LAMP UCITS Funds (Ire) 1 PLC (an umbrella fund with segregated - - PDF document
LAMP UCITS Funds (Ire) 1 PLC (an umbrella fund with segregated liability between sub-funds constituted as an investment company with variable capital under the laws of Ireland and authorised by the Central Bank of Ireland pursuant to the European
(an umbrella fund with segregated liability between sub-funds constituted as an investment company with variable capital under the laws of Ireland and authorised by the Central Bank of Ireland pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2003 as amended)
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IMPORTANT INFORMATION This Supplement contains information in relation to the First SMB Fund (the “Fund”), which is a sub-fund of LAMP UCITS Funds (Ire) 1 plc (the “Company”), an investment company with variable capital incorporated with limited liability in Ireland with registered number 485852 and established as an umbrella fund with segregated liability between its sub-funds. This Supplement forms part of the prospectus dated 16 September 2010, as amended by an addendum dated 25 February 2011 for the Company (the “Prospectus”) and should be read in the context of, and in conjunction with the Prospectus. Distribution of this Supplement is not authorised unless accompanied by or supplied in conjunction with a copy of the Prospectus. Applicants for Shares in the Company will be deemed to be on notice of all information contained in the Prospectus. Words and terms defined in the Prospectus have the same meaning in this Supplement unless otherwise stated herein. The Prospectus contains detailed information on the following aspects of the Fund: the general risks associated with an investment in the Fund; the management and administration
Value; the other funds of the Company; meetings of and reports to Shareholders; and taxation. Information in respect of any other funds in the Company is to be found in the Prospectus and the supplement for each such fund. There are currently [four] other funds in the Company, namely: [First Multi-Asset Active ICG European High Yield Bond Fund First Norway Alpha First Norway Delta] The Directors of the Company, whose names appear in the Directory of the Prospectus, accept responsibility for the information contained in this Supplement. To the best of the knowledge and belief of the Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this Supplement is in accordance with the facts and does not omit anything likely to affect the import of such information. The Fund will use financial derivative instruments for investment purposes. While the prudent use of derivatives can be beneficial, they also involve risks different from, and in certain cases, greater than, the risks presented by more traditional investments. An investment in the Fund should not constitute a substantial proportion of an investment portfolio and may not be appropriate for all investors.
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DEFINITIONS In this Supplement, unless more particularly defined herein or in the Prospectus, the following capitalised words and phrases, which are in addition to and are intended to be read in conjunction with those definitions contained in the Prospectus, will have the meanings set out below. “Base Currency” means Norwegian Krone (“NOK”), the base currency of the Fund; “Calculation Agent” means UBS AG, London Branch; “Closing Date” means [15 April] 2011 or such earlier or later date as the Directors may in their discretion determine, having notified the Central Bank; “Distribution Agent” means First Asset Management AS; “Effective Date” means [18 April] 2011 or such earlier or later date as the Directors may in their discretion determine, being the date
“Fund” means First SMB Fund; “Fund Business Day” means, unless otherwise determined by the Directors and notified to Shareholders in advance, [a day, excluding Saturday or Sunday, on which banks are open for normal business in Oslo and Dublin, provided always that there will be at least two Fund Business Days per month at regular intervals]; “Initial Offer” means the initial offer of Shares in the Fund which will commence on [18 March] 2011, or such later date as the Directors may in their discretion determine having notified the Central Bank, and finish on the Closing Date; “Investment Manager” means First Asset Management AS; “Market Disruption Event” means the occurrence or existence in respect of any component security on any day or any number of consecutive days of any one or more of the following events: (i) a limitation, suspension, or disruption of trading in one
by the relevant Exchange or otherwise and whether by movements in price exceeding limits permitted by the relevant Exchange or otherwise; (ii) the settlement price for any component security is a “limit price”, which means that the settlement price for such component security has, at any point during the last fifteen minute of trading on the Exchange increased or decreased from the previous day’s closing price by the maximum amount permitted under applicable Exchange rules; (iii) failure by the applicable Exchange or other price source as applicable to announce or publish the
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settlement price in respect of any component security; (iv) the closure on any Exchange business day of any relevant Exchange in respect of a component security, prior to its scheduled closing time; (v) any event (other than an early closure as described above) that disrupts or impairs (as determined by the Calculation Agent) the ability of market participants in general to effect transactions in, or obtain market values for any component security “Minimum Subscription” means a minimum amount that should be subscribed by an investor as set out below; “Novated Investment Management Agreement” means the investment management agreement dated 16 September 2010 between the Company, the Manager and First Securities AS which was subsequently novated and entered into between the Company, the Manager, First Securities AS and the Investment Manager on 15 March 2011, as may be amended from time to time in accordance with the requirements of the Central Bank; “Redemption Date” means the next Fund Business Day after the Valuation Date; “Shares” means the shares in the Fund; “Share Classes” means the classes of Shares in the Fund; “Subscription Date” means the next Fund Business Day after the Valuation Date; “Swap Counterparty” means UBS AG, London Branch; “Valuation Date” means every Fund Business Day; “Valuation Point” means 9.00 pm (Dublin time) on each Valuation Date;
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CONTENTS Page No Important Information.............................................................................................................................. i Definitions .............................................................................................................................................. ii The Fund ............................................................................................................................................... 1 Management and Administration of the Fund ....................................................................................... 2 The Company ........................................................................................................................... 2 Investment Manager ................................................................................................................. 2 Investment Objectives, Policies and Restrictions .................................................................................. 3 Investment Objective ................................................................................................................ 3 Additional Risk Factors .......................................................................................................................... 6 General Risk Factors ................................................................................................................ 6 Subscription ........................................................................................................................................... 8 Redemption ......................................................................................................................................... 10 Fees and Expenses ............................................................................................................................. 11 Management Fee .................................................................................................................... 11 Performance Fee .................................................................................................................... 11 Administration Fee .................................................................................................................. 12 Custodian Fee ......................................................................................................................... 12 Distributor Fee ........................................................................................................................ 12 Subscription, Transfer and Redemption Fees ........................................................................ 12 Establishment Expenses ........................................................................................................ 12 Miscellaneous ...................................................................................................................................... 13 Distribution Policy ................................................................................................................... 13 Minimum Net Asset Value ...................................................................................................... 13 Publication of Net Asset Value ............................................................................................... 13
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THE FUND The Company currently offers one Share Class in the Fund. The Directors of the Company may create new Share Classes from time to time, provided that the creation of any such new Share Classes is notified in advance to and cleared by the Central Bank. A separate pool of assets will not be maintained for each of the Share Classes. The current Share Class of the Fund is: NOK/RA The NOK/RA Share Class is intended for both retail and institutional investors. The Minimum Subscription for the NOK/RA Share Class is as follows: Share Class NOK/RA Minimum Subscription NOK 1,000
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MANAGEMENT AND ADMINISTRATION OF THE FUND The Company Details in respect of the Manager, the Global Distributor, the Administrator, and the Custodian for the Fund are set out in the Prospectus. Investment Manager Pursuant to the Novated Investment Management Agreement, the Manager has delegated the discretionary investment management function for the Fund to the Investment Manager, a financial institution incorporated in Norway and authorised by the Norwegian financial regulator. Address of the Investment Manager is: Filipstad Brygge 1, Aker Brygge, Postbox 1441 Vika, 0115 Oslo, Norway Business: The Investment Manager is an asset management subsidiary of First Securities AS, one of Norway's leading investment firms which is, in turn, wholly owned by Swedbank AB, a Swedish financial institution. It provides a full range of investment services and has a strong position in the Norwegian securities trading market. The company has one of the highest ranked analysis teams in the business, a strong distribution capacity and a tightly knit team of co-workers that have achieved excellent results for many years. The Novated Investment Management Agreement provides, inter alia, that: (i) the appointment of the Investment Manager shall continue and remain in force unless and until terminated upon either party (a) going into liquidation, or (b) committing a material breach of the agreement or (c) following the appointment of a receiver/examiner, or by (d) either party giving to the other at least six months’ notice in writing; (ii) the Company and Manager shall indemnify and hold harmless the Investment Manager against all claims and demands (including costs and expenses arising therefrom or incidental thereto) which may be made against the Investment Manager in respect of any loss or damage sustained or suffered or alleged to have been sustained or suffered by any third party as a result of or in the course of the discharge
reason of the negligence or wilful default or bad faith of the Investment Manager as aforesaid.
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INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS Investment Objective The investment objective of the Fund is capital appreciation through a long/short exposure principally to equity securities of small and medium capitalised Norwegian listed companies. For the purposes of meeting its investment objective, the Fund may also have exposure to companies listed on other developed market exchanges, including Europe and the United States of America which themselves may have an exposure to Norway, although this will not always necessarily be the case. The Fund attempts to outperform a Norwegian equity benchmark, namely the Oslo Bors Small Cap Index (“OSESX”). The Oslo Bors Small Cap Index is sponsored and calculated by Oslo Bors, the Norwegian stock exchange. It measures the performance of a diversified basket of Norwegian listed small and medium capitalised equity securities. The index consists of the 10% lowest capitalised stocks listed on Oslo Bors, and is rebalanced on a bi-annual frequency. (source: Bloomberg). As described below, the Fund will invest directly in equities listed or traded on Recognised Markets and will also obtain long and short exposure to equity securities through the Swap Agreement with the Swap Counterparty. Investors should be aware that the Fund does not have a protection feature and as such the full amount subscribed is at risk. Given the investment objective and policy of the Fund, it is anticipated that a high level of volatility will apply to the Fund. Investment Policy For the purpose of meeting its investment objective, the Fund will seek to obtain exposure to a long/short equity strategy (principally in respect of small and medium capitalised Norwegian listed companies) by investing directly up to 100% of the Net Asset Value of the Fund in equity securities listed or traded on Recognised Markets, and also by entering into one or more swap agreements negotiated at arm’s length with the Swap Counterparty (collectively the “Swap Agreement”). The Swap Agreement permits the Fund to have an exposure equivalent to buying long and selling short equity securities. The Investment Manager will make all investment decisions, including which securities to buy and sell, as well as the composition of the reference assets underlying the Swap Agreement. The Swap Agreement will be unfunded and although the Swap Agreement is open-ended, it is anticipated that the Swap Agreement will last the lifetime of the Fund. The Swap Agreement may be terminated or otherwise cancelled in accordance with its terms. The Swap Agreement will be valued on a consistent and daily basis by the Swap Counterparty and verified independently on a daily basis in accordance with the prevailing market parameters. The Fund will obtain verification of the swap valuation from an entity
The Swap Counterparty will provide collateral to the Fund so that the Fund's risk exposure to the Swap Counterparty is reduced to the extent required by the Central Bank i.e. the net exposure to the Swap Counterparty, taking into account the value of the collateral received, will not exceed 10% of the Net Asset Value of the Fund. Collateral means assets delivered pursuant to a credit support annex to the Swap Agreement and which constitute acceptable collateral in accordance with the requirements of the Central Bank.
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Investment Strategy The Investment Manager intends to achieve the Fund’s objective using a long/short equity strategy delivered both by direct investment in equity securities listed or traded on Recognised Markets as well as exposures through the Swap Agreement. The Investment Manager will seek both long and short exposures to equity securities, principally in Norway, but which may also include equities listed in other developed markets, including those in Europe and the USA. The majority of the Fund’s investments will consist of small and medium sized companies. The equity exposure will be diversified by issuer and sector in order to generate returns which outperform its benchmark (as outlined under Investment Objective above) . The investment strategy is not intended to be market neutral. A “long” exposure to a particular equity provides a positive return to the Fund when the price of such equity rises. A “short” exposure to a particular equity provides a positive return when the price of such equity
Swap Agreement. The short exposure will be notionally delivered to the Fund by the Swap Counterparty through the Swap Agreement. The Fund will normally have an exposure to long positions of between 80% and 150% of its net assets, and, and between 0% and 50% of its net assets to short positions. The Fund will have a net market exposure (long exposure less short exposure) of between 80% and 120%, and can hold up to 20% of its net assets in cash or cash equivalents. The absolute amount of the Fund’s exposure to equities will thus be between 80% and 200%. The Fund may have an exposure to other assets, including fixed and floating rate debt securities, cash and cash equivalents on an ancillary basis. Investment decisions will be made by the Investment Manager based on a robust and disciplined fundamental process which focuses on the analysis of companies’ valuations and growth potential. The fundamental analytical process is built on an in-depth understanding and interpretation of relevant key financial ratios and accounting figures. This is then combined with a continuous analysis of the equity's relative pricing to peers and to the market in general. The idea generation is therefore primarily 'bottom-up' driven; however, the Investment Manager will at times seek to take advantage of current sector and/or macro views when allocating risk and constructing the portfolio. The Investment Manager aims to take advantage of both positive and negative company views through a risk management and portfolio construction process which seeks to maximise the risk-adjusted return. Positive as well as negative company views will be ranked on a risk adjusted basis. This ranking will be the basis for the sizing of active positions and the entire portfolio construction process. The Investment Manager will seek to maximize intentional stock specific risk and at all time monitor and manage aggregated systematic exposures in the portfolio. As described above, the Fund intends to leverage its exposure through the Swap Agreement. As described under “Investment and Borrowing Restrictions” below, the Fund will use Value at Risk (“VaR”) methodology to measure the Fund’s market risk in accordance with the requirements of the Central Bank. In order to ensure that the VaR limit is not breached, the Fund may alter its exposure within the boundaries set out under the Investment Strategy above at any time. Investment and Borrowing Restrictions The Fund is subject to the investment and borrowing restrictions as set out in Appendix I of the Prospectus. Any market risk created through the use of derivatives will be measured using a sophisticated risk measurement technique called relative “value at risk” (“VaR”). No
methodology that predicts, using historical data (with an observation period of no less than
level over a 20 business day holding period. Accordingly, there is a 1% probability that the
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VaR number may be exceeded. The VaR is calculated as a percentage of the Net Asset Value of the Fund and [it may not be greater than 200% of the Oslo Bors Small Cap Index.]
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ADDITIONAL RISK FACTORS General Risk Factors Investors’ attention is drawn to the general risk factors set out in the Prospectus, which may relate to any investment in the Fund in addition to the risk factors set out below. Investment Risk: the Fund is exposed to the investment risk arising from its investment
equity securities, and also equities listed on other developed market exchanges including those in Europe and the USA. No Capital Protection Risk: the Fund does not have a capital protection feature and as such the full amount subscribed by an investor is at risk. Short Sales Risk: the Fund may have an exposure through the Swap Agreement equivalent to selling equities short. Such notional short sales involve costs and risk. If a security sold short increases in price, the Fund may have to close out its short exposure at a higher price than the short sale price, resulting in a loss. The Fund may not be able to close out a short exposure at an acceptable price and may have to sell long positions before it had intended to do so. Because the Fund’s loss on a short exposure arises from increases in the value of the security, such loss is theoretically unlimited. In certain cases, notionally purchasing a security to cover a short position can itself cause the price of the security to rise further, thereby exacerbating the loss. Short exposures involve certain transaction costs which are different from long exposures e.g. the Fund will normally be charged an amount equal to any dividends or interest that accrues during the short exposure together with a charge for notionally borrowing such securities. Additionally, the Fund must maintain sufficient liquid assets to cover its obligations arising from the short exposure. This may limit the Fund’s investment flexibility. Market disruption risk: pursuant to the section headed “Valuation - Suspension of Dealings “ in the Prospectus, the Directors may determine that where on any Fund Business Day, in the opinion of the Calculation Agent, a Market Disruption Event is in existence, that day will not meet the definition of a Valuation Date. Consequently, the Fund will not calculate a Net Asset Value for that Fund Business Day, and any subscription or redemption orders received before the cut-off on that Fund Business Day will be filled at the Net Asset Value calculated at the next succeeding Valuation Date. Dealing will only be suspended in accordance with the provisions detailed in the section headed “Valuation - Suspension of Dealings “ in the Prospectus. Leverage: as outlined above, the exposure to equity securities may be leveraged through the Swap Agreement. The Fund will normally have an exposure to long positions of between 80% and 150% of its net assets, and, and between 0% and 50% of its net assets to short
between 80% and 120%, and can hold up to 20% of its net assets in cash. The absolute amount of the Fund’s exposure to equities will thus be between 80% and 200%. Accordingly, the returns of the Fund will be more volatile compared to a similar fund where leverage is not used. Portfolio Turnover Risk: as part of the investment strategy, the equities held directly as well as those underlying the Swap Agreement may be traded frequently. Accordingly, the Fund’s transaction costs may be greater than a similar fund following a “buy and hold” investment strategy.
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Performance Fees: the performance fee is based on net realised and net unrealised gains and losses as at the end of each calculation period and as a result, incentive fees may be paid on unrealised gains which may subsequently never be realised. The performance fee is based on the outperformance during a calculation period of the Fund
Fund to be positive during that calculation period. Accordingly, performance fees may be paid even when the Net Asset Value per Share of the Fund falls from one calculation period to the next. The Fund does not apply performance fee equalisation and this may result in unequal effects being experienced between different Shareholders as to the effective performance fee rate that they bear on the performance of their investment in the Fund through the period of their investment. Counterparty Risk: as a result of the investment by the Fund in over-the-counter derivative transactions such as the Swap Agreement, the Fund may be exposed to the risk that the counterparties may default on their obligations to perform. In assessing this risk, investors should recognise the protection offered by the regulatory requirement that a counterparty post collateral for the benefit of the Fund when the exposure to the counterparty exceeds 10% of the Net Asset Value of the Fund. The counterparties will provide collateral to the Fund so that the Fund's risk exposure to that counterparty is reduced to the extent required by the Central Bank. Use of Derivatives: the Swap Agreement is a structured derivative transaction. While the prudent use of such a derivative can be beneficial, derivatives also involve risks different from, and in certain cases, greater than, the risks presented by more traditional investments. Structured derivative transactions are complex and may involve a high degree of loss. The aim of the Swap Agreement is to assist in meeting the Fund’s investment objective, and, as such, the use of the Swap Agreement is not speculative in nature. Legal Risk: the application of a law or regulation that has not been anticipated or that arises because the Swap Agreement is not legally enforceable or documented correctly could result in a loss to the Fund. Avoidance of conflict of interest: the units within the UBS AG group who are providing services to the Fund operate as independent entities and in order to avoid possible conflicts
length prices, and in the best interest of the Shareholders. Early Termination Risk: the Directors may decide to terminate the Fund where the Net Asset Value is less than NOK 100 million on any date subsequent to the one year anniversary
Shares compulsorily redeemed at the Net Asset Value per Share on that date. This may be less than the price at which they subscribed for their Shares. Consequently, Shareholders may receive redemption proceeds less than the amount subscribed. Taxation Any change in the Fund’s tax status or in taxation legislation could affect the value of the investments held by the Fund and could affect the return to investors. Potential investors and Shareholders should note that the statements on taxation, which are set out in the Prospectus are based on advice which has been received by the Directors regarding the law and practice in force in the relevant jurisdiction as at the date of the Prospectus. As is the case with any investment, there can be no guarantee that the tax position or proposed tax position prevailing at the time an investment is made in the Fund will endure indefinitely. The attention
sections headed “Taxation” in the Prospectus.
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SUBSCRIPTION Shares may be subscribed for during the Initial Offer at a price equal to the net asset value per share of the NOK/RA share class in First SMB Fund of LSAM SF 3 plc on the Closing Date, which is available from the Administrator . The net asset value per share of the NOK/RA class in First SMB Fund of LSAM SF 3 plc on 4 March 2011 is NOK 1,226.42. Subscriptions must be submitted in the Base Currency and foreign currency will only be accepted with the prior agreement of the Manager. Foreign currency subscribed will be converted to the Base Currency at the prevailing exchange rate which the Company deems appropriate in the circumstances. Such applications will not be processed until cleared funds are confirmed by the Administrator. Any delay will be at the expense of the relevant
that applications for subscriptions in the Fund received at the end of the Initial Offer amount to less than NOK 100 million. In this case, investors who have submitted orders will be immediately informed and will not be required to proceed with the payment of the subscription price, or, if payment has already been received by the Administrator, the Administrator will promptly return the monies received without interest to the investor’s account from which the monies were received. During the Initial Offer, investors should complete the application form, which is available from the Manager, (and supporting documentation in relation to money laundering prevention checks and taxation, if applicable) and send them to the Administrator by post, delivery, fax or
time) on the Closing Date. Cleared funds must be received, by the Administrator, for the account of the Fund, by no later than 11.00 am (Dublin time) on the [Closing Date]. Investors must subscribe for at least the Minimum Subscription during the Initial Offer and following the Initial Offer, in the case of an initial subscription into the Fund. For subsequent subscriptions the Investors must subscribe for at least one Share. Following the Closing Date, Shares will be available for subscription at the Net Asset Value per Share, subject to the applicable subscription fee, on each Subscription Date. In calculating the subscription price for the Fund, the Directors may on any dealing day when there are net subscriptions/redemptions adjust the subscription price by adding/deducting an anti-dilution levy to cover dealing costs and to preserve the value of the underlying assets of the Fund. The completed application form, which is available from the Manager, (and supporting documentation in relation to money laundering prevention checks and taxation, if applicable) must be received by the Administrator by post, delivery, fax or other electronic means (with the original to follow soon after) no later than 12.00 noon (Dublin time) on the relevant Valuation Date. Cleared funds must be received, by the Administrator, for the account of the Fund, by no later than 11.00 am (Dublin time) on the relevant [Valuation Date]. Where the amount subscribed for Shares is not equivalent to an exact number of Shares, fractions of Shares may be issued rounded to the third decimal place. Measures aimed at the prevention of money laundering may require an applicant, upon establishing a business relationship with the Fund, to provide verification of identity (and where applicable, verification of any beneficial owners) and source of funds to the Administrator and certain applicants may be required to complete a Declaration. Applicants which represent themselves as Politically Exposed Persons (“PEP’s”) or close associates or immediate family members of a politically exposed person, must also be
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information and documentation required in this regard. This may result in Shares being issued on a Subscription Date subsequent to the Subscription Date on which an applicant initially wished to have Shares issued or even cancellation of the application by the Company in which event the subscription monies will be returned without interest to the account from which it was received, at the risk of the applicant. The Fund, the Company (including its Directors), the Investment Manager, the Manager, the Global Distributor and Promoter and the Administrator shall be indemnified and held harmless against any loss arising from any application which has been rejected. Further and more detailed information in relation to the subscription of Shares is set out in the Prospectus.
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REDEMPTION Shares will be redeemable at the option of the Shareholder on each Redemption Date except in the circumstances described herein and in the Prospectus. Following the Closing Date, Shares may be redeemed at the Net Asset Value as adjusted for the redemption fee on each Redemption Date. Requests for redemption may be made by fax or other electronic means to the Administrator on a completed redemption request form (which is available on request from the Administrator) and must be received by no later than 12.00 noon (Dublin time) on the relevant Valuation Date. Redemption request forms not received by this time shall be held
by electronic transfer at the expense of the relevant Shareholder to the Shareholder’s account as specified in the Shareholder’s original application form or as otherwise specified by original notice in writing by the Shareholder to the Company. Settlement for redemptions will be made by telegraphic transfer or other form of bank transfer to the bank account of the Shareholder specified in the application or redemption form (at the Shareholder’s risk) normally within three (3) Fund Business Days and in any event within fourteen (14) days of the Redemption Date on which the redemption request has been
Redemption proceeds will not be paid where an original application form has not been previously received from the investor. No redemption payment may be made from that holding until any other documentation required by the Administrator, including any documents in connection with anti-money laundering procedures, have been received from the Shareholder and the anti-money laundering procedures have been completed. Further and more detailed information in relation to the redemption of Shares is set out in the Prospectus.
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FEES AND EXPENSES The following fees and expenses apply in respect of the Fund. Management Fee The Fund will pay a management fee to the Manager, which will accrue daily and will be payable quarterly in arrears (and pro rata for lesser periods). [For the purposes of calculating the management fee, the Net Asset Value is determined before the accrual or deduction of any distributions, redemptions, management fee or performance fee for the applicable period.] The Manager will pay the Investment Manager, the Administrator and the Custodian their Net Asset Value based fees out of this fee. The management fee will be based on a percentage of the Net Asset Value of the relevant Share Class as follows: Share Class Management Fee rate (% per annum) NOK/RA Up to 2% The Company will pay all out-of-pocket expenses incurred by the Manager (including VAT thereon). Such out-of-pocket expenses may include transaction charges provided that they are charged at normal commercial rates and incurred by the Manager in the performance of its duties under the Management Agreement. In addition to any subscription, transfer and redemption fees which may be paid directly to the Distribution Agent by investors as further described in the Subscription, Transfer and Redemption Fees section, the Distribution Agent may be paid an ongoing Net Asset Value-based fee by the Manager out of the management fee. Performance Fee Under the provisions of the Management Agreement, the Fund will pay the Manager a fee of 20% of the performance of the Fund over a benchmark hurdle rate, being the annual performance of the Oslo Bors Small Cap. Index (Bloomberg code OSESX). The first calculation period begins on the Effective Date and ends on the last Valuation Date
finish on the last Valuation Date of each year. The initial offer price is taken as the starting point for the performance fee calculations. A performance fee is payable only where:
calculation period is higher than the increase in the benchmark in respect of such calculation period; and
preceding calculation periods has been clawed back. The calculation of the performance fee will be verified by the Custodian. This performance fee is accrued daily and is payable annually in arrears. Shares redeemed or exchanged other than at the end of a calculation period will be treated as if the date of redemption or exchange was the end of the calculation period and the above provisions will apply. In the event of a partial redemption, whether at the end of or during a calculation period, Shares will be treated as redeemed on a first-in, first-out basis for the purposes of calculating the performance fee. The [Manager] may waive, at its own discretion, all or a portion of the performance fee with respect any one, some or all share classes in respect of any calculation period.
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Administration Fee The Administrator will be paid its Net Asset Value based fee out of the Management Fee. Certain other out-of-pocket expenses of the Administrator, as well as applicable data, communication and technology-related charges may also be charged to the Fund in accordance with the Administration Agreement. Custodian Fee The Custodian will be paid its Net Asset Value based fee out of the Management Fee. In addition, sub-custody fees may be charged to the Fund at normal commercial rates. Distributor Fee There are no distributor fees payable in respect of the Fund. Further charges and expenses of the Fund are set out in the “Fees and Expenses” section of the Prospectus. The charges and expenses apply to the Fund, save as set out herein. Subscription, Transfer and Redemption Fees For each subscription or redemption of Shares in the Fund, the subscribing or redeeming Shareholders may be charged a fee as a percentage of the subscription price or redemption proceeds as of the relevant Valuation Date. Such Subscription and Redemption Fees vary by Share Class (as outlined below), are payable by the investor to the Fund and/or Distribution Agent and are in addition to any anti-dilution levy payable by the investor. Where a Subscription or Redemption Fee is charged, the amount of the fee retained by the Fund will be 0.1% of the subscription price or redemption proceeds of the relevant Shares. Share Class NOK/RA Subscription Fee Up to 3% Redemption Fee Up to 0.5% For each switch of Shares from this Fund into another sub-fund in the Company, the Shareholders requesting the switch may be charged a fee as a percentage of the Net Asset Value of the Shares being switched as of the relevant Valuation Date. Such Switching Fees are outlined below, are payable by the investor to the Fund and/or Distribution Agent and are in addition to any other sales charge for the investor. Share Class NOK/RA Switching Fee Up to 0.1% Establishment Expenses The fees and expenses incurred in connection with the establishment of the Fund, the preparation and publication of this Supplement and all legal costs and out-of-pocket expenses related thereto will be borne by the [Promoter]. The expenses incurred in connection with the establishment of the Company are as set out in the section headed Fees and Expenses in the Prospectus.
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MISCELLANEOUS Distribution Policy At present, the Directors intend that the Fund will pursue an accumulation policy and will not make any distributions of dividends. In the event that the Directors determine to make any distributions of dividends in respect of the Fund, full details will be provided in an updated supplement and Shareholders will be notified in advance. Minimum Net Asset Value The Directors may decide to terminate the Fund where the Net Asset Value is less than NOK 100 million. Further details regarding termination are set out in the Prospectus. Publication of Net Asset Value The Net Asset Value per Share of the Fund as calculated for each Valuation Point will be published daily
Bloomberg and also updated daily
the Internet (www.ubs.com/keyinvest). The Net Asset Value per Share will also be available from the
subscribe for, redeem or convert Shares at that Net Asset Value.