Confidential. Information and opinion only. You are deemed to have read the NOTICE.
Deal Flow Reports
Market & Geopolitics
Findings of Global Economic Outlook (UNEP)
: Example Fund Details
information dated 2004
Risk Factors and Conflicts of Interest
Investment in The Fund is long term in nature and is only suitable for sophisticated investors who understand the risks involved.
While The Fundís Manager has experience in managing a broad range of investments and investment vehicles, The Fund is a newly formed entity and has no operating history upon which prospective investors may evaluate the likely performance of The Fund.
The risks inherent in investment by The Fund in unlisted companies are greater than those associated with investing in securities of listed companies. In particular, information is not usually as robust and liquidity opportunities are fewer.
The risks associated with investing in certain economies or industries may be greater than the risks inherent in investment in developed economies or established industries. These risks include political and economic risks and some are outlined below. They are additional to risks inherent in any normal investment.
Business Risks: Holdings will be exposed to a range of normal business risks that will effect value. These include product risks, market risks (including competition and customer risks), operations risks, financing risks, management risks, technology risks, staffing risks, natural risks. Prospective investors that do not understand the nature of these risks should not invest in The Fund. While the Managerís objective is to select opportunities offering the most attractive risk return profile, there is no assurance that the investment outcome will be successful.
Information on the Investment Environment. The information herein has been selected by the Manager with regard for perceived accuracy and reliability, however, no assurance can be given as to the completeness, accuracy or reliability of any of this information. Potential investors are cautioned not to rely solely on information contained herein when making a decision on whether or not to invest in The Fund or for any other purpose.
Illiquidity of Investments. Because of the objective of The Fund to invest in unlisted entities, investments made by The Fund may be illiquid. This could adversely affect The Fundís ability to realise or value its investments, especially in a deteriorating investment environment.
Political Stability. There is greater than normal political risk associated with investment in some of the countries in which The Fund expects to invest. Political instability in any country may have an adverse impact on the value of The Fundís investments. The volatility of political environment appears heightened by events such as the military activities around Iraq. All prognostications are more risky.
Global Investment. The regulatory framework for investment, finance and operations is changing a ross countries and within countries. Some countries have uncertain legal environments. In general, liberalisation of the regulatory framework pertaining to foreign investment is taking place in developing economies. There are risks specific to each country.
Tax Issues. Shareholders attention is drawn to Appendix Taxation which discusses possible tax issues. Some Shareholders may be liable to tax on unrealised gains in The Fund. Investors should seek their own tax advice and should not rely on any comments given herein.
No assurance can be made that any tax benefits initially granted to The Fundís investments will be maintained, nor that tax codes will be consistently applied by the various countries. Changes in tax codes could adversely affect the value of The Fundís investments or the amount of dividends, interest or capital gains that can be realised from an investment.
Diversification. Although The Fundís investments are subject to certain diversification restrictions, to the extent that the Manager concentrates The Fundís investments in a particular issuer, The Fundís portfolio will become more susceptible to fluctuations in value resulting from adverse economic or business conditions affecting that particular issuer.
Accounting Standards. Accounting standards are continually in flux. At the time of writing there appears to be a gradual merging of IAS and GAAP. Many companies in developing economies have adopted proprietary accounting standards. Although The Fund will give preference to companies which appoint auditors associated with large international accounting firms, in certain circumstances The Fund may invest in companies or businesses which can not or do not adopt international accounting standards.
Restrictions on Transfer. The Shareholdersí interests in The Fund are subject to significant restrictions on transferability. There is no market for the interests in The Fund and none is expected to develop.
Compulsory Transfer. Attention is drawn to the provisions of the Agreement requiring compulsory transfer, on the request of the Board, in order to comply with certain US or other relevant legal or regulatory restrictions.
Structure of Investments. The legal environment in some economies is evolving and investment structures may be untested. The Manager will seek to obtain preemption and/or buyback rights when investing as well as secure transfer and assignment rights. Investors must be aware that it may be unable to obtain these rights or to execute them if obtained.
Valuation. Valuation of The Fundís unlisted assets may be difficult because there is no liquid market in most of the securities which The Fund will hold and because there are likely to be few private transactions in comparable assets.
In addition, the Managerís assessment of value may not represent the actual sale value on disposal.
Actual Performance Will Differ From Projections. While expectations may or may not be exceeded, a rigorous investment management process implemented perfectly will still result in error. (All outcomes are beyond the probability threshold.) However, the investment management process that The Fund Management uses is intended to manage and reduce risk and to provide a framework for managing change during the tenor of Holdings.
Foreign Exchange. The Fund is denominated in US$. Investments may be denominated and realised in other currencies. The Fund is therefore exposed to exchange risk.
Conflicts of Interest
The Manager will devote such time and resources as may be reasonably required to further the business affairs and activities of The Fund.
The Manager may become manager of other accounts and vehicles for investment. The Board will direct this.
(If so directed the Manager may give advice and take action with respect to any of these accounts and vehicles which may be similar to or differ from the advice given or the timing or nature of action taken with respect to The Fund. The Manager will exercise discretion as to which vehicle should make new investments and will allocate or rotate investment opportunities in a manner deemed fair and equitable, but the Manager cannot assure, and assumes no responsibility for, equality among all accounts and vehicles.)
The Manager shall not have any obligation to engage in any transaction or investment for The Fundís account which a Shareholder or its associates may engage in for their own accounts or the account of any other client.
To the extent that a conflict of interest may arise in a situation, the Manager will take such action it deems appropriate and equitable to minimise such potential conflicts of interest.
The Manager and its associates may provide services to Holdings and may charge fees for these services.
During the Commitment Period until 75% of Committed Funds have been invested or allocated for particular investments, the Manager will not promote or act as manager for a collective investment vehicle with similar objectives to those of The Fund.
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