CROWN GLOBAL SECONDARIES IV PLC

Transcription

1 This document is important. If you are in any doubt about the contents of this Prospectus, you should consult your stockbroker, bank manager, accountant, lawyer or other financial adviser. Certain capitalized terms used in this Prospectus are defined in section 3. An application has been made to admit the Class A-L Shares and Class A-EL Shares of the Company (the Listed Shares ) to the Official List and trading on the Main Securities Market of the Irish Stock Exchange. It is expected that up to 1,000,000 Listed Shares will be admitted to the Official List and trading on the Main Securities Market on or about 29 January The Directors do not believe that an active secondary market will develop in the Shares of the Company. This Prospectus constitutes a prospectus in accordance with the Prospectus Regulations. The Prospectus has been approved by the Central Bank, as competent authority under the Prospectus Directive. The Central Bank only approves this Prospectus as meeting the requirements imposed under Irish and EU law pursuant to the Prospectus Directive. Such approval relates only to the Listed Shares which shall make application for admission to trade on the Main Securities Market or other regulated markets for the purposes of Directive 2004/39/EC or which are to be offered to the public in any member state of the European Economic Area. Neither the admission of the Shares to the Official List and to trading on the Main Securities Markets of the Irish Stock Exchange nor the approval of the Prospectus pursuant to the listing requirements of the Irish Stock Exchange shall constitute a warranty or representation by the Irish Stock Exchange as to the competence of the service providers to or any other party connected with the Company, the adequacy of information contained in this Prospectus or the suitability of the Company for investment purposes. A copy of this document will be delivered for registration to the Registrar of Companies in Dublin in accordance with Section 38(1) (b) of the Prospectus Regulation. CROWN GLOBAL SECONDARIES IV PLC (A closed-ended investment company with variable capital incorporated with limited liability and authorized by the Central Bank under the Companies Act 2014 with registered number ) Alternative Investment Fund Manager LGT CAPITAL PARTNERS (IRELAND) LIMITED Investment Advisor LGT CAPITAL PARTNERS LTD Dated: 12 June 2015 CROWN GLOBAL SECONDARIES IV PLC 3

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3 Introduction Crown Global Secondaries IV plc is a closed-ended investment company with variable capital incorporated under the Companies Act 2014 and has made an application for authorisation to the Central Bank as a designated investment company pursuant to the Act. The Company intends to offer Participating Shares in different Classes. As the Company is closed-ended, repurchases of Participating Shares at the request of Participating Shareholders are not permitted. or guarantee of the Company by the Central Bank nor is the Central Bank responsible for the contents of this Prospectus or any supplement. Any representation to the contrary is unauthorised and unlawful. The Participating Shares offered hereby have not been approved or disapproved by the SEC or by the securities regulatory authority of any State of the United States and neither the SEC nor any such authority has commented upon the accuracy or adequacy of the contents of this Prospectus nor is it intended that the SEC or any such authority will do so. Any representation to the contrary is a criminal offence. A separate application may be made to the Irish Stock Exchange with respect to admission to the Official List and trading on the Main Securities Market in respect of new or existing Classes of Participating Shares. Investors must rely on their own examination of the person or entity creating the securities and the terms of the offering, including the legal terms, taxation, the financial and other consequences of an investment in the Company, including the merits of investing and the risks involved. Investors should not treat the contents of this Prospectus as advice relating to legal, taxation or investment matters and are advised to consult their own professional advisors concerning the purchase or holding of Participating Shares. The attention of investors is drawn to the potential for above average risk associated with an investment in the Company as described in section 2 hereof. Investors should note that the Investments can be volatile and that their value may decline as well as appreciate. There can be no assurance that the Company will be able to attain its objectives. The price of Participating Shares as well as the income therefrom may go down as well as up to reflect changes in the Net Asset Value of the Company. Investors should be aware that the difference at any one time between the Subscription Price and the Repurchase Price means that the investment should be viewed as long term. An investment should only be made by those persons who could sustain a loss on their investment in the Company. The Central Bank shall not be liable by virtue of its authorisation of the Company thereof or by reason of its exercise of the functions conferred on it by legislation in relation to the Company for any default of the Company. The authorisation of the Company does not constitute a warranty by the Central Bank as to the credit worthiness or financial standing of the various parties to the scheme. The authorisation of the Company is not an endorsement The Company is authorised to be marketed solely to Qualifying Investors and the minimum amount to be subscribed by each applicant shall not be less than the Minimum Subscription. Accordingly, while the Company is authorised by the Central Bank, the Central Bank has not set any limits or other restrictions on the Investment Objectives, the Investment Policies or the degree of leverage which may be employed by the Company nor has the Central Bank reviewed this Prospectus. The Company must comply with the aim of spreading investment risk in accordance with section 253(2) (a) of the Act. The Company is a Qualifying Investor AIF, authorised by the Central Bank pursuant to Chapter 2 of the AIF Rulebook. Within the European Union and subject to the fulfillment of the requirements outlined in Article 32 of AIFMD, the Company is authorised to be marketed solely to Professional Clients unless the Member State in question permits, under the laws of that Member State, the Company to be sold to other types of investors (within the scope of the Qualifying Investor criteria). Participating Shareholders shall not be registered on the Register of the Company if their Subscription constitutes less than the Minimum Subscription or if they have not certified in writing that they are Qualifying Investors and aware of the risk involved in the proposed investment and of the fact that inherent in such investment is the potential risk to lose all of the capital invested. This Prospectus does not constitute, and may not be used for the purposes of, an offer or solicitation or sale to anyone in any jurisdiction in which such offer or solicitation or sale is not authorised, or to any person to whom it is unlawful to make such offer or solicitation or sale. The distribution of this Prospectus and the offering and sale of Participating Shares in certain jurisdictions may be restricted and, accordingly, persons into whose possession this Prospectus comes are required to inform themselves about, and to observe, such restrictions. Prospective investors should inform themselves as to (a) the legal requirements within their own jurisdictions for the purchase or holding CROWN GLOBAL SECONDARIES IV PLC 5

4 of Participating Shares, (b) any foreign exchange restrictions which may affect them, and (c) the income and other tax consequences which may apply in their own jurisdictions relevant to the purchase, holding, redeeming or disposal of Participating Shares. In the event Participating Shares are offered and sold by the Company in the United States, such Participating Shares are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under the Securities Act, and the applicable state securities laws, pursuant to registration or exemption therefrom. Investors should be aware that they will be required to bear the financial risks of this investment for an indefinite period of time. In certain limited circumstances, the Company may offer and sell Participating Shares to U.S. Persons that are Qualified Purchasers as defined in the Investment Company Act, and accredited investors as defined in the Securities Act, in each case residing in or doing business in the United States. The Participating Shares have not been and will not be registered under the Securities Act or any state securities laws. It is anticipated that the offering and sale of the Participating Shares in the United States will be exempt from registration pursuant to section 4(a)(2) of the Securities Act or Regulation D promulgated under the Securities Act and in reliance on appropriate exemptions for state registration and qualification requirements where available. As noted herein, there will be no public market for the Participating Shares. Each prospective investor who is a U.S. Person will be required to execute a Subscription Agreement which, among other things, contains representations and warranties relating to its status as a Qualified Purchaser, an accredited investor and/or a qualified client (as defined in Rule promulgated under the Advisers Act) status and its general suitability for an investment in the Company and that it is acquiring the Participating Shares purchased by it for investment and not with a view to resale or distribution. In addition, the Participating Shares offered and sold by the Company in the United States may not be resold except under limited circumstances in compliance with applicable laws including the Securities Act and other restrictions described in this Prospectus and the Articles. The Company is not registered as an investment company under the Investment Company Act, and it is not intended that the Company will operate as a registered investment company in reliance upon an available exemption from registration contained in the Investment Company Act. Consequently, Investors will not be afforded the protections of a fund that is registered under the Investment Company Act. In addition, neither the AIFM nor the Investment Advisor is registered as an investment adviser under the Advisers Act or any similar state laws although one or both may become a registered investment adviser under the Advisers Act or such similar state laws. Pursuant to U.S. Treasury Department Circular 230, Participating Shareholders are hereby advised that: (i) any discussion of U.S. federal tax issues herein is not intended or written to be relied upon, and cannot be relied upon, by Participating Shareholders for the purpose of avoiding penalties that may be imposed on Participating Shareholders under the U.S. Internal Revenue Code; (ii) such discussion is included herein in connection with the promotion or marketing of interests in the Company; and (iii) Participating Shareholders should seek advice based on their particular circumstances from an independent tax advisor. ERISA imposes certain limitations on investments, such as an investment in the Company, by ERISA Plans. Accordingly, any ERISA Plan considering an investment in the Company should consult its own counsel as to the legal effects of such investment. Prior to closing, the Directors of the Company, the AIFM or the Investment Advisor will give potential investors the opportunity to ask questions of and receive answers and additional information from it and its representatives concerning the offering and other relevant matters. None of the Company, the AIFM, the Investment Advisor or any of their respective directors, officers, employees, partners, members, shareholders or affiliates are making any representation or warranty to an investor regarding the legality of an investment in the Company by such investor or about the income and other tax consequences to them of such an investment. For answers to those questions, potential investors should consult their personal legal counsel and tax advisors. The Company and the Directors of the Company, whose names appear in section 7.1, accept responsibility for the information contained in this Prospectus. To the best of the knowledge and belief of the Company and the Directors (who have taken all reasonable care to ensure that such is the case) such information is in accordance with the facts and does not omit anything likely to affect the import of such information. No person has been authorised to issue any advertisement or to give any information, or to make any representations in connection with the offering, placing, subscription or sale of Participating Shares other than those contained in this Prospectus and the Articles, and if issued, given or made, such advertisement, information or representations must not be relied upon as having been authorised by the Company. Neither the delivery of this Prospectus nor the offer, placement, allotment, sale or issue of any of the Participating Shares shall under any circumstances create any implication or constitute a representation that the information given in this Prospectus is correct as of any time subsequent to the date hereof, or that the affairs of the Company have not changed since the date hereof. 6 CROWN GLOBAL SECONDARIES IV PLC

5 Distribution of this Prospectus is not authorised after the publication of the first annual report of the Company unless it is accompanied by a copy of the latest annual report of the Company. Such report will form part of this Prospectus. The main legal implications of the contractual relationship which an investor would enter into by investing in the Company are as follows: - By completing and submitting the relevant Subscription Agreement, an investor will have made an offer to subscribe for Participating Shares which, once it is accepted by the Company, has the effect of a binding contract. The terms of such contract will be governed by the Subscription Agreement (read together with the Prospectus and the Memorandum and Articles of Association). - Upon the issue of Participating Shares, an investor will become a Shareholder in the Company and the Memorandum and Articles of Association will take effect as a statutory contract between the investor and the Company. - The total liability of Shareholders (other than Defaulting Shareholders) shall be limited to the amounts of their Subscribed Capital in such amount and currency as set out in the Subscription Agreements (incl. Interest Charge, if any), plus all excess distributions recallable pursuant to this Prospectus and any indemnification obligations pursuant to the Subscription Agreement. - The Memorandum and Articles of Association are governed by, and construed in accordance with, the laws currently in force in Ireland. The Subscription Agreement is expressed to be governed by, and construed in accordance with, the laws of Ireland. - The rights and restrictions that will apply to an investor s Participating Shares may be modified and/or additional terms agreed from time to time in respect of a particular Class (subject to such terms being consistent with the Memorandum and Articles of Association). - Although there is no statutory enforcement in Ireland of judgments obtained in a foreign jurisdiction, a judgment obtained in a foreign jurisdiction may be recognised and enforced in the courts of Ireland pursuant to certain processes and conditions. Statements made in this Prospectus are based on the laws and practice currently in force in Ireland and are subject to changes in such laws and practice. The language of the Prospectus is English. Certain legislative references and technical terms have been cited in their original language in order that the correct technical meaning may be ascribed to them under applicable law. CROWN GLOBAL SECONDARIES IV PLC 7

6 Table of contents 1 Summary 9 2 Risk Factors 18 3 Definitions 24 4 The Company 33 5 Investment Objectives and Policies 35 6 Subscription for Shares, Redemption 40 7 Management and Administration 46 8 Fees and Expenses 57 9 Calculation of Net Asset Value and Reporting Taxation Certain United States Regulatory Considerations Appendix I General Information Appendix II Directorships of the Board of Directors Appendix III - Service Providers 87 8 CROWN GLOBAL SECONDARIES IV PLC

7 1 Summary This summary is included to satisfy the requirements of Article 5 (2) of Directive 2003/71//EC, as amended. Summaries are made up of disclosure requirements known as Elements. These Elements are numbered in Sections A E (A.1 E.7). This summary contains all the Elements required to be included in a summary for this type of securities and issuer. Because some Elements are not required to be addressed there may be gaps in the numbering sequence of the Elements. Even though an Element may be required to be inserted into the summary because of the type of securities and Issuer, it is possible that no relevant information can be given regarding the Element. In this case a short description of the Element is included in the summary with the mention of not applicable. This summary should be read as an introduction to the main body of the Prospectus and in the case of any inconsistencies between the terms reflected in this summary and the terms in the main body of the Prospectus the latter shall prevail. 1.1 SECTION A INTRODUCTION AND WARNINGS A.1 Warning This information should be read as an introduction to the full text of this document and any decision to invest in the Shares should be based on consideration of the full text of this document. Where a claim relating to the information contained in this document is brought before a court, a plaintiff investor may, under the national legislation of an EEA state, have to bear the costs of translating this document before the legal proceedings are initiated. Civil liability attaches to the Company and its Directors who are responsible for this summary, including any translation of this summary, but only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of this document or it does not provide, when read together with the other parts of this document, key information in order to aid investors when considering whether to invest in the Shares. A.2 Subsequent resale of securities or final placement of securities through financial intermediaries Not applicable. There is no resale of securities or a final placement of securities through financial intermediaries. 1.2 SECTION B ISSUER B.1 Legal and commercial name Crown Global Secondaries IV plc B.2 Domicile and legal form A closed-ended investment company with variable capital under the Companies Act 2014 and is authorised by the Central Bank as a designated investment company pursuant to the Act. B.3 Key factors relating to the nature of the issuer's current operations and its principal activities The Company was incorporated on 8 May 2015 under the laws of Ireland as a public limited company with variable capital pursuant to the Act. The Investment Objective of the Company is to provide Participating Shareholders with an attractive long-term capital appreciation from a globally diversified portfolio of Private Equity Investments. B.4a A description of the most significant recent trends affecting the issuer and the industries in which it operates Not applicable; As of the date of this Prospectus, the Company has not commenced trading. B.5 Group description Not applicable; the Company is a closed-ended investment company and is not part of a group. CROWN GLOBAL SECONDARIES IV PLC 9

8 B.6 Major Shareholders Not applicable; As of the date of this Prospectus, under the Company s national law, it is not a requirement to disclose any Shareholders. B.7 Key financial information Not applicable; As of the date of this Prospectus, the Company has not commenced operations. B.8 Key pro forma financial information Not applicable; As of the date of this Prospectus, the Company has not commenced operations. B.9 Profit forecast Not applicable; No profit forecast or estimate made. B.10 Description of the nature of any qualifications in the audit report Not applicable; As of the date of this Prospectus, the Company has not commenced operations. B.11 Working Capital The Company and the Directors are of the opinion that the Company has sufficient working capital for its present requirements, that is, for at least the next 12 months from the date of this document. B.34 Investment policy and investment restrictions: Investment Policies: The Company shall predominantly invest in Secondary Private Equity Investments. In addition, the Company may opportunistically commit to Primary Private Equity Investments and invest in Co-Investments which are acquired by way of a Secondary Transaction. The Private Equity Investments may invest in all Private Equity investment stages. Investment Restrictions: The Directors have resolved and agreed with the AIFM on the following Investment Restrictions. Unless otherwise approved by Special Resolution, the Company shall not invest or commit an aggregate Transaction Value of: a. more than 100% of the Subscribed Capital in Private Equity Investments; b. more than 25% of the Subscribed Capital in Private Equity Investments which are controlled by any single Private Equity manager; c. more than 20% of the Subscribed Capital in any single Secondary Transaction; d. more than 20% of the Subscribed Capital in Stapled Primary Private Equity Investments; e. more than 15% of the Subscribed Capital in Private Equity Investments predominantly focussed on Venture Capital investments; f. more than 15% of the Subscribed Capital in any single Private Equity fund; g. more than 10% of the Subscribed Capital in listed securities; and h. more than 5% of the Subscribed Capital in Pure Primary Private Equity Investments. Additionally, the Directors have agreed with the AIFM that: a. the Company shall not invest an aggregate purchase price of more than 40% of the Subscribed Capital in any rolling 12-month period; b. to the extent a Private Equity Investment is made through an Intermediate Investment Vehicle, the Investment Restrictions shall apply on the level of the underlying investments of such Intermediate Investment Vehicle subject to the Company s pro rata ownership thereof; and c. Investments which are substantially exposed to arms-related activities, violations of human rights, irresponsible treatment of the natural environment or other non-ethical conduct of business may be excluded. 10 CROWN GLOBAL SECONDARIES IV PLC

9 In accordance with the requirements of the Central Bank, the Company or the AIFM may acquire shares or other securities carrying voting rights in such an amount which would enable the Company or the AIFM to exercise significant influence over the management of a Private Equity Investment or enable it to take legal or management control of the issuer of any of its Investments (other than Intermediate Investment Vehicles) in accordance with the requirements of the Central Bank. B.35 Borrowing limits: The Company may borrow capital on a short-term basis with a maturity of typically no more than 12 months provided that prior to the Final Closing Date, any such borrowing will typically not exceed the Unfunded Subscriptions and as of the Final Closing Date the Company s borrowing shall not exceed 10% of the Subscribed Capital unless to the extent necessary to mitigate the effects caused by Defaulting Shareholders as described in section 6.7. The Company may mortgage, charge, pledge or otherwise encumber all of the Company s current and future Investments, accounts and Unfunded Subscriptions and any related right or remedy, such as default and subscription proceeds, in favour of a third party creditor. B.36 Regulatory Status: The Company is a closed-ended investment company with variable capital incorporated under the Companies Act 2014 and shall make application for authorisation by the Central Bank as a designated investment company pursuant to the Act. The AIFM has been authorised and is regulated by the Central Bank under the AIFMD Regulations. B.37 Typical Investor: Qualifying Investor with minimum investment of EUR 100,000. B.38 Investment of 20 per cent. or more of gross assets in (i) single underlying asset; (ii) collective investment undertakings ( CIUs ) investing more than 20 per cent. of gross assets in other CIUs; or (iii) with a single Counterparty: B.39 Investment of 40 per cent. or more of gross assets in a single collective investment undertaking: Not applicable. As of the date of this Prospectus, the Company has not commenced operations. Not applicable. As of the date of this Prospectus, the Company has not commenced operations. B.40 Service Providers including maximum fees: AIFM: Subject to authorisation, the Company will appoint LGT Capital Partners (Ireland) Limited as AIFM of the Company pursuant to the Management Agreement to fulfill the functions of AIFM for the Company as required under the AIFMD Regulations and provide investment management expertise and advice on the day to day investment decisions of the Company. In discharging its role, the AIFM shall act honestly, fairly, professionally, independently and in the interests of the Company and the Shareholders. From the Initial Closing Date, the AIFM will be entitled to an annual Management Fee calculated as a percentage of the Subscribed Capital (plus VAT, if any) in the first seven years following the Initial Closing Date and thereafter an annual Management Fee calculated as a percentage of the Net Asset Value per Class (plus VAT, if any) in accordance with the following: a. Class A Shares, Class A-D Shares, Class A-E Shares, Class A-EL Shares and Class A-L Shares shall be charged with an annual Management Fee of: 0.60% p.a. of the Subscribed Capital in the first year following the Initial Closing Date; CROWN GLOBAL SECONDARIES IV PLC 11

10 0.80% p.a. of the Subscribed Capital in the second year following the Initial Closing Date; 1.00% p.a. of the Subscribed Capital thereafter until the end of the seventh year following the Initial Closing Date; and 1.00% p.a. of the Net Asset Value per Class thereafter. b. Class B Shares and Class B-E Shares shall be charged with an annual Management Fee of: 0.75% p.a. of the Subscribed Capital in the first year following the Initial Closing Date; 1.00% p.a. of the Subscribed Capital in the second year following the Initial Closing Date; 1.25% p.a. of the Subscribed Capital thereafter until the end of the seventh year following the Initial Closing Date; and 1.25% p.a. of the Net Asset Value per Class thereafter. c. Class C Shares shall be charged with an annual Management Fee of: 1.00% p.a. of the Subscribed Capital in the first year following the Initial Closing Date; 1.25% p.a. of the Subscribed Capital in the second year following the Initial Closing Date; 1.50% p.a. of the Subscribed Capital thereafter until the end of the seventh year following the Initial Closing Date; and 1.50% p.a. of the Net Asset Value per Class thereafter. d. Class O Shares and Class O-E Shares shall not be charged with an annual Management Fee. As the Initial Closing Date does not coincide with the end of a calendar year the yearly periods of the above Management Fee schedule shall not refer to the calendar year but to the respective rolling twelve month periods. To the extent and for the time the Management Fee is based on the Subscribed Capital the Management Fee will accrue and be payable by the Company quarterly in advance. When the Management Fee is based on the Net Asset Value the Management Fee will accrue monthly and be payable in arrears on the final Business Day of each quarter and will be paid within 15 days after the relevant Net Asset Value calculation. Depositary: Subject to authorisation, the Company will appoint BNP Paribas Securities Services, Dublin Branch to act as its depositary pursuant to the terms of the Depositary Agreement. The Company will pay to the Depositary (i) depositary fees of up to 0.02% per annum (plus VAT, if any) of the Net Asset Value and (ii) custody fees equal to 0.02% per annum (plus VAT, if any) of the Net Asset Value subject to a capped fee of EUR 45,000 per annum, both fees accrued, calculated and payable monthly in arrears. In addition, the Depositary shall be entitled to a fee of EUR 170 for each subscription, redemption or transfer of non-cash assets and EUR 20 for every cash transfer. The Depositary is also entitled to an annual fee of USD 7,500 for cash flow monitoring servicers. Administrator: Subject to authorisation, the Company together with the AIFM will appoint LGT Fund Managers (Ireland) Limited as administrator to the Company. The Administrator is a private company incorporated with limited liability in Ireland on 13 December The Administrator will be entitled to an annual fee of 0.06% (plus VAT, if any) of the Net Asset Value of the Company accruing monthly and payable quarterly in advance, subject to a monthly 12 CROWN GLOBAL SECONDARIES IV PLC

11 minimum fee of EUR 5,000 (to include fees relating to company secretarial services), and is entitled to be reimbursed its reasonable out-of-pocket expenses incurred on behalf of the Company. Distributor: Subject to authorisation, the Company will appoint LGT Capital Partners (Ireland) Limited as Distributor to act as the distributor of the Participating Shares in respect of the Company. The fees payable to the Distributor shall be included in the Management Fee charged to the Company. Paying Agent: Subject to authorisation, the Company will appoint LGT Bank (Ireland) Limited, to act as paying agent. The Irish Paying Agent shall receive from the Company in respect of the Listed Classes an annual fee of EUR 1,000 payable. B.41 Identity and regulatory status of service providers: LGT Capital Partners (Ireland) Limited; the AIFM has been authorised and is regulated by the Central Bank. The Depositary is a branch of BNP Paribas Securities Services S.C.A., a company incorporated in France as a partnership limited by shares under Companies Registration Office Number and which has its registered office at 3 rue d Antin, 75002, Paris, France, acting through its Dublin Branch authorised by the Central Bank, the address of which is Trinity Point, Leinster Street South, Dublin 2. The Central Bank Authorisation number is C The Depositary is authorised by the Autorite de Controle Prudential and is supervised by the Autorite des Marches Financiers in France and has been authorised by the Central Bank of Ireland to provide depositary services in Ireland through a European Union passport mechanism. LGT Fund Managers (Ireland) Limited, the Administrator is authorised and regulated by the Central Bank. B.42 Calculation of Net Asset Value: The Net Asset Value per Share will be calculated on each Dealing Day which shall be notified to the Irish Stock Exchange without delay upon calculation. B.43 Cross Liability: Not applicable. This is a stand alone fund. B. 44 Where a collective investment undertaking has not commenced As of the date of this Prospectus, the Company has not commenced operations and no financial statements have been made up. operations and no financial statements have been made up as at the date of the registration document, a statement to that effect. B.45 Description of Portfolio: Not applicable; As of the date of this Prospectus, the Company has not commenced operations. B.46 Net asset value: Not applicable; As of the date of this Prospectus, the Company has not commenced operations. 1.3 SECTION C - SECURITIES C.1 Type of class and security: The ISIN Numbers and SEDOL codes, as appropriate for each of the Listed Shares of the Com- CROWN GLOBAL SECONDARIES IV PLC 13

12 pany are as follows: Class A-EL Shares ISIN: IE00BWX5DC83 SEDOL: BWX5DC8 Class A-L Shares ISIN: IE00BWX5DB76 SEDOL: BWX5DB7 C.2 Currency of the securities: The Denominated Currency of the Company shall be the U.S. Dollar which shall also be the denominated currency for all Share Classes other than Class A-E Shares, Class A-EL Shares, Class B-E Shares, and Class O-E Shares for which the denominated currency shall be the Euro. C.3 The number of shares issued: The authorised share capital of the Company is three (3) Management Shares of USD 1 each and 500,000,000 Participating Shares of no par value. C.4 A description of the rights attached to the securities: The rights attaching to the Securities will be as follows: Shareholders shall have the right to attend, speak and vote at any general meetings of the Company and the relevant Class, as the case may be, in accordance with the provisions of the Articles. The terms and conditions of the Participating Shares are identical with the exception of (i) the Management Fee and the Performance Fee charged, (ii) the denominated currency, (iii) the listing on the Irish Stock Exchange and (iv) the distribution mechanism. The Participating Shares are shares of no par value in the capital of the Company. The Management Shares shall only be issued at par value and shall not participate in the dividends or assets attributable to Participating Shares. C.5 Transfer restrictions: A transfer of Shares shall not be recognized or registered if the Directors reasonably believe that such transfer would a) Result in the assets of the Company becoming plan assets of any ERISA Plan Shareholder within the meaning of ERISA; b) Result in violation of the registration requirements of the Securities Act or any similar law or regulation; c) Require the Company to register as an investment company under the Investment Company Act or any similar law or regulation; d) Require the AIFM or the Investment Advisor to register as an investment adviser under the Advisers Act or any similar law or regulation, to the extent the AIFM and the Investment Advisor are not so registered and to the extent such registration would otherwise not be required; e) Result in a material change in the tax, legal or regulatory status of the Company, its management, its administration, the reasonable business interests of the Company, the AIFM or the Investment Advisor or a change in the Net Asset Value; 14 CROWN GLOBAL SECONDARIES IV PLC f) Result in a violation of any applicable law or requirements of any country or govern-

13 mental authority; or g) Cause (or which the Company or the Administrator acting on the Company s instructions suspects would cause) the Company to be non-compliant with FATCA. C.6 Admission: An application has been made to admit the Listed Shares of the Company to the Official List and trading on the Main Securities Market of the Irish Stock Exchange. C.7 Dividends: Not Applicable. In respect of Class A-D Shares only it is currently intended to distribute the proceeds from the Investments (other than return of capital) by way of dividend payments to the Participating Shareholders. As of the date of this Prospectus, no dividends have been declared. 1.4 SECTION D - RISKS D.1 Key information on the key risks that are specific to the issuer or its industry: Due to the nature of Private Equity transactions, the risk attached to an investment which the Company shall make is above the average risk attached to an investment in a fund that invests in publicly-traded securities, and therefore an investment in the Company is suitable only for investors who are in a position to take such a risk including the possible loss of their entire investment. Due to the nature of Private Equity markets, there is no guarantee that sufficient suitable investment opportunities will be found for the Company to invest in, nor can there be any assurance that the underlying investments of the Company will find suitable investment opportunities. As a result, there is no guarantee that the desired levels of diversification will be achieved by the Company or by the underlying investments of the Company. The value of the Company s assets may be affected by uncertainties such as international political developments, changes in government policies, changes in taxation, restrictions on foreign investment and currency repatriation, currency fluctuations and other developments in the laws and regulations of countries in which Investments may be made. The Company may significantly invest in underlying collective investment schemes which are unregulated and which will not provide a level of investor protection equivalent to schemes authorised under Irish laws and subject to Irish regulations and conditions. Legal, tax, and regulatory changes are likely to occur during the life of the Company and some of these changes may adversely affect the Company, perhaps materially. The financial services industry generally, and the activities of collective investment schemes and their managers, in particular, have been subject to intense and increasing regulatory scrutiny. Such scrutiny may increase the Company s exposure to potential liabilities and to legal, compliance and other related costs. D.3 Key information on the key risks that are specific to the securities: The securities in which the underlying funds, invest may be the most junior in what typically will be a complex capital structure, and thus subject to the greatest risk of loss as the claims of the underlying funds may be of a subordinate rank compared to other third party creditors and can only be recovered once all other creditors have been satisfied. Participating Shareholders should note that it may not always be possible for the Company to ensure sufficient liquidity in the event that the termination of an Investment is scheduled to occur after the Closed End Period. In the anticipated absence of a secondary market for the Participating Shares and due to the restrictions on their transferability, similar risks apply as to the Participating Shareholder s investment in the Company. CROWN GLOBAL SECONDARIES IV PLC 15

14 Any change in the Company s tax status or in taxation legislation could affect the value of the Investments held by the Company and affect the Company s ability to provide its Participating Shareholders with the expected returns on their capital. There can be no assurance that all profits realized from Investments in emerging markets will be capable of being repatriated. Current policies generally allow the repatriation of contributions to equity capital and revenues and dividends deriving therefrom, the repatriation of revenues from the sale of securities and dividends thereon, and credits and revenues used to repay credits. There can be no assurance in the future, however, that policies in emerging markets will not negatively affect the ability of the Company to receive the proceeds from the Investments. Certain of the Company s assets may be invested in securities denominated in currencies, which may or may not cease to be freely convertible into certain other currencies. The value of the assets of the Company and its income, as measured in the Denominated Currency, may suffer significant declines due to currency depreciation, disruptions in currency markets or delays and difficulties in currency conversions or be otherwise adversely affected by exchange control regulations or by changes in the method of controlling exchange rates or limiting exchange rate movements. 1.5 SECTION E - OFFER E.1 Total net proceeds and total expenses: The Company s preliminary and organisational expenses and the costs and expenses of and incidental to the offer of Participating Shares in respect of the Company (including expenses relating to the Company s establishment and the negotiation and preparation of the contracts to which it is a party and the fees and expenses of its professional advisers), all of which are payable by the Company, shall not exceed EUR 500,000 (exclusive of VAT). Such costs and expenses will be discharged immediately out of the initial proceeds of the offering of Shares. E.2a Reason for the offer and use of proceeds: To provide its Participating Shareholders with attractive long-term capital appreciation from a globally diversified portfolio of Private Equity Investments. The Company shall predominantly invest in Secondary Private Equity Investments. In addition, the Company may opportunistically commit to Primary Private Equity Investments and invest in Co-Investments which are acquired by way of a Secondary Transaction. The Private Equity Investments may invest in all Private Equity investment stages. E.3 Terms and conditions of the offer: The Company is authorised to be marketed solely to Qualifying Investors pursuant to Chapter 2 of the AIF Rulebook and Article 3(2) (a) of the Prospectus Directive. Accordingly, Participating Shares may only be purchased by Qualifying Investors. In addition, a U.S. Person must be an accredited investor and meet certain eligibility requirements as set forth in the Subscription Agreement to become a Shareholder of the Company. Each applicant must subscribe an amount equal to or greater than the Minimum Subscription which may be increased at the sole discretion of the Directors. Applicants shall not be registered on the Register of the Company if their Subscription constitutes less than the Minimum Subscription or if they have not certified in writing that they are Qualifying Investors and that they are aware of the risk involved in the proposed investment in the Company and of the fact that inherent in such investment is the potential to lose all of the capital invested. Participating Shares will be offered in the following Classes: Class A, Class A-D, Class A-E, Class A-EL, Class A-L, Class B, Class B-E, Class C, Class O and Class O-E Shares. In general, and subject to the sole discretion of the Directors, applicants subscribing for USD 25 million or more (or the 16 CROWN GLOBAL SECONDARIES IV PLC

15 equivalent amount in Euro) will typically be issued Class A Shares, and upon request Class A-D Shares, Class A-E Shares, Class A-EL Shares or Class A-L Shares. Applicants subscribing below USD 25 million (or the equivalent amount in Euro) will typically be issued Class B Shares, and upon request Class B-E Shares, and applicants subscribing below USD 5 million will typically be issued Class C Shares. Applicants with pre-existing commercial or fee agreements with the AIFM or its Affiliates (such as but not limited to managed accounts, separate advisory or intermediary arrangements, etc.) may typically be allotted Class O Shares, Class O-E Shares or Shares in other Classes which do not correspond to their individual Subscription amounts. E.4 Interest that is material to the issue/offer including conflicting interests: Not Applicable. There are no interests that are material to the issue and all conflicts will be carried out as if effected on normal commercial terms negotiated at arm's length and in the best interests of Participating Shareholders. E.5 Entity offering the shares: Not applicable. There are no lock-up agreements. E.6 The amount and percentage of immediate dilution resulting from the offer: Not applicable as there is no immediate dilution. E.7 Estimated expenses charged to the investor by the Company: Not applicable as generally, all fees, duties and charges borne by the Company will be charged to the relevant classes in respect of which they were incurred. CROWN GLOBAL SECONDARIES IV PLC 17

16 2 Risk Factors Each prospective applicant should carefully consider the following general risks before investing in the Company. 2.1 GENERAL The risks described herein should not be considered to be an exhaustive list of the risks which potential investors should consider before investing in the Company. Potential investors should be aware that an investment in the Company may be exposed to other risks of an exceptional nature from time to time. Investors should be aware that the difference at any one time between the Subscription Price and Repurchase Price of Participating Shares means that an investment in the Company should be viewed as long term. Moreover, investors should note that because investments in securities can be volatile and that their value may decline as well as appreciate, there can be no assurance that the Company will be able to attain its objectives. The price of Participating Shares as well as the income therefrom may go down as well as up to reflect changes in the Net Asset Value of the Company. An investment should only be made by those investors who could sustain a loss on their investment. Potential investors should review this Prospectus carefully and in its entirety and consult with their professional and financial advisers before making an application for Participating Shares. In particular, potential investors should note that any or all of the risks indicated below may materialize at the level of the Company and/or at the level of any number of the underlying Investments and their respective underlying funds. To the extent the risks will materialize cumulatively on a number of levels within the investment structure, the consequences and potential damages for Participating Shareholders may be significantly more severe. Additionally, in the context of Co-Investments each of the risks described herein may materialize in a more severe manner due to the lower diversification of any such Co-Investment. As a result, Co-Investments may be associated with even higher risks and volatility than other Private Equity Investments. 2.2 RISKS OF INVESTING IN PRIVATE EQUITY The Company will be investing in funds that invest in Private Equity transactions. Due to the nature of the Investments which the Company will make, the risk attached to an investment in the Company is above the average risk attached to an investment in a fund that invests in publicly-traded securities, and therefore an investment in the Company is suitable only for investors who are in a position to take such a risk including the possible loss of their entire investment. Due to the nature of Private Equity markets, there is no guarantee that sufficient suitable investment opportunities will be found for the Company to invest in, nor can there be any assurance that the Private Equity Investments will find suitable investment opportunities. As a result, there is no guarantee that the desired levels of diversification will be achieved by the Company or by the Private Equity Investments. The securities in which the underlying funds will invest may be the most junior in what typically will be a complex capital structure, and thus subject to the greatest risk of loss as the claims of the underlying funds may be of a subordinate rank compared to other third party creditors and can only be recovered once all other creditors have been satisfied. As there are generally no limits to the degree of leverage at the level of Private Equity Investments many of the investments may be in businesses with high levels of debt or in leveraged buyouts. Leveraged buyouts by their nature require the underlying funds to service substantial debt obligations which result in a high ratio of fixed interest charges to anticipated revenues. Leveraged investments are inherently more sensitive to declines in revenues and to increases in expenses (e.g. an increase in key interest rates). There can be no assurance that any targeted return will be attained. Additional financial risk of a similar nature may arise from the borrowing by the Company itself. Besides the high degree of financial risk due to relatively high leverage, the underlying funds may also incur counterparty and operating risks, which may give rise to the risks of insolvency of the underlying funds and total loss of funds invested. There may be a significant period of time before the underlying funds have invested all of their committed capital. Investments made by the Company will be long-term in nature and will require several years before they are suitable for realisation. Realisation of value from such Investments will be difficult in the short term or may have to be made at a substantial discount compared to freely tradable investments. Proceeds from the realisation of Investments in underlying funds may be retained by the Company to meet its obligations and pay expenses. It is therefore possible that no significant cash return will occur for some years. For further details of the AIFM s liquidity management policy please refer to section In order to preserve the confidential nature of Investments, the Investments in which the Company seeks to invest may refuse to accept investors that are subject to any law, rule or regulation that could require public disclosure of confidential information provided to such investor or, in case after the investment such 18 CROWN GLOBAL SECONDARIES IV PLC

17 investor becomes subject to any such law, rule or regulation, may require such investor to withdraw. In negotiating the terms of an Investment, the AIFM intends to obtain contractual provisions which will facilitate implementation of exit strategies such as sales to third parties. However, there can be no assurance that market, political or economic conditions will permit the successful implementation of such exit strategy at the time or in the manner required to provide an attractive return on the Company s Investment. Furthermore, such terms of Investments may provide for the underlying funds to be entitled to recall certain distributions for the purpose of satisfying indemnification claims or facilitating re-investments. In this context, it may be necessary for the Company as well to recall prior distributions in order to meet its obligations vis-à-vis the underlying funds. such as default and subscription proceeds, in favour of a third party creditor. During the continuance of such a security, the Company may be restricted to freely sell or transfer all or any of the charged Investment or allow the transfer of any Unfunded Subscription to a third party. Upon the enforcement of any such security, in accordance with the terms and conditions of the relevant security agreement, the Company may be required to take such steps as are necessary to authorize a third party creditor to give instructions to the Depositary on behalf of the Company to sell, realize, deliver or assign any of the charged Investments. The third party creditor may also have the right to issue Subscription Calls or to require the Company to issue Subscription Calls, the proceeds of which may be deposited in a bank account to be mortgaged, charged, pledged or otherwise encumbered in favour of the third party creditor or which may be paid directly to the third party creditor. 2.3 MARKET AND ILLIQUIDITY RISK The Company will be significantly exposed to unquoted companies. Applicants should therefore note that investments in Private Equity funds tend to be extremely illiquid in nature. This may affect the price at which the Company may liquidate positions to meet funding requirements. In addition, some of the Recognised Exchanges on which the Company s Investments might be trading may prove to be illiquid, insufficiently liquid or highly volatile from time to time. Furthermore, such underlying investments may not be freely redeemable and will be subject to restrictions on transferability. While borrowing presents opportunities for increasing the efficiency of the Company s cash management as well as the total return on Investments, it has the effect of potentially increasing losses as well. Accordingly, any event which adversely affects the value of an Investment could be magnified to the extent that borrowing is utilised. The cumulative effect of the use of borrowing with respect to any Investments in a market that moves adversely to such Investments could result in a substantial loss to the Company which would be greater than if no borrowing was utilized. 2.5 CO-INVESTMENT POSITIONS In particular, Participating Shareholders should note that it may not always be possible for the Company to ensure sufficient liquidity in the event that the termination of a Private Equity Investment is scheduled to occur after the end of the Closed End Period. In the anticipated absence of a secondary market for the Participating Shares and due to the restrictions on their transferability, similar risks apply as to the Participating Shareholder s investment in the Company. For further details of the AIFM s liquidity management policy please refer to section FINANCING RISKS Subject to applicable limitations set out in the Prospectus, the Company may borrow capital. Prior to the Final Closing Date any such borrowing will typically not exceed the Unfunded Subscriptions. As of the Final Closing Date any such borrowing shall not exceed 10% of the Subscribed Capital. There shall be no restrictions on the level of borrowings exercised to the extent necessary to mitigate the effects of any Defaulting Shareholders. The Company may charge, pledge or otherwise encumber all current and future Investments, the Company s accounts as well as its Unfunded Subscriptions and any related right or remedy, Co-Investments are typically made by way of partnering transactions with one or more other financial sponsors. The Company s execution of voting rights and the Company s investment and divestment from a Co-Investment is typically bound to the discretionary decision of the financial sponsor of the Co-Investment. 2.6 POLITICAL AND REGULATORY RISKS The value of the Company s assets may be affected by uncertainties such as international political developments, changes in government policies, changes in taxation, restrictions on foreign investment and currency repatriation, currency fluctuations and other developments in the laws and regulations of countries in which Investments may be made. Furthermore, the legal infrastructure and accounting, auditing and reporting standards in certain countries in which Investments may be made may not provide the same degree of investor protection or information to investors as would generally apply in major securities markets. As the Company may invest in markets where custodial and/or settlement systems are not fully developed, the assets of the Company which are traded in such markets and which have been CROWN GLOBAL SECONDARIES IV PLC 19