PROSPECTUS FOR THE EXANE LONG/SHORT EQUITY FUND (Fonds Commun de Placement FCP)

Transcription

1 PROSPECTUS FOR THE EXANE LONG/SHORT EQUITY FUND (Fonds Commun de Placement FCP) INVESTMENT FUND CONFORMING TO EUROPEAN STANDARDS FORM OF THE FUND NAME Exane Long Short Equity Fund LEGAL FORM I - GENERAL CHARACTERISTICS WHERE TO OBTAIN THE LATEST ANNUAL REPORT AND INTERIM FINANCIAL STATEMENTS The latest annual and interim reports will be sent within one week upon written request sent by the investor to: French mutual fund (Fonds Commun de Placement FCP) DATE OF CREATION AND PROJECTED LIFESPAN The Exane Long/Short Equity Fund, a mutual fund (FCP) with sub-funds, was approved by the French financial markets authority (Autorité des Marchés Financiers - AMF) on 20 December It was created on 21 January 2008 for a term of 99 years. The Exane Gulliver Fund sub-fund was approved by the AMF on 15 June It was created on 17 October 2007 for a term of 99 years from this date. The Exane Vauban Fund sub-fund was approved by the AMF on 7 August It was created on 1 July 2004 for a term of 99 years from this date. Exane Asset Management 16 Avenue Matignon Paris Tel relations.investisseurs@exane-am.com If required, further explanations can be obtained from the Investor Relations department on the following telephone number: Date of publication of the Prospectus: 20 February INVESTMENT OVERVIEW Units Code ISIN Appropriation of income Currency Investor profile Subscription fee Operating and Management charges Performance-based commission Maximum rate per annum Minimum initial investment I FR Accumulation EUR All investors, but primarily intended for institutional and equivalent investors Maximum 5% not retained by the Subfund Maximum 1.2% per annum including all taxes 20% including all taxes, of outperformance of the capitalised EONIA +1% of annual performance with High Water Mark Mechanism*. EUR 125,000 Exane Gulliver Sub-fund P FR Accumulation EUR All investors Maximum 2% C FR Accumulation EUR (i) employees of the Investment Manager, regardless of whether they invest directly or though the Investment Manager s funds; (ii) investments from funds of funds managed by the Investment Manager; (iii) investments from discretionary management portfolio managed by the Investment Manager. maximum 1.7% per annum including all taxes Maximum 0.30% per annum, including all taxes 20% including all taxes, of outperformance of the capitalised EONIA +1% of annual performance with High Water Mark Mechanism*. EUR 125,000 (*) High Water Mark Mechanism : The variable management fee is calculated by comparing the Sub-fund's performance with the performance of EONIA + 1% on a reference period with the application of a High Water Mark mechanism. Exane Vauban Fund: A sub-fund of the FCP Exane Long Short Equity Fund. Page 1 of 14

2 Units ISIN code Appropriation of income Currency Investor profile Subscription fee Operating and Management charges Performancebased commission Maximum rate per annum Minimum initial investment Exane Vauban Sub-fund I FR Accumulation EUR C FR Accumulation EUR All investors, but primarily intended for institutional and equivalent investors (i) employees of the Investment Manager, regardless of whether they invest directly or though the Investment Manager s funds; (ii) investments from funds of funds managed by the Investment Manager; (iii) investments from discretionary management portfolio managed by the Investment Manager. Maximum 1.5% per annum including all taxes Maximum 0.30% per annum including all taxes 20% including all taxes, of outperformance of the capitalised EONIA +1% of annual performance with High Water Mark Mechanism*. EUR 125,000 EUR 125,000 (*) High Water Mark Mechanism : The variable management fee is calculated by comparing the Sub-fund's performance with the performance of EONIA + 1% on a reference period with the application of a High Water Mark mechanism. III - OPERATIONAL AND MANAGEMENT PROCEDURES II- DIRECTORY GENERAL FEATURES INVESTMENT MANAGER UNIT CHARACTERISTICS Exane Asset Management SA ( EXANE AM ) 16 Avenue Matignon, Paris Nature of the right attached to the units Approved by the COB under no. GP on 30 April 2001 The various units constitute real rights. Each unitholder has a co-ownership right in DEPOSITORY, CUSTODIAN, INSTITUTION RESPONSIBLE FOR the Sub-fund s assets, proportional to the number of units held. CENTRALISING SUBSCRIPTION AND REDEMPTION ORDERS BY MANDATE OF THE INVESTMENT MANAGER AND INSTITUTION Liabilities management RESPONSIBLE FOR KEEPING THE REGISTERS OF UNITS The various units are listed on Euroclear France. Liabilities management is provided by the depository, Société Générale. Société Générale SA, a credit institution created on 8 May 1864 by decree signed by Napoleon III. Registered office: 29 Boulevard Haussmann, Paris Postal address for custody services : Paris Cedex 18 Postal address of the department responsible for centralising orders and keeping the registers: 32 Rue du Champ de Tir, Nantes Voting rights No voting rights are attached to the units since all decisions are taken by the Investment Manager. STATUTORY AUDITOR PwC Sellam49/53, Avenue des Champs Elysées, Paris PROMOTER Exane Asset Management. The list of promoters is not exhaustive, especially as the Sub-fund is listed for distribution on Euroclear. Some promoters may not therefore be approved by or known to the Investment Manager. Persons responsible for ensuring that criteria relating to investors capacities are complied with: At the time of subscription, each promoter must ensure in particular that: - subscribers have received, prior to subscription, the prospectus in application of Article of the French financial markets authority s general regulations; - its obligations of information and advice have been fulfilled in accordance with the French financial markets authority s general regulations; - employees eligibility to invest in the sub-funds C units is monitored by the Investment Manager. DELEGATED MANAGERS The Sub-fund s accounting and valuation have been delegated to the accounting and administration manager: SGSS France, Immeuble Colline Sud, 10 Passage de l Arche, Puteaux Form of units Bearer. Fractions of units Thousandths of units. FINANCIAL YEAR-END Last stock market trading day in December for the Exane Gulliver Fund and Exane Vauban Fund sub-funds. The Exane Gulliver Fund sub-fund s first financial year ends on 31 December The Exane Vauban Fund sub-fund s first financial year ends on 31 December TAXATION As a mutual fund (Fonds Commun de Placement FCP), the Sub-fund is not liable for tax. However, unitholders may be liable for tax when they sell the Sub-fund s units. The tax regime that applies to the capital gains or losses made by the Sub-fund depends on the tax regulations that apply to the investor s particular situation, his tax domicile, and/or the Sub-fund s investment jurisdiction. If an investor is not sure of his tax position, he should consult an adviser or expert. Disclaimer - Only the French version has legal validity In case of dispute, only the French version will prevail between the parties. Page 2 of 14

3 SPECIFIC PROVISIONS FOR THE EXANE GULLIVER FUND SUB-FUND CLASSIFICATION Diversified mutual fund ISIN CODE Units I P C ISIN code FR FR FR ASSETS USED 1. European equities Listed European equities, preferably with a stock market capitalisation in excess of 1.5bn euros. The selection of stocks to buy is based primarily on fundamental analysis of companies and sectors. 2. Contracts traded over-the-counter The Gulliver sub-fund may conclude contracts traded over the counter in the form of Contracts For Difference ( CFD ), which have equities or international equity market indices as their underlying or foreign exchange. CFD are over-the-counter financial contracts through which the Sub-fund gains exposure to fluctuations (positive or negative, depending on the direction of the transaction) of equities, baskets of equities or baskets of indices and foreign exchange. CFDs will be used either to replicate a purchase or sale of stocks or indices, or baskets of stocks or indices or to hedge the portfolio against foreign exchange risk. If the use of CFDs results in an increase in exposure to equities, this will be limited to 200%, equivalent to a maximum leverage effect of Forward financial instruments INVESTMENT OBJECTIVE The Gulliver sub-fund s investment objective is to deliver absolute, regular performance with a low level of volatility of the order of 2% to 4%. BENCHMARK There is no financial index suitable for evaluating the Gulliver sub-fund s performance, as the available indices are not representative of the Sub-fund s investment process. However, over an investment horizon of at least two years, the sub-fund s performance can be compared a posteriori to the capitalised EONIA. The EONIA is the reference interest rate for the euro zone money market. INVESTMENT STRATEGY The investment strategy is the long/short equity strategy. This consists of taking long positions on companies considered to be undervalued by the market and short positions on companies considered to be overvalued. Long positions are taken either via the direct purchase of equities, or using derivatives, traded over the counter or on the listed market such as swaps, CFDs or forward contracts. Short positions are taken using derivatives, traded over the counter or on the listed market, such as swaps, CFDs or forward contracts, so as to sell a security, a sector or a general index. NET EXPOSURE OF THE PORTFOLIO The portfolio s net exposure to equity market risk (long positions less short positions, taking into account any physical or derivatives positions) generally falls between 10% and 35%, averaging between 15% and 20%. The Gulliver sub-fund therefore makes few directional bets on movements by the market itself, which explains its low correlation with equity indices. The Gulliver sub-fund trades on all regulated or organised French and foreign OECD member state markets. The types of instruments used are futures, swaps and options. The strategies used with these products aim either: - to hedge the portfolio against the risk of a fall of an underlying equity or to expose the portfolio in order to profit from the rise of an underlying equity. These strategies contribute in a subsidiary manner to the pursuit of the investment objective. They nevertheless make it possible to protect positive performance already gained if the manager expects equities markets to fall (hedging equities indices or particular companies considered by the manager to be overvalued) or to expose the portfolio if the manager expects a rise in the equities markets which the securities already in the portfolio may not be able to fully exploit; - to hedge the portfolio against foreign exchange risk. 4. Temporary purchases and sales of financial instruments To achieve its investment objective and for cash management purposes, the Sub-fund may use repurchase and reverse repurchase agreements, or lending and borrowing of financial instruments such as equities, bonds, negotiable debt securities. 5. Instruments with embedded derivatives The Gulliver sub-fund trades in financial instruments with embedded derivatives having equities as their underlying. The instruments used are: warrants, equity warrants (Bons de Souscription d Actions BSA), certificates, and all types of bond securities that have conversion or subscription rights attached, especially convertible bonds, bonds convertible into new or existing shares and bonds with reimbursable equity warrants. These products are traded in order to gain exposure to one or more companies that meet the selection criteria defined above. 6. Debt securities The Sub Sub-fund invests in debt securities issued by government, bank or corporate issuers with, when acquired, a maximum residual maturity of 3 month and a minimum short term rating of A1 from the rating scale of Standard & Poor s or P1 from the rating scale of Moody s. These debt instruments are such as: Negotiable debt securities (Certificates of Deposit, Commercial Paper, Medium-Term Notes), money market instruments, bonds, Euro Medium Term Notes (EMTN). These investments are used mainly to manage cash and to limit the portfolio s exposure to equity risk if the outlook for the equity markets is unfavourable. Disclaimer - Only the French version has legal validity In case of dispute, only the French version will prevail between the parties. Page 3 of 14

4 7. Mutual Funds ( OPCVM ) This category of assets is used in particular to manage the sub-fund s cash position. The Gulliver sub-fund can hold up to 10% of its assets in units or shares of European (including French) investment funds able to invest up to 10% of their assets in UCITS or other investment funds. The Gulliver sub-fund may, within the above-mentioned limits, invest in funds promoted or managed by Exane Asset Management or one of its subsidiaries. OVERALL LIABILITIES In accordance with the regulations, the portfolio s off-balance sheet liabilities are limited to 100% of the assets, and the total exposure to risks resulting from offbalance sheet liabilities and securities positions may not exceed 200% of the assets. RISK PROFILE Your money will be invested primarily in financial instruments selected by the Investment Manager. These instruments will be exposed to market movements and fluctuations. The principal risks linked to investment management are: Capital risk The Gulliver sub-fund does not provide any guarantee of capital invested. Investors may not get back all the money they have invested. Risk relating to discretionary management The investment management is discretionary and seeks to generate performance by anticipating the movements of certain stocks in relation to others. These expectations may be incorrect and may result in a failure to meet the performance objective. Risk relating to the equities market The Gulliver sub-fund may be exposed to the equities market in such a way that the net asset value may fall in the event of a correction in the equities market. Investors are reminded that equities markets are particularly risky, that they can fall sharply for periods of several years and can cause investors substantial capital losses. Interest rate and credit risk There is a risk of interest rate risk and credit risk, since the Gulliver subfund may hold up to 100% of its assets in debt securities and money market instruments. Interest rate risk is: Counterparty risk The Sub-fund may incur losses through its commitments vis-à-vis a counterparty under their swap, CFD, forward, repurchase or reverse repurchase transactions in the event of the counterparty s default or its inability to fulfil its contractual obligations. Risk of overexposure There is a risk of overexposure since the Gulliver sub-fund s assets may be exposed up to 200% to the equities markets through the use of derivatives. The risk of overexposure is the risk that, in the event of a fall in certain markets in which the assets may have been over-invested, the fall in the Gulliver sub-fund s net asset value is greater than the fall in these markets. Liquidity risk Some of the securities in which the Gulliver sub-fund is invested may have limited liquidity. Liquidity risk is the risk that the number of securities bought and sold is less than the number of orders sent to the market, because of the low number of securities available on the market. The above list of risk factors is not exhaustive. GUARANTEE OR PROTECTION TARGET SUBSCRIBERS AND INVESTOR PROFILE The Gulliver sub-fund is available to all subscribers. It is intended in particular for institutional investors seeking investments for which risk management is a key feature of the investment process. The recommended investment horizon is two years. The amount that is reasonable to invest in this Sub-fund depends on each investor s particular circumstances. To determine this, investors should take into account not only their personal wealth, their needs now and in two years time, but also their willingness to accept risk, or, on the contrary, their preference for a more prudent form of investment. Investors are also strongly advised to diversify their investments so that they are not exposed solely to the risks of this Sub-fund. METHODS FOR DETERMINING AND APPROPRIATING INCOME DISTRIBUTION OF INCOME Units Investor profile Appropriation of income All investors, but primarily intended for I institutional and Accumulation equivalent investors Distribution of income - the risk that interest rates may fall, when investments have been made at variable rates (a lower return); - the risk that interest rates may rise when investments have been made at fixed rates, since the value of a fixed interest rate product falls when interest rates rise, and vice-versa. Credit risk is the risk that the issuer of a debt security is unable to service its debt, i.e., to repay it. Foreign exchange risk Foreign exchange risk is the risk that the investment currencies weaken in relation to the base currency of the portfolio, the euro. Fluctuations of these currencies against the euro may have a positive or negative effect on the value of these instruments. P C All investors (i) employees of the Investment Manager, regardless of whether they invest directly or though the Investment Manager s funds; (ii) investments from funds of funds managed by the Investment Manager; (iii) investments from discretionary management portfolio managed by the Investment Manager. Accumulation Accumulation Disclaimer - Only the French version has legal validity In case of dispute, only the French version will prevail between the parties. Page 4 of 14

5 FEATURES OF UNITS OR SHARES Units ISIN code Appropriation of income Base currency Minimum initial subscription I FR Accumulation EUR EUR 125,000 PLACE AND PROCEDURES FOR PUBLICATION OR ADVERTISING OF THE NET ASSET VALUE The net asset value will be published at the premises of the Investment Manager, at the following address: Exane Asset Management 16 Avenue Matignon Paris P FR Accumulation EUR C FR Accumulation EUR EUR 125,000 DATE AND FREQUENCY OF CALCULATION OF NET ASSET VALUE The net asset value is calculated daily on each Paris stock market trading day, on the basis of the closing prices of the financial instruments held by the Sub-fund. The net asset value of the day is calculated and published on the next business day. TERMS AND CONDITIONS OF SUBSCRIPTIONS AND REDEMPTIONS Subscriptions and redemptions are centralised by the depository and are executed in an amount or number of units on the basis of unknown prices. Subscription and redemption requests are accepted by the centralising agent, Société Générale, until 4pm on each Paris stock market trading day preceding calculation of the net asset value, and are executed on the basis of the net asset value dated the next business day. Settlement of redemptions (in cash) and delivery (of units) takes place two business days after calculation of the net asset value. The Investment Manager does not determine the net asset value, centralise subscription or redemption orders or calculate and publish the previous day s net asset value on days when the Paris stock market is closed. Paris stock market means the regulated market, Euronext Paris. The Paris stock market s trading days are set by the Euronext Paris calendar. Organisation appointed to receive subscriptions and redemptions: Société Générale 32 Rue du Champ de Tir Nantes Investors can switch from one category of units to another category by requesting a redemption of units in the category owned, followed by a request for a subscription to units of another category. Investors are reminded that switching from one category of units to another may incur a tax liability for capital gains or losses on financial instruments. Subscriptions and redemptions are centralised by the depository and are executed in an amount or number of units on the basis of unknown prices. Disclaimer - Only the French version has legal validity In case of dispute, only the French version will prevail between the parties. Page 5 of 14

6 Charges and fees Subscription and redemption fees Subscription and redemption fees have the effect of either increasing the subscription price paid by the investor or reducing the redemption price. Fees paid to the Sub-fund will be used to offset the costs borne by thesub-fund in investing or divesting the assets entrusted to it. The remaining fees are paid to the portfolio investment manager, the promoter, etc. Fees payable by the investor, deducted at the time of subscriptions and redemptions Base Rate/Scale I Units P units C Units Subscription fee not retained by the Sub-fund Net Asset Value x number of units subscribed Maximum 5% Maximum 2% Subscription fee retained by the Sub-fund Net Asset Value x number of units subscribed Redemption fee not retained by the Sub-fund Net Asset Value x number of units redeemed Redemption fee retained by the Sub-fund Net Asset Value x number of units redeemed Operating and Management charges The operating and management charges cover all the costs charged directly to the Sub-fund, excluding transaction charges. Transaction charges include intermediation charges (brokerage, stock market taxes, etc.) and activity charges, where applicable, that may be charged by the depository and the portfolio investment manager, in particular. The following may also be payable in addition to the operating and management charges: - Performance-based commissions. These reward the Investment Manager when the Sub-fund exceeds its objectives. Consequently these commissions are invoiced to the Sub-fund; - Activity charges invoiced to the Sub-fund; - A share of the income from temporary purchases and sales of securities. Charges invoiced to the Sub-fund Management charges and external management charges for the Investment Manager (including the statutory auditor, the depository, distribution, lawyers). Indirect fees maximum (commission and management charges) Base Net assets Net assets Rate/Scale I Units P units C Units Maximum annual rate including all taxes 1.20% 1.70% 0.30% * see note below Activity charges Taking on each transaction **Performance-fees Net assets 20%, including all taxes, of the performance exceeding the capitalised EONIA +1 % of annual performance with High Water Mark Mechanism**. (*) Indirect fees maximum : For cash management purpose and within a maximum of 10% of its net assets, the Sub-fund may subscribe in UCITS compliant monetary funds for which the management fees shall not exceed 0,50%, including all taxes, of the net asset per annum. The Sub-fund shall bear neither subscription fees nor redemption fees with respect to its investments in these UCITS compliant monetary funds. Variable management fee with High Water Mark Mechanism : The variable management fee is calculated by comparing the Sub-fund's performance with the performance of EONIA + 1% on a reference period with the application of a High Water Mark mechanism. Thus, the variable management fee is only activated and accrued once the High Water Mark is reached defined as the highest of the end of reference period net asset values of the last three reference period. The Investment Manager provides investors, upon request, with the calculation methodology of the foregoing performance fee. Selection of intermediaries Exane Asset Management selects and evaluates the intermediaries it deals with so that it retains only those that are the most effective in their field of operation, to better to serve investors needs. In addition to the charges and fees relating to purchases and sales of securities, the selection and evaluation of intermediaries takes into account factors such as the ability to find blocks of shares, process orders for illiquid stocks, or simply understand instructions. Exane Asset Management does not earn any soft commissions. For further information, the unitholders are invited to consult the annual investment management report. Disclaimer - Only the French version has legal validity In case of dispute, only the French version will prevail between the parties. Page 6 of 14

7 IV - COMMERCIAL INFORMATION DATE AND FREQUENCY OF CALCULATION OF NET ASSET VALUE The net asset value is calculated daily on each Paris stock market trading day, on the basis of the closing prices of the financial instruments held by the Sub-fund. The net asset value of the day is calculated and published on the next business day. TERMS AND CONDITIONS OF SUBSCRIPTIONS AND REDEMPTIONS Subscriptions and redemptions are centralised by the depository and are executed in an amount or number of units on the basis of unknown prices. Subscription and redemption requests are accepted by the centralising agent, Société Générale, until 4pm on each Paris stock market trading day preceding calculation of the net asset value, and are executed on the basis of the net asset value dated the next business day. Settlement of redemptions (in cash) and delivery (of units) takes place two business days after calculation of the net asset value. The Investment Manager does not determine the net asset value, centralise subscription or redemption orders or calculate and publish the previous day s net asset value on days when the Paris stock market is closed. Paris stock market means the regulated market, Euronext Paris. The Paris stock market s trading days are set by the Euronext Paris calendar. Organisation appointed to receive subscriptions and redemptions: Société Générale 32 Rue du Champ de Tir, Nantes DISTRIBUTION OF INFORMATION ABOUT THE FUND Information about the Sub-fund is sent by Exane Asset Management to your usual financial adviser, who is responsible for its distribution to its customers. Any other enquiries about the Sub-fund can be answered over the telephone by our investor services department on +33 (0) V - INVESTMENT RULES REGULATORY RATIOS APPLICABLE TO THE FUND The Gulliver sub-fund complies with the regulatory ratios that apply to generalist UCITS-compliant French investment funds. In particular, and in accordance with the principle of diversification of risks, the Gulliver sub-fund may not invest more than 5% of its assets in the securities (shares, debt securities, units and debt securities issued by an SPV) of a single issuing group. However, the 5% limit is raised to 10% for an entity and 20% for an issuing group if the total value of the groups that exceed 5% does not exceed 40% of the assets. The investments underlying forward contracts are used for calculation of the 5%/10% - 20%/40% ratio, except for index contracts recognised by the AMF. VI - GLOBAL EXPOSURE OF SUB-FUNDS The global exposure is measured using the commitment approach. VII VALUATION RULES FINANCIAL INSTRUMENTS AND SECURITIES TRADED ON A REGULATED FRENCH OR FOREIGN MARKET Valued at the closing price on the market. FINANCIAL INSTRUMENTS NOT TRADED ON A REGULATED MARKET Valued under the Investment Manager s responsibility at their probable market value. MUTUAL FUND SHARES OR UNITS Valued at the last known net asset value. NEGOTIABLE AND EQUIVALENT DEBT SECURITIES Valued using an actuarial method. The rate used is that applied to issues of equivalent securities adjusted, where applicable, to reflect the issuer of the stock s specific characteristics. However, negotiable debt securities with a residual duration of three months or less, and not of particular sensitivity, may be valued using the linear method. The Investment Manager sets the terms and conditions of application of these rules. These appear in the notes to the annual accounts. FIRM OR CONDITIONAL FORWARD FINANCIAL INSTRUMENTS TRADED ON FRENCH OR FOREIGN ORGANISED MARKETS Valued at market value in accordance with the terms and conditions set by the Investment Manager. These are described in the notes to the annual accounts. FIRM OR CONDITIONAL TRANSACTIONS OR SWAPS PLACED ON OVER-THE-COUNTER MARKETS Valued at their market value or at a value estimated in accordance with the terms and conditions set by the Investment Manager and described in the notes to the annual accounts. FINANCIAL INSTRUMENTS WHOSE PRICE HAS NOT BEEN RECORDED ON THE VALUATION DAY OR WHOSE PRICE HAS BEEN CORRECTED Valued under the Investment Manager s responsibility at their probable market value. These valuations and their justification are sent to the statutory auditor during its audits. ALTERNATIVE VALUATION METHODS IF FINANCIAL DATA UNAVAILABLE Subscribers are reminded that as a result of the delegation of the Gulliver subfund s administration and accounting to SGSS France, it is the latter s responsibility to value the Gulliver sub-fund s financial assets. Nevertheless, Exane Asset Management keeps its own estimates of the Gulliver sub-fund s financial assets at all times, obtained through numerous sources of financial data such as Reuters, Bloomberg, market counterparties etc. It is therefore always possible, if the administration and accounting sub-manager is unable to value the Gulliver sub-fund s assets, to provide it with the information required for this valuation, in which case the Statutory Auditor will be informed thereof as soon as possible. ACCOUNTING METHOD The accounting method used for recording income from financial instruments is the accrued interest method. Transaction charges are recorded on the accounts using the charges-included basis. Disclaimer - Only the French version has legal validity In case of dispute, only the French version will prevail between the parties. Page 7 of 14

8 SPECIFIC PROVISIONS FOR THE EXANE VAUBAN FUND SUB-FUND CLASSIFICATION Diversified mutual fund ISIN CODE Units I ISIN code FR ASSETS USED 1. Global equities Equities listed on all of the world s markets. Geographically however, the Vauban sub-fund focuses on European stocks. The selection of stocks is based primarily on fundamental analysis of companies and sectors. 2. Contracts traded over-the-counter The Gulliver sub-fund may conclude contracts traded over the counter in the form of Contracts For Difference ( CFD ), which have equities or international equity market indices as their underlying or foreign exchange. C INVESTMENT OBJECTIVE FR The Vauban sub-fund s investment objective is to deliver absolute performance with a level of volatility of the order of 2% to 5%. BENCHMARK There is no financial index suitable for evaluating the Vauban sub-fund s performance, as the available indices are not representative of the sub-fund s investment process. The pursuit of absolute performance effectively involves a slight correlation with all asset classes. INVESTMENT STRATEGY The investment strategy is the long/short equity strategy. This consists of taking long positions on companies considered to be undervalued by the market and short positions on companies considered to be overvalued. Long positions are taken either via the direct purchase of equities, or using derivatives, traded over the counter or on the listed market such as swaps, CFDs or forward contracts. Short positions are taken using derivatives, traded over the counter or on the listed market, such as swaps, CFDs or forward contracts, so as to sell a security, a sector or a general index. From a sectoral point of view, the investment universe will focus on the stocks of the industrial and equipment sectors: automotive, aircraft, industrial equipment, construction, mining, defence, medical equipment, property, and metals. NET EXPOSURE OF THE PORTFOLIO The portfolio s net exposure to equity market risk (long positions less short positions, taking into account any physical or derivatives positions) generally falls between 10% and 35%. The Vauban sub-fund therefore makes few directional bets on movements by the market itself, which explains its low correlation with equity indices. CFD are over-the-counter financial contracts through which the Sub-fund gains exposure to fluctuations (positive or negative, depending on the direction of the transaction) of equities, baskets of equities or baskets of indices and foreign exchange. CFDs will be used either to replicate a purchase or sale of stocks or indices, or baskets of stocks or indices or to hedge the portfolio against foreign exchange risk. If the use of CFDs results in an increase in exposure to equities, this will be limited to 200%, equivalent to a maximum leverage effect of Forward financial instruments The Gulliver sub-fund trades on all regulated or organised French and foreign OECD member state markets. The types of instruments used are futures, swaps and options. The strategies used with these products aim either: - to hedge the portfolio against the risk of a fall of an underlying equity or to expose the portfolio in order to profit from the rise of an underlying equity. These strategies contribute in a subsidiary manner to the pursuit of the investment objective. They nevertheless make it possible to protect positive performance already gained if the manager expects equities markets to fall (hedging equities indices or particular companies considered by the manager to be overvalued) or to expose the portfolio if the manager expects a rise in the equities markets which the securities already in the portfolio may not be able to fully exploit; - to hedge the portfolio against foreign exchange risk. 4. Temporary purchases and sales of financial instruments To achieve its investment objective and for cash management purposes, the Subfund may use repurchase and reverse repurchase agreements, or lending and borrowing of financial instruments such as equities, bonds, negotiable debt securities. 5. Instruments with embedded derivatives The Vauban sub-fund trades in financial instruments with embedded derivatives having equities as their underlying. The instruments used are: warrants, equity warrants (Bons de Souscription d Actions BSA), certificates, and all types of bond securities that have conversion or subscription rights attached, especially convertible bonds, bonds convertible into new or existing shares and bonds with reimbursable equity warrants. These products are traded in order to gain exposure to one or more companies that meet the selection criteria defined above. Disclaimer - Only the French version has legal validity In case of dispute, only the French version will prevail between the parties. Page 8 of 14

9 6. Debt securities The Sub-fund invests in debt securities issued by government, bank or corporate issuers with, when acquired, a maximum residual maturity of 3 month and a minimum short term rating of A1 from the rating scale of Standard & Poor s or P1 from the rating scale of Moody s. These debt instruments are such as: Negotiable debt securities (Certificates of Deposit, Commercial Paper, Medium-Term Notes), money market instruments, bonds, Euro Medium Term Notes (EMTN). These investments are used mainly to manage cash and to limit the Sub-fund s exposure to equity risk if the outlook for the equity markets is unfavourable. 7. Mutual Funds ( OPCVM ) This category of assets is used in particular to manage the sub-fund s cash position. The Vauban sub-fund can hold up to 10% of its assets in units or shares of European (including French) investment funds able to invest up to 10% of their assets in UCITS or other investment funds. OVERALL LIABILITIES In accordance with the regulations, the portfolio s off-balance sheet liabilities are limited to 100% of the assets, and the total exposure to risks resulting from offbalance sheet liabilities and securities positions may not exceed 200% of the assets. RISK PROFILE Your money will be invested primarily in financial instruments selected by the Investment Manager. These instruments will be exposed to market movements and fluctuations. The principal risks linked to investment management are: Capital risk The Vauban sub-fund does not provide any guarantee of capital invested. Investors may not get back all the money they have invested. Risk relating to discretionary management The investment management is discretionary and seeks to generate performance by anticipating the movements of certain stocks in relation to others. These expectations may be incorrect and may result in a failure to meet the performance objective. Risk relating to the equities market The Vauban sub-fund may be exposed to the equities market in such a way that the net asset value may fall in the event of a correction in the equities market. Investors are reminded that equities markets are particularly risky, that they can fall sharply for periods of several years and can cause investors substantial capital losses. Interest rate and credit risk There is a risk of interest rate risk and credit risk, since the Vauban sub-fund may hold up to 100% of its assets in debt securities and money market instruments. Interest rate risk is: - the risk that interest rates may fall, when investments have been made at variable rates (a lower return); - the risk that interest rates may rise when investments have been made at fixed rates, since the value of a fixed interest rate product falls when interest rates rise, and vice-versa. Counterparty risk The Sub-fund may incur losses through its commitments vis-à-vis a counterparty under their swap, CFD, forward, repurchase or reverse repurchase transactions in the event of the counterparty s default or its inability to fulfil its contractual obligations. Risk of overexposure There is a risk of overexposure since the Vauban sub-fund s assets may be exposed up to 200% to the equities markets through the use of derivatives. The risk of overexposure is the risk that, in the event of a fall in certain markets in which the assets may have been over-invested, the fall in the Vauban sub-fund s net asset value is greater than the fall in these markets. Liquidity risk Some of the securities in which the Vauban sub-fund is invested may have limited liquidity. Liquidity risk is the risk that the number of securities bought and sold is less than the number of orders sent to the market, because of the low number of securities available on the market. The above list of risk factors is not exhaustive. GUARANTEE OR PROTECTION TARGET SUBSCRIBERS AND INVESTOR PROFILE The Vauban sub-fund is available to all subscribers. It is intended in particular for institutional investors seeking investments for which risk management is a key feature of the investment process. The recommended investment horizon is two years. The amount that is reasonable to invest in this Sub-fund depends on each investor s particular circumstances. To determine this, investors should take into account not only their personal wealth, their needs now and in two years time, but also their willingness to accept risk, or, on the contrary, their preference for a more prudent form of investment. Investors are also strongly advised to diversify their investments so that they are not exposed solely to the risks of this Sub-fund. Units I C Investor profile All investors, but primarily intended for institutional and equivalent investors (i) employees of the Investment Manager, regardless of whether they invest directly or though the Investment Manager s funds; (ii) investments from funds of funds managed by the Investment Manager; (iii) investments from discretionary management portfolio managed by the Investment Manager. Appropriation of income Accumulation Accumulation Distribution income of Credit risk is the risk that the issuer of a debt security is unable to service its debt, i.e., to repay it. Foreign exchange risk Foreign exchange risk is the risk that the investment currencies weaken in relation to the base currency of the portfolio, the euro. Fluctuations of these currencies against the euro may have a positive or negative effect on the value of these instruments. Disclaimer - Only the French version has legal validity In case of dispute, only the French version will prevail between the parties. 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10 FEATURES OF UNITS OR SHARES Units ISIN code Appropriation of income Base currency Minimum initial subscription Subscription and redemption requests are accepted by the centralising agent, Société Générale, until 4pm on each Paris stock market trading day preceding calculation of the net asset value, and are executed on the basis of the net asset value dated the next business day. Settlement of redemptions (in cash) and delivery (of units) takes place two business days after calculation of the net asset value. I FR Accumulation EUR EUR 125,000 The Investment Manager does not determine the net asset value, centralise subscription or redemption orders or calculate and publish the previous day s net asset value on days when the Paris stock market is closed. Paris stock market means the regulated market, Euronext Paris. The Paris stock market s trading days are set by the Euronext Paris calendar. C FR Accumulation EUR EUR 125,000 Organisation appointed to receive subscriptions and redemptions: Société Générale 32 Rue du Champ de Tir Nantes DATE AND FREQUENCY OF CALCULATION OF NET ASSET VALUE The net asset value is calculated daily on each Paris stock market trading day, on the basis of the closing prices of the financial instruments held by the Sub-fund. The net asset value of the day is calculated and published on the next business day. TERMS AND CONDITIONS OF SUBSCRIPTIONS AND REDEMPTIONS Subscriptions and redemptions are centralised by the depository and are executed in an amount or number of units on the basis of unknown prices. PLACE AND PROCEDURES FOR PUBLICATION OR ADVERTISING OF THE NET ASSET VALUE The net asset value will be published at the premises of the Investment Manager, at the following address: Exane Asset Management 16 Avenue Matignon, Paris Disclaimer - Only the French version has legal validity In case of dispute, only the French version will prevail between the parties. Page 10 of 14

11 Charges and fees Subscription and redemption fees Subscription and redemption fees have the effect of either increasing the subscription price paid by the investor or reducing the redemption price. Fees paid to the Sub-fund will be used to offset the costs borne by the Sub-fund in investing or divesting the assets entrusted to it. The remaining fees are paid to the portfolio investment manager, the promoter, etc. Fees payable by the investor, deducted at the time of subscriptions and redemptions Rate/Scale Subscription fee not retained by the Sub-fund Net Asset Value x number of units subscribed Base I Units Subscription fee retained by the Sub-fund Net Asset Value x number of units subscribed C Units Redemption fee not retained by the Sub-fund Net Asset Value x number of units redeemed Redemption fee retained by the Sub-fund Net Asset Value x number of units redeemed Operating and Management charges The operating and management charges cover all the costs charged directly to the Sub-fund, excluding transaction charges. Transaction charges include intermediation charges (brokerage, stock market taxes, etc.) and activity charges, where applicable, that may be charged by the depository and the portfolio investment manager, in particular. The following may also be payable in addition to the operating and management charges: - Performance-based commissions. These reward the Investment Manager when the Sub-fund exceeds its objectives. Consequently these commissions are invoiced to the Sub-fund; - Activity charges invoiced to the Sub-fund; - A share of the income from temporary purchases and sales of securities. Rate/Scale Charges invoiced to the Sub-fund Base I Units C Units Management charges and external management charges for the Investment Manager, inclusive of all taxes (including the statutory auditor, the depository, distribution, lawyers) Net assets Maximum annual rate including all taxes 1.5% 0.30% Indirect fees maximum (commission and management charges) Net assets * see note below * see note below Activity charges Taking on each transaction Activity charges **Performance-fee Net assets 20%, including all taxes, of the performance exceeding the capitalised EONIA +1% of annual performance with High Water Mark Mechanism** (*) Indirect fees maximum : For cash management purpose and within a maximum of 10% of its net assets, the Sub-fund may subscribe in UCITS compliant monetary funds for which the management fees shall not exceed 0,50%, including all taxes, of the net asset per annum. The Sub-fund shall bear neither subscription fees nor redemption fees with respect to its investments in these UCITS compliant monetary funds. Variable management fee with High Water Mark Mechanism : The variable management fee is calculated by comparing the Sub-fund's performance with the performance of EONIA + 1% on a reference period with the application of a High Water Mark mechanism. Thus, the variable management fee is only activated and accrued once the High Water Mark is reached defined as the highest of the end of reference period net asset values of the last three reference period. The Investment Manager provides investors, upon request, with the calculation methodology of the foregoing performance fee. Selection of intermediaries Exane Asset Management selects and evaluates the intermediaries it deals with so that it retains only those that are the most effective in their field of operation, to better to serve investors needs. In addition to the charges and fees relating to purchases and sales of securities, the selection and evaluation of intermediaries takes into account factors such as the ability to find blocks of shares, process orders for illiquid stocks, or simply understand instructions. Exane Asset Management does not earn any soft commissions. For further information, the unitholders are invited to consult the annual investment management report. Disclaimer - Only the French version has legal validity In case of dispute, only the French version will prevail between the parties. Page 11 of 14

12 IV - COMMERCIAL INFORMATION DISTRIBUTION OF INFORMATION ABOUT THE FUND Information about the Sub-fund is sent by Exane Asset Management to your usual financial adviser, who is responsible for its distribution to its customers. Any other enquiries about the Sub-fund can be answered over the telephone by our investor services department on +33 (0) V - INVESTMENT RULES REGULATORY RATIOS APPLICABLE TO THE FUND The Vauban sub-fund complies with the regulatory ratios that apply to generalist UCITS-compliant French investment funds. In particular, and in accordance with the principle of diversification of risks, the Vauban sub-fund may not invest more than 5% of its assets in the securities (shares, debt securities, units and debt securities issued by an SPV) of a single issuing group. However, the 5% limit is raised to 10% for an entity and 20% for an issuing group if the total value of the groups that exceed 5% does not exceed 40% of the assets. The investments underlying forward contracts are used for calculation of the 5%/10% - 20%/40% ratio, except for index contracts recognised by the AMF. VI - GLOBAL EXPOSURE OF SUB-FUNDS FINANCIAL INSTRUMENTS WHOSE PRICE HAS NOT BEEN RECORDED ON THE VALUATION DAY OR WHOSE PRICE HAS BEEN CORRECTED Valued under the Investment Manager s responsibility at their probable market value. These valuations and their justification are sent to the statutory auditor during its audits. ALTERNATIVE VALUATION METHODS IF FINANCIAL DATA UNAVAILABLE Subscribers are reminded that as a result of the delegation of the Vauban subfund s administration and accounting to SGSS France, it is the latter s responsibility to value the Vauban sub-fund s financial assets. Nevertheless, Exane Asset Management keeps its own estimates of the Vauban sub-fund s financial assets at all times, obtained from a variety of sources of financial data such as Reuters, Bloomberg, market counterparties etc. It is therefore always possible, if the administration and accounting sub-manager is unable to value the Vauban sub-fund s assets, to provide it with the information required for this valuation, in which case the Statutory Auditor will be informed thereof as soon as possible. ACCOUNTING METHOD The accounting method used for recording income from financial instruments is the accrued interest method. Transaction charges are recorded on the accounts using the charges-included basis. The global exposure is measured using the commitment approach. VII VALUATION RULES FINANCIAL INSTRUMENTS AND SECURITIES TRADED ON A REGULATED FRENCH OR FOREIGN MARKET Valued at the closing price on the market. FINANCIAL INSTRUMENTS NOT TRADED ON A REGULATED MARKET Valued under the Investment Manager s responsibility at their probable market value. MUTUAL FUND SHARES OR UNITS Valued at the last known net asset value. NEGOTIABLE AND EQUIVALENT DEBT SECURITIES Valued using an actuarial method. The rate used is that applied to issues of equivalent securities adjusted, where applicable, to reflect the issuer of the stock s specific characteristics. However, negotiable debt securities with a residual duration of three months or less, and not of particular sensitivity, may be valued using the linear method. The Investment Manager sets the terms and conditions of application of these rules. These appear in the notes to the annual accounts. FIRM OR CONDITIONAL FORWARD FINANCIAL INSTRUMENTS TRADED ON FRENCH OR FOREIGN ORGANISED MARKETS Valued at market value in accordance with the terms and conditions set by the Investment Manager. These are described in the notes to the annual accounts. FIRM OR CONDITIONAL TRANSACTIONS OR SWAPS PLACED ON OVER-THE-COUNTER MARKETS Valued at their market value or at a value estimated in accordance with the terms and conditions set by the Investment Manager and described in the notes to the annual accounts. Disclaimer - Only the French version has legal validity In case of dispute, only the French version will prevail between the parties. Page 12 of 14