PROSPECTUS FOR THE EXANE LONG/SHORT EQUITY FUND (Fonds
Commun de Placement – FCP)
INVESTMENT FUND CONFORMING TO EUROPEAN STANDARDS
I - GENERAL CHARACTERISTICS
FORM OF THE FUND
NAME
WHERE TO OBTAIN THE LATEST ANNUAL REPORT AND INTERIM
FINANCIAL STATEMENTS
Exane Long Short Equity Fund
The latest annual and interim reports will be sent within one week upon written
request sent by the investor to:
LEGAL FORM
French mutual fund (Fonds Commun de Placement – FCP)
Exane Asset Management
16 Avenue Matignon
75008 Paris
Tel. 01 53 24 27 00
DATE OF CREATION AND PROJECTED LIFESPAN
The Exane Long/Short Equity Fund, a mutual fund (FCP) with sub-funds, was
approved by the French financial markets authority (Autorité des Marchés Financiers
- AMF) on 20 December 2007. It was created on 21 January 2008 for a term of 99
years.
The Exane Gulliver Fund sub-fund was approved by the AMF on 15 June 2007. It was
created on 17 October 2007 for a term of 99 years from this date.
e-mail: [email protected]
If required, further explanations can be obtained from the Investor Relations
department on the following telephone number: 01 44 95 40 97.
Date of publication of the Prospectus: 20 February 2013.
The Exane Vauban Fund sub-fund was approved by the AMF on 7 August 2007. It
was created on 1 July 2004 for a term of 99 years from this date.
INVESTMENT OVERVIEW
Units
Exane Gulliver Sub-fund
I
P
C
Code
ISIN
FR0000984379
FR0010490383
FR0010829754
Appropriation of
income
Accumulation
Accumulation
Accumulation
Currency
EUR
Investor profile
All investors, but primarily
intended for institutional
and equivalent investors
EUR
All investors
EUR
(i) employees of the
Investment Manager,
regardless of whether they
invest directly or though the
Investment Manager’s
funds;
(ii) investments from funds
of funds managed by the
Investment Manager;
(iii) investments from
discretionary management
portfolio managed by the
Investment Manager.
Subscription
fee
Operating
and
Management
charges
Performance-based
commission
Maximum rate per
annum
Minimum
initial
investment
EUR
125,000
Maximum 5%
not retained
by the Subfund
Maximum
1.2% per
annum
including all
taxes
20% including all taxes,
of outperformance of the
capitalised EONIA +1%
of annual performance
with High Water Mark
Mechanism*.
Maximum 2%
maximum
1.7% per
annum
including all
taxes
20% including all taxes,
of outperformance of the
capitalised EONIA +1%
of annual performance
with High Water Mark
Mechanism*.
None
Maximum
0.30% per
annum,
including all
taxes
None
None
EUR
125,000
(*) High Water Mark Mechanism : The variable management fee is calculated by comparing the Sub-fund's performance with the performance of EONIA + 1% on a reference period with the
application of a High Water Mark mechanism.
Exane Vauban Fund: A sub-fund of the FCP Exane Long Short Equity Fund.
Page 1 of 14
Exane Vauban Sub-fund
Units
I
C
ISIN code
FR0010098335
FR0010829770
Appropriation of
income
Accumulation
Accumulation
Currency
EUR
EUR
Investor profile
Subscription
fee
Operating and
Management
charges
None
Maximum
1.5% per
annum
including all
taxes
None
Maximum
0.30% per
annum
including all
taxes
All investors, but primarily
intended for institutional
and equivalent investors
(i) employees of the
Investment Manager,
regardless of whether they
invest directly or though the
Investment Manager’s
funds;
(ii) investments from funds
of funds managed by the
Investment Manager;
(iii) investments from
discretionary management
portfolio managed by the
Investment Manager.
Performancebased commission
Maximum rate
per annum
20% including all
taxes, of
outperformance of
the capitalised
EONIA +1% of
annual
performance with
High Water Mark
Mechanism*.
None
Minimum
initial
investment
EUR 125,000
EUR 125,000
(*) High Water Mark Mechanism : The variable management fee is calculated by comparing the Sub-fund's performance with the performance of EONIA + 1% on a reference period with the
application of a High Water Mark mechanism.
III - OPERATIONAL AND MANAGEMENT PROCEDURES
II- DIRECTORY
GENERAL FEATURES
INVESTMENT MANAGER
Exane Asset Management SA (‘EXANE AM’)
16 Avenue Matignon, 75008 Paris
Approved by the COB under no. GP-01-015 on 30 April 2001
DEPOSITORY, CUSTODIAN, INSTITUTION RESPONSIBLE FOR
CENTRALISING SUBSCRIPTION AND REDEMPTION ORDERS BY
MANDATE OF THE INVESTMENT MANAGER AND INSTITUTION
RESPONSIBLE FOR KEEPING THE REGISTERS OF UNITS
Société Générale SA, a credit institution created on 8 May 1864 by decree signed by
Napoleon III.
Registered office: 29 Boulevard Haussmann, 75009 Paris
Postal address for custody services : 75886 Paris Cedex 18
Postal address of the department responsible for centralising orders and keeping the
registers: 32 Rue du Champ de Tir, 44000 Nantes
STATUTORY AUDITOR
PwC Sellam49/53, Avenue des Champs Elysées, 75008 Paris
PROMOTER
Exane Asset Management. The list of promoters is not exhaustive, especially as the
Sub-fund is listed for distribution on Euroclear. Some promoters may not therefore be
approved by or known to the Investment Manager.
Persons responsible for ensuring that criteria relating to investors’ capacities are
complied with: At the time of subscription, each promoter must ensure in particular
that:
- subscribers have received, prior to subscription, the prospectus in application of
Article 411-51 of the French financial markets authority’s general regulations;
- its obligations of information and advice have been fulfilled in accordance with the
French financial markets authority’s general regulations;
- employees eligibility to invest in the sub-funds’ C units is monitored by the
Investment Manager.
DELEGATED MANAGERS
The Sub-fund’s accounting and valuation have been delegated to the accounting and
administration manager:
SGSS France, Immeuble Colline Sud, 10 Passage de l’Arche, 92800 Puteaux
UNIT CHARACTERISTICS
ƒ Nature of the right attached to the units
The various units constitute real rights. Each unitholder has a co-ownership right in
the Sub-fund’s assets, proportional to the number of units held.
ƒ Liabilities management
The various units are listed on Euroclear France. Liabilities management is provided
by the depository, Société Générale.
ƒ Voting rights
No voting rights are attached to the units since all decisions are taken by the
Investment Manager.
ƒ Form of units
Bearer.
ƒ Fractions of units
Thousandths of units.
FINANCIAL YEAR-END
Last stock market trading day in December for the Exane Gulliver Fund and Exane
Vauban Fund sub-funds.
The Exane Gulliver Fund sub-fund’s first financial year ends on 31 December 2002.
The Exane Vauban Fund sub-fund’s first financial year ends on 31 December 2004.
TAXATION
As a mutual fund (Fonds Commun de Placement – FCP), the Sub-fund is not liable for
tax. However, unitholders may be liable for tax when they sell the Sub-fund’s units.
The tax regime that applies to the capital gains or losses made by the Sub-fund
depends on the tax regulations that apply to the investor’s particular situation, his tax
domicile, and/or the Sub-fund’s investment jurisdiction. If an investor is not sure of
his tax position, he should consult an adviser or expert.
Disclaimer - Only the French version has legal validity – In case of dispute, only the French version will prevail between the parties.
Page 2 of 14
SPECIFIC PROVISIONS FOR THE EXANE GULLIVER FUND SUB-FUND
CLASSIFICATION
ASSETS USED
Diversified mutual fund
1. European equities
ISIN CODE
Listed European equities, preferably with a stock market capitalisation in excess of
1.5bn euros. The selection of stocks to buy is based primarily on fundamental analysis
of companies and sectors.
Units
I
P
ISIN code
FR0000984379
FR0010490383
2. Contracts traded over-the-counter
The Gulliver sub-fund may conclude contracts traded over the counter in the form of
“Contracts For Difference” (“CFD”), which have equities or international equity
market indices as their underlying or foreign exchange.
CFD are over-the-counter financial contracts through which the Sub-fund gains
exposure to fluctuations (positive or negative, depending on the direction of the
transaction) of equities, baskets of equities or baskets of indices and foreign exchange.
CFDs will be used either to replicate a purchase or sale of stocks or indices, or baskets
of stocks or indices or to hedge the portfolio against foreign exchange risk.
C
FR0010829754
If the use of CFDs results in an increase in exposure to equities, this will be limited to
200%, equivalent to a maximum leverage effect of 2.
3. Forward financial instruments
INVESTMENT OBJECTIVE
The Gulliver sub-fund’s investment objective is to deliver absolute, regular
performance with a low level of volatility of the order of 2% to 4%.
BENCHMARK
There is no financial index suitable for evaluating the Gulliver sub-fund’s
performance, as the available indices are not representative of the Sub-fund’s
investment process. However, over an investment horizon of at least two years, the
sub-fund’s performance can be compared a posteriori to the capitalised EONIA. The
EONIA is the reference interest rate for the euro zone money market.
INVESTMENT STRATEGY
The Gulliver sub-fund trades on all regulated or organised French and foreign OECD
member state markets. The types of instruments used are futures, swaps and options.
The strategies used with these products aim either:
- to hedge the portfolio against the risk of a fall of an underlying equity or to
expose the portfolio in order to profit from the rise of an underlying equity.
These strategies contribute in a subsidiary manner to the pursuit of the
investment objective. They nevertheless make it possible to protect positive
performance already gained if the manager expects equities markets to fall
(hedging equities indices or particular companies considered by the manager to
be overvalued) or to expose the portfolio if the manager expects a rise in the
equities markets which the securities already in the portfolio may not be able to
fully exploit;
The investment strategy is the “long/short equity” strategy. This consists of taking
long positions on companies considered to be undervalued by the market and short
positions on companies considered to be overvalued.
4. Temporary purchases and sales of financial instruments
Long positions are taken either via the direct purchase of equities, or using
derivatives, traded over the counter or on the listed market such as swaps, CFDs or
forward contracts.
To achieve its investment objective and for cash management purposes, the Sub-fund
may use repurchase and reverse repurchase agreements, or lending and borrowing of
financial instruments such as equities, bonds, negotiable debt securities.
Short positions are taken using derivatives, traded over the counter or on the listed
market, such as swaps, CFDs or forward contracts, so as to sell a security, a sector or
a general index.
5. Instruments with embedded derivatives
NET EXPOSURE OF THE PORTFOLIO
The instruments used are: warrants, equity warrants (Bons de Souscription d’Actions –
BSA), certificates, and all types of bond securities that have conversion or
subscription rights attached, especially convertible bonds, bonds convertible into new
or existing shares and bonds with reimbursable equity warrants.
The portfolio’s net exposure to equity market risk (long positions less short positions,
taking into account any physical or derivatives positions) generally falls between –
10% and 35%, averaging between 15% and 20%.
The Gulliver sub-fund therefore makes few directional bets on movements by the
market itself, which explains its low correlation with equity indices.
- to hedge the portfolio against foreign exchange risk.
The Gulliver sub-fund trades in financial instruments with embedded derivatives
having equities as their underlying.
These products are traded in order to gain exposure to one or more companies that
meet the selection criteria defined above.
6. Debt securities
The Sub Sub-fund invests in debt securities issued by government, bank or corporate
issuers with, when acquired, a maximum residual maturity of 3 month and a
minimum short term rating of A1 from the rating scale of Standard & Poor’s or P1
from the rating scale of Moody’s. These debt instruments are such as: Negotiable debt
securities (Certificates of Deposit, Commercial Paper, Medium-Term Notes), money
market instruments, bonds, Euro Medium Term Notes (EMTN).
These investments are used mainly to manage cash and to limit the portfolio’s
exposure to equity risk if the outlook for the equity markets is unfavourable.
Disclaimer - Only the French version has legal validity – In case of dispute, only the French version will prevail between the parties.
Page 3 of 14
ƒ Counterparty risk
7. Mutual Funds (“OPCVM”)
This category of assets is used in particular to manage the sub-fund’s cash position.
The Sub-fund may incur losses through its commitments vis-à-vis a
counterparty under their swap, CFD, forward, repurchase or reverse
repurchase transactions in the event of the counterparty’s default or its
inability to fulfil its contractual obligations.
The Gulliver sub-fund can hold up to 10% of its assets in units or shares of European
(including French) investment funds able to invest up to 10% of their assets in UCITS
or other investment funds.
ƒ Risk of overexposure
The Gulliver sub-fund may, within the above-mentioned limits, invest in funds
promoted or managed by Exane Asset Management or one of its subsidiaries.
There is a risk of overexposure since the Gulliver sub-fund’s assets may be
exposed up to 200% to the equities markets through the use of derivatives.
OVERALL LIABILITIES
The risk of overexposure is the risk that, in the event of a fall in certain
markets in which the assets may have been over-invested, the fall in the
Gulliver sub-fund’s net asset value is greater than the fall in these markets.
In accordance with the regulations, the portfolio’s off-balance sheet liabilities are
limited to 100% of the assets, and the total exposure to risks resulting from offbalance sheet liabilities and securities positions may not exceed 200% of the assets.
ƒ Liquidity risk
Some of the securities in which the Gulliver sub-fund is invested may have
limited liquidity.
RISK PROFILE
Your money will be invested primarily in financial instruments selected by the
Investment Manager. These instruments will be exposed to market movements
and fluctuations.
Liquidity risk is the risk that the number of securities bought and sold is less
than the number of orders sent to the market, because of the low number of
securities available on the market.
The principal risks linked to investment management are:
The above list of risk factors is not exhaustive.
ƒ Capital risk
GUARANTEE OR PROTECTION
The Gulliver sub-fund does not provide any guarantee of capital invested.
Investors may not get back all the money they have invested.
ƒ Risk relating to discretionary management
The investment management is discretionary and seeks to generate
performance by anticipating the movements of certain stocks in relation to
others. These expectations may be incorrect and may result in a failure to
meet the performance objective.
None
TARGET SUBSCRIBERS AND INVESTOR PROFILE
The Gulliver sub-fund is available to all subscribers. It is intended in particular for
institutional investors seeking investments for which risk management is a key feature
of the investment process.
The recommended investment horizon is two years.
ƒ Risk relating to the equities market
The Gulliver sub-fund may be exposed to the equities market in such a way
that the net asset value may fall in the event of a correction in the equities
market.
Investors are reminded that equities markets are particularly risky, that they
can fall sharply for periods of several years and can cause investors
substantial capital losses.
The amount that is reasonable to invest in this Sub-fund depends on each investor’s
particular circumstances. To determine this, investors should take into account not
only their personal wealth, their needs now and in two years time, but also their
willingness to accept risk, or, on the contrary, their preference for a more prudent
form of investment. Investors are also strongly advised to diversify their investments
so that they are not exposed solely to the risks of this Sub-fund.
METHODS FOR DETERMINING AND APPROPRIATING INCOME –
DISTRIBUTION OF INCOME
ƒ Interest rate and credit risk
There is a risk of interest rate risk and credit risk, since the Gulliver subfund may hold up to 100% of its assets in debt securities and money market
instruments.
Interest rate risk is:
- the risk that interest rates may fall, when investments have been made at
variable rates (a lower return);
- the risk that interest rates may rise when investments have been made at
fixed rates, since the value of a fixed interest rate product falls when
interest rates rise, and vice-versa.
Units
I
All investors, but
primarily intended for
institutional and
equivalent investors
Appropriation of
income
Distribution of
income
Accumulation
None
Accumulation
None
Accumulation
None
All investors
P
Credit risk is the risk that the issuer of a debt security is unable to service its
debt, i.e., to repay it.
ƒ Foreign exchange risk
Foreign exchange risk is the risk that the investment currencies weaken in
relation to the base currency of the portfolio, the euro. Fluctuations of these
currencies against the euro may have a positive or negative effect on the
value of these instruments.
Investor profile
C
(i) employees of the
Investment Manager,
regardless of whether
they invest directly or
though the Investment
Manager’s funds;
(ii) investments from
funds of funds
managed by the
Investment Manager;
(iii) investments from
discretionary
management portfolio
managed by the
Investment Manager.
Disclaimer - Only the French version has legal validity – In case of dispute, only the French version will prevail between the parties.
Page 4 of 14
FEATURES OF UNITS OR SHARES
Units
ISIN code
Appropriation
of income
PLACE AND PROCEDURES FOR PUBLICATION OR ADVERTISING OF
THE NET ASSET VALUE
Base
currency
Minimum
initial
subscription
I
FR0000984379
Accumulation
EUR
EUR 125,000
P
FR0010490383
Accumulation
EUR
None
C
FR0010829754
Accumulation
EUR
EUR 125,000
The net asset value will be published at the premises of the Investment Manager, at
the following address:
Exane Asset Management
16 Avenue Matignon
75008 Paris
DATE AND FREQUENCY OF CALCULATION OF NET ASSET VALUE
The net asset value is calculated daily on each Paris stock market trading day, on the
basis of the closing prices of the financial instruments held by the Sub-fund. The net
asset value of the day is calculated and published on the next business day.
TERMS AND CONDITIONS OF SUBSCRIPTIONS AND REDEMPTIONS
Subscriptions and redemptions are centralised by the depository and are executed in
an amount or number of units on the basis of unknown prices.
Subscription and redemption requests are accepted by the centralising agent, Société
Générale, until 4pm on each Paris stock market trading day preceding calculation of
the net asset value, and are executed on the basis of the net asset value dated the next
business day.
Settlement of redemptions (in cash) and delivery (of units) takes place two business
days after calculation of the net asset value.
The Investment Manager does not determine the net asset value, centralise
subscription or redemption orders or calculate and publish the previous day’s net asset
value on days when the Paris stock market is closed.
“Paris stock market” means the regulated market, Euronext Paris. The Paris stock
market’s trading days are set by the Euronext Paris calendar.
Organisation appointed to receive subscriptions and redemptions:
Société Générale
32 Rue du Champ de Tir
44000 Nantes
Investors can switch from one category of units to another category by requesting a
redemption of units in the category owned, followed by a request for a subscription to
units of another category. Investors are reminded that switching from one category of
units to another may incur a tax liability for capital gains or losses on financial
instruments.
Subscriptions and redemptions are centralised by the depository and are executed in
an amount or number of units on the basis of unknown prices.
Disclaimer - Only the French version has legal validity – In case of dispute, only the French version will prevail between the parties.
Page 5 of 14
Charges and fees
ƒ Subscription and redemption fees
Subscription and redemption fees have the effect of either increasing the subscription price paid by the investor or reducing the redemption price. Fees paid to the
Sub-fund will be used to offset the costs borne by theSub-fund in investing or divesting the assets entrusted to it. The remaining fees are paid to the portfolio
investment manager, the promoter, etc.
Rate/Scale
Fees payable by the investor, deducted at the time
of subscriptions and redemptions
Base
Subscription fee not retained by the Sub-fund
Net Asset Value x number of units subscribed
Subscription fee retained by the Sub-fund
Net Asset Value x number of units subscribed
None
Redemption fee not retained by the Sub-fund
Net Asset Value x number of units redeemed
None
Redemption fee retained by the Sub-fund
Net Asset Value x number of units redeemed
None
I Units
P units
C Units
Maximum 5%
Maximum 2%
None
ƒ Operating and Management charges
The operating and management charges cover all the costs charged directly to the Sub-fund, excluding transaction charges. Transaction charges include
intermediation charges (brokerage, stock market taxes, etc.) and activity charges, where applicable, that may be charged by the depository and the portfolio
investment manager, in particular.
The following may also be payable in addition to the operating and management charges:
- Performance-based commissions. These reward the Investment Manager when the Sub-fund exceeds its objectives. Consequently these commissions are invoiced
to the Sub-fund;
- Activity charges invoiced to the Sub-fund;
- A share of the income from temporary purchases and sales of securities.
Rate/Scale
Charges invoiced to the Sub-fund
Base
Management charges and external management charges
for the Investment Manager (including the statutory
auditor, the depository, distribution, lawyers).
Net assets
Indirect fees maximum (commission and management
charges)
Net assets
* see note below
Activity charges
Taking on each transaction
None
**Performance-fees
I Units
P units
C Units
Maximum annual rate including all taxes
1.20%
Net assets
1.70%
20%, including all taxes, of the
performance exceeding the
capitalised EONIA +1 % of annual
performance with High Water Mark
Mechanism**.
0.30%
None
(*) Indirect fees maximum : For cash management purpose and within a maximum of 10% of its net assets, the Sub-fund may subscribe in UCITS compliant monetary funds for
which the management fees shall not exceed 0,50%, including all taxes, of the net asset per annum. The Sub-fund shall bear neither subscription fees nor redemption fees with
respect to its investments in these UCITS compliant monetary funds.
Variable management fee with High Water Mark Mechanism :
The variable management fee is calculated by comparing the Sub-fund's performance with the performance of EONIA + 1% on a reference period with the application of a High
Water Mark mechanism.
Thus, the variable management fee is only activated and accrued once the High Water Mark is reached defined as the highest of the end of reference period net asset values of the
last three reference period.
The Investment Manager provides investors, upon request, with the calculation methodology of the foregoing performance fee.
Selection of intermediaries
Exane Asset Management selects and evaluates the intermediaries it deals with so that it retains only those that are the most effective in their field of operation, to better to serve
investors’ needs.
In addition to the charges and fees relating to purchases and sales of securities, the selection and evaluation of intermediaries takes into account factors such as the ability to find
blocks of shares, process orders for illiquid stocks, or simply understand instructions.
Exane Asset Management does not earn any soft commissions.
For further information, the unitholders are invited to consult the annual investment management report.
Disclaimer - Only the French version has legal validity – In case of dispute, only the French version will prevail between the parties.
Page 6 of 14
VII – VALUATION RULES
IV - COMMERCIAL INFORMATION
DATE AND FREQUENCY OF CALCULATION OF NET ASSET VALUE
FINANCIAL INSTRUMENTS AND SECURITIES TRADED ON A
REGULATED FRENCH OR FOREIGN MARKET
The net asset value is calculated daily on each Paris stock market trading day, on
the basis of the closing prices of the financial instruments held by the Sub-fund.
The net asset value of the day is calculated and published on the next business day.
Valued at the closing price on the market.
TERMS AND CONDITIONS OF SUBSCRIPTIONS AND REDEMPTIONS
FINANCIAL INSTRUMENTS NOT TRADED ON A REGULATED
MARKET
Subscriptions and redemptions are centralised by the depository and are executed
in an amount or number of units on the basis of unknown prices.
Valued under the Investment Manager’s responsibility at their probable market
value.
Subscription and redemption requests are accepted by the centralising agent,
Société Générale, until 4pm on each Paris stock market trading day preceding
calculation of the net asset value, and are executed on the basis of the net asset
value dated the next business day.
MUTUAL FUND SHARES OR UNITS
Settlement of redemptions (in cash) and delivery (of units) takes place two
business days after calculation of the net asset value.
The Investment Manager does not determine the net asset value, centralise
subscription or redemption orders or calculate and publish the previous day’s net
asset value on days when the Paris stock market is closed.
“Paris stock market” means the regulated market, Euronext Paris. The Paris stock
market’s trading days are set by the Euronext Paris calendar.
Organisation appointed to receive subscriptions and redemptions:
Valued at the last known net asset value.
NEGOTIABLE AND EQUIVALENT DEBT SECURITIES
Valued using an actuarial method. The rate used is that applied to issues of
equivalent securities adjusted, where applicable, to reflect the issuer of the stock’s
specific characteristics. However, negotiable debt securities with a residual
duration of three months or less, and not of particular sensitivity, may be valued
using the linear method. The Investment Manager sets the terms and conditions of
application of these rules. These appear in the notes to the annual accounts.
FIRM OR CONDITIONAL FORWARD FINANCIAL INSTRUMENTS
TRADED ON FRENCH OR FOREIGN ORGANISED MARKETS
Valued at market value in accordance with the terms and conditions set by the
Investment Manager. These are described in the notes to the annual accounts.
Société Générale
32 Rue du Champ de Tir,
44000 Nantes
DISTRIBUTION OF INFORMATION ABOUT THE FUND
Information about the Sub-fund is sent by Exane Asset Management to your usual
financial adviser, who is responsible for its distribution to its customers.
Any other enquiries about the Sub-fund can be answered over the telephone by our
investor services department on +33 (0)1 44 95 40 97.
V - INVESTMENT RULES
REGULATORY RATIOS APPLICABLE TO THE FUND
The Gulliver sub-fund complies with the regulatory ratios that apply to generalist
UCITS-compliant French investment funds.
In particular, and in accordance with the principle of diversification of risks, the
Gulliver sub-fund may not invest more than 5% of its assets in the securities
(shares, debt securities, units and debt securities issued by an SPV) of a single
issuing group.
However, the 5% limit is raised to 10% for an entity and 20% for an issuing
group if the total value of the groups that exceed 5% does not exceed 40% of the
assets.
The investments underlying forward contracts are used for calculation of the
5%/10% - 20%/40% ratio, except for index contracts recognised by the AMF.
VI - GLOBAL EXPOSURE OF SUB-FUNDS
The global exposure is measured using the commitment approach.
FIRM OR CONDITIONAL TRANSACTIONS OR SWAPS PLACED ON
OVER-THE-COUNTER MARKETS
Valued at their market value or at a value estimated in accordance with the terms
and conditions set by the Investment Manager and described in the notes to the
annual accounts.
FINANCIAL INSTRUMENTS WHOSE PRICE HAS NOT BEEN
RECORDED ON THE VALUATION DAY OR WHOSE PRICE HAS BEEN
CORRECTED
Valued under the Investment Manager’s responsibility at their probable market
value. These valuations and their justification are sent to the statutory auditor
during its audits.
ALTERNATIVE
UNAVAILABLE
VALUATION
METHODS
IF
FINANCIAL
DATA
Subscribers are reminded that as a result of the delegation of the Gulliver subfund’s administration and accounting to SGSS France, it is the latter’s
responsibility to value the Gulliver sub-fund’s financial assets.
Nevertheless, Exane Asset Management keeps its own estimates of the Gulliver
sub-fund’s financial assets at all times, obtained through numerous sources of
financial data such as Reuters, Bloomberg, market counterparties etc.
It is therefore always possible, if the administration and accounting sub-manager is
unable to value the Gulliver sub-fund’s assets, to provide it with the information
required for this valuation, in which case the Statutory Auditor will be informed
thereof as soon as possible.
ACCOUNTING METHOD
The accounting method used for recording income from financial instruments is the
accrued interest method. Transaction charges are recorded on the accounts using
the charges-included basis.
Disclaimer - Only the French version has legal validity – In case of dispute, only the French version will prevail between the parties.
Page 7 of 14
SPECIFIC PROVISIONS FOR THE EXANE VAUBAN FUND SUB-FUND
CLASSIFICATION
ASSETS USED
Diversified mutual fund
1. Global equities
ISIN CODE
Units
ISIN code
Equities listed on all of the world’s markets. Geographically however, the Vauban
sub-fund focuses on European stocks. The selection of stocks is based primarily on
fundamental analysis of companies and sectors.
2. Contracts traded over-the-counter
I
FR0010098335
C
FR0010829770
INVESTMENT OBJECTIVE
The Vauban sub-fund’s investment objective is to deliver absolute performance
with a level of volatility of the order of 2% to 5%.
BENCHMARK
There is no financial index suitable for evaluating the Vauban sub-fund’s
performance, as the available indices are not representative of the sub-fund’s
investment process. The pursuit of absolute performance effectively involves a
slight correlation with all asset classes.
The Gulliver sub-fund may conclude contracts traded over the counter in the form
of “Contracts For Difference” (“CFD”), which have equities or international equity
market indices as their underlying or foreign exchange.
CFD are over-the-counter financial contracts through which the Sub-fund gains
exposure to fluctuations (positive or negative, depending on the direction of the
transaction) of equities, baskets of equities or baskets of indices and foreign
exchange.
CFDs will be used either to replicate a purchase or sale of stocks or indices, or
baskets of stocks or indices or to hedge the portfolio against foreign exchange risk.
If the use of CFDs results in an increase in exposure to equities, this will be limited
to 200%, equivalent to a maximum leverage effect of 2.
3. Forward financial instruments
The Gulliver sub-fund trades on all regulated or organised French and foreign
OECD member state markets. The types of instruments used are futures, swaps and
options.
INVESTMENT STRATEGY
The strategies used with these products aim either:
The investment strategy is the “long/short equity” strategy. This consists of taking
long positions on companies considered to be undervalued by the market and short
positions on companies considered to be overvalued.
- to hedge the portfolio against the risk of a fall of an underlying equity or to
expose the portfolio in order to profit from the rise of an underlying equity.
These strategies contribute in a subsidiary manner to the pursuit of the
investment objective. They nevertheless make it possible to protect positive
performance already gained if the manager expects equities markets to fall
(hedging equities indices or particular companies considered by the manager to
be overvalued) or to expose the portfolio if the manager expects a rise in the
equities markets which the securities already in the portfolio may not be able to
fully exploit;
Long positions are taken either via the direct purchase of equities, or using
derivatives, traded over the counter or on the listed market such as swaps, CFDs or
forward contracts.
Short positions are taken using derivatives, traded over the counter or on the listed
market, such as swaps, CFDs or forward contracts, so as to sell a security, a sector
or a general index.
From a sectoral point of view, the investment universe will focus on the stocks of
the industrial and equipment sectors: automotive, aircraft, industrial equipment,
construction, mining, defence, medical equipment, property, and metals.
NET EXPOSURE OF THE PORTFOLIO
The portfolio’s net exposure to equity market risk (long positions less short
positions, taking into account any physical or derivatives positions) generally falls
between –10% and 35%.
The Vauban sub-fund therefore makes few directional bets on movements by the
market itself, which explains its low correlation with equity indices.
- to hedge the portfolio against foreign exchange risk.
4. Temporary purchases and sales of financial instruments
To achieve its investment objective and for cash management purposes, the Subfund may use repurchase and reverse repurchase agreements, or lending and
borrowing of financial instruments such as equities, bonds, negotiable debt
securities.
5. Instruments with embedded derivatives
The Vauban sub-fund trades in financial instruments with embedded derivatives
having equities as their underlying.
The instruments used are: warrants, equity warrants (Bons de Souscription
d’Actions – BSA), certificates, and all types of bond securities that have conversion
or subscription rights attached, especially convertible bonds, bonds convertible into
new or existing shares and bonds with reimbursable equity warrants.
These products are traded in order to gain exposure to one or more companies that
meet the selection criteria defined above.
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Page 8 of 14
ƒ Counterparty risk
6. Debt securities
The Sub-fund invests in debt securities issued by government, bank or corporate
issuers with, when acquired, a maximum residual maturity of 3 month and a
minimum short term rating of A1 from the rating scale of Standard & Poor’s or P1
from the rating scale of Moody’s. These debt instruments are such as: Negotiable
debt securities (Certificates of Deposit, Commercial Paper, Medium-Term Notes),
money market instruments, bonds, Euro Medium Term Notes (EMTN).
The Sub-fund may incur losses through its commitments vis-à-vis a
counterparty under their swap, CFD, forward, repurchase or reverse
repurchase transactions in the event of the counterparty’s default or its
inability to fulfil its contractual obligations.
ƒ Risk of overexposure
There is a risk of overexposure since the Vauban sub-fund’s assets
may be exposed up to 200% to the equities markets through the use of
derivatives.
These investments are used mainly to manage cash and to limit the Sub-fund’s
exposure to equity risk if the outlook for the equity markets is unfavourable.
7. Mutual Funds (“OPCVM”)
The risk of overexposure is the risk that, in the event of a fall in
certain markets in which the assets may have been over-invested, the
fall in the Vauban sub-fund’s net asset value is greater than the fall in
these markets.
This category of assets is used in particular to manage the sub-fund’s cash
position.
The Vauban sub-fund can hold up to 10% of its assets in units or shares of
European (including French) investment funds able to invest up to 10% of their
assets in UCITS or other investment funds.
ƒ Liquidity risk
Some of the securities in which the Vauban sub-fund is invested may
have limited liquidity. Liquidity risk is the risk that the number of
securities bought and sold is less than the number of orders sent to the
market, because of the low number of securities available on the
market.
OVERALL LIABILITIES
In accordance with the regulations, the portfolio’s off-balance sheet liabilities are
limited to 100% of the assets, and the total exposure to risks resulting from offbalance sheet liabilities and securities positions may not exceed 200% of the
assets.
GUARANTEE OR PROTECTION
RISK PROFILE
None
Your money will be invested primarily in financial instruments selected by
the Investment Manager. These instruments will be exposed to market
movements and fluctuations.
The principal risks linked to investment management are:
The above list of risk factors is not exhaustive.
TARGET SUBSCRIBERS AND INVESTOR PROFILE
The Vauban sub-fund is available to all subscribers. It is intended in particular for
institutional investors seeking investments for which risk management is a key
feature of the investment process.
ƒ Capital risk
The recommended investment horizon is two years.
The Vauban sub-fund does not provide any guarantee of capital invested.
Investors may not get back all the money they have invested.
The amount that is reasonable to invest in this Sub-fund depends on each
investor’s particular circumstances. To determine this, investors should take into
account not only their personal wealth, their needs now and in two years time, but
also their willingness to accept risk, or, on the contrary, their preference for a
more prudent form of investment. Investors are also strongly advised to diversify
their investments so that they are not exposed solely to the risks of this Sub-fund.
ƒ Risk relating to discretionary management
The investment management is discretionary and seeks to generate
performance by anticipating the movements of certain stocks in
relation to others. These expectations may be incorrect and may result
in a failure to meet the performance objective.
Units
Investor profile
ƒ Risk relating to the equities market
The Vauban sub-fund may be exposed to the equities market in such a
way that the net asset value may fall in the event of a correction in the
equities market.
I
Investors are reminded that equities markets are particularly risky,
that they can fall sharply for periods of several years and can cause
investors substantial capital losses.
ƒ Interest rate and credit risk
There is a risk of interest rate risk and credit risk, since the Vauban
sub-fund may hold up to 100% of its assets in debt securities and
money market instruments.
Interest rate risk is:
- the risk that interest rates may fall, when investments have been
made at variable rates (a lower return);
- the risk that interest rates may rise when investments have been
made at fixed rates, since the value of a fixed interest rate
product falls when interest rates rise, and vice-versa.
C
All investors, but primarily
intended for institutional
and equivalent investors
(i) employees of the
Investment Manager,
regardless of whether they
invest directly or though the
Investment Manager’s
funds;
(ii) investments from funds
of funds managed by the
Investment Manager;
(iii) investments from
discretionary management
portfolio managed by the
Investment Manager.
Appropriation
of income
Distribution
income
Accumulation
None
Accumulation
None
of
Credit risk is the risk that the issuer of a debt security is unable to
service its debt, i.e., to repay it.
ƒ Foreign exchange risk
Foreign exchange risk is the risk that the investment currencies weaken in
relation to the base currency of the portfolio, the euro. Fluctuations of
these currencies against the euro may have a positive or negative
effect on the value of these instruments.
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Page 9 of 14
FEATURES OF UNITS OR SHARES
Units
ISIN code
Appropriation
of income
Base
currency
Minimum
initial
subscription
Subscription and redemption requests are accepted by the centralising agent,
Société Générale, until 4pm on each Paris stock market trading day preceding
calculation of the net asset value, and are executed on the basis of the net asset
value dated the next business day.
Settlement of redemptions (in cash) and delivery (of units) takes place two
business days after calculation of the net asset value.
I
FR0010098335
Accumulation
EUR
EUR 125,000
The Investment Manager does not determine the net asset value, centralise
subscription or redemption orders or calculate and publish the previous day’s net
asset value on days when the Paris stock market is closed.
“Paris stock market” means the regulated market, Euronext Paris. The Paris stock
market’s trading days are set by the Euronext Paris calendar.
C
FR0010829770
Accumulation
EUR
EUR 125,000
Organisation appointed to receive subscriptions and redemptions:
Société Générale
32 Rue du Champ de Tir
44000 Nantes
DATE AND FREQUENCY OF CALCULATION OF NET ASSET VALUE
PLACE AND PROCEDURES FOR PUBLICATION OR ADVERTISING
OF THE NET ASSET VALUE
The net asset value is calculated daily on each Paris stock market trading day, on
the basis of the closing prices of the financial instruments held by the Sub-fund.
The net asset value of the day is calculated and published on the next business day.
The net asset value will be published at the premises of the Investment Manager, at
the following address:
TERMS AND CONDITIONS OF SUBSCRIPTIONS AND REDEMPTIONS
Exane Asset Management
16 Avenue Matignon, 75008 Paris
Subscriptions and redemptions are centralised by the depository and are executed
in an amount or number of units on the basis of unknown prices.
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Page 10 of 14
Charges and fees
ƒ Subscription and redemption fees
Subscription and redemption fees have the effect of either increasing the subscription price paid by the investor or reducing the redemption price. Fees paid to the
Sub-fund will be used to offset the costs borne by the Sub-fund in investing or divesting the assets entrusted to it. The remaining fees are paid to the portfolio
investment manager, the promoter, etc.
Fees payable by the investor, deducted at the time of
subscriptions and redemptions
Rate/Scale
Base
I Units
C Units
Subscription fee not retained by the Sub-fund
Net Asset Value x number of units subscribed
None
Subscription fee retained by the Sub-fund
Net Asset Value x number of units subscribed
None
Redemption fee not retained by the Sub-fund
Net Asset Value x number of units redeemed
None
Redemption fee retained by the Sub-fund
Net Asset Value x number of units redeemed
None
ƒ Operating and Management charges
The operating and management charges cover all the costs charged directly to the Sub-fund, excluding transaction charges. Transaction charges include
intermediation charges (brokerage, stock market taxes, etc.) and activity charges, where applicable, that may be charged by the depository and the portfolio
investment manager, in particular.
The following may also be payable in addition to the operating and management charges:
Performance-based commissions. These reward the Investment Manager when the Sub-fund exceeds its objectives. Consequently these
commissions are invoiced to the Sub-fund;
Activity charges invoiced to the Sub-fund;
A share of the income from temporary purchases and sales of securities.
Rate/Scale
Charges invoiced to the Sub-fund
Base
I Units
Management charges and external management charges for the Investment
Manager, inclusive of all taxes (including the statutory auditor, the
depository, distribution, lawyers)
C Units
Maximum annual rate including all taxes
Net assets
1.5%
0.30%
Indirect fees maximum (commission and management charges)
Net assets
* see note below
* see note below
Activity charges
Taking on each
transaction
None
Activity charges
Net assets
20%, including all taxes, of the
performance exceeding the
capitalised EONIA +1% of annual
performance with High Water Mark
Mechanism**
None
**Performance-fee
(*) Indirect fees maximum : For cash management purpose and within a maximum of 10% of its net assets, the Sub-fund may subscribe in UCITS compliant monetary funds for
which the management fees shall not exceed 0,50%, including all taxes, of the net asset per annum. The Sub-fund shall bear neither subscription fees nor redemption fees with
respect to its investments in these UCITS compliant monetary funds.
Variable management fee with High Water Mark Mechanism :
The variable management fee is calculated by comparing the Sub-fund's performance with the performance of EONIA + 1% on a reference period with the application of a High
Water Mark mechanism.
Thus, the variable management fee is only activated and accrued once the High Water Mark is reached defined as the highest of the end of reference period net asset values of the
last three reference period.
The Investment Manager provides investors, upon request, with the calculation methodology of the foregoing performance fee.
Selection of intermediaries
Exane Asset Management selects and evaluates the intermediaries it deals with so that it retains only those that are the most effective in their field of operation, to better to serve
investors’ needs.
In addition to the charges and fees relating to purchases and sales of securities, the selection and evaluation of intermediaries takes into account factors such as the ability to find
blocks of shares, process orders for illiquid stocks, or simply understand instructions.
Exane Asset Management does not earn any soft commissions. For further information, the unitholders are invited to consult the annual investment management report.
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Page 11 of 14
IV - COMMERCIAL INFORMATION
DISTRIBUTION OF INFORMATION ABOUT THE FUND
Information about the Sub-fund is sent by Exane Asset Management to your usual
financial adviser, who is responsible for its distribution to its customers.
Any other enquiries about the Sub-fund can be answered over the telephone by our
investor services department on +33 (0)1 44 95 40 97.
V - INVESTMENT RULES
REGULATORY RATIOS APPLICABLE TO THE FUND
The Vauban sub-fund complies with the regulatory ratios that apply to generalist
UCITS-compliant French investment funds.
In particular, and in accordance with the principle of diversification of risks, the
Vauban sub-fund may not invest more than 5% of its assets in the securities
(shares, debt securities, units and debt securities issued by an SPV) of a single
issuing group.
However, the 5% limit is raised to 10% for an entity and 20% for an issuing
group if the total value of the groups that exceed 5% does not exceed 40% of the
assets.
The investments underlying forward contracts are used for calculation of the
5%/10% - 20%/40% ratio, except for index contracts recognised by the AMF.
FINANCIAL INSTRUMENTS WHOSE PRICE HAS NOT BEEN
RECORDED ON THE VALUATION DAY OR WHOSE PRICE HAS BEEN
CORRECTED
Valued under the Investment Manager’s responsibility at their probable market
value. These valuations and their justification are sent to the statutory auditor
during its audits.
ALTERNATIVE
UNAVAILABLE
VALUATION
METHODS
IF
FINANCIAL
DATA
Subscribers are reminded that as a result of the delegation of the Vauban subfund’s administration and accounting to SGSS France, it is the latter’s
responsibility to value the Vauban sub-fund’s financial assets.
Nevertheless, Exane Asset Management keeps its own estimates of the Vauban
sub-fund’s financial assets at all times, obtained from a variety of sources of
financial data such as Reuters, Bloomberg, market counterparties etc. It is therefore
always possible, if the administration and accounting sub-manager is unable to
value the Vauban sub-fund’s assets, to provide it with the information required for
this valuation, in which case the Statutory Auditor will be informed thereof as soon
as possible.
ACCOUNTING METHOD
The accounting method used for recording income from financial instruments is the
accrued interest method. Transaction charges are recorded on the accounts using
the charges-included basis.
VI - GLOBAL EXPOSURE OF SUB-FUNDS
The global exposure is measured using the commitment approach.
VII – VALUATION RULES
FINANCIAL INSTRUMENTS AND SECURITIES TRADED ON A
REGULATED FRENCH OR FOREIGN MARKET
Valued at the closing price on the market.
FINANCIAL INSTRUMENTS NOT TRADED ON A REGULATED
MARKET
Valued under the Investment Manager’s responsibility at their probable market
value.
MUTUAL FUND SHARES OR UNITS
Valued at the last known net asset value.
NEGOTIABLE AND EQUIVALENT DEBT SECURITIES
Valued using an actuarial method. The rate used is that applied to issues of
equivalent securities adjusted, where applicable, to reflect the issuer of the stock’s
specific characteristics. However, negotiable debt securities with a residual
duration of three months or less, and not of particular sensitivity, may be valued
using the linear method. The Investment Manager sets the terms and conditions of
application of these rules. These appear in the notes to the annual accounts.
FIRM OR CONDITIONAL FORWARD FINANCIAL INSTRUMENTS
TRADED ON FRENCH OR FOREIGN ORGANISED MARKETS
Valued at market value in accordance with the terms and conditions set by the
Investment Manager. These are described in the notes to the annual accounts.
FIRM OR CONDITIONAL TRANSACTIONS OR SWAPS PLACED ON
OVER-THE-COUNTER MARKETS
Valued at their market value or at a value estimated in accordance with the terms
and conditions set by the Investment Manager and described in the notes to the
annual accounts.
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Page 12 of 14
REGULATIONS OF THE EXANE LONG/SHORT EQUITY FUND (Fonds
Commun de Placement – FCP)
TITLE I - ASSETS AND UNITS
ARTICLE 1 – CO-OWNERSHIP UNITS
minimum subscription amount stipulated by the prospectus and the key investor
information document.
Pursuant to Article L.214-8-7 of the French monetary and financial code (Code
monétaire et financier), if exceptional circumstances and the interests of the
shareholders so dictate, the Investment Manager may temporarily suspend
redemptions of units or the issue of new units by the Sub-fund.
When the net asset of a Sub-fund is less than the amount stipulated in the
applicable rules, no redemption of units or shares shall be allowed on the
concerned Sub-fund.
The co-owners rights are expressed as units, each unit representing an equal
fraction of the Sub-fund’s assets. Each unitholder has a co-ownership right in and to
the assets of the Sub-fund proportional to the number of units they hold.
The Sub-fund shall exist for 99 years from the date of its creation, except in cases
of early dissolution, or the extension provided for in these regulations.
Each sub-fund issues units representing the Sub-fund’s assets that have been
allocated to it. In this case the provisions of these regulations that apply to the Subfund’s units shall apply to the units issued to represent the sub-fund’s assets.
The characteristics of the various categories of units and their terms of access are
specified in the prospectus and the key investor information document of the
Fund.
The various categories of shares may:
- be subject to different rules governing the distribution of income
(distribution or accumulation);
- be denominated in different currencies;
- be charged different management fees;
- be charged different subscription and redemption fees;
- have a different par value;
- come with automatic partial or full risk hedging, as defined in the
prospectus. This hedging is achieved using financial instruments that reduce
the impact of hedging transactions on the other unit classes in the CIS to a
minimum;
- be reserved for one or more marketing networks.
The net asset value is calculated in accordance with the valuation rules specified in
the key investor information document. The net asset value is calculated and
communicated to the unitholders according to the frequency and time frames stated
in the prospectus. In accordance with Article L. 214-8-7 of the French monetary
and financial code, in exceptional circumstances and after consulting the French
financial markets authority (Autorité des Marchés Financiers – AMF), the
Investment Manager reserves the right to temporarily suspend the calculation of the
net asset value and subscriptions and redemptions in order to protect the
unitholders. In this event, current subscriptions and redemptions shall be executed
at the net asset value calculated after such exceptional circumstances have ceased.
The Sub-fund reserves the right to regroup or divide the units.
The units shall be divided into thousandths, known as fractions of units.
The provisions of the regulations governing the issue and redemption of units shall
apply to fractions of units whose value shall always be proportionate to that of the
units they represent. Unless stipulated otherwise, all other provisions of the
regulations relating to units shall apply to fractions of units without the need to
specify further provisions to that end.
Lastly, the Investment Manager may decide, at its own discretion, to sub-divide the
units by issuing new units, which shall be allocated to unitholders in exchange for
their existing units.
ARTICLE 5A - OPERATING RULES
ARTICLE 2 — MINIMUM AMOUNT OF ASSETS
When the assets of a Sub-fund fall below 300,000 euros and remain under the
amounts for thirty days, the Sub-fund in question is wound up or subject to one of
the transactions provided for in Article 411-16 of the French financial markets
authority’s general regulation.
ARTICLE 3 - ISSUE AND REDEMPTION OF UNITS
Units shall be issued at any time as and when requested by investors on the basis of
their net asset value, increased, if applicable, by a subscription fee.
Subscriptions and redemptions shall be carried out in accordance with the
conditions and procedures defined in the prospectus and key investor information
document.
Where applicable, the minimum subscription amount is stated in the prospectus
and the key investor information document.
The issue price may be increased by a subscription fee, and the redemption price
may be reduced by a redemption fee, applied and allocated according to the rates
appearing in the prospectus and the key investor information document.
Fractions of units may be bought or sold in thousandths.
The Sub-fund’s units may at some point be admitted for trading on a regulated
market under the applicable regulations.
Subscriptions must be paid in full on the date of calculation of the net asset value.
Subscriptions may be made in cash and/or by a contribution in the form of
transferable securities. The Investment Manager shall be entitled to refuse to accept
the securities offered, and shall have seven days from the date of their deposit in
which to make its decision known. If it accepts the securities, they shall be valued
on the basis of the rules laid down in Article 4, and the subscription shall be made
on the basis of the first net asset value calculated following acceptance of the
securities involved.
Redemptions shall be solely in cash, except in the event of the liquidation of the
Sub-fund if unitholders have stated that they agree to be repaid in securities. They
are settled by the depository within a maximum of five days following the day of
valuation of the unit.
However, if in exceptional circumstances the reimbursement requires the prior sale of
assets held in the Sub-fund, this deadline may be extended to a maximum of 30 days.
With the exception of succession or an inter vivos gift, the sale or transfer of units
between unitholders or unitholders and third parties is considered as a redemption
followed by a subscription; if this involves a third party, the sale or transfer amount must,
where applicable, be supplemented by the beneficiary in order to at least reach the
ARTICLE 4 - CALCULATION OF NET ASSET VALUE
TITLE II - OPERATION OF THE FUND
ARTICLE 5 – INVESTMENT MANAGER
The Sub-fund is managed by the Investment Manager in accordance with the
investment guidelines set for the Sub-fund.
The Investment Manager shall act in all circumstances on behalf of the unitholders
and has the exclusive right to exercise the voting rights attached to the securities
held in the Sub-fund.
The financial instruments and eligible deposits to a Sub-fund, as well as the
investment rules are described on the Prospectus.
ARTICLE 6 - DEPOSITORY
The depository is responsible for the assignments assigned to it by the applicable
laws and regulations as well as the ones contractually delegated. In the event of a
dispute with the Investment Manager it shall inform the French financial markets
authority (AMF).
ARTICLE 7 – STATUTORY AUDITOR
An Auditor shall be appointed by the Board of Directors of the Investment Manager for
a term of six financial years, with the approval of the AMF.
The auditor carries out the checks and audits established by law and, in particular,
certifies whenever necessary the accuracy and consistency of the financial
statements and of the accounting information contained in the management report.
He may be re-appointed.
The Auditor shall inform the AMF and the Investment Manager of any
inconsistencies and inaccuracies identified during the course of his work.
Assets will be valued and exchange ratios will be determined for the purpose of
any transformation, merger or split up under the statutory auditor's supervision. He
shall determine the value of any contribution in kind, and shall prepare a report,
under his own responsibility, on its valuation and remuneration. The statutory
auditor shall certify the accuracy of the composition of the assets and other
information before publication.
The auditor's fees are determined by mutual agreement between the auditor and the
Investment Manager on the basis of a work programme setting out the duties
deemed necessary. In the event of the liquidation of the Sub-fund, he shall
determine the total value of the assets and shall prepare a report on the terms of the
liquidation.
He shall certify the financial statements used to calculate distributions. His fees are
comprised of the management fees.
ARTICLE 8 - FINANCIAL STATEMENTS AND MANAGEMENT
REPORT
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Page 13 of 14
At the end of each financial year, the Investment Manager prepares the summary
documents and prepares a report on the management of each Sub-fund during the last
financial year.
The Investment Manager prepares, at least on a six-month period and into the
depository control, the inventory of the assets of each Sub-fund. The auditor shall
inspect all of the above documents.
The Investment Manager shall make these documents available to unitholders within
four months of the financial year-end and shall notify them of the amount of income
attributable to them: these documents shall be sent by post if expressly requested by
the unitholders, or held at their disposal by the Investment Manager.
TITLE III – TERMS AND CONDITIONS OF APPROPRIATION OF
INCOME
creditors, and divide the available balance among the unitholders in the form of
cash or securities.
The auditor and the depository shall continue to perform their duties until
completion of the liquidation proceedings.
TITLE V - DISPUTES
ARTICLE 13 – JURISDICTION – ELECTION OF DOMICILE
Any dispute relating to the Sub-fund that may arise during its term or at the time of
its liquidation, either among the unitholders, or between the unitholders and the
Investment Manager or the depository, shall be referred to the courts having
jurisdiction.
ARTICLE 9 – ACCUMULATION OF INCOME
The net income for the financial year is equal to the amount of interest, arrears, dividends,
premiums and bonuses, directors’ fees as well as all income relating to the securities held
in the Sub-fund’s portfolio, plus income generated by temporary cash holdings, less fixed
and variable management fees, and borrowing costs.
Distributable income is equal to the net income for the financial year plus retained
earnings, plus or minus the balance of the income equalisation accounts for the last
financial year.
Distributable income shall be fully accumulated each year, with the exception of
those amounts that are subject to compulsory distribution by law.
The Investment Manager shall decide on the appropriation of income.
For each category of units and where applicable, the Sub-fund may choose one the
following procedures:
- full accumulation: distributable income shall be fully reinvested, with the
exception of those amounts that are subject to compulsory distribution by law;
- full distribution: distributable sums are distributed in full, to the nearest round
figure, with the option of interim distributions;
- for Sub-funds that wish to retain the option of accumulation and/or distribution.
The Investment Manager shall decide on the allocation of net income each year.
TITLE IV - MERGER - SPIN-OFF - DISSOLUTION - LIQUIDATION
ARTICLE 10 - MERGER - SPLIT
The Investment Manager may either merge all or part of the assets of the Sub-fund
with another fund that it manages, or split the Sub-fund into two or more collective
funds under its management.
Such mergers or splits may only be carried out one month after unitholders have
been notified. They shall give rise to the issue of a new certificate indicating the
number of units held by each unitholder.
The provision of this Article 10 will be applied for each Sub-fund.
ARTICLE 11 - DISSOLUTION - EXTENSION
If the Sub-fund’s) assets remain below the amount set in Article 2 above for thirty
days, the Investment Manager shall inform the AMF and, unless the Sub-fund is
merged with another mutual fund (fond commun de placement – FCP), shall
dissolve the Sub-fund).
The Investment Manager may dissolve the Sub-fund early; it shall inform
unitholders of its decision and from this date subscription and redemption orders
shall no longer be accepted.
The Investment Manager shall also dissolve the Sub-fund if a request is made for the
redemption of all of the units, if the depository's role is terminated and no other
depository has been appointed, or upon expiry of the Sub-fund's term, unless such
term is extended.
The Investment Manager shall inform the AMF by post of the dissolution date and
procedure adopted. It shall then send the AMF the auditor's report.
The Investment Manager may, with the depository’s agreement, decide to extend
the term of a Sub-fund. Its decision must be taken at least 3 months before the
expiry of the Sub-fund's term and must be communicated to the unitholders and the
AMF.
ARTICLE 12 - LIQUIDATION
In the event of dissolution, the depository or the Investment Manager shall be
responsible for liquidation. Where applicable, it may be requested the assignment
of the depository by a competent court to proceed to the liquidation. For this
purpose, they shall be granted the broadest powers to realise assets, pay off any
Disclaimer - Only the French version has legal validity – In case of dispute, only the French version will prevail between the parties.
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