HARVEST FUNDS (CAYMAN) EXPLANATORY MEMORANDUM

Transcription

1 HARVEST FUNDS (CAYMAN) (a unit trust established as an exempted trust in the Cayman Islands) EXPLANATORY MEMORANDUM October 2011 Copyright Deacons October 2011 All rights reserved. Not to be reproduced without prior permission.

2 PRELIMINARY IMPORTANT NOTICE - If you are in any doubt about the contents of this Explanatory Memorandum, you should consult your stockbroker, bank manager, solicitor, professional accountant or other professional adviser. Harvest Funds (Cayman) (the Fund ) is a unit trust constituted as an umbrella fund by a trust deed dated 29 August 2011 as amended, varied or supplemented from time to time (the Trust Deed ) between Harvest Global Investments Limited (the Manager ) and BNP Paribas Bank & Trust Cayman Limited (the Trustee ) and governed by the laws of the Cayman Islands. The Fund may establish from time to time sub-funds ( Sub-Funds ) in respect of which a separate class or classes or units ( Units ) will be issued. This Explanatory Memorandum is provided on a confidential basis solely for the information of those persons to whom it is transmitted so that they may consider an investment in the Units of the Sub-Funds of the Fund. Some of the information in this Explanatory Memorandum is a summary of corresponding provisions in the Trust Deed. Investors or potential investors should refer to the Trust Deed for full details. The Manager accepts full responsibility for the accuracy, as at the date of this Explanatory Memorandum, of the information contained in this Explanatory Memorandum and confirms, having made all reasonable enquiries, that to the best of its knowledge and belief there are no other facts the omission of which would make any statement misleading. This Explanatory Memorandum may from time to time be updated. Units issued after the date of this Explanatory Memorandum are offered on the basis only of the information contained in this Explanatory Memorandum and such additional document(s), if any, as may be issued by the Manager expressly in conjunction with the issue of this Explanatory Memorandum. Any further information or representations made by any dealer, salesman or other person must be regarded as unauthorized and must accordingly not be relied upon. The delivery of this Explanatory Memorandum or the other documents mentioned above or the offer, issue or sale of the Units shall not in any way constitute a representation that the information and representations given herein or in such documents are correct as at any time subsequent to the date of this Explanatory Memorandum or such documents. No action has been taken to permit the distribution of this Explanatory Memorandum in any jurisdiction where action would be required for such purpose. Accordingly, no person receiving a copy of this Explanatory Memorandum and/or an application form or subscription agreement in any territory may treat the same as constituting an invitation to him to purchase or subscribe for Units nor should he in any event use such an application form or subscription agreement unless in the relevant territory such an invitation could lawfully be made without compliance with any registration or other legal requirement. In particular, potential investors should note the following: Cayman Islands No offer or invitation to subscribe for Units may be made to the public in the Cayman Islands. This Explanatory Memorandum does not constitute such an offer or invitation. Hong Kong WARNING: The contents of this document have not been reviewed by any regulatory authority in Hong Kong. You are advised to exercise caution in relation to the offer. If you are in any doubt about any of the contents of this document, you should obtain independent professional advice. Hong Kong residents should be aware that neither the Fund nor any of its Sub-Funds have been authorized by the Securities and Futures Commission in Hong Kong ( SFC ) and the contents of this i

3 Explanatory Memorandum have not been reviewed by any regulatory authority in Hong Kong. Accordingly, Units may not be offered or sold in Hong Kong by means of this Explanatory Memorandum or any other document other than to professional investors or in other circumstances which do not constitute an offer to the public for the purposes of the Hong Kong Securities and Futures Ordinance. In other words, Units may only be offered or sold in Hong Kong on a private placement basis. No Units will be issued to any person other than the person to whom this Explanatory Memorandum has been sent. No person in Hong Kong other than the person to whom a copy of this Explanatory Memorandum has been addressed may treat the same as constituting an invitation to him to invest. This Explanatory Memorandum may not be reproduced in any form or transmitted to any person other than the person to whom it is addressed. The Manager may, after consulting the Trustee, apply to the SFC for authorization of the Fund and any of its Sub-Funds in Hong Kong without seeking Unitholders consent. However, the Manager has sole discretion to decide whether to apply, and there is no guarantee that the SFC will grant authorization. Japan Investors should note that no public offering of Units in the Fund may be made in Japan unless a securities registration statement pursuant to Articles 4 and 5 of the Financial Instruments and Exchange Law of Japan ( FIEL ) has been filed with the Director of Kanto Local Finance Bureau of the Ministry of Finance of Japan and a registration pursuant to the Law concerning Investment Trusts and Investment Corporations of Japan as amended ( Investment Trust Law ) has been filed with the Commissioner of the Financial Services Agency of Japan. The Manager has not filed, and has no intention to file, such securities registration statements for a public offering in Japan. Singapore The offer of Units which is the subject of this Explanatory Memorandum is only allowed to be made pursuant to exemptions from prospectus requirements under the Singapore Securities and Futures Act (Cap. 289) (the "Act") and not to the retail public in Singapore. The Fund is not authorised or recognised by the Monetary Authority of Singapore (the MAS ) and Units in the Fund are not allowed to be offered to the retail public in Singapore. Recipients of the Explanatory Memorandum in Singapore should note that the offering of the Units (as defined in this Explanatory Memorandum) is subject to the terms of the Explanatory Memorandum and the Act. Accordingly, the Units may not be offered nor may the Explanatory Memorandum or any other document or material in connection with the offer for subscription or purchase of such Units be circulated or distributed, whether directly or indirectly, to the retail public in Singapore other than to persons permitted to receive such offers under applicable exemptions, and pursuant to, and in accordance with the conditions of any other applicable provision of the Act. The first sale by investors of Units, if subscribed for or purchased in Singapore, are issued subject to the transferability conditions and restrictions stipulated under the Act. This Explanatory Memorandum has not been and will not be registered as a prospectus with the MAS and is not a prospectus as defined in the Act. Accordingly, statutory liability under the Act in relation to the content of prospectuses would not apply. The MAS takes no responsibility for the contents of this document. Investors should consider carefully whether this investment is suitable for them. United Kingdom Neither the Fund nor any of its Sub-Funds is authorized under the United Kingdom Financial Services and Markets Act 2000 (the "FSMA") in the United Kingdom and accordingly this Explanatory Memorandum must not be distributed in the United Kingdom other than to certain categories of person as specified in regulations made under the FSMA. Such categories include certain persons with sufficient expertise such as authorized persons, who understand the risks involved. ii

4 United States The Units have not been and will not be registered under the United States Securities Act of 1933, as amended (the Securities Act ) or any other state or other securities laws, and may not be offered of sold in the United States of America or to US Persons (as defined in the section headed 1. Definitions below) other than distributors, unless the Units are registered under the Securities Act, or an exemption from the registration requirements of the Securities Act is available. The Fund will not be registered under the Investment Company Act of 1940, as amended (the Investment Company Act ) in reliance on exemptions thereunder. Accordingly, the Units are subject to further restrictions on transferability and resale and may not be transferred or resold to US Persons except as permitted under the Securities Act, the Investment Company Act and any other applicable federal, state or other securities laws, pursuant to registration or an exemption from them. There will be no public market for the Units, and there is no obligation on the part of any person to register the Units under the Securities Act or any state securities laws. The Trust Deed gives powers to the Trustee and/or the Manager to require the realisation or transfer of Units held by any person in breach of any law or requirement of any country, governmental authority or any stock exchange on which such Units are listed or by any person or persons in circumstances (whether directly or indirectly affecting such person and whether taken alone or in conjunction with other persons connected or not, or any other circumstance appearing to the Manager and/or the Trustee to be relevant) which, in the opinion of the Trustee or the Manager, might result in the Fund or any Sub-Funds of the Fund or the Trustee or the Manager or any person connected with any of them breaching any law or requirement of any country or governmental authority or stock exchange on which such Units are listed, incurring any liability to taxation or suffering any other pecuniary disadvantage which the Fund or any Sub-Fund of the Fund or the Trustee or the Manager (or any person connected to any of them) might not otherwise have incurred or suffered or which might result in the Fund, any Sub-Fund of the Fund, the Trustee, the Manager (or any person connected to any of them) or any other service provider to the Fund or any Sub-Fund of the Fund becoming subject to additional regulation in any country or being required to comply with any registration or filing requirements in any jurisdiction with which it would not otherwise be required to comply or by any Unitholder in circumstances where such Units have a value of less than the stipulated minimum number or value of Units or if such person is not a Qualified Holder. Potential subscribers of Units should inform themselves as to (a) the possible tax consequences, (b) the legal requirements and (c) any foreign exchange restrictions or exchange control requirements which they might encounter under the laws of the countries of their citizenship, residence, incorporation or domicile and which might be relevant to the subscription, holding, or disposal of Units. This Explanatory Memorandum is intended solely for the use of the person to whom it has been delivered for the purpose of evaluating a possible investment by the recipient in the Units described herein, and is not to be reproduced or distributed to any other persons (other than professional advisors of the prospective investor receiving this Explanatory Memorandum). Investment involves risk and investors should note that losses may be sustained on their investment. There is no assurance that the investment objectives of the Sub-Funds of the Fund will be achieved. Investors should read this Explanatory Memorandum, particularly the section headed Risk Factors, before making their investment decisions. Enquiries and complaints Enquiries and complaints concerning the Fund and its Sub-Funds (including information concerning subscription and realisation procedures and the current Net Asset Value of the Sub-Funds) should be directed to the Manager by mail to Suites Two Exchange Square, 8 Connaught Place, Central, Hong Kong or by electronic mail at HGIclientservice@hk.jsfund.cn. The Manager will respond to any enquiry or complaint as soon as practicable. iii

5 Please note that this Explanatory Memorandum must be read together with the relevant Appendix and/or Addendum to this Explanatory Memorandum which relate to a specific Sub-Fund of the Fund. The Appendix and/or Addendum set out the details relating to a specific Sub-Fund (which may include, without limitation, specific information on the Sub-Fund and additional terms, conditions and restrictions applicable to the Sub-Fund). In the event of any inconsistency between the provisions of an Appendix and/or an Addendum in relation to a specific Sub-Fund and the Explanatory Memorandum, the provisions of the Appendix and/or Addendum of that Sub-Fund should apply. iv

6 TABLE OF CONTENTS Heading Page Number 1. DEFINITIONS DIRECTORY STRUCTURE INVESTMENT CONSIDERATIONS MANAGEMENT AND ADMINISTRATION MANAGER TRUSTEE ADMINISTRATOR, CUSTODIAN AND REGISTRAR AND TRANSFER AGENT AUDITORS INVESTING IN THE FUND DESCRIPTION OF UNITS THE INITIAL ISSUE OF UNITS SUBSEQUENT ISSUES MINIMUM SUBSCRIPTION PAYMENT PROCEDURE RESTRICTIONS ON ISSUE GENERAL REALISATIONS RESTRICTIONS ON REALISATIONS COMPULSORY REALISATIONS AND TRANSFERS CONVERSION OF UNITS ANTI-MONEY LAUNDERING REGULATIONS ELIGIBLE INVESTORS DISTRIBUTION POLICY RISK FACTORS AND CONFLICTS OF INTEREST RISK FACTORS POTENTIAL CONFLICTS OF INTEREST VALUATION AND PRICES CALCULATION OF NET ASSET VALUE SUSPENSIONS SUBSCRIPTION AND REALISATION PRICES OF UNITS ACCOUNTS AND INFORMATION CHARGES AND EXPENSES MANAGER'S FEES TRUSTEE S FEES, ADMINISTRATOR S, CUSTODIAN S AND REGISTRAR AND TRANSFER AGENT S FEES GENERAL EXPENSES

7 11. TAXATION CAYMAN ISLANDS HONG KONG GENERAL INFORMATION

8 1. DEFINITIONS Accounting Date Administrator 31 December in each year or such other date as the Manager may from time to time determine in respect of a Sub-Fund and as disclosed in the relevant Appendix; BNP Paribas Securities Services, Singapore Branch in its capacity as the delegate of the Trustee in order to carry out functions as the administrator of the Fund and/or such other person as may be appointed as administrator from time to time in respect of the Fund and/or specific Sub-Funds; Appendix the appendix and/or addendum containing specific information in relation to a Sub-Fund or a class or classes of Units in relation thereto which is enclosed with this Explanatory Memorandum and which forms part of this Explanatory Memorandum; Base Currency Business Day class or classes or class of Units Class Currency Code Custodian connected person in relation to a Sub-Fund, the currency of account of the Sub- Fund as disclosed in the relevant Appendix; unless otherwise provided for in the relevant Appendix in relation to a Sub-Fund, means a day (other than a Saturday or Sunday) on which banks in Hong Kong are open for normal banking business or such other day or days in relation to a Sub-Fund as the Manager may determine from time to time either generally or in respect of a particular class or classes of Units, provided that where as a result of a number 8 typhoon signal, black rainstorm warning or other similar event, the period during which banks in Hong Kong are open on any day is reduced, such day shall not be a Business Day unless the Manager determines otherwise; a class or classes of Units within a Sub-Fund; in relation to a class of Units in a Sub-Fund, the currency in which such class is denominated, as specified in the relevant Appendix; the Code on Unit Trusts and Mutual Funds issued by the SFC, as amended from time to time; BNP Paribas Securities Services, Singapore Branch in its capacity as the delegate of the Trustee in order to carry out functions as the custodian of the Fund and/or such other person as may be appointed as custodian from time to time in respect of the Fund and/or specific Sub-Funds; means, in relation to the Manager or the Trustee: (a) any person, company or fund beneficially owning, directly or indirectly, 20% or more of the ordinary share capital of the Manager (or the Trustee) or being able to exercise, directly or indirectly, 20% or more of the total 3

9 votes in the Manager (or the Trustee); or (b) any person, company or fund controlled by a person who or which meets one or both of the descriptions given in (a); or (c) any member of the group of which the Manager (or the Trustee) forms part; or (d) any director or officer of the Manager (or the Trustee) or of any of its connected persons as defined in (a), (b) or (c) above; Dealing Day Dealing Deadline EUR, Euro Explanatory Memorandum Fund IFRS Initial Offer Period in relation to a Sub-Fund, each Business Day or such other day or days as specified in the relevant Appendix, as the Manager may from time to time, with the approval of the Trustee, determine either generally or in respect of a particular class or classes of Units provided that reasonable notice of any such determination shall, unless the Trustee otherwise agrees, be given by the Manager to Unitholders of the relevant class or classes at such time and in such manner as the Trustee shall approve for processing applications for subscription and realisation of Units in the Sub-Fund. For the avoidance of doubt, different Dealing Days may be determined in relation to the issue and realisation of Units of a Sub-Fund and also in relation to different classes of Units of a Sub-Fund, as more particularly described in the relevant Appendix; in relation to a Dealing Day, such time either on the Dealing Day or an earlier Business Day as the Manager may from time to time determine generally or in relation to any particular jurisdiction in which Units may from time to time be sold and set out in the relevant Appendix (provided that different Dealing Deadlines may apply in relation to the issue and realisation of Units and also in relation to different classes of Units of a Sub-Fund, as more particularly described in the relevant Appendix); the currency of the member states of the European Union who are participants in the single European currency; this explanatory memorandum including any appendices or addenda, as may be amended, updated or supplemented from time to time; Harvest Funds (Cayman), an umbrella Cayman Islands unit trust established as an exempted trust; International Financial Reporting Standards; in relation to a Sub-Fund or a class or classes of Units in respect thereof, the initial period during which the Units of the relevant class of the Sub-Fund are being offered to investors as described in the relevant Appendix; 4

10 Initial Offer Price JPY, Yen, Japanese Yen Manager Net Asset Value PRC Qualified Holder Realisation Price Registrar and Transfer Agent RMB SFC SGD Sub-Fund Subscription Price in respect of each Sub-Fund or a class or classes of Units in respect thereof, the pre-determined price per Unit during the Initial Offer Period as disclosed in the relevant Appendix; the lawful currency of Japan; Harvest Global Investments Limited, a company incorporated with limited liability in Hong Kong or such other person as may be appointed as manager of the Fund and its Sub-Funds from time to time; the net asset value of the Fund or a Sub-Fund or, as the context may require, of a Unit of the class or classes relating to such Sub-Fund, calculated in accordance with the Trust Deed; the People s Republic of China; any person, corporation or entity other than (a) a US Person which is not a US Person who has acquired Units with the consent of the Manager (provided that the number or nature of such persons shall not exceed such number or shall include such qualification as the Manager shall determine from time to time with a view to precluding the Fund or any Sub-Fund from being required to register as an investment company under the Investment Company Act), (b) any person, corporation or entity which cannot acquire or hold Units without violating law, regulation or requirement of any country or governmental or other competent authority, or (c) a custodian, nominee, or trustee for any person described in (a) or (b) above; the price calculated in the manner described in the Trust Deed and the relevant Appendix at which Units will be realised; BNP Paribas Securities Services, Singapore Branch, in its capacity as the delegate of the Trustee in order to carry out functions as the registrar and transfer agent of the Fund or such other person as may be appointed as registrar and transfer agent from time to time; Renminbi, the lawful currency of the PRC; the Securities and Futures Commission of Hong Kong; the lawful currency of Singapore; a separate pool of assets within the Fund with respect to which one or more separate classes of Units may be issued and which is invested and administered separately from other assets of the Fund; the price at which Units will be issued after the Initial Offer Period calculated in the manner described in the Trust Deed and the relevant Appendix; 5

11 Trust Deed Trustee Unit Unitholders US dollars or USD or US$ US Person Valuation Day the trust deed dated 29 August 2011, as amended and/or supplemented from time to time, establishing the Fund between the Manager and the Trustee and includes, unless the context otherwise requires, the supplemental trust deeds establishing the relevant Sub-Funds; BNP Paribas Bank & Trust Cayman Limited in its capacity as the trustee of the Fund in accordance with the Trust Deed or such other person as may be appointed as trustee from time to time; a unit in a Sub-Fund and includes units of any class thereof and except where used in relation to a particular class of units, a reference to Units means and includes units of all classes; persons registered as holders of Units; the lawful currency of the United States of America; a person so defined by Regulation S under the Securities Act; in relation to a Sub-Fund, means each Business Day as at which the Net Asset Value of a Unit falls to be calculated as the Manager may from time to time determine with the prior approval of the Trustee (and until otherwise determined the Valuation Day in relation to each Dealing Day shall be such Dealing Day). 6

12 2. DIRECTORY Manager and distributor: Directors of the Manager: Principal Office of the Fund in the Cayman Islands: Harvest Global Investments Limited Suites Two Exchange Square 8 Connaught Place Central, Hong Kong ZHAO Xuejun CHOY Peng Wah WRIGHT Lindsay Megan BANG Michele Mi-Kyung WANG Wei c/o BNP Paribas Bank & Trust Cayman Limited 3 rd Floor, Royal Bank House24 Shedden Road P.O. Box Grand Cayman KY Cayman Islands Trustee: BNP Paribas Bank & Trust Cayman Limited 3 rd Floor, Royal Bank House 24 Shedden Road P.O. Box Grand Cayman KY Cayman Islands Administrator, Custodian and Registrar and Transfer Agent BNP Paribas Securities Services, Singapore Branch 20 Collyer Quay #01-01 Tung Centre Singapore Auditors: PricewaterhouseCoopers P.O. Box 258 Strathvale House, George Town Grand Cayman KY Cayman Islands Legal Advisers to the Manager: As to matters of Cayman Islands law: - Maples and Calder 53 rd Floor, The Center 99 Queen s Road, Central Hong Kong 7

13 As to matters of Hong Kong and international law:- Deacons 5th Floor Alexandra House 18 Chater Road Central Hong Kong 8

14 3. STRUCTURE The Fund is a unit trust constituted as an umbrella fund pursuant to the Trust Deed and governed by the laws of the Cayman Islands. The Fund has been established as an umbrella fund and accordingly the assets of the Fund will be separated into different Sub-Funds. Units of each Sub-Fund may be issued in different classes of Units, as specified in the relevant Appendices. The Manager may issue one or more Sub-Funds and/or a new class or classes of Units related thereto from time to time subject to the Trustee s acceptance of a notice of establishment given to the Trustee by the Manager as provided for in the Trust Deed. The assets of a Sub- Fund will be invested and administered separately from the assets of the other Sub-Funds issued. The details of the Sub-Funds and/or the new class or classes of Units related thereto in respect of which Units are on offer are set out in this Explanatory Memorandum or in the Appendices to this Explanatory Memorandum. The Trustee will act as trustee of the Fund and shall stand possessed of the assets of the Fund and each Sub-Fund on behalf of and for the benefit of the Unitholders. The Manager will act as investment manager for the Fund and its Sub-Funds and is subject to the removal by the Trustee in accordance with the provisions of the Trust Deed. The Base Currency of a Sub-Fund will be set out in the relevant Appendix. Each class of Units within a Sub-Fund will be denominated in the Class Currency thereof, which may be the Base Currency of the Sub-Fund to which such class relates or such other currency of account as specified in this Explanatory Memorandum or in the relevant Appendix. The Fund and each of its Sub-Funds is constituted as a trust and does not have separate legal personality and cannot enter into contracts or take or refrain from taking any action. Therefore, all references to the Fund or a Sub-Fund entering into any contract or taking or refraining from taking any action in this Explanatory Memorandum or in any Appendix shall mean the Trustee and/or the Manager doing so in its capacity as trustee and/or manager, as the case may be, of the Fund, or the relevant Sub-Fund pursuant to the terms of the Trust Deed. 9

15 4. INVESTMENT CONSIDERATIONS The investment objective of each Sub-Fund, the investment strategy, policy and restrictions and risk factors applicable to the Units of each Sub-Fund, its borrowing policy, as well as other important details are set forth in the relevant Appendices relating to the Sub-Funds. 10

16 5. MANAGEMENT AND ADMINISTRATION MANAGER Harvest Global Investments Limited has been appointed as the Manager of the Fund, with responsibility for the selection of investments and the day-to-day management of the Fund and the Sub-Funds. Subject to the terms of the Trust Deed, the Manager has full discretionary investment management authority in respect thereof. The Manager was established in Hong Kong in 23 September 2008 and is a wholly owned subsidiary of Harvest Fund Management Co., Ltd, a company registered in the People s Republic of China. The Manager is licensed and regulated by the SFC to conduct Type 1 regulated activity (dealing in securities), Type 4 regulated activity (advising on securities) and Type 9 regulated activity (asset management). In September 2009, the Chinese Equities and Asian equity teams at Deutsche Asset Management joined the Manager. The appointment of the Manager will continue unless and until terminated by the Trustee or the Manager in accordance with the Trust Deed. The Manager also acts as the global distributor of the Fund and the Sub-Funds and may appoint one or more sub-distributors and/or placing agents to distribute on its behalf Units in one or more Sub-Funds and/or classes of Units in respect thereof. The Manager is entitled to the fees set out below under the section headed 10. Charges and Expenses Manager s Fees. The directors of the Manager are Zhao Xuejun, Choy Peng Wah, Lindsay Megan Wright, Michele Bang and Wang Wei. Their biographies are set out below. Zhao Xuejun Chairman of the Board of Directors and Non-Executive Director Dr. Zhao Xuejun is the Chief Executive Officer and board member of Harvest Fund Management Co., Ltd., the parent company of the Manager. He has been in the financial industry for more than 16 years with 14 years management experience. Dr. Zhao joined Harvest Fund Management Co., Ltd. in October Under his leadership, Harvest Fund Management Co., Ltd. has become one of the top asset management companies in China. Prior to joining Harvest Fund Management Co., Ltd., he worked for Da Cheng Fund Management Co., Ltd., serving as Assistant General Manager and Deputy General Manager. Dr. Zhao holds a PhD in Economics from Guanghua School of Management, Peking University. Choy Peng Wah Vice Chairman of the Board of Directors and Executive Director Mr. Choy Peng Wah is the Chief Executive Officer of the Manager and joined the Manager in February He has more than 15 years of Asian fund management experience. Prior to joining Harvest Global Investments Limited, Mr. Choy was the Deputy Chief Executive Officer of Fullerton Fund Management Company Ltd. and before that Regional Head, Sales and Distribution for Prudential s fund management business in Asia. Prior to Prudential, Mr. Choy was the Chief Executive Officer at Deutsche Asset Management Asia, ex-japan, based in Singapore for 7 years. During his time at Deutsche, he was responsible for Deutsche s expansion into South Korea, India and China. Mr. Choy started his career at Citibank Singapore as an executive trainee and has worked in Citibank s offices in New York and Hong Kong in a variety of capacities. Mr. Choy holds a Masters in Business Administration from McGill University in Canada. 11

17 Lindsay Megan Wright Vice Chairman of the Board of Directors and Non-Executive Director Ms. Lindsay Wright is the Head of Strategy for the Harvest Group and Head of Harvest Alternative Investment Partners, the newly established alternatives business of the Harvest Fund Management Group. Ms. Wright joined Harvest Alternative Investment Partners in September 2010 and has more than 20 years of experience in the financial industry. Prior to joining Harvest Alternative Investment Partners, Ms. Wright was Managing Director and Global Head of Strategy and Business Development for Deutsche Asset Management/DWS based in New York. Her previous positions at Deutsche Asset Management and Deutsche Bank which spanned 24 years included Head of Strategy and Business Development for Deutsche Asset Management, Asia Pacific and Middle East region based in Singapore, Chief Operating Officer Deutsche Asset Management, Asia Pacific based in Tokyo, Managing Director and Partner, DB Capital Partners Asia Pacific, the direct private equity business of Deutsche Bank, based in Sydney and Managing Director, Chief Financial and Operating Officer Deutsche Bank New Zealand (formerly Bankers Trust New Zealand) based in Auckland. Ms. Wright holds a Bachelor of Commerce degree major in law and accounting from Auckland University in New Zealand. Michele Bang Non-Executive Director Ms. Michele Bang is the Managing Director of Strategy and Business Development Team of Deutsche Asset Management Hong Kong and leads its partnership with Harvest Fund Management Co., Ltd. From July 2009 to February 2011, Ms. Bang was seconded from Deutsche Asset Management (Asia) Ltd. to serve as the Chief Executive Officer of Harvest Global Investments Limited. Prior to her assignment at Harvest Global Investments Limited, Ms. Bang served as the Chief Executive Officer of Asia (Ex-Japan) for Deutsche Asset Management (Asia) Ltd., Singapore from July 2005 to July 2009 where she ran DeAM s Asset Management units in Korea, Taiwan, Hong Kong, Singapore, India and the Philippines. Ms. Bang started her career at Manufacturers Hanover Trust Co. New York in 1987 as a management trainee and has since worked in Asia regional management roles for fixed income and derivatives businesses of various global financial institutions based in Tokyo and Hong Kong. Ms. Bang holds a B.A. in International Relations from Cornell University. Wang Wei Non-Executive Director Ms. Wang Wei is the Chief Compliance Officer of Harvest Fund Management Co., Ltd. and joined Harvest Fund Management Co., Ltd. in January Ms Wang had been the Head of Legal at Harvest Fund Management Co., Ltd. Prior to joining Harvest Fund Management Co., Ltd,, Ms. Wang has worked in the Law School of China University of Political Science and Law, Beijing Lutong United Law Firm, Beijing Zhihao Law Firm and New China Insurance Company Limited. Ms. Wang holds a Master Degree of Law from the China University of Political Science and Law. TRUSTEE BNP Paribas Bank & Trust Cayman Limited has been physically present in the Cayman Islands since 1995 and is licensed and regulated by the Cayman Islands Monetary Authority as a Category B Bank and Unrestricted Trust Company as well as a Mutual Fund Administrator. The Trustee has a staff of seasoned professionals combining over 25 years of experience in all aspects of servicing corporate trusteeships, mutual fund and special purpose vehicles including custody, principal and registered office services. The Trustee is a wholly owned subsidiary of BNP Paribas Securities Services which in turn is a wholly owned subsidiary of the BNP Paribas Group. Under the Trust Deed, the Trustee is responsible for the safe-keeping of the assets of the Fund. The Trustee may, however, appoint any agent, nominee, custodian, joint custodian in respect of the safekeeping of such assets. The Trustee shall remain liable for any act or omission of any agent, nominee, 12

18 custodian or joint custodian (other than Clearstream or Cedel, S.A or any other depositories or clearing system) in respect of such assets deposited with such agent, nominee, custodian or joint custodian (other than aforesaid) as if the same were the act or omission of the Trustee. The Trustee and/or its appointed agents or delegates shall monitor the Manager s performance of its functions in respect of the Manager s adherence to the applicable investment guidelines of each Sub-Fund and shall conduct periodic meetings with the Manager. In the absence of fraud, negligence, wilful default, breach of duty or trust by the Trustee, the Trustee shall not incur any liability by reason of any error of law or thing done or suffered or omitted to be done by it in good faith under the provisions of the Trust Deed. The Trustee shall be entitled to be indemnified out of the assets of the relevant Sub-Fund for any action, costs, claims, damages, expenses or demands relating to such Sub-Fund other than those arising from its fraud, negligence, wilful default, breach of duty or that of its agents or delegates or imposed on the Trustee pursuant to the laws of Hong Kong. The appointment of the Trustee may be terminated in the circumstances set out in the Trust Deed. The Trustee is entitled to the fees set out below under the sub-section headed Trustee s Fees, Administrator s, Custodian s and Registrar and Transfer Agent s Fees under the section headed Charges and Expenses. The Trustee, in its capacity as trustee of the Fund, has delegated certain of its functions and duties to BNP Paribas Securities Services, Singapore Branch. ADMINISTRATOR, CUSTODIAN AND REGISTRAR AND TRANSFER AGENT The Trustee has appointed BNP Paribas Securities Services, Singapore Branch as its delegate to provide administrative (administration, registrar and transfer agent inclusive) and custodian services for the Fund. BNP Paribas Securities Services, Singapore Branch was registered on 7 November 2008 as the Singapore branch of a company incorporated under the laws of France as a Société Anonyme (public limited company). The share capital of BNP Paribas Securities Services stands at EUR165,279,835, fully paid up, and its registered office is located at 3 Rue d Antin, Paris, France. The parent company of BNP Paribas Securities Services is BNP Paribas, a company incorporated under the laws of France as a Société Anonyme (public limited company). BNP Paribas Securities Services, Singapore Branch is a licensed bank in Singapore regulated by the MAS. Its banking license was granted with effect from 16 April It became a Bank Clearing Member of the Singapore Exchange Derivatives Clearing Limited on 9 June BNP Paribas Securities Services, Singapore Branch in its capacity as administrator of the Fund, pursuant to an agreement entered into between the Administrator and the Trustee, is responsible for, inter alia, the general administration of the Fund, which includes keeping the respective registers of Unitholders, the proper book-keeping of the Fund, arranging for the issue and realisation of Units of the Fund, and calculating the Net Asset Value. BNP Paribas Securities Services, Singapore Branch in its capacity as custodian of the Fund pursuant to an agreement entered into between the Custodian and the Trustee, is responsible for, inter alia, the safekeeping of the assets of the Fund. Sub-custodians may be appointed by the Custodian, provided that the Custodian shall exercise such care and diligence in choosing and appointing sub-custodians so as to ensure that such sub-custodians have and maintain the expertise, competence and standing appropriate to discharge their responsibilities. The Custodian will maintain an appropriate level of supervision over the sub-custodians and will make appropriate enquiries from time to time to confirm that the obligations of the sub-custodians continue to be competently discharged. 13

19 BNP Paribas Securities Services, Singapore Branch, as the Administrator, Custodian and Registrar and Transfer Agent does not warrant the contents of this Explanatory Memorandum and is not involved in the management of the Fund. AUDITORS PricewaterhouseCoopers Cayman Islands has been appointed auditors to the Fund and will conduct their audits in accordance with International Standard on Auditing. Under the standard terms of the annual engagement letter which the Fund has entered into with the Auditors, the Auditors' liability under such letter is expected be capped based upon a multiple of fees paid to the Auditors under such letter, except to the extent finally determined to have resulted from the wilful or intentional neglect or misconduct or fraudulent behaviour by the Auditors. The annual engagement letter is also expected to contain a limitation of any liability to the Auditors' proportionate share thereof and other release and indemnity provisions relating to consequential loss, third party claims and fraudulent acts or omissions, misrepresentation or wilful default on the part of the Manager, employees or agents of the Manager. PricewaterhouseCoopers' audit reports may only be relied upon by those parties to whom they are addressed. 14

20 6. INVESTING IN THE FUND Units of each Sub-Fund will be offered to qualified investors on the terms described in the relevant Appendices. The Manager may establish and issue from time to time new Sub-Funds and/or issue a class or classes of Units in relation thereto subject to the Trustee s acceptance of a notice of establishment given to the Trustee by the Manager as provided for in the Trust Deed. Each such class may be issued in differing currencies, have differing investment parameters, fee structures, liquidity terms and other features. DESCRIPTION OF UNITS Classes of Units Without prejudice to the Manager s ability to issue new classes of Units from time to time as aforesaid, a Sub-Fund may establish and offer one or more of the following classes of Units to qualified investors, unless otherwise provided in the relevant Appendix: Class Class S (USD) Units Class S (EUR) Units Class S (SGD) Unit Class S (HKD) Units Class S (RMB) Units Class I (USD) Units Class I (EUR) Units Class I (SGD) Units Class I (HKD) Units Class I (RMB) Units Class P (USD) Units Class P (EUR) Units Class P (SGD) Units Class P (HKD) Units Class P (RMB) Units Class A (USD) Units Class A (EUR) Units Class Currency US Dollars Euro SGD HKD RMB US Dollars Euro SGD HKD RMB US Dollars Euro SGD HKD RMB US Dollars Euro 15

21 Class A (SGD) Units Class A (HKD) Units Class A (RMB) Units Class J Units SGD HKD RMB JPY Class S Units will only be made available with the Manager s express agreement. Class I Units will be offered to institutional investors in accordance with applicable laws and regulations in the relevant jurisdictions and to such other persons (whether qualifying as an institutional investor or not) as the Manager determines from time to time. Class P Units will only be offered to selected distributors and private banks, whether as principal or as nominee for and on behalf of their respective clients. Class A Units will be offered to investors generally (including retail investors in jurisdictions where a Sub-Fund is authorized by applicable laws and regulations to be offered to retail investors). Class J Units will only be offered to and can only be acquired by investors that are established as Fund of Funds type of investment vehicles as defined from time to time in the Regulations on Management of Investment Trust etc. of the Investment Trusts Association of Japan, regardless of whether it is resident or established in Japan or elsewhere. Notwithstanding the above, investors should note that the offer and issuance of Units of any class or classes shall be at the discretion of the Manager, upon giving prior notice to the Trustee. Hedging A class of Units of a Sub-Fund designated in a Class Currency other than the Base Currency of such Sub- Fund may, in the Manager s discretion, be hedged against exchange rate fluctuation risks between the designated Class Currency of the Units and the Base Currency in which the assets of that Sub-Fund are designated. Any such hedged classes of Units will be disclosed in the relevant Appendices. Any expenses arising from such hedging transactions will be borne by the class of Units in relation to which they have been incurred. Investors should note that such hedging techniques/transactions may not completely eliminate exposure to currency movements and may not necessarily succeed in protecting investors against exchange rate risks that the Sub-Fund is exposed to. Please see section below headed Risk Factors for more details. THE INITIAL ISSUE OF UNITS Units of a class of each Sub-Fund will be offered for the first time to investors during the Initial Offer Period at the Initial Offer Price as set forth in the relevant Appendix. Unless otherwise waived by the Manager (either in whole or in part and whether generally or in a particular case), the Manager may levy a preliminary charge of up to 5% of the Subscription Price in respect of Units subscribed for. The preliminary charge, if any, is described in the relevant Appendix. The Manager may retain the benefit of such charge or may re-allow or pay all or part of the preliminary charge (and any other fees received) to intermediaries or such other persons as the Manager may at its discretion determine. To purchase Units, an investor should complete the subscription form which is available from the Manager ("Subscription Form") and return it to the Administrator (details of which are set out in the Subscription Form). 16

22 In respect of applications which are received prior to 4:00 p.m. (Hong Kong time) or such other time as the Manager may determine, on the day of the close of the Initial Offer Period, Units will be issued following the close of the Initial Offer Period provided that application monies are received in cleared funds on or before the day of the close of the Initial Offer Period or such other period as the Manager, with the approval of the Trustee, may determine. If applications and/or cleared funds are received after that time, such applications shall be carried forward to the next Dealing Day unless otherwise determined by the Manager and provided for in the relevant Appendix. All monies received prior to the close of the Initial Offer Period will not be invested in securities until after the last day of the Initial Offer Period. All interest earned, if any, on these monies, will accrue for the benefit of the relevant Sub-Fund. Applications may be sent by facsimile provided the original follows promptly unless the applicant has already made arrangements with the Manager or the Administrator to allow orders to be made via facsimile instructions and without the same being followed by original orders. Applicants should be reminded that if they choose to send Subscription Forms by facsimile, they bear their own risk of the Subscription Forms not being received by the Administrator. Applicants should therefore for their own benefit confirm with the Administrator the receipt of a Subscription Form. Applicants should note that none of the Trustee, the Manager, the Administrator or any of their authorised agents or delegates accept any responsibility for any loss caused as a result of non-receipt or illegibility of any application sent by facsimile or for any loss caused in respect of any action taken as a consequence of such facsimile believed in good faith to have originated from properly authorised persons. This is notwithstanding that a facsimile transmission report produced by the originator of such transmission discloses that such transmission was sent. SUBSEQUENT ISSUES Following the close of the Initial Offer Period, Units may be issued on any Dealing Day for applications in respect of applications which are received prior to the Dealing Deadline in relation to that Dealing Day. Applications should be sent to the Administrator details of which are set out in the Subscription Form which is available from the Manager. Applications will generally be accepted only if the Subscription Form and application monies in cleared funds have been received on or prior to the Dealing Deadline relating to the relevant Dealing Day unless otherwise determined by the Manager or the Trustee and provided for in the relevant Appendix. Unless otherwise agreed by the Manager, applications received after the Dealing Deadline in relation to a Dealing Day for applications will be held over until the Dealing Day for applications next following such Dealing Day. The Manager also has the discretion to accept application monies after the relevant Dealing Deadline or Dealing Day as set out in the relevant Appendix. Applications may be sent by facsimile provided the original follows promptly unless the investor has already made arrangements with the Manager or Administrator to allow orders to be made via facsimile instructions and without the same being followed by original orders. Applicants should be reminded that if they choose to send Subscription Forms by facsimile, they bear their own risk of the Subscription Forms not being received by the Administrator. Applicants should therefore for their own benefit confirm with the Administrator the receipt of a Subscription Form. Applicants should note that none of the Trustee, the Administrator or the Manager or any of their authorised agents or delegates accepts any responsibility for any loss caused as a result of non-receipt or illegibility of any application sent by facsimile or for any loss caused in respect of any action taken as a consequence of such facsimile believed in good faith to have originated from properly authorised persons. This is notwithstanding that a facsimile transmission report produced by the originator of such transmission discloses that such transmission was sent. 17

23 The price at which Units in a Sub-Fund will be issued on any particular Dealing Day will be the Subscription Price, calculated in the manner provided in the Trust Deed and as may be described in the relevant Appendix. Unless otherwise waived by the Manager (either in whole or in part and whether generally or in a particular case), the Manager may levy a preliminary charge of up to 5% of the Subscription Price in respect of Units subscribed for. The preliminary charge, if any, is described in the relevant Appendix. The Manager may retain the benefit of such charge or may re-allow or pay all or part of the preliminary charge (and any other fees received) to intermediaries or such other persons as the Manager may at its discretion determine. Where the current level of preliminary charge is stated in an Appendix, the Manager will give not less than one (1) month s prior notice to Unitholders should there be any increase in preliminary charge from the stated current level charged to Unitholders. Applications may also be submitted through sub-distributors or placing agents appointed specifically for the purpose of distributing a Sub-Fund. Investors should note that different sub-distributors or placing agents may impose an earlier cut-off time before the Dealing Deadlines for receiving instructions for subscriptions, realiastions or conversions. Investors should confirm the arrangements with the subdistributor(s) or placing agents concerned. The list of appointed sub-distributors or placing agents appointed may be obtained from the Manager. MINIMUM SUBSCRIPTION The minimum initial investment for Units in a Sub-Fund or a class or classes of Units in relation thereto will be such number of Units or value as set out below or in the relevant Appendix (or such lesser amount as the Manager may agree from time to time, whether generally or in a particular case). Additional subscriptions for Units may be made in increments equal to or greater than such number of Units or value as set out below or in the relevant Appendix (or such lesser amount as the Manager may agree from time to time, whether generally or in a particular case). Class Minimum Initial Investment Minimum Subsequent Investment Class S (USD) Units USD 5 million USD 10,000 Class S (EUR) Units EUR 3 million EUR 10,000 Class S (SGD) Unit SGD 5 million SGD 10,000 Class S (HKD) Units HKD 30 million HKD 50,000 Class S (RMB) Units RMB 30 million RMB 50,000 Class I (USD) Units USD 5 million USD 10,000 Class I (EUR) Units EUR 3 million EUR 10,000 Class I (SGD) Units SGD 5 million SGD 10,000 Class I (HKD) Units HKD 30 million HKD 50,000 Class I (RMB) Units RMB 30 million RMB 50,000 18