STANDARD AFRICA EQUITY FUND (ex South Africa)

Transcription

1 If you are in any doubt about the contents of this Supplement, you should consult your stockbroker, bank manager, solicitor, accountant or other financial adviser. The Directors of the Company, whose names appear under the heading Directors in the Prospectus of the Company dated 4 March 2011, are the persons responsible for the information contained in this Supplement and the Prospectus and accept responsibility accordingly. To the best of the knowledge and belief of the Directors (who have taken all reasonable care to ensure that such is the case) the information contained in this document and the Prospectus is in accordance with the facts and does not omit anything likely to affect the import of such information. STANDARD AFRICA EQUITY FUND (ex South Africa) (A fund of Standard Master Funds plc an investment company with variable capital structured as an umbrella fund with segregated liability between sub-funds) SUPPLEMENT This Supplement contains information relating to the Standard Africa Equity Fund (ex South Africa) (the Fund ), which is a separate fund of Standard Master Funds plc (the Company ), an umbrella fund. This Supplement forms part of the current prospectus of the Company (the Prospectus ) and should be read in the context of and together with the Prospectus and together with the most recent audited annual report and accounts and if published after such report, a copy of the latest unaudited semi annual report. This Supplement replaces the Supplement dated 27 May The date of this Supplement is 4 March 2011.

2 DEFINITIONS Unless otherwise defined herein or unless the context otherwise requires all defined terms used in this Supplement shall bear the same meaning as in the Prospectus AIM, the Alternative Investment Market in the UK, regulated and operated by the London Stock Exchange. Accumulating Share Class(es), the Class A-1(US$) Shares of the Fund and any other Share Class to be issued by the Fund in accordance with Central Bank requirements bearing similar designation. Business Day, any day (except Saturday and Sunday) where the banks in Dublin and London are open for business. Dealing Day, Friday of each week (provided that such day is a Business Day and if such day is not a Business Day, the preceding Business Day), provided that there shall be at least one Dealing Day in each fortnight. Distributing Share Class(es), the Class B-1(US$) Shares of the Fund and any other Share Class to be issued by the Fund in accordance with Central Bank requirements bearing similar designation. Investment Manager STANLIB Asset Management Limited or such other person as may be appointed by the Company, in accordance with the requirements of the Central Bank, to provide investment management services to the Fund. JSE, JSE Limited or the Johannesburg Stock Exchange. Valuation Point, shall be 10.45pm (Irish Time) on the relevant Dealing Day. 2

3 STANDARD AFRICA EQUITY FUND (ex SOUTH AFRICA) Introduction The Fund currently has two Classes of Shares designated as Class A-1 (US$) and Class B-1 (US$). The base currency of the Fund is US Dollars. As the Fund is an emerging market fund, an investment in the Fund should not constitute a substantial portion of an investment portfolio and may not be appropriate for all investors. Investors should consider the risk factors set out in the Prospectus and in this Supplement. As of the date of these listing particulars the Fund has no loan capital (including term loans) outstanding or created but unissued, and no outstanding mortgages, charges, debentures or other borrowings, including bank overdrafts and liabilities under acceptances or acceptance credits, hire purchase or finance lease commitments, guarantees or other contingent liabilities. Investment Objectives and Policies The primary investment objective of the Fund is to achieve medium to long-term capital growth. The generation of income shall be secondary to the primary objective of maximising capital growth. The Company will pursue this objective by investing in equity securities of companies that are listed or traded on Regulated Markets either in Africa (excluding South Africa) or of companies that are listed or traded on Regulated Markets that carry out a substantial portion of their business (meaning not less than 51%) in Africa (excluding South Africa) (e.g. mining exploration companies listed on AIM, the Toronto Stock Exchange or the JSE). The Fund may also invest no more than 10% of its Net Asset Value in collective investment schemes, in accordance with the requirements of the Central Bank, where such investment is consistent with the investment policy of the Fund. The Fund may hold ancillary liquid assets (meaning cash, deposits or securities evidencing deposits issued by or guaranteed by an institution) within the conditions and limits set out in Appendix 1 to the Prospectus. While the base currency of the Fund is US Dollars, the Investments of the Company will primarily be denominated in currencies other than US Dollars. Such Investments may be made (subject to the conditions and limits laid down by the Central Bank) on a hedged or unhedged basis at the discretion of the Investment Manager. Currently, the Investment Manager considers the following stock exchanges in the countries set out below to constitute Regulated Markets in Africa (excluding South Africa):- Namibia, Zambia, Ghana, Mauritius, Botswana, Nigeria, Zimbabwe, Kenya, Morocco, and Egypt. The Directors consider that the stock exchanges in the countries set out below meet the regulatory criteria for a regulated market. To the extent that the Directors confirm that such stock exchanges meet the regulatory criteria and provided that the Custodian can provide custody of assets in these countries, it is the intention of the Investment Manager to avail of investment opportunities in these countries and Shareholders will be notified in the next following periodic report of the Company. The relevant countries are Ivory Coast, Tunisia, Malawi, Uganda, and Tanzania. 3

4 Investment and Borrowing Restrictions The investment and borrowing restrictions set out in the Prospectus apply in their entirety to the Fund. Efficient Portfolio Management Investors are referred to the section entitled Efficient Portfolio Management in the Prospectus. Risk Factors Investors should consider the risk factors set out in the Prospectus. In addition to the risk factors outlined in the Prospectus and under the heading Introduction, investors should consider the additional risk factors set out below before investing in the Fund. Political Risk Africa is in the process of democratizing but political risks in Africa are recognized to be greater than those in other parts of the world. To a greater degree than in other continents, African countries can be subject to sudden changes of political regime, which can be potentially destabilizing for capital markets. Country Specific Risk A number of African countries are economically well diversified but others are highly dependent on individual economic sectors, such as agriculture, which can be subject to sudden and unpredictable developments. This can make investment in African capital markets more volatile than investment in markets which represent more diversified economies and which are therefore less susceptible to unexpected developments in specific sectors of their economy. Exchange Rate Volatility Political instability in Africa and Africa's relative lack of economic diversification could impact foreign exchange markets adversely as well as capital markets. Because many Africa currencies are thinly traded, this could make investment in Africa potentially more volatile than investment in countries with more widely traded currencies. Liquidity and Tradability The greatest practical problem when investing in Africa is liquidity of securities and the ability to trade in them. Many African equity markets are relatively illiquid in comparison to more developed markets. This can lead to significant volatility. The Investment Manger has restricted the Fund to bimonthly dealing in order to minimize the impact of volatility caused by trading the Fund's underlying investments but general market volatility is beyond the Investment Manager s control and is a factor investors must be cognizant of. Derivative and Hedging Mechanisms Africa's capital markets are relatively unsophisticated and derivative and hedging structures are virtually non-existent. This means that generally it may not be possible to hedge the portfolio against falling capital markets and this potentially could add to short term volatility and expose investors to short-term capital losses. 4

5 Research Risk African capital markets are not widely researched by international stock broking and investment banking institutions. The Investment Manager employs its own research analysts to make up for this deficiency but it remains the case that the 'consensus' forecasts that apply to securities in more thoroughly researched markets are largely absent in Africa and investors are therefore advised that they will be relying on the proprietary research of a single Investment Manager to a greater degree than would be the case with investments in more mainstream markets. Transparency of Financial Information Risk While it is the case that companies listed on regulated African exchanges are required to produce audited accounts, the provision of this information can be less timely than would be the case in more developed capital markets and the commentary surrounding audited accounts might be less transparent than would be acceptable in more developed markets. Once again, investors should be aware that they are therefore required to place greater reliance on the analysis of the accounts undertaken by the Investment Manager than would be the case in more developed investment markets. Registration and Tax There may be no obligation on the part of registration and tax authorities to make official copies of records available to third parties. In addition, there may be no reliable commercial firms who at present could undertake a comprehensive credit analysis or who could search the records of notary publics to determine whether the assets of an enterprise have been pledged or are otherwise subject to a pledge or other security interest. Accordingly, the extent of due diligence of prospective companies in which a Fund may invest must in some cases be significantly limited as compared with the standards for due diligence in more developed markets. Settlement Risk The organisation of settlement systems in African equity markets may be less secure than in developed markets. Consequently there is a risk that the assets of the fund may be in jeopardy because of defects in the settlement system. While the Fund will seek to use counterparties whose financial status is such that the settlement risk is reduced, there can be no certainty that such risks can be completely eliminated. Furthermore, compensation schemes may be non-existent, limited of inadequate to meet the Fund's claims in the event of loss due to failures in the settlement system. Furthermore, due to the local postal and banking systems, no guarantee can be given that all entitlements attaching to securities acquired by a Fund (including in relation to dividends) can be realised. However, none of the Company, the Custodian, the Investment Manager, the Administrator or any of their agents makes any representation or warranty about, or any guarantee of the operation, performance or settlement, clearing and registration of transactions dealing in emerging markets. MANAGEMENT AND ADMINISTRATION Detailed descriptions of the Directors and other service providers to the Fund are set out in the Prospectus. 5

6 DIVIDEND POLICY It is intended that the Distributing Share Classes will declare and pay its net investment income (i.e. income from dividends, interest or otherwise less the Distributing Share Classes accumulated accrued expenses) to Shareholders as dividends at least on an annual basis on or about 31 May each year. The Directors may change the frequency with which the Distributing Classes declare and pay dividends and Shareholders will be notified of any changes by way of a note to the annual or semi-annual financial statements of the Company. Dividends payable to Shareholders will automatically be reinvested immediately after such dividends are paid to the Custodian as nominee for the Shareholders by subscription for further Shares (such Shares issuing directly to the Shareholders) or, at the Shareholder s option, be paid in cash by telegraphic transfer to the account number listed on the Application Form. In respect of the Share Classes that are designated as Accumulating Share Classes, no dividends will be declared. The income and profits will be accumulated and reinvested in the Fund on behalf of the Shareholder. Any dividend which is unclaimed for six years or more from the date of its declaration shall, at the discretion of the Directors, be forfeited and shall become the property of the Fund. SUBSCRIPTIONS AND REDEMPTIONS Application Forms Procedures for Subscriptions All applicants must complete an Application Form prescribed by the Directors in relation to the Fund ( Application Form ). An Application Form accompanies this Supplement and sets out the methods by which and to whom the subscription monies must be sent. Application Forms shall (save as determined by the Directors) be irrevocable and may be sent by facsimile at the risk of the applicant. The originals of the Application Forms should be sent to arrive with the Administrator within three Business Days after the time for receipt of such application. Failure to provide the original Application Form by such time may, at the discretion of the Directors, result in the compulsory redemption of the relevant Shares. Moreover, applicants will not receive redemption proceeds until the Administrator has received the original application form. Offer Participating Shares in the Fund will be allotted at the Subscription Price per Share calculated as of the Valuation Point plus a waivable sales charge of up to 5% of the amount subscribed. The Application Form should be received by 11am (Irish time) on the Business Day preceding the relevant Dealing Day and be accompanied by such documentation or the circumstances of the application are such that the Administrator is in a position to verify the identity of the applicant. It is the responsibility of the Distributor or their appointed agents to ensure that the orders placed through them are transmitted on a timely basis. Any applications received after such time will be held over until the next Dealing Day. Subscription monies should be received in cleared funds no later than three Business Days following the relevant Dealing Day. The minimum initial investment amount will be US$50,000 and minimum subsequent investment amount for applicants shall be US$50,000. Such minimum may be lowered at the discretion of the Directors. 6

7 Payment of Subscription Monies For instructions concerning purchases, investors should contact the Administrator. A waivable sales charge of up to 5% of the Subscription Price may be payable by applicants in addition to the Subscription Price, such sales charge being payable as a discloseable retrocession to distributors. The Net Asset Value per Share in the Fund will be available from the Administrator and will be published daily on the Bloomberg website at The Net Asset Value of a Sub- Fund or attributable to a Class whose Shares are listed will also be notified to the Irish Stock Exchange by the Administrator without delay and will be available on and will be kept up-to-date. If payment in full in cleared funds in respect of a subscription (plus the sales charge, if any) has not been received by the time for receipt by the Administrator or in the event of non-clearance, any provisional allotment of Participating Shares made in respect of such application may be cancelled. In such event and notwithstanding cancellation of the application, the Directors may charge the applicant for any expense incurred by it or the Company for any loss to the Fund arising out of such non-receipt or non-clearance. In addition, the Company will have the right to sell all or any part of the applicants holding of Shares in any Fund in order to meet these charges. Subscription monies representing less than the Subscription Price for one Participating Share will not be returned to the applicant. Fractions of up to three decimal places of Participating Shares will be issued where any part of the subscription monies for Participating Shares represents less than the Subscription Price for one Participating Share. Subscription monies are payable in designated currency of the relevant Class by telegraphic transfer to the account set out on the application form. The Administrator has reserved the right to reject in whole or in part any application for Shares or to request further details or evidence of identity from an applicant for Shares. Where an application for Shares is rejected, the subscription monies shall be returned to the applicant as soon as is reasonably practicable after the date of such application. Contract notes confirming ownership will generally be sent to applicants within five Business Days of the Dealing Day, setting out details of the Participating Shares which have been provisionally allotted. This may be delayed if the Administrator has requested further details or evidence of identity as detailed above. Share certificates will not be issued. For security and administration purposes shareholders will be issued with a holder number which should be quoted in all future correspondence in relation to their holding. 7

8 Procedures for Redemptions A redemption request must be received by the Administrator prior to 11am (Dublin time) on the Business Day preceding the relevant Dealing Day. Faxed instructions will be accepted. Applicants should provide the following information when redeeming and where there is more than one registered Shareholder, the redemption request must be signed by all Shareholders:- 1. full name and address of the Shareholder(s) making the redemption; 2. the number of Shares or amount of the Fund to be redeemed; 3. whether Shares were issued with or without certificate(s). (If Shares were issued in certificated form, the certificate(s) must be enclosed); 4. account number of the Shareholder(s) making the redemption; and 5. the name and class of the Fund to be redeemed. Redemption proceeds will normally be sent by telegraphic transfer at the risk and expense of the Shareholder to the Shareholder s designated bank account, within three Business Days after the Dealing Day or, if later, within two Business Days of the receipt of the original application form and share certificate (if issued) and any other required documents whichever is applicable and in any event within 10 Business Days of the receipt of the redemption request. If the redemption request is received after the deadline for receipt of requests for redemption for any particular Dealing Day, it shall be treated as a request for redemption and Shares will be redeemed at the Redemption Price as at the Valuation Point relevant to the next following Dealing Day. If total requests for redemption on any Dealing Day exceed 10% of the total number of Shares in the Fund outstanding, each redemption request in respect of Shares in the Fund may, if in their sole discretion the Directors acting in good faith believe it shall be necessary or desirable in order not to prejudice the interests of the Shareholders not requesting redemption or on grounds of liquidity or other like reason, be reduced pro rata so that the total number of Shares for the Fund for redemption on that Dealing Day shall not exceed 10% of the Shares in issue in the Fund. Any redemption request so reduced shall be effected in priority to subsequent redemption requests on the following Dealing Day, subject always to the foregoing provisions. If redemption requests are so carried forward, the Directors shall ensure that the Shareholders affected thereby are promptly informed. The Articles provide that redemption proceeds may be satisfied by making distributions in specie. Although the Directors do not intend to utilise this provision, the Company may make such distributions subject to the approval of Shareholders of the Fund at a meeting of Shareholders convened for that purpose and shall notify the Custodian accordingly. Where a distribution in specie is approved, Shareholders making a redemption request shall be entitled to require the Company to sell the assets of the Company being transferred and to remit the net proceeds to that Shareholder. Any redemptions by way of distributions in specie will not materially prejudice the interests of remaining Shareholders. 8

9 FEES AND EXPENSES The Fund shall bear its attributable proportion of the organisational expenses of the Company. These are set out in detail under the heading Fees and Expenses in the Prospectus. All fees and expenses relating to the establishment of the Fund and the fees of the professional advisers to the Fund (establishment expenses) not exceeding US$35,000 will be borne by the Fund. To the extent that such fees and expenses are borne by the Fund, they will be amortised over the first 36 months of the lifetime of the Fund or such other period as the Directors may determine and will be charged as between the various classes thereof established by the Company within the amortisation period and in such manner as the Directors (with the consent of the Custodian) deem fair and equitable and provided that Class thereof will bear its own direct establishment costs and the cost of listing its Shares on the Irish Stock Exchange. If the effect of this accounting treatment becomes material in the future and there is a requirement to write off the unamortised balance of establishment and organisational costs, the Directors will reconsider this policy Details of other fees and expenses relating to the Company and Shareholders are set out in the Prospectus. Investment Manager s Fees The Investment Manager is entitled to a fee of up to 2.5% of the Net Asset Value of the Fund, calculated and accrued as of each Dealing Day and payable monthly in arrears in US Dollars out of the assets of the Fund. Out of this fee, the Investment Manager will pay distribution fees to intermediaries of up to 1% of the Net Asset Value of the Fund attributable to such Shares. The distribution fee shall be calculated and accrued as of each Dealing Day and payable monthly in arrears. The Investment Manager shall also be entitled to be reimbursed all reasonable, properly vouched outof-pocket expenses incurred by the Investment Manager in the performance of his duties and responsibilities under the Investment Management Agreement. The Investment Manager is responsible for the fees of any advisers it utilises. Sales Charge The Articles authorise the Directors to impose a sales charge on the issue of Shares of any class up to a maximum of up to 5 % of the Subscription Price. Such fee as may be charged will not be retained by the Company but will be payable as a disclosable retrocession to distributors. Administrator s Fees The Administrator is entitled to receive administration and fund accounting fees ranging between 0.03% and 0.06% of the Net Asset Value of the Fund, calculated and accrued daily and payable monthly in arrears, subject to an annual minimum charge of US$48,000 per annum per Fund. Additional share classes shall be charged at US$1,000 per month. The Administrator shall also be entitled to receive reasonable and properly vouched out-of-pocket expenses. The Administrator for transfer agency services shall be entitled to receive from the Fund registration fees and transactions charges as agreed at normal commercial rates in addition to the Funds pro rata share of an overall per annum minimum fee of US$10,000 payable by the Company which shall accrue daily and is payable monthly in arrears. 9

10 Custodian s Fees The Custodian shall receive a trustee fee of 0.02% of the Net Asset Value of each Fund calculated and accrued daily and payable monthly in arrears. The Company shall also pay custody fees ranging from 0.01% to 0.60% of the value of the assets of the Fund. The Custodian s fees are payable monthly in arrears, subject to a minimum charge of US$24,000 per annum per Fund. The Custodian shall also receive transaction charges, sub-custodial fees, and reasonable, properly vouched out-of-pocket expenses as shall be agreed, which shall be at normal commercial rates. Redemption Fee The Articles authorise the Directors to charge a fee on the redemption of Participating Shares in any Fund up to a maximum of 3% of the Redemption Price, such fee being payable to the Company. The Directors do not currently intend to impose a redemption charge. In event of the Directors resolving to impose a redemption charge, Shareholders will be given reasonable notification to enable them redeem their Shares prior to implementation of the charge. WF v31 10