Second rewrite
Cover
_________________________________________________________________________________
Novare Africa Fund PCC
(a Mauritius protected cell private company limited by shares authorised to operate as an Expert
Fund)
______________________________________________________________________________
Permission was granted by the Listing Executive Committee on 1 July 2010 (LP no.:LEC/TL/03/2010)
for the listing of NOVARE AFRICA PROPERTY FUND I on the Official List of the Stock Exchange of
Mauritius Ltd on 12 July 2010. It is not expected that dealings in the shares of NOVARE AFRICA
PROPERTY FUND I will take place on the official list of the Stock Exchange of Mauritius.
These listing particulars have been vetted by the Listing Executive Committee, in conformity with the
Listing Rules of the Stock Exchange of Mauritius Ltd.
These listing particulars have been filed with the Financial Services Commission (FSC).
Neither the Listing Executive Committee (LEC) of the Stock Exchange of Mauritius Ltd (SEM), nor the
SEM nor the FSC assumes any responsibility for the contents of this document. The LEC of the SEM,
the SEM and the FSC make no representation as to the accuracy or completeness of any of the
statements made or opinions expressed in this document and expressly disclaim any liability
whatsoever for any loss arising from or in reliance upon the whole or any part thereof.
SEM, the LEC of the SEM and the FSC do not vouch for the financial soundness of the Company or
for the correctness of any statements made or opinions expressed with regard to it.
Norton Rose Fulbright South Africa Inc
Our ref: NOV75 PPM, Novare Africa Fund PCC Revised for Fund II
LP number:
Recipient:
_______________________
_______________________
Private and confidential
Listing Particulars
____________________________________________________________________
Novare Africa Fund PCC
(a Mauritius Protected Cell Private Company Limited by Shares authorised to operate
as an Expert Fund)
_____________________________________________________________________
18 August 2015
Norton Rose Fulbright South Africa Inc
Our ref: NOV75 PPM, Novare Africa Fund PCC Revised for Fund II
Important information
General
Unless otherwise defined in these listing particulars (referred to herein as the Listing Particulars, the
Private Placement Memorandum, the LP or the PPM), capitalised terms have the meanings set out
opposite them in the section entitled “Definitions” below.
This LP is issued in full replacement of and substitution for the private placement memorandum of the
Company dated 4 December 2009 (2009 PPM). The 2009 PPM is deleted and replaced in its entirety
with this LP with effect on and from the date hereof.
This LP provides general information in relation to the Company and the relevant Supplemental
Memorandum sets out general information in relation to the Cell in which an investor proposes to
invest. Distribution of this LP is not authorised unless it is accompanied by the relevant Supplemental
Memorandum. The LP should be read in its entirety and also in conjunction with the relevant
Supplemental Memorandum, the Constitution and the Subscription Agreement.
This LP and the relevant Supplemental Memorandum have been issued by Novare Africa Fund PCC.
These Listing Particulars include particulars given in compliance with the Stock Exchange of Mauritius Ltd
Rules Governing the Official Listing of Securities for the purpose of giving information with regard to the
issuer. The directors, whose names appear on page 8, collectively and individually, accept full
responsibility for the accuracy or completeness of the information contained in these Listing Particulars
and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief there
are no other facts the omission of which would make any statement herein misleading.
Reliance on PPM and Supplemental Memorandum
The Shares are offered solely on the basis of the information and representations contained in this
PPM and the relevant Supplemental Memorandum and any further information given or
representations made by any person may not be relied upon as having been authorised by the
Company or the Directors.
The Information is selective and subject to updating, expansion, revision and amendment. This PPM
and the relevant Supplemental Memorandum do not purport to contain all the information that
investors may require, and no obligation is accepted to provide investors with access to any additional
information, or to update, expand, revise or amend the Information, or to correct any inaccuracies
which may become apparent.
This PPM and/or the relevant Supplemental Memorandum may include certain statements, estimates
and projections with respect to the anticipated performance of each Cell. Such statements, estimates
and projections reflect various assumptions made by the Directors and/or the Manager and by the
shareholders, directors and employees of the Manager concerning anticipated results, which
assumptions may or may not prove to be correct. No representation or warranty (express or implied)
is made as to the accuracy of such statements, estimates and projections. Except in the case of
fraud, all such persons expressly disclaim any and all liability for or based on or relating to such
statements, estimates or projections, or relating to the investor’s use of them or consequential loss
howsoever arising from any use of, or reliance on such statements, estimates and projections or
otherwise in connection with them.
Neither the delivery of this PPM and the relevant Supplemental Memorandum nor the allotment or
issue of any Shares shall under any circumstances create any implication that there has been no
change in the affairs of the Company or the relevant Cell since the date hereof or the date of the
relevant Supplemental Memorandum, respectively.
3
Restrictions on distribution
European Economic Area (EEA): Generally within the member states of the EEA, alternative
investment funds (AIFs) such as the Company and the Cells may only be marketed to professional
investors as defined in the Alternative Investment Fund Managers Directive 2011/61/EU (AIFMD)
unless the member state in question permits, under the laws of that member state, the AIF to be sold
to other categories of investors and this permission encompasses the following types of investors
(together Qualifying Investors):
(i)
an investor who receives appraisal from an EEA credit institution, a MiFID firm or a UCITS
management company that the investor has the appropriate expertise, experience and
knowledge to adequately understand the investment in the Company; or
(ii)
an investor who certifies that they are an informed investor by providing the following:

confirmation (in writing) that the investor has such knowledge of and experience in
financial and business matters as would enable the investor to properly evaluate the
merits and risks of the prospective investment; or

confirmation in writing that the investor’s business involves, whether for its own
account or the account of others, the management, acquisition or disposal of property
of the same kind as the property of the Company or a Cell.
Mauritius: The Shares may not be offered or sold, directly or indirectly, to the Mauritian public.
Neither this PPM, any Supplemental Memorandum nor any offering material or information contained
herein relating to the offer of Shares, may be released or issued to the Mauritian public or used in
connection with any such offer. This PPM and any Supplemental Memorandum do not constitute an
offer to sell the Shares to the Mauritian public.
Investors in a Cell are not protected by any statutory compensation arrangements in Mauritius
in the event of its failure. The Mauritius Financial Services Commission does not vouch for
the financial soundness of the Company or any Cell or for the correctness of any statements
made or opinions expressed with regard to the Company or any Cell.
South Africa: This PPM and the relevant Supplemental Memorandum have not been registered with
the Companies and Intellectual Property Commission in South Africa nor has the Company been
authorised by the South African Financial Services Board as a foreign collective investment scheme
under the South African Collective Investment Schemes Control Act, 2002 (CISCA). Any investment
in the Company is unregulated in South Africa. Shares are only offered or sold in South Africa in
circumstances which do not constitute an offer to members of the public within the meaning of the
Companies Act 71 of 2008 of South Africa or CISCA.
United Kingdom: In the United Kingdom, the Company and the Cells are only being marketed to
Qualifying Investors (as defined in the paragraph headed “European Economic Area” above) in
accordance with article 42 of the AIFMD and otherwise marketing is only being addressed to, or
directed at, the following persons: (i) persons falling within one of the categories of investment
professional as defined in article 19(5) of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005 (as amended) (FPO), (ii) persons falling within any of the categories of person
described in article 49 (high net worth companies, unincorporated associations, etc.) of the FPO and
(iii) any other person to whom it may otherwise lawfully be made in accordance with the FPO.
Persons of any other description in the United Kingdom may not receive and should not act or rely on
this PPM and each Supplemental Memorandum or any other marketing materials in relation to the
Company and the Cells.
United States: Subject to certain exceptions, this document is not intended for distribution in or into
the United States or to US Persons.
4
The Shares have not been and will not be registered under the US Securities Act or any state
securities laws in the United States and may not be offered or sold within the United States or to, or
for the account or benefit of, any US Person except pursuant to an exemption from, or in a transaction
not subject to, the registration requirements of the US Securities Act and applicable state securities
laws. The Company has not registered and will not register under the US Investment Company Act in
reliance on the exemption provided by Section 3(c)(7) thereof. Accordingly, the Shares are being sold
in the United States only to certain persons who are reasonably believed to be “qualified institutional
buyers” (QIBs) (as defined in Rule 144A of the US Securities Act) who are also qualified purchasers
(QPs) within the meaning of Section 2(a)(51) of the US Investment Company Act, and to certain
persons (other than to, or for the account or benefit of, US Persons) outside the United States in
offshore transactions in reliance on Regulation S. No transfer of the Shares that would have the effect
of requiring the Company to register as an investment company under the Investment Company Act
will be permitted. The Directors of the Company reserve the right, in their absolute discretion, to
refuse to permit a transfer of Shares and to require compulsory redemption of Shares and intend to
exercise this discretion as the Directors determine to be necessary for purposes of compliance with
the US Securities Act, the US Investment Company Act, and other US legislation.
The Directors do not intend to permit Shares to be acquired by investors subject to Title I of the US
Employee Retirement Income Security Act of 1974, as amended (ERISA), or to the prohibited
transaction provisions of Section 4975 of the US Internal Revenue Code of 1986, as amended (the
Code), or to any federal, state, local or non-US law that is substantially similar to the provisions of
Title I of ERISA or Section 4975 of the Code, where the purchase, holding, and disposition of the
Shares will constitute or result in a non-exempt violation of any such substantially similar law.
The Shares have not been approved or disapproved by the US Securities and Exchange Commission
(the SEC) or any states securities commission, nor has any such regulatory authority passed upon or
endorsed the merits of this offering or the accuracy or adequacy of this PPM or any Supplemental
Memorandum. Any representation to the contrary is against the law.
The Manager and the Investment Adviser have not been and will not be registered as investment
advisers under the US Investment Advisers Act of 1940, as amended (the US Investment Advisers
Act), or under any state laws. Further, the Manager and the Investment Adviser have not been
registered as commodity pool operators under the US Commodity Exchange Act of 1936, as
amended (the CEA), based upon an exemption available under Rule 4.13(a)(4) thereunder.
Consequently, prospective investors will not be entitled to certain protections afforded by those
statutes. Unlike a registered commodity pool, the Company is not required to deliver to prospective
investors a Disclosure Document (as such term is defined in the CEA), or a certified annual report.
Generally: This PPM and any Supplemental Memorandum are not an invitation to the public to
subscribe for Shares but are issued for the purpose of giving information to prospective investors.
This offering is being made to a limited number of sophisticated institutional, corporate, and high-networth individual investors. An investment in the Company is only suitable for investors (i) who are
capable of evaluating the merits and risks of such investment and who have sufficient resources to
bear any loss, which might result from such investment, and (ii) for whom an investment in the
Company does not constitute a complete investment program and who fully understand and have the
financial resources necessary to assume the risks involved in the relevant Cell’s investment program.
Investors must warrant on the Subscription Agreement that they have the knowledge, expertise and
experience in financial matters to evaluate the risks of investing in the Company, are aware of the
risks inherent in investing in the Investments in which the relevant Cell will invest and the method by
which these Investments will be held and/or traded, and can bear the loss of their entire investment in
the Company. Any transferee of Shares will be required to warrant in like terms before any transfer is
registered.
The distribution of this PPM and the relevant Supplemental Memorandum may be restricted in certain
jurisdictions. This PPM and the relevant Supplemental Memorandum do not constitute, and may not
be used for the purposes of, an offer or solicitation to anyone in any jurisdiction in which such offer or
solicitation is not authorised, or to any person to whom it is unlawful to make such offer or solicitation.
5
Persons into whose possession this PPM and the relevant Supplemental Memorandum come are
required to inform themselves as to (a) the legal requirements within their own jurisdictions for the
purchase or holding of Shares, (b) any foreign exchange restrictions which may affect them, and (c)
the income and other tax consequences which may apply in the countries of their respective
citizenship, residence or domicile relevant to the purchase, holding or disposal of Shares.
Confidentiality
This PPM and any Supplemental Memorandum have been prepared solely for the benefit of persons
interested in a possible investment in the Company and any reproduction or distribution of this PPM
or any Supplemental Memorandum in whole or in part, or the divulgence of any of their contents
without the prior written consent of the Company is strictly prohibited.
This PPM and each Supplemental Memorandum are confidential and for use only by the persons to
whom they are issued and by accepting delivery of this PPM and any Supplemental Memorandum
each recipient agrees to treat the contents as confidential. This PPM and each Supplemental
Memorandum are numbered and, in each case, has the number specified on its cover page; a
number unique to the recipient. Neither document may be copied, reproduced, distributed or passed
by the recipient to any third parties (other than to the recipient’s professional advisors who are subject
to a similar duty of confidentiality and for the sole purpose of obtaining advice hereon). In the event
that the recipient does not proceed with its interests in the Company it must return this PPM and any
Supplemental Memorandum to the Manager.
If you are in any doubt about the contents of this PPM or the relevant Supplemental
Memorandum, you should consult your attorney or other professional adviser. By accepting
this PPM or the relevant Supplemental Memorandum, the recipient agrees to be bound by the
conditions and limitations set out above.
6
Contents
Directory
8
Definitions
9
Principal features
14
Investment programme
16
Directors, Investment Committee and Advisory Board
17
Manager and Investment Adviser
20
Administrator and Valuer
23
Commitments and Contributors
24
Redemptions
27
Valuations
28
Fees and Expenses
31
Distribution policy
34
Reports and financial statements
34
Conflicts of Interest
36
Co-Investment
37
Risk Factors
38
Taxation
45
General and statutory information
47
7
Directory
Novare Africa Fund PCC
Directors:
Brett Childs
Dhanraj Boodhoo
Didier Merven
Richard Charrington
Rudolf Pretorius
Registered office
th
Suite 510, 5 Floor
Barkly Wharf
Le Caudan Waterfront
Port-Louis, Mauritius
Manager
Novare Africa Property Fund I
Novare Fund Manager Limited
th
Suite 510, 5 Floor
Barkly Wharf
Le Caudan Waterfront
Port-Louis, Mauritius
Investment Adviser
Novare Equity Partners Proprietary Limited
Fifth Floor
The Cliffs Office Block 1
Niagara Way
Tyger Falls
Carl Cronje Drive
Belville, 7530, South Africa
Novare Africa Property Fund II
Novare Fund Manager Limited
th
Suite 510, 5 Floor
Barkly Wharf
Le Caudan Waterfront
Port-Louis, Mauritius
Principal Banker
Standard Bank Mauritius Limited
Level 6, Medine Mews Building
La Chaussée Street
Port Louis, Mauritius
Legal advisers
as to South African law and English law
Norton Rose Fulbright South Africa
15 Alice Lane
Sandton
2196, South Africa
Auditors
PricewaterhouseCoopers Ltd
18 CyberCityEbène
Réduit 72201
Mauritius
as to Mauritian law
Appleby
L9 Medine Mews
La Chaussée Street
Port-Louis, Mauritius
Administrator
(and secretary and reporting accountant)
Maitland (Mauritius) Limited
th
Suite 510, 5 Floor
Barkly Wharf, Le Caudan Waterfront
Port Louis, Mauritius
8
Definitions
The following definitions apply throughout this PPM and each Supplemental Memorandum unless the
context otherwise requires:Abort Costs means all reasonable costs and expenses associated with and incurred by a Cell or the
Manager on its behalf in connection with making an Investment or Disposal (including the costs of any
due diligence, travel and lodging and professional advisers) which is not completed for any reason but
excluding any Manager Expenses;
Acquisition Cost or Disposal Cost means all costs and expenses (including third party costs)
associated with and incurred as a result of or in connection with making (or endeavouring to make) an
Investment or Disposal (including the costs of any due diligence, reasonable travel and lodging
expenses, and the fees of professional advisers related to an Investment in or Disposal of a Portfolio
Entity, at any time after a final recommendation has been made by the Directors or the Investment
Committee, as appropriate, to invest in the relevant entity, but excluding any Manager Expenses);
Administration Agreement means the agreement entered into between the Company and the
Administrator, as amended from time to time, pursuant to which the Administrator has been appointed
as administrator of the Company and each Cell;
Administrator means Maitland (Mauritius) Limited, or its successor as may be applicable.
Advisory Board means an advisory board, constituted in respect of a particular Cell, details in relation
to which are, where relevant, set out in the relevant Supplemental Memorandum (the Directors may
constitute one or more Advisory Boards, in each case in respect of a single Cell);
Annual Meeting means an annual meeting of the Company held pursuant to the provisions of the
Constitution;
Base Currency means the base currency of each Cell as set out in the relevant Supplemental
Memorandum;
Board means the board of Directors of the Company;
Business Day any day (except Saturday and Sunday and such other day as the Directors may
determine) on which banks in South Africa and Mauritius and/or such other place or places as the
Directors may from time to time determine are open for normal business;
Capital Call means a capital call issued by the Manager to investors, requesting a drawdown of
investors’ Unfunded Commitments;
Carried Interest means a share of the profits of a Cell distributed or paid to the Manager (in certain
Cells, the Carried Interest may be distributed to the Manager as a dividend or other distribution out of
the profits of the relevant Cell, and in other Cells, Carried Interest may be paid to the Manager as a
Company Expense attributable to that Cell, in each case as set out in the relevant Supplemental
Memorandum);
Cell means a cell created by the Company for the purpose of segregating liabilities and Cellular
Assets in the manner provided by the PCC Act;
Cellular Assets means the assets of the Company attributable to a particular Cell, comprising assets
represented by the proceeds of the issue of Shares of that Cell, reserves (including retained earnings,
capital reserves and share premiums) and all other assets attributable to that Cell;
9
Class means a class of Shares in the Company attributable to a Cell;
Commitment means the amount that each investor has committed to subscribe for Shares in a Cell
pursuant to its Subscription Agreement;
Commitment Period means in relation to a Cell the period during which the Manager may issue
Capital Calls for Contributions to that Cell in respect of Unfunded Commitments of that Cell, as set out
in the relevant Supplemental Memorandum;
Companies Act means the Companies Act No. 15 of 2001 of Mauritius as may be amended,
supplemented or replaced from time to time;
Company means Novare Africa Fund PCC, an open-ended limited liability protected cell company
incorporated under the Laws, comprising Shares and Core Shares;
Company Expenses means expenses of the Company;
Constitution means the constitution of the Company as amended, restated or supplemented from time
to time;
Contribution means the portion of a Shareholder's Commitment that has been contributed to a Cell at
the relevant time by way of a subscription for Shares in that Cell;
Core Assets means the assets of the Company, which are not attributable to any Cell;
Core Share means a non-redeemable share in the capital of the Company having no par value
designated as a Core Share and having the rights provided for under the Constitution;
Core Shareholder means the party/ies recorded as the holder(s) of all or some of the Core Shares in
the Company’s register of Members;
Directors means the members of the board of directors of the Company for the time being, and any
duly authorised committee thereof (comprising members of the board of directors) and any successors
to such members as may be appointed from time to time;
Disposal means the sale, realisation, redemption, assignment, transfer, or disposal by a Cell of all or
any portion of an Investment, or a cessation or liquidation of a business in conjunction with a receipt by
a Cell of a dividend, distribution upon a sale of all, or substantially all, of the assets of a Portfolio Entity,
including the writing off of an asset or Investment;
Expert Fund means an expert fund, as that term is described in The Securities (Collective Investment
Schemes and Closed-end Funds) Regulations 2008 of Mauritius;
Expert Investor means (i) an investor which makes an initial subscription for Shares of a Class, for its
own account, of no less than US$100,000; or (ii) a Sophisticated Investor or any similarly defined
investor in any other applicable securities legislation;
FSC means the Financial Services Commission established under the Mauritian Financial Services Act
2007;
First Closing means the closing date for the acceptance of initial subscriptions in a Cell as
determined by the Manager;
Investment means any asset or right of any description, the acquisition of which is authorised by the
Constitution, this PPM and the relevant Supplemental Memorandum;
10
Investment Adviser means Novare Equity Partners Proprietary Limited, or its successors as may be
applicable as determined by each Manager in consultation with the Directors;
Investment Advisory Agreement means the agreement, entered into between the Manager, the
Investment Adviser and the Company in respect of a Cell, as amended from time to time, pursuant to
which the Investment Adviser is appointed as investment adviser to such Manager in respect of that
Cell;
Investment Committee means an investment committee constituted in respect of a particular Cell, to
which the Directors will delegate investment discretion in respect of the relevant Cell, details in relation
to which are, where relevant, set out in the relevant Supplemental Memorandum (the Directors may
constitute one or more Investment Committees, in each case in respect of a single Cell);
Late Subscriber means a person admitted as a subscriber in a Cell after that Cell’s First Closing;
Laws means the laws of Mauritius including the Companies Act, the PCC Act, the Securities Act and
any other act, regulation, rule, proclamation, order or revision thereof for the time being in force and
applying to global business companies and as amended, supplemented or replaced;
Lead Investor means an Investor which makes a Commitment equal to or greater than the amount, if
any, specified in the relevant Supplemental Memorandum for qualification as a Lead Investor;
Management Agreement means the agreement entered into between the Manager and the Company
in respect of a Cell, as amended from time to time, pursuant to which a Manager is appointed as
Manager of that Cell;
Management Fee means the ongoing management fee payable to a Manager out of the assets of
each Cell pursuant to the relevant Management Agreement;
Manager means the manager appointed as such for a Cell, being Novare Fund Manager Limited, in the
case of each of Novare Africa Property Fund I and Novare Africa Property Fund II, or, in each case, its
successor as may be applicable;
Manager Expenses means has the meaning given to it in the paragraph headed “Manager Expenses”
under “Fees and Expenses” below;
Mauritius means the Republic of Mauritius;
MRA means the Mauritius Revenue Authority;
Members mean the members of the Company, being the Shareholders and the Core Shareholder;
Net Asset Value means the net asset value of a Cell calculated in accordance with the provisions of
the Constitution and this PPM;
Net Asset Value per Share means the Net Asset Value of any Cell divided by the number of Shares
attributable to that Cell in issue or deemed to be in issue;
Ordinary Resolution means a resolution approved by not less than 50% (fifty percent) plus one of
the votes of those Members entitled to vote and voting on the matter which is the subject of the
resolution or a written resolution signed by Members who would be entitled to vote on that resolution
at a meeting of Members who together would hold not less than 50% (fifty percent) plus one of the
votes entitled to be cast on that resolution;
PCC means a protected cell company as defined in the PCC Act;
11
PCC Act means the Protected Cell Companies Act No. 37 of 1999 of Mauritius as may be amended
or supplemented from time to time;
Portfolio Entity means any person, company, trust, partnership, undertaking, fund or other entity in
which the monies of a Cell have been invested;
Qualified Holder means any person (being over the age of 18), corporation or entity other than (i)
any person, corporation or entity which cannot acquire or hold Shares without violating the Laws or
any other laws or regulations applicable to it; or (ii) any person, corporation or entity whose holding of
Shares, in the opinion of the Directors, might result in the Company or any Cell incurring any liability
to taxation or suffering any other pecuniary disadvantage which the Company and/or any Cell might
not otherwise have incurred or suffered; or (iii) a custodian, nominee or trustee for any person or
entity described in (i) and (ii) above;
Raising and Establishment Expenses means the expenses incurred by or on behalf of the
Company in relation to (i) the raising and establishment of the Company and its first Cell, and (ii) the
establishment of each additional Cell;
Region means the countries and/or regions in Africa (but excluding Mauritius) in which a Cell may
make Investments, as set out in the relevant Supplemental Memorandum;
Securities Act means the Securities Act No. 22 of 2005 of Mauritius as may be amended or
supplemented from time to time;
Share means a share in the capital of the Company, designated as a Share of a Class, in accordance
with the provisions of the Laws and the Constitution, having the rights provided for under the
Constitution, and having no par value;
Shareholder means a party recorded as a holder of Shares in the Company’s register of Members;
Sophisticated Investor means (a) the Government of Mauritius; (b) a statutory authority or an
agency established by an enactment for a public purpose; (c) a company, the shares of which are
wholly owned by the Government of Mauritius or a body specified in paragraph (b); (d) the
government of a foreign country, or an agency of such government; (e) a bank incorporated under the
Companies Act, or a branch of a company incorporated abroad which is licensed by the Bank of
Mauritius in accordance with the Banking Act No. 35 of 2004 of Mauritius; (f) a company duly licensed
by the FSC to act as a CIS manager under the Securities Act; (g) an insurer licensed under the
Insurance Act No. 21 of 2005 of Mauritius; (h) a person holding an investment adviser licence under
the Securities Act; (i) a person holding an investment dealer licence under the Securities Act; or (j) a
person declared by the FSC to be a sophisticated investor;
Special Resolution means a resolution approved by not less than 75% (seventy five percent) of the
votes of those Members entitled to vote and voting on the matter which is the subject of the resolution
or a written resolution signed by Members who would be entitled to vote on that resolution at a
meeting of Members who together would hold not less than 75% (seventy five percent) of the votes
entitled to be cast on that resolution;
SPV means a special purpose vehicle through which a Cell holds an Investment;
Subscription Agreement means the subscription agreement entered into between the Company and
an investor pursuant to which the investor agrees to subscribe for Shares in a Cell, the form of which is
set out in a schedule to the relevant Supplemental Memorandum;
Subsequent Closing means the closing date(s) for the acceptance of additional subscriptions in a
Cell after the First Closing, as determined by the Manager;
12
Supplemental Memorandum means a supplemental private placement memorandum in relation to a
particular Cell;
TRC means a tax residence certificate issued in accordance with the Mauritius Income Tax Act 1995;
Unfunded Commitment means, in relation to a Cell, the difference between an investor's Commitment
and its aggregate Contributions;
Valuation Day means the last day of each month or such other day or days as the Directors may
designate from time to time as a Valuation Day in relation to a Cell;
Valuer means the independent person or entity in a particular jurisdiction appointed by the Company
from time to time to determine the value of immovable property or other illiquid Investments of a Cell in
that jurisdiction.
In this PPM all references to US Dollars and US$ are to the currency of the United States of America.
13
Principal features
The following is summary of the principal features of the Company and should be read in conjunction
with the full text of this PPM, the relevant Supplemental Memorandum and the Constitution.
General
The Company is a protected cell company incorporated with limited liability and governed by the
Laws. It was incorporated on 29 May 2009 and has an unlimited life. The Company has been issued
with a category 1 global business licence, number 088469 C1/GBL by the FSC and is governed by
the Companies Act and the PCC Act. The Company is only available to Expert Investors and has
been authorised by the FSC as an Expert Fund.
A protected cell company, or PCC, in general, is a special legal structure made up of Cellular Assets
and Core Assets. It provides for the legal segregation and protection of Cellular Assets attributable to
each cell of the PCC whether owned by individuals or bodies corporate. A PCC is required to keep
segregated assets and investments registered in the name of a particular and distinct cell. Each cell
operates independently so that in the event that one cell becomes insolvent, only the assets of that
cell and, if those assets are exhausted, the Core Assets, are available to creditors of that cell. The
other cells remain protected. With regard to third party creditors (except the MRA), there is thus no
cross liability among the cells. Shareholders in a Cell are not, except as required by the Laws,
entitled to any information in relation to the other Cells.
Shareholders in a Cell shall participate pro rata in any profits generated, declared and distributed by
such Cell but shall not have any entitlement to participate in the profits of any other Cell.
Furthermore, Shareholders in a Cell shall not have the right to participate directly or indirectly in the
share capital, current or cumulative profits or reserves in the Company whether or not of a capital
nature, to the extent not attributable to the assets and liabilities of such Shareholders’ Cell. Core
Assets comprise the assets which are not attributable to any cell. Investors are referred to the
paragraph headed “PCC Structure” under “Risk Factors” below.
Core Shares
The Core Shares are not available for subscription by investors and are being issued to the Core
Shareholder. The Core Shares carry no economic rights and the Core Shareholder shall not be
entitled to share in the profits of the Company or any Cell (unless it is also a Shareholder in a Cell).
Shares
A separate Class of Shares will be issued in each Cell. The details of the Share Classes available in
a Cell are set out in the relevant Supplemental Memorandum.
Base Currency
The Base Currency of each Cell will be set out in the relevant Supplemental Memorandum.
Investment programme
The investment programme for each Cell is set out in the relevant Supplemental Memorandum.
Manager
Novare Fund Manager Limited has been appointed as the Manager of both Novare Africa Property
Fund I and Novare Africa Property Fund II.
14
Investment Adviser
Novare Equity Partners Proprietary Limited has been appointed by each Manager as the initial
Investment Adviser to the Manager in relation to the relevant Cell.
Fees and expenses
The Manager receives a Management Fee and Carried Interest from each Cell as described under
“Fees and Expenses” below.
The Administrator receives an administration fee payable out of the assets of each Cell on a pro rata
basis.
The Manager is responsible for the fees of the Investment Adviser in relation to the relevant Cell,
which will be paid out of its Management Fee.
Distribution policy
The distribution policy of each Cell is set out in the relevant Supplement Memorandum.
Reports and financial statements
Annual financial statements of the Company will be made up to 31 December in each year.
The Company also produces quarterly reports incorporating unaudited accounts.
Taxation
Under the provisions of the Mauritian Income Tax Act 1995, the Company is currently taxed at the
rate of 15% (fifteen percent). It is entitled to claim a tax credit on foreign source income at a rate
which is the higher of the actual foreign tax paid (including underlying tax where the Company holds
more than 5% (five percent) of the issued capital of a foreign company) on such income or a deemed
foreign tax representing 80% (eighty percent) of the Mauritius tax on such income resulting in an
effective tax rate on net income of not more than 3% (three percent), as described under “Taxation”
below.
15
Investment programme
The investment programme for each Cell is set out in the relevant Supplemental Memorandum. No
Cell may invest in South Africa or Mauritius. Additional portfolio specific investment restrictions
attributable to each Cell are set out in the relevant Supplemental Memorandum.
The Directors may from time to time specify additional investment restrictions, or amend existing
restrictions or remove existing restrictions, or amend the investment programme applicable to a Cell,
in each case (i) as may be considered necessary or desirable for the efficiency of the operations of
the Company or of that Cell or for conforming to regulatory restrictions, (ii) in consultation with the
Manager, and (iii) with the approval of the Shareholders in the relevant Cell (by way of Special
Resolution of the relevant Class).
16
Directors, Investment Committee and Advisory Board
The control and management of the Company is vested in the Board, which shall comprise of both
local Mauritius appointees and foreign appointees. Under the Constitution, the Company is required to
have at least two Directors who are resident in Mauritius.
The Directors will review the operations of the Company at regular meetings and it is the current
intention of the Directors to meet at least quarterly but this requirement may be changed by the
Directors. For this purpose, the Directors receive periodic reports from the Administrator detailing
each Cell’s performance and providing an analysis of its Investment portfolio. The Manager will
provide such other reports and information as may from time to time be reasonably required by the
Directors for the purpose of such meetings.
Directors’ biographies
Brett Childs
c/o Eden Rock Lane, Pereyberre, Mauritius.
Mr Childs spent fifteen years in London. He was involved in the development of Equitas, the vehicle
set up by Lloyds of London to acquire distressed re-insurance contracts from Names, and was one of
the first individuals to be approved by Lloyds of London to act as CFO to corporate capital providers in
Lloyds of London. After leaving the re-insurance industry he helped build a successful venture capital
business focused on the I.T. industry, listing assets on LSE and HEX (Finland) before moving to
Mauritius in 2001.
Mr Childs resides in Mauritius where he sits, in a non-executive capacity, on the board of a number of
privately and publically owned companies and funds including entities regulated by the Bank of
Mauritius and the FSC.
Mr Childs joined Brait S.E. in 2004 and is executive chairman of Brait Mauritius Limited, where he is
responsible for the group’s on balance sheet investments, manages the group’s private equity fund
and sits on the group’s investment committee.
Mr Childs is also retained by Maitland (Mauritius) Limited, an international firm providing wealth
services to both private and institutional clients, to assist with developing their private client and
corporate services business.
Dhanraj Boodhoo
c/o Schoenfeld Road, Riviere Du Rempart, Mauritius
Mr Boodhoo is an executive director of Brait in Mauritius since 2001. He has a wide range of
experience in global fund management, international investment structuring, audit, taxation,
accounting, treasury management and economic research gained in the UK and Mauritius.
Mr Boodhoo is a Fellow Chartered Certified Accountant (FCCA) qualified in UK and holds a BSc Hons
(Monetary Economics) from the London School of Economics. He is a British Council and London
Chamber of Commerce scholarship and award recipient for his academic performance.
He currently sits on the boards of various global business companies in Mauritius.
Didier Merven
c/o Route du Moulin a vent, Petit Raffray, Mauritius
17
Mr Merven spent many years in Australia and moved back to Mauritius in 1988. He started portfolio
management on an individual basis before setting up Portfolio & Investment Management Ltd (PIM) in
1992, the very first professional portfolio management company in Mauritius. Over the following 22
years PIM became the AXYS Group and evolved from these beginnings into a diversified financial
services company.
Mr Merven now sits on various boards of the AXYS Group and and on the board of United
Investments Limited and is still involved in portfolio management for the company’s high net worth
clients.
Richard Charrington
c/o 32 Allee De La Canne Rubanee, Domaine De Belle Vue, Mapou, Mauritius
Mr Charrington is a UK Security & Futures (SFA) accredited corporate finance specialist with a
particular focus on structured products in trade, project and shipping finance. Mr Charrington is
resident in Mauritius.
Mr Charrington started his career as a commodity trader with C. Czarnikow in 1980 subsequently
bought out by the Kuok Organisation of Malaysia and went on to specialise in trade finance with
Credit-Anstalt. In 1992 he joined Ceres Capital International specialising in South African debt/equity
conversion and corporate restructuring & concluding some US$1.5billion in debt conversion. In 2000
Mr Charrington took over The Ceres Group, with offices in London, Namibia and Mauritius and
developed the business into a bespoke corporate finance house with focus on financial engineering,
project finance, asset trading and debt brokerage with particular attention to Africa. To date, the
Group has closed over 20 Billion Rands worth of business in Sub-Saharan Africa.
Rudolf Pretorius
c/o 2519 Solaia, Anahita, Beau Champ, Flacq, Mauritius
Mr Pretorius is a venture capitalist with a focus on backing entrepreneurial management teams that
possess the ability to develop international-standard software in South Africa’s low-cost environment.
Mr Pretorius has a B.Compt (Hons) degree and is a qualified chartered accountant (SA).
Mr Pretorius joined Rand Merchant Bank (RMB) in 1988 as a manager in the corporate finance
division, which included the bank’s private equity activities and assisted with the management,
development and growth of such companies as momentum Life, Aegis Insurance and Outsurance. In
1996, on his appointment to the executive committee of RMB, he was responsible for starting the first
venture of the RMB group into the retail banking industry through the launch of Origin.
RMB acquired First National Bank in 1998, leading to the formation of the FirstRand group. Mr
Pretorius was appointed to the FirstRand executive committee taking responsibility for mortgage
lending and private banking in the group. Board positions included First National Bank, Aegis
Insurance and Outsurance. Mr Pretorius also served on the RMB private equity investment committee
up to 1998.
He established Treacle Private Equity in 2000 providing equity capital to mid-market private and small
cap listed companies in Southern Africa.
He currently sits on the boards of numerous companies.
Investment Committee
The Directors may in relation to each Cell delegate their investment discretion to an Investment
Committee. Details of the powers, composition, nomination and appointment of the Investment
Committee shall, where relevant, be set out in the relevant Supplemental Memorandum.
18
Advisory Board
Each Cell may, if the Directors so elect, but shall not be required to, have an Advisory Board. Details
of the Advisory Board’s composition and its functions shall, where relevant, be set out in the relevant
Supplemental Memorandum.
19
Manager and Investment Adviser
Manager
Novare Fund Manager Limited is the Manager of each of Novare Africa Property Fund I and Novare
Africa Property Fund II (in each case, pursuant to a Management Agreement in relation to the
relevant Cell).
Novare Fund Manager Limited is a company, duly incorporated on 9 December 2013 in accordance
with the laws of Mauritius with registration number 119921 C1/GBL. It is registered with the FSC,
under registration Number 119921 C1/GBL and is authorised to conduct investment management
activities.
Below is a description of the directors and senior professionals of the Manager:
Derrick Roper
Derrick Roper is a qualified actuary, having graduated from the University of Stellenbosch in South
Africa as well as being a Fellow of the Institute of Actuaries in England. Before joining Novare he
worked for a number of large financial services companies in South Africa including Sanlam and
Gensec Asset Management. He spent some time in the United Kingdom where he gained experience
in investment product development for the pension fund market. Mr Roper co-founded Novare in
October 2000. He is also a regular commentator on fund industry topics in financial media and has
addressed numerous conferences across the globe. As CEO of Novare Equity Partners, his areas of
particular expertise include asset-liability matching, strategic asset allocation, as well as alternative
investments and private equity in Southern and sub-Saharan Africa. Mr Roper was listed in the Top
50 most influential, innovative and powerful figures in the African asset management industry by
Africa Asset Management magazine for 2013. He has 22 years’ experience in the industry.
Mr Roper is an executive director on the board of directors of Novare Holdings Proprietary Limited.
Dhanraj Boodhoo
Refer to "Directors, Investment Committee and Advisory Board" above for Mr Boodhoo's biography.
Brendon Jones
Mr Jones is a Director of Maitland (Mauritius) Limited, a position he has held since November 2006.
He currently holds a number of executive and non-executive directorships and is on the boards of
each of Tremont Master Holdings, a mining investment holding company; Tremont Services, an
investment manager; and One Thousand and One Voices Management (Mauritius) Ltd, a pan-African
private equity fund. His Board roles include reviewing and approving investment proposals presented
by the various investment teams.
Mr Jones has also worked in Thailand in a consulting capacity and prior to this spent a number of
years in London working in investment banking, completing his time there with Reuters, London, in
2002.Mr Jones holds a Higher National Diploma in Human Resources, Investment Advice Certificate
from the Securities Institute, London and in 2003 obtained a Master of Business Administration (MBA)
from the University of Cape Town Graduate School of Business.
Simon Hopkins
Mr. Hopkins is the CEO and founder of Milltrust International Group. He has been a senior figure in
the international investment management industry for more than two decades. Mr. Hopkins has a
strong record fighting for the rights of shareholders throughout his professional career, where he has
20
been an outspoken critic of egregious practices in asset management and an ardent champion of
investors’ interests. He was an early advocate and exponent of managed account investing.
In 1996 Mr. Hopkins created one of the industry’s first dedicated research and investment consulting
businesses, Global Fund Analysis, to provide truly objective analysis for investors, after a career
spanning over a decade in Investment Banking. At its peak GFA had over 27,000 registered users
around the globe.
Mr. Hopkins played a pioneering role in seeding many of the incipient European hedge funds through
the Fortune Group, an award-winning alternatives investment banking and advisory business, which
he also created in 1996, and which merged with Global Fund Analysis in 2000. Fortune Group went
on to become one of the UK’s pre-eminent hedge fund advisory firms with clients in 24 countries and
a focus on pension funds, charities and endowments, as well as a number of the world’s leading
families. The firm was successfully sold to UK-listed, financial services group, Close Brothers Group
PLC, in 2006, culminating in its full integration in January 2010.
He has over 25 years’ investment experience.
Pierre Groenewald
Pierre Groenewald started his career completing his articles at PricewaterhouseCoopers. He spent
time in the UK from 2001 to 2004 working for Credit Suisse First Boston where he gained valuable
international experience in risk management, asset valuation and the accounting of proprietary and
market-making portfolios. Mr Groenewald joined Novare in 2005 as a member of the teams managing
the Novare Funds of Hedge Funds and the multi-manager portfolios responsible for product
structuring and operational due diligence. Mr Groenewald moved to Novare Equity Partners in 2009 to
establish the group’s private equity business. His current duties include the operational and financial
structuring of the underlying investments of the Novare Africa Fund. Mr Groenewald is a CFA
charterholder and has 14 years’ experience in the industry.
Jan Wandrag
Jan Wandrag joined Maitland (Mauritius) Limited in November 2013. He manages Maitland’s
operations in Mauritius and serves as director and trustee in businesses involved in industries ranging
from mining to agriculture to finance. He joined the Mauritius office from Maitland’s Cape Town office
where he served as the manager of Maitland’s South African Private Client team from March
2013. Before this, Mr Wandrag worked as the Product Manager: Structured Finance at GMG Trust
Company in Cape Town from September 2009. As part of his duties, he managed a team responsible
for the administration of financial structures, in particular securitisations, syndicated loans, hedge
funds, debenture trusts and BEE structures. He served as a trustee and director on the entities which
GMG was appointed as administrator. Mr Wandrag joined GMG from Integer where he started
working as a legal advisor in 2006 and was part of the teams responsible for product development,
compliance, credit processes, collections and financial structuring. Jan holds a B.Com (Law) degree
from the University of Johannesburg (previously Rand Afrikaans University).
Investment Adviser
Each Manager has initially appointed Novare Equity Partners Proprietary Limited as its Investment
Adviser in relation to the relevant Cell.
Under the Investment Advisory Agreement in relation to each Cell, the Investment Adviser is required
to provide advice and information to the relevant Manager in relation to Investment and Disposal
opportunities for each Cell. The Investment Adviser acts in a purely advisory capacity and does not
have or exercise any investment discretion. The fees of the Investment Adviser are payable by the
Manager out of its Management Fee.
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The Investment Adviser is a wholly owned subsidiary of Novare Holdings Proprietary Limited, the
South African-based investment management company (Novare). Novare was established in 2000
and manages assets of some of the largest institutional clients in Africa. It has been actively involved
in investing in Africa since 2005. The principals of the Investment Adviser have over 40 years of
combined experience in investing and working with companies in Africa. Novare has offices in Cape
Town, Johannesburg, Gaborone, Lagos, and Mauritius.
Below is a description of the directors and senior professionals of the Investment Adviser who have
responsibility for providing investment advice to the Manager:
Derrick Roper
Refer to "Manager and Investment Adviser" above for Mr Roper's biography.
Pierre Groenewald
Refer to "Manager and Investment Adviser" above for Mr Groenewald’s biography.
Craig Lyons
Mr Lyons studied a Batchelor of Commerce degree majoring in Economics and post graduate studies
at Oxford University majoring in Finance and Economics. Mr Lyons is an Investment Banker with 16
years’ experience in private equity fund management. He worked for Standard Corporate and
Merchant Bank before co-founding Mvelaphanda Strategic Investments (Pty) Ltd in 2001, where he
was CEO and responsible for its building its investment portfolio of non-mining assets. He built up
Mvelaphanda into one of the leading black economic empowerment investment houses in South
Africa and resigned in 2006 to pursue other investment opportunities.
He sits on the boards of various listed and private companies in Southern Africa and is actively
engaged in private equity investments.
22
Administrator and Valuer
Administrator
Maitland (Mauritius) Limited has been appointed as the initial administrator and reporting accountant
pursuant to the Administration Agreement. Maitland is an offshore management company licensed by
the FSC to provide global management and corporate trustee services and is a member of the
Association of Trust and Management Companies in Mauritius. Maitland (Mauritius) Limited forms part
of the Maitland group of companies.
The Administrator is responsible for providing administration services to the Company, including the
calculation of the Net Asset Value, the Net Asset Value per Share, the Management Fee and the
Carried Interest and serving as the Company’s agent for the issue and redemption of Shares and
acting as reporting accountant for the Company. The Administrator will also provide the Company’s
registered office.
Maitland (Mauritius) Limited has also been initially appointed to provide secretarial services to the
Company. Services include the preparation and filing of company reports in compliance with the
Company’s reporting requirements under the Laws. Maitland (Mauritius) Limited will initially also
attend to the Company’s tax filing requirements in Mauritius and will liaise with the tax authorities in
Mauritius on behalf of the Company.
Maitland (Mauritius) Limited will initially also generally perform all duties usually performed by registrars
of companies including but not limited to keeping the register of Members, arranging for, and entering on
the register, all issue, transfers, allotments, redemptions and/or purchases of Shares, take reasonable
precautions for the safe custody of the register and any share certificates held by it.
Valuer
In relation to Investments in immovable property or other illiquid Investments in a particular
jurisdiction, the Directors may, in consultation with the Manager, appoint a Valuer in that jurisdiction to
determine the value of such Investment on the acquisition or disposal thereof as well as on a semiannual basis for so long as the Investment is held. Any Valuer so appointed shall be a person or
entity which is regarded by the Directors as reputable in the relevant jurisdiction.
23
Commitments and Contributors
General
Subject to the Laws and the Constitution, the Directors may offer, allot and/or grant options over the
Shares to such persons, at such times and for such consideration and upon such terms and
conditions as the Directors may determine. The Company does not intend to issue share certificates
in any Cell, except in exceptional circumstances upon the written request of an investor. The
ownership of a Share will be evidenced by an entry in the register of Members.
Classes
A separate Class(es) of Shares will be issued in each Cell. The details of the Classes of a Cell are
set out in the relevant Supplemental Memorandum.
Procedure
Investors proposing to make a Commitment should complete and execute a Subscription Agreement
and send it to the Administrator by mail (with a copy by facsimile or email) so as to be received by the
Administrator no later than 5.00pm (Mauritius time) on the Business Day immediately preceding the
proposed date of the First Closing or Subsequent Closing, as appropriate, or by such other time and
date as may be specified in the relevant Supplemental Memorandum.
The Administrator will carry out an anti-money laundering review in respect of each investor, prior to
accepting any Subscription Agreement from that investor (see the paragraph headed "Anti-money
laundering" below).
The Directors reserve the right, in consultation with the Manager, to reject any Subscription
Agreement in whole or in part at their absolute discretion on or before the First Closing or the relevant
Subsequent Closing, as appropriate.
Contributions
The Directors will delegate to the Manager the discretion to issue Capital Calls in relation to each Cell.
Contributions may, at the discretion of the Manager and as set out in the relevant Supplemental
Memorandum, be required to be paid (i) in full at the same time that the Subscription Agreement
(executed by or on behalf of the investor) is submitted, or (ii) in tranches when the Manager issues
Capital Calls in respect of investors’ Unfunded Commitments. In either case, Shares will not be
issued to an investor until receipt of notification that the investor’s funds have been cleared in the full
amount of the investor's total Commitment or the Capital Call, as appropriate.
Where the Directors have rejected in whole or in part a Subscription Agreement in respect of an
investor which paid its Contribution in full at the same time that it submitted its Subscription
Agreement, the amount paid or the balance thereof (as the case may be) will be returned to the
investor (without interest) as soon as practicable, in the relevant Base Currency and at the risk and
cost of the investor.
Minimum Commitment
The minimum Commitment per investor in a Cell shall be set out in the relevant Supplemental
Memorandum.
A Supplemental Memorandum may also state the minimum aggregate Commitments in relation to a
Cell, provided that the Manager may, in its discretion, launch a Cell notwithstanding that aggregate
Commitments are less than the stated minimum.
24
Over-subscriptions
The maximum permitted aggregate Commitment amount for a Cell is, where relevant, set out in the
relevant Supplemental Memorandum. The Manager’s policy on over-subscription, if any, for each Cell
is set out in the relevant Supplemental Memorandum.
Additional amount
An investor which is admitted as a subscriber in a Cell after the First Closing in that Cell may be required
to pay an additional amount, details of which will be set out in the relevant Supplemental Memorandum.
Eligible investors
The Subscription Agreement requires each investor to represent and warrant to the Company that,
among other things, it is a Qualified Holder and an Expert Investor and is able to acquire and hold
Shares without violating the Laws or any other laws applicable to it.
The Shares may not be issued or transferred to any person who is not a Qualified Holder and an
Expert Investor or in circumstances which, in the opinion of the Directors, might result in the Company
or any Cell incurring any liability to taxation or suffering any other pecuniary disadvantage which the
Company or Cell might not otherwise incur or suffer.
Investors must warrant on the Subscription Agreement that they have the knowledge, expertise and
experience in financial matters to evaluate the risks of investing in the Company, are aware of the
risks inherent in investing in the Investments in which the relevant Cell will invest and the method by
which these Investments will be held and/or traded, and can bear the loss of their entire investment in
the Company. Any transferee of Shares will be required to warrant in like terms before any transfer is
registered.
Anti-money laundering
The Company does not tolerate money laundering and supports the fight against money launderers.
Under the Mauritius Financial Intelligence and Anti-Money Laundering Act 2002, an offence of money
laundering carries a fine not exceeding 2 million Mauritius rupees (approximately US$ 56 000 at the
rates prevailing at the date of this PPM) and a term of imprisonment not exceeding 10 years. The
Administrator will carry out a review process in respect of each investor, based on the Laws and
generally accepted industry norms, prior to accepting any subscriptions for Shares from that investor.
This review will include but may not be limited to:
(a)
applying the ‘know your client’ principle by making sure that investors provide valid proof of
identification;
(b)
maintaining records of identification information;
(c)
determining that investors are not known or suspected terrorists by checking their names
against lists of known or suspected terrorists;
(d)
informing investors that information they provide may be used to verify their identity; and
(e)
monitoring shareholders’ money transactions, i.e., level of subscriptions and frequency of
redemptions.
To ensure compliance with the Financial Intelligence and Anti-Money Laundering Act 2002 and the
Code on the Prevention of Money Laundering and Terrorist Financing (Anti Money Laundering
Code) issued by the FSC, an investor will be required to provide certain information/documents for
the purpose of verifying the identity of the investor, source of funds and obtain confirmation that the
Investment monies do not represent, directly or indirectly, the proceeds of any crime. The request for
25
information may be exempted where an investor (other than an investor acting on behalf of underlying
principals) is a regulated financial services business based in Mauritius, or in an equivalent jurisdiction
(i.e. subject to the supervision of a public authority), or in the case of public companies listed on
recognised stock/investment exchanges, as set out in the Anti-Money Laundering Code.
The Administrator will notify investors if proof of identity is required. By way of example an individual
may be required to produce a copy of a passport or identification card duly certified by a public
authority such as a notary public, the police or the ambassador in his/her country of residence,
together with evidence of his address such as a utility bill or bank statement. In the case of corporate
investors this may require production of a certified copy of the certificate of incorporation (and any
change of name) and of the memorandum and articles of association (or equivalent), and of the
names and residential and business addresses of all directors and beneficial owners. The investor
may also be required to furnish information relating to its underlying clients or beneficial owners.
The details given above are by way of example only and the Company has authorised the
Administrator to request such information and documentation as is necessary to verify the identity of
an investor. Subscription Agreements shall not be accepted and Shares will not be issued until such
time as the Administrator has received and is satisfied with all the information and documentation
requested to verify the identity of the investor. This may result in a Commitment being accepted on a
date subsequent to the First Closing or Subsequent Closing, as appropriate, on which an investor
wanted to make its Commitment.
26
Redemptions
The Directors may require the compulsory redemption of all or some Shares held by or for the benefit
of any Shareholder, in accordance with the Laws, if:
(a)
the Directors determine, in their absolute discretion, that the Shares are held by or for the
benefit of any Shareholder who is not a Qualified Holder and an Expert Investor;
(b)
a Cell has insufficient retained earnings to make distributions and to comply with the
"solvency test" as defined in the Companies Act;
(c)
a Contribution has been made but has not been used by a Cell;
(d)
a Cell has permitted Late Subscribers in the Cell and Contributions by the Late Subscribers
have created an excess of capital in the Cell; or
(e)
the Directors determine, in their absolute discretion, that such redemption would be in the
best interests of the Company, the relevant Cell and/or the relevant Shareholder(s).
Where Shares in a Cell are redeemable at the option of a Shareholder, a Shareholder in that Cell may
request redemption of its Shares of the relevant Class, subject to the Laws and any additional
requirement(s) as may be set out in the relevant Supplemental Memorandum.
Not all Cells will permit redemptions at the option of a Shareholder and in some Cells this may be
specifically prohibited.
Redemption price
Where Shares in a Cell are redeemable at the option of a Shareholder, the redemption price per
Share will be equal to the Net Asset Value per Share as at the Valuation Day preceding the relevant
Business Day on which the redemption is effected.
Settlement
Where Shares in a Cell are redeemable at the option of a Shareholder, payment of redemption
proceeds will normally be made within two calendar months of the actual redemption date or such
earlier or later date as may be specified in the relevant Supplemental Memorandum. However, the
Directors may defer payment of redemption proceeds for such period as they, in their discretion,
determine is reasonable but not exceeding 12 (twelve) months.
Payment will be made in the relevant Base Currency (except where payment of redemption proceeds
is made in non-cash consideration – see “Redemptions in specie” below), by direct electronic transfer
and at the Shareholder’s risk and cost.
Redemptions in specie
Subject to the Laws and the provisions of the relevant Supplemental Memorandum and with the
approval of the Shareholders of the relevant Class (by way of Special Resolution), payment of all or a
portion of redemption proceeds may be made in non-cash consideration provided such distributions
will not materially prejudice the interests of the other Shareholders in the relevant Cell. Refer to the
paragraph headed “Distributions in specie” under “Risk Factors” below. For the avoidance of doubt, a
Cell may, in each case in accordance with the terms of its Supplemental Memorandum, prohibit
redemptions in specie entirely or permit redemptions in specie subject to certain additional
restrictions, including without limitation requiring the prior approval of the Cell’s Manager and/or the
prior unanimous consent of Shareholders in that Cell.
27
Valuations
General
Valuations will be undertaken in accordance with the provisions set out under “Valuations” below,
provided that such provisions may be disapplied in part or in their entirety on a Cell by Cell basis in
each case in accordance with the terms of a Cell’s Supplemental Memorandum.
Valuations
Where so specified in the relevant Supplemental Memorandum, the Net Asset Value of a Cell will be
determined as at the close of business on each Valuation Day, or at such other times as the Directors
may determine. The Directors have delegated to the Administrator the determination of the Net Asset
Value. Except in the case of manifest error, any calculations made by the Administrator shall, upon
approval by the Directors, be binding on all parties. Any valuation of an Investment in immovable
property or of other illiquid private equity Investments which is determined by a Valuer appointed by
the Company, shall be binding on the Administrator for the purposes of determining the Net Asset
Value.
The assets of the Company which are attributable to a Cell shall be deemed to include:
(a)
all Investments in immovable property;
(b)
all cash in hand, on loan or on deposit, or on call including any interest accrued thereon,
owned or contracted for by the Cell or attributable to the Cell;
(c)
all money market instruments, bills, demand notes, promissory notes and accounts
receivable, owned or contracted for by the Cell or attributable to the Cell;
(d)
all shares, stocks, debentures, debenture stock, options and other Investments and securities
owned or contracted for by the Cell or attributable to the Cell, including shares in a special
purpose vehicle through which a Cell has invested;
(e)
all stock and cash dividends and cash distributions to be received by the Cell or attributable to
the Cell and not yet received by it but declared payable to shareholders on record on a date
on or before the day as of which the net asset value is being determined;
(f)
all interest accrued on any interest-bearing securities owned by the Cell or attributable to the
Cell except to the extent that the same is included or reflected in the principal value of such
security; and
(g)
all other assets and Investments of the Cell or that are attributable to the Cell of every kind
and nature including prepaid expenses.
The assets of the Company which are attributable to a Cell shall be valued as follows:
(a)
immovable property and other illiquid private equity Investments will be valued on the
acquisition or disposal thereof as well as on a semi-annual basis on 30 June and 31
December or, at the discretion of the Directors, at shorter intervals. Such value shall be
determined by reference to prevailing market prices in the relevant jurisdiction and in
accordance with current Royal Institute of Chartered Surveyors Appraisal and Valuation
Standards or their equivalent in the relevant jurisdiction. In this regard, refer to the paragraph
headed "Monthly reports" under "Reports and financial statements" below;
28
(b)
securities traded on a stock exchange or other regulated market are to be valued generally at
the last traded price quoted on the relevant exchange or market on or before the relevant
Valuation Day;
(c)
unlisted equity securities, including shares in a special purpose vehicle through which a Cell
has invested, will be valued initially at cost and thereafter with any reduction or increase in
value (as the case may be) as the Directors shall in their absolute discretion deem
appropriate in light of the circumstances;
(d)
unlisted securities (other than equities) for which there is an ascertainable market value are to
be valued generally at the last known price dealt on the market on which the securities are
traded on or before the relevant Valuation Day;
(e)
unlisted securities (other than equities) for which there is no ascertainable market value will
be valued at cost plus interest (if any) accrued from purchase to (but excluding) the relevant
Valuation Day plus or minus the premium or discount (if any) from par value written off over
the life of the security;
(f)
any value otherwise than in the relevant Base Currency shall be converted into the relevant
Base Currency at the market rate (whether official or otherwise) which the Directors shall in
their absolute discretion deem appropriate to the circumstances having regard, inter alia, to
any premium or discount which they consider may be relevant and to the costs of exchange;
(g)
the value of any cash in hand or on deposit, bills and demand notes and accounts receivable,
prepaid expenses, cash dividends and interest accrued and not yet received shall be deemed
to be the full amount thereof, unless it is unlikely to be paid or received in full, in which case
the value thereof shall be arrived at after making such deduction or discount as the Directors
may consider appropriate to reflect the true value thereof.
Notwithstanding the foregoing, the Administrator may, in consultation with the Directors, permit
another method of valuation to be used if it considers that such valuation better reflects the fair value
of the assets. In addition, the Administrator may, in consultation with the Directors, the Manager and,
where relevant, the Valuer, require an Investment in immovable property or other illiquid private equity
Investments to be valued more frequently than semi-annually, if it determines that the value of such
Investment has or may have changed materially since its last semi-annual valuation.
Notwithstanding the foregoing, where at the time of any valuation any asset of a relevant Cell or
attributable to the Cell has been realised or contracted to be realised there shall be included in the
assets of the Cell in place of such asset the net amount receivable by the Cell in respect thereof
provided that if such amount receivable is not payable until some future time after the time of any
valuation the Administrator may make such allowance as it considers appropriate.
The liabilities of a Cell or attributable to a Cell shall be deemed to include all its expenses payable and
such provisions and allowances for contingencies (including tax) payable by that Cell or allocated or
apportioned to that Cell (including accrued Carried Interest, where relevant) and any and all amounts
that may be owing by that Cell but shall exclude the liabilities of another Cell or attributable to another
Cell. In determining the amount of such liabilities the Administrator may calculate any liabilities of a
regular or recurring nature on an estimated figure for yearly or other periods in advance and accrue
the same in equal proportions over any such period or on such other basis as it deems appropriate.
For the purpose of valuing the assets attributable to a Cell the Administrator may, where no Valuer
has been appointed, rely upon the opinions of any persons who appear to it to be competent to value
assets by reason of any appropriate professional qualification or of experience of any relevant market.
29
Temporary suspension of valuation
The Directors acting unanimously are empowered to declare a suspension of the calculation of the
Net Asset Value of a particular Cell, as applicable, and may only do so in any of the following events:
(a)
when one or more stock exchanges or other regulated markets which provide the basis for
valuing any assets of a particular Cell are closed other than for or during weekends or
holidays, or if dealings therein are restricted or suspended or where trading is restricted or
suspended in respect of securities forming a substantial part of the assets of the Cell or
attributable to that Cell;
(b)
when, as a result of political, economic, military or monetary events or any circumstances
outside the control, responsibility and power of the Company, disposal of the assets of the
Cell is not reasonably practicable without this being seriously detrimental to the interests of
the relevant Shareholders, or if, in the opinion of the Directors, a fair price cannot be
calculated for the assets of the Cell or attributable to the Cell;
(c)
in the case of a breakdown of the means of communication normally used for the valuing of
any assets of the Cell or if for any reason the value of any asset of the Cell may not be
determined as rapidly and accurately as required; or
(d)
if, as a result of exchange restrictions or other restrictions affecting the transfer of funds,
transactions on behalf of the Cell are rendered impracticable, or if purchases, sales, deposits
and withdrawals of any assets of a Cell or attributable to a Cell cannot be effected at the
normal rates of exchange, as determined by the Directors.
The Directors' power to suspend the calculation of the Net Asset Value of the relevant Cell in the
circumstances described above shall apply as if references above to “the assets of a Cell or assets
attributable to a Cell” are deemed to include references to any underlying assets representing or
attributable to the assets of that Cell, whether directly or indirectly.
Where applicable, notice of the suspension and its termination will be given to all Shareholders which
have requested redemption of Shares. Where possible, all reasonable steps will be taken to bring
any period of suspension to an end as soon as possible.
Each declaration of a suspension by the Directors shall be consistent with the Laws and such official
rules and regulations (if any) relating to the subject matter thereof as shall have been promulgated by
any authority having jurisdiction over the Company as shall be in effect at the time. To the extent not
inconsistent with such official rules and regulations the determination of the Directors shall be
conclusive.
Where applicable, no issue or redemption of Shares of a Cell shall take place during any period when
the calculation of the Net Asset Value of that Cell is suspended. The Company may withhold
payment of redemption proceeds to persons whose Shares have been redeemed prior to such
suspension until after the suspension is lifted.
30
Fees and Expenses
Management Fee and Carried Interest
The Manager receives a Management Fee from each Cell, which may be calculated as a percentage
of the relevant Cell's aggregate Commitments or Contributions or as otherwise set out in the relevant
Supplemental Memorandum. The Management Fee is a Company Expense attributed to, and
payable out of, the assets of the relevant Cell.
In certain Cells the Carried Interest may be paid to the Manager as a Company Expense attributable
to, and payable out of, the assets of the relevant Cell. Investors are referred to the paragraph headed
"Carried Interest risk" under "Risk Factors" below.
Details as to the calculation of the Management Fee and the Carried Interest are set out in the
relevant Supplemental Memorandum. They are each calculated by the Administrator.
Administration fee
The Company will pay the Administrator an annual fixed basic fee in the sum of US$117,980.
Included in this amount are the Administrator’s fees for the establishment, maintenance and
administration of the Company, its Cells and any special purpose vehicles established as investment
holding vehicles, registered office provision and company secretarial services.
In addition to the above fixed fee, the Administrator will be paid a quarterly variable fee calculated in
respect of the Aggregate Measurement Capital (as defined below), on the following basis:
(a)
in respect of that portion of the Aggregate Measurement Capital which is less than
US$10 million, an annual rate of 10 basis points;
(b)
in respect of that portion, if any, of the Aggregate Measurement Capital which is more than
US$10 million but less than US$100 million, an annual rate of 5 basis points;
(c)
in respect of the portion, if any, of the Aggregate Measurement Capital which is more than
US$100 million, an annual rate of 2.5 basis points.
The variable fee is payable quarterly in arrears based on the prevailing Aggregate Measurement
Capital as at the start of the current calendar quarter.
Aggregate Measurement Capital means the aggregate of the Measurement Capitals of all the Cells.
Measurement Capital relative to a Cell means:
(a)
in relation to each Cell where the full amount of investors’ Commitments is required to be paid
in full upfront at the time that each investor submits its Subscription Agreement, the aggregate
Commitments in relation to that Cell (which will be deemed to be reduced by the amount of
any distributions to made to Shareholders in that Cell); and
(b)
in relation to each Cell where investors’ Commitments are drawn down from time to time upon
issue of a Capital Call:
(i)
during the period up to the end of that Cell’s investment period, the total commitments
of that Cell; and;
(ii)
during the period after that Cell’s investment period, the invested capital of that Cell:
The administration fee shall be payable in US Dollars as a Company Expense out of the assets of
each Cell, pro rata to the Net Asset Value of each Cell.
31
Valuer
The fees of any Valuer appointed by the Company to determine the value of Investments in
immovable property or other illiquid private equity Investments of a Cell will be payable by the
Company as a Company Expense out of the assets of that Cell.
Investment Adviser
The fees of the Investment Adviser in relation to a Cell are payable by the relevant Manager out of its
Management Fee.
Core cell
No fees, expenses or charges will be attributed to the Core Assets.
Auditor
The auditors’ fee and the costs of each audit shall be paid by the Company as a Company Expense
out of the assets of each Cell, pro rata to each Cell's Net Asset Value.
Raising and Establishment Expenses
The Raising and Establishment Expenses incurred in relation to (i) the raising and establishment of
the Company and its first Cell were borne by the Company as a Company Expense out of the assets
of the first Cell, and (ii) the establishment of any additional Cell shall be borne by the Company as a
Company Expense out of the assets of the relevant Cell.
The amount of the Raising and Establishment Expenses borne by the Company is in each case
subject to the maximum amount, if any, specified in the relevant Supplemental Memorandum.
The Raising and Establishment Expenses attributable to a Cell may, at the discretion of the Directors,
be amortised over the life of that Cell or for such shorter period as the Directors may determine.
Other fees and expenses of the Company
The Company will, in addition to the Company Expenses described above, be responsible for the
payment of all other Company Expenses incurred in connection with the operation of the Company,
including the following:
(a)
Acquisition Costs and Disposal Costs;
(b)
third party due diligence, documentation, travel, and other costs, relating to the investigation,
consideration and negotiation of all Investment transactions that have been approved,
whether or not consummated, including Abort Costs;
(c)
third party documentation, travel, and other costs, relating to the investigation, consideration
and negotiation of all Disposal transactions that have been approved;
(d)
any legal, accounting, banking, custody costs, and other professional and consulting fees;
(e)
costs of insurance, including directors and officers liability insurance;
(f)
all taxes, franchise fees, and other regulatory (FSC, etc), stock exchange, and governmental
charges;
(g)
all indemnities and other expenses related to litigation or other claims;
32
(h)
reasonable out-of-pocket and third party costs relating to work on general compliance and the
prevention of money laundering at Portfolio Entities conducted at Company level and not
appropriately assumed by the Portfolio Entities;
(i)
costs and expenses relating to the Directors, the Investment Committee (where relevant) and
the Advisory Board (where relevant) including reasonable travelling, hotel and other expenses
properly incurred by them in attending and returning from meetings of Directors, general
meetings of the Company, meetings of the Investment Committee and meetings of the
Advisory Board, respectively; and
(j)
costs and expenses incurred in connection with establishing and maintaining any escrow
accounts with an independent escrow agents.
Company Expenses which are not attributable to a particular Cell will be allocated pro rata to all Cells.
Manager Expenses
The Manager will be responsible for all of its customary overhead expenses for fulfilling its duties as
manager, including compensation for its employees, rent, reasonable travel expenses approved by
the Directors, utilities and other administrative expenses (Manager Expenses). In addition, each
Manager will, as applicable, bear all other expenses in connection with the operation of the Company
other than those to be borne by the Company as provided above.
33
Distribution policy
The distribution policy of each Cell shall be set out in the relevant Supplemental Memorandum.
Reports and financial statements
The Company’s financial year ends on 31 December each year.
Annual report
An annual report and audited financial statements for the Company in respect of each financial year,
prepared in accordance with International Financial Reporting Standards, will be sent to Shareholders
as soon as practicable and in any event within 90 days of the end of the Company’s financial year.
Monthly reports
Monthly reports for a Cell will be sent to Shareholders in that Cell within 8 Business Days of each
calendar month end. Monthly reports will include details in relation to the following, as applicable:
(a)
total Commitments;
(b)
schedule of Contributions received up to that month end date;
(c)
Unfunded Commitments;
(d)
Capital Calls;
(e)
issued Share capital;
(f)
total number of Shares allotted;
(g)
Net Asset Value per Share; and
(h)
Net Asset Value of the Cell.
An independent valuation of immoveable property Investments in each Cell is performed semiannually on 30 June and 31 December and, due to the length of time taken to obtain a valuation
report in each case, any change in value will only be reflected in the monthly reports issued 90 days
after those dates. Accordingly, by way of an example, a revised valuation of an immoveable property
measured as at 31 December, will only reflect in the monthly report for the end of March of the
succeeding year.
Quarterly reports
Quarterly reports for a Cell will be sent to Shareholders in that Cell within 20 Business Days of each
calendar quarter end. Quarterly reports will include details in relation to the following, as applicable:
(a)
total Commitments;
(b)
schedule of Contributions received up to the quarter end date;
(c)
Unfunded Commitments; and
(d)
Shareholder return summary.
34
A quarterly management report for a Cell will also be sent to Shareholders in that Cell within 20
Business Days of each calendar quarter end. Quarterly management reports will include details in
relation to the following, as applicable:
(a)
statement of assets and liabilities;
(b)
statement of operations;
(c)
cash flow statement; and
(d)
statement of changes in capital.
General
Reports will be posted or, upon request, emailed to each Shareholder. Audited financial statements
will also be made available for inspection by Shareholders at the offices of the Administrator and the
registered office of the Company.
35
Conflicts of Interest
The key persons of the Manager devote a part of their time to the business of the Company and also
devote a part of their time to other activities including the management of other funds. There may be
situations in which the interests of the Company or a Cell may conflict with the interests of the
Manager and its shareholders, officers, directors, partners and employees. Subject to the terms of
the relevant Supplemental Memorandum, the Manager, the Directors and, where relevant, the
members of the Investment Committee must submit any actual or potential conflicts of interest relating
to the Company or a Cell to the relevant Advisory Board for consideration. Where a particular Cell
does not have an Advisory Board, such conflicts of interest or potential conflicts of interest relating to
the Company or that Cell shall be referred to the Directors.
Any Shareholder may (in its sole discretion) refer any conflict of interest to the Advisory Board or the
Directors, as appropriate.
Any Director or member of the Advisory Board which has an actual or potential conflict of interest in
relation to any matter being decided by the board of Directors or Advisory Board, respectively, shall
not be entitled to cast any vote in respect of such matter.
In the event that any Directors, their spouses or their minor children have any interest in any Shares or
any options in respect of any Shares, they are required to disclose such interests to the Advisory Board
or the Directors, as appropriate. Save as listed herein, no Director is materially interested in any
contract or arrangement subsisting at the date hereof which is unusual in its nature and conditions or
significant in relation to the business of the Company.
Dhanraj Boodhoo is an officer of the Manager which receives a Management Fee and may receive
Carried Interest. Brett Childs is an officer of the Administrator which receives an administration fee from
the Company.
36
Co-Investment
The co-investment policy relating to each Cell, if any, is set out in the relevant Supplemental
Memorandum.
There may be cases where an investment opportunity is appropriate for more than one Cell. In some
cases, several Cells may invest in a Portfolio Entity, whether simultaneously or at different times,
whilst in other cases a Cell which is exiting an investment may sell all or a portion of its investment to
one or more other Cells. The policy and process to be followed by the Board in any of the
circumstances described above is set out in the Company’s Co-Investment Policy for Cells (see the
Schedule hereto).
37
Risk Factors
The following considerations should be carefully evaluated before making a subscription for Shares.
General
A subscription for Shares involves a high degree of risk. Subscriptions in the Company should be
deemed as highly speculative and should be made only by sophisticated investors who are able to
bear the risk of complete loss of a subscription in the Company. Potential investors should be aware
of the risks associated with each Cell’s investment programme and are advised to consult with their
professional advisors, such as lawyers, financial advisors, accountants or tax advisors when
determining whether Shares are a suitable investment for them. There can be no assurance that the
Company's or a Cell’s objectives will be realised or that there will be any return of capital.
It should be appreciated that the value of Investments and the income from them may go down as
well as up and that Shareholders may not receive at the end of the life of a Cell or on redemption, the
amount that they invested.
Foreign countries
Investments in foreign jurisdictions pose high risks including risks in relation to currency fluctuations,
smaller capital markets, limited liquidity, price volatility and restrictions on foreign investment.
Dependence on the Manager
The success of each Cell depends on the skill and acumen of its Manager, and more particularly the
individuals involved in the decision making of the Manager. The likelihood that Shareholders will
realise income or gain depends on the skill and expertise of the Manager. The key persons of a
Manager may devote a part of their time to the business of the Company and also devote a part of
their time to other activities without presenting such opportunities to the Company. If any of these
individuals should cease to participate in the Company’s business, the Company’s ability to select
attractive Investments for each Cell and manage its portfolio could be severely impaired. All
Investments and strategies are proposed by the Manager.
Limited liquidity of Investments
Investments, such as immovable property, in which a Cell may invest may be relatively illiquid. A Cell
may not be able to liquidate its Investments promptly if the need should arise and this could affect
materially and adversely the amount of gain or loss the Cell may realise.
A Cell may invest in shares in private companies and/or in restricted securities that are subject to
substantial holding periods or that are not traded in public markets. Shares in private companies and
restricted securities generally are illiquid and are difficult or impossible to sell at prices comparable to
the market prices of similar securities that are publicly traded. No assurance can be given that any
such shares in private companies or restricted securities will be eligible to be traded on a public
market even if a public market for securities of the same type were to develop. It is highly speculative
as to whether and when an issuer will be able to register its securities so that they become eligible for
trading in public markets.
Investment selection
A Manager may recommend Investments for a Cell on the basis of information and data filed by the
issuers of such securities with various government regulators or made directly available to the
Manager by the issuers of securities and other instruments or through sources other than the issuers.
Although the Manager evaluates all such information and data and seeks independent corroboration
38
when it considers it appropriate and when it is reasonably available, the Manager is not in a position
to confirm the completeness, genuineness or accuracy of such information and data, and in some
cases, complete and accurate information is not readily available.
Concentration of Investments
A Cell’s investment portfolio may consist of a single asset or the securities of a single issuer. A Cell
may not have sufficient funds to diversify its Investments. Although market economists have
expressed differing views as to the effectiveness of diversification in reducing investment risk by
concentrating investments in several, relatively large security positions or industries, a loss in any one
position or a downturn in a sector in which a Cell is invested could materially reduce the Cell’s
performance. Thus, any investment by a Cell in the securities of a single issuer or the concentration of
a Cell’s investments in a particular industry may increase the level of risk.
Back-office operations
Any one or more of the service providers to the Company, including the Manager or the Administrator,
the Valuer (where relevant), the Principal Banker or any other service providers may, to the extent
permitted by applicable law, outsource some or all of their back-office operations relating to the
Company to third-party service providers. This can potentially expose the Company and its Members
to the risk of sensitive information being inadvertently provided to unauthorised persons.
Tax
Tax regulations differ from country to country and taxation laws applicable to derivative
incomes/losses may be different in various jurisdictions. The Company does not offer tax advice and
this PPM and any Supplemental Memorandum do not constitute tax advice or tax information on
which investors may rely. Investors are requested to seek independent tax advice.
Levels and bases of taxation in the relevant countries may change. The taxability of the income of the
Company would also be dependent upon the Double Taxation Avoidance Agreements between
Mauritius and the countries where Investments are undertaken (if any). Changes in tax regulations
may impact the Company’s operations and profitability.
There can be no assurance that these agreements will continue to be in full force and effect during
the existence of the Company or that the Company will continue to enjoy the benefit of any tax
treaties.
There can be no guarantee that the Company will not be regarded by the South African Revenue
Service as a “controlled foreign company” under the South African Income Tax Act and that as such a
pro rata portion of the income of the Company will not be imputed to its South African resident
Shareholders. Similarly, there can be no guarantee that any distributions made by a Cell to its South
African resident Shareholders, whether by way of dividend, a redemption of Shares, or otherwise, will
not be classified as “foreign dividends” taxable in the hands of such South African resident
Shareholders.
Political risks
Many countries of the Region have undergone a substantial political and social transformation
including from centrally controlled socialist systems to the early stages of a market-oriented
democracy. There can be no assurance that the economic, educational and political reforms
necessary to complete political and economic transformation have been effective or will continue.
The state of development of many political systems in the Region makes them susceptible to changes
and potential weakening from economic hardship, popular dissatisfaction with privatisation efforts and
social or ethnic instability. In some countries, popular dissatisfaction with recent economic and social
dislocations resulting in part from the rapid pace of privatisation may lead to revisions or rejection of
39
current laws and policies favoring economic reform. There can be no assurance that economic
reform will continue or, if continued, will proceed at the same pace.
Civil unrest, ethnic conflict or regional hostilities may contribute to instability in some countries of the
Region. Coups d’états may occur or civil wars may break out. Such instability may impede business
activity and adversely affect the environment for foreign investments, thereby having a material
adverse impact on the value of Investments.
Political reform among countries of the Region has not proceeded at a consistent pace or reached
significant depth. Many countries and their infrastructure sectors are still administered by government
officials and members of local bureaucracies that oppose political and economic liberalisation, which
could pose additional risks to Investments.
Economic risks
In many countries of the Region, the extent of the success of economic reform is difficult to evaluate.
Information on these economies is often contradictory or incomplete. Inflation rates have decreased
dramatically, but remain high compared to more developed economies, GDP growth rates have
begun to increase following the marked declines of the early period of transition, but increases in GDP
are affected by a variety of factors beyond the Manager’s control. In several countries of the Region,
large sections of the workforce remain under-employed or unemployed. Continued unemployment
could hinder the ability of various governments to keep deficit spending in check. In addition, growth
of the banking sector throughout the Region, combined with relatively little regulation, has raised
doubts about the safety and soundness of certain financial institutions in the countries of the Region.
A banking crisis combined with government deficits and/or increased inflation has the potential to
cause a rapid decline in the value of the currency in the countries of the Region. Such devaluation
could have a negative impact on the Company’s performance.
Market institutions have not yet developed in such a way as to allocate resources efficiently among
firms. At the micro-economic level, the success of economic reforms across the Region is also difficult
to evaluate. Price controls are largely absent, but many firms are squeezed between rising costs of
inputs and weak demand for their products. Management in many enterprises continues to resist
economic reform and the full transition to a market-based economy. Enterprises continue to operate
under inefficient management structures with little accountability. Capital and advanced technology
are in short supply. While basic bankruptcy laws are evolving, there is insufficient experience in many
countries of the Region to assure that such laws will permit the orderly liquidation of inefficient
industries.
An estimated 25 million people are living with HIV in sub-Saharan Africa. There appears to be
stabilization in HIV prevalence rates, but this is mainly due to a rise in AIDS deaths and a continued
increase in new infections. Prevalence is still rising in some countries such as Madagascar and
Swaziland, while trends are more positive in others such as Uganda. Sub-Saharan Africa is home to
just over 12% of the world’s population — and almost two-thirds of all people living with HIV. In 2005,
an estimated 3.2 million Africans became newly infected and 2.4 million died. The prevalence of AIDS
could adversely affect African businesses and the prospects for future economic development in the
Region.
Legal risks
Most countries in the Region have legal systems which may not be capable of providing significant
protection to investors. Many countries lack highly developed legal systems or any high degree of
sophistication in the law and practices of commercial law. Laws affecting international investment and
business may not be certain, and the law and practice of business may not be in line with international
best practice. The local legal systems may suffer material ineffectiveness, lack of transparency and
uncertainty. Corruption may be rife in some areas. Laws may change unexpectedly. Broad
discretion and sometimes lack of appropriate training on the part of government authorities
implementing the laws may produce additional legal risk. Further complicating the legal environment,
40
a number of older socialist-era laws remain technically in force in many countries of the Region and
continue to raise often intractable issues of legal compliance. There can be no assurance that the
regulatory environment in which the Company will be operating will become stable in the future. The
burden of complying with conflicting or onerous laws, or difficulties in clarifying or enforcing rights,
may have a material adverse impact on the operations of the Company.
The laws in the Region regulating ownership, control and corporate governance of companies are
often fairly undeveloped and not in line with best international practice. In many countries of the
Region, existing laws offer limited protection, if any, to minority shareholders. Management or
controlling shareholders may be able to take actions against the interests of minority shareholders
which could result in share dilution and other adverse effects. There is very little regulation of
securities markets in certain of these countries.
Even where substantial revisions have been made to commercial laws in countries in the Region, the
judicial and civil procedures have not been significantly modernised. Courts in the Region largely lack
experience in commercial dispute resolution, and many of the procedural remedies for enforcement
and protection of legal rights typically found in more developed jurisdictions are not available in such
countries. The extent to which local parties and entities, including local governmental agencies, will
recognise the contractual and other rights of the parties with which they deal is uncertain. The
Company may therefore be unable to protect and enforce its rights. The Company may also
encounter difficulties enforcing judgments of foreign courts or arbitration awards in the Region, or
those of courts of the Region in foreign jurisdictions, due to the relatively limited number of countries
that have signed treaties for mutual recognition of court judgments or arbitration with countries in the
Region.
Crime and corruption
Organised crime and corruption, including extortion and fraud, are common in many countries of the
Region. Property and employees of the Company and its portfolio companies may be targeted as
potential victims of theft, violence or extortion. Threats or incidents of crime may cause or force the
Company to cease or alter certain activities or liquidate certain investments, which may cause losses
or otherwise have a material adverse effect on the Company. Moreover, in most countries in the
Region, there historically have existed ties between government, agencies or officials and private
economic sectors that have resulted and could in the future result in preferential treatment, inefficient
resource allocation, arbitrary decisions and other practices or policies that could have a material and
adverse effect on Investments.
Environmental risks
The Company may face significant environmental liability in connection with Investments in the
Region. The historical lack of environmental regulation in the Region has led to widespread pollution
of air, ground and water resources, The legislative framework for environmental liability has not been
fully established or implemented. The extent of the responsibility, if any, for the costs of abating
environmental hazards may be unclear when the Company is considering any particular Investment.
The Company could experience material losses due to these risks.
Where possible, the Company will endeavor to seek indemnification for or other mitigation of
environmental risks from the enterprises in which it invests or from the sellers of such companies.
However, no assurance can be given that such indemnities will be available or that, if obtained, they
can be effectively enforced.
Restrictions on trade
Compliance with trade restrictions including but not limited to quotas, tariffs, customs duties and other
assessments may significantly increase the cost of obtaining needed goods and ultimately reduce the
amount that is realised upon the sale of Investments. In addition, delays in obtaining license
approvals and authorisations are common and may adversely affect the operations of Investments.
41
Currency risks
The Company will invest in instruments denominated in various currencies, which may be subject to
exchange rate fluctuations with consequent reductions in the US Dollar value. The repatriation of
capital may be hampered by changes in regulations concerning exchange controls or political
circumstances.
In addition, where relevant, the costs and risks of any foreign exchange transactions effected
(whether by an applicant for Shares or a Shareholder, as appropriate, or by the Administrator or the
Company) in relation to any subscriptions, redemptions, dividend payments or any other distributions
to Shareholders will be borne by the applicant for Shares or the Shareholder, as appropriate.
Co-investment credit risk
In circumstances where a Cell co-invests with other investors and/or finance providers through an
SPV formed in the country where the property is developed, the Cell may only hold equity in the SPV
and any claims it has for the return of its capital may, depending on the structure, be subordinated to
the claims of other investors and/or finance providers.
Limited control by Shareholders
The Directors may under certain circumstances suspend redemptions (refer to the paragraph headed
"Temporary suspension of valuation" under "Valuations" above) or compulsorily redeem Shares (refer to
the section headed "Redemptions" above). Further, any Share transfer requires the approval of the
Directors. In certain Cells, the voting rights of the Shareholders of the relevant Class of Shares may be
restricted to a right of veto in respect of any proposed changes to the rights attaching to that Class of
Shares.
Further, all or any of the rights attached to any Class of Shares for the time being issued may from time to
time be altered or abrogated with the consent in writing of the holders of not less than three-fourths of the
issued Shares of that Class or with the sanction of a Special Resolution passed at a separate general
meeting of the holders of such Shares (refer to the paragraph headed "Modification of Class rights"
under "General and statutory information" below).
These limitations on the rights of Shareholders may adversely affect the Shareholders’ ability to realise
their investment.
Carried Interest risk
Although the Carried Interest is an important aspect of motivating the Manager and aligning the
Manager’s interests with the performance of each Cell's Investments, it may create an incentive for the
Manager to take higher risks in making Investments than it would otherwise not take in the absence of
such Carried Interest. In the event that a Cell's Investments fail to achieve target rates of return, the
failure of the Cell to achieve Carried Interest will reduce the Manager’s incentive in the Cell’s overall
performance.
In certain Cells, Carried Interest may be paid to the Manager as a Company Expense attributable to,
and payable out of the assets of, the relevant Cell and as such the Carried Interest will be paid to the
Manager prior to the distributions of any profits and/or distributable reserves to Shareholders in the
relevant Cell.
Emerging markets
The Company may also invest in securities in emerging markets. Investing in the securities of issuers
in emerging markets involves certain risks and special considerations not typically associated with
investing in other more established economies or securities markets. Such risks may include (i) the
risk of nationalisation or expropriation of assets or confiscatory taxation; (ii) social, economic and
42
political uncertainty including war; (iii) dependence on exports and the corresponding importance of
international trade; (iv) price fluctuations, less liquidity and smaller capitalisation of securities markets;
(v) currency exchange rate fluctuations; (vi) rates of inflation (including hyperinflation); (vii) controls on
foreign investment and limitations on repatriation of invested capital and on the Company’s ability to
exchange local currencies for US Dollars; (viii) governmental involvement in and control over the
economies; (ix) governmental decisions to discontinue support of economic reform programs
generally and to impose centrally planned economies; (x) differences in auditing and financial
reporting standards which may result in the unavailability of material information about issuers; (xi)
less extensive regulation of the securities markets; (xii) longer settlement periods for securities
transactions in emerging markets; and (xiii) less developed corporate laws regarding fiduciary duties
of officers and directors and the protection of shareholders.
Illiquidity
It is not anticipated that there will be an active secondary market for the Shares and it is not expected
that such a market will develop. An investment in the Company is therefore a relatively illiquid
investment.
Distributions in specie
Distributions may in certain circumstances be made in non-cash consideration. There can be no
guarantee that the Company will in these circumstances be able to effect transfer of title in respect of
the relevant Investment(s) to the relevant Shareholder timeously or at all. Transferring Investments to
a Shareholder may result in the relevant Cell and/or the relevant Shareholder incurring significant
costs and expenses including but not limited to legal and conveyancing fees, transfer and/or stamp
duties, registration fees, agency fees, surveyor fees and valuation fees.
PCC structure
The PCC is a relatively new form of entity under the Laws. As such, there is no detailed body of
existing case law that assists in interpreting or applying the specific statutory provisions of the PCC
Act.
A PCC must inform any person with whom it transacts that it is a PCC and identify the particular Cell
with which that person is transacting. Some jurisdictions, however, may not recognise the concept of
a PCC. A PCC is one single legal person and though it may create one or more cells, those cells do
not constitute legal persons separate from the PCC.
Competition
The Company may be competing with other funds, as well as other investors and corporate buyers,
for the investments that a Cell will make. As a result of this competition, there may be fewer
attractively priced opportunities than would otherwise be available, which could have an adverse
impact on the ability of (or length of time required for) the Company to invest and the terms on which
investments can be made.
Regulatory risk
There can be no guarantee that the Company will not lose its FSC approval and/or its TRC.
Amortisation of Raising and Establishment Expenses
The financial statements of the Company will be prepared in accordance with International Financial
Reporting Standards (IFRS). IFRS does not permit the amortisation of Raising and Establishment
Expenses. Notwithstanding this a Cell may, at the discretion of the Directors, amortise the Raising
and Establishment Expenses attributable to the Cell over its life or for such shorter period as the
Directors may determine, and if it does so, the financial statements may be qualified in this regard.
43
The factors listed above are not intended to be exhaustive. Prospective investors are encouraged to
consider any other risks which may be relevant to them and to seek professional advice.
44
Taxation
The following information is a summary of certain tax considerations but is not intended to be a
complete discussion of all tax issues relating to the Company. The information is based on the
Company’s understanding of certain aspects of the law and practice currently in force in Mauritius.
No liability is accepted for, and prospective investors are not entitled to rely on, this section. There
can be no guarantee that the tax position or proposed tax position at the date of this PPM or at the
time of a subscription in the Company will endure indefinitely. Investors should consult their
professional advisers on the possible tax and other consequences of their subscribing for, purchasing,
holding, selling or redeeming Shares under the laws of their country of incorporation, establishment,
citizenship, residence or domicile. The Company, the Directors, the Administrator and the Manager
shall have no liability in respect of the individual tax affairs of the Shareholders or in respect of the
information in this section.
Mauritius
The Company is required to provide an undertaking to the MRA that it is and will be centrally
managed and controlled in Mauritius. The MRA has issued a TRC to the Company. The MRA issues
a TRC to an applicant if it is centrally managed and controlled in Mauritius. In order to satisfy the
MRA that it is centrally managed and controlled in Mauritius, the Company must:
(a)
have at least 2 directors who are resident in Mauritius, who are appropriately qualified and are
of sufficient calibre to exercise independence of mind and judgment;
(b)
keep and maintain at all times, its accounting records at its registered office in Mauritius;
(c)
shall maintain or is maintaining at all times its principal bank account in Mauritius;
(d)
prepare its statutory financial statements and cause such financial statements to be audited in
Mauritius; and
(e)
shall provide or provides for meetings of directors to include at least 2 directors from
Mauritius; and
(f)
is administered from Mauritius.
The Financial Services Commission has issued further guidelines, to which category 1 global
business companies must comply by 1 January 2015, whereby in addition to the above requirements
the FSC may consider whether a company meets at least one of the following criteria when
determining whether a corporation is managed and controlled from Mauritius:
(a)
the corporation has or shall have office premises in Mauritius; or
(b)
the corporation employs or shall employ on a full time basis at administrative/technical level,
at least one person who shall be resident in Mauritius; or
(c)
the corporation’s constitution contains a clause whereby all disputes arising out of the
constitution shall be resolved by way of arbitration in Mauritius; or
(d)
the corporation holds or is expected to hold within the next 12 months, assets (excluding cash
held in bank account or shares/interests in another corporation holding a Global Business
Licence) which are worth at least US$100,000 in Mauritius; or
(e)
the corporation’s shares are listed on a securities exchange licensed by the Commission; or
45
(f)
it has or expected to have a yearly expenditure in Mauritius which can be reasonably
expected from any similar corporation which is controlled and managed from Mauritius.
A TRC is currently renewable on an annual basis.
Under the provisions of the Mauritian Income Tax Act 1995, the Company is currently taxed on its
income at the rate of 15%. It is entitled to claim a tax credit on foreign source income at a rate which
is the higher of the actual foreign tax paid (including underlying tax where the Company holds more
than 5% of the issued capital of a foreign company) on such income or a deemed foreign tax
representing 80% of the Mauritius tax on such income, resulting in an effective tax rate on net income
of not more than 3%.
Tax is levied on the Company as whole (and not on individual Cells) and is allocated proportionately
to the Cells based on the respective income of each Cell.
Currently, no capital gains tax is payable in Mauritius in respect of the Company's realised
investments. Profits or capital gains made by the Company on disposal of securities are exempt from
income tax in Mauritius. Dividends and redemptions proceeds paid by the Company to Shareholders
are exempt in Mauritius from any withholding tax.
Levels and bases of taxation in the relevant countries may change. The taxation of the income of the
Company may also depend upon the Double Taxation Avoidance Agreements (DTAA) between
Mauritius and the countries where Investments are undertaken. Changes in tax regulations may
impact on the Company’s operations and profitability.
There can be no assurance that these DTAA will continue to be in full force and effect during the
existence of the Company or that the Company will continue to enjoy the benefit of the DTAA.
All exchange control regulations have been suspended in Mauritius. Payments made to or by the
Company are therefore not restricted by exchange control regulations in Mauritius. The suspension of
these exchange control regulations may be lifted at any time. Although it is unlikely that the
suspension of exchange control regulations will be lifted, there can be no assurance this will not
happen.
General
The receipt of dividends (if any) by Shareholders, the redemption, transmission or transfer of Shares
and any distribution on a winding up of the Company or a Cell may result in a tax liability for the
Shareholders according to the tax regime applicable in their various countries of residence,
citizenship or domicile. Shareholders resident in or citizens of certain countries which have antioffshore fund legislation may have a current liability to tax on the undistributed income and gains of
the Company or any Cell.
46
General and statutory information
The information in this section includes a summary of some of the provisions of the Constitution and
material contracts described below, and is provided for general information only. In the event of a
conflict between this PPM and the terms of a material contract, the latter shall prevail.
The Company and the Cells
Subject to procuring prior approval from the FSC, the Directors may create new Cells at their
discretion.
Save as provided in the Constitution, all Shares and Core Shares shall be under the control of the
Directors who may allot and dispose of or grant options over the same to such persons, on such
terms and in such manner as they may think fit.
Core Shares
The Core Shares have been created in order that the Shares may be issued. No Core Shares shall at
any time be held otherwise than by such person as may be approved by the Directors. Each Core Share
will confer on its holder the right to one vote at general meetings of the Company.
No dividends shall be payable to the holders of Core Shares. In the event of winding-up, the Core
Shares shall rank pari passu inter se but only for return of the nominal amount paid upon them (after
return of the nominal amounts paid up on the Shares). The provisions relating to the distribution of
assets in winding-up are more fully set out under the section headed “Winding up” below. The Core
Shares are not redeemable and do not carry any rights of pre-emption.
As at the date of the PPM, the Directors have authorised the issue of up to one Core Share. One
Core Share has accordingly been issued to the Core Shareholder for US$1.00 and is fully paid up.
Shares
Each Share shall not confer on its holder the right to exercise any vote, except on such matters on
which it is entitled to vote as set out in the Constitution, this PPM and the relevant Supplemental
Memorandum.
The Shares do not carry any rights of pre-emption.
Pursuant to the Companies Act, the Directors will pass an appropriate resolution, authorising the
issue of the relevant number of Shares, in respect of each approved Subscription Agreement. The
Directors shall not be bound to register more than four persons as joint holders of any Share.
Modification of Class rights
Subject to the provisions of the Laws, all or any of the rights for the time being attached to any Class of
Shares for the time being issued may (unless otherwise provided by the terms of issue of the Shares of
that Class, the relevant Supplemental Memorandum, or the Constitution) from time to time (whether or
not the Company is being wound up) be altered or abrogated with the sanction of a Special Resolution of
the holders of such Class of Shares.
The rights attached to any Class of Shares shall (unless otherwise expressly provided by the conditions
of issue of such Shares, the relevant Supplemental Memorandum, or the Constitution) be deemed not to
be varied by:
(a)
the creation, allotment or issue of further shares ranking pari passu therewith;
47
(b)
the creation, allotment or issue of Core Shares;
(c)
the creation allotment, issue or redemption of Shares of that Class; or
(d)
by the winding up of the Company or the relevant Cell.
Proposals that would result in a variation of all or any of the rights for the time being attached to any
Class of Shares for the time being issued where such variation will materially disadvantage a
Shareholder(s) shall require the consent of that Shareholder(s).
Transfer of Shares and Core shares
No transfer of Core Shares may be effected without the prior written consent of the Directors.
A Shareholder may transfer all but not some of its Shares, subject to the restrictions set out below and
to any requirements set out in the relevant Supplemental Memorandum.
All transfers of Shares shall be effected by a written instrument of transfer. The instrument of transfer
of a Share shall be signed by or on behalf of the transferee and the transferor and shall be in such
form as shall be specified by the Company. All instruments of transfer which shall be registered shall
be retained by the Company but any instrument of transfer which the Directors may decline to register
shall (except in any case of fraud) be returned to the person depositing the same. A Shareholder may
not transfer Shares unless:
(a)
the instrument of transfer is deposited at such place as the Directors may reasonably require,
accompanied by such other evidence as the Directors may reasonably require to demonstrate
the right of the transferor to make the transfer; and
(b)
the instrument of transfer relates to Shares of one Class only.
The transferor shall be deemed to remain the holder of the Share until the name of the transferee is
entered in the register of Members. If the transferee is not already a Shareholder, he will be required
to complete a Subscription Agreement.
Shares may not be transferred to any person which is not a Qualified Holder and an Expert Investor
and/or in respect of which relevant anti-money laundering checks have not been performed. Shares
may also not be transferred if they are not fully paid either in terms of the issue thereof or in
accordance with the Constitution (including any call made thereon).
The Directors shall refuse or shall delay the registration of any transfer of any Share, where:
(a)
so required by the Laws;
(b)
registration would impose on the transferee a liability to the Company and the transferee has
not signed the instrument of transfer;
(c)
the instrument transfer is not accompanied by such proof as the Directors reasonably require
as to the right of the transferor to make the transfer; or
(d)
the Company has a lien of the Shares.
The registration of transfers may be suspended at such times and for such periods as the Directors
may from time to time determine, provided always that such registration of transfers shall not be
suspended for more than thirty days in any year.
48
Transmission of Shares
In case of the death of a Shareholder, the survivors or survivor where the deceased was a joint
holder, and the executors or administrators of the deceased where he was a sole or only surviving
holder, shall be the only persons recognised by the Company as having title to his interest in the
Shares, but nothing in this clause shall release the estate of the deceased holder whether sole or joint
from any liability in respect of any Share solely or jointly held by him.
A person so becoming entitled to a Share in consequence of the death or insolvency of a Shareholder
shall have the right to receive and may give a discharge for all moneys payable or other advantages
due on or in respect of the Share, but he shall not be entitled to receive notice of or to attend or vote
at meetings of the Company, nor save as aforesaid, to any of the rights or privileges of a Shareholder
unless and until he shall be registered as a Shareholder in respect of the Share provided always that
the Directors may at any time give notice requiring any such person to elect either to be registered
himself or to transfer the Share and if the notice is not complied with within ninety days, the Directors
may thereafter withhold all moneys payable or other advantages due in respect of the Share until the
requirements of the notice have been complied with.
Commissions
Save as disclosed herein, or in any applicable Supplemental Memorandum, no commissions, discounts,
brokerages or other special terms have been granted or are payable by the Company in connection with
the issue or sales of any capital of the Company.
Meetings of Members and of the Directors
Annual Meetings will be held or chaired from Mauritius. Notices convening each Annual Meeting will be
sent to Members together with the annual reports and financial statements not later than twenty-one
days before the date fixed for the meeting.
The procedures for Members meetings and Director meetings, including quorum provisions are set
out in the Constitution.
Directors
The Directors shall be entitled to such remuneration as may be voted to them by the Core Shareholder
(by Special Resolution). Such remuneration shall be deemed to accrue from day to day. The Core
Shareholder may (by Special Resolution) in addition to such remuneration grant special remuneration to
any Director who, being called upon, shall perform special or extra services to or at the request of the
Company.
There are no existing or proposed service contracts between any of the Directors and the Company and
there is no fixed retirement age for Directors.
Investment Committee and Advisory Board
The remuneration of the members of any Investment Committee and any Advisory Board is in each case
set out in the relevant Supplemental Memorandum, where relevant.
Borrowing
Subject to the Laws and any restrictions set out in the relevant Supplemental Memorandum, the
Directors are authorised under the Constitution to exercise all the powers of the Company to borrow
money (including the power to borrow for the purpose of redeeming Shares) and hypothecate, mortgage,
charge or pledge its undertaking, property, and assets or any part thereof, and to issue debentures,
debenture stock or other securities, whether outright or as collateral security for any debt, liability or
obligation of the Company or any third party.
49
As at the date of this PPM, the Company has no loan capital (including term loans) outstanding or
created but unissued, and no outstanding mortgages, charges or other borrowings or indebtedness in
the nature of borrowings, including bank overdrafts and liabilities under acceptances or acceptance
credits, hire purchase of finance lease commitments, or guarantees or other contingent liabilities.
Material contracts
The following contracts, not being contracts entered into in the ordinary course of business, have
been entered into by the Company and are, or may be, material:
(a)
The Management Agreement relating to each Cell, pursuant to which the Manager is
appointed as manager to that Cell. Details in relation to the material terms of each
Management Agreement are set out in the relevant Supplemental Memorandum.
(b)
The Investment Advisory Agreement relating to each Cell, pursuant to which the Manager
appoints the Investment Advisor to provide it with investment advice in relation to the
Investments of that Cell. Details in relation to the material terms of each Investment Advisory
Agreement are set out in the relevant Supplemental Memorandum.
(c)
The Administration Agreement, pursuant to which the administrator is appointed as
Administrator of the Company. The Administration Agreement details the functions, duties
and powers of the Administrator and the fees payable to the Administrator. Under the
Administration Agreement, the Company indemnifies the Administrator against any liability or
claim to or from (a) any Member (or any shareholder in any holding company of the
Company); or (b) the custodian of the Company (including any reasonable costs or expenses
incurred in connection with properly and reasonably defending any such claim) as a result of
any such person relying on any calculation, statement or action published, prepared or made
in good faith by the Administrator, unless such claim or liability arises from the gross
negligence, fraud, bad faith or wilful default in the performance or non-performance by the
Administrator or its employees, officers or agents of its obligations or functions. The
Company also indemnifies the Administrator from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, claims, demands, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed on or
properly incurred by or against the Administrator howsoever arising (other than by reason of
gross negligence, fraud or wilful misconduct on the part of the Administrator) in connection
with the provision of the services under the Administration Agreement. The Administration
Agreement may be terminated by the Company on 30 (sixty) calendar days’ written notice to
the Administrator.
Documents available for inspection
Copies of the following documents may be inspected free of charge during normal business hours on
any week day (Saturdays and public holidays excepted) at the offices of the Administrator or at the
registered office of the Company:
(a)
the Constitution;
(b)
the relevant Management Agreement;
(c)
the relevant Investment Advisory Agreement;
(d)
the Administration Agreement;
(e)
the PPM;
(f)
the relevant Supplemental Memorandum; and
50
(g)
any interim financial statements published by the Company and, when available, the audited
financial statements of the Company.
Investor acting as agent
The Company recognises an investor in the Company and not the underlying clients of the investor or
any others with a beneficial interest in the investor's Shares. No contractual relationship will be
created or is envisaged with clients of the investor or any beneficial holders of the investor's Shares.
The Company shall not be bound to act in accordance with the instructions of any person other than
the investor (but shall be entitled to act in accordance with all instructions given by the investor or
purporting to be given by the investor) and the Company's liabilities under the Constitution, this PPM,
the relevant Supplemental Memorandum and the Subscription Agreement shall be fully discharged by
the Company performing such action in favour of the investor notwithstanding any instructions that the
Company may receive from the investor's principal or any notice that the Company may receive that
authority of the investor to act on behalf of its principal has been revoked or varied.
Restriction on auditor's liability
An engagement letter entered into between the Company and PricewaterhouseCoopers Ltd (PWC),
the Company's auditors, contains provisions limiting the liability of PWC for loss or damage arising
from or in relation to the services provided by PWC under its engagement. Such liability, whether in
respect of loss or damage arising from breach of contract, tort, or otherwise, is limited to an amount
equal to three times the fee payable by the Company for the services provided by PWC under its
engagement.
Governing law
The PPM, each Supplemental Memorandum, the Subscription Agreement and the Constitution are
governed by the laws of Mauritius. Any dispute between the Company and an investor shall be
submitted to arbitration in Mauritius under the Rules of Arbitration of the Permanent Commercial
Arbitration Court of the Mauritius Chamber of Commerce and Industry by one arbitrator appointed in
accordance with such rules. The seat (legal place) of the arbitration shall be Mauritius and
proceedings will be conducted in English. Nothing in this PPM shall preclude any party to the
arbitration from seeking interlocutory relief in any court having jurisdiction pending the institution of
appropriate proceedings for the enforcement of any rights under this PPM, the relevant Supplemental
Memorandum and the Constitution. The decision of the arbitrator shall, in the absence of manifest
error, be final and binding on the parties to the arbitration and may be made an order of Court at the
instance of any party to the arbitration.
Privacy policy
The Manager considers privacy to be fundamental to its relationship with its clients and their investors
and is committed to maintaining the confidentiality, integrity and security of its current and former
clients' non-public information. Accordingly, the Manager has developed internal policies to protect
confidentiality while allowing investors' needs to be met.
In the course of its Subscription duties, the Manager may receive certain non-public information in
relation to Shareholders from sources such as the Subscription Agreement. The Manager will not
disclose any non-public personal information about Shareholders, except to its affiliates and service
providers as allowed by applicable law or regulation or if required by the Laws or any stock exchange.
In the normal course of serving its clients, including the Company, information the Manager collects
may be shared with entities that perform various services such as the Investment Adviser, its
accountants, attorneys, the Administrator, transfer agent, custodians, broker-dealers and marketing
service firms. Specifically, the Manager may disclose to these service providers non-public personal
information including:
51
(a)
information the Manager receives on Subscription Agreements, such as name, address,
account or tax identification number and the types and amounts of investments; and
(b)
information about transactions with the Manager, its affiliates or others, such as participation
in other investment programs, ownership of certain types of accounts or other account data.
Any party that receives this information will be required to use it only for the services required and as
allowed by applicable law or regulation, and is not permitted to share or use this information for any
other purpose. To protect the personal information of individuals, the Manager permits access only by
authorised employees who need access to that information to provide services to the Company and
its investors. In order to guard investors' non-public personal information, the Manager maintains
certain physical, electronic and procedural safeguards. An individual investors' right to privacy
extends to all forms of contact with the Company or Manager, including telephone, written
correspondence and electronic media, such as the internet.
Indemnity
The Directors, and other officers of the Company, as well as the members of the Investment
Committee(s), if any, and of the Advisory Committee(s), if any, shall, except in cases which involve wilful
misconduct or gross negligence, be indemnified by the Company against all expenses (including legal
fees), losses or liabilities which they sustain or incur in or about the execution of their duties.
Winding up
The Company may voluntarily commence to wind up and dissolve by a Special Resolution of the Core
Shareholder.
A Cell may voluntarily commence to wind up and dissolve by a Special Resolution of Shareholders of the
relevant Class.
On the winding up of a Cell, only Shares of the Class(es) issued by that Cell shall have any rights in
respect of the Cellular Assets attributable to that Cell. The assets available for distribution among the
Shareholders of the Cell shall be distributed exclusively to the Shareholders of that Cell pro rata to
their respective shareholdings in accordance with the terms of the relevant Supplemental
Memorandum, provided that no recourse shall be made to the Core Assets or to the assets of any
other Cell.
Distribution (whether of cash or of assets of the Company in specie) may be effected in such instalments
and over such period or periods as the liquidator considers reasonable in the circumstances having
regards to the time involved in and the manner of realisation of Investments.
52
Schedule – Co-Investment Policy for Cells
1
Background
The Board anticipates that there may be cases where an investment opportunity is appropriate
for more than one cell of the Company. In some cases, several cells may invest in the relevant
Portfolio Entity, whether simultaneously or at different times, whilst in other cases a cell which is
exiting an investment may sell all or a portion of its investment to one or more other cells. In any
of these circumstances, the commercial objectives and, in particular, the exit timelines of the cells
may differ. Consequently, where cells do co-invest it may not be appropriate for them to do so
on the same legal and commercial terms.
This policy (the Co-Investment Policy for Cells) sets out the policy and process to be followed
by the Board in any of the circumstances described above.
2
Process for adopting Co-Investment Policy for Cells
This Co-Investment Policy for Cells is required to be approved by the Board and, once so
approved, the Board shall seek guidance and recommendations from the advisory board of each
cell, including, once constituted, the advisory board of each new cell. Any material changes to
the Co-Investment Policy for Cells are required to be approved by the Board with guidance and
recommendations from the advisory board of each cell. The Board shall distribute the revised
Co-Investment Policy for Cells, with the changes highlighted, to each investor in the Company.
The Board shall procure that this Co-Investment Policy for Cells is disclosed to each prospective
investor in a cell, whether as part of the due diligence documentation pack which is made
available to such prospective investor or by inclusion in the PPM and/or that cell’s Supplemental
Private Placement Memorandum.
3
Overriding principles
In applying this Co-Investment Policy for Cells, the Board shall be guided by and adhere to the
principles of transparency and good faith.
Where cells co-invest or where one cell acquires an investment from another cell, the Board shall
ensure that such transactions are always effected on genuine arm’s length terms which are
consistent with the investment policy of each relevant cell. The Board may, in its discretion and
where considered appropriate, consult with the advisory boards of the relevant cells.
Subject to the requirements relating to pricing (see paragraph 5a (Simultaneous investment)
below), where cells co-invest, it is permissible for a particular co-investing cell to have different
investment terms, including different exit terms and timings, where the Board in its reasonable
discretion considers it appropriate to do so; and provided that such terms (i) are required to
achieve that cell’s investment objective, (ii) are in compliance with that cell’s investment policy
and (iii) do not afford (or seek to afford) a commercial advantage for that cell as against the other
cell/s. For example, where two co-investing cells both have put options relative to their
respective investments, the Board may permit one cell’s put option to be exercisable at an earlier
date than the other.
A cell intending to sell an investment to a third party (Exiting Cell) will bear all direct and indirect
costs of the sale, including, for the avoidance of doubt, any capital gains tax, transfer taxes and
related costs whether born at the level of the relevant portfolio entity or otherwise.
4
Structure of co-investments
Where two or more cells co-invest in the same underlying investment, whether simultaneously or
at different times, it is preferred that the co-investments be held through a single Mauritian SPV
53
established solely for that purpose, in which each cell is a shareholder. The cells will hold their
respective investments in the SPV through separate share classes but in all other respects on a
pari pasu basis.
Where cells have co-invested through a single SPV and one cell exits the investment earlier than
(an)other co-investing cell/s, it is preferred that the Exiting Cell disposes of its interest in the SPV.
Any such disposal will be subject to the remaining cell/s and the third party purchaser entering
into a shareholders agreement in respect of the SPV on terms acceptable to the remaining cell/s.
Any representations, warranties and indemnities given to the purchaser will be given by the
Exiting Cell itself and not the SPV.
Where considered appropriate, the Board may allow distinct SPVs to be constituted for coinvesting cells, whether this is considered necessary for legal ring fencing purposes (for example,
where one cell proposes to employ leverage at the SPV level) or otherwise.
5
Co-investment minimum requirements
a.
Simultaneous investment
In the event that several cells co-invest concurrently in the same investment opportunity,
the Board shall procure that the investments are effected at the same price per
share/instrument and in accordance with the remaining terms of this Co-Investment
Policy for Cells.
b.
Investment at different times
Where a cell (second Cell):
(i)
invests in a portfolio entity in which another cell (first Cell) is already (and is to
remain) an investor, whether the second Cell invests as a new subscriber and/or
purchases the interest of a third investor in that Portfolio Entity; or
(ii)
acquires an investment in a Portfolio Entity from another Cell (first Cell),
the Board shall procure that the transaction is on arm’s length terms and at fair market
value.
If an independent audit has been performed on the underlying Portfolio Entity and
audited financial statements have been issued in respect of a date falling at any time in the six
month period preceding the proposed transaction closing date, then the fair market value will be
determined on the basis of such audited financial statements. If no such independent audit has
been performed, then the Board shall procure that the fair market value is independently
determined by an appropriately qualified expert in accordance with the methodology set out
below. The costs of such determination shall be borne by the affected cells pro rata to their
respective total commitments.
6
Pre-emptive rights and tag along rights
An Exiting Cell shall first offer the relevant shares on the same terms to such other cell\s as are
already invested in or proposing to invest in the relevant underlying portfolio entity (Other
Relevant Cells). Any Other Relevant Cell which elects not to exercise its pre-emptive right
pursuant to the above has the right to require the Exiting Cell to cause the third party to also buy
the same proportion of its relevant shares on the same terms as the sale by the Exiting Cell.
54