The Sub-Fund is a Feeder of the Master Fund and permanently invests at least eighty-five percent (85%) of its assets in shares of the Master Fund.
The Master Fund will seek to achieve its investment objective by investing in European (excluding the UK) equities of companies in special situations, where it believes the company is considered undervalued. The Master Fund will also invest in other European (excluding the UK) equities to mitigate the volatility of the Master Fund. The Master Fund’s portfolio will be managed on a concentrated basis. The Master Fund will be able to invest without restriction by market cap or sector. The Master Fund may also invest in other transferable securities, units or shares in collective investment schemes, money market instruments, cash and near cash, and deposits.
The use of derivatives is permitted by the Master Fund for efficient portfolio management purposes (including hedging), and borrowing will be permitted under the terms of the applicable laws and/or regulations. On giving 60 days’ notice to shareholders, the Master Fund may, in addition to its other investments powers, use derivatives and forward transaction for investment purposes. It is not intended that the use of derivatives in this way will change the risk profile of the Master Fund.
In addition, the Sub-Fund may hold up to 15% of its assets in ancillary liquid assets such as cash and cash equivalents, including time deposits and money market instruments having an initial or residual maturity of less than 12 months or, pursuant to the conditions of issue governing such securities, with an interest adapted at least annually, according to market conditions.
The Sub-Fund does not intend to invest in financial derivatives instruments and primarily seeks to invest in the Master Fund.
The Sub-Fund will not invest in securities financing transactions, such as securities lending transactions, repurchase and reverse repurchase agreements, buy-sell back or sell-buy back transactions for the purposes of efficient portfolio management, total return swaps or other OTC derivatives.
The performance of the Sub-Fund will be largely dependent upon the performance of the Master Fund. However, the performance of the Sub-Fund might deviate from the performance of the Master Fund, due to, inter alia, cash holding or transaction costs.