Infrastructure Debt
Incremental value and diversification
for fixed income allocations
Q2 2014
Fixed income allocations are expected to diversify away from high risks while reliably delivering cash
returns and preserving capital. Today globally, market conditions mean this expectation is challenged
as low and potentially increasing rates combined with growing demand to affect returns and volatility.
In response fixed income investors are looking to private and illiquid debt strategies to deliver value
and diversification. Infrastructure debt is an established and global private asset class that can be a
unique alternative for long term and investment grade bonds as well as offering shorter tenor or
higher risk-return portfolio alternatives. We explore this further in this paper.
Executive Summary
Challenges for Fixed Income Allocations
Infrastructure Debt’s Role
US public pension plans fixed income allocations highlight
Infrastructure debt as a private debt strategy has grown
the challenges today.
significantly. Initially led by Australian, Canadian and
European pension funds and US insurers via their private
US Public Plan Allocation and Performance
77%
10.7%
All
Other
Assets
77%
6.3%
23%
All
Other
Assets
23%
2011
2012
Fixed Income Assets
placement allocations. Today a wider and global group of
fixed income investors are realising infrastructure debt’s
78%
value and appeal within fixed income allocations.
All
Other
Assets
The Credit Spread Premium
Infra High Range
+200bps
Infra Low Range
22%
0.4%
2013
Fixed Income Returns
Source: Hastings 2014, average of 10 large US public pension
While portfolio managers may have out-performed
+100bps
+175bps
IG Infra Debt
+325bps
+135bps
BBB Bonds
Sub-IG Infra
Debt
+258bps
BB Bonds
Source: Barclays, Hastings, 2014
Barclays US Aggregate’s -2% p.a. for 2013 – earning a
barely positive return from 20-25% of a portfolio warrants
Infrastructure debt’s long term floating rate assets can
concern. This may be the new outlook for fixed income
assist in addressing rising rates without sub-investment
investors facing low and potentially rising rates coupled
grade risks of other loan strategies. Additionally the
with increasing competition for traditional bonds.
variety and return premium relative to traditional bonds
offer valuable diversification to fixed income portfolios.
Hastings: Past performance is no guarantee of future returns.
INVESTMENT PRODUCTS: • NOT FDIC INSURED • NOT CDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
Infrastructure Debt – A Fixed-Income Alternative | 1
issued by governments, financial institutions
and high grade corporates.
During periods of higher underlying rates
there was little risk to achieve a c. 5% p.a.
return.1
Annual Issuance (US$ bn)
been high quality A to AAA rated bonds
2,000
12,500
10,000
1,500
7,500
1,000
5,000
500
2,500
0
0
Outstanding Issuance (US$ bn)
US Non-Govt Corporate Bonds
Fixed income investments have traditionally
2001 2003 2005 2007 2009 2011 2013
Today it is a different story. Risks are
Asset-Backed
Corporate Debt
Outstanding Issuance
generally higher and returns tend to be
Source: SIFMA, March 2014
lower. This is a catalyst for investors to
evolve their fixed income strategies in order
In Q1 2014 US leverage loan and high yield bond markets
to achieve their goals.
saw lower volumes than Q1 2013 while investment grade
was up slightly.2 In Europe volumes have more generally
Historically fixed income total returns have benefited
grown as the capital markets develop from a lower base
from reducing interest rates, while cash coupons have
relative to the US market.
declined.
Demand for fixed income on the other hand looks to
As underlying interest rates increase, the head-winds to
maintain its growth trajectory. Again, this is illustrated
total returns that started in late 2013 with the on-set of
by US pension funds - with c. US$20 trillion of assets3
tapering may become more prevalent.
their influence is significant in local and global markets.
US Corp Credit Returns (% pa)
15.0%
US Pension Investment Flows
200
150
10.0%
5.0%
0
2013Q1
2012Q1
-50
-100
2011Q1
0.0%
50
2010Q1
USD billion
100
-150
-5.0%
Jan 14
Oct 13
Jul 13
Apr 13
Jan 13
Oct 12
Jul 12
Apr 12
Jan 12
Oct 11
Jul 11
Apr 11
Jan 11
12-mth rolling Total Return
-200
-250
Cash YTW
-300
Source: Barclays, US Corporate Credit Returns, 2014
While cash coupons from bonds may edge higher from c.
1
Bonds (ex Treasuries)
Equities
Source: Federal Reserve Statistical Release, March 2014
In the second half of 2013 pension funds de-risked by
3% p.a. today , the resulting decline in prices will likely
rotating out of public equities and into bonds. US Federal
lead to lower, even negative total returns.
Reserve data on investment flows showed US pensions
Supply of corporate bonds returned to record levels in
2012-2013. Stoked by investor demand and historically
switched from adding c. US$90 billion of supply to c.
US$70 billion of demand during 2013.4
low interest rates, we saw borrowers taking the
This raises a concern that supply in traditional markets
opportunity to lock in low cost and often long term debt.
may not keep pace with investor demand unless the rate
of business investment increases to create new supply.
2
3
1
Barclays, March 2014
Hastings: Past performance is no guarantee of future returns.
4
Thomson Reuters, Barclays, March 2014.
Towers Watson, Global Pension Assets Study, 2014
Federal Reserve Statistical Release, March 2014
Infrastructure Debt – A Fixed-Income Alternative | 2
This “de-risking” of pension funds is a growing trend. It is
often discussed as a reaction to unfunded liabilities
declining, while changing demographics of plan

Access to attractive supply of investments
Low returns and rising interest rates
beneficiaries may also create a preference for low risk
Low returns affect markets in many different ways. Asset
cash returning assets. This trend is creating greater
value inflation and increased risk appetite are some of
interest in liability driven investing strategies, similar to
the consequences. A common reaction for fixed income
those adopted by life insurance asset managers.
investors has been to increase credit and duration risks.
Insurers are a large participant in fixed income markets
The increase in risk is most evident via the demand for
globally. These investors are typically largely credit
“junk” bonds and other sub-investment grade credit
investors with 60-80% invested in traditional fixed income
assets such as Term Loan B and Leverage Loan issuances.
assets and only c.10% in equities. This is quite different
However these widely accessible markets have their own
to pension allocation strategies.
credit and market risks. An example is US high yield
bonds with an average B credit rating. Credit spreads are
100%
US Insurance and Pension Asset
Allocation
80%
Other
around +320bps relative to longer term averages of
+750bps over underlying interest rates.5
This means investors seeking 5% returns in fixed income
are investing in “junk” B-rated assets.6 Once, the same
60%
40%
20%
Equities
return from the highest quality A to AAA rated bonds.
Fixed Income
Increasing duration also has its pros and cons. The pro is
increasing coupons by exposure to higher long term
0%
Insurance
Pension
Source: OECDStats (insurance 2012), Towers Watson (pension 2013).
interest rates. The con is higher duration risk that means
greater exposure to total return losses as rates increase.
The driver of insurance portfolio allocation preferences
The rule-of-thumb is a 1% increase in rates results in a 1%
is a disciplined approach to asset-liability management
decline in price for each year of tenor.7 Applying this
that aims to mitigate investment performance risks. This
rule and assuming a 2% rate increase over 4 years, we
approach is widely supported by insurers and their
calculate the cumulative total returns across short (5
regulators via regulatory capital charges that require
year), medium (10 year) and long (30 year) tenor
varying levels of capital to be reserved against certain
investments as shown below. This is purely illustrative
asset types.
but offers one of many varying perspectives. As markets
The growing demand for credit investments from large
institutional investors adds a technical dimension as
continue to evolve the only certainty in our depiction
above is that it is unlikely to eventuate as modelled!
surplus demand bids up prices and returns down.
5.0%
Total Return (% pa)
Faced with low returns and growing demand,
fixed income investors are having to more
keenly balance risk and return.
1.75%
2.75%
3.50%
1.0%
-1.0% 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
Increasingly investors are creating or
Investment Tenor (years)
-3.0%
expanding private debt allocations to provide
flexibility in managing these challenges.
Short Term (5 years)
Medium Term (10 years)
-5.0%
Long Term (30 years)
-7.0%
Fixed income investors face two obvious challenges:

3.0%
Illustrative Total Return
Source: Hastings, 2014
5
low returns coupled with rising interest rates
Hastings: Past performance is no guarantee of future returns.
Barclays Esoteric Credit Weekly, February 2013, March 2014
6
Barclays, March 2014
7
Merill Edge, August 2013
Infrastructure Debt – A Fixed-Income Alternative | 3
Rising rates may be a shorter term issue as rate increases
are widely expected to stabilize over the next few years
as the influences of monetary policies subside and
economic factors regain a more normal influence.
A related issue of low returns and rising rates is that
We believe infrastructure debt’s return, risk
and diversity characteristics make it
attractive to fixed income allocations.
Fixed income allocations are typically
certain fixed income assets may become inherently
tailored to public and externally rated bond
illiquid if realising the mark-to-market losses is
strategies. Infrastructure debt may not be
unpalatable for the investor.
perfect fit within these existing allocations.
This poses the question of whether there are assets that
However, not being a neat fit is the value
offer better value, such as an illiquidity premium found
infrastructure debt can offer as an excellent
in private debt assets.
diversifier as part of a fixed income portfolio.
Access to attractive supply of investments
We see infrastructure debt as an appealing alternative
Access to supply to meet investment budgets and return
objectives is another fundamental issue.
for fixed income investors. Our view is echoed by the
growing demand out of established private placement
debt investors in North America and the wave of
Supply is being squeezed as demand increases from a
mandates issued by European insurance and pension
range of factors including de-risking and the growing
investors.
trend of liability driven investment strategies.
A common theme of these investors is complementing
This is showing up in declining credit spreads across
their existing fixed income portfolios not only with
traditional bond markets where corporate credit margins
attractive returns, but also much needed diversity. This
are once again below 100bps in Europe and the US.8
value includes:
A related challenge is that supply and demand
imbalances can lead to bubbles as investors are less
influenced by fundamentals of risk and return.
Fixed income investors are looking for more options to
manage the challenges if they are to avoid the concerns
associated with chasing yield.
“When Does a Bubble Spell Trouble”
Wall Street Journal, January 2014.

A return premium for illiquidity

The option to select fixed or floating rates

Diversity of supply, risk and return

A credit risk consistent with existing bonds
Illiquidity Premium
The scale of fixed income allocations mean liquidity may
not be needed for all assets. This has long been accepted
by investors in the life insurance sector.
“Fitch warns on leveraged finance defaults”
Financial Times, February 2014.
“Sellside warns on high junk bond valuations”
Financial Times, April 2014.
The fact that some assets may also be inherently illiquid
due to realisation of mark-to-market losses creates an
additional focus on the value of liquidity.
This means that where there is an ability to accept some
level of illiquid assets the value of infrastructure debt
may enhance portfolio returns and increase diversity
without materially increasing portfolio risks.
8
Barclays Esoteric Trading Weekly, March 2014
Hastings: Past performance is no guarantee of future returns.
Infrastructure Debt – A Fixed-Income Alternative | 4
indexation of their liabilities. For floating rate loans the
relationship with indexed liabilities is not direct.
1.40%
400
0.90%
0.80%
0.60%
0.40%
0.20%
0.00%
All Corp Bonds
Utility Bonds
BBB Bonds
Source: Barclays, Hastings, 2014.
In a low risk-return asset class a potential credit spread
Cumulative US Returns CPI vs LIBOR
350
Inedx (Jan 2005 = 100)
1.00%
1.24%
1.20%
1.39%
IG Infra Debt Spread to Bond
1.60%
Infra Debt's Illiquidity Premium
300
250
200
150
CPI - All Urban (seasonally adjusted)
100
6-Mth LIBOR
50
premium up to c. 140bps for an equivalent credit risk is
attractive. Perhaps the biggest challenge faced by an
investor is to realise this potential premium via an
Source: St Louis Fed (FRED) for LIBOR, and Burea for Labor Statistics
internal team or an external manager.
The general principle is interest rates outperformed
The internal costs of establishing a team with capability
inflation. However, recently the principle and historical
to originate, structure, negotiate and internally rate and
trends are no guarantee of a future relationship.
manage assets like infrastructure debt can be
prohibitively expensive relative to the premium. The
Diversity
scale needed to absorb the costs can be beyond the
Diversity is a valuable and rare attribute to reduce
foreseeable investment appetite for many investors.
portfolio volatility while achieving sustainable long term
returns across various market cycles.
Similarly, an external management strategy needs to be
cognisant of size of the premium available and recognise
One of the strengths of private debt is diversity.
the majority of this should be delivered to the end client
Infrastructure debt offers a strong range of diversity
on a net of fees basis. This means infrastructure debt is
relative to real estate and middle-market strategies.
less of a private equity fee model business, and more one
Infrastructure’s relationship to wider economic or market
that is based on relationships and value realised over the
trends is less likely because of its high barriers to entry,
longer term.
fundamental need and often subject to availability based
or regulated revenue streams.
Option for fixed or floating
Opting for floating rate investments can assist in
Consistent Credit Risk
addressing the issue of total return losses in a rising
When investing at the low end of the investment grade
interest rate environment.
risk there is often a preference for assets with more
stable credit profile.
Fixed rate investments are also available and widely
available globally for infrastructure debt.
Infrastructure debt’s largely investment grade and
declining risk profile over time, coupled with lower
Index linked and to a lesser extent floating rates can
volatility relative to corporate bonds leads us to
offer certain investors some level of mitigation to the
conclude infrastructure debt is ideally suited to lower
investment grade risk appetite.
Hastings: Past performance is no guarantee of future returns.
Infrastructure Debt – A Fixed-Income Alternative | 5
Perhaps more fundamentally, returns consistent with
junk bonds and widely available loan can be achieved
from assets with a materially lower credit risk profile.
Our conclusion is relatively simple.
Fixed income allocations and strategies have generally done well in navigating the current market
environment. However, there is merit in considering new investment markets and understanding
how these new investments may offer incremental value to the existing and evolving allocations
and strategies within the fixed income asset class.
Infrastructure debt can be a sensible addition within a fixed income allocation that offers value
and diversification. The long and proven track record, global supply, fixed and floating rates,
premium to comparable bonds, and low risk profile are the primary attributes that deliver
infrastructure debt’s value.
The diversity and the scale of debt issuance is highlighted by global opportunities tracked by
Hastings as of April 2014.
C$4bn
£7bn €23bn
US$31bn
A$25bn
Hastings: Past performance is no guarantee of future returns.
Infrastructure Debt – A Fixed-Income Alternative | 6
Appendix : What is Infrastructure debt
Illustrative Global Opportunites
Infrastructure is a tangible asset that meets a
4%
fundamental and long term economic and
26%
social need. These characteristics underpin a
35%
robust and stable long term credit risk profile
USD
EUR
GBP
AUD
Other
that typically ranges from BB to A.
8%
Infrastructure debt is a large, global and
27%
consistent private debt solution that may
offer a unique combination of return
premium, lower risk and diversity relative to
traditional fixed income investments.
Source: Hastings, 2014
The largest and most consistent opportunity is senior
debt. This can be divided into two sub-sets:

The following is a brief recap of what infrastructure debt
Investment grade: mature project financings to
single-asset/business corporate
is.

Infrastructure debt is largely a private senior debt
Sub-investment grade: largely project financings
or sectors with higher levels of market risks
opportunity. The market offers c. US$70 billion of
investments each year. The assets range from fixed to
Senior debt has a robust track record across both the
floating rate, typically BB to A rated credit profiles
sub-investment and investment grades over 30 years that
across various currencies. This offers a range of
we and others9 characterise as:
investment solutions to investors.
Infrastructure has the lowest default probability of its
peers and a recovery rate that ranges from 80-100% on
average.

Lower credit risk than other sectors

Decreasing credit risk over time

Higher recoveries at 80% if a default occurs,
Average Default Rate - Project Finance
with the most likely ultimate recovery being
30.00%
100%
20.00%

financial corporate credit investments.
10.00%
0.00%
Lower volatility of credit quality relative to non-
For this risk profile, current market credit spreads can
offer a potentially attractive 50 to 125bps premium
relative to comparable public bonds.
Source: Moodys, 2014.
Infrastructure debt investments can be broadly
categorised as senior and junior debt. Our global pipeline
of opportunities highlights the scale of the opportunity
and diversity available across the various key markets.
Our pipeline at any point in time sees between US$70100bn of investment opportunities:
In addition to the return premium, the higher recoveries,
lower volatility of credit quality and diversity relative to
public bonds can be additional sources of value. This
combination is our basis for stating infrastructure debt
offers attractive absolute and risk-adjusted returns.
Junior infrastructure debt represents another, albeit
smaller opportunity that we participate in globally.
9
Hastings: Past performance is no guarantee of future returns.
Moodys, Default and Recovery Rates for Project Finance Bank Loans, 1983-2012,
March 2014.
Infrastructure Debt – A Fixed-Income Alternative | 7
Junior debt is opportunistic because it is not normally a
permanent feature of an infrastructure asset’s capital
structure. Infrastructure’s low risk profile limits the role
for junior debt between senior debt and equity. Under
normal market conditions there can be ample senior debt
and equity appetite to fill any void in the capital
structure.
The spike in junior infrastructure debt issuance leading
up to and following the Global Financial Crisis is an
Issuance (USD million)
150,000
North America and Europe
Junior
Senior
Junior (%)
20%
15%
100,000
10%
50,000
5%
0
Junior Issuance (% of total)
example of its opportunistic nature.
0%
Source: Thomson Reuters, Deal Scan, 2013
For more detail related to infrastructure debt please
reach out to our global team or refer to a copy of our
earlier paper10.
10
The Global Infrastructure Debt Opportunity, Hastings, 2013.
Hastings: Past performance is no guarantee of future returns.
Infrastructure Debt – A Fixed-Income Alternative | 8
If you would like to discuss the contents of this paper, or understand the global
infrastructure debt opportunities in more detail, please contact our global team:
55 Market Street
Level 10
Sydney, NSW, Australia
[email protected]
575 Fifth Avenue
39th Floor
New York, NY, USA
[email protected]
+61 2 9287 8724
+1 212 551 1939
Steve Rankine
Executive Director (Sydney)
Nick Cleary
Investment Director (New York)
50 St Mary Axe
Level 2
London, EC3A, UK
[email protected]
55 Market Street
Level 10
Sydney, NSW, Australia
[email protected]
+44 20 7337 6724
Tim Cable
Investment Director (London)
+61 2 9287 8704
Ross Pritchard
Investment Director (Sydney)
50 St Mary Axe
Level 2
London, EC3A, UK
[email protected]
+44 20 3462 1347
Lisa Shaw
Investment Director (London)
Hastings Funds Management Limited
Transforming global infrastructure investment
opportunities to deliver long-term value
Melbourne, London,
New York, Sydney, Singapore
www.hastingsinfra.com
Hastings: Past performance is no guarantee of future returns.
Infrastructure Debt – A Fixed-Income Alternative | 9
Hastings Disclaimers
This document has been prepared by Hastings Funds Management Limited’ and affiliates (collectively “Hastings”), holder of Australian Financial Services Licence number
238309. Hastings is a subsidiary of Westpac Banking Corporation (Westpac).
By accepting the document, you agree to be bound by the following limitations. The information contained in this document is the property of Hastings and its affiliates.
This document is intended solely for the use of the persons to whom it has been delivered and is not to be reproduced, disclosed or distributed, in whole or in part, to any
other persons except as agreed in writing by Hastings. The information contained in this document is being made available to a limited number of
sophisticated/institutional investors for informational purposes only, and may not be used or reproduced for any other purpose. Neither Hastings, nor any of its employees
or related bodies corporate accepts any responsibility for or makes any representation or warranty as to the truth, accuracy or completeness of the information contained
in this document. This document does not constitute an offer from Hastings or its related bodies corporate to issue or arrange to issue, financial products and should not
be relied on as a financial product or investment advice. This document has been prepared without taking into account the investment objectives, financial situation or
particular needs of any particular person or entity. Before making an investment decision, you should consider, with or without the assistance of a financial adviser,
whether any investments are appropriate in light of your particular investment needs, objectives and financial circumstances.
Statements contained in this document may be forward looking statements. Such statements are inherently speculative and always involve some risk and uncertainty as
they relate to events and depend on circumstances in the future, many of which are outside the control of Hastings. Any forward looking statements contained in this
document are based on a number of assumptions which may prove to be incorrect, and accordingly, actual results or outcomes may vary. Any past performance information
contained in this document is not an indication of future performance. It has not been audited or verified by an independent party and should not be seen as any indication
of returns.
Certain information contained herein has been obtained from published sources and/or prepared by third parties and in certain cases has not been updated through to the
date hereof. While such sources are believed to be reliable, neither Hastings nor any of its affiliates assume any responsibility for the accuracy or completeness of such
information. Information contained in this document is believed by Hastings to be accurate and correct, and statements of opinion in this document are considered to be
reasonable at the time of this document production but Hastings does not accept responsibility for any such information, and all recipients of this document are expressly
warned of the requirement to carry out their own due diligence.
This document may not be updated if facts stated within it, assumptions or expectations of Hastings change, including materially. Hastings accordingly accepts no
responsibility to any person for the consequences of any person placing reliance on the content of this document. Hastings accordingly accepts no responsibility to any
person for the consequences of any person placing reliance on the content of this document.
To the maximum extent permitted by law, Hastings, its related bodies corporate and their respective officers, employees and advisers expressly disclaim all or any liability
which may arise out of the provision to, or use by, any person of the information contained in this document. Neither Hastings, Westpac or any other members of the
Westpac Group gives any guarantee or assurance as to the performance or the repayment of capital. Investments are not investments, deposits or other liabilities of
Hastings, Westpac or other members of the Westpac Group.
Nothing contained herein should be construed as legal, business or tax advice. Each prospective investor should consult its own legal adviser, business adviser,
appropriately authorized financial adviser and tax adviser as to legal, business, financial, tax and related matters concerning the information contained herein. All data in
this report has been calculated using the most accurate sources available and is in Australian dollars unless otherwise stated. Any rates or totals may differ from those
provided due to rounding. The distribution of this presentation may be restricted by law and all persons who come into possession of this document should seek advice on
and observe any such restrictions.
Australia
The information in this document is of a general nature only and does not take into account the personal needs of any particular person. Persons should consider their own
needs and circumstances or seek advice from an appropriately authorised financial adviser in considering any information in this document.
The distribution of this document outside Australia may be restricted by law. Persons who come into possession of this document who are not in Australia should seek
advice on and observe any such restrictions.
Canada
By assessing this document, an investor confirms and represents to Hastings that it is an “accredited investor” as such term is defined in Section 1.1 of National Instrument
45-106 – Prospectus and Registration Exemptions or if the distribution is made by an entity registered as an ‘international dealer”, a “permitted client”, as such term is
defined in National Instrument 31-103 – Registration Requirements and Exemptions.
You are advised and acknowledge that for Canadian purposes this presentation is preliminary in form and not an offer for any financial product. Prior to any subscription or
purchase of securities you will be provided with additional information which will incorporate all additional information which is required to be provided to accredited
investors or permitted clients, as the case may be, pursuant to the applicable laws of the relevant jurisdictions in Canada.
China
This document has not been registered as a prospectus with the China Bank Regulatory Commission. Accordingly, this document or material in connection with the offer or
sale, or invitation for subscription or purchase, of interests or units may not be circulated or distributed, nor may interests or units be offered or sold, or be made the
subject of an invitation for subscription or purchase, whether directly or indirectly, to any institutions or individuals in China.
Japan
This document has been prepared by Hastings Funds Management Limited and its affiliates, for the purpose of introducing you t o Hastings and its business. It is not
intended to be, and does not constitute a product disclosure statement, prospectus, short form prospectus or profile statement. This document is highly confidential (and
must be held on that basis), is intended for authorized recipients only and has been given to you on behalf of Hastings solely for your information. It must not be
reproduced or redistributed to any other person or made public in any format without the express written approval of Hastings.
Korea
This document is not intended as a solicitation of or recommendation to any person to invest in any Hastings fund. No representation or warranty (express or implied) is
made or can be given with respect to the accuracy or completeness of the information in this presentation, or that any future offer of securities or investment by Hastings
will conform to the terms described in this presentation. Investments of the type described in this presentation involve significant risks.
Malaysia
NOT FOR PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR TO THE JURISDICTION WHERE SUCH PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.
Singapore
This document has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this document or material in connection with the offer or
sale, or invitation for subscription or purchase, of Shares/Interests/Units may not be circulated or distributed, nor may Shares/Interests/Units be offered or sold, or be
made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under
Section 304 of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”) or (ii) otherwise pursuant to, and in accordance with the conditions of, any other
applicable provision of the SFA.
United Kingdom
The contents of this document, which have been prepared by Hastings Management Pty Ltd’ (“Hastings”), have been approved by Hastings Funds Management (UK) Limited,
a company registered in England and Wales and authorised and regulated by the Financial Services Authority, FRN 459816, solely for the purposes of section 21(2)(b) of the
Financial Services and Markets Act 2000.
This document is being made only to and is directed at (a) persons who have professional experience in matters relating to investments who fall within Article 19(5) of the
Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the ‘Order’) or (b) high net worth entities, and other persons to whom it may otherwise lawfully
be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”). Any person who is not a relevant
person should not act or rely on this presentation or any of its contents.
By accepting this document, you will be taken to have represented, warranted and undertaken that (i) you are a relevant person (as defined above); and (ii) you have read
and agreed to comply with the contents of this notice. This Document and the rights and obligations of the recipients arising out of or in connection with it, whether
contractual, non‐contractual, pre‐contractual or otherwise are governed by the laws of England and Wales.
United States
U.S. INTERNAL REVENUE SERVICE CIRCULAR 230 NOTICE: TO ENSURE COMPLIANCE WITH U.S. INTERNAL REVENUE SERVICE CIRCULAR 230, PROSPECTIVE INVESTORS ARE
HEREBY NOTIFIED THAT: (A) ANY DISCUSSION OF U.S. FEDERAL TAX ISSUES CONTAINED OR REFERRED TO IN THIS DOCUMENT IS NOT INTENDED OR WRITTEN TO BE USED, AND
CANNOT BE USED, BY A PROSPECTIVE INVESTOR FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED ON THEM UNDER THE INTERNAL REVENUE CODE; (B) SUCH
DISCUSSION IS WRITTEN IN CONNECTION WITH THE PROMOTION OR MARKETING BY THE FUND OF THE TRANSACTIONS OR MATTERS ADDRESSED HEREIN; AND (C) EACH
PROSPECTIVE INVESTOR SHOULD SEEK ADVICE BASED ON ITS PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.
INVESTMENT PRODUCTS: • NOT FDIC INSURED • NOT CDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
Hastings: Past performance is no guarantee of future returns.
Incremental value and diversification for fixed income allocations |10