provided and, where appropriate, apply an upward or downward adjustment factor to the valuation based on the outcome of that review. It is intended 9

10 that a third party valuer will be appointed by the Company to act as its independent valuation agent following Admission. (ii) Co-investment opportunities In the event that the Company makes co-investments, the Investment Adviser will provide the same information as above [and the Company will apply the same fair market valuation methodology as described above. (iii) Other assets (a) securities listed, traded or quoted on a stock exchange or over-the-counter market are valued by reference to the bid price, or the mid price for assets held in the Listed Bond Portfolio, on such stock exchange or market as at the close of business of the relevant exchange or market on the relevant valuation day (or, if the relevant exchange or market is not open for business on the relevant valuation day, the securities are valued as at the last day on which the relevant exchange or market was open for business) as shown in the relevant exchange s or market s recognised method of publication of prices for such securities (and where a security is listed, traded or quoted on more than one stock exchange or over-the-counter market, the Board may, in its absolute discretion, select any one of such exchanges or markets); (b) any securities that are not listed, traded or quoted on a stock exchange or over-the-counter market are valued at fair value as determined by the Board using appropriate valuation methodologies such as earnings multiples, recent transactions and net assets; (c) derivative instruments are valued at fair value using appropriate valuation methodologies as determined by the Board; (d) cash and bank deposits are valued by reference to their face value. Notwithstanding the above, the Board shall be entitled, in its absolute discretion, to apply a method of valuing any asset different from that described above. Calculation of Net Asset Value The Company intends to calculate and publish the NAV and the NAV per Share, as prepared by the Administrator, quarterly by RIS announcement and on the website of the Company. The NAV and NAV per Share will be calculated in accordance with IFRS. The Company also intends to publish on its website a quarterly factsheet for investors. B43 Cross liability Not applicable. The Company is not an umbrella collective investment undertaking. B44 No financial statements have been made up Not applicable. The Company has not commenced operations and no financial statements have been made up as at the date of this Prospectus. 10

11 c110178pu020 Proof 5: :32 B/L Revision: 0 Operator YouG B45 Portfolio Not applicable. The Company has not commenced operations and so has no portfolio as at the date of this Prospectus. B46 Net Asset Value Not applicable. The Company has not commenced operations and so has no Net Asset Value as at the date of this Prospectus. Section C Securities Element C1 C2 C3 C4 Disclosure requirement Type and class of securities Currency of the securities issue Number of securities in issue Description of the rights attaching to the securities Disclosure The Shares being offered under the Issue are ordinary shares of no par value in the capital of the Company. Application will be made for the Shares to be admitted to the London Stock Exchange s Specialist Fund Market. The ISIN for the Shares is GG00BNFX2T70 and the SEDOL is BNFX2T7. Sterling The issued share capital of the Company (all of which shares will be fully paid) immediately following the Issue will consist of a maximum of 150 million Shares. There are no non-paid up Shares in issue. Dividends Shareholders are entitled to receive, and participate in, any dividends out of income; other distributions of the Company available for such purposes and resolved to be distributed in respect of any accounting period; or other income or right to participate therein. Voting The Shareholders shall have the right to receive notice of and to attend, speak and vote at general meetings of the Company and each holder of Shares being present in person, by proxy, or by attorney at a meeting shall upon a show of hands have one vote and upon a poll each such holder present in person or by proxy or by attorney shall have one vote in respect of each Share held by him. Winding up On a winding up the surplus assets remaining after payment of all creditors shall be divided amongst the holders of shares then in issue, subject in any such case to the rights of any shares which may be issued with special rights or privileges. Variation of rights If at any time the share capital is divided into further classes of shares the rights attached to any class (unless otherwise provided by the terms of issue) may whether or not the Company is being wound up, be varied with the consent in writing of the holders of three fourths of the issued shares of that class or with the sanction of an extraordinary resolution of the holders of the shares of that class. Pre-emption rights There are no provisions of Guernsey law which confer rights of preemption in respect of the allotment of Shares. However, the Articles provide that the Company is not permitted to allot (for cash) equity securities (being Shares or rights to subscribe for, or convert 11

12 c110178pu020 Proof 5: :32 B/L Revision: 0 Operator YouG C5 C6 Restrictions on the free transferability of the securities Admission to trading on a regulated market securities into, Shares), unless it shall first have offered to allot to each existing holder of Shares on the same or more favourable terms a proportion of those Shares which is as nearly as practicable equal to the proportion of the total number of Shares in issue represented by the Shares held by such Shareholder. These preemption rights may be excluded and disapplied or modified by special resolution of the Shareholders. Subject to the Articles (and the restrictions on transfer contained therein), a Shareholder may transfer all or any of his Shares in any manner which is permitted by the Companies Laws or in any other lawful manner which is from time to time approved by the Board. The Company has not been and will not be registered under the US Investment Company Act. The Shares have not been and will not be registered under the US Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States. The Shares may not be offered, sold, pledged, or otherwise transferred or delivered, directly or indirectly, into or within the United States or to, or for the account or benefit of, any US Person. There will be no public offer of the Shares in the United States, and this Prospectus should not be distributed or forwarded into the United States or to US Persons. In connection with the Issue, the Shares are being offered and sold only outside the United States to, or for the account or benefit of, investors that are not US Persons in offshore transactions within the meaning of, and in reliance upon, the exemption from registration provided by Regulation S under the US Securities Act. The Shares and any beneficial interests therein may only be transferred in offshore transactions in accordance with Regulation S: (i) to a person outside the United States and not known to the transferor to be a US Person, by prearrangement or otherwise; or (ii) to the Company or a subsidiary thereof. No purchase, sale or transfer of the Shares may be made except in circumstances in which such purchase, sale or transfer will not result in the Company being required to register as an investment company under the US Investment Company Act or potentially being in violation of such Act or the rules and regulations promulgated thereunder. The Company and its agents will not be obligated to recognise any resale or other transfer of the Shares made other than in compliance with the restrictions described above. Application will be made to the London Stock Exchange for the Shares issued, and to be issued pursuant to the Issue, to be admitted to trading on the London Stock Exchange s Specialist Fund Market. It is expected that Admission will become effective and that dealings will commence on 22 July C7 Dividend policy The Company is targeting distributions to investors of Libor +5 to 6 per cent. per annum from (and including) year ending 31 March 2016, being the first full financial year of the Company, and a net IRR of approximately 6 per cent. per annum over the life of the Company. The Company intends that, subject to retentions to meet the Company s working capital requirements, any income or capital returned to the Company will be distributed promptly to Shareholders, save for where such income or capital has been returned in the Investment Period and is required to be held for further draw down. 12

13 c110178pu020 Proof 5: :32 B/L Revision: 0 Operator YouG Element D1 D2 Disclosure requirement Key information on the key risks specific to the issuer or its industry. Dividends From and including the year ending 31 March 2016 the Company will target quarterly distributions to investors amounting to distributions of Libor +5 to 6 per cent. per annum. It is also intended that dividends will be paid in respect of the period ending 31 March It is the Company s expectation that it will pay an annualised dividend of no less than Libor +3.5 per cent., with the first quarterly dividend expected to be declared in November 2014 for the period from Admission to 30 September The payment of all dividends is subject to satisfaction of the solvency test prescribed by the Companies Law. Capital distributions Following the end of the Investment Period in August 2017, it is intended that proceeds from the realisation of investments in IDF II received by the Company will be distributed to Shareholders on an ongoing basis until the termination of IDF II in August 2023 (subject to possible extension by up to two years). General The target returns above, including target dividend distributions, are targets only and are based on financial projections of the investment strategy which are themselves based on assumptions regarding market conditions and the economic environment at the time of modelling and are therefore subject to change. There can be no guarantee that the target returns will be achieved in the amounts indicated or at all. Investors should not place any reliance on such target return in deciding whether to invest in the Company. Section D Risks Disclosure * The Company is a recently established investment company and has no operating history. Accordingly, there are no historical financial statements or other meaningful operating or financial data with which to evaluate the Company and its performance. An investment in the Company is therefore subject to all of the risks and uncertainties associated with a new business, including the risk that the Company will not achieve its investment objectives and that the value of the investors investment could decline substantially as a consequence. * The ability of the Company to meet its investment objective will depend in large part on the Investment Adviser s ability to generate positive returns through the Listed Bond Portfolio and IDF II. * The target return figures are a target only and are based on financial projections which are themselves based on assumptions regarding market conditions and the economic environment. The level of dividends and other distributions to be paid by the Company may fluctuate and there can be no assurance as to the level and/or payment of any future dividends or any distributions by the Company. The declaration, payment and amount of any future dividends or distributions by the Company are subject to the discretion of the Directors and will depend upon, among other things, the 13

14 c110178pu020 Proof 5: :32 B/L Revision: 0 Operator YouG D3 Key information on the key risks specific to the securities. performance of the Company, the Company s financial position and cash requirements and the ability of the Company to comply with the applicable legal requirements for paying dividends, including the statutory solvency test under Guernsey law. * As the Company is unlikely to hold investments in the Listed Bond Portfolio to maturity, the Company will be exposed to fluctuations in yields and prices of such bonds. Should there be an adverse movement in yields and prices of such bonds this may adversely affect the returns of the Company and its Shareholders. * Notwithstanding the Listed Bond Portfolio, the assets of the Company and IDF II may be hard to value and the Company and/or IDF II may not be able to realise the value of the investments as reported from time to time. * Interests in IDF II in which the Company will invest are illiquid. Interests in IDF II will not ordinarily be transferable, there is no public market for interests in IDF II and none is expected to develop. * The Company does not currently intend to engage in hedging within its Portfolio, other than the hedging of investments within the Listed Bond Portfolio into Sterling and to swap fixed rate returns into floating rate returns, but reserves the right to do so in the future (in limited circumstances) if approval is granted by the board of Directors. Even so, it may not however be possible to hedge against a change or event at attractive prices or in sufficient size or at a price sufficient to protect the assets from the decline in value of the Portfolio positions anticipated as a result of such change, and the use of such hedging may result in lower returns on the Portfolio than would have occurred had such instruments not been utilised. In addition, it may not be possible to hedge against certain risks at all. * An investment in the Shares of the Company carries the risk of loss of capital. The value of a Share can go down as well as up and Shareholders may receive back less than the value of their initial investment and could lose all of the investment. * The Shares may trade at a discount to NAV per Share for a variety of reasons, including due to market conditions or to the extent investors undervalue the investment activities of the Company. While the Directors may seek to mitigate any discount to NAV per Share, for example through Share buy backs, there can be no guarantee that they will seek to do so or that they will be successful if they do and the Directors accept no responsibility for any failure of any such strategy to effect a reduction in any discount. * Shareholders will have no right to have their Shares redeemed or repurchased by the Company at any time. Shareholders wishing to realise their investment in the Company may be required to dispose of their Shares on the stock market. Accordingly, the ability of Shareholders to realise the Net Asset Value of, or any value in respect of, their Shares is mainly dependent on the existence of a liquid market in the Shares and the market price of such Shares. 14

15 c110178pu020 Proof 5: :32 B/L Revision: 0 Operator YouG Element E1 E2a E3 Disclosure requirement The total net proceeds and an estimate of the total expenses of the issue/offer, including estimated expenses charged to the investor by the issuer or the offeror. Reasons for the offer and use of proceeds Terms and Conditions of the offer Section E Offer Disclosure On the basis that 150 million Shares are issued under the Issue, Net Issue Proceeds after costs are expected to be not less than million. The initial expenses of the Company are those which are necessary for the Issue. The costs of the Issue borne by the Company will be no more than 1.5 per cent. of the Gross Issue Proceeds. These expenses will be paid on or around Admission (unless stated otherwise) and will include fees payable under the Placing and Offer Agreement, the fees and expenses of any sub-placing agents, registration, listing and admission fees, settlement arrangements, printing, advertising and distribution costs, legal fees and any other applicable expenses. All such expenses will be immediately written off. The Company will invest the Net Issue Proceeds in accordance with the Company s investment policy. Up to 150 million Shares of no par value are being marketed and are available under the Issue. Shares will be issued under the Issue at a price of 1.00 per Share. The Issue is not being underwritten. The Issue will be conditional upon: * Admission occurring by 8 a.m. on 22 July 2014 (or such later time or date, not being later than 1 August 2014, as the Company, Hudnall and Cantor Fitzgerald may agree); * the Placing and Offer Agreement becoming otherwise unconditional in all respects, and not being terminated in accordance with its terms before Admission occurs; and * the Minimum Net Issue Proceeds having been raised. No fractions of Shares will be issued. The Directors and the Joint Financial Advisers reserve the right not to proceed with the Issue if the Net Issue Proceeds are less than 73.9 million (or such lesser amount as the Company, Hudnall and Cantor Fitzgerald may determine and notify to investors via publication of a supplementary prospectus). If the Issue does not proceed, subscription monies received will be returned without interest at the risk of the applicant. E4 Material interests Not applicable. No interest is material to the Issue. E5 Name of person or entity offering to sell securities Not applicable. No person is selling securities. E6 Dilution Not applicable. No dilution will result from the Issue. E7 Estimated expenses charged to the investor by the issuer or the offeror Not applicable. No expenses will be charged to investors by the Company in connection with the Issue. 15

16 c110178pu020 Proof 5: :32 B/L Revision: 0 Operator YouG Element B1 B2 Disclosure requirement Legal and commercial name Domicile and legal form Summary for IDF II (USD) Section B Issuer Disclosure AMP Capital Infrastructure Debt Fund II (USD), LP ( IDF II (USD) ). IDF II (USD) is a limited partnership registered by the Assistant Registrar of Exempted Limited Partnership of the Cayman Islands on 8 March 2013 under registration number It is domiciled in the Cayman Islands and was established under the Cayman Islands Exempted Limited Partnership Law, IDF II (USD) is not authorised or regulated by the Financial Conduct Authority, the GFSC or any other regulatory authority. B5 Group description IDF II (USD) has two wholly-owned subsidiaries, AMP Capital Investors (IDF II USD No. 1) S.à.r.l. and AMP Capital Investors (IDF II USD No.2) S.à.r.l. B7 Key financial information IDF II (USD) was established on 8 March The key figures that summarise the financial condition of IDF II (USD) for the period from acceptance of its first limited partner on 23 August 2013 to 31 December 2013 are set out below: Consolidated period from 23 August 2013 to 31 December 2013 (USD 000) Total Income... 1,874 Net profit attributable to partners before interest... 1,479 Increase in net assets attributable to partners from operations... 1,455 Consolidated 31 December 2013 (USD 000) Total Assets... 45,495 Net profit attributable to partners from operations... 45,040 B8 Key pro forma financial information On 16 January 2014, IDF II (USD) received new and additional commitments amounting to US$84.4 million in aggregate. On 20 February 2014, IDF II (USD) made a distribution to investors of US$477,793. On 27 March 2014, IDF II (USD) received new and additional commitments amounting to US$257.1 million in aggregate. On 22 May 2014, IDF II (USD) made a distribution to investors of US$150,000. As at 31 March 2014, being the latest practicable date prior to the publication of this Prospectus, the net asset value of IDF II (USD) was US$44,766,067. There has been no other significant change to the financial condition and operating results during or subsequent to 31 December Not applicable. No pro forma information is included. 16

17 c110178pu020 Proof 5: :32 B/L Revision: 0 Operator YouG B9 Profit forecast Not applicable. No profit estimate or forecast is made. B10 B34 Description of the nature of any qualifications in the audit report on the historical financial information Investment objective and policy Not applicable. The audit reports on the historical financial information contained within the document are not qualified. Investment objective The principal objective of IDF II (USD) is to invest in the subordinated debt of defensive, non-cyclical infrastructure businesses, targeting sectors that serve as the backbone for the provision of essential products such as water, gas, electricity and transport. Investment policy IDF II (USD) seeks to achieve diversification across industry, sector and geography and adopts a buy and hold approach to its investments. IDF II (USD) has a specific focus on subordinated debt, and aims to deliver attractive risk adjusted returns focused on cash yield by investing in defensive private debt assets that can perform across different market cycles. IDF II (USD) may only invest in situations where the underlying business is incorporated in, has headquarters in, has the greatest part of its operational assets located in, generates the greatest part of its revenues from, or where the sponsor of the relevant transaction is based in, OECD member countries. B35 Borrowing limits For the purpose of regularising drawdowns from investors and bridging the timing gaps between commitment to investments in line with its investment strategy and receipt of drawdowns from investors, IDF II may borrow up to US$150 million under the bridging facility, with such amounts to be distributed amongst the parallel funds as decided from time to time by the General Partner with reference to the commitments of each parallel fund. As at 31 March 2014, the facility size for IDF II (USD) is US$102 million, which is secured against IDF II s current assets including undrawn investor commitments. In practice, IDF II(USD) is unable to borrow for the purpose of leverage. B36 Regulatory status IDF II (USD) is an exempted limited partnership registered by the Assistant Registrar of Exempted Limited Partnership of the Cayman Islands on 8 March 2013 under registration number It is domiciled in the Cayman Islands and was established under the Cayman Islands Exempted Limited Partnership Law, IDF II (USD) is not authorised or regulated by the Financial Conduct Authority, the GFSC or any other regulatory authority. B37 Typical investors Typical investors in IDF II (USD) are institutional investors. B38 Investment of 20 per cent. or more in single underlying asset or investment company Not applicable. The investment limit in respect of a single portfolio company is equal to 15 per cent. of total commitments provided that: * an investment in a portfolio company is reduced by the aggregate amount of all proceeds received by IDF II from that portfolio company, and 17

18 c110178pu020 Proof 5: :32 B/L Revision: 0 Operator YouG B39 Investment of 40 per cent. or more in single underlying asset or investment company * for investments made prior to the final close of IDF II, determinations are made as if aggregate commitments were equal to the greater of the actual amount of aggregate commitments and US$1,000 million. Not applicable. See B38 above. B40 Service providers General Partner The General Partner is responsible for the management, operation and administration of the affairs of IDF II (USD). The General Partner is responsible for ensuring that IDF II (USD) is always managed and operated, and that its investment portfolio is always managed on a discretionary basis, by AMP Capital or a management company that is an affiliate of the General Partner. The General Partner has power and authority conferred on it by the Limited Partnership Agreement which includes full power and authority to sign management agreements with the investment manager, execute documents or do any other act or thing which the investment manager may direct under the Limited Partnership Agreement or the management agreement, and generally, as a partner, represent IDF II (USD) in its dealings with the investment manager, or in relation to the protection of IDF II (USD) s assets, and as required by law or in any other respect, except where the power to do so is conferred on the investment manager. Taking into consideration a rebate of 0.3 per cent. agreed on the basis that the Company will invest greater than US$100 million in IDF II (USD), an amount equal to 0.7 per cent. per annum of total invested capital (being the amount of IDF II (USD) s capital which has been invested, other than in investments which have been disposed of or permanently written off), will be payable to the General Partner quarterly in advance. Following the return of capital to the limited partners and the achievement of the Preferred Return, carried interest shall be payable in the ratio of 15 per cent. to the General Partner and 85 per cent. to the limited partners. IDF II investment manager The investment manager of IDF II (USD) is AMP Capital Investors Limited, AMP Sydney Cove Building, 33 Alfred Street, Sydney, NSW 2000, Australia (AMP Capital). AMP Capital has full control, subject to the terms of the Limited Partnership Agreement, over the business, assets, conduct and affairs of IDF II (USD), which includes any risk management or portfolio management functions on behalf of IDF II (USD). Administrator Citco Fund Services (Cayman Islands) Limited is the administrator of IDF II (USD). As IDF II (USD) s administrator, it is responsible for the IDF II (USD) s general administrative functions such as the calculation and publication of the net asset values and maintenance of accounting and statutory records. Service provider fees The service providers are entitled to annual base fees and additional variable fees. The service provider fees are approximately US$200,000 per annum (as at 31 March 2014), excluding any non-recurring or extraordinary expenses. 18

19 c110178pu020 Proof 5: :32 B/L Revision: 0 Operator YouG B41 B42 Regulatory status of investment manager Calculation of Net Asset Value AMP Capital Investors Limited, the Investment Adviser, ABN is regulated by the Australian Securities and Investments Commission and holds an Australian Financial Services Licence AFSL IDF II has a hold-to-maturity strategy and, as such, its assets are valued at amortised cost as at the valuation date if there is no evidence of a material risk of loss. Material risk of loss is defined as an expectation that there is likely to be an event of default under the senior or junior loan obligations of the borrower leading to a potential loss for senior and junior (subordinated) lenders to the business, based on the projected performance of the business involved. Where the Investment Adviser believes that a material risk of loss will eventuate or does exist, the Investment Adviser obtains an independent valuation by an external appropriately qualified valuer. Based on this valuation, the value at which the loan asset is carried within IDF II is adjusted accordingly and may be reduced. B43 Cross liability Not applicable. IDF II (USD) is not an umbrella collective investment undertaking. B44 No financial statements have been made up Not applicable. IDF II (USD) has commenced operations and historical financial information is included in this Prospectus. B45 Portfolio The current called commitments in IDF II (USD) are invested in ADI Finance 2 Limited and Astoria Project Partners, LLC, further details of which are set out below. As at 31 December 2013, the audited fair value of IDF II (USD) s interests in ADI Finance 2 Ltd is US$27,461,443 and the audited fair value of Astoria Project Partners, LLC is US$16,585,000. ADI Finance 2 Limited ( ADI Finance 2 ) Deal summary Industry: Airports Deal status: Unrealised AMP Capital role: Arranger/Secondary Debt tranche: Subordinated Geography: UK Investment summary Invested date: Oct-13 Realisation date: Jul-20/22 Total IDF II Invested capital: 50.0m Gross IRR to 31/12/13: 15.2% 1 Astoria Project Partners, LLC ( Astoria ) Deal summary Industry: Energy Deal status: Unrealised AMP Capital role: Sole arranger Debt tranche: Subordinated Geography: North America Investment summary Total IDF II Invested capital: US$50m Initial investment date: Dec-2013 Realisation date: Dec-2022 Gross IRR to 31/12/13: 9.4% 1 Includes impact of upfront fee paid but not any other fees payable 19

20 c110178pu020 Proof 5: :32 B/L Revision: 0 Operator YouG B46 Net Asset Value As at 31 March 2014, being the latest practicable date prior to publication of this Prospectus, the net asset value of IDF II (USD) was US$44.8 million. Element C3 Disclosure requirement Number of securities in issue Section C Securities Disclosure Not applicable. IDF II (USD) does not issue securities. As at 31 May 2014, IDF II had US$399.2 million of undrawn capital commitments and US$442.3 million of total capital commitments. C7 Dividend policy Distributions of income and investment proceeds will be made as and when determined by the IDF II investment manager. Distributions of net income available for distribution will be made quarterly, while net proceeds of the realisation of investments (calculated after making provision for costs and expenses of IDF II) will be distributed to investors as soon as practicable. Section D Risks Element D1 D2 Disclosure requirement Key information on the key risks specific to the issuer or its industry. Disclosure * IDF II (USD) s investment portfolio will consist primarily of securities issued by privately held companies, and operating results in a specified period will be difficult to predict. Such investments involve a high degree of business and financial risk that can result in substantial losses. There is no assurance that IDF II (USD) will be profitable, and certain charges will be incurred regardless of whether any profits are earned. * The assets of IDF II (USD) are hard to value and may not be realised at the value of the investments as reported from time to time. * Interests in IDF II (USD) are illiquid and will not ordinarily be transferable. There are substantial restrictions on transferability of interests under the Limited Partnership Agreement and applicable laws, and investors may not freely transfer, assign or sell any of their interests in IDF II (USD), or withdraw from IDF II (USD), without the prior written consent of the IDF II investment manager. In general, withdrawals of interests are not permitted, and interests are not redeemable. Consequently, the Company may not be able to easily liquidate its investment in IDF II (USD). * Although investments are expected to generate income during steady state operations, it is uncertain as to when profits, if any, will be realised. Additionally, the return of capital, if any, from an investment generally will occur only at maturity. An investment may be sold by IDF II (USD) or repaid by the borrower at any time, although it is not generally expected that this will occur for a number of years after the initial investment. * The Company will be investing in IDF II (USD), the working currency of which is US dollars, but IDF II may invest in assets denominated in currencies other than US Dollars. 20

21 c110178pu020 Proof 5: :32 B/L Revision: 0 Operator YouG * AMP Capital may (but is not obligated to) endeavour to manage currency exposures to US Dollars in IDF II (USD). To the extent that any hedging arrangements are entered into, movements in foreign exchange rates may therefore adversely affect the returns of IDF II (USD), and hence the Company s ability to achieve its target returns. 21

22 c110178pu030 Proof 5: _08:32 B/L Revision: 0 Operator YouG RISK FACTORS Investors are referred to the risks set out below. Only those risks which are material and currently known to the Company have been disclosed. No assurance can be given that Shareholders will realise a profit or will avoid a loss on their investment. Investment in the Company is suitable only for persons who can bear the economic risk of a substantial or entire loss of their investment and who can accept that there may be limited liquidity in the Shares. Additional risks and uncertainties not currently known to the Company, or that the Company deems to be immaterial, may also have an adverse effect on its business. Potential investors should review this Prospectus carefully and in its entirety and consult with their professional advisers before making an application for Shares. Risks relating to the Company No operating history The Company is a recently established investment company and has no operating history. Accordingly, there are no historical financial statements or other meaningful operating or financial data with which to evaluate the Company and its performance. An investment in the Company is therefore subject to all of the risks and uncertainties associated with a new business, including the risk that the Company will not achieve its investment objective and that the value of an investor s investment could decline substantially as a consequence. The ability of the Company to meet its investment objective will depend on the Investment Adviser s ability to generate targeted returns through IDF II and the Listed Bond Portfolio After an initial period the majority of the Company s assets (to the extent not retained in cash or invested in the Listed Bond Portfolio) will be invested in IDF II. Accordingly, the success of the Company will depend principally on the ability of the Investment Adviser to generate positive returns within IDF II. This will depend on the ability of the Investment Adviser to implement the investment strategy of IDF II in such a manner as to ensure that the assets of IDF II are allocated as anticipated. Achievement of the investment objective will also depend, in part, on the ability of the Investment Adviser to provide competent, attentive and efficient services to IDF II under the terms of the agreements between the Investment Adviser and IDF II. There can be no assurance that the Investment Adviser will be able to do so or that IDF II will be able to invest their assets and commitments on attractive terms or generate any investment returns for its investors or avoid investment losses. The Company s ability to generate positive returns will also depend on the ability of the Investment Adviser to successfully manage the Listed Bond Portfolio. Any capital losses from the Listed Bond Portfolio will negatively affect the Company s returns. In addition, the performance of the Listed Bond Portfolio may affect the Company s ability to meet its capital commitments to IDF II (USD) reducing the value of the Company s invested value in IDF II (USD) and therefore the overall returns for the Company. The level of dividends and other distributions to be paid by the Company may fluctuate and there is no guarantee that any such distributions will be paid at the target return levels or at all The target return figures are targets only and are based on financial projections which are themselves based on assumptions regarding market conditions and the economic environment. There can be no assurance as to the level and/or payment of any future dividends or any distributions by the Company. The declaration, payment and amount of any future dividends or distributions by the Company are subject to the discretion of the Directors and will depend upon, among other things, the performance of the Company, the Company s financial position and cash requirements and the ability of the Company to comply with the applicable legal requirements for paying dividends, including the statutory solvency test under Guernsey law. There is no guarantee that the target returns of the Company can be achieved at the level set out in this Prospectus, or that its Net Asset Value will not decrease. A variety of factors, including changes in financial market conditions, interest rates, exchange rates, government regulations, the global economic environment or the occurrence of risks described elsewhere in this Prospectus could adversely impact the Company s ability to achieve its targets and its performance. Investors should not place any reliance on such target returns in deciding whether to invest in the Company. A failure by the Company to achieve its target returns, or a decrease in its Net Asset Value, could 22

23 c110178pu030 Proof 5: _08:32 B/L Revision: 0 Operator YouG adversely impact the value of the Shares and result in a loss of all or part of an investor s investment. The issue is not being underwritten The Issue is not being underwritten by any party. It is therefore possible that the maximum size of the Issue (being 150 million) will not be achieved. In such circumstances the ongoing expenses of the Company would erode a greater proportion of the Company s assets than would otherwise have been the case. Further, the Issue will not proceed if the Minimum Net Issue Proceeds of 73.9 million (or such other lesser amount as the Company, Hudnall and Cantor Fitzgerald may determine and notify to investors in a publication of a supplementary prospectus) are not achieved. The Company is in part reliant upon the provision of services by third party service providers in order to carry on its business and a failure by one or more service providers could materially disrupt the business of the Company or impact detrimentally on its investment performance The Company has no employees and the Directors have all been appointed on a non-executive basis. The Company is therefore reliant in part upon the performance of third party service providers for its executive function. In particular, the Investment Adviser, the Administrator and the Registrar will be performing services which are integral to the operation of the Company. Failure by any service provider to carry out its obligations to the Company in accordance with the terms of its appointment could have a materially detrimental impact on the operation of the Company and could affect the ability of the Company to meet its investment objective. The Investment Adviser and/or companies with which it is associated may provide services to other clients which could compete directly with the activities of the Company or IDF II which could cause the investment opportunities available to, and investment returns achieved by, the Company and/or IDF II to be prejudiced AMP Capital is the Investment Adviser of the Company and the manager of IDF II. The Investment Adviser s directors, administrator and/or their respective affiliates or any person connected with them may from time to time act as investment manager, investment adviser, custodian, registrar, broker, administrator, distributor or dealer in relation to, or be otherwise involved in, other investment funds which have similar or different objectives to those of the Company and IDF II. This could prejudice the investment opportunities available to, and investment returns achieved by, the Company and/or IDF II. In particular, the Investment Adviser or any of its affiliates or any person connected with them may invest in, directly or indirectly, or manage or advise other investment funds or accounts which invest in assets which may also be purchased or sold by the Company or IDF II. The Investment Adviser may give advice or take action with respect to its other clients that differs from the advice given or actions taken with respect to the Company. The Investment Adviser will ensure that transactions effected by it or an associate in which it or an associate has, directly or indirectly, a material interest or relationship of any description with another party, are effected on terms which are not materially less favourable to the Company than if the potential conflict had not existed. During IDF II s commitment period, AMP Capital will ensure that investment opportunities meeting the investment criteria of IDF II are offered to IDF II in priority to any other funds or vehicles managed or advised by it, subject to a superior priority afforded to IDF I. Other than as set out above, the Investment Adviser and its affiliates are under no obligation to offer investment opportunities of which any of them becomes aware to IDF II or the Company or account to IDF II or the Company in respect of (or share with IDF II or the Company) any such transaction or any benefit received by any of them from any such transaction, but will allocate such opportunities on an equitable basis between IDF II, the Company and other clients. Market Risks Global financial markets The global financial markets have experienced extreme volatility and disruption in recent years, as evidenced by a lack of liquidity in the equity and debt capital markets, significant write-offs in the financial services sector, the repricing of credit risk in the credit market and the failure of major financial institutions. Despite actions of government authorities, these events contributed to general 23

24 c110178pu030 Proof 5: _08:32 B/L Revision: 0 Operator YouG economic conditions that have materially and adversely affected the broader financial and credit markets and reduced the availability of debt and equity capital. The default of any financial institution could lead to defaults by other institutions. Concerns about, or default by, one financial institution could lead to significant liquidity problems, losses or defaults by other institutions, because the credit quality and integrity of many financial institutions may be closely related as a result of their credit, trading, clearing or other relationships. This risk is sometimes referred to as systemic risk and may adversely affect brokers, lending banks and other trading counterparties with whom the Company deals. The Company may, therefore, be exposed to systemic risk when it deals with various third parties, such as brokers, lending banks and other trading counterparties whose creditworthiness may be interlinked. Further, recurring market deterioration may materially adversely affect the ability of a borrower to service its debts or refinance its outstanding debt. Financial market disruptions may also have a negative effect on the valuations of, and may increase the risk of liquidity events involving, the Company s investments (and, by extension, may adversely affect the NAV and/or the market price of the Shares). In the future, non-performing assets in the Portfolio may cause the value of the Portfolio to decrease if the Company is required to write down the values of its investments. Adverse economic conditions may also decrease the value of collateral securing some of its loans. Conversely, in the event of sustained market improvement, the Company, through its investment in IDF II, may have access to only a limited number of potential investment opportunities, which would also result in limited returns to Shareholders. General market risk Market risk is risk associated with changes in market prices or rates. There are certain general market conditions in which any investment strategy is unlikely to be profitable. The Company does not have the ability to control or predict such market conditions. General economic and market conditions, such as currencies, interest rates, availability of credit, inflation rates, economic uncertainty, changes in laws, trade barriers, currency exchange controls and national and international political circumstances may affect the price level, volatility and liquidity of securities prices and result in losses in the value of the Company s assets. Risks relating to the investment strategy Debt securities Debt portfolios (including the Listed Bond Portfolio, the investments of IDF II and any coinvestments made by the Company in alignment with IDF II s investment strategy) are subject to credit, interest rate risk and refinancing risk. Credit risk refers to the likelihood that an issuer will default in the payment of principal and/or interest on an instrument. Financial strength and solvency of an issuer are the primary factors influencing credit risk and these could deteriorate as a result of, among other factors, an adverse development in their business or other factors, including those referred to under the subheading Market Risks above. In addition, subordination, lack or inadequacy of collateral or credit enhancement for a debt instrument may affect its credit risk. Credit risk may change over the life of an instrument and securities which are rated by rating agencies are often reviewed and may be subject to downgrade. Interest rate risk refers to the risks associated with market changes in interest rates. Interest rate changes may affect the value of a debt instrument indirectly (especially in the case of fixed rate securities) and directly (especially in the case of instruments whose rates are adjustable). In general, rising interest rates will negatively affect the price of a fixed rate debt instrument, and falling interest rates will have a positive effect on price. Refinancing risk refers to the risk that an issuer will be unable to refinance its debt obligations. In the event that an issuer does not have adequate funds or liquidity of assets to satisfy those obligations, the lender will be unable to recoup its money. The inability of an issuer to refinance debt can depend on a number of factors including the level of outstanding debt obligations, level of income achievable on its assets and type of assets held. Refinancing risk increases as interest rates rise, when issuers may not have adequate income to cover the interest payments of refinance arrangements. 24

25 c110178pu030 Proof 5: _08:32 B/L Revision: 0 Operator YouG As the Company is unlikely to hold investments in the Listed Bond Portfolio to maturity, the Company will be exposed to fluctuations in yields and prices of such bonds As the Company is unlikely to hold investments in the Listed Bond Portfolio to maturity, the Company will be exposed to fluctuations in yields and prices of such bonds caused by factors such as those set out under Debt securities above. Should there be an adverse movement in yields and prices of such bonds this may adversely affect the returns of the Company and its Shareholders. In particular, the Company may invest in debt securities that are rated in non-investment grade categories. A non-investment grade rating reflects, in the opinion of the ratings agencies, the riskier credit profile of an issuer compared to an investment grade issuer. Securities rated in these lower rating categories are generally considered to be more speculative with respect to their issuers capacity to make coupon or interest payments and to repay the principal amount of such securities, and are therefore subject to greater risks of loss of principal amount and non-payment of coupon or interest payments than securities rated in higher rating categories. They are also more susceptible to the effects of a deterioration of general economic conditions than securities in higher rating categories. Adverse publicity and negative investor perception about lower rated or unrated securities, whether or not based on an analysis of the fundamentals with respect to the relevant issuers, may contribute to a decrease in the value and liquidity of such securities. In addition, because investors generally perceive lower rated or unrated securities as being associated with greater risk, the yields and prices of such securities may fluctuate more than those of higher rated securities. The market for lower rated or unrated securities may be less liquid than that for higher rated securities, which can adversely affect the prices at which these lower rated securities can be sold. Whilst the Company will target investments in bonds that provide suitable liquidity to enable timely realisations in advance of meeting its investment commitments to IDF II, a change in general market and/or specific issuer conditions may make it more difficult for the Company to realise certain of its bond investments to meet such commitments within the required timeframe. In such circumstances, the Company may have to dispose of certain bond investments at prices that are lower than those prevailing in the market prior to the disposal and this may adversely affect the returns of the Company and its Shareholders. Hedging transactions The Company does not currently intend to engage in hedging within its Portfolio, other than the hedging of investments within the Listed Bond Portfolio into Sterling and to swap fixed rate returns into floating rate returns, but reserves the right to do so in the future (in limited circumstances) if approval is granted by the board of Directors. The use of hedging in the future will not require the approval of Shareholders. If approved by the Board, the Company may utilise financial instruments (including derivatives) to seek to hedge against declines in the values of its Portfolio positions as a result of changes in currency exchange rates, certain changes in the equity markets and market interest rates and other events. However, even if used primarily for hedging purposes, the price of derivative instruments (such as forward contracts, options, equity futures, equity indexes and interest rate swaps, caps and floors) is highly volatile, and acquiring or selling such instruments involves certain leveraged and unusual risks. The low initial margin deposits normally required to establish a position in such instruments permits an unusually high degree of leverage. As a result, a relatively small movement in the price of a contract may result in substantial losses to the Company (which may not be offset by increases in the value of the instrument being hedged). There may be an imperfect correlation between the instrument acquired for hedging purposes and the investments or market sectors being hedged, in which case, a speculative element is added to the highly leveraged position acquired through a derivative instrument primarily for hedging purposes. Further, it may not be possible to hedge against a change or event at attractive prices or in sufficient size or at a price sufficient to protect the assets from the decline in value of the Portfolio positions anticipated as a result of such change, and the use of such hedging may result in lower returns on the Portfolio than would have occurred had such instruments not been utilised. In addition, it may not be possible to hedge against certain risks at all. 25

26 c110178pu030 Proof 5: _08:32 B/L Revision: 0 Operator YouG The use of leverage by the Company may increase the volatility of returns and providers of leverage would rank ahead of Shareholders in the event of insolvency The Company may from time to time use cash borrowings. Borrowing by the Company will be restricted to 10 per cent. of the NAV of the Company (at the time of draw down) and may be used for short term liquidity purposes. It is not expected that the Company will use borrowings to finance its initial acquisitions of assets held in the Listed Bond Portfolio, although it may draw down to fund acquisitions of investments to enhance returns to Shareholders and to finance outstanding investment obligations. The use of leverage can have the effect of increasing the volatility of the performance of the Company and, by extension, the Shares. If income and capital appreciation on Investments made with borrowed funds are less than the costs of the leverage, the Net Asset Value will decrease. The effect of the use of leverage is to increase the investment exposure, the result of which is that, in a market that moves adversely, the possible resulting loss to capital would be greater than if leverage were not used. In addition, such borrowings may involve granting of security by the Company. Shareholders could rank behind the Company s financing and hedging counterparties, whose claims on insolvency of the Company would be considered as indebtedness of the Company and may be secured. Increased volatility of the Company s returns and losses resulting to the Company due to the effect of adverse movements in the market on leverage utilised by the Company could have a material adverse effect on the Company s business, financial condition, results of operations, NAV and/or the market price of the Shares. Risks relating to an investment in IDF II The Company has no control over the investments made by IDF II Once fully invested, the majority of the Company s capital will be invested in IDF II. While the Directors will review IDF II s compliance with its investment objective and investment policy (including any relevant investment limits or restrictions), the Company has no control over IDF II s investment policy, investment objectives or the specific investments made by IDF II and has no right to require the disposal of specific investments by IDF II. The Company will therefore be reliant on the skills and capabilities of AMP Capital in selecting, evaluating, structuring, negotiating, executing and monitoring any existing investments. AMP Capital (in its capacity as investment manager of IDF II) will have relatively broad discretion when making investment-related decisions for IDF II. As a result, the Company s ability to achieve its target returns will depend, to a large extent on the ability of the IDF II investment manager to identify suitable investment opportunities and to implement successfully the investment policy of IDF II. The assets of IDF II are hard to value and IDF II may not be able to realise the value of the investments as reported from time to time In calculating the Net Asset Value and the Net Asset Value per Share, the Administrator will principally be relying on the value of the Company s interests in IDF II. However, the investments that IDF II makes will typically be in a form for which market quotations are not readily available. Valuations of investments made by IDF II may be published based on estimated values of underlying investments and on the basis of the information available to AMP Capital (in its capacity as investment manager of IDF II) and/or the administrator of IDF II at the time. Such estimates may not be audited and will not be subject to independent verification. These valuations are inherently uncertain and may fluctuate over short periods of time. The Company can therefore provide no assurance that the investment valuations it records from time to time in relation to the investments held by IDF II will ultimately be realised. In the event that a price or valuation estimate accepted by the Company in relation to IDF II subsequently proves to be incorrect, no adjustment to any previously calculated Net Asset Value or Net Asset Value per Share, will be made. IDF II will typically hold its investments until maturity or early repayment, however, the majority of the investments held by IDF II will comprise unquoted interests which are not publicly traded or freely marketable, and a sale may require the consent of other interested parties. Such investments may be difficult to value and realise, and realisations may involve significant time and cost. In some cases, IDF II may be prohibited by contract or legal or regulatory reasons from selling certain securities for a period of time. This could result in the realisable value of an investment being less than the loan principal. Additionally, realisation of the value by IDF II may be subject to timing constraints. 26

27 c110178pu030 Proof 5: _08:32 B/L Revision: 0 Operator YouG The interests in IDF II in which the Company invests are illiquid. There is no public market for interests in IDF II and interests in IDF II will not ordinarily be transferable. IDF II interests will not ordinarily be transferable. There are substantial restrictions on transferability of such interests under the relevant partnership agreement(s) and applicable laws, and investors may not freely transfer, assign or sell any of their interests in IDF II, or withdraw from IDF II, without the prior written consent of AMP Capital (acting in its capacity as investment manager of IDF II). There will be no public market for the interests in IDF II and none is expected to develop. In general, withdrawals of interests in IDF II are not permitted, and IDF II interests are not redeemable. Consequently, the Company may not be able to easily liquidate its investment in IDF II. Such restrictions on transfer or withdrawal could result in the Company being unable to dispose of its interest in IDF II in circumstances in which such disposal would be preferable. IDF II is a recently formed entity, and its success will be largely dependent on AMP Capital and its key employees. Past performance of AMP Capital is no guarantee of future performance. IDF II is a recently formed entity with a short operating history. There can be no assurance that AMP Capital will achieve IDF II s investment objectives notwithstanding the performance of AMP Capital or its affiliates or principals in other transactions, including, without limitation, arrangements similar in nature to IDF II. The loss or reduction of service of one or more of the principals could have an adverse effect on IDF II s ability to realise its investment objectives. Limited partners in IDF II generally have no right or power to take part in the management of IDF II, and as a result the investment performance of IDF II will depend on the actions of AMP Capital, as investment manager of IDF II. Additionally, certain changes at AMP Capital or circumstances relating to AMP Capital may have an adverse effect on IDF II or on one or more of its portfolio companies. The success of IDF II will be largely dependent on AMP Capital, which in turn will rely on the expertise of its investment team and other key employees. There is no assurance that the investment team or other key employees will remain employed, or that comparable replacements will be found in an adequate time. Past performance of AMP Capital and/or the investment team is not necessarily indicative of future results, and is no guarantee of future performance. While AMP Capital intends for IDF II to make investments that have estimated returns commensurate with the risks undertaken, there can be no assurances that the targeted returns will be achieved. On any given investment, loss of principal is possible. IDF II may fail to reach full investment The availability and volume of new infrastructure debt opportunities suitable for IDF II is difficult to predict. IDF II will compete against other investors to secure access to these investments. IDF II may not be able to identify or secure access to suitable investments, with the risk that drawdown of commitments is delayed or does not fully occur. This may affect its targeted returns and thus the Company s returns. Use of debt to finance infrastructure projects Investment in debt instruments exposes IDF II, and by extension the Company, to interest rate and counterparty risk. Most infrastructure projects are financed using a high degree of debt. As such, it is expected that a portion of IDF II s, and by extension the Company s, investments (including coinvestments, if any) will consist of interests in loans originated by banks and other financial institutions. The value of an investment in IDF II may be negatively impacted by either adverse interest rate movements or deterioration in the cash flow available to a project to service projected debt obligations. The cost and availability of leverage is highly dependent on the state of the broader credit markets, which state is difficult to accurately forecast. During times when credit markets are tight, it may be difficult for a project to obtain or maintain the desired degree of leverage. Leverage often imposes restrictive financial and operating covenants on a project, in addition to the burden of debt service, and may impair its ability to finance future operations and capital needs. 27

28 c110178pu030 Proof 5: _08:32 B/L Revision: 0 Operator YouG If any project in which IDF II is invested cannot generate adequate cash flow to meet debt service, IDF II may suffer a partial or total loss of capital invested, which could adversely affect the returns of IDF II. This may in turn have an effect on the returns of the Company. Interest rate fluctuations may adversely affect the value of the investments held by IDF II IDF II will primarily make investments in instruments that earn a base rate of interest which is variable over the life of the instruments. IDF II may also utilise a bridge financing facility which will incur a base rate of interest which is variable for amounts drawn under such a facility. Consequently, there is the risk that unfavourable movements in interest rates may adversely affect the income of IDF II s investments, which in turn may affect returns to investors in IDF II such as the Company, and hence returns to Shareholders. Diverse and potentially divergent investor interests Investors in IDF II may have conflicting investment, tax and other interests with respect to such investments, including conflicts relating to the structuring of investment acquisitions and dispositions. The conflicting interests of individual investors may relate to or arise from, among other things, the nature of investments, the structuring or the acquisition of investments and the timing of disposition of investments. As a consequence, conflicts of interest may arise in connection with decisions made by AMP Capital (in its capacity as investment manager of IDF II) relating to the nature or structuring of investments that may be more beneficial for one investor than for another investor, especially with respect to investors individual tax situations. In selecting and structuring investments appropriate for IDF II, AMP Capital, as investment manager to IDF II, will consider the investment and tax objectives of IDF II and its investors as a whole, not the investment, tax or other objectives of any investor individually. Default on its commitment in IDF II (USD) may result in the Company being subject to various remedies in respect of such commitment, including a forfeiture of its interest in IDF II (USD) If the Company is unable to meet a required commitment in IDF II (USD) within 14 days of the due date for payment (in particular, where this results from the underperformance of the Listed Bond Portfolio), it is at risk of certain actions being taken against it, including interest being applied to and accruing on the outstanding amount, distributions which would otherwise be payable to the Company being withheld, the forfeiture of up to 50 per cent. of its interest without payment and/or a claim for the outstanding amount being pursued against it. Any such circumstances will be detrimental to the overall returns to the Company and consequently Shareholders. Risk of default by other investors in IDF II Any default by an investor, including the Company, in complying with draw down notices could have an adverse effect on IDF II s ability to complete a transaction and/or could increase the relative exposure of other investors to such transactions. If an investor defaults, they may be subject to various remedies, including a forfeiture of their IDF II interests. Any impairment of IDF II s abilities to maximise its returns may consequently affect the Company s returns. Although IDF II seeks to achieve diversification across industry, sector and geography, there may be limited diversification in certain countries, regions or sectors Although IDF II seeks to achieve diversification across industry, sector and geography, the portfolio may be concentrated in certain countries, regions or sectors, which could expose IDF II to certain risks; for example, if there is a limited number of investments, the aggregate returns realised by investors in IDF II may be substantially adversely affected by the unfavourable performance of a small number of those investments. The corollary of this is that the Company s returns will be subject to the increased risk of IDF II s failure and any potential effect on IDF II s returns. IDF II will likely have limited control of portfolio companies and hence limited ability to protect its position in relation to those companies IDF II is likely to have limited influence over its portfolio companies and thus limited ability to protect IDF II s position in its portfolio companies. Although AMP Capital will monitor the performance of each IDF II investment, it will primarily be the responsibility of each portfolio company s management team to operate each portfolio company on a day to day basis. 28

29 c110178pu030 Proof 5: _08:32 B/L Revision: 0 Operator YouG Other investors in such portfolio companies may have economic or business interests or goals that are inconsistent with those of IDF II and IDF II may not be in a position to limit or otherwise protect the value of its investment in such portfolio companies. Insofar as IDF II s lack of control in its portfolio companies affects its returns, the Company may experience similar effects on its returns. Deterioration of credit markets may adversely affect the ability of projects in which IDF II may invest to obtain favourable financing to finance and/or the ability of IDF II to syndicate or dispose of investments. Pending syndication, the exposure of IDF II may exceed its intended longer-term exposure The deterioration of the global credit markets has made it more difficult for projects in which IDF II may invest to obtain favourable financing. A widening of credit spreads, coupled with the deterioration of the sub-prime and global debt markets has dramatically reduced investor demand for high yield debt and senior bank debt, which in turn has led some investment banks and other lenders to be unwilling to finance new investments, or to only offer committed financing for these investments on unattractive terms. IDF II s ability to generate attractive investment returns may be adversely affected to the extent entities in which IDF II may invest are unable to obtain finance or are unable to obtain finance on favourable terms. Such marketplace events may also restrict the ability of IDF II to sell or liquidate investments at favourable times or for favourable prices notwithstanding that IDF II has a hold to maturity strategy. The value of publicly traded debt securities may be volatile and difficult to sell as a block, even following a realisation through listing. The impact of market and other economic events may also affect IDF II s level of profitability achievable on realisations of investments. Any material change in the economic environment, including a slowdown in economic growth and/ or changes in interest rates or foreign exchange rates could have a negative effect on the performance and/or valuation of IDF II s investments. IDF II s performance can be affected by deterioration in public markets and by market events such as the onset of the credit crisis in 2007, or the downgrading of the credit rating of the US in 2011, which, among other things, can affect the public market comparable earnings multiples used to value privately held portfolio companies and investors risk-free rate of return. Movements in foreign exchange rates may adversely affect the value of investments in portfolio companies, and the IDF II s performance. Further, IDF II may originate certain of its investments with the expectation of later syndicating a portion of such investment to other affiliated funds or third parties. Prior to such syndication, or if such syndication is not successful, IDF II s exposure to the originated investment may exceed the exposure that IDF II intends to have over the long term or would have had, had it purchased such investment in the secondary market rather than originating it. Environmental risk The operations of some portfolio companies to which IDF II (and/or the Company through its interest in IDF II and any co-investments) obtains exposure may be subject to numerous statutes, rules and regulations relating to environmental protection. There is a possibility of existing or future environmental contamination, including soil and groundwater contamination, as a result of the spillage of hazardous materials of other pollutants. Under various environmental statutes, rules and regulations of the appropriate jurisdiction, a current or previous owner or operator of real property may be liable for non-compliance with applicable health and safety requirements and for the cost of investigation, monitoring, removal or remediation of hazardous materials. These laws often impose liability whether or not the owner or operator knew of, or was responsible for, the presence of hazardous materials. The presence of these hazardous materials on a property could also result in personal injury, property damage or similar claims by private parties. Persons who arrange for the disposal or treatment of hazardous materials may also be liable for the costs of removal or remediation of those materials at the disposal or treatments facility, whether or not that facility is or ever was owned or operated by that person. Any liability of portfolio companies resulting from noncompliance or other claims relating to environmental matters could have a materially adverse effect on the value of IDF II s (or the Company s) investments in those companies. 29

30 c110178pu030 Proof 5: _08:32 B/L Revision: 0 Operator YouG As noted in the The Company has no control over the investments made by IDF II risk factor above, as a limited partner investor in IDF II, the Company will have no control over the investments made by IDF II. Sovereign and regulatory risk The concessions of certain of IDF II s portfolio companies may be granted by government bodies and are subject to risks, including the risk that the relevant government bodies will exercise sovereign rights and take actions contrary to the rights of IDF II or the relevant portfolio company under the relevant concession agreement. There can be no assurance that the relevant government bodies will not legislate, impose regulations or change applicable laws or act contrary to the law in a way that would materially and adversely affect the business of the portfolio companies. In many instances, the acquisition of infrastructure assets involves an ongoing relationship with a government agency. The nature of the arrangements can expose owners to a higher level of regulatory control than typically imposed on other businesses. The repealing, amending or enacting of a new law or regulation (or a new interpretation of the law or regulation) can substantially affect an infrastructure project. Many of the portfolio companies may be subject to substantial regulation by governmental agencies. In addition, their operations may rely on government permits, licences, concessions, leases or contracts that are generally very complex and may result in a dispute over interpretation or enforceability. If portfolio companies fail to comply with these regulations or contractual obligations, they could be subject to monetary penalties or may lose rights to operate the affected business, or both. The leases or concessions may also contain clauses more favourable to the government counterparty than a typical commercial contract. For instance, a lease or concession may enable the government to terminate the lease or concession in certain circumstances without requiring the payment of adequate compensation. Government counterparties also may have the discretion to change or increase regulation of portfolio company operations, or implement laws or regulations affecting their operations, separate from any contractual rights they may have. Governments have considerable discretion in implementing regulations that could affect the businesses carried on by portfolio companies, and because such businesses provide basic, everyday services, and face limited competition, governments may be influenced by political considerations and may make decisions that adversely affect such businesses. Where a portfolio company is the sole or predominant service provider in its service area and provides services that are essential to the community, it may be subject to rate regulation by governmental agencies that will determine the prices it may charge. Portfolio companies may be subject to unfavourable price determinations that may be final with no right of appeal or which, despite a right of appeal, could result in profits being negatively affected. Any negative effect on the returns of IDF II and/or its portfolio companies, as a result of the above risks, may adversely affect the returns of the Company and its Shareholders. International investments IDF II, directly or indirectly via its subsidiaries, will make investments in different countries. Consequently, there are risks due to, among other things, potentially unsettled points of applicable governing law, capital repatriation regulations (as such regulations may be given effect during the term of IDF II), the application of complex tax rules to cross-border investments, possible imposition of taxes on IDF II and/or the members of IDF II with respect to the IDF II s income, and possible tax return filing requirements for IDF II. Additionally, there are risks of adverse political, legal and tax developments, including confiscation without fair compensation, or war. Fluctuation in currency exchange rates may affect the value of investments, and any restriction imposed to prevent capital flight may make it difficult or impossible to exchange or repatriate money. Although AMP Capital (as investment manager of IDF II) will analyse risks in the applicable countries before making such investments, no assurance can be given that a political or economic climate, or particular legal or regulatory risks, might not adversely affect an investment. Insofar as IDF II is affected by such factors, the Company may experience similar effects on its returns. 30

31 c110178pu030 Proof 5: _08:32 B/L Revision: 0 Operator YouG Currency and Hedging in IDF II The Company will be investing in IDF II (USD), the working currency of which is US dollars, but IDF II may invest in assets denominated in currencies other than US Dollars. The value of an investment may fall substantially as a result of fluctuations in the currency of the country in which the investment is made as against the value of the US Dollar, in which IDF II (USD) is denominated. AMP Capital may (but is not obligated to) endeavour to manage currency exposures to US Dollars in IDF II. To the extent that any hedging arrangements are entered into, movements in foreign exchange rates may therefore adversely affect the returns of IDF II, and hence the Company s ability to achieve its target returns. Inflation Depending on the inflation assumptions relating to anticipated cashflows from an investment, and the manner in which asset revenue is determined in respect to such investment, a change in the rate of inflation may mean that returns from an investment vary from those projected by AMP Capital. Returns on the Company s holdings in IDF II may thus be affected in turn. Litigation The financial performance of IDF II s investments (and consequently the Company s interests in IDF II) may be affected from time to time by litigation such as contractual claims, occupational health and safety claims, industrial disputes, tenure disputes and legal action from special interest groups. Contract risk As part of their structure, the assets of IDF II will generally be exposed to contracts that are critical to their success and the return on the assets. As such, there is a risk that, if those contracts are amended, legally deficient or unenforceable, the returns from the assets may be affected, adversely affecting the ability of the Company to meet its target returns. Indemnity IDF II will indemnify AMP Capital for any claims, damages, losses and liabilities arising in connection with the management of IDF II, subject to certain exclusions. Such indemnification may impair the financial condition of IDF II and the Company and its ability to acquire assets or otherwise achieve its investment objective or meet its obligations. Consequently, IDF II s returns and hence the ability of the Company to achieve its target returns may be adversely affected. Operational risk Most infrastructure assets are operated and maintained by external parties under contractual relationships. Poor operational and maintenance performance by these third parties may have a negative effect on the value of an investment. Demand, usage and throughput risk can affect the performance of portfolio companies. To the extent that assumptions regarding the demand, usage and throughput of assets prove incorrect, returns to IDF II, and consequently the Company, could be adversely affected. Business risk Like any other business, the viability of an infrastructure asset is reliant on the revenue, costs and profitability of that asset. Variability in any of these factors will affect the value of an investment. These risks are particularly acute for greenfield investments that lack established revenue and profitability track records. Infrastructure assets can often experience gradually increasing or fluctuating patronage in the early years of operation, and there is also a risk that the demand for use of the asset may be less than originally projected. Risks relating to an investment in the Shares General An investment in the Shares carries the risk of loss of capital. The value of a Share can go down as well as up and Shareholders may receive back less than the value of their initial investment and could lose all of the investment. 31

32 c110178pu030 Proof 5: _08:32 B/L Revision: 0 Operator YouG Liquidity of Shares may be limited and Shareholders will have no right to have their Shares redeemed or repurchased by the Company at any time. SFM quoted securities may experience higher volatility and carry greater risks than those listed on the Main Market. Shareholders will have no right to have their Shares redeemed or repurchased by the Company at any time. While the Directors retain the right to effect repurchases of Shares in the manner described in this Prospectus, they are under no obligation to use such powers at any time and Shareholders should not place any reliance on the willingness of the Directors so to act. Shareholders wishing to realise their investment in the Company may therefore be required to dispose of their Shares on the market. There can be no guarantee that a liquid market in the Shares will exist or that the Shares will trade at prices close to their underlying Net Asset Value. Accordingly, Shareholders may be unable to realise their investment at Net Asset Value or at all. The number of Shares to be issued pursuant to the Issue is not yet known, and, following the Issue, there may be a limited number of holders of Shares. Limited numbers and/or holders of Shares may mean that there is limited liquidity in such Shares which may affect: (i) an investor s ability to realise some or all of his investment; and/or (ii) the price at which such investor can effect such realisation; and/or (iii) the price at which such Shares trade in a secondary market. Investments in shares traded on the SFM may have limited liquidity and may experience greater price volatility than shares listed on the Main Market. Limited liquidity and high price volatility may result in Shareholders being unable to sell their Shares at a price that would result in them recovering their original investment. Discount to Net Asset Value The Shares may trade at a discount to NAV per Share for a variety of reasons, including due to market conditions or to the extent investors undervalue the investment activities of the Company. While the Directors may seek to mitigate any discount to NAV per Share, for example through Share buy backs, there can be no guarantee that they will seek to do so or that they will be successful if they do and the Directors accept no responsibility for any failure of any such strategy to effect a reduction in any discount. In the event that the Directors were to issue further Shares in the future this could have a detrimental effect on the NAV of existing Shares then in issue. The Directors will not, however, issue further Shares at a discount to NAV without Shareholder approval. Pre-emption rights There are no provisions of Guernsey law which confer rights of pre-emption in respect of the allotment off Shares. However, the Articles provide that the Company is not permitted to allot (for cash) equity securities (being Shares or rights to subscribe for, or convert securities into, Shares), unless it shall first have offered to allot to each existing holder of Shares on the same or more favourable terms a proportion of those Shares which is as nearly as practicable equal to the proportion of the total number of Shares in issue represented by the Shares held by such Shareholder. These pre-emption rights may be excluded and disapplied or modified by special resolution of the Shareholders. Risks relating to regulation and taxation Changes in Laws Legal and regulatory changes could occur that may adversely affect the Company. Changes in the regulation of investment companies may adversely affect the value of the Company s investments and the ability of the Company successfully to pursue its investment strategy. The Company is not, and does not intend to become, registered in the US as an investment company under the US Investment Company Act and related rules The Company has not, does not intend to, and may be unable to, become registered in the United States as an investment company under the US Investment Company Act. The US Investment Company Act provides certain protections to US investors and imposes certain restrictions on companies that are registered as investment companies. As the Company is not so registered, and does not intend to register, none of these protections or restrictions is or will be applicable to the Company. In addition, in order to ensure that the Company is not required to register as an investment company under the US Investment Company Act and to avoid violating the US Investment 32

33 c110178pu030 Proof 5: _08:32 B/L Revision: 0 Operator YouG Company Act, the Company has implemented restrictions on the purchase of the Shares by persons who are located in the United States or who are US Persons. The Shares will be subject to purchase and transfer restrictions in the Issue and in secondary transactions as well as forced transfer provisions In order to avoid both the Company being required to register under the US Investment Company Act and the Company being subject to regulation under ERISA, the Company has imposed significant restrictions on the transfer of the Shares, which may materially affect the ability of Shareholders to transfer Shares in the United States or to US Persons. The Shares may not be resold in the United States or to US Persons. These restrictions may make it more difficult to resell the Shares and may have an adverse effect on the market value of the Shares. Moreover, the Articles of Incorporation provide that no transfer to any person will be registered without the consent of the Directors if it would: (i) give rise to an obligation on the Company to register as an investment company under the US Investment Company Act or any similar legislation; (ii) give rise to an obligation on the Company to register under the US Exchange Act, or any similar legislation; (iii) result in the Company not being considered a foreign private issuer as such term is defined in Rule 3b-4(c) under the US Exchange Act; (iv) result in a US Plan Investor holding Shares; or (v) result in a person holding Shares in violation of the transfer restrictions put forth in any Prospectus published by the Company, from time to time (each person described in (i) through (v) above, a Prohibited Person ), and in each of the cases described in (i) through (v) above, only to the extent permitted under the Guernsey USRs or the CREST Rules. If it shall come to the notice of the Directors that: (i) a Prohibited Person holds or is a beneficial owner of Shares; (ii) any Shares are held or beneficially owned in a manner that would, in the absolute discretion of the Directors, prevent the Company from relying on the exemption from the obligation to register as an investment company under the US Investment Company Act; or (iii) the holding or beneficial ownership of any Shares (whether on its own or in conjunction with any other Shares) would in the absolute discretion of the board of Directors cause the assets of the Company to be considered plan assets within the meaning of the US Plan Asset Regulations, then any Shares which the Directors decide, in their absolute discretion, are Shares which are held or beneficially owned as described above (such Shares, together the Prohibited Shares ) must be dealt with as described in the Articles. The Company may become subject to regulation under ERISA If 25 per cent. or more of any class of equity in the Company is owned, directly or indirectly, by US Plan Investors that are subject to ERISA or Section 4975 of the US Tax Code, the assets of the Company will be deemed to be plan assets, subject to the constraints of ERISA and Section 4975 of the US Tax Code. If this happens, transactions involving the assets of the Company could be subject to the fiduciary responsibilities of ERISA, the prohibited transaction provisions of ERISA and Section 4975 of the US Tax Code and, among other things, the fiduciary of a plan subject to ERISA that is responsible for the plan s investment in the Shares could be liable for any ERISA violations by the Directors. Changes in taxation Any change in the Company s tax status, or in taxation legislation or practice in either Guernsey or the United Kingdom or any jurisdiction in which IDF II or its portfolio companies or investments held in the Listed Bond Portfolio are resident, may affect the value of the investments held by the Company or the Company s ability to pursue its investment policy successfully or achieve its investment objective, or may alter the after-tax returns to Shareholders. Statements in this Prospectus concerning the taxation of Shareholders are based upon current Guernsey and UK laws and published practice, any aspect of which law and practice is, in principle, subject to change (potentially with retrospective effect), which change may adversely affect the ability of the Company to pursue its investment policy successfully or achieve its investment objective, and which may adversely affect the taxation of Shareholders. Statements in this Prospectus take into account, in particular, the UK offshore fund rules contained in Part 8 of the Taxation (International and Other Provisions) Act Should the Shares of the Company be regarded as being subject to the offshore fund rules this may have adverse tax consequences for certain UK resident Shareholders. 33

34 c110178pu030 Proof 5: _08:32 B/L Revision: 0 Operator YouG Tax residency In order to maintain its non-uk tax resident status, the Company is required to be controlled and managed outside the United Kingdom. The composition of the Board of the Company, the place of residence of the individual Directors and the location(s) in which the Board of the Company makes decisions will be important in determining and maintaining the non-uk tax resident status of the Company. Although the Company is established outside the United Kingdom and all of the Directors live outside the United Kingdom, continued attention must be given to ensure that major decisions are not made in the United Kingdom or the Company may lose its non-uk tax resident status. As such, management errors could potentially lead to the Company being considered UK tax resident which would negatively affect its financial and operating results, the value of the Shares and/or the after-tax return to the Shareholders. The Foreign Account Tax Compliance Act ( FATCA ) FATCA was enacted by the United States Congress in March 2010 and came into effect in 2013 (although implementation will be staggered). FATCA requires financial institutions to use enhanced due diligence procedures to identify US persons who have invested in either non-us financial accounts or non-us entities. Pursuant to FATCA, certain payments of (or attributable to) US-source income, and the proceeds of sales of property that give rise to US-source payments made to the Company, will in future be subject to 30 per cent. withholding tax unless the Company agrees to certain reporting and withholding requirements, and certain Shareholders may themselves be subject to such withholding tax if they do not provide the Company with required information. The Company intends, to the extent reasonably practicable, to conduct its affairs so that it will not be subject to withholding tax under FATCA. Pursuant to FATCA, the Company will be classified as a foreign financial institution. If, however, the Shares are considered regularly traded on an established securities market, as defined under the final FATCA regulations, Shareholders would not be regarded as holding financial accounts in the Company. Although the London Stock Exchange is an established securities market, it is unclear whether the Shares will be considered regularly traded as this is a factual determination made annually. The Company will be required, in order to be compliant for FATCA purposes, to file a FATCA agreement with the Internal Revenue Service ( IRS ), under which the Company may be required to obtain information about its Shareholders and to disclose information about its Shareholders to the IRS (if Shareholders are treated under FATCA as holders of financial accounts in the Company). Alternatively, the United States proposes to enter into intergovernmental agreements by which foreign financial institutions can comply with FATCA by reporting relevant information to their domestic tax authority. The US Treasury has released Model 1 and Model 2 agreements to implement FATCA. These agreements serve as a baseline for negotiations between the US and FATCA partner countries. The intergovernmental agreements provide that the governments in each respective country will enact legislation or issue guidance on how financial institutions can comply with the information, reporting and potential withholding tax provisions associated with FATCA. Under the FATCA provisions of the US Hiring Incentives to Restore Employment (HIRE) Act, where the Company invests directly or indirectly in US assets or there are payments to the Company of US-source income after 1 July 2014, gross proceeds of sales of US property by the Company after 31 December 2016 and certain other payments received by the Company after 31 December 2016, these will be subject to a 30 per cent. US withholding tax unless the Company complies with FATCA. FATCA compliance can be achieved by entering into an agreement with the US Secretary of the Treasury under which the Company agrees to certain US tax reporting and withholding requirements as regards holdings of and payments to certain investors in the Company or, if the Company is eligible, by becoming a deemed compliant fund. Guernsey has entered into an inter-governmental agreement with the U.S. Treasury. The aim of the intergovernmental agreement is that Guernsey institutions should be deemed compliant with FATCA by requiring them to report information to the Guernsey tax authority pursuant to domestic legislation rather than to the tax authorities in the US. If they are deemed to be compliant in this way, it is not anticipated that withholding tax obligations should arise. Any amounts of US tax withheld may not be refundable by the IRS. Potential investors should consult their advisors regarding the application of the withholding rules and the information that may be required to be provided and disclosed to the Company and in certain circumstances to the IRS as will be set out in the final FATCA 34

35 c110178pu030 Proof 5: _08:32 B/L Revision: 0 Operator YouG regulations. The application of the withholding rules and the information that may be required to be reported and disclosed are uncertain and subject to change. The Company would also be deemed to be compliant with the FATCA legislation if a sponsor performed the Company s obligations under FATCA on its behalf and certain other requirements were met, or if it were to be categorised as either a qualified collective investment vehicle or a restricted fund pursuant to the final form regulations published by the IRS on 17 January It is possible that the Company would not be deemed compliant under these categories. Failure by the Company to comply with FATCA, either pursuant to FATCA legislation or any applicable intergovernmental agreement could mean that the Company would, from 1 July 2014 become subject to a 30 per cent. withholding tax on certain US source payments to the Company, which may have an adverse effect on the Company s performance. Additionally, if the Company were to enter into such an agreement with the IRS, the Company may be compelled under FATCA to withhold tax on payments it makes to Shareholders that do not provide information as to their FATCA status or which are themselves non-compliant foreign financial institutions. This potential withholding tax on foreign passthru payments is not applicable before 2017 and is a matter for further discussion between the United States and other governments that enter into FATCA intergovernmental agreements with the United States. Further, even if the Company is not characterised under FATCA as a foreign financial institution, it nevertheless may become subject to such 30 per cent. withholding tax on certain US-source payments to it unless it either provides information to withholding agents with respect to its substantial US owners or certifies that it has no such substantial US owners. This may have a material adverse effect on the Company s performance. As a result, Shareholders may be required to provide any information that the Company determines necessary to avoid the imposition of such withholding tax or in order to allow the Company to satisfy such obligations. AIFM Directive The AIFM Directive imposes conditions on the marketing of entities such as the Company to investors in the EEA. The AIFM Directive requires that an alternative investment fund manager ( AIFM ) be identified to meet such conditions where such marketing is sought. For these purposes, the Company, as the legal person responsible for performing portfolio and risk management, shall be the AIFM. The AIFM Directive currently allows the continued marketing of non-eea AIFs, such as the Company, under the national private placement regimes of individual EEA Member States. However, there is no requirement for EEA Member States to retain private placement regimes and some Member States have either decided not to retain such regimes or adopted systems that impose onerous requirements before marketing can take place. At some point after 2018 it may be the case that a passporting regime will be phased in to allow the marketing of non-eea AIFs such as the Company and that the private placement regimes will be phased out, although this is currently uncertain. Both the phasing in of the passporting regime and the phasing out of national private placement regimes may increase the regulatory burden on the Company. Consequently, there may in the future be restrictions on the marketing of the Shares in the EEA, which in turn may have a negative effect on marketing and liquidity generally in the Company s shares. In addition, certain registration and reporting requirements in relation to any future marketing are likely to lead to an increase in the costs borne by the Company. 35

36 c110178pu030 Proof 5: _08:32 B/L Revision: 0 Operator YouG IMPORTANT NOTICES Investors should rely only on the information contained in this Prospectus. No person has been authorised to give any information or to make any representations other than those contained in this Prospectus in connection with the Issue and, if given or made, such information or representations must not be relied upon as having been authorised by or on behalf of the Company. Without prejudice to any obligation of the Company to publish a supplementary prospectus pursuant to section 87G(1) of FSMA, neither the delivery of this Prospectus nor any subscription or sale made under this Prospectus shall, under any circumstances, create any implication that there has been no change in the business or affairs of the Company since the date hereof or that the information contained in this Prospectus is correct as of any time subsequent to its date. The contents of this Prospectus are not to be construed as legal, business or tax advice. Each prospective investor should consult its own solicitor, financial adviser or tax adviser for legal, financial or tax advice in relation to the purchase of Shares. An investment in the Shares is suitable only for persons: (i) who understand and can bear the potential risk of a substantial or entire capital loss of their investment and who can accept that there may be limited liquidity in the Shares and the underlying investments of the Company; (ii) for whom an investment in the Shares is part of a diversified investment programme; and (iii) who fully understand and are willing to assume the risks involved in such an investment programme. Additional risks and uncertainties not currently known to the Company, or that the Company deems to be immaterial, may also have an adverse effect on its business. Potential investors should review this Prospectus carefully and in its entirety and consult with their professional advisers before making an application for Shares. Accordingly, typical investors in the Company are expected to be institutional investors, private client fund managers and private client brokers. General The Directors accept responsibility for the information contained in this Prospectus. To the best of the knowledge of the Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this Prospectus is in accordance with the facts and contains no omission likely to affect the import of such information. If you are in any doubt about the contents of this Prospectus you should consult your accountant, legal or professional adviser or financial adviser. It should be remembered that the price of securities and the income from them can go down as well as up. Prospective investors should rely only on the information contained in this Prospectus. No broker, dealer or other person has been authorised by the Company, its Directors or the Joint Financial Advisers to issue any advertisement or to give any information or to make any representation in connection with the offering or sale of the Shares other than those contained in this Prospectus and, if issued, given or made, any such advertisement, information or representation must not be relied upon as having been authorised by the Company, its Directors or the Joint Financial Advisers. Prospective investors should not treat the contents of this Prospectus as advice relating to legal, taxation, investment or any other matters. Prospective investors should inform themselves as to: (i) the legal requirements within their own countries for the purchase, holding, transfer, redemption or other disposal of Shares; (ii) any foreign exchange restrictions applicable to the purchase, holding, transfer, redemption or other disposal of Shares which they might encounter; and (iii) the income and other tax consequences which may apply in their own countries as a result of the purchase, holding, transfer, redemption or other disposal of Shares. Prospective investors must rely upon their own representatives, including their own legal advisers and accountants, as to legal, tax, investment or any other related matters concerning the Company and an investment therein. Statements made in this Prospectus are based on the law and practice currently in force in Guernsey and in England and Wales and are subject to changes therein. This Prospectus should be read in its entirety before making any application for Shares. Application will be made to the London Stock Exchange for all the Shares in issue and to be issued pursuant to the Issue to be admitted to trading on the London Stock Exchange s SFM. It is expected that Admission will become effective and that dealings in such Shares will commence on 22 July

37 c110178pu030 Proof 5: _08:32 B/L Revision: 0 Operator YouG All times and dates referred to in this Prospectus are, unless otherwise stated, references to London times and dates. No incorporation of website The contents of the Company s website do not form part of this Prospectus. Investors should base their decision to invest on the contents of this Prospectus alone and should consult their professional advisers prior to making an application to subscribe for Shares. Enforceability of judgments The Company is incorporated under the laws of Guernsey. All or substantially all of the assets of the Company are expected to be located in OECD member countries; however the assets may be traded on a worldwide basis. None of the Directors are citizens or residents of the United States. As a result, it may not be possible for investors to effect service of process within jurisdictions other than the United Kingdom and Guernsey upon the Company or any of the Directors, or to enforce in such other jurisdictions judgments obtained against the Company or any of the Directors in the courts of such other jurisdictions, including, without limitation, judgments based upon the civil liability provisions of the laws of any state or territory other than the United Kingdom and Guernsey. There is doubt as to the enforceability in the United Kingdom and Guernsey, in original actions or in actions for enforcement of judgments of courts outside the United Kingdom and Guernsey, of civil liabilities predicated solely upon the laws of jurisdictions other than the United Kingdom and Guernsey. In addition, awards for punitive damages in actions brought outside the United Kingdom and Guernsey may be unenforceable in the United Kingdom and Guernsey. Forward-looking statements This Prospectus includes statements that are, or may be deemed to be, forward-looking statements. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms believes, estimates, anticipates, expects, intends, may, will or should or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this Prospectus and include statements regarding the intentions, beliefs or current expectations of the Company concerning, amongst other things, the investment objectives and investment policy, financing strategies, investment performance, results of operations, financial condition, prospects, and dividend policy of the Company and the markets in which it, and its portfolio of investments invest and, where applicable, issue securities. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. The Company s actual investment performance, results of operations, financial condition, dividend policy and the development of its financing strategies may differ materially from the impression created by the forward-looking statements contained in this Prospectus. In addition, even if the investment performance, results of operations and financial condition of the Company, and the development of its financing strategies, are consistent with the forward-looking statements contained in this Prospectus, those results or developments may not be indicative of results or developments in subsequent periods. Important factors that could cause these differences include, but are not limited to: * changes in economic conditions generally and the Company s ability to achieve its investment objective and returns on equity for investors; * the Company s ability to invest the cash on its balance sheet and the proceeds of the Issue in suitable investments on a timely basis; * foreign exchange mismatches with respect to exposed assets; * changes in interest rates and/or credit spreads, as well as the success of the Company s investment strategy in relation to such changes and the management of the uninvested proceeds of the Issue; * impairments in the value of the Company s investments; * impairments in the value of the investments held by IDF II; * the availability and cost of capital for future investments; * competition within the industries in which the Company seeks to invest; 37

38 c110178pu030 Proof 5: _08:32 B/L Revision: 0 Operator YouG * the failure of AMP Capital to perform its obligations under the Investment Advisory and Managed Amount Agreement, to perform its obligations in its role as investment manager to IDF II or the termination of the appointment of the Investment Adviser; * trends relating to infrastructure industries; * changes in laws or regulations, including tax laws, or new interpretations or applications of laws and regulations, that are applicable to the Company or companies in which the Company makes investments, either directly or indirectly through IDF II; and * general economic trends and other external factors, including those resulting from war, incidents of terrorism or responses to such events. Given these uncertainties, prospective investors are cautioned not to place any undue reliance on such forward-looking statements. Prospective investors should carefully review the Risk Factors section of this Prospectus for a discussion of factors that could cause the Company s actual results to differ materially before making an investment decision. Forward-looking statements speak only as at the date of this Prospectus. Although the Company undertakes no obligation to revise or update any forward looking statements contained in this Prospectus (save that the Company will do so where required by the Prospectus Rules or Disclosure and Transparency Rules of the FCA), whether as a result of new information, future events, conditions or circumstances, any change in the Company s expectations with regard thereto or otherwise, Shareholders are advised to consult any communications made directly to them by the Company and/or any additional disclosures through announcements that the Company may make through an RIS. Selling Restrictions The distribution of this Prospectus and the offering and sale of securities offered hereby in certain jurisdictions may be restricted by law. Persons in possession of this Prospectus are required to inform themselves about and observe any such restrictions. This Prospectus does not constitute, and may not be used for the purposes of, an offer or an invitation to apply for any Shares by any person: (i) in any jurisdiction in which such offer or invitation is not authorised; or (ii) in any jurisdiction in which the person making such offer or invitation is not qualified to do so; or (iii) to any person to whom it is unlawful to make such offer or invitation. The distribution of this Prospectus and the offering of Shares in certain jurisdictions may be restricted. Accordingly, persons into whose possession this Prospectus comes are required to inform themselves about and observe any restrictions as to the offer or sale of Shares and the distribution of this Prospectus under the laws and regulations of any jurisdiction in connection with any applications for Shares, including obtaining any requisite governmental or other consent and observing any other formality prescribed in such jurisdiction. Save for the United Kingdom, no action has been taken or will be taken in any jurisdiction by the Company that would permit a public offering of Shares in any jurisdiction where action for that purpose is required, nor has any such action been taken with respect to the possession or distribution of this Prospectus in any other jurisdiction where action for that purpose is required. This Prospectus is being furnished by the Company solely to enable a prospective investor to consider the purchase of Shares in an offering being made in reliance on the exemption from registration provided by Regulation S under the US Securities Act. This Prospectus does not constitute, and may not be used for the purposes of, an offer or an invitation to subscribe for Shares by any US Person or within the United States, or in any jurisdiction: (i) in which such offer or invitation is not authorised; (ii) in which the person making such offer or invitation is not qualified to do so; or (iii) to any person to whom it is unlawful to make such offer or invitation. Any reproduction or distribution of this Prospectus and any disclosure of its contents or use of any information herein, directly or indirectly, in whole or in part, within the United States or to any US Person is prohibited. Each offeree of the Shares, by accepting delivery of this Prospectus, agrees to the foregoing. The Company has not been and will not be registered under the US Investment Company Act. The Shares have not been and will not be registered under the US Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States. The Shares may not be offered, sold, pledged, or otherwise transferred or delivered, directly or indirectly, into or within the United States or to, or for the account or benefit of, any US Person. There will be no public offer of the Shares in the United States, and this Prospectus should not be distributed or forwarded into 38

39 c110178pu030 Proof 5: _08:32 B/L Revision: 0 Operator YouG the United States or to US Persons. The Shares are being offered and sold only outside the United States to, or for the account or benefit of, investors that are not US Persons in offshore transaction within the meaning of, and in reliance upon, the exemption from registration provided by Regulation S under the US Securities Act. The Shares and any beneficial interests therein may only be transferred in offshore transactions in accordance with Regulation S: (i) to a person outside the United States and not known to the transferor to be a US Person, by prearrangement or otherwise; or (ii) to the Company or a subsidiary thereof. No purchase, sale or transfer of the Shares may be made except in circumstances in which such purchase, sale or transfer will not result in the Company being required to register as an investment company under the US Investment Company Act or potentially being in violation of such Act or the rules and regulations promulgated thereunder. The Shares may not be acquired by: (i) investors using assets of: (a) an employee benefit plan as defined in Section 3(3) of ERISA that is subject to Title I of ERISA; (b) a plan as defined in Section 4975 of the US Tax Code, including an individual retirement account or other arrangement that is subject to Section 4975 of the US Tax Code; or (c) an entity whose underlying assets are considered to include plan assets by reason of investment by an employee benefit plan or plan described in preceding clause (a) or (b) in such entity pursuant to the US Plan Assets Regulations; or (ii) a governmental, church, non-us or other employee benefit plan that is subject to any federal, state, local or non-us law that is substantially similar to the provisions of Title I of ERISA or Section 4975 of the US Tax Code, unless its purchase, holding, and disposition of the Shares will not constitute or result in a non-exempt violation of any such substantially similar law. If 25 per cent. or more of any class of equity in the Company is owned, directly or indirectly, by US Plan Investors that are subject to ERISA or Section 4975 of the US Tax Code, the assets of the Company will be deemed to be plan assets, subject to the constraints of ERISA and Section 4975 of the US Tax Code. If this happens, transactions involving the assets of the Company could be subject to the fiduciary responsibilities of ERISA, the prohibited transaction provisions of ERISA and Section 4975 of the US Tax Code and, among other things, the fiduciary of a plan subject to ERISA that is responsible for the plan s investment in the Shares could be liable for any ERISA violations by the Directors. European Economic Area In relation to each member state of the European Economic Area which has implemented the Prospectus Directive (each, a Relevant Member State ), no Shares have been offered or will be offered pursuant to the Offer to the public in that Relevant Member State prior to the publication of a prospectus in relation to the Shares which has been approved by the competent authority in that Relevant Member State, or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that offers of Shares to the public may be made at any time under the following exemptions under the Prospectus Directive, if they are implemented in that Relevant Member State: (i) (ii) (iii) to any legal entity which is a qualified investor as defined in the Prospectus Directive; to fewer than 100, or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) in such Relevant Member State; or in any other circumstances falling within Article 3(2) of the Prospectus Directive; provided that no such offer of Shares shall result in a requirement for the publication of a prospectus pursuant to Article 3 of the Prospectus Directive or any measure implementing the Prospectus Directive in a Relevant Member State and each person who initially acquires any Shares or to whom any offer is made under the Offer will be deemed to have represented, acknowledged and agreed that it is a qualified investor within the meaning of Article 2(1)(e) of the Prospectus Directive. For the purposes of this provision, the expression an offer to the public in relation to any offer of Shares in any Relevant Member State means a communication in any form and by any means presenting sufficient information on the terms of the offer and any Shares to be offered so as to enable an investor to decide to purchase or subscribe for the Shares, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State and the expression Prospectus Directive means Directive 2003/71/EC 39

40 c110178pu030 Proof 5: _08:32 B/L Revision: 0 Operator YouG (and the amendments thereto, including Directive 2010/73/EU (the 2010 PD Amending Directive ), to the extent implemented in the Relevant Member State and includes any relevant implementing measure in each Relevant Member State. AIFM Directive The AIFM Directive imposes detailed and prescriptive obligations on fund managers and selfmanaged funds established in the EEA (the Operative Provisions ). These Operative Provisions include prescriptive rules on: (i) measuring and capping leverage in line with known European standards; (ii) the treatment of investors; (iii) liquidity management; (iv) the use of depositaries ; and (v) cover for professional liability risks. These do not currently apply to managers or selfmanaged funds established outside the EEA, such as the Company. Rather, non-eea managers or self-managed funds are only required to comply with certain disclosure, reporting and transparency obligations of the AIFM Directive (the Disclosure Provisions ) and, even then, only if they market shares in a fund to EEA investors. To the extent that it is appropriate or possible for the disclosures under the Disclosure Provisions to be addressed within this Prospectus, such disclosures are included herein. Where the Disclosure Provisions appear to require disclosure on an Operative Provision which does not apply to the Company, no meaningful disclosure can be made. The AIFM Directive imposes conditions on the marketing of entities such as the Company to investors in the EEA. The AIFM Directive requires that an alternative investment fund manager ( AIFM ) be identified to meet such conditions where such marketing is sought. For these purposes, the Company, as the legal person responsible for performing portfolio and risk management, shall be the AIFM. The AIFM Directive currently allows the continued marketing of non-eea AIFs, such as the Company, under the national private placement regimes of individual EEA Member States. However, there is no requirement for EEA Member States to retain private placement regimes and some Member States have either decided not to retain such regimes or adopted systems that impose onerous requirements before marketing can take place. Marketing under the private placement regime in the United Kingdom requires notification to be made to the FCA and will be subject to, inter alia: (i) the requirement that an appropriate cooperation agreement is in place between the FCA and the GFSC (this was signed by the GFSC on 12 July 2013 and has been counter-signed by the FCA); (ii) Guernsey not being on the Financial Action Task Force ( FATF ) money-laundering blacklist (as at 4 July 2014, being the latest practicable date prior to the publication of this Prospectus, Guernsey was not on the FATF moneylaundering blacklist); and (iii) compliance by the AIFM with certain aspects of the AIFM Directive. Where the AIFM is located in Guernsey, these obligations primarily relate to disclosure and reporting. The Company will make the required notifications to the FCA prior to publication of this Prospectus. At some point after 2018 it may be the case that a passporting regime will be phased in to allow the marketing of non-eea AIFs such as the Company and that the private placement regimes will be phased out, although this is currently uncertain. Both the phasing in of the passporting regime and the phasing out of national private placement regimes may increase the regulatory burden on the Company. Consequently, there may in the future be restrictions on the marketing of the Shares in the EEA, which in turn may have a negative effect on marketing and liquidity generally in the Company s shares. In addition, certain registration and reporting requirements in relation to any future marketing are likely to lead to an increase in the costs borne by the Company. Bailiwick of Guernsey The Company is a registered closed-ended investment scheme registered pursuant to the Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended, and the Registered Collective Investment Scheme Rules 2008 (the RCIS Rules 2008 ) issued by the Guernsey Financial Services Commission (the Commission ). The Commission, in granting registration, has not reviewed this Prospectus but has relied upon specific warranties provided by the Administrator, the Company s designated manager for the purposes of the RCIS Rules

41 c110178pu030 Proof 5: _08:32 B/L Revision: 0 Operator YouG Neither the Commission nor the States of Guernsey Policy Council take any responsibility for the financial soundness of the Company or for the correctness of any of the statements made or opinions expressed with regard to it. A registered collective investment scheme is not permitted to be directly offered to the public in Guernsey but may be offered to regulated entities in Guernsey or offered to the public by entities appropriately licensed under the Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended. 41

42 c110178pu030 Proof 5: _08:32 B/L Revision: 0 Operator YouG EXPECTED TIMETABLE Latest time and date for commitments under the Placing p.m. on 15 July 2014 Latest time and date for receipt of Application Forms under the Offer 5.00 p.m. on 15 July 2014 Result of Issue announced 16 July 2014 Admission and dealings in Shares commences 8.00 a.m. on 22 July 2014 Crediting of CREST stock accounts in respect of the Shares 22 July 2014 Share certificates despatched Week commencing 28 July 2014 The dates and times specified above are subject to change without further notice. References to times are London times unless otherwise stated. PLACING STATISTICS Issue Price 3 Target number of Shares to be issued 4 Target Gross Issue Proceeds 1.00 per Share Up to 150 million Up to 150 million Initial Net Asset Value per Share DEALING CODES ISIN SEDOL Ticker GG00BNFX2T70 BNFX2T7 IDFL 2 Or such later time as may be notified by the Company to a particular Placee. 3 The minimum subscription per investor pursuant to the Issue is 50,000 Shares at a price of 1.00 per Share. 4 The target size of the Issue is up to 150 million with the actual size of the Issue being subject to investor demand. The number of Shares to be issued pursuant to the Issue, and therefore the Gross Issue Proceeds, is not known as at the date of this Prospectus but will be notified by the Company via an RIS announcement prior to Admission. The Issue will not proceed if the Net Issue Proceeds would be less than 73.9 million (or such lesser amount as the Company and the Joint Financial Advisers may agree). If the Issue does not proceed, subscription monies received will be returned without interest at the risk of the applicant. 5 NAV per Share immediately following Admission. The costs of the Issue borne by the Company will be no more than 1.5 per cent. of the Gross Issue Proceeds. 42

43 c110178pu030 Proof 5: _08:32 B/L Revision: 0 Operator YouG DIRECTORS AND ADVISERS Directors (all non-executive) Registered Office Investment Adviser Joint Financial Adviser and Joint Bookrunner Joint Financial Adviser and Joint Bookrunner Advocates to the Company (as to Guernsey law) Solicitors to the Company (as to English law and U.S. securities law) Solicitors to the Joint Financial Advisers and Joint Bookrunners (as to English law) Administrator and Company Secretary Registrar Robert King David Warr (James) Grant Wilson (All c/o the Company s registered office) 1 Royal Plaza Royal Avenue St Peter Port, Guernsey GY1 2HL AMP Capital Investors Limited AMP Sydney Cove Building 33 Alfred Street Sydney NSW 2000 Australia Hudnall Capital LLP Adam House 7-10 Adam Street London WC2N 6AA Cantor Fitzgerald Europe One Churchill Place London E14 5RB Carey Olsen P.O. Box 98 Carey House Les Banques St Peter Port, Guernsey GY1 4BZ Herbert Smith Freehills LLP Exchange House Primrose Street London, United Kingdom EC2A 2EG Wragge Lawrence Graham & Co LLP 4 More London Riverside London SE1 2AU IPES (Guernsey) Limited 1 Royal Plaza Royal Avenue St Peter Port, Guernsey GY1 2HL Computershare Investor Services (Guernsey) Limited 1st Floor Tudor House Le Bordage St Peter Port Guernsey GY1 1DB 43

44 c110178pu030 Proof 5: _08:32 B/L Revision: 0 Operator YouG Receiving Agent Reporting Accountant and Auditor Principal Banker to the Company Computershare Investor Services PLC The Pavilions Bridgwater Road Bristol BS13 8AE Ernst & Young LLP PO Box 9 Royal Chambers St. Julian s Avenue St. Peter Port, Guernsey GY1 4AF Barclays Bank Plc PO Box 41 Le Marchant House Le Truchot St Peter Port Guernsey GY1 3BE 44

45 c110178pu040 Proof 5: _08:33 B/L Revision: 0 Operator YouG PART I INFORMATION ON THE COMPANY Introduction The Company is a Guernsey-domiciled, non-cellular company limited by shares with an unlimited life, incorporated on 3 June 2014 with registered number The Shares are denominated in Sterling. Application will be made to the London Stock Exchange for all the Shares in issue, and to be issued pursuant to the Placing and Offer for Subscription, to be admitted to the SFM. It is expected that Admission will become effective and dealings will commence on 22 July For the purposes of the AIFM Directive, the Company will be a self-managed alternative investment fund. AMP Capital Investors Limited ( AMP Capital or the Investment Adviser ) will act as investment adviser to the Company. AMP Capital is a top 15 global infrastructure investment manager 6 with over US$124.4 billion in funds under management, of which over US$6.0 billion is invested in infrastructure, and is one of the most experienced arrangers and investors in subordinated debt, with an investment team fully dedicated to infrastructure debt. The Company is targeting a raise of up to 150 million to invest indirectly in a portfolio of secure assets focusing on subordinated infrastructure debt. It is expected that the majority of the Net Issue Proceeds will be invested into IDF II, a fund established by AMP Capital in March 2013 and structured as a number of parallel limited partnerships, the first closing of which took place in August IDF II has received investment commitments of approximately US$750 million in capital as at 31 May 2014 and is seeking to raise a total of approximately US$1 billion by its final closing. The Company intends to commit approximately 98 per cent. of the Net Issue Proceeds to IDF II (USD), a parallel limited partnership within IDF II, prior to such final closing. IDF II has made investments of approximately US$130 million and is expected to make a further investment of approximately US$110 million in July IDF II has an investment period expiring in August Its term is to expire 10 years from the date of the first closing (subject to possible extension by up to two years). It is anticipated that proceeds from the realisation of investments by IDF II after August 2017 will, to the extent that these have been received by the Company, be distributed to Shareholders prior to the end of IDF II s 10-year term. Pending drawdown by IDF II, substantially all of the Net Issue Proceeds will be invested in a managed portfolio of Sterling-hedged listed bonds issued by infrastructure-related companies (the Listed Bond Portfolio ), or cash and cash equivalents. The Company may also be offered co-investment opportunities to invest directly in infrastructurerelated companies alongside IDF II. As the Company will be admitted to the SFM, the Listing Rules applicable to closed-ended investment companies which are listed on the premium listing segment of the Official List of the UKLA will not apply to the Company. Nevertheless the Company intends to comply voluntarily with certain provisions of the Listing Rules. Further details are contained in the section entitled Voluntary Compliance with the Listing Rules in Part II of this Prospectus. Investment Objective The Company s investment objective is to deliver a stable and attractive interest rate-linked cash yield to investors. Targeted Returns The Company is targeting distributions to investors of Libor +5 to 6 per cent. per annum from (and including) the first full financial year of the Company (being year ending 31 March 2016), and a net IRR of approximately 6 per cent. per annum over the life of the Company. Investment Policy The Company will pursue its investment objective principally by investing in IDF II (USD), a parallel limited partnership within IDF II, in order to obtain exposure to subordinated debt of infrastructure businesses headquartered in Europe, North America, Australia and other Organisation for 6 Towers Watson Global Alternatives Survey

46 c110178pu040 Proof 5: _08:33 B/L Revision: 0 Operator YouG Economic Co-operation and Development ( OECD ) member countries. The Company intends to commit approximately 98 per cent. of the Net Issue Proceeds to IDF II prior to its final closing. Pending investment of the Company s capital in IDF II (USD) the Company will invest in a managed portfolio of Sterling-hedged listed bonds issued by infrastructure-related companies (the Listed Bond Portfolio ) or cash and cash equivalents. Amounts returned to the Company and any amounts not otherwise invested in IDF II (USD) may also be invested in the Listed Bond Portfolio or cash and cash equivalents from time to time over the life of the Company until returned to Shareholders. Listed Bond Portfolio The objective of the Listed Bond Portfolio is to provide income returns, with some potential for capital gain, by investing in a portfolio of global infrastructure-related corporate bonds and hybrid securities of investment grade and sub-investment grade issued by companies which provide essential services (such as utility, communications, energy or transportation) in OECD member countries. It is not expected that the Company will retain an investment in the Listed Bond Portfolio at all times. Only Sterling, US Dollar and Euro denominated bonds will be held in the Listed Bond Portfolio. The Investment Adviser will typically target liquid issues of investment grade and high yield bonds rated B- or above (unless the rating results from a downgrade of securities purchased while they were B- grade or above) with call dates or final maturities of up to 12 years. The Listed Bond Portfolio will have an investment limit in respect of a single issuer equal to 10 per cent. of the overall value of the Company s total assets as at the time of investment. The Investment Adviser intends to hedge the currency exposure of the Listed Bond Portfolio to Sterling, and it is anticipated that futures will be used to reduce duration risk by converting fixed interest rate risk to a floating rate exposure. Co-investment opportunities The Company may take advantage of co-investment rights available to investors in IDF II. Coinvestments will follow the same strategy as IDF II. The Company s possible exposure to coinvestment opportunities will be subject to the availability of suitable co-investment opportunities. Investment period Following Admission, the Company s investment period will reflect that of IDF II (which is four years from the anniversary of IDF II s first closing on 23 August 2013) (the Investment Period ). Following the end of the Investment Period, cash which has not been drawn down or committed and is surplus to the Company s working capital requirements will be returned to Shareholders as soon as practicable, save that where one or more transactions are in process and the Directors have determined that it would be in the best interests of Shareholders to complete such transaction(s) (and notwithstanding that such completion will fall outside of the Investment Period), the cash in respect of such transaction(s) will not be returned to Shareholders unless and until the relevant transaction aborts. Changes to Investment Policy The Directors will keep the investment policy under review taking into account market conditions and the size of the Portfolio. Any material change to the investment policy of the Company will be made only with the approval of Shareholders by ordinary resolution. Investment strategy IDF II Investment objective of IDF II The objective of IDF II is to invest in the subordinated debt of infrastructure businesses, targeting sectors that serve as the backbone for the provision of essential products such as water, gas, electricity and transport. Investment policy of IDF II IDF II is targeting debt investments with values of US$67 million to US$100 million and is seeking to achieve a diversified portfolio of 10 to 15 investments, with diversification across industry, sector and geography, with a geographical focus on infrastructure businesses in developed countries 46

47 c110178pu040 Proof 5: _08:33 B/L Revision: 0 Operator YouG (OECD-member countries), preferred regions being Europe, North America and Australia. IDF II targets investments in businesses that have capital structures which are robust and appropriate to their industry sector. IDF II focuses on taking lead arranging or cornerstone roles in primary market investments, while retaining an opportunistic strategy towards secondary asset purchases to enable it to take advantage of favourable market conditions. Changes to the investment policy of IDF II Changes to the IDF II investment policy would require variation of the relevant agreements constituting IDF II, including the Limited Partnership Agreement (for which the written consent of the General Partner and, unless provided otherwise, the limited partners in all parallel funds representing not less than 75 per cent. of the commitments of all limited partners within IDF II is required). Preferred investment characteristics and sectors for IDF II Target investments for IDF II will, in particular, include higher yielding subordinated debt securities and investments in floating rate securities (the latter providing a hedge against inflation). Investment in subordinated debt securities typically provides security on a second ranking basis over assets and/or shares of the portfolio company. IDF II is currently targeting investments with margins of 5 to 8 per cent. over base rates, with upfront fees of up to 4 per cent. IDF II is particularly seeking exposure to defensively managed infrastructure businesses which are assessed to: * have high barriers to entry and ability to perform across market cycles; * have balanced and consistent cash flows generated through stable operating platforms; and * operate in regulated environments with political stability and mature legal, tax and accounting frameworks (as typically exhibited in OECD member countries). IDF II focuses on sectors that serve as the backbone for the provision of essential products and services such as regulated utilities (for example, water and waste management, gas and electricity transmission and distribution, and telecommunications), renewable energy (wind, biomass and solar) and transportation (toll roads, ports, rail and airports). IDF II deal sourcing and arranging IDF II seeks to participate in deals in a manner that enables it to shape the investment terms, that is, typically as lead arranger or cornerstone investor. AMP Capital s infrastructure debt investment team (led by Andrew Jones) has acted as lead arranger or cornerstone investor in the majority of its previous infrastructure debt investments: in 65 per cent. of investments by invested capital, it has, on behalf of its clients, held the role of arranger (53 per cent.) or cornerstone investor (12 per cent.). The Company believes AMP Capital to be a favoured arranger in this area due to the expertise of its investment team, its typical speed of execution and its ability successfully to negotiate terms and facilitate underwriting of subordinated tranches. Consequently, the Company expects that AMP Capital and its affiliates will be the arrangers or cornerstone investors in the majority of investments made and that IDF II will typically be the sole provider of subordinated debt in the deals in which it participates, although additional participants may be sought where appropriate and as required. The Company believes that AMP Capital s experience, track record and extensive network of intermediaries should enable IDF II to benefit from: * proprietary deal flows (with diversified exposure across sector, geography and equity provider); * stronger pricing (with negotiated coupons and significant upfront fees and prepayment premiums, such fees and premiums being for the benefit of investors of IDF II); * strong intercreditor protections (by facilitating the negotiation of a security position with equity sponsors and senior lenders); and * negative control over voting rights, providing covenant integrity. 47

48 c110178pu040 Proof 5: _08:33 B/L Revision: 0 Operator YouG The Company considers that AMP Capital s extensive network of intermediaries will furthermore enable the Company and IDF II to secure syndicated subordinated debt investment opportunities and to capture technical discrepancies in current market pricing through opportunistic secondary purchases. Further detail on IDF II (USD) is set out in Part V of this Prospectus. Market Background and Opportunity from Infrastructure Debt Infrastructure debt Infrastructure debt is a defensive way to access the infrastructure asset class and gain exposure to secure, yield-focused assets, providing investors with an attractive risk return matrix that offers a complementary fit to a broader portfolio. The attractive investment opportunities in primary infrastructure markets are driven by: * stable performance of infrastructure companies through economic cycles; * enhanced security positions in the capital structure; * regular access to the management of portfolio companies and deal sponsors; and * low historical and forecast default levels. These key differentiators set the infrastructure debt asset class apart from equities or high yield securities and, the Company believes, provide a lower risk of capital loss. Compelling investment opportunity Investment in infrastructure debt presents a compelling opportunity for investors as part of their overall portfolio construction given the strategy s principal attributes, these being: * strong cash yield and attractive risk-adjusted returns; * targeting monopolistic assets with low competitive risk and low correlation to GDP; * diversification benefits; * subordinated debt ranks ahead of equity in the capital structure; * inflation hedging; * asset liability matching profile for certain investors; and * low correlation with traditional asset classes. Market opportunity The Company considers that AMP Capital s position as a market leader in infrastructure debt investment management, strong deal flow opportunities and the attractive market environment at present for infrastructure debt combine to provide the potential to generate attractive risk-adjusted returns focused on cash yield for investors. Infrastructure debt is considered a defensive way to access the infrastructure asset class (whether through the private or public debt markets) and gain exposure to secure, yield-focused assets, and consequently the infrastructure debt market may appeal to those investors who are seeking stable returns with low volatility. i. Increasing demand for infrastructure investment It is anticipated that the supply of existing assets changing hands and seeking refinancing will be significant over the next few years as private holders of infrastructure assets seek liquidity, public entities look to monetise their assets and debt securities reach maturity. The reduced availability of leverage for infrastructure assets has meant that infrastructure financing at present typically requires a greater proportion of equity and more conservative structures than was often the case prior to the start of the recent financial crisis in In addition, a number of long term holders of infrastructure debt securities have become forced sellers of these holdings due to changes in their balance sheet strength and financial sector regulation, thus providing ongoing opportunities to purchase strong performing assets, sometimes at a discount to face value, in what has traditionally been a hold to maturity market. Demand for infrastructure assets (including road, rail, power, telecommunications and water) is set to continue to expand significantly over the next few decades, driven largely by global economic growth, changes in public policy and financing, technological progress, climate change, urbanisation and growing population and congestion. Additionally, many parts of infrastructure systems in OECD 48

49 c110178pu040 Proof 5: _08:33 B/L Revision: 0 Operator YouG member countries are ageing rapidly and are in need of ongoing maintenance and hence, investment. The OECD 1 estimates that around US$2 trillion per annum is needed for additions, renewals and upgrades for telecommunications, road, rail, water and electricity transmission and distribution, equivalent to 2.5 per cent. of annual world gross domestic product (GDP), rising to 3.5 per cent. and above if electricity generation and other energy related infrastructure investments in oil, gas, coal, ports, airports and storage facilities are included. To meet this funding demand, over the period from 2011 a significant pool of private equity capital has been raised to seek infrastructure investment opportunities, resulting in approximately US$107 billion of investable capital raised by unlisted infrastructure equity funds, according to Preqin 2. In addition, as at 3 June 2014, in excess of US$95 billion of infrastructure equity is currently in the process of being raised. ii. Reduced supply of debt capital While the number of sellers and equity investors in infrastructure assets has continued to grow and thereby generate greater deal flow, there has been a marked decline in the availability of debt capital from traditional providers, as many international banks have severely restricted their lending or exited the market following the financial crisis. Banks have found current market conditions difficult to operate in, with growing pressure from increased regulatory capital requirements and a reduction in risk appetite. There is consequently a scarcity of experienced third party infrastructure debt providers, and in particular subordinated debt providers, in the current marketplace. AMP Capital believes that its long history in the market, its experienced investment team and its infrastructure-focused resources put it in a strong position from which to exploit this market opportunity. Infrastructure-related corporate bonds Listed bonds issued by infrastructure-related companies also provide investors with access to infrastructure debt. These bonds provide day-to-day liquidity whilst offering an attractive cash yield and risk-adjusted returns when compared against returns offered by cash or near cash equivalents. Accordingly, the Directors believe that investments in such bonds will provide the Company with a suitable strategy from time to time, and in particular pending draw down of the Company s committed capital by IDF II (USD). Infrastructure-related company fundamentals are typically strong as balance sheets continue to be relatively conservatively leveraged, in spite of a pick-up in M&A activity, and earnings are generally healthy. While macroeconomic conditions continue to improve as growth returns to developed market countries, monetary policy is likely to remain accommodating in order to underpin investment in such corporate bonds. Listed Bond Portfolio It is intended at the outset and while a significant proportion of the Net Issue Proceeds is invested in the Listed Bond Portfolio will initially hold 30 to 40 securities issued by 20 or more issuers domiciled in OECD member countries. The Investment Adviser will typically target liquid issues of investment grade and high yield bonds rated B- or above with interest rates of Sterling Libor +250 to +400 bps and with call dates or final maturities of up to 12 years. The Listed Bond Portfolio will be diversified across target sectors including, for example, exposure to pipelines, telecommunications, power generation and transmission, media and transportation. Distribution and Dividend Policy The Company is targeting distributions to investors of Libor +5 to 6 per cent. per annum from (and including) year ending 31 March 2016, being the first full financial year of the Company, and a net IRR of approximately 6 per cent. per annum over the life of the Company. The Company intends that, subject to retentions to meet the Company s working capital requirements, any income or capital returned to the Company will be distributed promptly to Shareholders, save for where such income or capital has been returned in the Investment Period and is required to be held for further draw down. 1 OECD Infrastructure to 2030 Telecom, Land Transport, Water and Electricity 2 Preqin Infrastructure Spotlight June

50 c110178pu040 Proof 5: _08:33 B/L Revision: 0 Operator YouG Dividends From and including the year ending 31 March 2016 the Company will target quarterly distributions to investors amounting to distributions of Libor +5 to 6 per cent. per annum. It is also intended that dividends will be paid in respect of the period ending 31 March It is the Company s expectation that it will pay an annualised dividend of no less than Libor +3.5 per cent., with the first quarterly dividend expected to be declared in November 2014 for the period from Admission to 30 September The payment of all dividends is subject to satisfaction of the solvency test prescribed by the Companies Law. Capital distributions Following the end of the Investment Period in August 2017, it is intended that proceeds from the realisation of investments in IDF II received by the Company will be distributed to Shareholders on an ongoing basis until the termination of IDF II in August 2023 (subject to possible extension by up to two years). General The target returns above, including target dividend distributions, are targets only and are based on financial projections of the investment strategy which are themselves based on assumptions regarding market conditions and the economic environment at the time of modelling and are therefore subject to change. There can be no guarantee that the target returns will be achieved in the amounts indicated or at all. Investors should not place any reliance on such target return in deciding whether to invest in the Company. Borrowing powers The Company may from time to time use cash borrowings. Borrowing by the Company will be restricted to 10 per cent. of the NAV of the Company (at the time of draw down). Borrowings may be used for short term liquidity purposes. It is not expected that the Company will use borrowings to finance its initial acquisitions of assets held in the Listed Bond Portfolio, although it may draw down to fund acquisitions of investments, to enhance returns to Shareholders and to finance outstanding investment obligations. Hedging Transactions and Currency Risk Management The Company will operate in Sterling. The Listed Bond Portfolio will be fully hedged back to Sterling. In respect of the Company s investment in IDF II or any co-investments, the Company does not intend to put in place currency hedging arrangements. However, the Company may give consideration in due course to hedging the value of non-sterling income flows from IDF II or any co-investments. Derivatives may only be used for the purpose of efficient portfolio management. Continuation Resolution In accordance with the Articles, the Directors are required to convene an extraordinary general meeting of the Company (an EGM ) by 2025 in order to propose an ordinary resolution that the Company continue its business as a closed-ended investment company (the Continuation Resolution ). If the Continuation Resolution is not passed, the Directors are required to put proposals for the reconstruction or reorganisation of the Company to the Shareholders for their approval. These proposals may or may not involve winding up the Company and, accordingly, failure to pass the Continuation Resolution will not necessarily result in the winding up of the Company. Share Purchases Share Buy Backs The Directors have general shareholder authority to purchase in the market up to per cent. of the Shares in issue from time to time following Admission and intend to seek renewal of this authority from Shareholders at each annual general meeting of the Company. It is not anticipated as at the date of this Prospectus, however, that this authority will be exercised. 50

51 c110178pu040 Proof 5: _08:33 B/L Revision: 0 Operator YouG Exercise of this authority will be subject to the discretion of the Directors and to applicable law at the relevant time, including the Companies Law and the requirements of the solvency test contained therein. Any purchases will be at prices which, after costs, enhance the NAV per Share of the remaining Shares and, in any event, will not be at a price higher than 5 per cent. above the average mid-market values for the Shares for the five Business Days before the purchase is made or the higher of the last independent trade or the highest independent bid for the Shares. Purchases of Shares will also be made in accordance with any guidelines established from time to time by the board of Directors and the timing of any such purchases will be decided by the Board. Shares purchased by the Company may be cancelled or held in treasury. General Shareholders and prospective Shareholders should note that the purchase of Shares by the Company is entirely discretionary and no expectation or reliance should be placed on the Directors exercising such discretion on any one or more occasions. Treasury Shares The Companies Law and the Articles allow the Company to hold up to 10 per cent. of its issued share capital in treasury when those shares have been purchased by the Company. It is the Company s current intention that shares held in treasury would only be issued at the prevailing NAV or at a premium to NAV. Further Issues of shares The Directors will have authority to issue further Shares following Admission. Further issues of Shares will only be made if the Directors determine such issues to be in the best interests of Shareholders and the Company as a whole. Relevant factors in making such a determination may include the Company s performance, the premium at which the Shares are trading and perceived investor demand. Shares will not be issued for cash at a price less than the prevailing NAV per Share. There are no provisions of Guernsey law which confer rights of pre-emption in respect of the allotment of Shares. However, the Articles provide that the Company is not permitted to allot (for cash) equity securities (being Shares or rights to subscribe for, or convert securities into, Shares), unless it shall first have offered to allot to each existing holder of Shares on the same or more favourable terms a proportion of those Shares which is as nearly as practicable equal to the proportion of the total number of Shares in issue represented by the Shares held by such Shareholder. Such pre-emption rights will be disapplied in relation to up to 10 per cent. of the Shares in issue following Admission for a period concluding immediately prior to the annual general meeting of the Company to be held in 2015 so as to assist the Company in managing market demand for Shares by the issue of further Shares. The Directors intend to request that the authority to allot Shares on a non-pre-emptive basis is renewed at the annual general meeting of the Company to be held in 2015 and at each subsequent annual general meeting of the Company. The pre-emption rights may also be excluded and disapplied or modified by special resolution of the Shareholders. The Company will seek to invest the proceeds of any further issue of Shares in accordance with the Company s investment policy and with regard to the Company s investment objective. Reports and Accounts The first accounting period of the Company will run until 31 March 2015 and, thereafter, accounting periods will end on 31 March in each year. The audited annual accounts will be sent to Shareholders within four months of the year end to which they relate. Unaudited half yearly reports, made up to 30 September, will be announced within two months of that date. The Company will report its results of operations and financial position in Sterling. The audited annual accounts and half yearly reports will also be available at the registered office of the Company and from the Company s website, The financial statements of the Company will be prepared in accordance with IFRS, and the annual accounts will be audited by the Auditors using auditing standards in accordance with International Standards on Auditing (UK and Ireland). 51

52 The preparation of financial statements in conformity with IFRS requires that the Directors make estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Such estimates and associated assumptions are generally based on historical experience and various other factors that are believed to be reasonable in the circumstances, and form the basis of making the judgements about attributing values of assets and liabilities that are not readily apparent from other sources. Actual results may vary from estimates in amounts that may be material to the financial statements. Net Asset Value Valuation of the Company s assets (i) Investment in IDF II The Investment Adviser will provide the Company with an audited valuation of the Company s investment in IDF II (USD) as at 31 December of each year and an unaudited valuation as at 31 March, 30 June and 30 September of each year. These valuations will be on a fair value basis and used to calculate the NAV and NAV per share that is reported by the Company. The valuation processes applied in fair valuing assets held by IDF II is governed by AMP Capital s asset valuation policy. This policy outlines the asset valuation methodologies and processes applied to measure non-exchange traded assets which have no regular market price, including illiquid debt securities. Following receipt of a valuation from AMP Capital and, with the assistance of an independent valuation agent, the Company will review the fair valuation provided and, where appropriate, apply an upward or downward adjustment factor to the valuation based on the outcome of that review. It is intended that a third party valuer will be appointed by the Company to act as its independent valuation agent following Admission. (ii) Co-investment opportunities In the event that the Company makes co-investments, the Investment Adviser will provide the same information as above and the Company will apply the same fair market valuation methodology as described above. (iii) Other assets (a) securities listed, traded or quoted on a stock exchange or over-the-counter market are valued by reference to the bid price, or the mid price for assets held in the Listed Bond Portfolio, on such stock exchange or market as at the close of business of the relevant exchange or market on the relevant valuation day (or, if the relevant exchange or market is not open for business on the relevant valuation day, the securities are valued as at the last day on which the relevant exchange or market was open for business) as shown in the relevant exchange s or market s recognised method of publication of prices for such securities (and where a security is listed, traded or quoted on more than one stock exchange or over-the-counter market, the Board may, in its absolute discretion, select any one of such exchanges or markets); (b) (c) (d) any securities that are not listed, traded or quoted on a stock exchange or over-thecounter market are valued at fair value as determined by the Board using appropriate valuation methodologies such as earnings multiples, recent transactions and net assets; derivative instruments are valued at fair value using appropriate valuation methodologies as determined by the Board; and cash and bank deposits are valued by reference to their face value. Notwithstanding the above, the Board shall be entitled, in its absolute discretion, to apply a method of valuing any asset different from that described above. Calculation of Net Asset Value The Company intends to calculate and publish the NAV and the NAV per Share, as prepared by the Administrator, quarterly by RIS announcement and on the website of the Company. The NAV and NAV per Share will be calculated in accordance with IFRS. The Company also intends to publish on its website a quarterly factsheet for investors. 52

53 c110178pu040 Proof 5: _08:33 B/L Revision: 0 Operator YouG Suspension of the Calculation of Net Asset Value The Directors may at any time, but cannot be obliged, temporarily to suspend the calculation of the NAV and NAV per share during: (i) any period when, as a result of political, economic, military or monetary events or any circumstances outside the control, responsibility and power of the Directors, disposal or valuation of a substantial part of the investments is not reasonably practicable without this being seriously detrimental to the interests of the Shareholders or if in the opinion of the Directors the NAV cannot be fairly calculated; or (ii) any breakdown in the means of communication normally employed in determining the value of the investments or when for any reason the current prices on any market of a substantial part of the investments cannot be promptly and accurately ascertained. Should the calculation of the NAV of the Company be suspended then an announcement detailing such will be notified immediately to the London Stock Exchange. Structure of the Company The following structure chart sets out in overview the structure of company, including its relationship to IDF II. Shareholders Shares Infrastructure Debt Fund Limited (the Company) Guernsey closed-ended investment company Limited Partnership Agreement Subscription Agreement Side letter IDF II Investment Advisory and Managed Account Agreement AMP Capital As investment adviser to the Company General Partner As investment manager to IDF II Parallel IDF II limited partnerships IDF II (USD) Cayman Island limited partnership The Company may from time to time establish one or more wholly owned subsidiaries for the purposes of holding investments of the Company. Such subsidiaries may be domiciled in jurisdictions other than Guernsey including, for example, Luxembourg. 53

54 c110178pu040 Proof 5: _08:33 B/L Revision: 0 Operator YouG PART II DIRECTORS, MANAGEMENT AND ADMINISTRATION Directors The Directors, whose details are set out below, are responsible for managing the business affairs of the Company in accordance with the Articles of Incorporation and have overall responsibility for the Company s activities including the review of investment activity and performance. The Directors may delegate certain functions to other parties such as the Administrator and the Registrar. All of the Directors are non-executive. The address of the Directors is the registered office of the Company. The Directors, all of whom are non-executive, are as follows: Directors biographies Robert King (Chairman) Robert King is a non-executive director for a number of open and closed-ended investment funds and companies. He was a director of Cannon Asset Management Limited and their associated companies from October 2007 to February Prior to this he was a director of Northern Trust International Fund Administration Services (Guernsey) Limited (formerly Guernsey International Fund Managers Limited) where he had worked from 1990 to He has been in the offshore finance industry since 1986, specialising in administration and structuring of offshore open and closed-ended investment funds. He resides in Guernsey. David Warr David Warr is a fellow of the Institute of Chartered Accountants in England & Wales with particular expertise in trust and corporate work. He is a non-executive director of Threadneedle UK Select Trust Limited, Breedon Aggregates Limited, Schroder Real Estate Investment Trust Limited, Unigestion (Guernsey) Limited and Mid Europa Fund Management Limited. He resides in Guernsey. (James) Grant Wilson Grant Wilson is the Chief Investment Officer of International Asset Monitor Limited and a director of China Development Capital (GP) Limited. He is a trustee of several charities including The Church of Scotland Investors Trust. From 1992 to 2003 he was a director of Martin Currie Investment Management Limited. Formerly he was a director of Gartmore Investment Trust Management Limited and worked as a fund manager at Ivory & Sime plc. He is a member of the Chartered Financial Analyst Institute, The Institute of Chartered Secretaries and Administrators and the UK Society of Investment Professionals. He resides in Guernsey. Investment Manager The Company will not have an investment or portfolio manager and will be self-managed for the purposes of the AIFM Directive. The Directors will have responsibility for compliance with the Company s Investment Policy. Investment Adviser The Investment Adviser to the Company is AMP Capital Investors Limited, a company incorporated in Australia with Australian Business Number The Investment Adviser has been appointed pursuant to the Investment Advisory and Managed Account Agreement, further details of which are set out in paragraph 6.2 of Part IV of this Prospectus. The Investment Adviser is a specialist investment manager and adviser with over US$125 billion 7 in funds under management and over 70 years of experience managing and advising on investments, and is the investment management and advisory business of AMP Limited, Australia s largest retail and corporate pension provider, with approximately US$176 billion 8 in funds under management (including over US$6.0 billion in infrastructure investments as at 31 December 2013). 7 As at 31 March As at 31 December

55 c110178pu040 Proof 5: _08:33 B/L Revision: 0 Operator YouG In 2013, AMP Capital was ranked a Global Top 15 Infrastructure Investment Manager by Towers Watson 9 and is one of the longest standing investors in the global infrastructure marketplace, with its first investment in the Sydney Harbour Tunnel in As at the date of this Prospectus, AMP Capital manages infrastructure investments across Asia, Europe, North America, Australia and New Zealand, investing in all sub-sectors (utilities, transport and social infrastructure) and at all stages in the lifecycle (greenfield, growth and mature) of the infrastructure universe. The infrastructure investment team of AMP Capital represents one of the world s most experienced subordinated infrastructure debt arrangers, underwriters and investors, and has a strong track record of successfully investing in the subordinated debt of infrastructure businesses. As at 31 March 2014, the team has: * successfully invested over US$1.8 billion in 42 subordinated debt issues of infrastructure businesses; * from 2010 reviewed over 130 infrastructure debt investment opportunities as a result, the investment team has built up robust processes and refined its investment philosophy to deliver stable, predictable returns; * global coverage of the asset class and experience in investing in a range of international markets, including Europe, the US and Australia; and * long-standing relationships with key equity providers through which the investment team is able to gain access to proprietary deal flow, and specialist origination skills to tailor deals to the needs of investors. This investment team, which comprises 8 individuals based in offices in London, New York and Sydney, possesses a complementary set of infrastructure investment management, transactional, financing and strategic expertise and is supported by deeply resourced infrastructure equity, legal and compliance teams. Since 2010, the investment team has successfully invested US$414.9 million, through AMP Capital Infrastructure Debt Fund I (a fund with a similar investment objective to IDF II), in eight assets generating a gross IRR of 8.7 per cent. and a cash yield of 8.1 per cent 10. Outside of AMP Capital Infrastructure Debt Fund I and IDF II, the investment team has invested US$1.3 billion in 32 assets generating a gross IRR of 9.4 per cent. and a cash yield of 10.1 per cent 11. Track record by sector 12 9 Towers Watson Global Alternatives Survey As at 31 March 2014 and gross of any fees paid to AMP Capital 11 As at 31 March 2014 and gross of any fees paid to AMP Capital 12 AMP Capital infrastructure debt investments by industry, as at 31 March

56 c110178pu040 Proof 5: _08:33 B/L Revision: 0 Operator YouG AMP Capital Fixed Income Team AMP Capital has had a presence in the fixed income markets for more than 40 years and its scale, brand and relationships in these markets give it strong deal sourcing capabilities allowing its fixed income team to find attractive opportunities globally. The team is experienced and wellresourced, with an average of 15 years of industry knowledge each and, as a group, in excess of AU$47 billion in funds under management (as at 28 February 2014). AMP Capital, and hence the fixed income team, has a global credit research universe of approximately 450 issuers and uses a sophisticated suite of risk management systems which includes BlackRock s Aladdin and GreenPackage. The fixed income team is also supported by a global dealing team for execution. Administrator IPES (Guernsey) Limited, which is regulated by the GFSC, has been appointed as administrator, company secretary and designated manager of the Company pursuant to the Administration Agreement (further details of which are set out in paragraph 6.6 of Part IV of this Prospectus). The Administrator will be responsible for the Company s general administrative functions such as the calculation and publication of the Net Asset Values and maintenance of the Company s accounting and statutory records. The Administrator may, with the consent of the Company and subject to compliance with the GFSC guidance note on outsourcing, delegate the provision of administrative functions and other services to a third party. Investors should note that it is not possible for the Administrator to provide any investment advice to investors. Custodian BNP Paribas Securities Services (the Custodian ) is expected to be appointed pursuant to the Custody Agreement with the Company (or a subsidiary thereof), further details of which are set out in paragraph 6.7 of Part IV of this Prospectus, to act as custodian of the Company s investment in the Listed Bond Portfolio, together with cash and cash equivalent assets. The Custodian will ensure segregation in its books and registers between the securities held on its own account from those securities held on behalf of its clients, and the securities held on the Client s account from those securities held on behalf of its other clients. Registrar The Registrar will be responsible for the maintenance of the Company s register of members, dealing with routine correspondence and enquiries, and the performance of all the usual duties of a registrar in relation to the Company. Auditor Ernst & Young LLP will provide audit services to the Company. The auditor s responsibility is to audit and express an opinion on the financial statements of the Company in accordance with applicable law and auditing standards. The annual report and accounts will be prepared according to IFRS. Fees and Expenses Initial expenses related to the Issue The initial expenses of the Company are those which are necessary for the Issue. The costs of the Issue borne by the Company will be no more than 1.5 per cent. of the Gross Issue Proceeds (that is, assuming 150 million is raised pursuant to the Issue, 2.25 million). These expenses will be paid on or around Admission (unless stated otherwise) and will include fees payable under the Placing and Offer Agreement, the fees and expenses of any sub-placing agents, registration, listing and admission fees, settlement arrangements, printing, advertising and distribution costs, legal fees and any other applicable expenses. All such expenses will be immediately written off. In consideration for their acting as Joint Financial Advisers and Bookrunners in the Issue, the Company has agreed to pay Hudnall and Cantor Fitzgerald a Placing commission. 56

57 c110178pu040 Proof 5: _08:33 B/L Revision: 0 Operator YouG Ongoing, Annual Expenses (i) Investment Adviser and General Partner of IDF II All fees relating to the Company s investment in IDF II (USD) will be incurred at the level of that fund and so will not be subject to double charging. (a) Listed Bond Portfolio The Investment Adviser shall be entitled to a fee (such fee to accrue daily in arrear) at a rate of 0.35 per cent. of the value of authorised investments under management in respect of the Managed Account. (b) IDF II General Partner s profit share and carried interest The General Partner of IDF II (USD), an associated company of the Investment Adviser, is entitled to a profit share of 1 per cent. of Total Invested Capital per annum, and (following the return of capital to limited partners) a performance-related return, known as a carried interest, in relation to IDF II (USD). Taking into consideration a rebate of 0.3 per cent. agreed on the basis that the Company will invest greater than US$100 million in IDF II (USD), a profit share equal to 0.7 per cent. per annum of Total Invested Capital, will be payable to the General Partner quarterly in advance. Following the return of capital to IDF II s limited partners (in repayment of the limited partners capital commitments) and the achievement by limited partners of a Preferred Return, capital returned will be applied 100 per cent. to the General Partner until amounts distributed to the General Partner represent 15 per cent. of the aggregate amounts distributed to the relevant limited partner and the General Partner in respect of such limited partner in excess of the return of capital to such limited partner. Capital will then be applied in the ratio of 15 per cent. to the carried interest participant (being the General Partner) and 85 per cent. to the limited partners. Carried interest may be subject to clawback, calculated at the end of the term of IDF II (USD). Further details are set out in Part V of this Prospectus. While the General Partner will be entitled to charge portfolio companies or other parties fees directly referable to the making of investments, including arrangement, underwriting, subunderwriting, agency and/or establishment fees (collectively Upfront Fees ), such Upfront Fees will be credited to IDF II or offset in full against the General Partner s profit share. Any other amounts received by the General Partner or AMP Capital (in its capacity as the manager of IDF II) in connection with its management of IDF II will be credited to IDF II or offset in full against the General Partner s profit share. (c) Other assets No fee will be payable on co-investments or cash held by the Company. (ii) Other ongoing annual expenses The Company will also incur other ongoing annual expenses which, although they may vary, are estimated to be in the region of 0.4 million per annum (excluding any non-recurring or extraordinary expenses). These expenses will include the following: (a) Administration Under the terms of the Administration Agreement, the Administrator is entitled to various fees, which are expected to be approximately 85,500 in aggregate per annum, and reasonable out of pocket expenses. (b) Registrar The Registrar is entitled to an annual fixed fee from the Company equal to 6,500 per annum. Other registrar activity will be charged for in accordance with the Registrar s normal tariff as listed in the Registrar Agreement. (c) Directors The non-executive Directors will be remunerated for their services at a fee for each Director of 27,500 per annum (the Chairman will receive a further 2,500 per annum). 57

58 c110178pu040 Proof 5: _08:33 B/L Revision: 0 Operator YouG (d) Shareholder liaison Hudnall is entitled to an annual fee from the Company of 5.625bps of the NAV of the Company in respect of its services pursuant to the Shareholder Liaison Agreement. Separately, it is expected that Cantor Fitzgerald will be appointed to act as corporate broker to the Company. (e) Custodian The Custodian is expected to be entitled to an annual fee of approximately 20,000 to 35,000 from the Company in respect of its services pursuant to the Custody Agreement; such fee only to be payable as long as there are assets held in the Listed Bond Portfolio. (f) Other operational expenses Other ongoing operational expenses of the Company will be borne by the Company including travel, accommodation, printing, D&O insurance, thrid party valuer, website maintenance, and audit and legal fees. All out of pocket expenses of the Administrator, the Registrar, and the Directors relating to the Company will be borne by the Company. These other operational expenses will be deducted from the assets of the Company and, although they may vary, are estimated to be in the region of 0.15 million per annum, excluding any non-recurring or extraordinary expenses. Taxation Information concerning the tax status of the Company is contained in paragraph 4 of Part IV of this Prospectus. If any potential investor is in any doubt about the taxation consequences of acquiring, holding or disposing of Shares, he should seek advice from his own independent professional adviser. Meetings and Reports to Shareholders All general meetings of the Company shall be held in Guernsey. The Company expects to hold its first annual general meeting in July The Company s audited annual report and accounts will be prepared to 31 March each year, commencing in 2015, and it is expected that copies will be sent to Shareholders in July each year, or earlier if possible. Shareholders will also receive an unaudited interim report each year commencing in respect of the period to 30 September, expected to be despatched in November each year, or earlier if possible. The Company s audited annual report and accounts will be available on the Company s website, The Company s accounts will be drawn up in Sterling and in compliance with IFRS. Regular and periodic disclosures required by the AIFM Directive will be made available in such manner and at such frequency as is required pursuant to the EU implementing measures and delegated regulations and those provisions implementing and transposing the AIFM Directive in any applicable jurisdiction. Where such disclosure requirements are applicable to the Company, the relevant disclosures will, at a minimum, be included in the Company s annual report. Conflicts of Interest Each of the Directors, the Investment Adviser, the Administrator and/or their respective affiliates or any person connected with them may from time to time act as directors, investment manager, manager, director, registrar, broker, administrator, investment adviser, distributor or dealer in relation to, or be otherwise involved in, other investment funds (including IDF II and investment funds which may invest in the Company) which have similar or different objectives to those of the Company. It is, therefore, possible that any of the foregoing may, in the course of business, have potential conflicts of interest with the Company. Each will, at all times, have regard in such event to its obligations to the Company and will endeavour to ensure that such conflicts are resolved fairly. Further, subject to applicable law, any of the foregoing may deal, as principal or agent, with the Company and/or IDF II, in certain cases provided that such dealings are carried out as if effected on normal commercial terms negotiated on an arm s length basis. Directors In relation to transactions in which a Director is interested, the Articles provide that as long as the Director, immediately after becoming aware of the fact that he is interested in a transaction or proposed transaction with the Company, discloses to the Board: (i) if the monetary value of the 58

59 Director s interest is quantifiable, the nature and monetary value of that interest; or (ii) if the monetary value of the Director s interest is not quantifiable, the nature and extent of that interest (in each case unless the transaction or proposed transaction is between the Director and the Company, and is to be entered into in the ordinary course of the Company s business and on usual terms and conditions), then such Director shall not by reason of his office, be accountable to the Company for any remuneration or benefit which he derives from any such office or employment or from any such transaction or arrangement or from any interest in any such body corporate and no such transaction or arrangement shall be liable to be avoided on the ground of any such interest or benefit. For further details see paragraph 3 of Part IV of this Prospectus. The Directors are also required by the RCIS Rules 2008 to take all reasonable steps to ensure that there is no breach by any relevant person, including the Directors themselves, the Investment Adviser, the Administrator or the Custodian, of any of the conflict of interest requirements in the RCIS Rules Investment Adviser The Investment Adviser may be involved in other financial, investment or professional activities that may give rise to conflicts of interest with the Company. In particular, it currently provides, and expects to continue to provide, investment management, investment advice or other services in relation to a number of other companies, funds or accounts that may have similar investment objectives and/or policies to that of the Company and may receive ad valorem and/or performancerelated fees for doing so. The Investment Adviser may give advice or take action with respect to its other clients that differs from the advice given or actions taken with respect to the Company. The Investment Adviser shall at all times in providing services under the Investment Advisory and Managed Account Agreement comply with its conflicts of interest policy and intends to take all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of its clients. The Investment Adviser will disclose to the Company any interests which it or any body corporate related to it, or any of its or their officers, directors, employees or shareholders, may have in any authorised investment under the Investment Advisory and Managed Account Agreement before such authorised investment is made. Corporate governance The Company has voluntarily committed to comply with the UK Corporate Governance Code. The Commission s Finance Sector Code of Corporate Governance (the GFSC Code ) applies to all companies that hold a licence from the Commission under the regulatory laws or which are registered or authorised as collective investment schemes. The Commission has stated in the GFSC Code that companies which report against the UK Corporate Governance Code or the AIC Code are deemed to meet the requirements of the GFSC Code. Save for departing from the requirements to: (i) have a senior independent director (since the Company considers that each Director can effectively fulfil this function); (ii) have a chief executive (since the Company has no executive directors); (iii) appoint the Directors for a term of six years; and (iv) have a nomination committee, the Company is not presently aware of any departures from the UK Corporate Governance Code. The Company does and will continue to comply from the date of this Prospectus with the UK Corporate Governance Code. Voluntary Compliance with the Listing Rules Applications will be made to the London Stock Exchange for all of the Shares issued and to be issued pursuant to the Issue to be admitted to trading on the SFM. The SFM is an EU regulated market. Pursuant to its admission to the SFM, the Company will be subject to the Prospectus Rules, the Disclosure and Transparency Rules and the Market Abuse Directive (as implemented in the UK through FSMA) and the admission and disclosure standards of the London Stock Exchange. As such, the Listing Rules applicable to closed-ended investment companies which are listed on the premium listing segment of the Official List of the UKLA will not apply to the Company. In addition, the Directors have resolved that should Admission be granted, as a matter of best practice and good corporate governance the Company will voluntarily comply with the following key provisions of the Listing Rules in such manner as they would apply to the Company were it admitted to the Official List under Chapter 15 of the Listing Rules: 59

60 c110178pu040 Proof 5: _08:33 B/L Revision: 0 Operator YouG * Complying with the Listing Principles set out at Chapter 7 of the Listing Rules; * the Company, while it is not required to appoint a listing sponsor under Chapter 8 of the Listing Rules, has appointed Hudnall and Cantor Fitzgerald as financial advisers to guide the Company in understanding and meeting its responsibilities in connection with Admission and the Issue and complying with Chapter 10 of the Listing Rules relating to significant transactions, with which the Company intends to voluntarily comply; * the Company intends to comply with the following provisions of Chapter 9 of the Listing Rules from Admission: (i) Listing Rule to Listing Rule (Compliance with the Model Code); (ii) Listing Rule 9.3 (Continuing obligations: holders); (iii) Listing Rule 9.5 (Transactions); (iv) Listing Rule to Listing Rule other than Listing Rule (2) and Listing Rule (3) (Notifications); (v) Listing Rule 9.7A (Preliminary statement of annual results and statement of dividends); and (vi) Listing Rule 9.8 (Annual financial report); * the Company has adopted a related party policy which shall apply to any transaction which would constitute a related party transaction as defined in Chapter 11 of the Listing Rules regarding related party transactions. This policy may only be modified with Shareholder approval; * in relation to the purchase of its own shares, the Company has adopted a policy consistent with the provisions of Listing Rules and ; * the Company intends to comply with the following provisions of Chapter 13 of the Listing Rules from Admission: (i) Listing Rule 13.3 (Contents of all circulars); (ii) Listing Rule 13.4 (Class 1 circulars); (iii) Listing Rule 13.5 (Financial information in Class 1 Circulars); (iv) Listing Rule 13.7 (Circulars about purchase of own equity shares); and (v) Listing Rule 13.8 (Other circulars); and * the Company intends to comply with the following provisions of Chapter 15 of the Listing Rules from Admission: (i) Listing Rule to Listing Rule (Continuing obligations); (ii) Listing Rule 15.5 (Transactions); and (iii) Listing Rule 15.6 (Notifications and periodic financial information). * Complying with the Model Code for directors dealings contained in Chapter 9 of the Listing Rules (the Model Code ). It should be noted that the UK Listing Authority will not monitor the Company s voluntary compliance with the Listing Rules applicable to closed-ended investment companies which are listed on the premium listing segment of the Official List of the UKLA nor will it impose sanctions in respect of any failure of such compliance by the Company. This Prospectus has been approved by the UK Listing Authority. Audit Committee The Company s Audit Committee will meet formally at least twice a year for the purpose, amongst other things, of considering the appointment, independence and remuneration of the auditor and to review the annual accounts, interim reports and interim management statements. Where non-audit services are to be provided by the auditor, full consideration of the financial and other implications on the independence of the auditor arising from any such engagement will be considered before proceeding. The Audit Committee comprises each of the Directors. David Warr will act as chairman of the Audit Committee. The principal duties of the Audit Committee will be to consider the appointment of external auditors, to discuss and agree with the external auditors the nature and scope of the audit, to keep under review the scope, results and cost effectiveness of the audit and the independence and objectivity of the auditor, to review the external auditors letter of engagement and to analyse the key procedures adopted by the Company s service providers. 60

61 c110178pu040 Proof 5: _08:33 B/L Revision: 0 Operator YouG PART III ISSUE ARRANGEMENTS The Issue The target size of the Issue is up to 150 million (up to 150 million Shares of no par value issued at a price of 1.00 per Share). As at the date of this Prospectus, the actual number of Shares to be subscribed under the Issue, and therefore the Gross Issue Proceeds, is not known, but will be notified by the Company via an RIS announcement and on the Company s website prior to Admission. The maximum number of Shares available under the Issue should not be taken as an indication of the number of Shares finally to be issued. Applications under the Issue must be for a minimum subscription amount of 50,000 Shares. The Directors (in consultation with the Joint Financial Advisers) may in their absolute discretion waive the minimum application requirements in respect of any particular application for Shares under the Issue. The Directors and the Joint Financial Advisers reserve the right not to proceed with the Issue if the Net Issue Proceeds would be less than 73.9 million or such lesser amount as the Joint Financial Advisers and the Directors may agree. If the Issue does not proceed, subscription monies received will be returned without interest at the risk of the applicant. No fractions of Shares will be issued and the Issue is not being underwritten. The Placing The Company, the Investment Adviser, Hudnall, Cantor Fitzgerald and the Directors have entered into the Placing and Offer Agreement whereby the Joint Financial Advisers, Hudnall and Cantor Fitzgerald (each of whom are authorised and regulated by the FCA), have agreed, as agents for the Company, to use their reasonable endeavours to procure subscribers for Shares under the Placing at the Issue Price. A summary of the terms of the Placing and Offer Agreement is set out in paragraph 6.1 of Part IV of this Prospectus. The terms and conditions of the Placing are set out in Part VIII of this Prospectus. The Offer The Company is also offering the Shares for subscription pursuant to the Offer. The terms and conditions of the Offer are set out in Part VII of this Prospectus and the Application Form. Notes on how to complete the Application Form are set out in Appendix I to this Prospectus. The Terms and Conditions of Application should be read carefully before an application is made. Application Forms must be posted or delivered by hand (during normal business hours only) to Computershare Investor Services PLC, Corporate Actions Projects, Bristol BS99 6AH so as to arrive by no later than 5.00 p.m. on 15 July Unless extended, the Offer will be closed at that time. Scaling Back and Allocation In the event that applications under the Issue were to exceed a level that the Directors determine, in their absolute discretion at the time of closing the Issue, to be the appropriate maximum size of the Issue, it would be necessary to scale back applications under the Issue. The Joint Financial Advisers reserve the right, at their sole discretion but after consultation with the Company, to scale back applications in such amounts as they consider appropriate. The Company reserves the right to decline in whole or in part any application for Shares pursuant to the Offer. Accordingly, applicants for Shares may, in certain circumstances, not be allotted the number of Shares for which they have applied. The Company will notify investors of the number of Shares in respect of which their application has been successful and the results of the Issue will be announced by the Company on or around 16 July 2014 through an RIS announcement. To the extent that any application for shares is rejected in whole or in part (whether by scaling back or otherwise), subscription monies received will be returned without interest at the risk of the applicant by cheque. 61

62 c110178pu040 Proof 5: _08:33 B/L Revision: 0 Operator YouG Dealings Application will be made to the London Stock Exchange for the Shares in issue and to be issued pursuant to the Issue to be admitted to trading on the SFM. The Company does not guarantee that at any particular time market maker(s) will be willing to make a market in the Shares or any class of shares, nor does it guarantee the price at which a market will be made in the Shares. Accordingly, the dealing price of the Shares may not necessarily reflect changes in the NAV per Share. It is expected that dealings in the Shares will commence on 22 July Dealings in Shares in advance of the crediting of the relevant stock account shall be at the risk of the person concerned. The ISIN number is GG00BNFX2T70 and the SEDOL code for the Shares is BNFX2T7. Clearing and Settlement Payment for Shares issued under the Placing should be made in accordance with settlement instructions to be provided to Placees by (or on behalf of) the Company, Hudnall or Cantor Fitzgerald. In the case of the Offer, payment for the Shares should be made in accordance with the Terms and Conditions of the Offer in Part VII of this Prospectus and in the Application Form. Shares issued under the Issue will be issued to successful applicants in accordance with the Terms and Conditions set out in Parts VII and VIII of this Prospectus. The Articles permit the holding of the Shares under the CREST system. The Directors intend to apply for the Shares to be admitted to CREST with effect from Admission. Shares will be issued in registered form and may be held in either certificated or uncertificated form and settled through CREST from Admission. In the case of Shares to be issued in uncertificated form pursuant to the Issue, these will be transferred to successful applicants through the CREST system. Accordingly, settlement of transactions in the Shares following Admission may take place within the CREST system if any Shareholder (other than US Persons) so wishes. CREST is a paperless book-entry settlement system operated by Euroclear which enables securities to be evidenced otherwise than by certificates and transferred otherwise than by written instrument. CREST is a voluntary system and Shareholders who wish to receive and retain share certificates will be able to do so. It is expected that the Company will arrange for Euroclear to be instructed on 22 July 2014 to credit the appropriate CREST accounts of the subscribers concerned or their nominees with their respective entitlements to Shares. The names of subscribers or their nominees investing through their CREST accounts will be entered directly on to the share register of the Company. The transfer of Shares out of the CREST system following the Issue should be arranged directly through CREST. However, an investor s beneficial holding held through the CREST system may be exchanged, in whole or in part, only upon the specific request of the registered holder to CREST for share certificates or an uncertificated holding in definitive registered form. If a Shareholder or transferee requests Shares to be issued in certificated form and is holding such Shares outside CREST, a share certificate will be despatched either to him or his nominated agent (at his risk) within 21 days of completion of the registration process or transfer, as the case may be, of the Shares. Shareholders (other than US Persons and persons acting for the account or benefit of any US Person) holding definitive certificates may elect at a later date to hold such Shares through CREST or in uncertificated form provided they surrender their definitive certificates. Shareholders holding their Shares through CREST or otherwise in uncertificated form may obtain from the Registrar (as evidence of title) a certified extract from the Register showing their Shareholding. Purchase and Transfer Restrictions This Prospectus does not constitute, and may not be used for the purposes of, an offer or an invitation to subscribe for Shares by any US Person or within the United States, or in any jurisdiction: (i) in which such offer or invitation is not authorised; or (ii) in which the person making such offer or invitation is not qualified to do so; or (iii) to any person to whom it is unlawful to make such offer or invitation. The Company has not been and will not be registered under the US Investment Company Act. The Shares have not been and will not be registered under the US Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States. The Shares may not be 62

63 c110178pu040 Proof 5: _08:33 B/L Revision: 0 Operator YouG offered, sold, pledged, or otherwise transferred or delivered, directly or indirectly, into or within the United States or to, or for the account or benefit of, any US Person. There will be no public offer of the Shares in the United States, and this Prospectus should not be distributed or forwarded into the United States or to US Persons. The Shares are being offered and sold only outside the United States to, or for the account or benefit of, investors that are not US Persons in offshore transactions within the meaning of, and in reliance upon, the exemption from registration provided by Regulation S under the US Securities Act. The Shares and any beneficial interests therein may only be transferred in offshore transactions in accordance with Regulation S: (i) to a person outside the United States and not known to the transferor to be a US Person, by pre-arrangement or otherwise; or (ii) to the Company or a subsidiary thereof. No purchase, sale or transfer of the Shares may be made except in circumstances in which such purchase, sale or transfer will not result in the Company being required to register as an investment company under the US Investment Company Act or potentially being in violation of such Act or the rules and regulations promulgated thereunder. The Company has elected to impose the restrictions described below on the Issue and on the future trading of the Shares so that the Company will not be required to register the offer and sale of the Shares under the US Securities Act, so that the Company will not have an obligation to register as an investment company under the US Investment Company Act and related rules or to address certain ERISA, US Tax Code and other considerations. These transfer restrictions, which will remain in effect until the Company determines in its sole discretion to remove them, may adversely affect the ability of holders of the Shares to trade such securities. The Company and its agents will not be obligated to recognise any resale or other transfer of the Shares made other than in compliance with the restrictions described below. Restrictions on investors due to lack of registration under the US Securities Act and US Investment Company Act Each subscriber of Shares in the Issue, as of the date it subscribes for or otherwise received such Shares, and each subsequent investor in the Shares will be deemed to have represented, warranted, agreed and acknowledged as follows: (i) it is not a US Person and is not acquiring the Shares for the account or benefit of a US Person; (ii) it is acquiring the Shares in an offshore transaction meeting the requirements of Regulation S; (iii) it acknowledges that the Shares have not been and will not be registered under the US Securities Act with any securities regulatory authority of any state or other jurisdiction of the United States and may only be transferred in an offshore transaction in accordance with Regulation S: (i) to a person outside the United States and not known by the transferor to be a US Person (or acting for the account or benefit of any US Person), by pre-arrangement or otherwise; or (ii) to the Company or a subsidiary thereof; (iv) it acknowledges that the Company has not registered under the US Investment Company Act and that the Company has put in place restrictions for transactions not involving any public offering in the United States, and to ensure that the Company is not and will not be required to register under the US Investment Company Act; (v) if in the future the investor decides to offer, sell, transfer, assign or otherwise dispose of the Shares, it will do so only in compliance with an exemption from the registration requirements of the US Securities Act and under circumstances which will not require the Company to register under the US Investment Company Act. It acknowledges that any sale, transfer, assignment, pledge or other disposal that might (in the opinion of the Directors) require the Company to register under the US Investment Company Act will be subject to the compulsory transfer provisions as provided in the Articles; (vi) it is purchasing the Shares for its own account or for one or more investment accounts for which it is acting as a fiduciary or agent, in each case for investment only, and not with a view to or for sale or other transfer in connection with any distribution of the Shares in any manner that would violate the US Securities Act, the US Investment Company Act or any other applicable securities laws; (vii) no portion of the assets used by such investor to purchase, and no portion of the assets used by such investor to hold, the Shares or any beneficial interest therein constitutes or will constitute the assets of: (i) investors using assets of: (a) an employee benefit plan as 63

64 c110178pu040 Proof 5: _08:33 B/L Revision: 0 Operator YouG defined in Section 3(3) of ERISA that is subject to Title I of ERISA; (b) a plan as defined in Section 4975 of the US Tax Code, including an individual retirement account or other arrangement that is subject to Section 4975 of the US Tax Code; or (c) an entity whose underlying assets are considered to include plan assets by reason of investment by an employee benefit plan or plan described in preceding clause (a) or (b) in such entity pursuant to the US Plan Assets Regulations; or (ii) a governmental, church, non-us or other employee benefit plan that is subject to any federal, state, local or non-us law that is substantially similar to the provisions of Title I of ERISA or Section 4975 of the US Tax Code, unless its purchase, holding, and disposition of the Shares will not constitute or result in a non-exempt violation of any such substantially similar law; (viii) it acknowledges that the Company reserves the right to make inquiries of any holder of the Shares or interests therein at any time as to such person s status under the federal US securities laws and to require any such person that has not satisfied the Company that holding by such person will not violate or require registration under the US securities laws to transfer such Shares or interests in accordance with the Articles; (ix) it is entitled to acquire the Shares under the laws of all relevant jurisdictions which apply to it, it has fully observed all such laws and obtained all governmental and other consents which may be required thereunder and complied with all necessary formalities and it has paid all issue, transfer or other taxes due in connection with its acceptance in any jurisdiction of the Shares and that it has not taken any action, or omitted to take any action, which may result in the Company, the Investment Adviser, the Joint Financial Advisers or any of their respective directors, officers, agents, employees and advisers being in breach of the laws of any jurisdiction in connection with the Issue or its acceptance of participation in the Issue; (x) that if any Shares are issued in certificated form, then such certificates evidencing ownership will contain a legend substantially to the following effect unless otherwise determined by the Company in accordance with applicable law: Infrastructure Debt Fund Limited (the Company ) has not been and will not be registered under the US Investment Company Act of 1940, as amended (the US Investment Company Act ). in addition, the securities of the company represented by this certificate have not been and will not be registered under the US Securities Act of 1933, as amended (the US Securities Act ), or with any securities regulatory authority of any state or other jurisdiction of the United States. This security may not be offered, sold, resold, transferred, delivered or distributed, directly or indirectly, into or within the united states or to, or for the account or benefit of, US Persons (as defined in Regulation S under the US Securities Act) ; (xi) it has received, carefully read and understands this Prospectus, and has not, directly or indirectly, distributed, forwarded, transferred or otherwise transmitted this Prospectus or any other presentation or offering materials concerning the Shares to within the United States or to any US Persons, nor will it do any of the foregoing; and (xii) the Company, Hudnall, Cantor Fitzgerald, their respective directors, members, officers, agents, employees, advisers and others will rely upon the truth and accuracy of the foregoing representations and agreements. If any of the representations or agreements made by the investor are no longer accurate or have not been complied with, the investor will immediately notify the Company and, if it is acquiring any Shares as a fiduciary or agent for one or more accounts, the investor has sole investment discretion with respect to each such account and it has full power to make such foregoing representations and agreements on behalf of each such account. General The Directors reserve the right to extend the closing date for receipt of applications under the Placing and/or the Offer. No commissions will be paid by the Company to any applicants under the Issue. Temporary documents of title will not be issued. Pursuant to anti-money laundering laws and regulations with which the Company must comply in the UK and/or Guernsey, the Company and its agents will require evidence in connection with any application for Shares, including further identification of the applicant(s), before any Shares are issued. Definitive certificates in respect of Shares in certificated form will be dispatched by post in the week commencing 28 July Temporary documents of title will not be issued. 64

65 c110178pu050 Proof 5: _08:33 B/L Revision: 0 Operator YouG PART IV ADDITIONAL INFORMATION ON THE COMPANY 1. Incorporation and Administration 1.1 The Company was incorporated as a non-cellular company limited by shares in Guernsey under the Companies Law on 3 June 2014 with registered number The Company has been registered by the GFSC as a registered closed-ended investment collective investment scheme pursuant to the Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended, and the RCIS Rules The registered office and principal place of business of the Company is 1 Royal Plaza, Royal Avenue, St. Peter Port, Guernsey GY1 2HL, and the telephone number is The statutory records of the Company will be kept at the registered office. The Company operates under the Companies Law and ordinances and regulations made thereunder. The Company has an unlimited life. 1.2 The Directors confirm that the Company has not traded or commenced operations and that, as at the date of this Prospectus, no accounts or financial statements of the Company have been made up since its incorporation on 3 June Ernst & Young LLP, located at PO Box 9, Royal Chambers, St. Julian s Avenue, St. Peter Port, Guernsey, GY1 4AF, has been the only auditor of the Company since its incorporation. Ernst & Young LLP is regulated by the Institute of Chartered Accountants of England & Wales to carry out audit work. The auditor s responsibility is to audit and express an opinion on the financial statements of the Company in accordance with applicable law and auditing standards. 1.4 Save for its entry into the material contracts summarised in paragraph 6 of this Part IV of this Prospectus and certain non-material contracts, since its incorporation the Company has not carried on business, incurred borrowings, issued any debt securities, incurred any contingent liabilities or made any guarantees, nor granted any charges or mortgages. 2. Share Capital 2.1 The share capital of the Company consists of an unlimited number of ordinary shares of no par value which upon issue the Directors may classify as Shares or shares of such other classes denominated in such currencies as the Directors may determine. Notwithstanding this, a maximum number of 150 million Shares will be issued pursuant to the Issue. All holders of the same class of Shares shall have the same voting rights in respect of the share capital of the Company. 2.2 As at the date of incorporation and as at the date of this Prospectus, the Company s issued share capital comprises one Share issued at a price of 1.00 and held by the subscriber to the Memorandum, CO1 Limited. 2.3 Without prejudice to any special rights previously conferred on the holders of any existing Shares or class of shares, any share in the Company may be issued with such preferred, deferred or other special rights or restrictions, whether as to dividend, voting, return of capital, redemption or otherwise, as the Board may determine. 2.4 The Directors have absolute authority to allot the Shares pursuant to the Issue under the Articles and are expected to resolve to allot Shares shortly prior to Admission in respect of the Shares to be issued pursuant to the Issue. 2.5 Pursuant to a duly adopted written resolution dated 4 July 2014, conditional upon Admission, the Company is authorised in accordance with Companies Law to make market acquisitions as defined in the Companies Law of any of its Shares provided that: (i) the maximum number of Shares authorised to be purchased is up to per cent. of the Company s issued share capital immediately following Admission; (ii) the minimum price (exclusive of expenses) which may be paid for a Share shall be 0.01; and (iii) the maximum price (exclusive of expenses) which may be paid for a Share shall be not more than 5 per cent. above the average of the market value of the Shares for the five business days prior to the day the purchase is made. Such authority expires at the end of the first annual general meeting of the Company. The Directors intend to request that the authority to make market acquisition of its Shares is renewed at each subsequent annual general meeting of the Company. Pursuant to a written extraordinary resolution of the subscribers to the Company s Memorandum dated 4 July 2014, 65

66 c110178pu050 Proof 5: _08:33 B/L Revision: 0 Operator YouG pre-emption rights have been disapplied in relation to up to 10 per cent. of the Shares in Issue following Admission for a period concluding immediately prior to the annual general meeting of the Company to be held in Subject to the exceptions set out in paragraph of this Part IV, Shares are freely transferable and Shareholders are entitled to participate (in accordance with the rights specified in the Articles) in the assets of the Company attributable to their Shares in a winding up of the Company or a winding up of the business of the Company. 2.7 Save as disclosed in this paragraph 2 and paragraph 6.1 of this Part IV, since the date of its incorporation, no share or loan capital of the Company has been issued or agreed to be issued, or is now proposed to be issued, either for cash or any other consideration and no commissions, discounts, brokerages or other special terms have been granted by the Company in connection with the issue or sale of any such capital. No share or loan capital of the Company is under option or has been agreed, conditionally or unconditionally, to be put under option. 2.8 All of the Shares will be in registered form and eligible for settlement in CREST. Temporary documents of title will not be issued. 3. Directors and Other Interests 3.1 As at the date of this Prospectus, none of the Directors or any person connected with any of the Directors has a shareholding or other interest in the in the share capital of the Company. The Directors and their connected persons may, however, subscribe for shares pursuant to the offer. 3.2 Save as is disclosed in this paragraph 3 of this Part IV, there are no other interests of any Director, including any connected person, the existence of which is known to, or could with reasonable diligence be ascertained by, such Director, whether or not held through another party, in the share capital of the Company, together with any options in respect of such capital immediately following the Issue. 3.3 As at the date of this Prospectus, insofar as is known to the Company, no person is or will, immediately following the Issue, be directly or indirectly interested in 5 per cent. or more of the Company s share capital. Neither the Administrator nor the Investment Adviser has any interest in the Company s share capital. As at the date of this Prospectus, the Company, insofar as it is aware, will not immediately following the Issue be directly or indirectly owned or controlled by any single person or entity and there are no arrangements known to the Company the operation of which may subsequently result in a change of control of the Company. 3.4 The aggregate remuneration and benefits in kind of the Directors in respect of the Company s accounting period ending on 31 March 2015 which will be payable out of the assets of the Company are not expected to exceed 200,000. The chairman of the Board will receive 30,000 per annum and each of the other Directors will receive 27,500 per annum. None of the Directors are entitled to any retirement or other similar benefits. 3.5 Prior to Admission, the Company will neither pay any amount of remuneration (including any contingent or deferred compensation) nor grant any benefits in kind to any persons for any services provided to the Company. 3.6 No Director has a service contract with the Company, nor are any such contracts proposed. The appointments of the Directors can be terminated in accordance with the Articles and without compensation. There is no notice period specified in the Articles for the removal of Directors. The Articles provide that the office of Director shall be terminated by, among other things: (i) written resignation; (ii) unauthorised absences from board meetings for 12 months or more; (iii) written request of the other Directors; and (iv) an ordinary resolution of the Company in general meeting declaring he shall cease to be a Director. The Directors have undertaken to the Company to devote sufficient time to fulfil their duties as a Director. 3.7 No loan has been granted to, nor any guarantee provided for the benefit of, any Director by the Company. 3.8 No Director has, or has had, an interest in any transaction which is or was unusual in its nature or conditions or significant to the business of the Company or which has been effected by the Company since its incorporation. 66

67 c110178pu050 Proof 5: _08:33 B/L Revision: 0 Operator YouG 3.9 As at the date of this Prospectus, there are no potential conflicts of interest between the duties the Directors owed to the Company and their private interests or other duties In addition to their directorships of the Company, the Directors hold or have held the directorships and are or were members of the partnerships, as listed in the table below, over or within the past five years. Details of the directorships that are held and have been held in the past five years by any Director will also be made available to any subscriber or potential subscriber at the registered office of the Company. Robert King Current directorships/partnerships F&C Alternative Strategies Limited Clarion 5 IC Limited Clarion ICC Limited F&C Directional Opportunities Fund Limited F&C Longstone Fund Limited F&C Property Growth & Income Fund Limited F&C Warrior Fund Limited F&C Warrior II Fund Limited Golden Prospect Precious Metals Limited JPMorgan Senior Secured Loan Fund Limited Jubilee Absolute Return Fund Limited Jubilee Absolute Return Master Fund Limited KIC Global Strategy Fund Pembroke Heritage Fund Limited Pera Capital Partners Advisory Limited Praetorian Resources (GP) Limited Sienna Investment Company 2 Limited Sienna Investment Company 3 Limited Sienna Investment Company 4 Limited Sienna Investment Company Limited Thames River Hillside Apex Fund SPC Thames River Sentinel Fund Limited Weiss Korea Opportunity Fund Ltd Past directorships/partnerships Absolute Return Trust Limited* Advaita Energy Finance Limited Advaita Energy Ventures Limited Advaita Indian Energy Ventures (Mauritius) Limited Albanactus Holdings Limited Ambridge Limited Anice Limited Arnold House Holdings Limited Azurie OS Limited Bewcastle Holdings Limited Blackpine Properties Limited Cannon Asset Management Limited Cannon Capital Advisors Limited Cannon Corporate Directors Limited Cannon Corporate Services Limited Cannon International Limited Cannon Investments Limited Cannon Nominess Limited Cannon Secretaries Limited Cape Diving Limited Carrousel Fund II Limited (The)*** Cascades Limited Centrix IX Fund Limited Clarion 1 IC Limited** Clarion 10 IC Limited** Clarion 2 IC Limited** Clarion 3 IC Limited** Clarion 4 IC Limited** Clarion 6 IC Limited** Clarion 7 IC Limited** Clarion 8 IC Limited** Clarion 9 IC Limited** Clarion Test Trade IC Limited Computershare Investor Services (Guernsey) Limited Deloitte CIS Holdings Limited Deloitte CIS Nominee Limited Deloitte CIS Shareholders Limited Distressed Focus Redemption Limited*** Dominion DMG International Limited Dominion Marketing Limited Euro Finance Limited Factory Electric Holdings Limited FCM Asia-Pacific Fund Limited*** FCM Asia-Pacific Master Fund Limited*** FCM European Frontier Fund Limited*** 67

68 c110178pu050 Proof 5: _08:33 B/L Revision: 0 Operator YouG Current directorships/partnerships Past directorships/partnerships FCM European Frontier Master Fund Limited*** FCM European Opportunities Fund Limited*** FCM European Opportunities Master Fund Limited*** FCM Global Opportunities Fund Limited*** FCM Global Opportunities Master Fund Limited*** Guernsey Photography Festival LBG Hillside Apex Fund Limited*** Hilson Park Limited Holborn Properties Limited Iris Holdings Limited Kingsway Fund Limited Lions of Africa SPC (formerly) South African Hedge Funds SPC Littlegate Properties Limited Metsi Trading Limited Micro Investments Limited Montreux Advisers Limited Nebraska Holdings Limited Nevsky Capital Holdings Limited Newgate Property Holdings Limited Orchid Developments Limited Pharmed Consultants Limited Process Marine Engineering Services Ltd Redwood Developments Limited Renaissance Russia Infrastructure Equities Limited* Rhodium Stone PCC Limited Rowan Developments Limited Sarnia Construction Limited Seahaze Limited Sentinel Redemption Limited*** Takura Trading Limited Thames River 1X Currency Alpha Fund Limited*** Thames River 2X Currency Alpha Fund Limited*** Thames River Africa Focus Fund Limited*** Thames River Argentum Fund Limited*** Thames River Capital Holdings Limited Thames River Distressed Focus Fund Limited*** Thames River Equity Focus Fund Limited*** Thames River Hillside Apex Fund II Limited*** Thames River Kingsway Fund Limited Thames River Kingsway Plus Fund Limited*** Thames River Legion Fund Limited*** Thames River Magi Macro Fund Limited** Thames River Mainstay Fund Limited*** Thames River Origin Fund Limited Thames River ZeCo Fund Limited*** The Cromwell Corporation Limited Therium Holdings Limited*** Thomas Ventures Limited Viki International Limited Visio Trading Limited Waldemar Developments Limited Walden Way Limited Warrior II Redemption Limited*** Warrior Redemption Limited*** 68

69 c110178pu050 Proof 5: _08:33 B/L Revision: 0 Operator YouG Current directorships/partnerships David Warr Current directorships/partnerships Acorn Income Fund Limited Breedon Aggregates Limited Central Way House Limited FRM Diversified Alpha Limited* Gemini Holdings Limited Laurent Investments Limited LP (Brentford) Limited Lunar Partnership (Brentford) Limited Mid Europa Fund Management Limited Nightwatch Limited Schroder Real Estate Investment Trust Limited Shoreham Investments Limited SREIT Holding Company Limited SREIT (No. 2) Limited SREIT Property Limited Sunflowers Limited The Guernsey Community Foundation, LBG The Horizon Fund PCC Limited Threadneedle UK Select Trust Limited Unigestion (Guernsey) Limited Unigestion SRI World Equity Fund Limited Uni-Hedge Arbitrage IC Limited Uni-Hedge Commodity Alpha IC Limited Uni-Hedge Concentrated Long/Short Equity IC Limited Uni-Hedge CPP-UK IC Limited Uni-Hedge Defensive TT IC Limited Uni-Hedge Diversified IC Limited Uni-Hedge GMTIC Limited Uni-Hedge Global Equity FO IC Limited* Uni-Hedge Global Equity IC Limited Uni-Hedge ICC Limited Uni-Hedge Patrimoine IC Limited* The Uni-Hedge Trust Diversified JPY Distribution Fund* Uni-Hedge Vaudoise I IC Limited* (James) Grant Wilson Current directorships/partnerships Advance Frontier Markets Fund Limited International Asset Monitor Limited Prudent Wealth Management Limited The China Absolute Fund Limited Past directorships/partnerships West End London Property Investment Company Limited*** Wintergreen Limited Woodford Limited Past directorships/partnerships Bright Star Limited Crystal Amber Fund Limited The Defensive Strategies Fund Limited Guernsey Sports Commission LBG Hemisphere Defensive HF (USD) Limited Hemisphere Defensive HF PCC Limited*** LP (Alfreton) Limited LP (Bristol) Limited LP (Cannock) Limited LP (Fleet) Limited LP (Havant) Limited LP (Hemel Hempstead) Limited LP (New Malden) Limited LP (Northampton) Limited LP (Tudor Street) Limited LP (York) Limited Lunar Partnership (Alfreton) Limited Lunar Partnership (Bolton) Limited Lunar Partnership (Cannock) Limited Lunar Partnership (Fleet) Limited Lunar Partnership (Havant) Limited Lunar Partnership (Hemel Hempstead) Limited Lunar Partnership (New Malden) Limited Lunar Partnership (Northampton) Limited Lunar Partnership (Scunthorpe) Limited Lunar Partnership (Tudor Street) Limited Lunar Partnership (York) Limited Lunar Partnership Limited Opportunities PCC Limited SREIT (Mid City) Limited*** Uni-Hedge Absolute Return Asia IC Limited* Uni-Hedge Arbitrage Enhanced (EUR) IC Limited* Uni-Hedge Arbitrage Enhanced (USD) IC Limited* Uni-Hedge Equity Insurance IC Limited* Uni-Hedge GBF Alternative IC Limited* Uni-Hedge Global Equity Dynamic (EUR) IC Limited* Uni-Hedge Global Equity Dynamic (USD) IC Limited*** Uni-Hedge Global Equity PCC Limited Uni-Hedge Systematic Non-Trend IC Limited* Uni-Hedge Tactical Trading IC Limited* Past directorships/partnerships China Development Capital (GP) Limited Claibeth Limited Eland Mar Limited Eland Mar LLP Gartmore Investment Trust Management Limited GMS (Recordings) Limited Independent Professional Trustees LLP 69

70 c110178pu050 Proof 5: _08:33 B/L Revision: 0 Operator YouG Current directorships/partnerships Past directorships/partnerships Martin Currie Investment Management Limited Martin Currie Inc Phillipi Guernsey LBG Prison Fellowship Guernsey LBG * (in members voluntary liquidation); ** (voluntarily struck off); *** (liquidated) 3.11 At the date of this Prospectus, save as disclosed above: (i) none of the Directors has any convictions in relation to fraudulent offences for at least the previous five years; (ii) none of the Directors was a director of a company, a member of an administrative, management or supervisory body or a senior manager of a company within the previous five years which has entered into any bankruptcy, receivership or liquidation proceedings; (iii) none of the Directors has been subject to any official public incrimination and/or sanctions by statutory or regulatory authorities (including designated professional bodies) or has been disqualified by a court from acting as a member of the administrative, management or supervisory bodies of an issuer or from acting in the management or conduct of the affairs of any issuer for at least the previous five years; (iv) none of the Directors are aware of any contract or arrangement subsisting in which they are materially interested and which is significant to the business of the Company which is not otherwise disclosed in this Prospectus; and (v) none of the Directors is personally involved in any litigation proceedings or aware of any such proceedings threatened against them The Company intends to maintain directors and officers liability insurance on behalf of the Directors at the expense of the Company. Pursuant to an instrument of indemnity to be entered into between the Company and each Director, the Company has undertaken, subject to certain limitations, to indemnify each Director out of the assets and profits of the Company against all costs, charges, losses, damages, expenses and liabilities arising out of any claims made against each of them in connection with the performance of their duties as a Director of the Company No members or employees of the Administrator or the Investment Adviser have any service contracts with the Company. 4. Taxation General The information below, which relates only to Guernsey and United Kingdom taxation, summarises the advice received by the Directors and is applicable to the Company and to persons who are resident or ordinarily resident in Guernsey or the United Kingdom for taxation purposes and who hold Shares as an investment. It is based on current Guernsey and United Kingdom revenue law and published practice, respectively, which law or practice is, in principle, subject to any subsequent changes therein (potentially with retrospective effect). Certain Shareholders, such as dealers in securities, collective investment schemes, insurance companies and persons acquiring their Shares in connection with their employment may be taxed differently and are not considered. If you are in any doubt about your tax position, or if you may be subject to tax in a jurisdiction other than the United Kingdom or Guernsey, you should consult your professional adviser. United Kingdom (i) The Company The Directors intend that the Company will be managed and controlled in such a way that it should not be resident in the United Kingdom for United Kingdom tax purposes. Accordingly, and provided that the Company does not carry on a trade in the United Kingdom (whether or not through a branch, agency or permanent establishment situated there), the Company will not be subject to United Kingdom income tax or corporation tax other than on any United Kingdom sourced income. 70

71 c110178pu050 Proof 5: _08:33 B/L Revision: 0 Operator YouG (ii) Shareholders Disposal of Shares The Directors have been advised that, under current law, the Company should not be treated as an offshore fund for the purposes of United Kingdom taxation and the legislation contained in Part 8 of the TIOPA. Accordingly, Shareholders (other than those holding Shares as dealing stock, who are subject to separate rules) who are resident in the United Kingdom, or who carry on business in the United Kingdom through a branch, agency or permanent establishment with which their investment in the Company is connected, may, depending on their circumstances and subject as mentioned below, be liable to United Kingdom tax on chargeable gains realised on the disposal of their Shares (which will include any liquidation of the Company). If the Company takes steps to return capital to Shareholders, on the passing of a Continuation Resolution or otherwise, the Directors intend that such returns of capital will be structured so as to be treated as a capital receipt in the hands of Shareholders who hold their Shares as investments and are subject to UK tax on chargeable gains. For individual Shareholders a flat rate of tax at 18 per cent. (for basic rate taxpayers) or at 28 per cent. (for higher and additional rate taxpayers) will be payable on any gain. Individuals may benefit from certain reliefs and allowances (including a personal annual exemption allowance, which presently exempts the first 11,000 of gains from tax) depending on their circumstances. Shareholders which are bodies corporate resident in the United Kingdom for taxation purposes will benefit from indexation allowance which, in general terms, increases the chargeable gains tax base cost of an asset in accordance with the rise in the retail prices index. Dividends Individual Shareholders resident in the United Kingdom for tax purposes will be liable to UK income tax in respect of dividends or other income distributions of the Company. An individual Shareholder resident in the UK for tax purposes and in receipt of a dividend from the Company will, provided they own less than 10 per cent. of the Shares, be entitled to claim a non-repayable dividend tax credit equal to one-ninth of the dividend received. The effect of the dividend tax credit would be to extinguish any further tax liability for eligible basic rate taxpayers (who currently pay tax at the dividend ordinary rate of 10 per cent.). The effect for current eligible higher rate taxpayers (who pay tax at the current dividend upper rate of 32.5 per cent.) would be to reduce their effective tax rate to 25 per cent. of the cash dividend received. An additional rate of income tax applies for United Kingdom resident individuals with income in excess of 150,000 and such individuals will pay 37.5 per cent. tax on dividends received (reduced to an effective tax rate of per cent. for eligible taxpayers as a result of applying the tax credit). UK Shareholders within the charge to UK corporation tax may be liable for UK corporation tax (the main rate of UK corporation tax is currently 21 per cent.) on the receipt of the dividend. There is, however, an exemption from corporation tax on foreign dividends received by UK resident companies, which may exempt such UK Shareholders from UK taxation on dividends paid by the Company, depending on their circumstances and subject to certain conditions being satisfied. Stamp duty and Stamp Duty Reserve Tax ( SDRT ) No United Kingdom stamp duty or SDRT will arise on the issue of Shares. No UK stamp duty will be payable on a transfer of Shares, provided that all instruments effecting or evidencing the transfer (or all matters or things done in relation to the transfer) are not executed in the United Kingdom and that no matters or actions relating to the transfer are performed in the United Kingdom. Provided that the Shares are not registered in any register kept in the United Kingdom by or on behalf of the Company and that the Shares are not paired with shares issued by a company incorporated in the United Kingdom, any agreement to transfer the Shares will not be subject to UK SDRT. 71

72 c110178pu050 Proof 5: _08:33 B/L Revision: 0 Operator YouG ISAs and SSAS/SIPPs From 1 July 2014, ISAs will become New ISAs ( NISAs ). While Shares acquired pursuant to the Placing will not be eligible for inclusion in a stocks and shares NISA, Shares acquired pursuant to the Offer will be eligible for inclusion in a stocks and shares NISA. On admission to the SFM, Shares acquired by purchase in the market should be eligible for inclusion in a stocks and shares NISA, subject to applicable subscription limits. The annual NISA investment allowance is 15,000 for the tax year 2014 to The amount of the allowance can be split between a cash NISA and a stocks and shares NISA in any way chosen. The Shares should be eligible for inclusion in a SSAS or SIPP, subject to the discretion of the trustees of the SSAS or SIPP, as the case may be. Other United Kingdom Tax Considerations United Kingdom resident companies having an interest in the Company, such that 25 per cent. or more of the Company s profits for an accounting period could be apportioned to them or to connected or associated parties, may be liable to United Kingdom corporation tax in respect of their share of the Company s undistributed profits in accordance with the provisions of Part 9A of TIOPA relating to controlled foreign companies ( CFC ). These provisions only apply if the company is controlled by United Kingdom residents. Control for this purpose is established by reference to control of a company s affairs, economic control over a company s income and assets and, in certain cases, where a company is regarded as a parent of a CFC for accounting purposes. Individuals resident in the United Kingdom should note that Chapter 1 of Part 13 of the Income Tax Act 2007, which contains provisions for preventing avoidance of income tax by transactions resulting in the transfer of income to persons (including companies) abroad, may render them liable to taxation in respect of any undistributed income and profits of the Company. The attention of Shareholders resident in the United Kingdom is drawn to the provisions of Section 13 of the Taxation of Chargeable Gains Act 1992 under which, in certain circumstances, a portion of capital gains made by the Company can be attributed to a Shareholder who holds, alone or together with associated persons, more than 25 per cent. of the Shares. The attention of Shareholders is drawn to anti-avoidance legislation in Chapter 1 of Part 13 of the Income Tax Act 2007 and Part 15 of the Corporation Tax Act 2010 that could apply if Shareholders are seeking to obtain tax advantages in prescribed conditions. Guernsey (i) The Company The Company has applied for and been granted exemption from liability to income tax in Guernsey under the Income Tax (Exempt Bodies) (Guernsey) Ordinance, 1989 as amended ( Exempt Bodies Ordinance ) by the Director of Income Tax in Guernsey for the current year. Exemption must be applied for annually and will be granted, subject to the payment of an annual fee, which is currently fixed at 600 per applicant, provided the applicant qualifies under the applicable legislation for exemption. It is the intention of the Directors to conduct the affairs of the Company so as to ensure that it continues to qualify for exempt company status for the purposes of Guernsey taxation. As an exempt company, the Company is and will be treated as if it were not resident in Guernsey for the purposes of liability to Guernsey income tax. Under current law and practice in Guernsey, the Company will only be liable to tax in Guernsey in respect of income arising or accruing in Guernsey, other than from a relevant bank deposit. (ii) Taxation of Shareholders Provided the Company maintains its exempt status, Shareholders who are resident for tax purposes in Guernsey (which includes Alderney and Herm for these purposes) will suffer no deduction of tax by the Company from any dividends payable by the Company but the Administrator will provide details of distributions made to Guernsey resident Shareholders to the Director of Income Tax in Guernsey, including the names and 72

73 c110178pu050 Proof 5: _08:33 B/L Revision: 0 Operator YouG addresses of the Guernsey resident Shareholders, the gross amount of any distribution paid and the date of the payment. The Director of Income Tax can require the Company to provide the name and address of every Guernsey resident who, on a specified date, has a beneficial interest in Shares, with details of the interest. Shareholders resident outside Guernsey will not be subject to any tax in Guernsey in respect of distributions paid in relation to any Shares owned by them or on the disposal of their holding of shares in the Company. (iii) (iv) (v) (vi) Capital Taxes and Stamp Duty Guernsey currently does not levy taxes upon capital inheritances, capital gains (with the exception of a dwellings profit tax, which is currently suspended) gifts, sales or turnover, nor are there any estate duties, save for registration fees and ad valorem duty for a Guernsey Grant of Representation where the deceased dies leaving assets in Guernsey (which required presentation of such a grant). No stamp duty is chargeable in Guernsey on the issue, transfer, switching or redemption of Shares. EU Savings Tax Directive Guernsey has introduced measures that are the same as the EC Directive 2003/48 (the EU Savings Tax Directive ). The Company will not, under the existing regime, be regarded as an undertaking for collective investment established in Guernsey that is equivalent to a UCITS authorised in accordance with EC Directive 85/611/EEC of the Council of the EU for the purposes of the application in Guernsey of the bilateral agreements on the taxation of savings income entered into by Guernsey with EU member states. Consequently, in accordance with current States of Guernsey guidance on the application of the bilateral agreements, where the Company s paying agent (as defined for these purposes) is located in Guernsey, the paying agent would not be required to exchange information regarding distributions made by the Company and/or the proceeds of the sale, refund, or redemption (if any) of Shares. Amendments to the EU Savings Tax Directive could potentially lead to Guernsey introducing equivalent amending measures. This could lead to changes that may affect the Company. US-Guernsey Intergovernmental agreement On 13 December 2013 the Chief Minister of Guernsey signed an intergovernmental agreement with the US ( US-Guernsey IGA ) regarding the implementation of FATCA, under which certain disclosure requirements will be imposed in respect of certain investors in the Company who are, or being entities are controlled by one or more, residents or citizens of the US. The US-Guernsey IGA will be implemented through Guernsey s domestic legislation, in accordance with regulations and guidance yet to be published in finalised form. Accordingly, the full impact of the US-Guernsey IGA on the Company and the Company s reporting responsibilities pursuant to the US-Guernsey IGA as implemented in Guernsey is currently uncertain. UK-Guernsey Intergovernmental agreement On 22 October 2013 the Chief Minister of Guernsey signed an intergovernmental agreement with the UK ( UK-Guernsey IGA ) under which certain disclosure requirements will be imposed in respect of certain investors in the Company who are, or being entities are controlled by one or more, residents of the UK. The UK-Guernsey IGA will be implemented through Guernsey s domestic legislation, in accordance with regulations and guidance yet to be published in finalised form. Accordingly, the full impact of the UK-Guernsey IGA on the Company and the Company s reporting responsibilities pursuant to the UK-Guernsey IGA as implemented in Guernsey is currently uncertain. Other The receipt of dividends by Shareholders may result in a tax liability for Shareholders according to the tax regime applicable in their various countries of citizenship, residence, ordinary residence or domicile, as the case may be. Investors resident in or citizens of certain countries which have anti-offshore company legislation may have a current liability for a proportion of the undistributed income and gains of the Company. Such investors should seek their own professional advice. 73

74 c110178pu050 Proof 5: _08:33 B/L Revision: 0 Operator YouG 5. Memorandum and Articles The Memorandum of Incorporation provides that the objects and powers of the Company are not restricted. The Memorandum of Incorporation is available for inspection at the addresses specified in paragraph 17 of this Part IV. 5.1 The Articles contain provisions, inter alia, to the following effect: Shares Generally (i) The share capital is represented by an unlimited number of shares of no par value. (ii) Holders of Shares shall have the following rights: Dividends Shareholders are entitled to receive, and participate in: any dividends out of income; other distributions of the Company available for such purposes and resolved to be distributed in respect of any accounting period; or other income or right to participate therein. Voting The Shareholders shall have the right to receive notice of and to attend, speak and vote at general meetings of the Company and each holder of Shares being present in person, by proxy, or by attorney at a meeting shall upon a show of hands have one vote and upon a poll each such holder present in person or by proxy or by attorney shall have one vote in respect of each Share held by him. Winding-up On a winding-up the surplus assets remaining after payment of all creditors shall be divided amongst the holders of Shares then in issue, subject in any such case to the rights of any shares which may be issued with special rights or privileges. (iii) The Company may issue an unlimited number of Ordinary Shares. Without prejudice to any special rights previously conferred on the holders of any existing shares or class of shares, any share in the Company may be issued with such preferred, deferred or other special rights or restrictions whether as to dividend, distribution, voting, return of capital, redemption or otherwise as the Board may determine. The amount payable in respect of an application for a share shall be fixed by the Board. (iv) (v) (vi) Subject to the provisions of the Companies Law, the terms and rights attaching to any class of shares, the Articles and any guidelines established from time to time by the Directors, the Company may from time to time purchase or enter into a contract under which it will or may purchase any of its own shares whether or not they are redeemable. The making and timing of any buy back will be at the absolute discretion of the Directors. The Company and any of its subsidiaries companies may, at the discretion of the Board, give financial assistance directly or indirectly for the purpose of or in connection with the acquisition of shares in the Company or in connection with reducing or discharging any liability incurred in connection with the purchase of shares in the Company. If at any time the share capital is divided into further classes of shares the rights attached to any class (unless otherwise provided by the terms of issue) may, whether or not the Company is being wound up, be varied with the consent in writing of the holders of three fourths of the issued shares of that class or with the sanction of an extraordinary resolution of the holders of the shares of that class. There are no provisions of Guernsey law which confer rights of pre-emption in respect of the issue of additional shares. The Articles, however, provide that the Company is not permitted to allot (for cash) equity securities (being Shares or rights to subscribe for, or convert securities into, Shares), unless it shall first have offered to allot to each existing holder of Shares on the same or more favourable terms a proportion of those Shares which is as nearly as practicable equal to the proportion of the total number of Shares in issue represented by the Shares held 74

75 c110178pu050 Proof 5: _08:33 B/L Revision: 0 Operator YouG by such Shareholder. The Company may pass a special resolution of the Shareholders granting the authority to disapply, exclude or modify the pre-emption rights and any such issue may dilute the Shareholdings of existing Shareholders Continuation Resolution (i) The Directors are required to convene an extraordinary general meeting of the Company by 2025 to propose an ordinary resolution that the Company continue its business as a closed-ended investment company. (ii) If the Continuation Resolution is not passed, the Directors will, as soon as reasonably practicable, bring forward specific proposals for the reconstruction or reorganisation of the Company to the Shareholders for their approval Winding Up (i) On a winding up the surplus assets remaining after payment of all creditors shall be divided amongst the holders of shares then in issue, subject in any such case to the rights of any shares which may be issued with special rights or privileges. (ii) On a winding up the liquidator may, with the authority of a special resolution, divide amongst the members in specie any part of the assets of the Company, and may set such value as he deems fair upon any one or more class or classes of property, and may determine the method of division of such assets between members. The liquidator may with like authority vest any part of the assets in trustees upon such trusts for the benefit of members as he shall think fit but no member shall be compelled to accept any assets in respect of which there is any liability. (iii) Where the Company is proposed to be or is in the course of being wound up and the whole or part of its business or property is proposed to be transferred or sold to another company, the liquidator may, with the sanction of an ordinary resolution, receive in compensation shares, policies or other like interest for distribution or may enter into any other arrangements whereby the members may, in lieu of receiving cash, shares policies, or other like interests, participate in the profits of or receive any other benefit from the transferee Notice Requiring Disclosure of Interests in Shares The Directors shall have power by notice in writing to require any member to disclose to the Company the identity of any person other than the member (an interested party) who has any interest in the shares held by the member and the nature of such interest. Any such notice shall require any information in response to such notice to be given in writing within such reasonable time as the Directors may determine. The Directors may be required to exercise their powers under the relevant Article on a requisition of members holding not less than one-tenth of the total voting rights of the ordinary shares of the Company at that date. If any member is in default in supplying to the Company the information required by the Company within the prescribed period (which is 28 days after service of the notice or 14 days if the shares concerned represent 0.25 per cent. or more in value of the issued shares of the relevant class), the Directors in their absolute discretion may serve a direction notice on the member. The direction notice may direct that, in respect of the shares in respect of which the default has occurred (the Default Shares ) and any other shares held by the member, the member shall not be entitled to vote in general meetings or class meetings. Where the Default Shares represent at least 0.25 per cent. of the class of shares concerned, the direction notice may additionally direct that dividends on such shares will be retained by the Company (without interest) and that no transfer of the Default Shares (other than a transfer authorised under the Articles) shall be registered until the default is rectified Dividends and Distributions (i) Any dividends and distributions will be paid in accordance with the Companies Law, having fulfilled the requirements of the solvency test contained therein. (ii) The Directors may, if they think fit, at any time declare and pay such annual or interim dividends or distributions as appear to be justified by the position of the Company. 75

76 c110178pu050 Proof 5: _08:33 B/L Revision: 0 Operator YouG (iii) (iv) (v) (vi) The Directors may, subject to such terms and in such manner as they may determine, issue shares in lieu of dividend in accordance with section 306 of the Companies Law. The Directors may, in relation to any dividend or distribution, direct that the dividend or distribution shall be satisfied wholly or partly by the distribution of assets, and in particular of paid up shares, debentures, or other securities of any other company. All unclaimed dividends and distributions may be invested or otherwise made use of by the Directors for the benefit of the Company until claimed and the Company shall not be constituted a trustee thereof. No dividend or distribution shall bear interest against the Company. Any dividend or distribution unclaimed after a period of 12 years from the date of declaration of such dividend shall be forfeited and shall revert to the Company. The Directors are empowered to create reserves before recommending or declaring any dividend or distribution. The Directors may also carry forward any sums (out of profit or otherwise) which they think prudent not to distribute by way of dividend or distribution Transfer of Shares The Articles provide that the Directors may implement such arrangements as they may think fit in order for any class of shares to be admitted to settlement by means of the CREST system. If the Directors implement any such arrangements no provision of the Articles shall apply or have effect to the extent that it is in any respect inconsistent with: (i) the holding of shares of that class in uncertificated form; (ii) the transfer of title to shares of that class by means of the CREST system; or (iii) the Guernsey USRs or the CREST Rules. Where any class of shares is, for the time being, admitted to settlement by means of the CREST system such securities may be issued in uncertificated form in accordance with and subject as provided in the Guernsey USRs or the CREST Rules. Unless the Directors otherwise determine, such securities held by the same holder or joint holders in certificated form and uncertificated form shall be treated as separate holdings. The permitted number of joint holders of a share shall be four. No provision of the Articles shall apply so as to require the Company to issue a certificate to any person holding such shares in uncertificated form. Such securities may be changed from uncertificated to certificated form, and from certificated to uncertificated form, in accordance with and subject as provided in the Guernsey USRs or the CREST Rules. Title to such of the shares as are recorded on the register as being held in uncertificated form may be transferred only by means of the CREST system and as provided in the Guernsey USRs or the CREST Rules. Every transfer of shares from a CREST account of a CREST member to a CREST account of another CREST member shall vest in the transferee a beneficial interest in the shares transferred, notwithstanding any agreements or arrangements to the contrary, however and whenever arising and however expressed. Subject to such of the restrictions of the Articles as are described in this paragraph 5, any member may transfer all or any of his certificated shares by an instrument of transfer in any usual form or in any other form which the Directors may approve. The instrument of transfer of a share shall be signed by or on behalf of the transferor and, unless the share is fully paid, by or on behalf of the transferee. The Directors may refuse to register a transfer of any share in certificated form which is not fully paid up or on which the Company has a lien provided that this would not prevent dealings from taking place on an open and proper basis. The Directors may also refuse to register any transfer of certificated shares which is prohibited by the provisions described above, or any transfer of shares unless such transfer is in respect of only one class of shares, is in favour of a single transferee or no more than four joint transferees, is not in favour of a Prohibited Person (as defined below), is delivered for registration to the registered office or such other place as the Directors may decide, and is accompanied by the relevant share certificate(s) and such other evidence as the Directors may reasonably require to show the right of the transferor to make the transfer. 76

77 c110178pu050 Proof 5: _08:33 B/L Revision: 0 Operator YouG Subject to such of the restrictions of the Articles as are described in this paragraph 5, any member may transfer all or any of his uncertificated shares by means of a relevant system authorised by the Directors in such manner provided for, and subject as provided, in any regulations issued for this purpose under the Companies Law or such as may otherwise from time to time be adopted by the Directors on behalf of the Company and the rules of any relevant system and accordingly no provision of the Articles shall apply in respect of an uncertificated Share to the extent that it requires or contemplates the effecting of a transfer by an instrument in writing or the production of a certificate for the shares to be transferred Register of Members Subject to the provisions of the Guernsey USRs or the CREST Rules, the registration of transfers may be suspended at such times and for such periods as the Directors may from time to time determine, provided that such suspension shall not be for more than 30 days in any calendar year Qualified Holders No transfer to any person will be registered without the consent of the Directors if it would: (i) (ii) (iii) (iv) (v) give rise to an obligation on the Company to register as an investment company under the US Investment Company Act or any similar legislation; give rise to an obligation on the Company to register under the US Exchange Act, or any similar legislation; result in the Company not being considered a foreign private issuer as such term is defined in Rule 3b-4(c) under the US Exchange Act; result in a US Plan Investor holding shares; or result in a person holding shares in violation of the transfer restrictions put forth in any prospectus published by the Company from time to time, (each person described in (i) through (v) above, a Prohibited Person ), and in each of the cases described in (i) through (v) above, only to the extent permitted under the Guernsey USRs or the CREST Rules. If it shall come to the notice of the Directors that: (i) (ii) (iii) (iv) a Prohibited Person holds or is a beneficial owner of shares; that any shares are held or beneficially owned in a manner that would, in the absolute discretion of the Directors, prevent the Company from relying on the exemption from the obligation to register as an investment company under the US Investment Company Act; or the holding or beneficial ownership of any shares (whether on its own or in conjunction with any other shares) would in the absolute discretion of the board of Directors cause the assets of the Company to be considered plan assets within the meaning of the US Plan Asset Regulations; then any shares which the Directors decide, in their absolute discretion, are shares which are held or beneficially owned as described above (such shares, together the Prohibited Shares ) must be dealt with as described below. The Directors shall give written notice to the holder of any share which the Directors decide, in their absolute discretion, to be a Prohibited Share requiring him within 21 days (or such other time as the Directors consider reasonable) to provide the Directors with sufficient satisfactory documentary evidence to satisfy the Directors that such share is not a Prohibited Share or to sell or transfer (and/or procure the disposal of interests in) such share to another person so that it will cease to be a Prohibited Share and to provide the Directors with satisfactory evidence of such sale or transfer. From the date of such notice until such person has established to the satisfaction of the Directors that the share is not a Prohibited Share or until registration of such a transfer or a transfer arranged by the Directors as referred to below: 77

78 c110178pu050 Proof 5: _08:33 B/L Revision: 0 Operator YouG (i) (ii) the share will not confer any right on the holder to receive notice of or to attend or vote at general meetings of the Company and of any class of members (and those rights will vest in the chairman of any such meeting, who may exercise or refrain from exercising them entirely at his discretion); and no payments shall be made by the Company in respect of such Prohibited Shares. Further, the holder shall repay the Company any amounts distributed to such holder by the Company during the time such holder held Prohibited Shares. If the notice is not complied with within 21 days (or such other time as the Directors consider reasonable) to the satisfaction of the Directors, the Directors may, in their absolute discretion: (i) (ii) impose a penalty for each day such beneficial holder continues to hold Prohibited Shares; or to the extent permitted under the Guernsey USRs or the CREST Rules, arrange for the Company to sell the Share at the best price reasonably obtainable to any other person so that the Share will cease to be a Prohibited Share. For the purpose of arranging the sale of Prohibited Shares to any other person so that the shares will cease to be Prohibited Shares, the Directors may, but only to the extent permitted under the Guernsey USRs or the CREST Rules: (1) require that the member in question execute powers of attorney or other authorisations as the Directors, in their discretion, deem necessary to effect the transfer as if such transfer had been executed by the holder of, or person entitled to transfer, the Shares; or (2) (a) in the case of a share in certificated form, authorise in writing any officer of the Company or person appointed by them to execute on behalf of the member a transfer of the share to a purchaser and may issue a new certificate to such purchaser; or (b) in the case of a share in uncertificated form: (i) may instruct Euroclear or the operator of any other relevant system to convert such uncertificated share into certificated form and take such other steps (including the giving of directions to or on behalf of the member who shall be bound by them) as they think fit to effect the transfer of the share to that person; or (ii) as irrevocably authorised by the Articles, authorise any officer of the Company or any person appointed by the Directors, to deliver an instruction to Euroclear, or the operator of any other relevant system, or to complete and execute all or any documents required to effect such transfer as required by Euroclear or the operator of any other relevant system. The purchaser will not be bound to see to the application of the purchase monies nor will his title to the shares be affected by an irregularity or invalidity in the proceedings relating to the sale. The net proceeds of sale will belong to the Company and, upon their receipt, the Company will become indebted to the former holder of, or person entitled to transfer, the shares for an amount equal to the net proceeds. No trust will be created in respect of the debt and no interest will be payable in respect of it and the Company will not be required to account for any moneys earned from the net proceeds which may be employed in the business of the Company or as it thinks fit. Payment of any amount due to the former holder of, or person entitled by transmission to, the shares shall be subject to any requisite exchange control consents first having been obtained and the satisfactory completion by the Company or its authorised agent of any relevant anti-money laundering due diligence and the amount due to such person will be deposited by the Company in a bank for payment to such person upon such consent being obtained against surrender of the certificate or certificates representing the relevant shares previously held by such person. 78

79 c110178pu050 Proof 5: _08:33 B/L Revision: 0 Operator YouG Upon deposit of such amount as aforesaid, such person shall have no further interest in such relevant shares or any of them or any claim against the Company in respect thereof except the right to receive such amount so deposited (without interest) upon such consents as aforesaid being obtained Untraceable members The Company shall be entitled to sell (at a price which the Company shall use its reasonable endeavours to ensure is the best obtainable) the shares of a member or the shares to which a person is entitled by virtue of transmission on death or insolvency or otherwise by operation of law if and provided that: (i) during the period of not less than 12 years prior to the date of the publication of the advertisements referred to below (or, if published on different dates, the first thereof) at least three dividends in respect of the shares in question have become payable and no dividend in respect of those shares has been claimed; and (ii) the Company shall following the expiry of such period of 12 years have inserted advertisements in a national newspaper and/or in a newspaper circulating in the area in which the last known address of the member or the address at which service of notices may be effected under the Articles is located giving notice of its intention to sell the said shares; and (iii) during the period of three months following the publication of such advertisements (or, if published on different dates, the last thereof) the Company shall have received indication neither of the whereabouts nor of the existence of such member or person; and (iv) notice shall have been given to the stock exchanges on which the Company is listed, if any. The foregoing provisions are subject to any restrictions applicable under any regulations relating to the holding and/or transferring of securities in any paperless system as may be introduced from time to time in respect of the shares of the Company or any class thereof Alteration of Capital The Company may by ordinary resolution: (i) consolidate all or any of its share capital into shares of larger amount than its existing shares; (ii) subdivide all or any of its shares into shares of a smaller amount than its existing shares; (iii) cancel any shares which at the date of the resolution have not been taken or agreed to be taken and diminish the amount of its authorised share capital by the amount of shares so cancelled; (iv) redesignate the whole, or any particular class, of its shares into another class; (v) where its share capital is expressed in a particular currency or former currency, denominate or redenominate it, whether by expressing its amount in units or subdivisions of that currency or former currency; or (vi) convert all or any of its shares the nominal amount of which is expressed in a particular currency or former currency into shares of a nominal amount of a different currency. The Company may reduce its share capital, any capital redemption reserve fund or any share premium account in any manner and with, and subject to, any authority and consent required by the Companies Law Notices Any notice or communication to be given to or by any person may be given in any manner permitted by the Articles. A notice or other communication may be given by the Company to any member personally, by sending it by post in a pre-paid envelope addressed to the member at his registered address (or such other address as nominated for the purpose) or in electronic form. 79

80 c110178pu050 Proof 5: _08:33 B/L Revision: 0 Operator YouG A notice or other document sent by post shall, unless the contrary is shown, be deemed to have been received in the case of a notice sent to an address in the United Kingdom, Channel Islands or the Isle of Man, on the third business day after the day of posting and in the case of a notice sent elsewhere by airmail on the seventh day after the day of posting. Service of a document sent by post shall be proved by showing the date of posting, the address thereon and the fact of pre-payment. Any notice or other document, if transmitted by electronic communication facsimile transmission or other similar means which produce or enable the production of a document containing the text of the communication, shall be regarded as served at the expiration of twenty-four hours after the time it was sent. A notice or other communication may be given by the Company to the joint holders of a share by giving the notice or other communication to the joint holder first named in respect of the share in the register of members to be kept pursuant to the Companies Law. All members shall be deemed to have agreed to accept communication from the Company by electronic means in accordance with the Companies Law unless a member notifies the Company otherwise (which must be in writing and signed by the member and delivered to the registered office or such other place as directed by the Directors). Any notice or document delivered or other communication sent by post to or left at the registered address of any member shall, notwithstanding the death, disability or insolvency of such member and whether the Company has notice thereof, be deemed to have been duly served in respect of any share registered in the name of such member as sole or joint holder and such service shall, for all purposes, be deemed a sufficient service of such notice or document on all persons interested (whether jointly with or as claiming through or under him) in any such share. Notice for any general meeting shall be sent not less than 10 days before the meeting. Notices may be published on a website in accordance with the requirements of the Companies Law. The notice shall be exclusive of the day on which it is served or deemed to be served and of the day for which it is given and shall be given to: (i) every member entitled to receive notice of a general meeting; (ii) each Director; and (iii) each alternate Director. No other person shall be entitled to receive notices of general meetings. The notice must specify the time and place of the general meeting, the general nature of any business to be dealt with at the meeting, any special business to be transacted and such other information required by the Companies Law. With the consent in writing of all the members, a meeting may be convened by a shorter notice or at no notice in any manner they think fit. The accidental omission to give notice of any meeting or the nonreceipt of such notice by any member shall not invalidate any resolution, or any proposed resolution otherwise duly approved, passed or proceeding at any meeting Interests of Directors Subject to and in accordance with the Companies Law, a Director must, immediately after becoming aware of the fact that he is interested in a transaction or proposed transaction with the Company, disclose that fact to the Directors (including, if the monetary value of the Director s interest is quantifiable, the nature and monetary value of that interest, or if the monetary value of the Director s interest is not quantifiable, the nature and extent of that interest). Subject to the provisions of the Companies Law, and provided that he has disclosed to the Directors the nature and extent of any interests of his, a Director notwithstanding his office: (i) may hold any other office or place of profit under the Company (other than the office of auditor) in conjunction with his office of Director on such terms as to the tenure of office and otherwise as the Directors may determine; 80

81 c110178pu050 Proof 5: _08:33 B/L Revision: 0 Operator YouG (ii) may be a party to, or otherwise interested in, any transaction or arrangement with the Company or in which the Company is otherwise interested; (iii) may be a director or other officer of, or employed by, or a party to any transaction or arrangement with, a shareholder of or otherwise interested in, any body corporate promoted by the Company or in which the Company is otherwise interested; (iv) shall not, by reason of his office, be accountable to the Company for any remuneration or benefit which he derives from any such office or employment or from any such transaction or arrangement or from any interest in any such body corporate and no such transaction or arrangement shall be liable to be avoided on the ground of any such interest or benefit; (v) may act by himself or his firm in a professional capacity for the Company, other than as auditor, and he or his firm shall be entitled to remuneration for professional services as though he were not a Director of the Company; and (vi) may be counted in the quorum present at any meeting in relation to any resolution in respect of which he has declared an interest (but he may not vote thereon). (ii) (iii) Remuneration of Directors (i) The Directors shall be remunerated for their services at such rate as the Directors shall determine provided that the aggregate amount of such fees shall not exceed 200,000 per annum (or such larger sum as may be determined from time to time by ordinary resolution of the Company). The Directors shall also be entitled to be paid all reasonable travelling, hotel and incidental expenses properly incurred by them in attending and returning from general meetings, board or committee meetings or otherwise in connection with the performance of their duties. (ii) A Director may hold any other office or place of profit under the Company (other than the office of auditor) in conjunction with his office of Director on such terms as the Directors may determine. (iii) The Directors may from time to time appoint one or more of their body to the office of managing director for such term and at such remuneration and upon such terms as they determine. (iv) The Directors may at any time appoint any person to be a Director either to fill a casual vacancy or as an addition to the existing Directors. Any Director so appointed shall be eligible for re-election at the next annual general meeting following his appointment. Without prejudice to those powers, the Company in general meeting may by ordinary resolution appoint any person to be a Director either to fill a casual vacancy or as an additional Director. Retirement of Directors (i) At each annual general meeting of the Company one-third of the Directors (excluding any Director who has been appointed by the Board since the previous annual general meeting) or, if their number is not an integral multiple of three, the number nearest to one-third but not exceeding one-third shall retire from office (but so that if there are fewer than three Directors who are subject to retirement by rotation under this Article one shall retire) and shall be available for re-election at the same meeting. (ii) A Director shall not be required to hold any shares in the Company in order to qualify to be a Director. (iii) There is no age limit at which a Director is required to retire. (iv) The office of Director shall be vacated if, inter alia: (1) the Director resigns his office by written notice; (2) he shall have absented himself from meetings of the board of Directors for a consecutive period of 12 months and the Board resolves that his office shall be vacated; (3) he dies or he becomes of unsound mind or incapable; (4) he becomes insolvent, suspends payment or compounds with his creditors; 81

82 c110178pu050 Proof 5: _08:33 B/L Revision: 0 Operator YouG (5) he is requested to resign by written notice signed by all his co-directors; (6) the Company in general meeting by ordinary resolution shall declare that he shall cease to be a Director; (7) he becomes resident in the United Kingdom and, as a result, a majority of the Directors are resident in the United Kingdom; or (8) he becomes prohibited from being a Director by reason of any order made under any provisions or any law or enactment. (iv) (v) Borrowing Powers The Directors may exercise all the powers of the Company to borrow money to give guarantees, hypothecate, mortgage, charge or pledge all or part of the Company s assets, property or undertaking and uncalled capital or any part thereof and, subject to compliance with the Memorandum and the Articles, the Directors may issue securities whether outright or as security for any debt, liability or obligation of the Company or of any third party. Indemnity and Insurance The Directors, Company Secretary and officers for the time being of the Company and their respective heirs and executors shall, to the extent permitted by the Companies Law, be fully indemnified out of the assets and profits of the Company from and against all actions expenses and liabilities which they or their respective heirs or executors may incur by reason of any contract entered into or any act in or about the execution of their respective offices or trusts except such (if any) as they shall incur by or through their own negligence, default, breach of duty or breach of trust respectively and none of them shall be answerable for the acts receipts neglects or defaults of the others of them or for joining in any receipt for the sake of conformity or for any bankers or other person with whom any moneys or assets of the Company may be lodged or deposited for safe custody or for any bankers or other persons into whose hands any money or assets of the Company may come or for any defects of title of the Company to any property purchased or for insufficiency or deficiency of or defect in title of the Company to any security upon which any moneys of the Company shall be placed out or invested or for any loss misfortune or damage resulting from any such cause as aforesaid or which may happen in or about the execution of their respective offices or trusts except the same shall happen by or through their own negligence, default, breach of duty or breach of trust. The Directors may agree to such contractual indemnities for the benefit of the company secretary, officers, employees and other agents and contracting parties as they may from time to time, deem fit. In addition, the Board may purchase and maintain, at the expense of the Company, insurance for the benefit of the Directors, company secretary, officers, employees and other agents and/or to cover corporate reimbursement of such Directors, secretary, officers, employees and other agents. 6. Material Contracts The following are all of the contracts, not being contracts entered into in the ordinary course of business, that have been entered into by the Company since its incorporation or will be entered into shortly following Admission and are, or may be, material or that contain any provision under which any entity within the Company has any obligation or entitlement which is or may be material to the Company as at the date of this Prospectus: 6.1 The Placing and Offer Agreement, dated on or around the date of this Prospectus, between the Company, the Directors, the Investment Adviser, Hudnall and Cantor Fitzgerald, whereby Hudnall and Cantor Fitzgerald have agreed, as agents for the Company, to use their reasonable endeavours to procure subscribers for up to 150 million Shares under the Issue at the Issue Price. The obligations of the Company to issue Shares and the obligations of Hudnall and Cantor Fitzgerald to use reasonable endeavours to procure subscribers for the Shares to be issued under the Issue, are subject to conditions, including, amongst others, Admission occurring by not later than 8.00 a.m. on 22 July 2014 (or such later time and/or date as Hudnall and 82

83 c110178pu050 Proof 5: _08:33 B/L Revision: 0 Operator YouG Cantor Fitzgerald may agree with the Company) and the Placing and Offer Agreement not having been terminated. Hudnall and Cantor Fitzgerald may terminate the Placing and Offer Agreement in certain circumstances that are typical for an agreement of this nature prior to Admission. These circumstances include the breach by the Company or the Investment Adviser of the warranties given pursuant to the Placing and Offer Agreement, the occurrence of certain material adverse changes in the condition (financial or otherwise) or prospects or earnings of the Company, and certain adverse changes in financial, political or economic conditions. In consideration for their acting as Joint Financial Advisers and Bookrunners in the Issue, the Company has agreed to pay Hudnall and Cantor Fitzgerald a Placing commission. The Company has agreed to pay by way of reimbursement to Hudnall and Cantor Fitzgerald any stamp duty or stamp duty reserve tax arising on the issue of the Shares by them under the Issue and the Company has agreed to pay or cause to be paid (together with any related value added tax) certain costs, charges, fees and expenses of, or in connection with, or incidental to, amongst others, the Issue, Admission or the other arrangements contemplated by the Placing and Offer Agreement. The Company, the Directors and the Investment Adviser have given certain representations, warranties, undertakings and indemnities to Hudnall and Cantor Fitzgerald concerning, inter alia, the accuracy of information contained in this Prospectus. The warranties given by the Company, the Directors and the Investment Adviser are standard for an agreement of this nature. The Placing and Offer Agreement is governed by the law of England and Wales. 6.2 The Investment Advisory and Managed Account Agreement, dated on or around the date of this Prospectus, between the Company and the Investment Adviser, pursuant to which the Investment Adviser will manage the Listed Bond Portfolio within the parameters set by the Company and provide certain other ancillary investment advisory services, as agreed between the Company and the Investment Adviser from time to time. The Investment Adviser shall be entitled to a fee (such fee to accrue daily in arrear) at a rate of 0.35 per cent. of the value of authorised investments under management in respect of the Listed Bond Portfolio. The Investment Adviser will be indemnified against any losses or liabilities reasonably incurred by the Investment Adviser arising out of, or in connection with, and any costs, charges and expenses incurred in connection with, the Investment Adviser or any of its officers or agents acting under and in the proper performance of its services under the Investment Advisory and Managed Account Agreement or on account of any bona fide investment decision made by the Investment Adviser or its officers, employees or agents under the Investment Advisory and Managed Account Agreement except insofar as any loss, liability, cost, charge or expense is caused by the negligence, wilful default, fraud, dishonesty or breach of the Investment Advisory and Managed Account Agreement which is material in the context of the agreement by the Investment Adviser, or its officers or supervised agents. The Company will be indemnified by the Investment Adviser against any losses or liabilities reasonably incurred by the Company arising out of, or in connection with, and any costs, charges and expenses incurred in connection with, any negligence, wilful default, fraud, dishonesty or breach of the Investment Advisory and Managed Account Agreement by the Investment Adviser or its officers, employees or supervised agents. The Company will pay all taxes, costs, charges and expenses properly incurred by the Investment Adviser in connection with the investment and management of the Listed Bond Portfolio or the acquisition, disposal or maintenance of any authorised investment of the Listed Bond Porfolio or in acting under the Investment Advisory and Managed Account Agreement. The Company has given certain representations and warranties to the Investment Adviser pursuant to the Investment Advisory and Managed Account Agreement, which representations and warranties are standard for an agreement of this nature. This agreement may be terminated: 83

84 c110178pu050 Proof 5: _08:33 B/L Revision: 0 Operator YouG (i) (ii) by the Company on not less than six months written notice such notice not to be given prior to the second anniversary of the Investment Advisory and Managed Account Agreement; by the Investment Adviser on not less than six months written notice provided that such notice may not be given prior to the second anniversary of the Investment Advisory and Managed Account Agreement. Notwithstanding the foregoing, with the consent of the Company, a lesser period of notice may be given, provided that no such termination shall be effective until a replacement account manager is appointed. Either of the Company or the Investment Adviser may terminate the Investment Advisory and Managed Account Agreement earlier with immediate effect if: (a) (b) (c) (d) an order has been made or an effective resolution passed for the winding-up or liquidation of the other party; the other party ceases or threatens to cease to carry on its business; the other party has committed a material breach of the Investment Advisory and Managed Account Agreement and fails to remedy such breach within 30 days of receiving notice requiring it to do so; the other party ceases to hold any required authorisation to carry out its services under the Investment Advisory and Managed Account Agreement and fails to remedy the situation within a reasonable period specified; (e) the other party breaches any provision of the Investment Advisory and Managed Account Agreement and such breach results in the listing and trading of Shares on the London Stock Exchange to be suspended or terminated; and (f) they are required to do so by any relevant regulatory authority. On termination, the Company must pay accrued and escrowed management fees and expenses incurred in respect of the period to the date of termination. The Investment Advisory and Managed Account Agreement is governed by the laws of New South Wales, Australia. 6.3 The Limited Partnership Agreement and the Subscription Agreement Pursuant to the Subscription Agreement to be entered into on or around Admission between the Company and AMP Capital, the Company shall subscribe to IDF II (USD) on the terms set out in the Limited Partnership Agreement and gives certain warranties to AMP Capital and agrees to indemnify and hold harmless AMP Capital, IDF II (USD) and the General Partner for all losses which may arise as a result of the breach of such warranties by the Company and for any action for securities laws violations instituted by or on behalf of the Company that is finally resolved by judgment against the Company or in favour of an indemnified party. Pursuant to the Limited Partnership Agreement between the General Partner and the limited partners, investors may be admitted to IDF II or increase their commitments at any time up to the expiry of 18 months after the first close. After the first close, an investor participating in any subsequent closing will participate in all of the IDF II s investments and will be required to pay to IDF II: (i) (ii) for payment to the General Partner and/or distribution to any limited partners admitted in a prior closing (as applicable), its proportionate share of the General Partner s profit share retroactive to the first close, plus a premium amount equal to the Base Rate, plus 7 per cent. per annum; and for distribution to any limited partners admitted in a prior closing: (a) (b) (c) its proportionate share of all amounts called prior to its admission to IDF II in respect of establishment costs and operating expenses (in each case as defined in this paragraph 6.3); its proportionate share of the original cost of any unrealised investments; and a premium amount equal to the Base Rate plus 7 per cent. per annum multiplied by the amounts referred to in (a) and (b) above. 84

85 c110178pu050 Proof 5: _08:33 B/L Revision: 0 Operator YouG Amounts distributed pursuant to this paragraph 6.3 (ii) to any limited partner admitted in a prior closing will be added to that limited partner s unfunded commitment provided that premiums distributed to limited partners under this paragraph 6.3 will not be added to that limited partner s unfunded commitment and will not reduce the unfunded commitment of limited partners admitted at subsequent closings. It is estimated that the Company will pay IDF II up to US$0.2 million in addition to its called capital payment in order to satisfy its obligations under the above payment arrangement. Drawdowns of commitments to IDF II will be made as required, pro rata to commitments, on not less than 10 business days notice. Drawdowns may be cancelled or deferred prior to the due date. Bridging finance for the initial funding of costs and investments may be arranged for IDF II, so as to allow drawdowns on commitments to occur on a periodic basis during the commitment period. Fund drawdowns and pending distributions may be offset (at a cash level only). If an investor fails to comply with a drawdown notice, interest will accrue on the unpaid amount at the daily average rate of the Base Rate weighted by reference to the defaulted amounts plus a default margin of 7 per cent. per annum. If the unpaid amount plus accrued interest is not paid within 14 days (or such later date as AMP Capital may allow) customary default provisions, including forfeiture and forced sale, may apply subject to certain agreed exemptions. Commitments that are drawn down from investors and subsequently repaid may be redrawn by the manager in certain circumstances. In certain circumstances, IDF II may recall distributions to satisfy its liabilities where the liability would have reduced the distributions received by investors if the liability had been incurred prior to the time that the distribution was made. From time to time and prior to 90 days after the final close, the parallel partnerships may purchase and sell investments such that each parallel partnership holds interests in each investment that are proportionate to its commitments. IDF II will be entitled to co-invest in any transaction with any person or to invite some or all investors to co-invest with it in any transaction, on such terms as AMP Capital, as investment manager of IDF II, may determine. Taking into consideration a volume based discount of 0.3 per cent. (on the basis that the Company will commit to invest greater than US$100 million in IDF II), the profit share payable by the Company to the General Partner will be 0.7 per cent. per annum of Total Invested Capital, payable quarterly in advance. AMP Capital will be entitled to charge portfolio companies or other parties fees directly referable to the making of investments ( Upfront Fees ). Upfront Fees will be credited to IDF II or offset in full against the General Partner s profit share. Other amounts received by the General Partner or, in connection with its management of IDF II, AMP Capital will generally be credited to IDF II or offset in full against the General Partner s profit share. After settling any expenses and liabilities of IDF II, including the General Partner s profit share, distributions will be made in respect of each investor in the following order of priority: (i) Capital return: First, 100 per cent. to the relevant investor in repayment of its drawn down commitment. (ii) Preferred Return: Then, 100 per cent. to the relevant investor until it receives an amount equal to the Preferred Return against its drawn down commitment. (iii) Catch-up: Then 100 per cent. to the carried interest participant (the General Partner) until amounts distributed to the carried interest participant under this paragraph represent 15 per cent. of the aggregate amounts distributed to the relevant investor and the carried interest participant in respect of such investor in excess of the capital return referred to in the first bullet point above. (iv) 85/15 split: Thereafter, 85 per cent. to the relevant investor and 15 per cent. to the carried interest participant. Distributions to investors will be calculated before the impact of: (i) withholding taxes; 85

86 c110178pu050 Proof 5: _08:33 B/L Revision: 0 Operator YouG (ii) (iii) foreign tax credits; and any income taxes payable by IDF II in any international jurisdiction. Investors may not sell, assign, transfer, exchange, pledge or encumber any interest in IDF II without the consent of AMP Capital or to: (i) (ii) (iii) competitors of AMP Capital or AMP Capital s affiliates; persons that are not qualified investors; or distressed debt funds. In general, withdrawals of interests in IDF II are not permitted. The Company has agreed to indemnify IDF II, AMP Capital and their respective agents and affiliates in respect of any loss which may result directly or indirectly from the Company s breach of the subscription arrangements, including failing to pay drawdowns by the time specified in a drawdown notice. The General Partner, AMP Capital and their respective affiliates, officers, directors, agents, delegates, consultants, employees and members of the representative board shall each be entitled to be indemnified out of the assets of IDF II against any claims, liabilities, actions, proceedings, costs, damages, demands or expenses incurred or threatened by reason of their activities on behalf of IDF II, apart from matters resulting from fraud, wilful misconduct, bad faith or gross negligence. After the second anniversary of the final closing, investors holding not less than 75 per cent. of total commitments will be entitled, by resolution, to replace the General Partner as general partner of the IDF II. On removal, the General Partner will be entitled to a termination fee equivalent to 12 months profit share. Carried interest participants will be entitled to retain carried interest attributable to investments made before the General Partner s removal. No termination fee will be payable if the General Partner is terminated for cause (fraud or gross negligence having a materially adverse impact on IDF II). 6.4 The Side Letter to be entered into on or around Admission between the Company and AMP Capital sets out certain circumstances that are typical for an agreement of this nature where the Company shall be exempt from satisfying a drawdown. The Side Letter also acknowledges that as the Company will be listed on the London Stock Exchange, in order to comply with its legal and regulatory obligations, the Company may be required to provide to its shareholders, and/or publish on a regulatory information service of the London Stock Exchange (which is in effect a public announcement to the market), certain information provided to it by AMP Capital relating to the Company s interest in IDF II (USD). Further, under the Side Letter, AMP Capital agrees that the Company will not be deemed to be in breach of the Limited Partnership Agreement if it discloses such information to its shareholders, and/or publishes the same on a regulatory information service of the London Stock Exchange solely to the extent that such disclosure is required to comply with the Company s legal and regulatory obligations. 6.5 The Shareholder Liaison Agreement dated on or around the date of this Prospectus between Hudnall and the Company, pursuant to which the Company appoints Hudnall to, inter alia: meet with Shareholders on a regular basis including after the announcements of annual and interim results by the Company; upon receiving access to it, monitor the Shareholder register of the Company and report to the Company on its Shareholder composition and significant Shareholders; and track the market price and any discount to NAV at which the Shares may be trading. Hudnall is entitled to an annual fee from the Company of 5.625bps of the NAV of the Company in respect of its services pursuant to the Shareholder Liaison Agreement. The Shareholder Liaison Agreement may be terminated by either party (i) on one month s written notice or (ii) immediately by written notice in certain circumstances, including where the other party goes into liquidation or becomes subject to similar insolvency proceedings or where the other party has committed a material breach of its obligations and fails to remedy such breach within 30 days after receiving written notice requiring the same to be remedied. 86

87 c110178pu050 Proof 5: _08:33 B/L Revision: 0 Operator YouG 6.6 The Administration Agreement dated on or around the date of this Prospectus, between the Company and the Administrator, pursuant to which the Administrator will provide administration and company secretarial services to the Company. Under the terms of the Administration Agreement, the Administrator is entitled to various fees, which are expected to be approximately 85,500 in aggregate per annum, and reasonable out of pocket expenses. The Administrator may, with the consent of the Company and subject to compliance with the GFSC guidance note on oursourcing, delegate the provision of administrative functions and other services to a third party. The Company has given certain market standard indemnities in favour of the Administrator in respect of the Administrator s potential losses in carrying out its responsibilities under the Administration Agreement. The Administration Agreement may be terminated by either party on giving not less than sixty Business Days notice (ending on the last day of a calendar month). The Administration Agreement may be terminated immediately by either party by written notice if: (i) the other party is declared insolvent, declared en état de désastre, enters into any arrangements with creditors, stops or threatens to stop payment of debts, has a receiver appointed or is the subject of any similar measure; (ii) the other party is guilty of fraud, wilful misconduct, material breach of duty or negligence in connection with the Administration Agreement; or (iii) the other party has committed any material breach of the Administration Agreement and failed to remedy such breach within 30 Business Days of receiving a written notice of the material breach. The Company may terminate the Administration Agreement by written notice if the Administrator ceases to be licensed to act pursuant to the Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended. The Administration Agreement is governed by the laws of the Island of Guernsey. 6.7 The Custody Agreement is expected to be entered into on or around Admission, between the Company (or a subsidiary thereof) and the Custodian, pursuant to which the Company (or a subsidiary thereof) has appointed the Custodian to act as principal custodian of the Company s investments in the Listed Bond Portfolio, cash and cash equivalent assets. The fees payable to the Custodian pursuant to the Custody Agreement are expected to be approximately 20,000 to 35,000 per annum; such fee only to be payable as long as there are assets held in the Listed Bond Portfolio. It is expected that the Company (or a subsidiary thereof) will give certain market standard indemnities to the Custodian in respect of the Custodian s potential losses in carrying on the services it is to provide under the Custody Agreement. The Custody Agreement is governed by the laws of the Grand Duchy of Luxembourg. 6.8 The Registrar Agreement dated on or around the date of this Prospectus, between the Company and the Registrar, pursuant to which the Company has appointed the Registrar to act as registrar of the Company. The Registrar Agreement may be terminated by either the Company or the Registrar giving to the other at any time not less than six months written notice. The Registrar will be entitled to an annual basic fee from the Company equal to 6,500. The Registrar Agreement may be terminated immediately by written notice by any party if the other party: (i) is in persistent or material breach of any term of Registrar Agreement and has failed to remedy such breach within 21 days of receiving a written notice of the breach; (ii) goes into insolvency or liquidation (not being a members voluntary winding up) or has a receiver or administrator appointed; (iii) ceases to have the appropriate authorisations, which permit it to lawfully perform its obligations under the Registrar Agreement at any time. Other registrar activity will be charged for in accordance with the Registrar s normal tariff as listed in the Registrar Agreement. The Registrar Agreement is governed by the laws of the Island of Guernsey. 87

88 c110178pu050 Proof 5: _08:33 B/L Revision: 0 Operator YouG 7. Litigation Since the incorporation of the Company there have been no governmental, legal or arbitration proceedings nor, so far as the Company is aware, are there any governmental, legal or arbitration proceedings pending or threatened which may have, or have since incorporation had, significant effects on the Company s financial position or profitability. 8. Related Party Transactions Save as described in paragraphs 3 and 6 of this Part IV, the Company has not entered into any related party transactions since incorporation. 9. Third Party Information Where third party information has been referenced in this Prospectus, the source of that third party information has been disclosed. Where information contained in this Prospectus has been sourced from a third party, the Company confirms that such information has been accurately reproduced and, as far as the Company is aware and able to ascertain from information published by such third parties, no facts have been omitted which would render the reproduced information inaccurate or misleading. 10. Working Capital The Company is of the opinion that, on the basis that the Minimum Net Issue Proceeds are raised, the working capital available to the Company is sufficient for the present requirements of the Company, that is, for at least the next 12 months from the date of this Prospectus. 11. Capitalisation and Indebtedness The following table shows the Company s gross indebtedness as at 3 July 2014, being the latest practicable date prior to the publication of this Prospectus. As at 3 July 2014 Total current debt Guaranteed... 0 Secured... 0 Unguaranteed/unsecured... 0 Total non current debt (excluding current position of non current debt) Guaranteed... 0 Secured... 0 Unguaranteed/unsecured The following table shows the capitalisation of the Company as at 3 July 2014, being the latest practicable date prior to the publication of this Prospectus: As at 3 July 2014 Shareholders equity Share capital... 0 Legal reserve... 0 Other reserves... 0 Total... 0 As at the date of this Prospectus, the Company has nil net indebtedness. 88

89 c110178pu050 Proof 5: _08:33 B/L Revision: 0 Operator YouG 12. Significant Change Since its incorporation the Company has not commenced operations and therefore has not generated earnings; following the completion of the Issue it is expected that the Company will derive earnings from its gross assets in the form of interest. There has been no significant change in the trading or financial position of the Company since the date of its incorporation. 13. Relationship between Shareholders, the Company and Service Providers Relationship between Shareholders and the Company 13.1 The Company is a non-cellular company limited by shares, registered and incorporated in Guernsey under the Companies Law. While prospective investors will acquire an interest in the Company on subscribing for Shares, the Company is the sole legal and/or beneficial owner of its investments. Consequently, Shareholders have no direct legal or beneficial interest in those investments. The liability of Shareholders for the debts and other obligations of the Company is limited to the amount unpaid, if any, on the Shares held by them Shareholders rights in respect of their investment in the Company are governed by the Articles, the Companies Law and the terms of any placing letter (as appropriate). Under Guernsey law, the following types of claims may in certain circumstances be brought against a company by its shareholders: (i) (ii) (iii) (iv) (v) contractual claims under its articles of incorporation; claims in misrepresentation in respect of statements made in its prospectus and other documents; claims in respect of assumptions of responsibility by a director in favour of an individual shareholder; unfair prejudice claims under sections 349 to 352 of the Companies Law; and derivative actions arising under Guernsey customary law. In the event that a Shareholder considers that it may have a claim against the Company in connection with its investment in the Company, such Shareholder should consult its own legal advisers. Rights against third parties, including third party service providers 13.3 The Company is in part reliant on the performance of third party service providers, including the Investment Adviser, the Registrar and the Administrator Without prejudice to any potential right of action in tort that a Shareholder may have to bring a claim against a service provider, each Shareholder s contractual relationship in respect of his investment in Shares is with the Company only. Accordingly, no Shareholder will have any contractual claim against any service provider with respect to such service provider s default In the event that a Shareholder considers that he may have a claim against a third party service provider in connection with such Shareholder s investment in the Company, such Shareholder should consult his own legal advisers. 14. Jurisdiction and Applicable Law and Recognition and Enforcement of Foreign Judgments Jurisdiction and applicable law 14.1 As noted above, Shareholders rights are governed principally by the Articles and the Companies Law. By subscribing for Shares, investors agree to be bound by the Articles, the terms of the Offer and the terms of any placing letter (as appropriate), which are governed by, and construed in accordance with, the laws of Guernsey or England and Wales, as appropriate. Recognition and enforcement of foreign judgments 14.2 A final and conclusive judgment under which a sum of money is payable (not being a sum payable in respect of taxes or other charges of a like nature or in respect of a fine or penalty) obtained in the superior courts in the reciprocating countries set out in the Judgments (Reciprocal Enforcement) (Guernsey) Law 1957 (the 1957 Law ) (which include the Supreme Court and the Senior Courts of England and Wales, excluding the Crown Court) 89

90 c110178pu050 Proof 5: _08:33 B/L Revision: 0 Operator YouG after a hearing on the merits would be recognised as a valid judgment by the Guernsey courts and would be enforceable in accordance with and subject to the provisions of the 1957 Law The Courts of Guernsey would also recognise any final and conclusive judgment under which a sum of money is payable (not being a sum payable in respect of taxes or other charges of a like nature or in respect of a fine or other penalty) obtained in a court not recognised by the 1957 Law provided such court is deemed to have jurisdiction in accordance with the principles of private international law as applied by Guernsey, and such judgment would be sufficient to form the basis of proceedings in the Guernsey Courts for a claim for liquidated damages in the amount of such judgment. In such proceedings, the Guernsey Courts would not re-hear the case on its merits save as in accordance with such principles of private international law. 15. General 15.1 The placing of the Shares is being carried out on behalf of the Company by Hudnall and Cantor Fitzgerald, both of which are authorised and regulated in the UK by the Financial Conduct Authority The principal place of business and registered office of the Company is at 1 Royal Plaza, Royal Avenue, St Peter Port, Guernsey, GY1 2HL No amount or benefit has been paid, or given, to any promoter of the Company or any of their subsidiaries since the incorporation of the Company and none is intended to be paid, or given Applications will be made to the London Stock Exchange for such Shares to be admitted to trading on the SFM. It is expected that admission will become effective, and that dealings will commence, on 22 July No application is being made for the Shares to be dealt with in or on any stock exchanges or investment exchanges other than the London Stock Exchange The Company does not own any premises and does not lease any premises. The Company currently has no subsidiaries or employees The City Code on Takeovers and Mergers (the City Code ) applies to the Company. Under Rule 9 of the City Code, if: (i) a person acquires an interest in shares in the Company which, when taken together with shares already held by him or persons acting in concert with him, carry 30 per cent. or more of the voting rights in the Company; or (ii) a person who, together with persons acting in concert with him, is interested in not less than 30 per cent. and not more than 50 per cent. of the voting rights in the Company acquires additional interests in shares which increase the percentage of shares carrying voting rights in which that person is interested, the acquiror and, depending on the circumstances, its concert parties, would be required (except with the consent of the Panel on Takeovers and Mergers) to make a cash offer for the outstanding shares in the Company at a price not less than the highest price paid for any interests in the Shares by the acquiror or its concert parties during the previous 12 months Part XVIII of the Companies Law governs situations where a scheme or contract (a Scheme ) involves the transfer of shares in a company by a transferor (the Transferor ) to a transferee (the Transferee ). If, within four months of making an offer in respect of a Scheme, the offer is approved by shareholders comprising 90 per cent. in value of the shares affected (excluding any shares held as treasury shares), the Transferee may, within two months after the expiration of those four months, give notice to any dissenting shareholder that it desires to acquire his shares (a Notice To Acquire ). Where a Notice To Acquire is given (unless cancelled by the court), the Transferee is entitled and bound to acquire those shares on the terms set out in the Scheme. Unless the Notice To Acquire has been cancelled by the Court, the Transferee shall, on the expiration of one month from the date of the Notice To Acquire, send a copy of the Notice To Acquire to the Transferor and pay or transfer to the Transferor the consideration required under the Notice To Acquire in respect of those shares, and the Transferor shall thereupon register the Transferee as the holder of those shares. The consideration so received will be paid into a separate bank account and held on trust for the shareholders whose shares were the subject of the Notice To Acquire. A dissenting 90

91 c110178pu050 Proof 5: _08:33 B/L Revision: 0 Operator YouG shareholder may apply to the court to cancel a Notice To Acquire, within one month of the date of such notice. The Court, on such an application, may cancel the notice or make such order as it thinks fit. 16. New UK Rules on Marketing of Pooled Investments In June 2013 the FCA published a policy statement setting out final rules restricting the marketing within the UK of certain pooled investments or funds, referred to in the rules as non-mainstream pooled investments (NMPIs), to ordinary retail clients. These rules took effect from 1 January Subject to any later changes to these rules or material change to the Company s investment policy, it is expected that the Company will not be subject to the marketing restrictions under these rules. 17. Documents Available for Inspection Copies of the following documents will be available for inspection at the registered office of the Company and the offices of Herbert Smith Freehills LLP, Exchange House, Primrose Street, London EC2A 2EG during normal business hours on any weekday (Saturdays and Public Holidays excepted) until the date of Admission: (i) the Memorandum and Articles; and (ii) this Prospectus. In addition, copies of this Prospectus will be uploaded to the National Storage Mechanism at ( Following Admission, copies of the Company s interim management statements, half-yearly financial and the audited annual financial report and accounts will also, as and when published, be available for inspection at the Company s registered office during normal business hours, as above. 91

92 c110178pu060 Proof 5: _08:34 B/L Revision: 0 Operator YouG PART V ADDITIONAL INFORMATION ON IDF II (USD), LP 1. AMP Capital Infrastructure Debt Fund II (USD), LP IDF II (USD) is a limited partnership registered by the Assistant Registrar of Exempted Limited Partnership of the Cayman Islands on 8 March 2013 under registration number It is domiciled in the Cayman Islands and was established under the Cayman Islands Exempted Limited Partnership Law, IDF II (USD) is not authorised or regulated by the Financial Conduct Authority, the GFSC or any other regulatory authority. The General Partner of IDF II (USD) is AMP Capital Investors (IDF II GP) S.à.r.l. The General Partner is responsible for the management, operation and administration of the affairs of IDF II (USD). IDF II (USD) is part of a structure consisting of parallel limited partnerships and entities allowing investor participation via various currency denominations, including US Dollars, Euro and the Japanese Yen (together, IDF II). The parallel funds will invest in parallel pro rata to their respective commitments as at final closing based on the prevailing currency exchange rates. Additional parallel or other vehicles may also be created to meet particular investors needs, at the discretion of AMP Capital. IDF II (USD) accepted its first limited partners on 23 August 2013 and will continue in existence until the later of: (i) 22 August 2023; or (ii) the date by which all investments of IDF II (USD) have been liquidated. IDF II (USD) may also be dissolved earlier or its term may be extended for up to another two years by the General Partner, with the approval of investors holding not less than 75 per cent. of the aggregate commitments to IDF II (USD) and its parallel funds. IDF II (USD) has two wholly-owned subsidiaries, AMP Capital Investors (IDF II USD No. 1) S.à.r.l. and AMP Capital Investors (IDF II USD No.2) S.à.r.l., whose registered offices are in the Grand Duchy of Luxembourg. 2. Investment Objective The principal objective of IDF II (and hence IDF II (USD)) is to invest in the subordinated debt of defensive, non-cyclical infrastructure businesses, targeting sectors that serve as the backbone for the provision of essential products such as water, gas, electricity and transport. 3. Investment Policy and Restrictions IDF II (USD) seeks to achieve diversification across industry, sector and geography and adopts a buy and hold approach to its investments. IDF II (USD) has a specific focus on subordinated debt, and aims to deliver attractive risk adjusted returns focused on cash yield by investing in defensive private debt assets that can perform across different market cycles. IDF II (USD) may only invest in situations where the underlying business is incorporated in, has headquarters in, has the greatest part of its operational assets located in, generates the greatest part of its revenues from, or where the sponsor of the relevant transaction is based in, OECD member countries. The investment limit in respect of a single portfolio company is equal to 15 per cent. of total commitments provided that: * an investment in a portfolio company is reduced by the aggregate amount of all proceeds received by IDF II from that portfolio company, and * for investments made prior to the final close, determinations are made as if aggregate commitments were equal to the greater of the actual amount of aggregate commitments and US$1.0 billion. Changes to the investment policy of IDF II Changes to the IDF II investment policy would require variation of the relevant agreements constituting IDF II, including the Limited Partnership Agreement (for which the written consent of the General Partner and, unless provided otherwise, the limited partners in all parallel funds representing not less than 75 per cent. of the commitments of all limited partners within IDF II would be required). 92

93 c110178pu060 Proof 5: _08:34 B/L Revision: 0 Operator YouG 4. Historical Performance Audited historical financial information for the period ended 31 December 2013 is set out in Part VI of this Prospectus. IDF II (USD) commenced operation on 23 August 2013; no other accounts or interim financial information are available as at the date of this Prospectus. IDF II (USD) s capital is represented by the net assets attributable to the partners. The table below provides details of the partners capital since inception as at 31 December 2013: General Partner USD Limited Partners USD Total USD Commitments ,750, ,750,000 Cumulative capital contributions... 43,585,437 43,585,437 Cumulative net contributions... 43,585,437 43,585,437 Cumulative net unrealised gains... 1,098,049 1,098,049 Cumulative other net income , ,633 Net assets attributable to partners... 45,040,119 45,040,119 The table below provides details of the partners capital as at 31 March 2014, being the latest practicable date prior to publication of this Prospectus: General Partner USD Limited Partners USD Total USD Commitments ,320, ,320,000 Cumulative capital contributions... 43,585,437 43,585,437 Cumulative net contributions... 43,118,418 43,118,418 Cumulative net unrealised gains... 1,268,437 1,268,437 Cumulative other net income , ,988 Income distributions... (10,776) (10,776) Net assets attributable to partners... 44,776,067 44,776, Significant Change On 16 January 2014, IDF II (USD) received new and additional commitments amounting to US$84.4 million in aggregate. On 20 February 2014, IDF II (USD) made a distribution to investors of US$477,793. On 27 March 2014, IDF II (USD) received new and additional commitments amounting to US$257.1 million in aggregate. On 22 May 2014, IDF II (USD) made a distribution to investors of US$150,000. There has otherwise been no significant change in the trading or financial position of IDF II (USD) since 31 December 2013, being the end of the last financial period for which audited accounts have been published. 6. Existing Investments The current called commitments in IDF II (USD) are invested in ADI Finance 2 Limited and Astoria Project Partners, LLC, further details of which are set out below. As at 31 December 2013, the audited fair value of IDF II (USD) s interests in ADI Finance 2 Ltd is US$27,461,443 and the audited fair value of IDF II (USD) s interests in Astoria Project Partners, LLC is US$16,585,000. There has been no material change in the investments held in the portfolio since the period ended 31 December 2013, being the period in respect of which the most recent audited accounts of IDF II (ISD) have been prepared. ADI Finance 2 Deal summary Investment summary Industry: Airports Invested date: Oct-13 Deal status: Unrealised Realisation date: Jul-20/22 AMP Capital role: Arranger/Secondary Invested capital: 50.0m Debt tranche: Subordinated Gross IRR to 31/12/13: 15.2% 1 Geography: UK 1 Includes impact of upfront fee. 93

94 c110178pu060 Proof 5: _08:34 B/L Revision: 0 Operator YouG Company overview ADI Finance 2 has subordinated security over Heathrow airport and non-regulated assets of Glasgow, Aberdeen and Southampton airports. These airports generate diversified revenue streams including landing charges from airlines, rents from shops, income from car parks and advertising, the rental of premises at the airports such as aircraft hangars, cargo, maintenance and office facilities, baggage handling and passenger check-in. Heathrow is regulated by the Civil Aviation Authority (CAA) which was established by the 1986 Airports Act, and has provided a stable platform for the past 25 years. Investment rationale Demand connected to the airport assets of ADI Finance 2 is resilient due to the good network of airlines and routes, strong catchment area and good mix between business and leisure traffic. Heathrow has a high exposure to the fast growing long haul intercontinental traffic and benefits from countercyclical transfer traffic, i.e. when origin and destination traffic falls, the airport attracts more transfer passengers. The management of ADI Finance 2 are experienced and well regarded. Moreover, there are high barriers to entry in this market: the UK government has adopted a policy to limit expansion of UK airports. There continues to be strong demand for landing slots at Heathrow with airlines willing to commit significant amounts in order to acquire slots. Further, ADI Finance 2 has robust, long-term cash flows linked to inflation, benefiting from a stable regulatory regime. Deal origination The Investment Adviser has completed a number of deals with ADI Finance 2, including as part of a group of investors who arranged the subordinated debt facility at ADI Finance 2. Astoria Deal summary Investment summary Industry: Energy Invested capital: US$50m Deal status: Unrealised Initial investment date: Dec-2013 AMP Capital role: Sole arranger Realisation date: Dec-2022 Debt tranche: Subordinated Gross IRR to 31/12/13: 9.4% Geography: North America Company overview Astoria is a fully operational combined cycle power generation plant located in Queens, New York, with a total generating capacity of 535MW (the Project ). The Project became a fully operational combined cycle power generation in May Investment rationale Astoria Power has a strong financial profile, with positive cash flow, operating in a welldefined regulatory environment controlled by the Federal Energy Regulatory Commission ( FERC ) and New York Independent System Operator. The Project is providing power into New York, one of the most constrained power markets in the US. This robust macroeconomic position is underpinned by strong fundamentals. The Project also benefits from an experienced management team and a group of sponsors that are industry leaders in power generation. Deal origination This deal was sourced through existing relationships with sponsors and financial advisers. 7. Deal Pipeline AMP Capital s investment team has identified a number of strong deal opportunities which would provide attractive opportunities for IDF II. Transactions identified include both new and refinancing situations. New facilities in which IDF II has an allocation in Australia and Europe are, as at the date of this Prospectus, in the documentation stage of the investment process. 94

95 c110178pu060 Proof 5: _08:34 B/L Revision: 0 Operator YouG It is expected that in early July 2014, investors in IDF II will be sent draw down notices to finance a further investment which is in documentation stage. This investment relates to the provision of debt financing for a portfolio of renewable energy assets located in North America and is expected to have a value of US$110 million. It is expected to have an 8.5 year term and deliver returns that are within IDF II s target range. These deal opportunities are not finalised agreements and there can be no certainty that these or similar opportunities will continue to be available in the future. Furthermore, the opportunities may not result in finalised deals. 8. Borrowing For the purpose of regularising drawdowns from investors and bridging the timing gaps between commitment to investments in line with its investment strategy and receipt of drawdowns from investors, IDF II may borrow up to US$150 million under the bridging facility, with such amounts to be distributed amongst the parallel funds as decided from time to time by the General Partner with reference to the commitments of each parallel fund. As at 31 March 2014, the facility size for IDF II (USD) is US$102 million, which is secured against IDF II s current assets including undrawn investor commitments. In practice, IDF II (USD) is unable to borrow for the purpose of leverage. 9. General Partner The General Partner is responsible for the management, operation and administration of the affairs of IDF II (USD). The General Partner is responsible for ensuring that IDF II (USD) is always managed and operated, and that its investment portfolio is always managed on a discretionary basis by AMP Capital or a management company that is an affiliate of the General Partner. The General Partner has power and authority conferred on it by the Limited Partnership Agreement which includes full power and authority to sign management agreements with the investment manager, execute documents or do any other act or thing which the investment manager may direct under the Limited Partnership Agreement or the management agreement, and generally, as a partner, represent IDF II (USD) in its dealings with the investment manager, or in relation to the protection of IDF II (USD) s assets, and as required by law or in any other respect, except where the power to do so is conferred on the investment manager. 10. Investment Manager The investment manager of IDF II (USD) is AMP Capital Investors Limited, AMP Sydney Cove Building, 33 Alfred Street, Sydney, NSW 2000, Australia (AMP Capital). AMP Capital has full control, subject to the terms of the Limited Partnership Agreement, over the business, assets, conduct and affairs of IDF II (USD), which includes any risk management or portfolio management functions on behalf of IDF II (USD). AMP Capital originates transactions and sources proprietary deal flow, and implements a three-stage investment process incorporating: * Initial review assessment of the opportunity for fit with investment strategy and preliminary due diligence of the business case to assess attractiveness and risk profile; * Risk management due diligence and fundamental business and credit analysis with a view to ensuring compliance with investment objective; and * Monitoring and asset management ongoing interaction with the management of portfolio companies to closely monitor covenant conditions and asset performance. In addition to the process of ongoing active management, the manager prepares a review of the performance of each of the investments on an annual basis. The documented findings of the annual review compare the latest performance of the business against forecasts in the original investment paper and, if necessary, a detailed analysis of any variance is performed. The analysis is then presented to the AMP Capital infrastructure debt investment committee on an annual basis. 95

96 c110178pu060 Proof 5: _08:34 B/L Revision: 0 Operator YouG 11. Investment Committee The members of the AMP Capital infrastructure debt investment committee, whose details are set out below, are responsible for considering and approving proposals from AMP Capital as investment manager. Scott Davies, Global Head of Infrastructure Scott Davies has over 20 years investment experience and a well-established presence in the global infrastructure space. Mr Davies brings a strong record of establishing and growing infrastructure businesses. Prior to joining AMP Capital in July 2011, Mr Davies was CEO of ASX-listed Macquarie Communications Infrastructure Group (MCG) from its inception in 2002, where he was accountable for all aspects of business performance and management. Prior to this, Mr Davies held senior investment roles for Macquarie Capital in New York and London between 1995 and 2002, where he was responsible for cross-border asset financing activities with a particular focus on the telecommunications sector. Mr Davies has also held roles at Hambros Bank in London and Sydney where he was team leader in mergers and acquisitions, primarily in telecommunications. Mr Davies holds a Bachelor of Laws from the University of Sydney (Australia) and is a member of AMP Capital s Infrastructure Debt Investment Committee. Andrew Jones, Managing Director Andrew Jones is responsible for leading AMP Capital s infrastructure debt activities globally. Mr Jones has over 25 years of experience in the industry, and joined the investment team in January Mr Jones has significant experience sourcing, arranging and managing infrastructure debt assets in all of the target markets of IDF II. From 2004 to 2010, he was a member of AMP Capital s Infrastructure Investment Committee which considered equity investments for AMP Capital s infrastructure equity investments. Prior to joining AMP Capital, Mr Jones held senior roles within the project finance teams at National Australia Bank and National Westminster Bank s Australian operations. Mr Jones holds a Bachelor of Arts in Economics from Flinders University (Australia) and is a Member of AMP Capital s Infrastructure Debt Investment Committee. Simon La Greca, Principal Simon La Greca joined AMP Capital in May Mr La Greca is responsible for sourcing, arranging and managing infrastructure debt investments in the Asia Pacific region and the US. Prior to joining AMP Capital, Mr La Greca was Manager of Project and Leveraged Finance within the global investment banking division of Deutsche Bank for three years. Mr La Greca has over 12 years of relevant market experience, holds a Bachelor of Business in Banking and Finance from Monash University (Australia), and is a Member of AMP Capital s Infrastructure Debt Investment Committee. Patrick Trears, Director Patrick Trears joined the AMP Capital infrastructure debt team in December Mr Trears is based at AMP Capital s New York office and is responsible for the sourcing and managing of infrastructure debt assets in the Americas. Mr Trears has over 12 years industry experience and joined AMP Capital from WestLB, where he was responsible for project and acquisition finance transactions in the Americas, supporting strategic financial sponsors. Prior to this, he held structured and project finance positions at Hypo Real Estate, Citi Investment Bank and DEPFA Bank (Ireland). Mr Trears holds a Bachelor of Commerce (Economics and Finance) (Honours) from University College Dublin, Ireland, and is a Member of AMP Capital s Infrastructure Debt Investment Committee. Sean Henaghan, Investment Director, Multi-Manager and Investment Solutions Sean Henaghan is responsible for the management of AMP Capital s flagship multi-manager capability, the Future Directions Funds (FDF) as well as the Responsible Investment Leaders (RIL) ESG Funds. He is also responsible for the multi-asset diversified fund portfolio management team. His role also encompasses oversight of the investment solutions/design function within the multi asset group (MAG). Mr Henaghan chairs the various investment committees which provide both strategic direction and fiduciary oversight to the MAG workgroups which contain members of both the internal MAG team and representatives from MAG s investment adviser consultants. He moved to AMP Capital in early 2006, prior to 96

97 c110178pu060 Proof 5: _08:34 B/L Revision: 0 Operator YouG which he spent 12 years at Watson Wyatt in New Zealand, Hong Kong, London, and for the last four years in Sydney. In his most recent role at Watson Wyatt, Mr Henaghan was a Director of Research with responsibility for the Asia Pacific region. Mr Henaghan has a Bachelor of Arts from Otago University majoring in Statistics and Economics and is a member of AMP Capital s Infrastructure Debt Investment and Property Investment Committees. Andrew McGregor, Head of Debt Advisory Andrew McGregor is responsible for managing AMP Capital s debt advisory team. Mr McGregor acts as lead on all major debt advisory transactions and works closely with AMP Capital s business units in evaluating and restructuring capital structures on a broad range of assets and potential acquisitions. Mr McGregor joined AMP Capital in 2003 to establish the AMP Capital Debt Advisory business, having had previous experience in both corporate and consulting roles. Mr McGregor trained as a Chartered Accountant with Arthur Anderson and holds a Bachelor of Business (Accounting) from Monash University (Australia). 12. Key-person provisions Certain individuals will be key people primarily responsible for managing or advising IDF II. If at any time prior to the expiry of the investment period of IDF II (that is, prior to 22 August 2017) fewer than three of the key people devote substantially all of their business time to the affairs of IDF II, the investment powers of IDF II shall be suspended and such suspension shall continue until replacements have been appointed who are satisfactory to investors holding more than 50 per cent. of total commitments across the parallel funds. If such investor approval is not obtained within 6 months of the relevant event, the investment period of IDF II will be deemed to have ended. 13. Other Service Providers Administrator Citco Fund Services (Cayman Islands) Limited is the administrator of IDF II (USD). As IDF II (USD) s administrator, it is responsible for the IDF II (USD) s general administrative functions such as the calculation and publication of the net asset values and maintenance of accounting and statutory records. Auditor Ernst & Young, located in 680 George Street, Sydney, NSW2000, Australia, is the independent auditor of IDF II (USD). Service provider fees The service providers are entitled to annual base fees and additional variable fees. The service provider fees are approximately US$200,000 per annum (as at 31 March 2014), excluding any non-recurring or extraordinary expenses. 14. Fees and Expenses General partner s profit share and carried interest Taking into consideration a volume based discount of 0.3 per cent. (on the basis that the Company will commit to invest greater than US$100 million in IDF II), the profit share payable by the Company to the General Partner will be 0.7 per cent. per annum of Total Invested Capital, payable quarterly in advance. Following the return of capital to the limited partners and the achievement of the Preferred Return, carried interest is applied in the ratio of 15 per cent. to the General Partner and 85 per cent. to the limited partners. Further details in relation to carried interest at the IDF II level, including the circumstances in which carried interest repayments may be made by the General Partner to ISD II (USD) are set out in paragraph 16 of this Part V. 97

98 c110178pu060 Proof 5: _08:34 B/L Revision: 0 Operator YouG Establishment costs IDF II bears the costs and expenses (including the out of pocket expenses of AMP Capital as investment manager of IDF II and any placement agent) incurred in connection with its establishment, up to US$2 million (plus any value-added or similar taxes). No excess has been or will be charged to IDF II. IDF II will not bear the cost of placement agent fees, if any. Operating expenses IDF II will bear its own operating expenses and will reimburse the operating expenses (other than overhead expenses) of AMP Capital relating to IDF II, including domiciliation, custodial and administration fees, board meeting costs, tax, legal and audit fees and third party costs arising from uncompleted transactions. This will include any fees or charges incurred in relation to any debt facilities. The General Partner shall bear the fees and charges of AMP Capital out of its profit share. 15. Transaction and other fees The General Partner will be entitled to charge portfolio companies or other parties Upfront Fees. Upfront Fees will be credited to IDF II or offset in full against the General Partner s profit share. Other amounts received by the General Partner or the IDF II investment manager in connection with its management of IDF II will generally be credited to IDF II or offset in full against the General Partner s profit share. 16. Distribution Policy After settling any expenses and liabilities of IDF II (USD) including the General Partner s profit share, distributions by IDF II (USD) will be made in respect of each investor in the following order of priority: * Capital return First, 100 per cent. to the relevant investor in repayment of its drawn down commitment; * Preferred Return Then, 100 per cent. to the relevant investor until it receives an amount equal to the Preferred Return against its drawn down commitment; * Catch-up Then 100 per cent. to the carried interest participant (in respect of IDF II, the General Partner) until amounts distributed to the carried interest participant under this paragraph represent 15 per cent. of the aggregate amounts distributed to the relevant investor and the carried interest participant in respect of such investor in excess of the capital return referred to in the first bullet point above; and * 85/15 split Thereafter, 85 per cent. to the relevant investor and 15 per cent. to the carried interest participant. Distributions to investors will be calculated before the impact of: (i) (ii) withholding taxes; foreign tax credits; and (iii) any income taxes payable by the relevant limited partnership in any international jurisdiction. In certain circumstances, IDF II (USD) may recall distributions to satisfy its liabilities where the liability would have reduced the distributions received by investors if the liability had been incurred by IDF II (USD) prior to the time that the distribution was made. Carried interest clawback At the end of the term of IDF II (USD), a calculation will be made to assess whether the carried interest participants have received excess payments of carried interest (that is, a greater amount than they would have received if all distributions of carried interest had been made on the last day of the term of IDF II (USD). 98

99 c110178pu060 Proof 5: _08:34 B/L Revision: 0 Operator YouG If excess payments have been made, AMP Capital will repay to IDF II (USD) the amount of that excess, less taxes which have or will be paid on that excess (including any tax losses or similar items which have or will be applied in respect of that excess). Timing of distributions Distributions of income and investment proceeds will be made as and when determined by the AMP Capital as investment manager of IDF II (USD). It is currently envisaged that distributions of net income available for distribution will be made quarterly, while net proceeds of the realisation of investments (calculated after making provision for costs and expenses of IDF II (USD)) will be distributed to investors as soon as practicable. 17. Timing of reports and financial statements, meetings Investors will receive annual audited accounts of IDF II (USD) prepared to 31 December in each year and unaudited quarterly reports providing descriptive investment information for each investment and their investment position. Annual meetings will be held at which reports on the progress of IDF II (USD) will be given. 18. Conflicts of Interest Each of the AMP Capital, the General Partner, the Administrator and/or their respective affiliates or any person connected with them may from time to time act as directors, investment manager, manager, general partner, director, registrar, broker, administrator, investment adviser, distributor or dealer in relation to, or be otherwise involved in, other investment funds (including IDF I and investment funds which may invest in IDF II and/or the Company) which have similar or different objectives to those of IDF II (USD). It is, therefore, possible that any of the foregoing may, in the course of business, have potential conflicts of interest with IDF II (USD). Each will, at all times, have regard in such event to its obligations to IDF II (USD) and will endeavour to ensure that such conflicts are resolved fairly. Further, subject to applicable law, any of the foregoing may deal, as principal or agent, with the Company and/or IDF II, provided that such dealings are carried out as if effected on normal commercial terms negotiated on an arm s length basis. AMP Capital and the General Partner The Investment Adviser and/or the General Partner may be involved in other financial, investment or professional activities that may give rise to conflicts of interest with the Company and/or IDF II. In particular, it currently provides, and expects to continue to provide, investment management, investment advice or other services in relation to a number of other companies, funds or accounts that may have similar investment objectives and/or policies to that of the Company and IDF II, and may receive ad valorem and/or performance-related fees for doing so. The Investment Adviser and/or the General Partner may give advice or take action with respect to its other clients that differs from the advice given or actions taken with respect to IDF II, but will ensure that transactions effected by it or an associate in which it or an associate has, directly or indirectly, a material interest or relationship of any description with another party, are effected on terms which are not materially less favourable to IDF II than if the potential conflict had not existed. During IDF II s commitment period, AMP Capital will ensure that investment opportunities meeting the investment criteria of IDF II are offered to IDF II in priority to any other funds or vehicles managed or advised by AMP Capital, provided that investment opportunities that also fall within the investment policy for IDF I will be offered to IDF I in priority to IDF II until the earlier of (i) the date on which IDF I is declared closed to new investments and (ii) the date on which the IDF I investment period expires. AMP Capital may offer other co-investment opportunities to investors at its sole discretion. Subject to certain stipulated exceptions, neither AMP Capital nor any of its affiliates in the AMP Group are permitted to invest a material amount (other than through IDF II, any parallel 99

100 c110178pu060 Proof 5: _08:34 B/L Revision: 0 Operator YouG fund or an alternative investment vehicle) in debt securities falling within the mandate of IDF II issued by an entity in which IDF II is either actively considering making an investment or has an existing investment. IDF II is restricted from investing in entities in which an affiliate has an existing economic interest, subject to certain specified exceptions. Other investors in IDF II Investors in IDF II may have conflicting investment, tax and other interests with respect to such investments, including conflicts relating to the structuring of investment acquisitions and dispositions. The conflicting interests of individual investors may relate to or arise from, among other things, the nature of investments, the structuring or the acquisition of investments and the timing of disposition of investments. As a consequence, conflicts of interest may arise in connection with decisions made by AMP Capital (in its capacity as investment manager of IDF II) relating to the nature or structuring of investments that may be more beneficial for one investor than for another investor, especially with respect to investors individual tax situations. In selecting and structuring investments appropriate for IDF II, AMP Capital, as investment manager to IDF II, will consider the investment and tax objectives of IDF II and its investors as a whole, not the investment, tax or other objectives of any investor individually. Any default by an investor, including the Company, in complying with draw down notices could have an adverse effect on IDF II s ability to complete a transaction and/or could increase the relative exposure of other investors to such transactions. If an investor defaults, they may be subject to various remedies, including a forfeiture of their IDF II interests. 19. Valuation IDF II has a hold-to-maturity strategy and, as such, its assets are valued at amortised cost as at the valuation date if there is no evidence of a material risk of loss. Material risk of loss is defined as an expectation that there is likely to be an event of default under the senior or junior loan obligations of the borrower leading to a potential loss for senior and junior (subordinated) lenders to the business, based on the projected performance of the business involved. Where the Investment Adviser believes that a material risk of loss will eventuate or does exist, the Investment Adviser obtains an independent valuation by an external appropriately qualified valuer. Based on this valuation, the value at which the loan asset is carried within IDF II is adjusted accordingly and may be reduced. 20. Calculation and Publication of Partners Capital IDF II (USD) calculates the NAV, as prepared by its administrator, on a monthly basis and publishes the NAV on a quarterly basis in the Statement of Partners Account. IDF II (USD) also publishes audited annual returns to 31 December in accordance with IFRS. 21. Investor Rights A representative board comprising investor nominees appointed by AMP Capital as IDF II investment manager, (the Representative Board ) will be established and will meet annually or more frequently if required. The Representative Board will provide a forum for raising with AMP Capital any issues of concern to investors, and will assist in the resolution of conflicts of interest. The Representative Board will not make decisions in relation to the making or realisation of investments or the management of IDF II. After the second anniversary of the final closing, investors holding not less than 75 per cent. of total commitments will be entitled, by resolution, to replace the General Partner as general partner of IDF II. On removal, the General Partner will be entitled to a termination fee equivalent to 12 months profit share. Carried interest participants will be entitled to retain carried interest attributable to investments made before the General Partner s removal. The termination fee will not be payable if the General Partner is terminated for cause (fraud or gross negligence having a materially adverse impact on IDF II). 100

101 c110178pu060 Proof 5: _08:34 B/L Revision: 0 Operator YouG 22. Hedging The working currency of IDF II (USD) is US dollars, but IDF II (USD) may invest in assets denominated in currencies other than US Dollars. The value of an investment may fall substantially as a result of fluctuations in the currency of the country in which the investment is made as against the value of the US Dollar, in which IDF II (USD) is denominated. AMP Capital may (but is not obligated to) endeavour to manage currency exposures to US Dollars. Certain of the IDF II parallel funds may use foreign exchange and interest rate hedging instruments to reduce foreign exchange and interest rate basis exposures related to fund investments. IDF II will not use credit hedging instruments, including credit default swaps, total rate of return swaps or other credit derivatives, for any other speculative purpose and will not hedge its exposure to variable interest rates on its debt investments. As amounts drawn under the bridging facility are expected to be repaid in a short time frame, IDF II will not hedge its exposure to variable interest rates on debt drawn under this facility. 23. Transfer of Interests and Withdrawal Investors may not sell, assign, transfer, exchange, pledge or encumber any interest in IDF II (USD) without the consent of AMP Capital or to: * competitors of AMP Capital or AMP Capital s affiliates; * persons that are not qualified investors; or * distressed debt funds. In general, withdrawals of interest in IDF II are not permitted. 24. Material Contracts The following are all of the contracts, not being contracts entered into in the ordinary course of business, that have been entered into by IDF II (USD) since its formation and which are, or may be, material or that contain any provision under which any entity within IDF II (USD) has any obligation or entitlement which is or may be material to IDF II (USD) as at the date of this Prospectus: The Limited Partnership Agreement between the General Partner and the limited partners, a summary of which is set out in paragraph 6.3 of Part IV of this Prospectus. 25. Litigation Since the formation of IDF II (USD) there have been no governmental, legal or arbitration proceedings nor, so far as IDF II (USD) is aware, are there any governmental, legal or arbitration proceedings pending or threatened which may have, or have since incorporation had, significant effects on IDF II (USD) or its group s financial position or profitability. 26. Related Party Transactions For the purposes of IDF II (USD), parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial or operational decisions. The General Partner is a related party of the IDF II Group, being responsible for the management, operation and administration of the affairs of the IDF II Group. The General Partner has no holding in the company. The General Partner is entitled to receive a profit share equal to 1.0 per cent. of the acquisition cost of IDF II investments (0.7 per cent., in the case of the Company). AMP Capital (Jersey No. 2) Limited, an affiliate of the General Partner, received a fee of 785,000 for coordinating the investment in ADI Finance 2 Ltd. In accordance with the LPA, IDF II (USD) s share has been offset against the General Partner s share and accordingly there is an amount in respect of a debtor balance presented as prepaid management fees of US$359,644 as at 31 December At period ended 31 December 2013, amounts due to affiliates is US$60,000 of which US$20,000 is payable to AMP Capital Investors Limited and US$40,000 is payable to AMP Capital Investors (IDF II GP) S.à.r.l. 101

102 c110178pu060 Proof 5: _08:34 B/L Revision: 0 Operator YouG Save as described in this paragraph 25 of this Part V of this Prospectus, IDF II has not entered into any related party transactions since incorporation. 102

103 c110178pu060 Proof 5: _08:34 B/L Revision: 0 Operator YouG PART VI FINANCIAL INFORMATION ON IDF II (USD) 103

104 AMP Capital Infrastructure Debt Fund II (USD), LP Report of General Partner and Audited Consolidated Financial Statements For the financial period from 23 August 2013 (commencement of operations) to 31 December