CIRCULAR TO THE SHAREHOLDERS OF Old Mutual Global Investors Series II ICAV (the "ICAV") (an umbrella fund with segregated liability between sub-funds)

Transcription

1 CIRCULAR TO THE SHAREHOLDERS OF Old Mutual Global Investors Series II ICAV (the "ICAV") (an umbrella fund with segregated liability between sub-funds) Old Mutual Absolute Return Government Bond Fund (the "Merging Fund") This document is important and requires your immediate attention. If you are in doubt about the contents of this document, you should consult your stockbroker, investment advisor/consultant, bank manager, solicitor, accountant or other professional adviser. If you have sold or transferred all of your shares, you should pass this document, together with the relevant accompanying documents, to the purchaser or transferee or to the stockbroker, bank or other agent through whom the sale or transfer was made for transmission to the purchaser or transferee as soon as possible. A notice convening an extraordinary general meeting (the "EGM") of Shareholders of the Merging Fund is enclosed at Appendix 3. Please complete the enclosed form of proxy and return by post or by fax to (with original to follow by post) for the attention of Martin McDonnell, Tudor Trust Limited, 33 Sir John Rogerson's Quay, Dublin 2. All proxy votes in whichever format provided must arrive in Ireland no later than 12:00 noon (Irish time) on 10 July The meeting will take place at 12:00 noon (Irish time) on 12 July Capitalised terms used in this document shall bear the same meaning as the capitalised and defined terms used in the prospectus of the ICAV dated 6 April, 2018 (the "Prospectus") including the supplement in respect of the Merging Fund (the "Supplement"). A copy of the Prospectus and the Supplement are available upon request during normal business hours from the registered office of the ICAV.

2 Timetable for the proposals Key dates Event Date Shareholder Circular Mailing Date 8 June, 2018 Latest time and date for receipt of forms of proxy 12:00 noon (Irish time) 10 July 2018 Meeting of Shareholders in the Merging Fund 12:00 noon (Irish time) 12 July 2018 The last dealing day in Existing Shares of the Merging Fund The final valuation for the Merging Fund Effective Date First day of dealing in New Shares issued in the Receiving Fund pursuant to the Merger Written confirmation posted to Shareholders advising of allocation and number of New Shares in the Receiving Fund Tuesday 24 July 2018 (the Redemption Deadline ) noon (Irish Time) on 27 July 2018 (the Final Valuation Point ) Friday 27 July 2018 (the Effective Date ) Monday 30 July 2018 Within five 5 Business Days of the Effective Date 1

3 Old Mutual Global Investors Series II ICAV 33 Sir John Rogerson's Quay Dublin 2 Date: 8 June 2018 Proposed merger of Old Mutual Absolute Return Government Bond Fund a sub-fund of Old Mutual Global Investors Series II ICAV into Old Mutual Strategic Absolute Return Bond Fund a sub-fund of Old Mutual Global Investors Series Plc (the "Merger") Dear Shareholder, This Circular has been prepared pursuant to the requirements of Regulation 57(2)(a)(iv) of the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2011 (S.I. No. 352 of 2011) as amended (the "Regulations"), to provide you with the information referred to in Regulation 61 of the Regulations on our proposal to merge Old Mutual Absolute Return Government Bond Fund (the Merging Fund ) with Old Mutual Strategic Absolute Return Bond Fund (the Receiving Fund ) and to seek your approval for the proposal. This Circular has been reviewed and cleared in advance by the Central Bank of Ireland (the "Central Bank") and the Merger authorised pursuant to Regulation 57 of the Regulations prior to the circulation of this Circular. It is proposed that the Merger take place in accordance with Regulation 3(1)(c) of the Regulations meaning that the net assets of the Merging Fund transfer to the Receiving Fund, the Shareholders of the Merging Fund become shareholders of the Receiving Fund and the Merging Fund continues to exist until such time as its liabilities have been discharged. If the Merger is approved by the requisite majority of Shareholders of the Merging Fund all remaining Shareholders of the Merging Fund will be entitled, as of 27 July 2018 (the "Effective Date"), to receive Shares in the corresponding share class of the Receiving Fund (the New Shares ). Details of the relevant classes of New Shares you will receive are set out in Appendix 1 to this document. A Key Investor Information Document ( KIID ) for the Receiving Fund is set out in Appendix 2 and the KIIDs for each share class of the Merging Fund shall also be provided to Shareholders on the website prior to the Effective Date. The value of the New Shares will be calculated on the Final Valuation Point and you will be notified of the exact number of New Shares you will receive in the Receiving Fund within five business days following the Effective Date. For the avoidance of doubt, the Existing Shares will be cancelled when the New Shares are issued on the Effective Date. Background of the Merging Fund Old Mutual Global Investors Series II ICAV (the ICAV ) is an open-ended umbrella Irish collective assetmanagement vehicle with segregated liability between sub-funds formed in Ireland on 26 May 2015 and authorised in Ireland as an undertaking for collective investment in transferable securities pursuant to the Regulations. The Merging Fund was approved by the Central Bank of Ireland (the Central Bank ) on 1 September The investment objective of the Merging Fund is to seek to deliver positive total returns on a rolling twelve month basis with stable levels of volatility uncorrelated to bond and equity market conditions. As at 30 April 2018 the net asset value of the Merging Fund was 710m. Background of the Receiving Fund Old Mutual Global Investors Series Plc (the Receiving UCITS ) is an open-ended investment company with variable capital incorporated on 2 September 1997 and authorised in Ireland as an undertaking for collective investment in transferable securities pursuant to the Regulations. 2

4 The Receiving Fund was approved by the Central Bank on 8 November The investment objective of the Receiving Fund is to seek to deliver positive total returns on a rolling twelve month basis with stable levels of volatility uncorrelated to bond and equity market conditions. As at 30 April 2018 the net asset value of Receiving Fund was US$104m. Rationale for the Merger Old Mutual Global Investors (UK) Limited, (the Investment Manager ) has conducted a review of its Irish domiciled fixed income range, including the Merging and Receiving Funds. The Receiving Fund was converted to an absolute return fund in May 2017 with the same investment objective as the Merging Fund, and a broadly similar investment policy to invest mainly in global government bond markets. However, the funds employ different investment processes to achieve the objective, with the Receiving Fund investing in a broader investment universe with lower levels of leverage. In addition, the Merging Fund is operated from a separate administration platform to the rest of the Investment Manager s range. The Investment Manager believes that by merging the Merging Fund into the Receiving Fund, Shareholders will be able to retain exposure to an absolute return global bond strategy delivered via a more diversified investment approach. In addition, they will benefit from the lower annual management fees and performance fee rates that apply to the Receiving Fund. Expected Impact of Merger The Merger ultimately will result in the following: (1) all the assets of the Merging Fund shall be transferred to the Receiving Fund; (2) the Shareholders of the Merging Fund shall become shareholders of the Receiving Fund; (3) the Merging Fund shall be terminated following the Merger; and (4) an application for withdrawal of approval of the Merging Fund will be submitted to the Central Bank once all liabilities of the Merging Fund have been discharged. Appendix 1 sets out the comparison of the key features and operation of the Merging Fund and the Receiving Fund but we have highlighted the principal similarities and differences below. It should be noted that if the Merger is not approved by the Shareholders, the Directors will in accordance with the provisions of the Instrument of Incorporation and Prospectus terminate the Merging Fund and seek the Central Bank's withdrawal of approval of the Merging Fund. Principal Similarities and Differences between the Merging Fund and the Receiving Fund: 1. Investment Objective: The Investment Objectives of the Merging Fund and the Receiving Fund are identical. 2. Investment Policy: The Merging Fund and the Receiving Fund both seek to achieve their investment objective by investing primarily in a portfolio of debt securities, either directly or by taking long or short exposure to them through the use of derivatives. However there are some differences between the investment policies of the Merging Fund and the Receiving Fund, which are set out in more detail in Appendix 1. The Merging Fund invests primarily in debt securities issued or guaranteed by the governments of OECD countries and may invest no more than 10% in securities rated below investment grade. The Receiving Fund has the ability to invest in a broader spectrum of debt 3

5 securities, including those issued by companies or in emerging markets, and up to 20% in subinvestment grade debt securities. 3. Base Currency: The base currency of the Merging Fund is GBP and the base currency of the Receiving Fund is USD. As is the case for the Merging Fund, the Receiving Fund will use currency hedging in respect of its hedged Share classes in order to seek to mitigate the exchange rate risk between the Base Currency of the Receiving Fund and the currency of the hedged Share Class. 4. Derivative use and resulting leverage: The Merging Fund and the Receiving Fund both use derivatives for investment purposes and for efficient portfolio management purposes. Both funds use instruments which may be exchange-traded or over-the-counter derivatives, however the Merging Fund typically has more holdings in the portfolio with higher levels of leverage. The level of leverage of the Merging Fund, based on the gross sum of notionals of derivatives used, is typically within the range of 3,000% to 5,000% with a maximum expected level of 30,000% of the Merging Fund's Net Asset Value. The Merging Fund's bond exposure has been managed to operate in normal circumstances within an anticipated range of 2,500% long exposure and 2,500% short exposure. The level of leverage of the Receiving Fund, based on the gross sum of notionals of derivatives used, will not exceed 800%, and the Receiving Fund is typically managed to operate within a range of 0% to 400% short exposure and 0% to 400% long exposure. Fuller details of the differences in the investment policies of both funds are set out at Appendix Fees and Expenses: a. Annual Management Fee: If the Merger is approved, Shareholders of the Merging Fund will receive New Shares in the Receiving Fund which have a lower annual management fee than their Existing Shares in the Merging Fund. b. Performance Fee (where applicable to the particular Share class): Both the Merging Fund and the Receiving Fund charge a performance fee on the amount by which any increase in the Net Asset Value per Share exceeds the hurdle rate set out in the respective fund s supplement. In the case of the Merging Fund, the performance fee rate is 15%, whilst for the Receiving Fund it is 10%. Accordingly, if the Merger is approved Shareholders in the Merging Fund will benefit from a lower performance fee rate. To the extent that any performance fee is payable in respect of any of the Existing Shares of the Merging Fund for the relevant performance fee calculation period prior to the Effective Date (.e.g any performance fee accrued from 1 April to the Effective Date), the Investment Manager shall waive any such performance fee payable. c. Other Fees and Expenses; For the Merging Fund there is a Fixed Operating Expense charge out of which all the running costs of the Merging Fund are met (including fees payable to the Administrator and the Depositary). For the Receiving Fund, all running costs are payable directly out of the Receiving Fund s assets. As a result, the Ongoing Charge Figures ( OCF ) of the Existing Shares in the Merging Fund are fixed, whereas the OCF of the New Shares in the Receiving Fund will vary in accordance with the fees actually incurred by the Receiving Fund. If the Merger is approved, it is anticipated that the OCF of the New Shares issued in the Receiving Fund will be equivalent or lower than the OCF of the Existing Shares held by Shareholders in the Merging Fund. 6. Risk Profile: As noted above, the investment policies of the Merging Fund and the Receiving Fund are similar, however there are some differences in the risk characteristics of the two funds. As part of its investment strategy the Merging Fund invests more extensively in derivatives. The use of derivatives can involve a higher level of risk including counterparty risk, leverage risk and valuation risk. The Receiving Fund has the ability to invest in a broader range of global fixed interest securities including exposure to emerging markets, and may have a higher exposure to sub-investment grade debt. Emerging markets may carry additional risks compared to developed markets, whilst 4

6 investments in sub-investment grade debt securities may involve greater price volatility and risk of loss of income and principal. Notwithstanding the above, the overall risk profile of the funds is similar, and both funds have the same Synthetic Risk and Reward Indicator (category 4 ), denoting a similarly moderate level of volatility. 7. Registrations: There are no anticipated adverse implications from a global registrations perspective from the Merger as an exercise has been undertaken to align the registration jurisdictions of the Merging Fund and the Receiving Fund as necessary. 8. Corporate Structure: It should be noted that the corporate structure for the Shareholders of the Merging Fund will change if the Merger is approved. The Shareholders' holdings will be transferred from an Irish collective asset management vehicle to a public limited company. This however will not result in a material change to the rights of Shareholders of the Merging Fund as a consequence of becoming a shareholder in the Receiving Fund. The ICAV was formed in Ireland under the ICAV Act 2015 whereas the Receiving UCITS was incorporated pursuant to the Companies Act Both the ICAV and the Receiving UCITS are authorised pursuant to the Regulations and have segregated liability between sub-funds. Details of Subscriptions in the Receiving Fund You are further advised that if the Merger is approved, you will receive New Shares in the corresponding Class in the Receiving Fund. As part of the Merger, the net assets of the Merging Fund will be transferred to the Receiving Fund on the Effective Date. State Street Fund Services (Ireland) Limited, the administrator of the Merging Fund (the "Administrator") will value the net assets being transferred as part of the Merger pursuant to the Instrument of Incorporation of the ICAV (the "Instrument of Incorporation") and consistent with Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Undertakings for Collective Investment in Transferable Securities) Regulations 2015 (the "Central Bank UCITS Regulations"). In calculating the net assets of the Merging Fund, and pursuant to the provisions of the Instrument of Incorporation, there shall be deducted from the assets of the Merging Fund an amount to provide for all actual or estimated future liabilities properly payable out of the assets of the Merging Fund until the withdrawal of approval of the Merging Fund. If subsequent to the Merger taking effect, and prior to the withdrawal of approval of the Merging Fund, such amount is insufficient to meet the remaining liabilities of the Merging Fund the costs of any reasonable and non-material liabilities shall be borne by the Receiving Fund. The exchange ratio used to calculate the number of new Shares you will receive in the Receiving Fund is based on the net asset value ("NAV") per Share of such class of Shares in the Merging Fund relative to the NAV per Share in the corresponding class of Shares in the Receiving Fund as calculated at the daily pricing point of noon (Irish Time) on the Effective Date (the Exchange Ratio ). Valuations of the assets transferring from the Merging Fund into the Receiving Fund will be carried out in accordance with the Merging Fund s valuation methodology. The Exchange Ratio is then applied to the number of Shares held by each Shareholder in the Merging Fund to calculate the number of Shares they are to receive in the Receiving Fund. The number of New Shares to be issued in the relevant Class of the Receiving Fund shall be the number which would, on the Effective Date, have been issued for cash against the payment of a sum equal to the value of the net assets being transferred from the Merging Fund. Please note that the number of Shares held by a Shareholder in the Receiving Fund on the Effective Date may not be equal to the number of Shares held by the Shareholder in the relevant Merging Fund prior to the Effective Date. The Exchange Ratio is calculated as follows: NAV per Share of the Merging Fund NAV per Share of the Receiving Fund = Exchange Ratio 5

7 In accordance with Regulation 60(1) of the Regulations, KPMG (the "Independent Auditor") shall validate the criteria adopted for valuation of the assets and, where applicable, the liabilities on the date of calculating the exchange ratio and validate such other criteria as may be specified pursuant to Regulation 60 of the Regulations. Provided that you have not redeemed your Existing Shares in the Merging Fund, the Administrator will issue you with a written confirmation of ownership of New Shares in the Receiving Fund within five business days of the Effective Date as outlined above. For the avoidance of doubt, the Existing Shares will be cancelled when the New Shares are issued as at the Effective Date. No initial charge will be made on the issue of New Shares in the Receiving Fund as part of this process. Details of the class of Shares to be issued in the Receiving Fund in place of Shareholders existing class of Shares in the Merging Fund are set out below: Shareholders existing class of Shares in the Merging Fund A (USD) Hedged Accumulation Class A (EUR) Hedged Accumulation Class A (GBP) Accumulation Class I (USD) Hedged Accumulation Class I (EUR) Hedged Accumulation Class R (GBP) Accumulation Class U1 (EUR) Hedged Accumulation Class U1 (GBP) Accumulation Class U2 (GBP) Accumulation Class W (GBP) Accumulation Class F (USD) Hedged Accumulation Class F (EUR) Hedged Accumulation Class F (GBP) Accumulation Class L2 (EUR) Hedged Accumulation Class Corresponding Class of Shares to be issued in the Receiving Fund A (USD) Accumulation Class A (EUR) Hedged Accumulation Class A (GBP) Hedged Accumulation Class I (USD) Accumulation Class I (EUR) Hedged Accumulation Class U1 (GBP) Hedged Accumulation Class I (EUR) Hedged Accumulation Class U1 (GBP) Hedged Accumulation Class U3 (GBP) Hedged Accumulation Class U3 (GBP) Hedged Accumulation Class U3 (USD) Accumulation Class U3 (EUR) Hedged Accumulation Class U3 (GBP) Hedged Accumulation Class L2 (EUR) Hedged Accumulation Class Timing Shareholders should note that in order to facilitate an orderly transfer of net assets from the Merging Fund to the Receiving Fund prior to the Effective Date, redemption requests in respect of the Merging Fund will be suspended with effect from the Redemption Deadline, which shall be three Business Days prior to the date for calculating the Exchange Ratio referred to in Regulation 65(1) of the Regulations. The Merging Fund shall not seek a derogation from Regulation 104 of the Regulations and so will comply with the requirements of Regulation 63(1). If a person asks to receive a copy of the Merging Fund documents or seeks to subscribe for new shares in the Merging Fund between the date of this Circular and the Effective Date, such person will be provided with the KIID for the Merging Fund (in accordance with Regulation 100 of the Regulations) and will also be provided with a copy of this Circular and the KIID for the Receiving Fund. Notwithstanding the foregoing, the Directors of the Merging Fund may exercise their discretion, in accordance with the Instrument of Incorporation, to refuse to accept any further subscriptions from the date of this Circular to the Effective Date. If the Merger is approved at the EGM, you will be advised in writing within five business days following the Effective Date of the number of New Shares issued to you in the Receiving Fund. Subject to the Dealing Deadline provisions set out in the Prospectus of the Receiving UCITS, you may deal in New Shares of the Receiving Fund on the next business day after the Effective Date. The entry into effect of the Merger shall be made public through an appropriate means which may include posting on the website or through such other means as the Directors may in their discretion determine appropriate. The entry into effect of the Merger shall also be notified to the Central Bank. 6

8 Furthermore if the Merger is approved and completed, an application will be made to the Central Bank for withdrawal of the approval of the Merging Fund. A submission seeking the withdrawal of approval of the Merging Fund will be submitted to the Central Bank when the audited accounts of the ICAV are available showing a net asset value of zero for the Merging Fund. Costs of the Merger All administration costs in connection with the Merger and the transfer of net assets to the Receiving Fund (including the costs of calling the meeting of Shareholders and of the preparation and implementation of the transfer) will be borne by Old Mutual Global Investors (UK) Limited (the Investment Manager ). All costs in connection with the termination of the Merging Fund and the withdrawal of its approval will be borne by the Investment Manager. In advance of the Effective Date, the Merging Fund s investment portfolio will be rebalanced in order to align it more closely with the Receiving Fund s investment portfolio. There will be transaction costs associated with the rebalancing of the investment portfolio, which will be borne by the Merging Fund and it is expected that these costs will be approximately 0.25% of the Net Asset Value of the Merging Fund. To the extent that any performance fee is payable in respect of any of the Existing Shares of the Merging Fund for the relevant performance fee calculation period prior to the Effective Date (e.g. any performance fee accrued from 1 April to the Effective Date), the Investment Manager shall waive any such performance fee payable. Any accrued income, dividends, and income receivables will be included in the calculation of the Net Asset Value of the Merging Fund and will be transferred into the Receiving Fund as part of the Merger. All assets of the Merging Fund, will be transferred to the Receiving Fund so that you receive New Shares in the Receiving Fund that are as close as practicable in value to the Existing Shares that you own in the Merging Fund. Tax Both the Merging Fund and the Receiving Fund will only be subject to tax in respect of Shareholders who are Irish residents generally (being persons who are resident or ordinarily resident in Ireland for tax purposes) on certain chargeable events. In both the Merging Fund and the Receiving Fund on the occurrence of certain chargeable events the ICAV or the Receiving UCITS may recover any tax payable by deduction or otherwise to meet this tax liability. The tax consequences of implementation of the merger may vary depending on the law and regulations of your country of residence, citizenship or domicile and it is possible that your tax treatment will change following the merger. If you are in any doubt about your potential liability to tax, you should seek professional advice. Notice of an Extraordinary General Meeting of the Merging Fund As noted above, the Shareholders of the Merging Fund are to consider a resolution to approve the Merger at the EGM. Shareholders will be notified of the outcome of this EGM through an appropriate means which may include posting the outcome on the website or through such other means as the Directors may in their discretion determine appropriate. If the resolution is approved by the Shareholders of the Merging Fund, it is proposed that the Merger will take effect on the Effective Date. As noted, the last dealing day in Existing Shares of the Merging Fund will be the day of the Redemption Deadline. You will find attached a notice of EGM of the Merging Fund. At the EGM, Shareholders will be asked to consider as an item of business the approval of the Merger. In order for the Merger to be effective, the special resolution to be considered at the EGM of the Merging Fund requires three quarters of those present, entitled to vote and voting in person or by proxy to vote in favour of the resolution. 7

9 Two persons entitled to vote upon the business to be transacted, each being a Shareholder or a proxy for such Shareholders or a duly authorised representative of a corporate Shareholder shall be a quorum at the EGM. The Form of Proxy accompanying the notice of the EGM enclosed with this Circular is for use in relation to the EGM and should be completed and returned in accordance with the instructions thereon, and to be received as soon as possible and in any event not later than 12:00 (Irish time) on 10 July Shareholders may return a signed copy of the Form of Proxy either by post to Tudor Trust Limited, 33 Sir John Rogerson s Quay, Dublin 2, Ireland,, Tudor Trust (Ireland) Limited, 33 Sir John Rogerson s Quay, Dublin 2, Ireland for the attention of Martin McDonnell or by fax to , with the original to follow by post. Completion and return of a Form of Proxy will not preclude you from attending and voting in person at the EGM. It should be noted that, if the resolution is approved by the requisite majority, the Merger will be binding on all Shareholders, including Shareholders who voted against it or who did not vote at all. However, you will have the opportunity at any time up to 12:00pm (Irish time) on the Redemption Deadline to redeem your Existing Shares free of any redemption charge and subject to the procedures set out in the Prospectus. Documents relating to the Receiving UCITS and the Receiving Fund available for display As mentioned above, a KIID of the Receiving Fund, which contains key investor information relating to the Receiving Fund, is enclosed and the KIIDs for each share class of the Merging Fund shall also be provided to Shareholders on the website prior to the Effective Date. The Directors recommend that you review these documents in order to familiarise yourself with the key investor information in respect of the Receiving Fund. Copies of the memorandum and articles of association of the Receiving UCITS, latest annual and semi-annual reports, material contracts, Prospectus, KIIDs of the Receiving Fund and other relevant information are available free of charge and may be inspected at the registered office of the Receiving UCITS or the relevant local representatives. In accordance with Regulation 60(3) of the Regulations, the Independent Auditor has produced an independent report in respect of the Merger and should you wish to do so you may inspect a copy of this report at the registered office of the Receiving UCITS on request and free of charge. Recommendation The Directors believe the Merger of the Merging Fund and the Receiving Fund is in the best interests of existing Shareholders and accordingly recommend that you vote in favour of the proposal. It should be noted that if the Merger is not approved by the Shareholders, the Directors will in accordance with the provisions of the Instrument of Incorporation and Prospectus terminate the Merging Fund and seek the Central Bank's withdrawal of approval of the Merging Fund. Please note that State Street Custodial Services (Ireland) Limited (the "Depositary") is satisfied with the Merger and has confirmed to the Central Bank that it has no objection to the proposal being put before you for approval. In accordance with Regulation 60 of the Regulations, the Independent Auditor has validated the criteria adopted for the valuation of the assets and the liabilities on the date of calculating the exchange ratio in relation to the Merger. Yours sincerely, Jessica Brescia Director for and on behalf of Old Mutual Global Investors Series II ICAV 8

10 Appendix 1: Details of Key Differences between the terms and procedures and fees of the Merging Fund and the Receiving Fund & Details of Share Classes in the Receiving Fund Appendix 2: KIID for the Receiving Fund Appendix 3: Notice of an Extraordinary General Meeting of the Merging Fund Appendix 4: Form of proxy for Extraordinary General Meeting of the Merging Fund 9

11 Share Class Transfer Table APPENDIX 1 KEY FEATURES OF THE MERGING FUND AND THE RECEIVING FUND Name of Sub-Fund Name of Umbrella Fund Investment Manager Regulatory status and structure Investment Objective Investment Policy Merging Fund Old Mutual Absolute Return Government Bond Fund Old Mutual Global Investors Series II ICAV Old Mutual Global Investors (UK) Limited Authorised in Ireland as an undertaking for collective investment in transferable securities pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 as amended. The investment objective of the Fund is to seek to deliver positive total returns on a rolling twelve month basis with stable levels of volatility uncorrelated to bond and equity market conditions. The Fund shall seek to achieve its investment objective by investing in a combination of debt securities (as set out below) and taking exposure to them indirectly (both long and short) through FDI in accordance with the investment strategy outlined below. The types of debt securities in which the Fund may invest shall include, but shall not be limited to, bonds (which may be fixed and/or floating rate), debt securities and other similar instruments denominated in the domestic currencies of Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, Luxembourg, the Netherlands, New Zealand, Norway, Portugal, Slovenia, Spain, Sweden, Switzerland, United Kingdom and the United States of the following types: Receiving Fund Old Mutual Strategic Absolute Return Bond Fund Old Mutual Global Investors Series plc Old Mutual Global Investors (UK) Limited No difference. The objective of Old Mutual Strategic Absolute Return Bond Fund is to seek to deliver positive total returns on a rolling twelve month basis with stable levels of volatility uncorrelated to bond and equity market conditions. Old Mutual Strategic Absolute Return Bond Fund shall seek to achieve its investment objective by investing primarily in a portfolio of debt securities both directly and by taking exposure to them indirectly (both long and short) through the use of financial derivative instruments. Old Mutual Strategic Absolute Return Bond Fund is a global fund insofar as its investments are not confined or concentrated in any particular geographic region or market, subject to relevant regulatory restrictions, and minimum credit rating criteria as stated below. Old Mutual Strategic Absolute Return Bond Fund will invest primarily in a portfolio which includes (but is not limited to) debt or debt-related securities, denominated in local or foreign currencies, issued by governments, government related issuers, supranational institutions and corporations. Old Mutual Strategic Absolute Return GML/ / v19

12 sovereign and central bank debt of Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, Luxembourg, the Netherlands, New Zealand, Norway, Portugal, Slovenia, Spain, Sweden, Switzerland, United Kingdom and the United States; debt securities issued by major international institutions (as prescribed by the Bank of England and including, for example, the African Development Bank, the European Investment Bank, the European Union, the International Finance Corporation, the Islamic Development Bank and the Nordic Investment Bank); bonds of the highest credit quality (broadly equivalent to AAA) issued by government agencies or banks in G10 countries, explicitly guaranteed by national governments; conventional debt securities issued by the Federal Home Loan Mortgage Corporation, Federal National Mortgage Corporation and the Federal Home Loan Banks system; UK and Dutch prime residential mortgage-backed securities of the most senior tranches and highest credit quality; UK, US and EEA asset-backed securities of the most senior tranches and highest credit quality (broadly equivalent to AAA) backed by credit cards, auto loans, student and consumer loans. Bond Fund may utilise the full spectrum of debt securities including, but not limited to, fixed, inflation-linked, variable and floating rate bonds, and asset-backed, mortgage-backed and convertible securities, Old Mutual Strategic Absolute Return Bond Fund may utilise money market instruments to manage cash, including, but not limited to deposits, certificates of deposit, discount notes issued by government and/or corporate bodies and treasury bills. These investments are not protected by any government, government agency or other guarantee scheme which may be available to protect the holder of a bank deposit account. As a result, prospective investors should note that there is a risk that the value of their investment in the Old Mutual Strategic Absolute Return Bond Fund may fluctuate. Old Mutual Strategic Absolute Return Bond Fund may also invest in collective investment schemes (including money market funds) which comply with the Central Bank s requirements up to an aggregate limit of 10 per cent. of Old Mutual Strategic Absolute Return Bond Fund s Net Asset Value. Up to 10% of the Net Asset Value of the Old Mutual Strategic Absolute Return Bond Fund may be invested in securities traded on domestic Russian markets and any such investment will only be made in securities that are listed/traded on the Moscow exchange. The Fund is not constrained geographically. The Fund will be managed with a focus on OECD countries and their Investment Grade sovereign debt but may invest in or have exposure of up to 10% (long or short) in below Investment Grade debt securities. Extent of FDI Use The Fund may invest in FDIs for (i) efficient portfolio management and (ii) investment purposes. The types of FDI in which the Fund may invest and the rationale for their use is set out in the supplement. It is intended that the Fund's bond exposure will be managed to The Fund may invest in FDIs for (i) efficient portfolio management and (ii) investment purposes. The types of FDI in which the Fund may invest and the rationale for their use is set out in the supplement. GML/ / v19

13 operate in normal circumstances within an anticipated range of 2500 % long exposure and 2500 % short exposure. The level of leverage is expected to be within the range of 3,000% to 5,000% but there may be periods when the leverage will be materially below these levels. It is also possible that this could increase during abnormal market conditions or, for example, in a scenario where the Fund takes specific short term interest rate FDI positions in order to pursue its investment strategy at the precise point that a central bank is expected to adjust interest rates. Such events are not expected to occur at a regular frequency but could present for short periods two or three times per year or more, depending on market circumstances. In such cases the Fund will be managed to work within a maximum expected level of 30,000% of the Fund's Net Asset Value (with the increase from the normal expected range a result of the concentrated use of certain types of short term interest rate FDI that carry high levels of leverage when calculated based on the sum of the gross notionals). The Fund will regularly monitor its leverage and the level of leverage of the Fund will not exceed 800 per cent. of the Fund. The expected range for the long and short positions the Fund may take is between 0% to 400 % short exposures in combination with 0% to 400 % long exposures of the Net Asset Value of the Fund. This range for derivatives use is not a limit and the exposures can exceed the range in certain circumstances. The methodology used to measure the global exposure of the Fund is Absolute VaR. The VaR limit of the Fund, based on a one-tailed 99% confidence level, a 20-day holding period and an historical observation period of not less than 1 year is equivalent to 20% of the Fund s Net Asset Value. It should be noted however that the Fund has historically been managed with an Absolute VaR of less than 5% of the Net Asset Value. Profile of Typical Investor The methodology used to measure the global exposure of the Fund is Absolute VaR. The VaR limit, based on a one-tailed 99% confidence level, a 1-day holding period and an historical observation period of not less than 1 year is 2.24% of the Fund s Net Asset Value. This is equivalent to a VaR limit of 10% of the Fund s Net Asset Value based on a 20-day holding period. It should be noted that, on the 20-day holding period basis, the Fund has historically been managed with an Absolute VaR of less than 5% of the Net Asset Value. A typical investor has an investment horizon of 5 years or more and is prepared to accept a moderate level of volatility. A typical investor has a long term investment horizon and is prepared to accept a moderate level of volatility. GML/ / v19

14 Base Currency of Fund Sterling USD Frequency Dealing of Daily each "Business Day" being any day (other than a Saturday or Sunday) on which commercial banks are open for business in London, New York and Dublin. Daily each "Business Day" being any day (excluding Saturdays and Sundays) on which banks and stock exchanges are open for business both in Dublin and in London. Distribution frequency Semi-annually (A (GBP) Income Shares, R (GBP) Income Shares, U1 (GBP) Income Shares, U2 (GBP) Income Shares only) Quarterly (Class F2 (GBP) Hedged Income only) Valuation Methodology Latest mid-market price on market on which investments are quoted as of noon (Irish time) Last available market price on market on which investments are quoted as of noon (Irish time) GML/ / v19

15 Accounting Date 30 September (Interim) 30 June (Interim) Performance fees 31 March (Final) 31 December (Final) 15% of the amount by which any increase in the Net Asset Value per Share exceeds the Hurdle Rate (Sterling Overnight Interbank Average Rate for GBP classes, Euro Overnight Index Average Rate for EUR classes, Federal Funds Effective Overnight Rate for USD classes) 10% of the amount by which any increase in the Net Asset Value per Share exceeds the Hurdle Rate (Sterling Overnight Interbank Average Rate for GBP classes, Euro Overnight Index Average Rate for EUR classes, Federal Funds Effective Overnight Rate for USD classes Domiciled Ireland No difference Governance Board of Directors No difference Depositary State Street Custodial Services (Ireland) Limited Citi Depositary Services Ireland DAC Administrator State Street Fund Services (Ireland) Limited Citibank Europe plc Auditors KPMG No difference Investment restrictions UCITS fund restrictions as per UCITS Directive The Merging Fund will be managed with a focus on OECD countries and their Investment Grade sovereign debt but may invest in or have exposure of up to 10% (long or short) in below Investment Grade debt securities. UCITS fund restrictions as per UCITS Directive. No more than 20 per cent. of the Receiving Fund may be invested in securities which are rated below Investment Grade. Up to 10% of the Net Asset Value of the Receiving Fund may be invested in securities traded on domestic Russian markets and any such investment will only be made in securities that are listed/traded on the Moscow exchange. Borrowing The Fund may borrow up to 10% of its net assets, which may only be on a temporary basis No difference GML/ / v19

16 Merging Fund Share Class Receiving Fund Share Class Classes of Shares (Class Currency) A (USD) Hedged Accumulation A (USD) Accumulation Class Distribution status A (EUR) Hedged Accumulation A (GBP) Accumulation I (USD) Hedged Accumulation I (EUR) Hedged Accumulation R (GBP) Accumulation U1 (EUR) Hedged Accumulation U1 (GBP) Accumulation U2 (GBP) Accumulation W (GBP) Accumulation F (USD) Hedged Accumulation F (EUR) Hedged Accumulation F (GBP) Accumulation L2 (EUR) Hedged Accumulation The Fund is distributed in Ireland (domicile), Austria, Belgium, Denmark, Finland, Germany, Italy, Luxembourg, the Netherlands, Singapore, Spain, Sweden, Switzerland and the United Kingdom Fixed Operating Expense USD Hedged classes 0.30% A (EUR) Hedged Accumulation A (GBP) Hedged Accumulation I (USD) Accumulation I (EUR) Hedged Accumulation U1 (GBP) Hedged Accumulation I (EUR) Hedged Accumulation U1 (GBP) Hedged Accumulation U3 (GBP) Hedged Accumulation U3 (GBP) Hedged Accumulation U3 (USD) Accumulation U3 (EUR) Hedged Accumulation U3 (GBP) Hedged Accumulation L2 (EUR) Hedged Accumulation The Fund is distributed in Ireland (domicile), France, Italy, Spain, Sweden, Switzerland and the United Kingdom EUR Hedged classes 0.30% Not applicable GBP classes 0.25% Administrator Fee Included within Fixed Operating Expense The Company will pay to the Administrator monthly in arrears an administration fee of up to 3.75 basis points per annum of the combined average Net Asset Value of the Funds and in the case of each Fund subject to a minimum fee per Fund of EUR 15,000 per annum. The GML/ / v19

17 administration fee shall accrue on each Dealing Day. Additional annual fees shall be payable for the second and each subsequent Class of Shares in each Fund which shall be charged at normal commercial rates. The Administrator is also entitled to transaction fees it incurs for the Funds and fees for the registrar and transfer agency functions and maintenance services it performs payable out of the Company s assets. These services are (i) maintaining the register of each Share class of the Company and the annual shareholder account, (ii) servicing, and (iii) reporting, all of which shall be charged at normal commercial rates. The Administrator is entitled to be reimbursed by the Company for all reasonable out-of-pocket expenses incurred by it. All fees will be invoiced and payable monthly. The Administrator will also be entitled to be reimbursed by the Company out of the assets of each Fund for all reasonable and vouched out-of-pocket expenses incurred by it and charged to it for the benefit of the Fund in the performance of its duties to the Company. Depositary Fee Included within Fixed Operating Expense The Company will pay to the Depositary monthly in arrears a fiduciary fee of 1 basis point per annum of the combined average Net Asset Value of the Funds plus VAT (if any), and in the case of each Fund subject to a minimum fee of EUR 3,500 per annum for each Fund. The fiduciary fee shall accrue on each Dealing Day. The Depositary is also entitled to sub-depositary fees and transaction charges which shall be charged at normal commercial rates and paid monthly in arrears. The Depositary is also entitled to be reimbursed by the Company for all reasonable disbursements and out-ofpocket expenses Sales Charge Class A Up to 6.25% Class A Up to 5% GML/ / v19

18 Annual Management Fee Class I, R, U1, U2, W, F, L2 Nil Class I, U1, U3, L2 Nil A (USD) Hedged A (EUR) Hedged A (GBP) 1.00% A (USD) A (EUR) Hedged A (GBP) Hedged 0.80% I (USD) Hedged I (EUR) Hedged 0.50% I (USD) I (EUR) Hedged 0.40% R (GBP) 0.50% U1 (GBP) U1 (EUR) Hedged 0.45% U1 (GBP) Hedged 0.36% U2 (GBP) 0.40% W (GBP) Accumulation Class 0.40% F (GBP) F (EUR) Hedged F (USD) Hedged 0.30% U3 (GBP) Hedged U3 (EUR) Hedged U3 (USD) 0.25% L2 (EUR) Hedged 1.25% L2 (EUR) Hedged 0.70% Performance Fee Class A, I, R, U1, U2, W, F - 15% of the amount by which any increase in the Net Asset Value per Share exceeds the Hurdle Rate (Sterling Overnight Interbank Average Rate for GBP classes, Euro Overnight Index Average Rate for EUR classes, Federal Funds Effective Overnight Rate for USD classes) Class L2 Nil Class A, I, U1, U3-10% of the amount by which any increase in the Net Asset Value per Share exceeds the Hurdle Rate (Sterling Overnight Interbank Average Rate for GBP classes, Euro Overnight Index Average Rate for EUR classes, Federal Funds Effective Overnight Rate for USD classes) Class L2 Nil Redemption Price of Merging Fund & The prevailing Net Asset Value per Share of each share The prevailing Net Asset Value per Share of each share GML/ / v19

19 Subscription Price of Receiving Fund class on the Effective Date class on the Effective Date Further Information The key features of the Merging Fund and the Receiving Fund are set out in the table above, in order to bring changes where relevant to the attention of investors. This is intended as a brief summary of details of the Merging Fund and the Receiving Fund. In order to provide a more complete summary of the Receiving Fund, a copy of the Receiving Fund's KIID is enclosed for your information at Appendix 2. If you would like any further information about the Receiving Fund, please contact your investment manager or your relationship manager at Old Mutual Global Investors. GML/ / v19

20 Appendix 2 The Key Investor Information Document ( KIID ) for the Receiving Fund GML/ / v19

21

22 Appendix 3 Old Mutual Global Investors Series II ICAV (the "ICAV") Old Mutual Absolute Return Government Bond Fund (the "Merging Fund") Incorporated in Ireland with Reference No: C Registered Office 33 Sir John Rogerson's Quay Dublin 2 Ireland Notice of Extraordinary General Meeting of the Merging Fund NOTICE IS HEREBY GIVEN that an Extraordinary General Meeting of the Merging Fund will be held at 33 Sir John Rogerson's Quay, Dublin 2 on 12 July 2018 at 12:00 noon (Irish Time) for the purposes of transacting the following business of the ICAV:- 1. That the proposed merger of the Merging Fund into the Receiving Fund on the terms and conditions as set out in the enclosed Shareholder circular, be and are hereby approved; 2. That the termination of the Merging Fund immediately following the effective date of the merger, be and is hereby approved; and 3. Any other business. Dated this 8 June 2018 By order of the Board Tudor Trust (Ireland) Limited ICAV Secretary Note: A shareholder entitled to attend, speak and vote at the Extraordinary General Meeting is entitled to appoint a proxy to attend, speak and vote on their behalf. A body corporate may appoint an authorised representative to attend, speak and vote on its behalf. A proxy or an authorised representative need not be a member of the ICAV. (a) Shareholders have the option of returning proxy forms by post, or by facsimile. Signed proxy forms may be returned by post to Tudor Trust (Ireland) Limited for the attention of Martin McDonnell at 33 Sir John Rogerson's Quay, Dublin 2. A proxy form may be faxed to the ICAV for the attention of Martin McDonnell, Tudor Trust (Ireland) Limited, 33 Sir John Rogerson's Quay, Dublin 2 or signed copies can be sent by facsimile to Tudor Trust (Ireland) Limited at , or returned by to Martin.McDonnell@dilloneustace.ie. Returning the completed form of proxy will not preclude a shareholder from attending the EGM and voting in person if they so wish.

23 Appendix 4 Old Mutual Global Investors Series II ICAV (an umbrella fund with segregated liability between sub-funds) (the ICAV ) Old Mutual Absolute Return Government Bond Fund (the "Merging Fund") FORM OF PROXY I,/We being a Shareholder of Old Mutual Absolute Return Government Bond Fund hereby appoint the Chairman of the ICAV or failing him/ her, Martin McDonnell of 33 Sir John Rogerson s Quay, Dublin 2, Ireland or failing him any representative of Tudor Trust Limited of 33 Sir John Rogerson s Quay, Dublin 2, Ireland as my/our* proxy and to vote for me/us* on my/our* behalf at the Extraordinary General Meeting of the ICAV to be held at 33 Sir John Rogerson's Quay, Dublin 2 on 12 July, 2018 at 12:00 noon (Irish Time) and at any adjournment thereof. Please indicate with an X in the boxes below how you wish the proxy to vote. RESOLUTIONS Special Business FOR AGAINST 1. It is resolved that the proposed Merger of the Merging Fund (of which I am a Shareholder) into the Receiving Fund on the terms and conditions as set out in the enclosed Shareholder circular, be and hereby is approved; and 2. It is resolved that the termination of the Merging Fund (of which I am a Shareholder) immediately following the Effective Date of the Merger, be and is hereby approved. Signed this 8 day of June, 2018 Signature: NOTES:- (b) If this form of proxy is signed and returned without any indication of how the person appointed proxy shall vote, he/she will exercise discretion as to how he/she votes and whether or not he/she abstains from voting. (c) Unless and otherwise instructed the proxy will vote as he/she thinks fit. (d) Where the Member is an individual, this proxy may be executed by an attorney of such Member duly authorised in writing to do so. (e) In the case of joint holders, the signature of any one holder will be sufficient, but the names of all joint holders should be stated. (f) Where this form of proxy is executed by a corporation, it must be either under its seal or under the hand of an officer or attorney duly authorised. (g) This form, which is personalised, may only be used in respect of the share account of which details are shown overleaf. Any alteration to such details or any attempt to use the form in respect of any other share account may render the form invalid. GML/ / v19