GRAMERCY INVESTMENT FUNDS PLC

Transcription

1 The Directors of the Company whose names appear on page iv accept responsibility for the information contained in this document. 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 is in accordance with the facts and does not omit anything likely to affect the import of such information. GRAMERCY INVESTMENT FUNDS PLC (an investment company with variable capital incorporated with limited liability in Ireland and established as an umbrella fund with segregated liability between sub-funds pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2011, as amended) PROSPECTUS for GRAMERCY LOCAL EMERGING MARKET DEBT FUND GRAMERCY CORPORATE EMERGING MARKET DEBT FUND GRAMERCY HIGH YIELD CORPORATE EMERGING MARKET DEBT FUND GRAMERCY TOTAL RETURN ALLOCATOR EMERGING MARKET DEBT FUND Dated 30 September 2014 GR213/001/AC#

2 THIS DOCUMENT CONTAINS IMPORTANT INFORMATION ABOUT THE COMPANY AND THE FUNDS AND SHOULD BE READ CAREFULLY BEFORE INVESTING. IF YOU HAVE ANY QUESTIONS ABOUT THE CONTENTS OF THIS PROSPECTUS, YOU SHOULD CONSULT YOUR BANK MANAGER, LEGAL ADVISOR, ACCOUNTANT, OR OTHER FINANCIAL ADVISOR. Certain terms used in this Prospectus are defined in the Definitions section of this Prospectus. Authorisation by the Central Bank The Company has been authorised by the Central Bank as a UCITS within the meaning of the Regulations. The authorisation of the Company is not an endorsement or guarantee of the Company by the Central Bank nor is the Central Bank responsible for the contents of this Prospectus. Authorisation of the Company by the Central Bank does not constitute a warranty as to the performance of the Company and the Central Bank shall not be liable for the performance or default of the Company or of the Funds. Investment Risks There can be no assurance that the Funds will achieve their investment objective. It should be appreciated that the value of Shares may go down as well as up and, accordingly, an investor may not get back the full amount invested. An investment in a Fund involves investment risks, including possible loss of the entire amount invested. The capital return and income of the Funds are based on the capital appreciation and income on the investments it holds, less expenses incurred. Therefore, a Fund s return may be expected to fluctuate in response to changes in such capital appreciation or income. A subscription fee of up to 3.00% may be payable to the Company on subscriptions for Shares and a redemption fee of up to 3.00% may be payable to the Company on redemptions of Shares by an investor in a Fund. Distributors or financial intermediaries who market the Funds may also be entitled to receive a subscription fee from investors. An Anti-Dilution Levy of up to 2.00% may also be payable on net subscriptions for and net redemptions of Shares. The difference at any one time between the subscription and redemption price of Shares means that the investment should be viewed as medium to long term. Investors attention is drawn to the specific risk factors set out in the section of this Prospectus entitled Risk Factors. Selling Restrictions The distribution of this Prospectus and the offering or purchase of the Shares may be restricted in certain jurisdictions. No persons receiving a copy of this Prospectus or the accompanying application form in any such jurisdiction may treat this Prospectus or such application form as constituting an invitation to them to subscribe for Shares, nor should they in any event use such application form, unless in the relevant jurisdiction such an invitation could lawfully be made to them and such application form could lawfully be used without compliance with any registration or other legal requirements. Accordingly, this Prospectus does not constitute an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not lawful or in which the person making such offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such offer or solicitation. It is the responsibility of any persons in possession of this Prospectus and any persons wishing to apply for Shares pursuant to this Prospectus to inform themselves of, and to observe, all applicable laws and regulations of any relevant jurisdiction. Prospective applicants for Shares should inform themselves as to the legal requirements of so applying and any applicable exchange control regulations and taxes in the countries of their respective citizenship, residence, incorporation, or domicile. Before investing in a Fund an investor shall be required to confirm whether the investor is an Irish Resident for tax purposes. ii

3 United States: The Shares have not been and will not be registered under the Securities Act of 1933 of the United States (as amended) (the 1933 Act ) or the securities laws of any of the states of the United States, nor is such registration contemplated. The Shares are being offered outside the United States pursuant to the exemption from registration under Regulation S under the 1933 Act. In addition, the Company will not be registered as an investment company under the United States Investment Company Act of 1940 (as amended) (the 1940 Act ). The Shares may not be offered, sold, or delivered directly or indirectly in the United States or to or for the account or benefit of any U.S. Person except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the 1933 Act and any applicable state laws. Any reoffer or resale of any of the Shares in the United States or to U.S. Persons may constitute a violation of United States law. Each applicant for Shares will be required to certify whether it is a U.S. Person. In order to comply with U.S. federal securities laws and tax regulations, the Directors may compulsorily redeem Shares beneficially owned by U.S. Persons. Applicants will be required to certify whether they are Irish Residents or Ordinarily Resident in Ireland and may be required to confirm that they are not U.S. Persons. This Prospectus has been prepared solely for the information of the person to whom it has been delivered by or on behalf of the Company, and should not be reproduced or used for any other purpose. Notwithstanding anything herein to the contrary, each Shareholder (and each employee, representative or other agent of such Shareholder) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of: (i) the Company and the Funds; and (ii) any of their transactions, and all materials of any kind (including options or other tax analyses) that are provided to such Shareholder relating to such tax treatment and tax structure. Marketing Rules Shares are offered only on the basis of the information contained in the current key investor information document and Prospectus and the latest audited annual accounts and any subsequent halfyearly report. Investors should note that the auditor s report on the Company s annual accounts is made only to the Company and the Shareholders as a body at the date of the auditor s report. Any further information or representation given or made by any dealer, salesman or other person should be disregarded and accordingly should not be relied upon. Neither the delivery of this Prospectus nor the offer, issue or sale of Shares shall, under any circumstances, constitute a representation that the information given in this Prospectus is correct as of any time subsequent to the date of this Prospectus. Statements made in this Prospectus are based on the law and practice currently in force in Ireland and are subject to changes therein. The distributor of this Prospectus in some jurisdictions may require the translation of this Prospectus into other languages specified by the regulatory authorities of those jurisdictions provided that any such translation shall be a direct translation of the English text. In the event of any inconsistency or ambiguity in relation to the meaning of any word or phrase in translation, the English text shall prevail and all disputes as to the terms thereof shall be governed by, and construed in accordance with, the laws of Ireland. This Prospectus should be read in its entirety before making an application for Shares. iii

4 DIRECTORY The Board of Directors Registered Office Investment Manager and Promoter Administrator Custodian Auditor Legal Advisors in Ireland Company Secretary Mr. Vincent Dodd Mr. Gunter Heiland (Chairman) Mr. Milton Koenigsberger Mr. Kevin Murphy Mr. Dennis Wilson Arthur Cox Building Earlsfort Terrace Dublin 2 Ireland Gramercy Funds Management LLC 20 Dayton Avenue Greenwich CT U.S.A. State Street Fund Services (Ireland) Limited 78 Sir John Rogerson s Quay Dublin 2 Ireland State Street Custodial Services (Ireland) Limited 78 Sir John Rogerson s Quay Dublin 2 Ireland PricewaterhouseCoopers One Spencer Dock North Wall Quay Dublin 1 Ireland Arthur Cox Earlsfort Centre Earlsfort Terrace Dublin 2 Ireland Bradwell Limited Arthur Cox Building Earlsfort Centre Earlsfort Terrace Dublin 2 Ireland iv

5 INDEX SUMMARY... 1 DEFINITIONS... 3 INTRODUCTION... 9 INVESTMENT OBJECTIVES AND POLICIES OF THE FUNDS... 9 Gramercy Local Emerging Market Debt Fund... 9 Gramercy Corporate Emerging Market Debt Fund Gramercy High Yield Corporate Emerging Market Debt Fund Gramercy Total Return Allocator Emerging Market Debt Fund SHARE CLASSES BORROWING ADHERENCE TO INVESTMENT OBJECTIVES, STRATEGIES AND POLICIES DISTRIBUTION POLICY INVESTMENT RESTRICTIONS INVESTMENT TECHNIQUES AND INSTRUMENTS RISK FACTORS FEES AND EXPENSES ADMINISTRATION OF THE COMPANY Determination of Net Asset Value Application for Shares Anti-Money Laundering Procedures Subsequent Subscriptions Subscription Price Written Confirmations of Ownership Redemption Requests Redemption Price Mandatory Redemption of Shares Transfer of Shares Withholdings and Deductions Conversion of Shares Excessive Trading Publication of the Price of the Shares Temporary Suspension of Valuation of the Shares and of Sales and Redemptions Data Protection Notice MANAGEMENT AND ADMINISTRATION The Board of Directors The Investment Manager The Administrator The Custodian The Distributor The Paying Agents TAXATION GENERAL Conflicts of Interest The Share Capital The Funds and Segregation of Liability Termination Meetings Reports Best Execution Policy Voting Policy Complaints Miscellaneous Material Contracts v

6 Supply and Inspection of Documents SCHEDULE I THE REGULATED MARKETS SCHEDULE II INVESTMENT RESTRICTIONS APPLICABLE TO THE FUNDS SCHEDULE III INVESTMENT TECHNIQUES AND INSTRUMENTS SCHEDULE IV CLASSES OF SHARES vi

7 GRAMERCY INVESTMENT FUNDS PLC SUMMARY The information set out under this heading is a summary of the principal features of the Company and should be read in conjunction with the full text of this Prospectus. Structure The Company is an umbrella fund with segregated liability between Funds, established as an openended, variable capital investment company incorporated as a public limited company under the laws of Ireland. The Articles of Association provide for separate Funds, each representing interests in a separate and defined portfolio of assets and liabilities, which may be issued, from time to time with the approval of the Central Bank. Investment Objectives Gramercy Local Emerging Market Debt Fund The investment objective of the Fund is to achieve a high total return comprised of income, currency and capital appreciation. Gramercy Corporate Emerging Market Debt Fund The investment objective of the Fund is to achieve a high total return comprised of income and capital appreciation. Gramercy High Yield Corporate Emerging Market Debt Fund The investment objective of the Fund is to achieve a high total return comprised of income and capital appreciation. Gramercy Total Return Allocator Emerging Market Debt Fund The investment objective of the Fund is to achieve a high total return comprised of income and capital appreciation. Share Classes A number of Classes of Shares are available in respect of the Funds, details of which are set out in Schedule IV. The minimum initial and minimum subsequent subscription requirements and the Minimum Holding requirements in respect of each Class of Shares are set out in Schedule IV. The Company reserves the right to vary the minimum initial investment, the minimum subsequent investment and the Minimum Holding in the future and may choose to waive or reduce these criteria. Distribution Policy For the Distributing Classes of each Fund, it is expected that the Directors will declare and pay annual dividends on or before the last Business Day in May each year equal to all or substantially all of the Fund s net income attributable to such Share Classes. Dividends may be paid from net income and/or realised gains net of realised and unrealised losses attributable to the relevant Share Classes. The Directors have delegated to the Investment Manager the power to determine if, and to what extent, dividends will be paid and if they will include realised gains net of realised and unrealised losses attributable to the relevant Share Classes. To the extent that the net income and net realised gains 1

8 attributable to the relevant Share Classes exceeds the amount declared payable, the excess return will be reflected in the Net Asset Value of such Share Classes. Dividends will be automatically reinvested in the Fund unless the Administrator is otherwise notified by the Shareholder upon subscription, in which case dividends will be paid by wire transfer in the Class Currency of the relevant Share Class to the Shareholder s account. It is not proposed to declare dividends in respect of the Accumulating Shares of each Fund and any net income and realised gains net of realised and unrealised losses attributable to such Classes will be accumulated in the Net Asset Value per Share of that Class. Fees and Expenses Investors attention is drawn to the details of the fees and expenses charged to the Funds set out in the section of this Prospectus entitled Fees and Expenses. Dealing Days Shares may be issued on a Dealing Day by sending an application form to the Administrator to arrive no later than the Trade Cut-Off Time. Shares may be redeemed on a Dealing Day by sending a redemption form to the Administrator to arrive no later than the Trade Cut-Off Time. Taxation As an investment undertaking within the meaning of Section 739B (1) of the TCA, the Company is exempt from Irish tax on its income and gains and the Company will not be required to account for any tax in respect of Shareholders who are not Irish Residents provided that the necessary signed declarations are in place. The Company may be required to account for tax in respect of Shareholders who are Irish Residents. Investor Restrictions The Shares may not be offered or sold in any jurisdiction in which such offer or sale is not lawful or in which the person making such offer or sale is not qualified to do so or to anyone to whom it is unlawful to make such an offer or sale. Except as otherwise provided in this Prospectus, Shares may not be purchased or held by or for the account of any U.S. Person. Applicants and transferees will be required to certify whether or not they are Irish Residents. Investment Risks An investment in a Fund involves investment risks, including possible loss of the amount invested. There can be no assurance that a Fund will achieve its investment objective. A more detailed description of certain investment risks relevant to investors in the Company is set out in the sections of this Prospectus entitled Investment Objectives and Policies of the Funds and Risk Factors. 2

9 DEFINITIONS In this Prospectus, the following words and phrases shall have the meanings indicated below:- Accumulating Class Administrator Administration Agreement Anti-Dilution Levy Articles of Association or Articles Base Currency Business Day Central Bank class or Class Class Currency Company any Class of Shares which has the designation Accumulating ; State Street Fund Services (Ireland) Limited, or any successor administrator appointed in respect of the Company in accordance with the requirements of the Central Bank; the agreement dated 5 July 2013 between the Company and the Administrator pursuant to which the latter was appointed administrator, registrar and transfer agent of the Company; the amount added to the subscription price or subtracted from the redemption price in the event of net subscriptions and/or net redemptions and, in each case, payable to the relevant Fund, representing an estimate of dealing costs in order to preserve the underlying value of the assets of the Fund; the articles of association of the Company; the base currency of the Funds as specified in the section entitled Investment Objectives and Policies of the Funds ; unless otherwise determined by the Directors and notified in advance to Shareholders, a day (excluding Saturday and Sunday) on which retail banks in Ireland are open for business and which is not a US bond market holiday as recommended by the Securities Industry and Financial Markets Association (SIFMA); the Central Bank of Ireland or any successor regulatory authority with responsibility for the authorisation and supervision of the Company; any class of Shares each representing interests in the Funds; the currency in which Shares of a Class are issued; Gramercy Investment Funds plc, an investment company with variable capital, incorporated in Ireland pursuant to the Companies Acts 1963 to 2013 and the Regulations; 3

10 Companies Acts 1963 to 2013 the Companies Acts, 1963 to 2005, Parts 2 and 3 of the Investment Funds, Companies and Miscellaneous Provisions Act 2006, the Companies (Amendment) Act 2009, the Companies (Miscellaneous Provisions) Act 2009, the Companies (Amendment) Act 2012 and the Companies (Miscellaneous Provisions) Act 2013, all statutory instruments which are to be read as one with, or construed or read together with or as one with, the Companies Acts and every statutory modification and reenactment thereof for the time being in force; Custodian State Street Custodial Services (Ireland) Limited, or any successor custodian appointed in respect of the Company in accordance with the requirements of the Central Bank; Custodian Agreement Dealing Day Developed Countries or Developed Country the agreement dated 5 July 2013 between the Company and the Custodian pursuant to which the latter was appointed custodian of the Company; means, unless otherwise determined by the Directors and notified in advance to Shareholders, (i) in the case of Gramercy Corporate Emerging Market Debt Fund and Gramercy Local Emerging Market Debt Fund, each Business Day; and (ii) in the case of Gramercy High Yield Corporate Emerging Market Debt Fund and Gramercy Total Return Allocator Emerging Market Debt Fund, each Wednesday, provided that where a Wednesday is not a Business Day, the next Business Day shall be a Dealing Day (provided that in any event there shall be at least one Dealing Day per fortnight); members of the G-7 (U.S., U.K., France, Germany, Italy, Canada and Japan), Australia, New Zealand and any country that has been considered by the World Bank to be a high income country within the past five consecutive years and is not a country of investment listed in the JP Morgan Emerging Markets Bond Index Global (USD), the JP Morgan Government Bond Index Emerging Markets Global Diversified (Local) or the JP Morgan Corporate Emerging Market Bond Index Diversified (Corporate); Directive Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to 4

11 undertakings for collective investment in transferable securities (UCITS) (Recast), as such may be amended, supplemented or replaced from time to time; Directors Distributing Class Distributor EEA Emerging Markets or Emerging Market the directors of the Company for the time being and any duly constituted committee thereof; any Class of Shares which has the designation Distributing ; Gramercy Funds Management LLC, or any successor distributor appointed in respect of the Company or the Funds; the European Economic Area; (i) all countries in the world except Developed Countries; (ii) Developed Countries that have issued sovereign debt that is rated below Investment Grade; or (iii) Developed Countries that have issued sovereign debt that is rated Investment Grade but which, in the Investment Manager s opinion, is highly likely to be downgraded below Investment Grade within the duration of an investment proposed to be made by a Fund in that country; or euro or EUR the currency unit referred to in the Second Council Regulation (EC) no. 974/98 of 3 May 1998 on the introduction of the euro; EU FDI Fund or Funds Initial Offer Period the European Union; financial derivative instruments; any fund from time to time established by the Company including the Funds the subject of this Prospectus, where appropriate. As at the date of this Prospectus, the Funds are: Gramercy Local Emerging Market Debt Fund, Gramercy Corporate Emerging Market Debt Fund, Gramercy High Yield Corporate Emerging Market Debt Fund and Gramercy Total Return Allocator Emerging Market Debt Fund; (i) in respect of the unlaunched Share classes in Gramercy Corporate Emerging Market Debt Fund, Gramercy High Yield Corporate Emerging Market Debt Fund, Gramercy Total Return Allocator Emerging Market Debt Fund and Gramercy Local Emerging Market Debt Fund, the period ending at 3.00 p.m. (Irish time) on 20 February 2015; and (ii) in respect of the Class (W)I USD Accumulating Shares in 5

12 Gramercy Corporate Emerging Market Debt Fund, the period beginning at 9.00 a.m. (Irish time) on 1 October 2014 and ending at 3.00 p.m. (Irish time) on 1 March 2015, or such other time as the Directors may determine, in accordance with the requirements of the Central Bank; Initial Offer Price Investment Grade Investment Manager Investment Management and Distribution Agreement Member State Minimum Holding Moody s Net Asset Value or NAV Net Asset Value per Share Norwegian Krone or NOK OECD Pound Sterling or GBP or Stg the price at which a Class of Shares is first offered or at which it is re-offered as specified in Schedule IV; in reference to a security, a security that has a rating of BBB or higher from Standard & Poor s or Baa or higher from Moody s or the equivalent or higher from another nationally recognised statistical rating agency or that is not rated but is considered by the Investment Manager to be of similar quality; Gramercy Funds Management LLC, or any successor investment manager appointed in respect of the Company or the Funds; the agreement dated 5 July 2013 between the Company and the Investment Manager, pursuant to which the latter was appointed investment manager and distributor of the Company, as amended from time to time; a member state of the EU; such minimum value of a holding of shares in any Fund as the Directors may determine and as set out in Schedule IV; Moody s Investor Services, Inc.; the Net Asset Value of the Company, or of a Fund or class, as appropriate, calculated as described herein; in respect of any Shares the Net Asset Value attributable to the Shares issued in respect of a Fund or class, divided by the number of Shares in issue in respect of that Fund or class; Norwegian Krone, the lawful currency of Norway; the Organisation for Economic Co-Operation and Development; Pound Sterling, the lawful currency of the United Kingdom; 6

13 Regulated Market Regulations Securities Act Share or Shares Shareholder Standard and Poor s Subscriber Shares Supplemental Prospectus Swedish Krona or SEK any stock exchange or regulated market in the EU or a stock exchange or regulated market which is set forth in Schedule I to this Prospectus, or such other markets as the Directors may from time to time determine in accordance with the Regulations and as shall be specified in a supplement or addendum to this Prospectus; the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2011 or any amendment thereto or replacement thereof for the time being in force; the U.S. Securities Act of 1933, as amended; any class of share or shares in the Company or a Fund, as the context so requires; a holder of Shares; Standard & Poor s Corporation; the initial share capital of 300,002 Shares of no par value subscribed for 300,002; any supplemental prospectus issued by the Company in connection with the Fund from time to time in accordance with the requirements of the Central Bank; Swedish Krona, the lawful currency of Sweden; Swiss Franc or CHF Swiss Franc, the lawful currency of Switzerland; TCA Trade Cut-Off Time UCITS UCITS Notices U.K. the Taxes Consolidation Act, 1997, as amended from time to time; in the case of subscriptions, redemptions and conversions, before 3.00pm (Irish time) on the relevant Dealing Day; an undertaking for collective investment in transferable securities established pursuant to the Regulations or, in the case of UCITS established in a Member State other than Ireland, the Directive; the notices issued by the Central Bank from time to time pursuant to the Regulations; the United Kingdom of Great Britain and Northern Ireland; 7

14 U.S. U.S.$ or U.S. Dollar or USD U.S. Person Valuation Point World Bank Yen or JPY the United States of America (including the States and the District of Columbia), its territories, possessions and all other areas subject to its jurisdiction; Dollars, the lawful currency of the U.S.; any person, any individual or entity that would be a U.S. Person under Regulation S of the Securities Act, as amended; 9.00pm (Irish time) on each Dealing Day, provided that the Directors may declare an alternative Valuation Point, provided such alternative Valuation Point is notified in advance to Shareholders and provided that the Valuation Point is after the relevant Trade Cut- Off Time; the International Bank for Reconstruction and Development, a United Nations agency created to assist developing nations through loans guaranteed by member governments; Yen, the lawful currency of Japan. 8

15 INTRODUCTION The Company is an open-ended investment company with variable capital organised under the laws of Ireland as a public limited company pursuant to the Companies Acts 1963 to 2013 and the Regulations. It was incorporated in Ireland on 27 May It was authorised by the Central Bank on 5 July Its sole object, as set out in Clause 2 of the Company s memorandum of association, is the collective investment in transferable securities and other liquid financial assets referred to in Regulation 68 of the Regulations of capital raised from the public and which operates on the basis of risk spreading. The Company is organised in the form of an umbrella fund with segregated liability between Funds. The Articles of Association provide that the Company may offer separate Classes of Shares, each representing interests in a Fund, with each Fund comprising a separate and distinct portfolio of investments. The Company has obtained the approval of the Central Bank for the establishment of Gramercy Local Emerging Market Debt Fund, Gramercy Corporate Emerging Market Debt Fund, Gramercy High Yield Emerging Market Debt Fund and Gramercy Total Return Allocator Emerging Market Debt Fund. Additional Funds may be established by the Company with the prior approval of the Central Bank. A Fund may consist of one or more Classes of Shares. A separate pool of assets will not be maintained for each Class within a Fund. Further Classes of Shares may be issued on advance notification to, and in accordance with the requirements of, the Central Bank. INVESTMENT OBJECTIVES AND POLICIES OF THE FUNDS Each Fund aims to achieve its investment objective, as set out below, while spreading investment risks through investment in a diversified portfolio of securities in accordance with the Regulations and the restrictions set forth in Schedule II. The transferable securities and liquid financial assets in which the Funds may invest generally must be listed, traded or dealt in on a Regulated Market except that up to 10% of the Net Asset Value of each Fund may be invested in transferable securities and liquid financial assets which are not listed, traded or dealt in on a Regulated Market. The Regulated Markets in which the Funds investments will be listed, traded or dealt in are set out in Schedule I. Each Fund may invest its cash balance for temporary defensive purposes in cash deposits and in shortterm securities, such as commercial paper, bankers acceptances, certificates of deposit, and government securities issued by an OECD member country or by any supranational entity provided that the securities are denominated in U.S. Dollars, are listed, traded or dealt in on a Regulated Market in an OECD member country and are rated Investment Grade or higher. Investment techniques and FDI may be used by each Fund for efficient portfolio management and/or investment purposes within the limits set forth in Schedule III as described in the section entitled Investment Techniques and Instruments. Gramercy Local Emerging Market Debt Fund Investment Objective The investment objective of the Fund is to achieve a high total return comprised of income, currency and capital appreciation. Investment Policies As the Fund will invest at least 80% of its Net Asset Value in Emerging Markets and may invest a substantial portion of its assets in securities rated below Investment Grade, the Net Asset 9

16 Value of the Fund may have a relatively high level of volatility and investors should note that an investment in the Fund should not constitute a substantial portion of an investment portfolio and may not be appropriate for all investors. The Fund will aim to invest at least 80% of its Net Asset Value in fixed-income securities and other forms of debt issued by sovereign and corporate entities organised, head-quartered, operating or located in, or having a significant portion of their revenues, profits or assets located in or derived from, Emerging Markets (including Russia) under normal market conditions. No more than 25% of the Fund s Net Asset Value may be invested in securities located in any one Emerging Market country. There is no limit on the percentage of the Fund s Net Asset Value that may be invested in debt and other fixed income securities which are rated below Investment Grade. Up to 35% of the Fund s Net Asset Value may be invested in securities denominated in U.S. Dollar, Euro or Yen. No more than 25% of the Fund s Net Asset Value will be invested in securities that are denominated in any single currency other than the U.S. Dollar, Euro or Yen. Up to 35% of the Fund s Net Asset Value may be invested in securities issued by corporate issuers located in Emerging Markets. No more than 10% of the Fund s Net Asset Value will be invested in securities issued by any single corporate issuer. The Fund may hold up to 10% of its Net Asset Value in Emerging Market equity securities where this arises as a result of the restructuring of the fixed-income securities and other forms of debt held by the Fund. The Investment Manager seeks to invest in individual fixed-income instruments and will seek to spread the Fund s investments over various types of fixed-income securities and other forms of debt. The Investment Manager generally carries out a risk/reward evaluation of the interest rate risk and credit risk associated with an investment prior to investing in an individual fixed-income security or other form of debt. The fixed-income securities and other forms of debt in which the Fund may invest shall include, without limitation, fixed and floating rate bonds, fixed and floating rate notes, inflation linked, zero coupon and discount bonds, debentures, securitised loans, securitised loan participations, certificates of deposit, bankers acceptances, commercial paper and short-term debt securities. The Fund may invest no more than 10% of its Net Asset Value in aggregate in units or shares of openended collective investment schemes within the meaning of Regulation 68(e) of the Regulations which are consistent with the investment objective and policies of the Fund. Up to 10% of the Net Asset Value of the Fund may be invested in transferable securities and liquid financial assets which are not listed, traded or dealt in on a Regulated Market. The Fund may employ efficient portfolio management techniques and the following FDI: options, futures (namely bond futures, interest rate futures and currency futures), swaps, forward currency exchange contracts and convertible bonds for investment purposes and/or for efficient portfolio management purposes including, for example, where the Investment Manager considers the use of such techniques and instruments to be economically appropriate in order to seek to reduce risk, reduce costs, generate additional capital or income for the Fund. For further details on the FDI that the Fund may employ see the section in this Prospectus entitled Investment Techniques and Instruments. Gramercy Corporate Emerging Market Debt Fund Investment Objective The investment objective of the Fund is to achieve a high total return comprised of income and capital appreciation. 10

17 Investment Policies As the Fund will invest at least 80% of its Net Asset Value in Emerging Markets and may invest a substantial portion of its assets in securities rated below Investment Grade, the Net Asset Value of the Fund may have a relatively high level of volatility and investors should note that an investment in the Fund should not constitute a substantial portion of an investment portfolio and may not be appropriate for all investors. The Fund will aim to invest at least 80% of its Net Asset Value in fixed-income securities and other forms of debt issued by corporate entities organised, head-quartered, operating or located in, or having a significant portion of their revenues, profits or assets located in or derived from, Emerging Markets (including Russia) under normal market conditions. No more than 25% of the Fund s Net Asset Value may be invested in securities issued by corporate entities located in any one Emerging Market. There is no limit on the percentage of the Fund s Net Asset Value that may be invested in debt and other fixed income securities which are rated below Investment Grade. Up to 35% of the Fund s Net Asset Value may be invested in securities denominated in currencies other than U.S. Dollar, Euro or Yen. At least 50% of the Fund s Net Asset Value will be invested in securities denominated in U.S. Dollar and no more than 25% of the Fund s Net Asset Value will be invested in securities that are denominated in any currency other than the U.S. Dollar and are not subject to a currency hedge linked to the U.S. Dollar. Up to 20% of the Fund s Net Asset Value may be invested in securities issued by sovereign or governmental issuers located in Emerging Markets. The Fund may hold up to 10% of its Net Asset Value in Emerging Market equity securities where this arises as a result of the restructuring of the fixed-income securities and other forms of debt held by the Fund. The Investment Manager seeks to invest in individual fixed-income instruments and will seek to spread the Fund s investments over various types of fixed-income securities and other forms of debt. The Investment Manager generally carries out a risk/reward evaluation of the interest rate risk and credit risk associated with an investment prior to investing in an individual fixed-income security or other form of debt. The fixed-income securities and other forms of debt in which the Fund may invest shall include, without limitation, fixed and floating rate bonds, fixed and floating rate notes, zero coupon and discount bonds, debentures, securitised loans, securitised loan participations, certificates of deposit, bankers acceptances, commercial paper and short-term debt securities. The Fund may invest no more than 10% of its Net Asset Value in aggregate in units or shares of openended collective investment schemes within the meaning of Regulation 68(e) of the Regulations which are consistent with the investment objective and policies of the Fund. Up to 10% of the Net Asset Value of the Fund may be invested in transferable securities and liquid financial assets which are not listed, traded or dealt in on a Regulated Market. The Fund may employ efficient portfolio management techniques and the following FDI: options, futures (namely bond futures, interest rate futures and currency futures), swaps, forward currency exchange contracts and convertible bonds for investment purposes and/or for efficient portfolio management purposes including, for example, where the Investment Manager considers the use of such techniques and instruments to be economically appropriate in order to seek to reduce risk, reduce costs, generate additional capital or income for the Fund. For further details on the FDI that the Fund may employ see the section in this Prospectus entitled Investment Techniques and Instruments. Gramercy High Yield Corporate Emerging Market Debt Fund Investment Objective The investment objective of the Fund is to achieve a high total return comprised of income and capital appreciation. 11

18 Investment Policies As the Fund will invest at least 80% of its Net Asset Value in Emerging Markets and may invest a substantial portion of its assets in securities rated below Investment Grade, the Net Asset Value of the Fund may have a relatively high level of volatility and investors should note that an investment in the Fund should not constitute a substantial portion of an investment portfolio and may not be appropriate for all investors. The Fund will aim to invest at least 80% of its Net Asset Value in high yield fixed-income securities and other high yield forms of debt issued by corporate entities organised, head-quartered, operating or located in, or having a significant portion of their revenues, profits or assets located in or derived from, Emerging Markets (including Russia) under normal market conditions. No more than 25% of the Fund s Net Asset Value may be invested in securities issued by corporate entities located in any one Emerging Market. There is no limit on the percentage of the Fund s Net Asset Value that may be invested in debt and other fixed income securities which are rated below Investment Grade. Up to 35% of the Fund s Net Asset Value may be invested in securities that are denominated in currencies other than U.S. Dollar, Euro or Yen and are not subject to a currency hedge linked to the U.S. Dollar, Euro or Yen. Up to 20% of the Fund s Net Asset Value may be invested in securities issued by sovereign or governmental issuers located in Emerging Markets. The Fund may hold up to 10% of its Net Asset Value in Emerging Market equity securities where this arises as a result of the restructuring of the fixed-income securities and other forms of debt held by the Fund. The Investment Manager seeks to invest in individual fixed-income instruments that it believes have the potential to provide high yields for the Fund over one or more market cycles and will seek to spread the Fund s investments over various types of fixed-income securities and other high yield forms of debt. The Investment Manager generally carries out a risk/reward evaluation of the interest rate risk and credit risk associated with a security prior to investing in an individual fixed-income security or other form of debt. The high yield fixed-income securities and other high yield forms of debt in which the Fund may invest shall include, without limitation, fixed and floating rate bonds, fixed and floating rate notes, zero coupon and discount bonds, debentures, securitised loans, securitised loan participations, certificates of deposit, bankers acceptances, commercial paper and short-term debt securities. The Fund may invest no more than 10% of its Net Asset Value in aggregate in units or shares of openended collective investment schemes within the meaning of Regulation 68(e) of the Regulations which are consistent with the investment objective and policies of the Fund. Up to 10% of the Net Asset Value of the Fund may be invested in transferable securities and liquid financial assets which are not listed, traded or dealt in on a Regulated Market. The Fund may employ efficient portfolio management techniques and the following FDI: options, futures (namely bond futures, interest rate futures and currency futures), swaps, forward currency exchange contracts and convertible bonds for investment purposes and/or for efficient portfolio management purposes including, for example, where the Investment Manager considers the use of such techniques and instruments to be economically appropriate in order to seek to reduce risk, reduce costs, generate additional capital or income for the Fund. For further details on the FDI that the Fund may employ see the section in this Prospectus entitled Investment Techniques and Instruments. Gramercy Total Return Allocator Emerging Market Debt Fund Investment Objective The investment objective of the Fund is to achieve a high total return comprised of income and capital appreciation. 12

19 Investment Policies As the Fund will invest at least 70% of its Net Asset Value in Emerging Markets and may invest a substantial portion of its assets in securities rated below Investment Grade, the Net Asset Value of the Fund may have a relatively high level of volatility and investors should note that an investment in the Fund should not constitute a substantial portion of an investment portfolio and may not be appropriate for all investors. The Fund seeks to maximise returns and achieve its investment objective by attempting to capture the returns offered by particular Emerging Market debt sectors and Emerging Market debt securities. The Investment Manager believes that the Emerging Market debt universe can be divided into four distinct sectors: U.S. Dollar denominated sovereign debt, local currency denominated sovereign debt, corporate debt and high yield or distressed debt. Using the Investment Manager s proprietary sector rotation strategy, combined with its experienced investment team, the Investment Manager seeks to increase the Fund s exposure to sectors that it expects to outperform and while reducing the Fund s exposure to sectors that it expects to underperform. The Investment Manager s proprietary sector rotation strategy uses a framework of optimised sector weightings based on historical performance and a proprietary indicator that attempts to identify the position of a proposed investment in the global economic/investment cycle and whether that investment is expected to increase or decrease in value accordingly. In selecting securities, the Investment Manager seeks to identify investment opportunities across the Emerging Market debt universe that it believes are undervalued. The Fund seeks to hold positions in securities that the Investment Manager believes offer the best total return at the time of investment and does not seek to track any particular index in its approach to selecting these securities. By capitalising on the Investment Manager s expertise across the entire spectrum of Emerging Market debt, the Investment Manager seeks to maximise total return within the Emerging Market debt universe by investing in securities which the Investment Manager believes offer the best total return consisting of income and capital appreciation over a normal business cycle. The Fund will aim to invest at least 70% of its Net Asset Value in fixed-income securities and other forms of debt issued by sovereign and corporate entities organised, head-quartered, operating or located in, or having a significant portion of their revenues, profits or assets located in or derived from, Emerging Markets (including Russia) under normal market conditions. No more than 25% of the Fund s Net Asset Value may be invested in securities issued by corporate entities located in any one Emerging Market. There is no limit on the percentage of the Fund s Net Asset Value that may be invested in debt and other fixed income securities which are rated below Investment Grade. Up to 75% of the Fund s Net Asset Value may be invested in securities denominated in currencies other than U.S. Dollar, Euro or Yen. At least 25% of the Fund s Net Asset Value will be invested in securities denominated in U.S. Dollar, Euro or Yen. Up to 100% of the Fund s Net Asset Value may be invested in securities issued by sovereign or governmental issuers located in Emerging Markets. The Fund may hold up to 10% of its Net Asset Value in Emerging Market equity securities where this arises as a result of the restructuring of the fixed-income securities and other forms of debt held by the Fund. The Investment Manager seeks to invest in individual fixed-income instruments and will seek to spread the Fund s investments over various types of fixed-income securities and other forms of debt. The Investment Manager generally carries out a risk/reward evaluation of the interest rate risk and credit risk associated with an investment prior to investing in an individual fixed-income security or other form of debt. The fixed-income securities and other forms of debt in which the Fund may invest shall include, without limitation, fixed and floating rate bonds, fixed and floating rate notes, zero coupon and discount bonds, debentures, securitised loans, securitised loan participations, certificates of deposit, bankers acceptances, commercial paper and short-term debt securities. 13

20 The Fund may invest no more than 10% of its Net Asset Value in aggregate in units or shares of openended collective investment schemes within the meaning of Regulation 68(e) of the Regulations which are consistent with the investment objective and policies of the Fund. Up to 10% of the Net Asset Value of the Fund may be invested in transferable securities and liquid financial assets which are not listed, traded or dealt in on a Regulated Market. The Fund may employ efficient portfolio management techniques and the following FDI: options, futures (namely bond futures, interest rate futures and currency futures), swaps, forward currency exchange contracts and convertible bonds for investment purposes and/or for efficient portfolio management purposes including, for example, where the Investment Manager considers the use of such techniques and instruments to be economically appropriate in order to seek to reduce risk, reduce costs, generate additional capital or income for the Fund. For further details on the FDI that the Fund may employ see the section in this Prospectus entitled Investment Techniques and Instruments. Calculation of Global Exposure of the Funds For the purposes of compliance with the Regulations, the global exposure of the Funds will be measured using the commitment approach. In the event that the Fund uses FDIs, the Fund will be leveraged as a result, but such leverage will not exceed 100% of the Fund s Net Asset Value. Profile of a Typical Investor in the Funds Investment in the Funds is suitable only for investors who are in a position to take the risks outlined in the section of this Prospectus entitled Risk Factors and who have a long-term investment horizon. Base Currency The Base Currency of each Fund is U.S. Dollar. SHARE CLASSES A list of the Classes of Shares available in respect of the Funds and the characteristics of each such Class are set out in Schedule IV. The Company reserves the right to vary the minimum initial investment, the minimum subsequent investment and the Minimum Holding in the future and may choose to waive or reduce these criteria. Investors should note that as at the date of this Prospectus only certain Classes of Shares may currently be available for purchase. BORROWING The Funds may not borrow money except that: (a) (b) a Fund may acquire foreign currency by means of a back to back loan. Foreign currency obtained in this manner is not classified as borrowing for the purposes of the Regulations provided that the offsetting deposit: (a) is denominated in the base currency of the Fund; and (b) equals or exceeds the value of the foreign currency loan outstanding; and a Fund may borrow up to 10% of its Net Asset Value provided such borrowing is on a temporary basis. 14

21 ADHERENCE TO INVESTMENT OBJECTIVES, STRATEGIES AND POLICIES Any change in investment objectives and any material change in investment strategies or policies will be subject to approval by the majority of votes of Shareholders passed at a general meeting or by all of the Shareholders by way of a written resolution. In accordance with the Company s Articles of Association, Shareholders will be given 21 clear days notice of such general meeting. The notice shall specify the place, day, hour, and nature of business of such meeting, as well as the proposed effective date of any changes to the investment objectives and policies. In the event that a change in investment objectives and/or policies is approved by Shareholders, a reasonable notification period will be provided to Shareholders to enable them to redeem their Shares prior to the implementation of such a change. DISTRIBUTION POLICY For Distributing Classes of each Fund, it is expected that the Directors will declare and pay annual dividends on or before the last Business Day in May each year equal to all or substantially all of the Fund s net income attributable to such Share Classes. Dividends may be paid from net income and/or realised gains net of realised and unrealised losses attributable to the relevant Share Classes. The Directors have delegated to the Investment Manager the power to determine if, and to what extent, dividends paid will include realised gains net of realised and unrealised losses attributable to the relevant Share Classes. To the extent that the net income and net realised gains attributable to the relevant Share Classes exceeds the amount declared payable, the excess return will be reflected in the Net Asset Value of such Share Classes. Dividends will be automatically reinvested in the Fund unless the Administrator is otherwise notified by the Shareholder upon subscription, in which case dividends will be paid by wire transfer in the Class Currency of the relevant Share Class to the Shareholder s account. It is not proposed to declare dividends in respect of the Accumulating Classes of each Fund and any net income and realised gains net of realised and unrealised losses attributable to such Classes will be accumulated in the Net Asset Value per Share of that Class. INVESTMENT RESTRICTIONS Each of the Funds investments will be limited to investments permitted by the Regulations, as set out in Schedule II. If the Regulations are altered during the life of the Company, the investment restrictions in the Prospectus may be changed to take account of any such alterations but any such changes to the Prospectus shall be in accordance with the Central Bank s requirements and will be subject to approval by the majority of votes of Shareholders passed at a general meeting or by all of the Shareholders by way of a written resolution. Shareholders will be advised whether such changes were approved in the next succeeding annual or half-yearly report of the Company. INVESTMENT TECHNIQUES AND INSTRUMENTS The Funds may employ FDI for investment purposes and/or for efficient portfolio management purposes, for example where the Investment Manager considers the use of such techniques and instruments to be economically appropriate in order to seek to reduce risk, reduce costs, generate additional capital or income for the Fund with an appropriate level of risk, taking into account the risk profile of the Fund as described therein and the general provisions of the Directive. The Funds use of such FDI shall be subject to the conditions and within the limits from time to time laid down by the Central Bank. The Company employs a risk management process which enables it to accurately measure, monitor and manage the various risks associated with such FDI. Any FDI not included in the risk management process will not be used until such time as a revised risk management process has been provided to the Central Bank. The Company shall supply to a Shareholder upon request supplementary information relating to the risk management methods employed including the quantitative limits that are applied and any recent developments in the risk and yield characteristics of the main categories of investments. 15