information memorandum

VICTUS CAPITAL ICC LIMITED
(a registered open ended investment company incorporated as an incorporated cell company
under the laws of Guernsey with registered number 56012)
VICTUS EUROPEAN STUDENT ACCOMMODATION FUND IC LIMITED
(incorporated under the laws of Guernsey with registered number 56015),
an incorporated cell of Victus Capital ICC Limited
INFORMATION MEMORANDUM
17 JANUARY 2013
CONTENTS
Page
PART I
IMPORTANT INFORMATION
1
PART II
DIRECTORS, PROMOTER AND ADVISORS
3
PART III
COMPANY AND FUND STRUCTURE
4
PART IV
INVESTMENT OBJECTIVE AND STRATEGY
5
PART V
DIRECTORS, MANAGEMENT AND ADMINISTRATION
8
PART VI
DEALING PROCEDURES
11
PART VII
ADDITIONAL INFORMATION
14
PART VIII
FEES AND EXPENSES
15
PART IX
TAXATION
18
PART X
RISK WARNINGS
19
PART XI
GENERAL INFORMATION
22
PART XII
DEFINITIONS
29
B SHARES SUPPLEMENT
32
PART I - IMPORTANT INFORMATION
IF YOU ARE IN ANY DOUBT ABOUT THE CONTENTS OF THIS DOCUMENT, YOU SHOULD SEEK INDEPENDENT PROFESSIONAL FINANCIAL ADVICE.
This Information Memorandum has been issued in respect of Victus Capital ICC Limited (the “Company”) and its Incorporated Cell (a “Cell”), Victus
European Student Accommodation Fund IC Limited (the “Fund”), and has been prepared to comply with the Registered Collective Investment Schemes
Rules 2008 (the “Rules”) and the Prospectus Rules 2008 as issued by the Guernsey Financial Services Commission (the “Commission”) pursuant to The
Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended (the “Law”).
This Information Memorandum may be revised from time to time. Prospective investors should enquire of the Administrator as to whether this document has
been revised or superseded.
The Company is an open-ended investment company established as an incorporated cell company under the provisions of The Companies (Guernsey)
Law, 2008 as amended (the “Companies Law”). The Companies Law permits an incorporated cell company to incorporate one or more Cells (as
incorporated cells) for the purpose, inter alia, of segregating and protecting assets in each Cell, each Cell being constituted as a separate corporate entity
so that the liabilities of the incorporated cell company attributable to one Cell may only be satisfied out of the assets of that Cell, and holders of shares in
a particular Cell have no rights to assets in any other Cell. Further details of the Fund, the first Cell established by the Company, are set out in this Information
Memorandum.
The Company, together with the Fund, is a Registered Open-ended investment scheme registered pursuant to the Protection of Investors (Bailiwick of
Guernsey) Law, 1987, as amended and the Registered Collective Investment Scheme Rules 2008 issued by the Guernsey Financial Services Commission
(the “Commission”). The Commission, in granting registration, has not reviewed this document but has relied upon specific warranties provided by Ardel
Fund Services Limited, the Company's designated manager.
Neither the Guernsey Financial Services Commission nor the States of Guernsey Policy Council take any responsibility for the financial soundness of the
Company and the Fund or for the correctness of any of the statements made or opinions expressed with regard to it.
A registered collective investment scheme is not permitted to be directly offered to the public in Guernsey but may be offered to regulated entities in
Guernsey or offered to the public by entities appropriately licensed under the Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended.
Investors in the Fund are not eligible for payment of any compensation under the Collective Investment Schemes (Compensation of Investors) Rules 1988
made under the Law.
The Fund proposes to issue an unlimited number of redeemable shares of no par value (“Shares”) of the Fund. Shares will be available for issue as either “A”
Shares or “B” Shares in different currencies as per the relevant Supplement to this Information Memorandum.
Application has been made to the CISX for the Shares in issue immediately following the close of the Initial Offer Period (as defined below) to be admitted
to the Official List of the CISX (the “Admission”) by way of offer for subscription.
This Information Memorandum shall form the Listing Document for the purpose of admitting the Shares to the Official List of the Channel Island Stock
Exchange LBG (the “CISX”) and includes particulars given in compliance with the listing rules of the CISX for the purpose of giving information with regard to
the Fund.
Neither the Admission of the Shares of no par value to the Official List nor the approval of this Information Memorandum as the Listing Document pursuant
to the listing requirements of the CISX shall constitute a warranty or representation by the CISX as to the competence of the service providers to or any other
party connected with the Fund, the adequacy or accuracy of the information contained in the Information Memorandum or the suitability of the Fund for
investment or for any other purpose.
The Directors, whose names appear on page 4 and under the heading “Directors” on page 11, have taken all reasonable care to ensure that the facts
stated in this Listing Document are true and accurate in all material respects, and that there are no other facts, the omission of which, would make
misleading any statement in this Listing Document, whether of facts or of opinion. All the Directors accept responsibility accordingly.
The distribution of this Information Memorandum and the issue of Shares may be restricted in certain jurisdictions; persons into whose possession this
Information Memorandum comes are required by the Fund and the Promoter to inform themselves of and to observe any such restrictions. This
Information Memorandum does not constitute an offer or solicitation to anyone in any jurisdiction in which such offer is not authorised or to any person
to whom it is unlawful to make such offer or solicitation. Prospective investors should not construe the contents of this Information Memorandum as
legal, tax or financial advice. If in any doubt about the contents of this Information Memorandum a prospective investor should consult his own
professional advisors as to the legal, tax, financial or other matters relevant to the suitability of an investment in the Shares of the Fund for such investor.
The Shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended (“U.S Securities Act”) or with any securities regulatory
authority of any state or other jurisdiction of the United States and the Shares may not be offered, sold, exercised, resold, transferred or delivered, directly or
indirectly, within the United States or to, or for the account or benefit of, U.S. Persons (as defined in Regulation S under the U.S. Securities Act), except pursuant
to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and in compliance with any applicable
securities laws of any state or other jurisdiction in the United States. There will be no public offer of the Shares in the United States. The Fund has not been and
will not be registered under the U. S. Investment Company Act of 1940, as amended and investors will not be entitled to the benefits of the U.S. Investment
Company Act.
It should be remembered that the price of the Shares and the income from them can go down as well as up.
The attention of investors is drawn to the section entitled “Risk Warnings” in Part X.
If you are in any doubt about the contents of this document you should consult your accountant, legal or professional advisor or financial advisor.
1
EXPECTED TIMETABLE OF PRINCIPAL EVENTS AND OFFER STATISTICS
SHARES TO BE OFFERED
Shares of the Fund are to be offered as A Shares and B Shares.
Please refer to the appropriate supplemental schedule (“Supplement”) appended to this Information Memorandum for further information about the
terms upon which the A Shares and B Shares are offered.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Opening date of the offer of Shares: 17 January 2013
Latest time and date for application before Initial Closing Date: 5.00pm 27 February 2013
Latest time and date for receipt of Funds: 5.00pm 27 February 2013
Initial Closing Date: 28 February 2013
Admission Date: 4 March 2013
First Dealing Day after Admission: 3 April 2013
DETAILS OF OFFER
Minimum number of Shares to be issued on Initial Closing Date: 4 million
Maximum number of Shares to be issued on Initial Closing Date: Unlimited
Base Currency of the Company and the Fund: Pounds Sterling
An investor applying for Shares will receive Shares in uncertificated form. No temporary documents of title will be issued.
In the event that the minimum number of Shares is not subscribed, all monies will be returned to investors at their own risk and cost, by electronic bank
transfer within 10 Business Days following the Initial Closing Date. In any event the Directors retain discretion whether or not to proceed with the application
for Admission.
2
PART II - DIRECTORS, PROMOTER AND ADVISORS
The Company
Victus Capital ICC Limited
The Fund
Victus European Student
Accommodation Fund IC Limited
Directors of each
of the Company
and the Fund
Gunther Gommes
Andrew Henton
Kerry-Anne Marais
James Metcalf
Registered Office of the
Company and the Fund
Frances House
Sir William Place
St Peter Port
Guernsey
GY1 4HQ
each of
Frances House
Sir William Place
St Peter Port
Guernsey
GY1 4HQ
CISX Sponsor to the Fund
Mourant Ozannes
Securities Limited
1 Le Marchant Street
St Peter Port
Guernsey
GY1 4HP
Administrator,
Secretary,
Registrar and
Designated
Manager
Ardel Fund Services Limited
Frances House
Sir William Place
St Peter Port
Guernsey
GY1 4HQ
Legal Advisors as to
the laws of Guernsey
Mourant Ozannes
Advocates & Notaries
1 Le Marchant Street
St Peter Port
Guernsey
GY1 4HP
Custodian and
Principal Banker
Royal Bank of Canada
(Channel Islands) Limited
Canada Court
Upland Road
St Peter Port
Guernsey
GY1 3BQ
Auditors
BDO Limited
Place du Pre
Rue du Pre
St Peter Port
Guernsey
GY1 3LL
Promoter
Crosslane Fund Managers LLP
Manchester International
Office Centre
Suite 3D
Styal Road
Manchester
M22 5WB
Legal Advisors
as to the laws
of England
Pinsent Masons
30 Crown Place
Earl Street
London
EC3A 4ES
Property Advisor
Crosslane Property Advisor
(Guernsey) Limited
First Floor
Challenge House
The Grange
St Peter Port
Guernsey
GY1 2QJ
Property Manager
Prime Student Living Limited
formerly
Crosslane Asset Management
& Lettings Limited
Manchester International
Office Centre
Suite 3D, Styal Road
Manchester M22 5WB
Tax Advisor
Grant Thornton
Lefebvre House
Lefebvre Street
St Peter Port
Guernsey
GY1 3TF
3
PART III - COMPANY AND FUND STRUCTURE
Victus Capital ICC Limited (the “Company”) is a Guernsey open-ended investment company established under the Companies Law as an incorporated
cell company. The Company may create one or more Cells as incorporated cells (each a “Cell”). As of the date of this document the Company has
created the following separate Cell:
Victus European Student Accommodation Fund IC Limited (the “Fund”)
The Fund will invest in Student Accommodation located in Europe's major university towns and cities in accordance with the Fund's investment objectives
and strategy described in more detail in Part IV of this Information Memorandum.
The Fund may issue an unlimited number of Shares, which will be issued as A Shares and B Shares denominated in different currencies as specified in the
Supplement to this Information Memorandum. The terms of the A and B Shares are set out in the relevant Supplement.
Application has been made for the Shares in the following Share Classes in issue in the Fund immediately following the close of the Initial Offer Period to be
listed on the CISX:
GBP Class A Shares
EUR Class A Shares
USD Class A Shares
CHF Class A Shares
SEK Class A Shares
and
GBP Class B Shares
EUR Class B Shares
CHF Class B Shares
The Base Currency of the Fund is Pounds Sterling. The Directors may, at their discretion, determine from time to time to issue further Share Classes on different
terms.
In accordance with the taxation advice received in respect of property investments, it is proposed, subject to taxation review from time to time, to hold each
property using a special purpose vehicle (“SPV”). In respect of property investments located in Europe, that each such property will be directly held via a
Luxembourg holding company and for each property investment in the UK by an SPV registered in Guernsey.
Where any further Cells of the Company are created all of the assets, income, earnings, liabilities, expenses and costs of each Cell will be kept separate
and separately identifiable from all other assets, income, earnings, liabilities, expenses and costs of the Company and any other Cells. It should be noted
that segregation is therefore at Cell level. When, as is the case in respect of the Fund, there are two or more Share Classes in issue in respect of a single
Cell, there is no segregation at Share Class level, although separate accounting and other records for each such Share Class will be maintained to enable
calculation of NAV at Share Class level.
Hedging
Share class and asset hedging
The Directors have the ability, but are not required, to enter into derivative transactions (including but not restricted to forward foreign exchange contracts)
with the sole purpose of hedging currency and interest rate exposures within the Fund. Hedging would be of a defensive nature and would not eliminate all
performance fluctuations associated with non GBP interest rate and currency exposures over the life of the fund. Any hedging strategy that may be deployed
would require careful consideration by the Directors as in so doing it would absorb liquidity and introduce a further layer of expense.
Debt finance hedging
The Directors intend to use derivative transactions (including but not restricted to interest rate swaps) to hedge debt finance where employed in relation to
property, against the risk of changes in interest rates.
4
PART IV - INVESTMENT OBJECTIVE AND STRATEGY
OBJECTIVE
Background to the Fund
Student property in the UK has recently performed exceptionally well as an asset class compared to traditional investments. In fact it has outperformed every
other commercial property class and delivered consistent returns throughout the economic downturn. The sector is attractive to investors whose objectives
are to seek uncorrelated investments which offer the potential for attractive yields and the prospect of long term capital growth.
In the opinion of the Directors the Student Accommodation market in Europe's major university towns and cities represents an excellent opportunity to
achieve these objectives. There are several reasons why this sector of the property market has remained resilient to the global economic downturn:•
•
•
socially there remains an ambition amongst the younger generation to obtain Higher Education degrees.
attending a university offers an alternative to entering what is currently an extremely challenging job market, and also access to financial support
(for EU citizens) in the form of direct grants, subsidies and/or access to cheap loans.
having successfully completed a university degree there is the perception of better career prospects.
Furthermore, the emergence of the new ‘middle class’ in developing countries, has resulted in a growing pool of potential overseas students studying at
European universities.
These features have served to maintain demand levels from students for convenient and secure accommodation that is competitively priced.
Investment Objective
The Fund has been established to take advantage of the developing European Student Accommodation sector and will provide investors with exposure to
this evolving market. The objective of the Fund is to generate long term capital appreciation which will be achieved by investing in existing purpose-built
Student Accommodation units, the conversion or renovation of existing commercial property units into modern Student Accommodation and the acquisition
and development of new build opportunities.
To assist in achieving its investment objective Crosslane Property Advisor (Guernsey) Limited (the “Property Advisor”) has been appointed as the property
advisor to the Fund whilst Crosslane Fund Managers LLP (the “Promoter”) is the promoter to the Fund. In addition Prime Student Living Limited (the “Property
Manager”) will act as the Fund’s management and letting agent.
The Fund has been specifically established to allow investors to benefit from the expertise, market presence and experience of Crosslane.
The Fund will not materially change its principal investment strategy and objective as set out in this Information Memorandum (which also comprises the
Listing Document for the purposes of application to list the Shares on the CISX) for a minimum period of three years from the date of Admission other than
with the consent of a majority of the Shareholders.
OPPORTUNITIES
UK – Student Accommodation Market
Private Student Accommodation is predominantly utilised by post-first year students, as well as some first year intakes where universities are unable to provide
for all of their accommodation needs. The Directors believe that the most attractive accommodation for students must offer secure, purpose-designed,
modern accommodation either close to campus or the city centre. Traditionally, accommodation with these features was only available from the universities
themselves, and then primarily for first year students. As student numbers have risen, the demand for high quality accommodation has outstripped the supply
available from universities. Increasingly universities now have to rely on the private sector to house their overspill of first year and post graduate students. In
addition, universities have been giving consideration to selling off their own Student Accommodation to the specialist private accommodation providers as
they seek to focus investment on the provision of educational courses. Indeed, some universities have gone so far as to sell off all of their accommodation
stock in order to "outsource" Student Accommodation to specialist providers. Today, privately owned, purpose-built accommodation is offered by universities
alongside traditional halls of residence and such property provides a genuine alternative to shared houses in multiple occupation (HiMO), bedsits or small
shared apartments.
Europe – Student Accommodation Market
“Europe dominates the globe in respect of attracting international students”
1
The characteristics of the Student Accommodation market in continental Europe are fundamentally similar to those in the UK, except that the provision of
custom-built housing blocks by private landlords is, at present, much less pronounced. The Directors believe this presents an opportunity for the Fund.
Moreover, whilst there is a large population of domestic students in each EU member state, EU universities are increasingly attracting students from outside
of their national borders. The Directors believe that, with a new standardisation of qualifications across Europe, the modern international student is now more
mobile than ever before. This has alleviated concerns about studying abroad lessening the chances of gaining employment in a student's home country
or elsewhere. The advantages for students studying abroad remain constant: learning or perfecting a new language and experiencing a different culture.
Both are skills that continue to be much sought after by modern globalised employers.
These factors have helped boost the number of students studying abroad which, according to the OECD in 2009, totalled almost 3.2 million students who
were enrolled on Higher Education courses outside their country of citizenship. This is forecast to grow to 7.6 million by 20252 .
“The major European academic centres represent a key investment opportunity for Student Accommodation developers and operators” 3.
The Directors would endorse this statement based on their observations of how the UK market for Student Accommodation has developed and the extra
demand that is expected to continue originating from international students.
Rental Growth Prospects
A key attraction of Student Accommodation to investors is the long-term income stream and its rental growth prospects. In the last academic year (2011/12),
rents in the UK private sector purpose-built Student Accommodation grew by an average of 9.1% in London and 4% in the regions of the UK 4.
The Directors believe that rental growth in the major European towns and cities will be at least comparable to that of the UK, following research carried out
by Crosslane. According to a recent German government housing report, annual student rents in 2011 increased by an average of 2.9%, but in some
locations the increase was over 10%.
1
Knight Frank International Student Property Report 2012
OECD, Böhm et al
Knight Frank International Student Property Report 2012
4
Knight Frank Student Property 2012
2
3
5
STRATEGY
Investment Strategy
Crosslane has experience and a track record in developing Student Accommodation in the UK. Over the past twelve months, Crosslane has undertaken
extensive research on the Student Accommodation market in a number of European jurisdictions, in addition to the UK, which have major university towns
and cities and has identified several attractive markets which are expected to develop in a manner similar to the UK. This presents an opportunity for the
Fund to take advantage of emerging trends in those other European markets by capitalising on the experience gained by Crosslane. The Fund will therefore
invest in Student Accommodation in selected European university towns and cities.
In order to take advantage of opportunities, the Fund will enter into agreements with the Property Advisor whereby the Property Advisor will identify and
recommend to the Fund asset opportunities that meet target return criteria. The Property Advisor will be responsible for researching each asset and will
present a detailed proposal to the Fund which will include (inter alia) outline plans for development, supply/demand analysis and an assessment of potential
for further value creation. Target assets will be either existing blocks of Student Accommodation that are already income producing, new developments to
be built or converted and refurbished or land with planning permission for Student Accommodation. In each case Student Accommodation will be the
predominant use.
New Build Properties
The Directors believe that there is the opportunity to acquire and develop well located land and property assets for conversion, close to university campuses,
and further believe that the commercial property market has continued to struggle and in many instances there are opportunities to acquire
underperforming assets (retail and office sites) which lend themselves to conversion into Student Accommodation.
Mature Properties
The Directors believe that, unlike the general commercial property sector, the European Student Accommodation sub-sector continues to forecast increasing
demand and rental growth for student beds. This is as a result of the number of students seeking accommodation having risen over recent years whilst
supply remains relatively static.
It is possible to acquire existing purpose-built, university owned, Student Accommodation at a price that represents a significant reduction in their more historic
values where factors such as age, condition and the need for redevelopment and refurbishment play a determining factor.
Within Europe there are opportunities to acquire existing stock for refurbishment, as the universities and quasi-government bodies seek to sell off their
accommodation to private operators.
Mix of properties to be acquired
The Fund will provide diversification and risk reduction through:•
•
•
•
a geographical spread of sites across identified countries, university towns and cities.
a mix of older schemes with non en-suite accommodation in the “affordable/ good value” range of the student rental market and newer schemes with
en-suite/studio accommodation at higher rental levels.
maintaining a mix between undergraduate and postgraduate students and between domestic students and international students.
having a variety of occupational agreements including university leases and direct lets.
The Board of Directors will be responsible for monitoring the composition of the investment portfolio and ensuring that there is appropriate diversification
across jurisdictions, individual towns and cities within each jurisdiction and stage of asset development. An analysis of the portfolio will be included in the
annual accounts.
Property Qualification and Investment Criteria
The Fund will apply a two-step appraisal model when considering any potential acquisition.
Property Qualification Criteria
The property qualification criteria will be analysed initially by the Property Advisor and presented to the Directors as part of the property recommendation.
The key aspects of the property qualification are;
The town or city must demonstrate:•
•
Top tier status of university when compared to its peers.
A long established, large and increasing student population, relative to the existing and projected future supply of accommodation.
In order to determine whether the qualification criteria can be met, the Property Advisor will undertake analysis of and research into the following:•
•
•
size of student population in the university town or city and in particular the number of full time undergraduate students, postgraduates and
international students, together with any forecastable trends in numbers and how this has changed over time.
supply of the total purpose-built Student Accommodation in the university town or city.
any new, purpose-built Student Accommodation schemes likely to become available in the foreseeable future.
Property Investment Criteria
Once the qualification criteria have been met, the investment criteria will then be applied to each proposed acquisition.
The investment criteria are:•
•
•
•
purchase price relative to open market value.
potential to increase value through development or refurbishment.
comparison of end product following refurbishment or development in the local market.
modelled return forecasted to meet the Fund’s objectives.
The Property Advisor has access, deal-flow and property acquisition opportunities throughout Europe. The Promoter has demonstrable credibility as a market
participant which has successfully closed Student Accommodation transactions in the past. These skills and expertise will be deployed for the benefit of the
Fund; the Property Advisor will provide and recommend opportunities to the Fund on a first refusal basis.
6
Acquisition of Properties
The Fund may only make investments following a written recommendation from the Property Advisor. The Property Advisor will identify potential Student
Accommodation in the form of properties or buildings where student use is the predominant use, or land with planning permission for Student
Accommodation development. Such Student Accommodation, properties or buildings may have been recently developed or require development in the
future. The Board of Directors will review all recommendations received from the Property Advisor, taking the final decision on whether or not to proceed with
individual investments and on what terms.
Forward Purchase Agreements
The Fund might enter into forward purchase arrangements with a vendor of a Student Accommodation property. Such arrangements will involve the Fund
acquiring the right to purchase those sites – at a discount to open market value – once they have been developed, upgraded and converted into yield
generating assets. These arrangements will involve the Fund providing a loan to the vendor (secured on the legal title of the property and carrying a
commercial rate of interest) which will be used by the vendor to finance the necessary development.
Future Development
On the completion of every asset purchase, the Fund will enter into a Development Management Agreement with the Property Advisor by which the Property
Advisor will oversee and undertake any future development on the property. This might include new construction, reconfiguration, or refurbishment, or a
combination of all three. The Property Advisor will provide an asset management report every six months which will comment on the performance of an
asset as well as making recommendations for future development or disposal options. The Property Advisor will receive a fee for carrying out approved
development management services under the Development Management Agreements which will be linked to the amount of additional value created for
the Fund by carrying out that future development.
Land Purchases
The Fund might acquire land with planning permission granted to develop a predominantly student use scheme at a discount to open market value. The
development of the land will be overseen and carried out by the Property Advisor through a land Development Management Agreement. The Property
Advisor might, subject to suitability, sub-contract or assign the land Development Management Agreement. The total cost to the Fund of the land and the
total development costs (including debt) will be less than the completed asset value resulting in a return to the Fund which meets the Fund's investment
strategy.
The Property Advisor will receive an incentivised land Development Management Fee calculated by reference to the additional value the Property Advisor
creates through the development process that it manages.
Property Management
Following the acquisition of a property by the Fund, it will appoint the Property Manager to provide property management and lettings services. The Property
Manager can sub-contract the provision of these services following an approved accreditation process and the approval of the Fund.
Debt
The Promoter will act on behalf of the Fund to arrange all debt proposals in relation to assets acquired or developed on behalf of the Fund. All debt will be
arranged on a non-recourse basis outside of the relevant SPV.
Property Fees
All property transaction fees and costs, including those payable to third parties are to be amortised over up to 60 months.
Spread of Risk
The Directors will monitor the mix of assets acquired by reference to their location and stage of development. The intention is to diversify risk by creating a
portfolio of assets that is not unduly concentrated by physical location. The advantage of acquiring development sites is the opportunity to make purchases
at a relatively lower cost, accepting that in so doing there will be a deferral of income generation whilst the necessary construction or improvement works
take place. The Board will also ensure that a variety of potential senior lenders are used to avoid excessive exposure to any single banking counterparty.
Liquidity
The liquidity of the Fund will be monitored on an on-going basis to ensure where possible there are adequate levels of liquidity within the Fund to meet
redemptions.
It is the Directors intention that the Fund will hold up to 10% of the NAV as cash or near-cash equivalents at all times, to satisfy potential cash withdrawals.
Should this prove insufficient to meet cash withdrawals, the Fund will have the ability to:•
•
•
•
•
place debt on assets that strategically have previously been unencumbered.
increase debt on particular assets where the value of the assets has risen.
sell the freehold of any property.
split any property into individual, long-leasehold flats predominantly for use by students and subsequently dispose of these into the market.
raise finance by other means consistent with the Articles.
Each property will be held in its own, individual SPV in order to secure any financing on a property by property basis and also to ensure flexibility should there
be a requirement to dispose of a property.
If the Directors are not able to raise liquidity by way of the above options, the Articles permit the Directors to delay redemptions.
Gearing and Bank Financing
Each property will be acquired via an SPV, a company established to hold the particular asset. Debt finance in the form of senior debt lending will be with
each SPV. The SPV in the case of property held in the UK will be located in Guernsey and, in the case of property held in Europe, located in either the country
in which the property is located or in the most fiscally neutral alternative jurisdiction. .
The Fund gearing in aggregate will be subject to a maximum of 100% of its Net Asset Value (equivalent to 50% of the Gross Asset Value). Loan to value
(“LTV”) varies amongst the major debt providers according to the perceived security and quality of the rental income. Higher LTVs are available where
students are placed in accommodation via the relevant university, or where the university itself is the direct tenant, as distinct from students renting rooms
directly themselves. Funding will be provided at the SPV level to finance the acquisition of the property and/or the asset within the SPV. The Fund will be
responsible for determining the appropriate level of gearing and the bank finance strategy for each of the SPV’s.
Valuation
The Property Advisor will be responsible for carrying out all due diligence and research on proposed acquisitions. The Fund will instruct lawyers and other
advisors as required. All properties suitable for acquisition will be supported by an independently obtained valuation provided by a member of the Royal
Institution of Chartered Surveyors (“RICS”) or its equivalent in other jurisdictions. The Valuation Agent will have experience of the relevant market sector in that
jurisdiction.
7
PART V - DIRECTORS, MANAGEMENT AND ADMINISTRATION
DIRECTORS
The Directors of the Company and the Fund are as follows:
Gunther Gommes
Gunther graduated from HELMo University in 1986 in Accounting and Finance. He is a Member of the Institute of Directors and has qualified as a Chartered
Director. Gunther is a Guernsey resident with over 25 year’s international business experience in senior positions. He started his career in Luxembourg in 1987
joining Banque Internationale a Luxembourg ('BIL')'s Fund administration unit. In May 2000, Gunther went on to join Credit Suisse AM Fund Services in
Luxembourg; he transferred on an international assignment to Credit Suisse Fund Administration in Guernsey in 2006, where he was Head of Operations, Co
Chief Operating Officer and director of the Executive Board. Gunther brings relevant board experience and is fluent in English, German, French and
Luxemburgish and conversational in Swiss German and Dutch. Gunther is Belgian and resident in Guernsey.
Andrew Henton
Andrew graduated from Oxford University in 1991 and subsequently qualified as a Chartered Accountant with PricewaterhouseCoopers in London,
specialising as a corporate tax consultant. He spent eight years working in the City as a corporate finance advisor with HSBC Investment Bank and as a
principal of the Baring English Growth Fund, a private equity Fund focussed on mid market transactions sponsored by ING Barings. He has extensive
transaction analysis and execution experience that is directly relevant to structured property acquisitions. In 2002 Andrew was relocated to Guernsey by Close
Brothers Group plc to take responsibility for integrating and reorganising a number of regulated banking, custody, asset management and fiduciary
administration businesses that the bank had acquired in Jersey, Guernsey and Isle of Man. Their activities included the administration of over £1 billion of
property assets held in open ended investment funds and in Special Purpose Vehicles. He was Head of Offshore Businesses for Close until the division he
managed was sold to Kleinwort Benson in 2011. He has wide board experience of both regulated and non regulated businesses (including listed Funds) in
both executive and non executive capacities. Specifically he was Chairman of Close Global Funds Limited, a Jersey domiciled retail fund which had a
specific asset allocation to property assets. Andrew is British and resident in Guernsey.
Kerry-Anne Marais
Kerry-Anne graduated from Heriot Watt University in 1995 and went on to qualify as a Chartered Accountant becoming a Member of the Institute of
Chartered Accountants in Scotland in 1999. Over the years Kerry-Anne has held senior positions offshore including financial controller for HSBC Private Bank
(Funds), managing director of Augentius Fund Administration (Guernsey) Limited and managing director of Augentius Trust Company (Guernsey) Limited.
Kerry-Anne has also acted as designated compliance officer and MLRO. She has had varied Board experience including director of a Guernsey regulated
general partner to a property fund and director of a property group which was ultimately sold to a London Stock Exchange listed company. She has also
obtained relevant qualifications to compliment her experience including the MLRO Diploma, Diploma in Trust creation (law and practice) and the Investment
Management Certificate. Kerry-Anne is British and resident in Guernsey.
James Metcalf
James studied Mathematics, Computing and Law at Liverpool and Manchester universities. He spent over 20 years in the computing industry operating in
sales and senior management at global companies including Tandem and Oracle where he managed multi business sectors. He has Board experience
as a director at several companies and has acted as fund manager previously including those in the Crosslane group of companies which he founded in
2007. James is British and is resident in the United Kingdom.
All of the Directors are non-executive Directors.
A list of other directorships held by the Directors is available upon request from the Administrator.
The Directors control the affairs of the Fund at regular board meetings and are responsible for the overall investment strategy to be pursued by the Fund.
PROMOTER
The Promoter of the Fund is Crosslane Fund Managers LLP.
The Promoter was incorporated on 22 December 2009 in England & Wales as a limited liability partnership and operates as fund manager for the Crosslane
Student Accommodation Fund No.1 and The St Regent Fund, both of which are Student Accommodation funds totalling over 1,000 beds and valued at
over £50million. Its registered number is OC351047. James Metcalf is a designated member of the Promoter.
The Promoter's activity has historically been concentrated on the establishment and management of high yielding Student Accommodation investment
funds.
Functions of the Promoter
The Promoter will co-ordinate the promotion of the Fund, distribute application forms, assist the Administrator to complete customer due diligence enquiries
in respect of subscribers for Shares, prepare quarterly shareholder reports, attend meetings of the Board as required, arrange for the publication of
advertisements and other documents of that nature, arrange all debt for the Funds consideration in relation to the properties acquired and developed and
generally deal with enquiries in relation to proposed investments. In addition, the Promoter will provide financial performance information including that of
the provision of financial data to the Administrator or the Fund as required.
PROPERTY ADVISOR
The Property Advisor of the Fund is Crosslane Property Advisor (Guernsey) Limited.
The Property Advisor was incorporated on 3rd December 2012 in Guernsey. Its registered number is 55937. The Property Advisor has access to a pipeline of
over 2,000 beds throughout Europe with a 2012 valuation in excess of £150 million and expects that this level of pipeline can be maintained for the
foreseeable future. The Property Advisor has significant UK student accommodation experience and the Directors of the Fund believe that the skills,
experience and track record of Crosslane in the UK are directly transferrable into the targeted EU markets that have been identified.
Functions of the Property Advisor
The Fund has appointed the Property Advisor on an exclusive basis to provide all property related investment advice in respect of property assets owned or
to be acquired or developed on behalf of the Fund. The terms of its appointment include (but are not limited to) the following:•
•
evaluation of potential property investments for acquisition.
recommendations in relation to opportunities for the acquisition or development of property investments.
8
•
•
duties as detailed in individual Development Management Agreements entered into by the Fund and the Property Advisor on the acquisition of every
property asset.
provision of advice and assistance to the Fund, as the Fund may reasonably require, in arranging and negotiating the purchase or sale of property
investments and in monitoring the performance of the property portfolio including;
• the provision of an asset management report every 6 months including the analysis of the financial and general information regarding the Fund’s
property portfolio, monitoring property market conditions and advising the Fund if, at any time, a sale or refurbishment of a property investment
may be desirable.
• when requested by the Fund, make recommendations as to the appointment of, and liaison with, such other persons (including investment
banks, financial institutions, solicitors, accountants, valuers, surveyors, property managers, real estate agents, brokers, loss adjusters, insurance
valuers, planning consultants and environment consultants) engaged by or on behalf of the Fund from time to time.
The services provided by the Property Advisor are on a strictly advisory basis and the Property Advisor shall have no power to bind the Fund or make any
investment decisions.
PROPERTY MANAGER
The Property Manager of the Fund is Prime Student Living Limited formerly Crosslane Asset Management & Lettings Limited.
The Property Manager was incorporated on 14th April 2008 in England & Wales. Its registered number is 6563753. The Property Manager currently manages
1,058 beds across the UK on behalf of Crosslane Student Accommodation No1 Limited Partnership and St. Regent Limited Partnership. The Property Manager
has significant UK student accommodation management experience and the Directors of the Fund believe that the skills, experience and track record of
the Property Manager in the UK are directly transferrable into the targeted EU markets that have been identified, to either manage that property directly or
to recommend suitable property managers outside of the UK.
Functions of the Property Manager
The Property Manager will be responsible for the day to day management of each property acquired by the Fund and the marketing and letting of the
Student Accommodation with the aim of achieving maximum occupation. All costs of operating the building will be paid for by the Fund in accordance
with the services within each Property Management Agreement.
CUSTODIAN
Royal Bank of Canada (Channel Islands) Limited is the designated custodian for the purposes of the Law of Victus Capital ICC Limited and the Fund and
acts as custodian of the assets of the Fund.
The Custodian is a company incorporated with limited liability in Guernsey on 10th July 1973 and having its registered office at Canada Court, Upland Road,
St Peter Port, Guernsey GY1 3BQ. The Custodian has an authorised share capital of 7,500,000 shares of £1 each, of which 5,000,000 have been issued and
are fully paid. Its principal business activities are the provision of banking and custody services and its ultimate owner is Royal Bank of Canada, a company
with limited liability incorporated in Halifax, Nova Scotia, Canada in 1869 and with its registered office at 1 Place Ville Marie, Montreal, Quebec, Canada.
The Custodian is licensed under the Banking Supervision (Bailiwick of Guernsey) Law, 1994 and the Law to carry on banking and investment business in
Guernsey and the business of a trustee of collective investment schemes. As at 30 September 2012, the Custodian had assets under custody of USD
37,478,990,243.
Functions of the Custodian
Under the terms of the Custodian Agreement dated 8 January 2013 made between the Fund and the Custodian, the Custodian was appointed as
custodian of the Fund. The Custodian's responsibilities include performing and discharging all the duties of the custodian of the Fund under and in
accordance with the Custodian Agreement, the Law and the Rules. The Custodian will receive regular reports and valuations from the Valuation Agent of
each SPV.
The Custodian is not responsible for the selection or valuation of investments. The Custodian is responsible for custody of only those assets held directly by
the Fund, being the shares in and loans made by the Fund to its wholly owned SPVs. The Custodian is not responsible for the custody or control of the property
and other assets of the underlying property holding SPVs (which custody and control shall rest with the board of directors of those SPVs). However, the
Custodian will take reasonable care to ensure that it is satisfied that arrangements are in place and continue to be made for the safekeeping of documents
of title to such property and other assets. For the avoidance of any doubt, such documents of title will not be held with the Custodian.
In accordance with the Rules, the Custodian will also take reasonable care to ensure that the methods used by the Administrator in calculating the prices
at which Shares are issued or redeemed are in accordance with the Articles and this Information Memorandum and that the Fund is properly administered
by the Administrator in accordance with its obligations under the Rules.
ADMINISTRATOR, SECRETARY AND REGISTRAR AND DESIGNATED MANAGER
The Administrator, Secretary, Registrar and Designated Manager is Ardel Fund Services Limited, a company incorporated in Guernsey as Bachmann Asset
Management Limited with limited liability on 12 March 1993, with its registered office at Frances House, Sir William Place, St. Peter Port, Guernsey GY1 4HQ.
It changed its name to Bachmann Fund Administration Limited on 31 May 2002 and to Ardel Fund Services Limited on 6 August 2010, following a partial
management buyout on 1 April 2010. The Administrator provides third-party Fund administration services to a wide range of investment Funds. The
Administrator is licensed in Guernsey by the Guernsey Financial Services Commission under applicable law to carry on business as an administrator of
collective investment schemes. The Administrator is responsible for the management and administration of the administrative, financial and legal affairs of
the Fund (and also of the Company) under the terms of the Administration Agreement.
The Administrator has been appointed as Designated Manager of the Fund for the purposes of the Law.
Functions of the Administrator
The Administrator was appointed, pursuant to the Administration Agreement dated 8 January 2013 between the Fund and the Administrator to act as
administrator, secretary and registrar of the Fund.
The Administrator's duties include the following:
•
•
•
•
•
•
receiving all subscriptions for Shares and processing all Application Forms.
paying all redemptions and processing all Redemption Notices.
maintenance of the shareholder register.
opening and operating, in the name of the Fund, interest-bearing bank accounts in order to receive and distribute the Fund's Funds.
administering the Fund's cash holdings.
preparing and publishing a monthly NAV per Share, based on the valuation of the Fund’s assets.
9
•
•
•
•
•
•
•
•
•
preparation of annual accounts for auditing by the Auditor.
carrying out the day-to-day administrative requirements of the Fund, including preparing and posting all notices for quarterly and ad hoc management
and board meetings of the Fund.
procuring that all the statutory filings of the Fund are made, including filing annual validations, any other periodic regulatory filings, signing and filing
annual accounts and notifying the Companies registrar of any change in details in relation to Directors and shareholders.
preparation of stock exchange announcements and continuing obligations.
carrying out due diligence/money laundering verification of investors.
compliance monitoring and reporting.
assisting the Promoter in the preparation of quarterly investor reports to shareholders.
responding to investor queries.
paying service provider fees and the fees and commissions of the Promoter, the Property Advisor, the Valuation Agent, the Auditor, and any legal and
other costs and expenses as directed by the Directors.
CISX SPONSOR
The CISX Sponsor was appointed by the Fund, pursuant to the Sponsor agreement dated 8 January 2013, to act as the sponsor to the Fund in connection
with the listing of the Shares of the Fund on the Official List of the CISX.
The duties of the Sponsor include to prepare the formal application for listing and lodge it and all documents supporting it with the CISX, assist in the
preparation and obtain the approval of the CISX for the publication of the Listing Document and, on an ongoing basis after Admission, to advise on the
application of the Listing Rules when requested by the Fund and to liaise and communicate with the CISX on behalf of the Fund.
SPV ADMINISTRATORS
In accordance with the taxation advice received it is intended to incorporate limited liability holding companies in Luxembourg (the “Lux Co.”) and Guernsey
(the “Guernsey Co.”) with their share capital owned by the Fund. Both Lux Co. and Guernsey Co. will act as intermediary companies to hold each of the
property holding SPVs. In the case of Lux Co., this is in order to participate in double taxation treaties.
On incorporation of the Lux Co. by the Fund, a suitable Luxembourg Administrator will be appointed.
In the case of Guernsey Co. the administrator is Ardel Fund Services Limited.
CONFLICTS OF INTEREST
The Rules contain conflicts of interest provisions requiring that “relevant persons” may not sell or deal in the sale of property to the Fund or purchase scheme
property from the Fund unless the arm's length requirement is met. The onus is on the Directors to take all reasonable steps to ensure that there is no breach
of this requirement.
The term "relevant persons" would include the Property Advisor, the Property Manager and any of their associates and the arm's length requirement is that
the arrangements between the relevant person and the Fund are at least as favourable to the Fund as would be any comparable arrangement effected
on normal commercial terms negotiated at arm's length between the relevant person and an independent party.
It is necessary for the value of the property in question to be certified in writing for the purpose of the transaction by a person selected and approved by
the Directors as independent of any relevant person and qualified to value the property and for the Directors to be of the opinion that the terms of the
transaction are not likely to result in any material prejudice to shareholders.
As noted in the section entitled Risk Warnings in Part X of this document, various entities associated with the Property Advisor, the Property Manager and the
Promoter will be involved in the process to acquire, refurbish and/or manage properties held by the Fund. In order to ensure that the relevant requirements
under the Rules in relation to conflicts of interest are met, the Directors will make independent enquiries and take independent advice as appropriate and,
in particular, will ensure that all properties suitable for acquisition by the Fund are supported by an independently obtained RICS valuation report, or
equivalent in other jurisdictions, from a suitably qualified independent Valuation Agent.
10
PART VI - DEALING PROCEDURES
APPLICATION PROCEDURE
Share Classes
Shares in the Fund will be offered for subscription at the discretion of the Directors on the terms described below. Shares in the Fund will be issued initially in
the Share Classes set out in the relevant Supplement.
The Directors in their discretion, from time to time may determine to issue further Share Classes in the Fund on different terms. This may include, without
limitation, Shares in respect of which different charges may apply.
After the Initial Offer Period, Shares may be issued at the Subscription Price based on the NAV on a monthly basis on each Dealing Day.
SUBSCRIPTION PROCEDURE
The Shares for each of the Share Classes will be available for issue at the initial Subscription Price on the initial Dealing Day. The expected timetable for the
initial issue of Shares and the latest date for receipt of Funds is set out on page 3 of this Information Memorandum.
After the initial Dealing Day, the Shares of each Class will be available for subscription on any Dealing Day at the relevant Subscription Price subject to the
applicable terms as detailed in the relevant Supplement.
Subscription Price
The Price at which Shares of any Share Class will be issued on the relevant Dealing Day (the “Subscription Price”) will be calculated by the Administrator by
determining the Net Asset Value attributable to the relevant Share Class in accordance with the provisions of the Articles at the Valuation Point for the relevant
Dealing Day, as described in Part VII of this Information Memorandum. In arriving at the Net Asset Value for each Share Class, adjustments will be made in
respect of fees, costs, expenses, losses, gains and profits (including foreign currency gains and losses and the costs associated with any foreign exchange
contracts or other hedging instrument, if any, in respect of Share Classes which are not denominated in the Base Currency). The resulting amount will then
be divided by the number of Shares in issue or deemed to be in issue in respect to the relevant Share Class. In the case of Share Classes denominated in
currencies other than Pounds Sterling, the resulting amount will be multiplied by the relevant foreign currency exchange rate applicable to the relevant Share
Class. NAV and the Subscription Price will be calculated to four (4) decimal places.
Minimum Subscription
The current Minimum Subscription level for Shares of each Class will be set out in the relevant Supplement. However the Directors, at their discretion, may
vary the Minimum Subscription from time to time. Shares will be issued to two (2) decimal places.
Applications
Application for Shares must be made in writing on the Application Form which is available from the Administrator and submitted by fax or electronic mail or
in writing to the Administrator to be received by 5:00 p.m. Guernsey time on 20th day of the month or if not a Business Day the preceding Business Day or
such other date as determined by the Directors prior to the relevant Dealing Day. The Directors reserve their discretion to accept Application Forms that are
received late. Applications received by fax or electronic mail must be confirmed immediately by sending the original Application Form to the Administrator.
The Dealing Days comprise the second Business Day in each calendar month (or such other or additional Business Day(s) as the Directors may determine in
their absolute discretion).
All payments, comprising cleared monies for Shares, must be received on behalf of the Fund by 5:00 p.m. two Business Days prior to the month end before
the relevant Dealing Day. The Directors reserve, in their absolute discretion, their right to accept cleared monies after the specified time. Where cleared
monies are received late, the application may be held over until the next following Dealing Day. Interest earned on cleared funds received before each
Dealing Day will accrue for the benefit of the Fund.
Incomplete Application Forms will be returned to the applicant without being logged as received. Where an application is rejected, any funds received will
be returned to the applicant (without interest) as soon as practicable at the risk and cost of the applicant. Applications may not be accepted if the
determination of NAV is suspended. The circumstances in which this might occur are set out in Part VII.
Contract Notes
Contract notes in respect of subscriptions will be sent to investors by the Administrator within seven Business Days of the relevant Dealing Day.
Certificates
The Directors are not obliged to issue certificates in respect of Shares. Title to shares will be evidenced by entries on the Register of Members, held by the
Administrator.
Procedures for the Prevention of Money Laundering
Measures aimed towards the prevention of money laundering require each investor to verify his/her identity and source of Funds and wealth to the
Administrator and applicants are therefore required to produce the documents as outlined in the notes to the Application Form. This obligation is absolute
and the Administrator will notify investors if additional proof of identity is required.
The issue of Shares remain subject at all times to the satisfactory completion of all customer due diligence requirements.
Data Protection
The Fund and/or the Administrator may hold personal data (as defined in The Data Protection (Bailiwick of Guernsey) Law, 2001 (the “DP Law”)) relating to
past and present shareholders. Personal data may be retained on record after it is no longer used.
Such personal data is processed by the Administrator to maintain the register of shareholders and mailing lists, which may involve sharing such data with
third parties when (a) effecting the payment of dividends and other moneys to shareholders and (b) filing returns of shareholders and their respective
transactions in shares with statutory bodies and regulatory authorities.
The Administrator will only transfer personal data to third parties who are resident in a country which ensures an adequate level of protection for the rights
and freedoms of data subjects or which has agreed with the Administrator to ensure that such an adequate level of protection is afforded to any personal
data so transferred to it.
11
By becoming registered as a holder of shares in the Fund a person becomes a data subject (as defined in the DP Law) and is deemed to have consented
to the processing by the Scheme or the Administrator of any personal data relating to them in the manner described above.
Transfers
The transfer of Shares may normally be affected by delivery to the Administrator of an instrument of transfer in a form acceptable to the Administrator
together with a specimen signature of the transferee, subject to appropriate prevention of money laundering requirements. The Directors may at their
absolute discretion decline to register a transfer of Shares in the circumstances set out in the Articles. There will be no administration fee for the transfer of
Shares.
Conversions
Conversion between Classes of Shares may be permitted by the Directors at their discretion subject to the following conditions:•
•
•
the number of Shares of the new Share Class to be issued in exchange for Shares of the first Share Class will be calculated as the number of Shares
of the first Share Class as specified in the notice of conversion which the holder has requested to be exchanged times the Redemption Price of a
Share of the first Share Class as calculated at the Valuation Point relative to the Dealing Day of the first Share Class times such currency conversion
factor as determined by the Directors as representing the effective rate of exchange between the currency in which the first Share Class is
designated and the currency in which the new Share Class is designated, the resulting figure to be divided by the Subscription Price for a Share of
the new Share Class as calculated at the Valuation Point relative to the Dealing Day for subscriptions in relation to the new Share Class.
application for conversion must be made in writing to the Administrator to be received by 5:00 p.m. on 20th Business Day of the month or if not a
Business Day the preceding Business Day or such other date as determined by the Directors prior to the relevant Dealing Day. The Directors reserve
their discretion to accept any application for conversion that is received late. Requests received by electronic mail or fax must be confirmed
immediately by sending the original to the Administrator.
in the event that a conversion request would, if satisfied, contravene the Minimum Subscription amount or Minimum Redemption amount specified
in the relevant Supplement, the Directors may refuse to effect the conversion.
There is no limit on the number of conversions that may be made and no conversion charge applies. The Conversions may not be effected in circumstances
where the determination of NAV is suspended or redemptions are delayed.
REDEMPTION PROCEDURE
Shareholders may apply to have their Shares redeemed on the relevant Dealing Day subject to the Articles and the following terms and conditions. Additional
information of the redemption terms for individual Share Classes are detailed in the relevant Supplement.
Redemption Price
The Price at which Shares of any Share Class will be issued on the relevant Dealing Day (the “Redemption Price”) will be calculated by the Administrator by
determining the Net Asset Value attributable to the relevant Share Class in accordance with the provisions of the Articles at the Valuation Point for the relevant
Dealing Day, as described in Part VII of this Information Memorandum. In arriving at the Net Asset Value for each Share Class, adjustments will be made in
respect of fees, costs, expenses, losses, gains and profits (including foreign currency gains and losses and the costs associated with any foreign exchange
contracts or other hedging instrument, if any, in respect of Share Classes which are not denominated in the Base Currency). The resulting amount will then
be divided by the number of Shares in issue or deemed to be in issue in respect to the relevant Share Class. In the case of Share Classes denominated in
currencies other than Pounds Sterling, the resulting amount will be multiplied by the relevant foreign currency exchange rate applicable to the relevant Share
Class. NAV and the Redemption Price will be calculated to four (4) decimal places.
If applicable, the Redemption Price may be adjusted by the redemption fee as set out in the Supplement to this Information Memorandum.
Redemption Notices
Requests to redeem Shares (“Redemption Notices”) must be made in writing or on a completed Redemption Notice form to the Administrator by 5:00 p.m.
not less than 60 days prior to the intended Dealing Day. For example if a redemption was required on 2nd November (assuming that is a Business Day) a
Redemption Notice would need to be received by the Administrator by 5:00 p.m. on 3rd September. Redemption Notices received after the cut-off time
may, at the discretion of the Directors, be effected or may be carried forward to the next following Dealing Day.
Redemption Notices submitted by fax or electronic mail must be confirmed immediately in writing and the original must be received by the Administrator
prior to the release of any redemption proceeds.
Except in the circumstances described in the Articles, including where redemptions have been suspended, limited or delayed, Redemption Notices are
irrevocable once received by the Administrator, and can only be cancelled at the discretion of the Directors.
In the event that a redemption would reduce the value of the shareholder’s holding of Shares to a figure below the Minimum Subscription of the relevant
Share Class as detailed in the Supplement to this Information Memorandum, the request may be treated as a request to redeem that shareholder’s entire
holding at the Director's discretion.
If the determination of the NAV of any Share Class is suspended beyond the day on which it would normally occur, the right of a shareholder to have his
Shares of that Class redeemed shall also be suspended. The circumstances in which determination of NAV may be suspended are set out in Part VII. Should
redemptions of any Share Class be suspended for any period of time, the listed status of that Share Class on the Official List may also be suspended.
Contract Notes
Contract notes in respect of redemptions will be sent to investors by the Administrator within seven Business Days of the relevant Dealing Day.
Settlement
Following redemption, payment of the redemption proceeds, net of any deductions including the redemption fee (if applicable), will be made in the
currency of the Share Class redeemed to the relevant shareholder in accordance with the instructions detailed in the Redemption Notice. Except where
redemptions are delayed (as described below), payment will normally be made within twenty Business Days of the relevant Dealing Day and, wherever
possible, the Administrator will endeavour to pay the redemption proceeds within ten Business Days of the relevant Dealing Day. Payments to third parties will
not be made.
Redemption proceeds will normally be sent by telegraphic transfer at the expense and risk of the shareholder credited to the bank account of the
shareholder as detailed in the Redemption Notice.
Redemption Limitation and Delay
The Articles permit the Directors to limit the number of Shares of the Fund as a whole to be redeemed on a single Dealing Day to one tenth (10%). By way
of example only, the Directors may apply this limitation if there is insufficient liquidity in underlying property investments to effect disposal at NAV or if the
disposal of underlying property investments will result in the payment of penalties from the Fund to a lending bank for the early repayment of any debt.
The Articles further permit the Directors to delay redemptions.
12
If, in the opinion of the Directors, insufficient subscription proceeds and/or insufficient cash is available to the Fund to meet redemption requests in addition
to normal operating expenses, it may be necessary to dispose of properties in the Fund's portfolio to meet such redemptions. In such an eventuality, the
Administrator will advise the redeeming Shareholders accordingly.
In such circumstances, the Directors may, at their absolute discretion, either limit redemptions on the relevant Dealing Day or elect to delay the entire
redemption for a period of up to twelve months, in order to achieve an orderly realisation of assets to satisfy the redemption requests. In such circumstances,
all subsequent redemption requests will similarly be delayed.
Where it is necessary to delay Redemptions, the Directors reserve the right, in their absolute discretion, to adjust the Redemption Price to reflect the net
proceeds received from the realisation of such assets.
Where, pursuant to the Articles, redemptions of Shares have been suspended, limited or delayed, then following such continuing period of suspension, limit
or delay the Directors may deal with all redemption requests as follows. Either:•
in order of the date they were received (commencing with the earliest); or
•
so as to be scaled back rateably so that all Shareholders wishing to redeem Shares on that Dealing Day shall be permitted pro rata to the amount
requested in their Redemption request; or
•
in such other equitable manner as the Directors in their sole discretion consider appropriate;
and redemption requests shall be treated as if a request for redemption or conversion had been made in respect of each subsequent Dealing Day until all
the Shares to which the original requests related have been redeemed.
A Share shall be deemed to remain in issue until the close of business on the Dealing Day on which it is actually redeemed. From this point, a Share shall
be deemed to be redeemed for all purposes and shall carry no further rights under the Articles and the ex-member concerned will rank only as a creditor
of the Fund in respect of the Redemption Price payable.
Compulsory Redemption
The Directors have the power under the Articles to compulsorily redeem Shares of any shareholder who is a US Person or whose existence as a shareholder
causes or may cause the Fund to suffer any regulatory or fiscal restrictions in any jurisdiction which the Fund would otherwise not have suffered.
The Directors further have the power under the Articles to compulsorily redeem all Shares in issue at either Class or Fund level if at any time the NAV of the
relevant Share Class or the Fund is less than £1 million.
Illiquid Investments
The Articles contain provisions that would allow the Directors to segregate certain of the Fund's investments which are deemed by the Directors or the
Promoter to be illiquid and to issue to Shareholders at the relevant time shares of a separate share class in respect thereof which shares shall not be
redeemable at the option of Shareholders holding such shares. The terms of issue of any such shares shall be fixed at the time of issue and subject to the
provisions of the Articles and the Companies Law.
Switching between Cells
The Fund is the first Cell to be activated by the Company. If further Cells are subsequently established or activated, shareholders will be informed in advance
of the implementation of any procedures designed to enable shareholders to apply to have their Shares switched into one or more other Cells of the
Company.
13
PART VII - ADDITIONAL INFORMATION
VALUATION
Net Asset Value
The Net Asset Value per Share of each Share Class will be calculated by the Administrator in the relevant currency (and rounded to four (4) decimal places)
as at each Valuation Point in accordance with the valuation principles set out in the Articles.
The Net Asset Value of each Share Class is equal to the value as at the Valuation Point of all of the assets less all of the liabilities of each Share Class at such
Valuation Point. For that purpose the Articles provide for increases and decreases in Net Asset Value to be attributed to the relevant Share Class. The Articles
further provide for a separate sub-account or “Class Fund” to be maintained for this purpose so that all foreign exchange items, fees, hedging costs, hedging
gains and losses, liabilities and expenses in relation to the relevant valuation period may be attributed to the relevant Share Class or Classes.
The NAV per Share of each Share Class will be published by the Administrator normally within five (5) Business Days of the Dealing Day and will be provided
to the CISX by the Administrator as soon as it is available.
Valuation Principles
Cash held in interest-bearing bank accounts will be valued at face value (together with accrued interest to the relevant date). The value of any investment
which is listed or quoted on a stock exchange will normally be based on the mid-market price.
The value of any other investment will, so far as practicable, be made in accordance with the Fund's accounting policies from time to time but subject
thereto be such as the Directors may decide having regard to such valuations as may be available to the Directors. Shares in any wholly owned subsidiary
company established for the purposes of holding assets of the Fund shall be valued at Net Asset Value in accordance with the provisions of the Articles
applicable to the Fund and any loan between the Fund and such subsidiary shall be excluded for the purposes of such valuation.
The Articles permit the Directors to consider whether any basis of valuation set out in the Articles is inapplicable or that the value determined is unfair, in which
case the Directors may substitute what is in their opinion fair value. All valuations made pursuant to the Articles will be binding on all persons.
Valuation of Property Investments
Valuations of the Fund's property investments will be prepared monthly by the Valuation Agent in accordance with the latest Royal Institution of Chartered
Surveyors Valuation Standards or its equivalent in other jurisdictions using comparative investment valuation methods.
Suspension of Valuations
The Directors may declare a suspension of the determination on any Dealing Day of the Net Asset Value of Shares of the Fund or any Share Class in the
event that:
(a) a Stock Exchange which provides the basis for valuing any of the assets is closed other than for or during holidays, or if dealings on such Stock Exchange
are restricted or suspended;
(b) as a result of political, economic, military or monetary events or any other cause or circumstance whatsoever outside the control, responsibility and
power of the Fund, disposal of assets is not reasonably practicable without being seriously detrimental to the interests of shareholders or if, in the opinion
of the Directors, a fair price cannot be calculated for the assets;
(c) there is a breakdown of the means of communication normally used for the valuation of a significant portion of the investments or if for any reason the
value of any asset may not be determined as rapidly and as accurately as required;
(d) as a result of exchange restriction or other restrictions affecting the transfer of Funds, transactions are rendered impracticable, or purchases, sales,
deposits and withdrawals cannot be effected at the normal rates of exchange;
(e) Redemption Notices received in respect of Shares exceed ten percent (10%) of the Net Asset Value of the Fund;
(f) a resolution to wind up the Fund has been passed; or
(g) a resolution or determination to wind up the relevant Class has been duly passed or made.
The determination of the Directors to declare a suspension shall be conclusive. Declarations of suspension will be notified to shareholders and will also be
notified immediately to the GFSC and CISX.
Details of any such suspension will be announced via the CISX website and the listing of the Shares will be suspended during the suspension period.
During the period of any suspension the Directors will review the reasons for such suspension and declare the suspension at an end as soon as they consider
that the reasons or conditions giving rise to the suspension have ceased to exist and no other reasons or conditions entitling them to declare a suspension
shall exist. The lifting of any such suspension will be notified to shareholders, the GFSC and CISX.
Dividend/Distributions
All income will be rolled up and reflected in the NAV of Shares. It is not intended that the Fund will distribute any of its income.
Publication of Prices
The NAV per Share of each Class will be notified to the CISX by the Administrator as soon as is practicable after calculation and will be published on the
CISX website (www.cisx.com), on Reuters and on Bloomberg, or such other media as the Directors may from time to time deem appropriate. The NAV per
Share will be calculated as at each Valuation Point and will be updated as soon as is practicable. The Subscription Price and the Redemption Price is
available from the Administrator upon request and is also available on the Fund's website, www.victus-capital.com.
Accounting date and annual reports
The accounting date of the Fund is 31 August in each year or such other date as the Directors shall determine from time to time having given due notice
to all holders. The first annual accounting date will be 31 August 2013. Annual reports will be published and made available on the Promoter's website,
www.victus-capital.com and sent to shareholders within a period of six months following the relevant accounting date. The Directors do not intend that the
Fund should prepare interim accounts.
The audited financial statements of the Fund will be prepared in accordance with IFRS (International Financial Reporting Standards).
At the accounting date full valuations of the Fund's property investments will be prepared in accordance with the Royal Institution of Chartered
Surveyors appraisal standards, or equivalent in other jurisdictions.
Untraced Shareholders
The Articles permit the Fund to sell the Shares of an untraceable member of the Fund after twelve (12) years if certain conditions are met. These conditions
include having written to the person's last known address without response during the twelve (12) year period. The Fund must then advertise its intention to
sell the said Shares in a national newspaper and in a newspaper circulating in the area in which the last known address of the member is located. The
proceeds from any such sale will be held for the account of the Fund.
14
PART VIII - FEES AND EXPENSES
FEES
This Part summarises the various fees, expenses and costs payable by the Fund. For further information in respect of fees payable in respect of a Share Class,
please refer to the relevant Supplement.
Establishment cost
The cost of establishing the Fund and the Company is estimated to be £440,000 and will be amortised over a period of up to 60 months. This includes the
expenses of issue of the Shares and the application for Admission. If all Share Classes are listed the CISX listing application fees will amount to £3,875.
Share Allocation
Investors will receive an initial allocation of Shares equivalent to 100% of the amount invested.
Promoters Fees
Sales and Marketing Allowance
The Promoter will be entitled to receive an initial sales and marketing allowance calculated as 5% of the gross amount invested by subscribers in A Shares.
This charge will be amortised over 60 months following receipt of an investor’s subscription.
Annual Management Charge
The Promoter will receive an Annual Management Charge (“AMC”) of 1.5% per annum, calculated at a rate of 0.125% per month of the NAV, this will be
charged to the Fund and is payable monthly in arrears. The AMC will be calculated and accrued at each Valuation Point.
Performance Fee
The Promoter will be entitled to a performance fee (the “Performance Fee”) of 20% of the amount by which the Preliminary Net Asset Value per Notional
Share exceeds both, (i) the High Water Mark (as defined below) and (ii) the Hurdle (as defined below). The Performance Fee charged at the Participating
Portfolio level will be reflected in the Net Asset Value. This method of calculation ensures that (1) any Performance Fee paid to the Promoter is charged only
if the management of the core objectives of the Fund has resulted in an appreciation in value, and (2) the gain or loss of Share Class hedging is not
considered as an over or under performance.
The Performance Fee will be calculated on each Dealing Day falling in the respective Fnancial Year (a “Performance Period"). However the first Performance
Period will be the period commencing on the Business Day immediately following the close of the initial Offer Period and ending on the 31 August 2013.
The Performance Fee will be deemed to accrue at each Valuation Point.
The high water mark (“High Water Mark” or “HWM”) for each Performance Period is:• in respect of the first Performance Period, and the second Performance Period if no Performance Fee was due in the first Performance Period, the
Initial Subscription Price of the Notional Share; and
• once a Performance Fee is paid, the Net Asset Value of the Notional Share on the last Valuation Day of the Performance Period in respect of which
a Performance Fee was last paid; and
• after two consecutive Performance Periods without a Performance Fee crystallisation, the higher of the average Net Asset Value of the Notional Share
over the past two Performance Periods or the initial Subscription Price of the Notional Shares. The average Net Asset Value of the Notional Share
means the average value of all the Net Asset Values per Notional Share calculated on consecutive Valuation Points during the two Performance
Periods.
For avoidance of doubt, based on before mentioned parameters, the HWM will be reset at the end of two (2) consecutive Performance Periods in respect
of which no Performance Fee becomes payable.
Hurdle Rate
The hurdle rate (“Hurdle Rate”), expressed as a percentage, for each Performance Period is 10%
Hurdle
The hurdle (“Hurdle”) for any relevant Performance Period is calculated as the product of the High Water Mark and the Hurdle Rate plus one, according to
the following formula:
Hurdle = High Water Mark x (1 + Hurdle Rate)
The Performance Period will be extended to two years if 1st Year does not achieve a positive performance. The Hurdle Rate will be compounded during that
second year as the product of the High Water Mark and the compounded Hurdle Rate plus one, according to the following formula:
Hurdle 2nd Performance Period = High Water Mark x (1 + Hurdle Rate)2
A compounding of the Hurdle will be done maximum for two consecutive Performance Periods in respect of which no Performance Fee is payable.
The Performance Fee will be reflected in the Net Asset Value of the Notional Shares and the Shares. In the case of Shares redeemed during the Performance
Period, the Redemption Price will be net of any accrued Performance Fees even if there was no Performance Fee due at the end of the respective
Performance Period. It should be noted that the Fund will not provide any equalisation provisions in respect of the performance fee calculation.
The Performance Fee, if due, will be crystallised at the end of each Performance Period and payable yearly to the Promoter in arrears within 30 calendar
days following the acceptance of the audited annual accounts at the annual general meeting of the Fund. In case of a negative performance as at the
end of the Performance Period, the High Water Mark will remain unchanged for the new Performance Period.
If the Promoter Agreement is terminated during a Performance Period the Performance Fee in respect of the then current Performance Period will be
calculated and paid as though the date of termination were the end of the relevant Performance Period.
Debt Arrangement Fee
The Promoter will receive a debt arrangement fee of an amount equal to 1.5% of any debt agreed to be lent to the Fund to complete an acquisition or to
fund any development costs or fee in relation to any property investments held or to be acquired by the Fund. The fee shall be payable as soon as monies
are drawn down from a lender.
Equity Arrangement Fee
The Promoter shall be entitled to receive an equity arrangement fee equal to 3% of the equity provided by the Fund towards any Development Costs
incurred under a Development Management Agreement or the purchase of land that is not funded by Debt Finance provided that the Fund receives a
rate of return thereon at a rate that is set out in the relevant heads of terms or as otherwise agreed between the Fund and the Promoter.
15
Financial Fee
The Promoter will be reimbursed for its reasonable actual costs incurred by it in providing financial performance data to the Administrator or the Fund as they
shall request.
Directors' Fees
Each Director of the Fund (each of whom is also a Director of the Company) is entitled to receive out of the assets of the Fund a fee of £15,000 per annum,
plus £2,500 per annum for each property holding SPV acquired by the Fund (capped at a total of £50,000 per Director per annum). In addition a daily fee
of £750 will be paid for any days worked resulting from exceptional travel or Fund work, in respect of both the Fund and the Company. The aggregate
remuneration payable to the Directors, exclusive of any exceptional daily fee as referred to above, from the Fund in respect of each Financial Year shall not
exceed £250,000.
Each Director is also entitled to receive reimbursement of travel and other costs properly incurred through attending meetings of the Fund in connection
with the business of the Fund. Insurance for the benefit of the Directors may also be purchased at the cost of the Fund.
Custodian Fees
The Custodian shall be entitled to receive an annual fee of 0.03% of NAV of the Fund subject to an annual minimum fee of £10,000. The Custodian fees
will be reviewed annually and will increase annually by a percentage of at least the latest published RPI in Guernsey.
Transaction fees are £30 per transaction. The Custodian will also change an initial set up fee of £5,000.
All fees commence from the execution of the Custodian’s Agreement and are payable monthly in arrears. Under the Custodian Agreement, the Custodian
is entitled to be reimbursed for its reasonable out of pocket expenses properly incurred.
Administrator Fees
In respect of its duties as administrator, secretary and registrar of the Fund, the Administrator shall receive an annual fee calculated and accrued as at each
relevant Dealing Day, and payable by the Fund in arrears on or before the 15th Business Day in the month following the relevant Dealing Day. The fee will
be based on the Preliminary Net Asset Value of the Notional Shares at the following rates and will be subject to a minimum fee of £35,000 per annum plus
disbursements:
0.11% per annum of the Preliminary Net Asset Value up to £100 million, 0.085% per annum of the Preliminary Net Asset Value amount in excess of £100
million and up to £250 million and 0.06% per annum for the amount of Preliminary Net Asset Value amount in excess of £250 million will apply.
In addition to the fees detailed above the Administrator will also receive a set administration fee of £5,000 per annum for each active Share Class of the
Fund and shall not become payable until the first Shares have been issued in respect of each Share Class.
The fees will be allocated pro-rata between all active Classes based on the proportion that the Net Asset Value of the Class represents to the Net Asset Value
of the Fund.
The Administrators annual fee is inclusive of investor transactions (subscriptions, redemptions and transfer dealings) received from Offshore Bonds, Platforms,
Discretionary Fund Managers and/or institutions. In the event subscriptions are received directly from individual investors, the Administrator reserves the right
to levy a fee per each new investor of between £25 and £100 depending of the risk profile of the investor.
The Fund shall pay the Administrator a fixed fee of £6,000 per annum to undertake the administration of the foreign exchange hedging transactions on the
absolute instruction of the Promoter. Such fees will not become payable until the first hedging transaction has been arranged.
The Administrator is entitled to receive a property transaction fee of £2,000 per transaction in respect of every acquisition of real property by the Fund or any
SPV.
The Administrator is also entitled to receive an additional one off fee of £2,000 in respect of each SPV established to hold property assets of the Fund,
payable at the date of incorporation and an annual fee of £3,000 per annum in respect of each SPV thereafter.
The Administrator’s minimum and fixed fees will increase annually by a percentage of at least the latest published RPI in Guernsey. All fees commence from
the execution of the Administration Agreement and are payable monthly in arrears.
For the avoidance of doubt there will be initial set up costs and on-going administration fee charged by any overseas administrator appointed to administer
overseas SPV’s.
Property Advisor Fees
The Property Advisor will provide property services to the Fund on every transaction and will make recommendations to the Fund in line with the Funds
objectives. In return, the Property Advisor will receive a transactional fee of 1% of the acquisition and disposal price of each property asset. Where the Fund
acquires land the Property Advisor will receive a fee of 2% of the land purchase price. Where the Fund enters into a forward purchase agreements with a
vendor, as referred to in Page 9 of this document, the Property Advisor will receive a fee of 3% of any loan amount also entered into pursuant to those
agreements.
The agreements entered into by the Fund and the Property Advisor will include a Development Management Fee for the Property Advisor of 10% of the
development costs and professional fees. In addition, there will be an overage profit due to the Property Advisor, where the increase in value after all costs
is shared equally between the Property Advisor and the Fund. In the case where the Fund acquires land and enters into a land Development Management
Agreement to develop that land, the Property Advisor will receive a land Development Management fee which is equivalent to the residual amount of
increased value of the Property Investment after the fund has taken into consideration the purchase of the land, all development costs including fees and
an agreed return to the Fund.
Property Manager Fees
In consideration of its services under its Property Management Agreement, the Property Manager will receive 6.25% of the total annual rent and other income
received in respect of each Property. In the case of where its services are required ahead of a completion of an acquisition the Property Manager will
receive a fixed mobilisation fee of £10,000. In addition a daily fee of £500 will be paid to attend meetings at the Fund's request.
CISX Sponsor Fees
The CISX Sponsor to the listing of the Fund's Shares on the Official List of the CISX is entitled to receive an initial fee of £3,000 and an ongoing annual fee of
£1,500.
16
SPV Cost
The costs associated with the operation and administration of the SPV’s will be borne by the individual SPV and therefore indirectly by the Fund. The Fund will
be responsible to ensure there is sufficient liquidity within the SPV to meet its operating costs.
Other Operating Expenses
The Fund will pay on-going legal, audit and administrative expenses incidental to its operations and business, including but not limited to:• expenses necessarily incurred in the alteration of the Articles as a result of changes of law and any consequential amendments to the Administration
Agreement as a result.
• the out-of-pocket expenses of the Administrator incurred in convening meetings of the Directors, calling any extraordinary general meeting of the
shareholders of the Fund, preparing and forwarding to Members notices, circulars, reports, accounts and statements;
• stock exchange listing expenses and annual listing fees.
• the cost of postage, photocopying, facsimiles and telephone calls;
• the fees and expenses of accountants, auditors, lawyers and other professional advisors of the Fund.
• interest, fees or charges payable on or on account of any borrowing by the Fund;
• brokerage commissions and charges and foreign exchange costs.
• fees and expenses and fiscal and governmental charges and duties relating to the purchase, sale, issue or redemption of Shares.
• fiscal or governmental charges or duties of the Fund including in connection with the acquisition holding or disposal of any of the assets of the Fund.
• fees payable under the Income Tax (Exempt Bodies) (Guernsey) Ordinance, 1989, as amended and the annual registration fee of the Fund.
• the cost of publishing the price or prices of the Shares and any notices relating to the Fund in any newspaper or other publication.
17
PART IX - TAXATION
The following information is general in nature and relates only to taxation applicable to the Fund, and the anticipated tax treatment in Guernsey applies to
persons holding shares in the Fund as an investment. The summary does not constitute legal or tax advice and is based on taxation law and practice at the
date of this document. Prospective investors should be aware that the level and bases of taxation may change from those described and should consult
their own professional advisors on the implications of making an investment in, holding or disposing of, shares in the Fund under the laws of the countries in
which they are liable to taxation.
The tax consequences for each investor of acquiring, holding, redeeming or disposing of shares in the Fund will depend upon the relevant laws of any
jurisdiction to which the investor is subject.
The Fund
The Fund is eligible to be granted tax exempt status by the Director of Income Tax in Guernsey pursuant to the Income Tax (Exempt Bodies) (Guernsey)
Ordinance, 1989. The Fund will need to reapply annually for exempt status, an application that currently incurs a fee of £600 per annum.
Once exempt status has been granted, the Fund will not be considered resident in Guernsey for Guernsey income tax purposes and will be exempt from
tax in Guernsey on both bank deposit interest and any income that does not have its source in Guernsey. It is not anticipated that any income other than
bank interest will arise in Guernsey and therefore the Fund is not expected to incur any additional liability to Guernsey tax.
In response to the review carried out by the European Union Code of Conduct Group (‘EUCCG’), the States of Guernsey has abolished exempt tax status for
the majority of companies and introduced a zero rate of tax for companies carrying on all but a few specified types of regulated business from January
2008. However, as collective investment schemes were not one of the regimes in Guernsey that were classified by the EUCCG as being harmful, collective
investment schemes have continued to be able to apply for exempt status for Guernsey tax purposes.
A review of Guernsey’s corporate regime was announced by the States of Guernsey in October 2009, again in response to further comments from the
EUCCG. A consultation document was issued on 21st June 2010. The EUCCG recently reviewed Guernsey following similar reviews of other crown
dependencies in 2011, and then reported that Guernsey’s deemed distribution regime was non Code compliant. The States has responded by agreeing
to abolish deemed distributions to subsequently allow Guernsey to become Code compliant and for the States review of its company tax regime to be
concluded. The EUCCG confirmed in September that Guernsey’s tax regime would then conform to the EU Code of Conduct, and this was ratified by the
EU’s Economic and Financial Affairs Council (ECOFIN) in December 2012. Meanwhile, again, collective investment schemes have not been affected and
can continue to apply for exempt tax status.
The Policy Council of the States of Guernsey has stated that it may consider further revenue raising measures in the future, including the possible introduction
of a goods and services tax, depending on the state of Guernsey’s public finances at the time.
EU Savings Tax Directive
Guernsey has introduced measures that are equivalent to the EU Savings Tax Directive. The Fund will not, under the existing regime, be regarded as an
undertaking for collective investment established in Guernsey that is equivalent to a UCITS authorised in accordance with EC Directive 85/611/EEC of the
Council for the purposes of the application in Guernsey of the bilateral agreements on the taxation of savings income entered into by Guernsey with EU
Member States. Consequently, in accordance with current States of Guernsey guidance on the application of the bilateral agreements, where the Fund’s
Paying Agent (as defined for these purposes) is located in Guernsey, the Paying Agent would not be required to exchange information regarding distributions
made by the Fund and/or the proceeds of the sale, refund, or redemption of Shares in the Fund.
Shareholders
Shareholders resident outside Guernsey will not be subject to any tax in Guernsey in respect of or in connection with the acquisition, holding or disposal of
any shares owned by them. Such shareholders will receive dividends without deduction of Guernsey Income Tax. At present Guernsey does not levy taxes
upon capital inheritances, capital gains gifts, sales or turnover, nor are there any estate duties, save for an ad valorem fee for the grant of probate or letters
of administration. No stamp duty is chargeable in Guernsey on the issue, transfer, switching or redemption of Shares in the Fund.
Any shareholders who are resident for tax purposes in Guernsey, Alderney or Herm will incur Guernsey income tax on any dividends paid on shares owned
by them but will suffer no deduction of tax by the Fund from any such dividends payable by the Fund where the Fund is granted exempt status. The Fund is
required to provide details of distributions made to shareholders resident in the Islands of Guernsey, Alderney and Herm to the Director of Income Tax in
Guernsey.
Subject to their personal circumstances, shareholders may be liable to taxation in respect to their holding of Shares in the Fund in their country of tax
residence.
As regards individual shareholders resident in the United Kingdom, the Directors propose to apply for “reporting Fund” status to HM Revenue & Customs in
respect of the Income Share Classes. Under the reporting Fund regime, those United Kingdom shareholders will be subject to tax on any sums distributed
by the Fund together with a deemed distribution of any excess of “reported income” over the sums distributed.
Foreign tax considerations
It is the intention of the Directors to conduct the affairs of the Fund so that the central management and control of the Fund is not exercised anywhere other
than in Guernsey. They also intend not to carry on a trade through any permanent establishment. Thus the Fund is not expected to be considered tax resident
or subject to tax in any jurisdiction other than Guernsey.
The Directors of the Fund intend to organise the acquisition of properties through separate SPV’s and will take appropriate measures for them to be held as
subsidiaries to minimise any amounts of tax on income received by them and including withholding tax applied to that income then passed onto the Fund.
Such subsidiaries may need to be tax resident in other jurisdictions, such as, for example, Luxembourg, but again steps will be taken to minimise any local
taxes. Meanwhile there can be no guarantee that the Fund’s or any Fund’s profits will not be diluted in this way.
18
PART X - RISK WARNINGS
Set out below are a list of the risk factors which have been identified as being most relevant to the Fund. Prospective Investors should consider the following
risk factors, in relation to the Fund, which individually or in aggregate could have a material adverse effect on the Fund. The information set out below does
not purport to be an exhaustive summary of the risks affecting the Fund and prospective investors should consult with their professional advisor before
determining whether to invest in the Fund. There may be new risks that arise in the future which could not have been anticipated in advance. The list includes
both risks that relate to the investment performance of the underlying assets, as well as risks that relate to how a company operates or is administered.
Investment in the Fund is not intended to be a complete investment programme for any investor. Prospective investors should carefully consider whether an
investment in Shares of the Fund is suitable for them in light of their own circumstances and financial resources and should take appropriate independent
professional advice.
The risks as set out below are not intended to be presented in any assumed order of priority. In particular, prospective investors should consider the following:
General Risks
An investment in the Shares of the Fund carries the risk of loss of capital. The value of a Share can go down as well as up and Shareholders may receive
back less than the value of their initial investment and could lose all of the investment.
Long-term investment
Investors should normally expect to hold the investment for its long-term growth potential. As a consequence the Fund may not be suitable for short-term
investment.
Property values
The Fund’s objectives depend to a significant extent on the property values. Property investment and trading can perform in a cyclical nature and values
can increase or decrease. Economic, political and legal issues can affect values as they can with any other investment. The properties will be valued
independently monthly after the Initial Closing Date. This monthly valuation will be by way of a professional opinion of the Valuation Agent or another
independent valuer as appointed by the Fund. Such independent valuations may be conducted as desk top valuation, although a full valuation will be
conducted at least once every year after the final closing date. There is no assurance that the valuations of the properties will reflect the actual sale price
even where such sales occur shortly after the valuation date.
Availability of suitable acquisitions
The business of acquiring the types of properties contemplated by the Fund is competitive and involves a high degree of uncertainty. High levels of
competition may result in the Fund being unable to source suitable properties. No guarantee can be provided that any targeted pipeline properties
identified will be acquired. Furthermore, the availability of investment opportunities generally will be subject to market conditions. Accordingly, there is no
guarantee that the Fund will be able to acquire properties that match its investment criteria or fulfil its investment strategy.
Occupancy risk
The value of the properties will be dependent upon the occupancy levels and the net rentals achieved of the property owned by the Fund. Other operators
of Student Accommodation in towns and cities where the Fund’s property is located may offer more attractive property or property at lower rentals.
Consequently, there is no guarantee that the occupancy levels will be sufficient to cover the costs of managing these assets and the administration costs
of the Fund. Occupancy levels could decline owing to a reduction in government Funding, change in market structure with an increase prevalence of
students living with their parents, drop in student numbers generally due to better job opportunities, closure of a university, changes to visa rules, increased
tuition fee, overbuilding of Student Accommodation, stricter entry requirements for foreign students and a lower take up of university places as economic
conditions improve. Ultimately this could lead to the closure of universities.
Lower than anticipated gross rental yield
In respect of those properties that are successfully let, the gross rental yield may be lower than currently anticipated due to a depressed rental market
conditions which may change. This situation could result in the net rental income being insufficient to cover the lending bank interest payments. In this
situation, the Directors would have to take steps to balance the net rental income of the Fund and the operating expenses, including the lending bank
interest. If required, it may be difficult to sell any of their properties and the disposal prices of the properties may be significantly below purchase cost and
the NAV per Share may be materially damaged.
Liquidity
Liquidity will be required to satisfy redemption requests by investors and the payment of fees and expenses by the Fund. In certain adverse market conditions
or when the demand for redemptions exceeds the level of subscriptions and the available cash resources, it may be necessary to sell some of the Fund’s
assets in order to meet the demand for redemptions. Investors should note that by the Fund investing in properties which may have some rights attached
for third parties or by granting third party rights in the process of using the properties to provide income, it is possible that the ability of the Fund to sell the
properties may be decreased. In such circumstances, it may be difficult to sell the Fund’s assets and the property sales process may take many weeks, even
months, to complete. Redemptions of Shares may therefore be restricted or suspended and/or payment of redemption proceeds may be delayed.
Conflicts of interest
The investment performance of the Fund will be heavily influenced by the performance of the Promoter, the Property Manager and the Property Advisor,
each of which are part of Crosslane and have shareholders in common. There is the potential for conflicts of interest since members of Crosslane will be
charging fees to the Fund and introducing / recommending transactions to it. Directors and employees of the Property Advisor and/or the Promoter and their
Affiliates who are involved in the operation and/or management of the Fund will also spend time on matters other than the Fund. Each member of Crosslane
and the Directors of the Fund (the majority of whom are independent) will respectively endeavour to ensure that the performance of their respective duties
will not be impaired by any other such involvements that they may have and that any conflicts which may arise will be resolved fairly.
Kerry-Anne Marais and James Metcalf, Directors of the Company, are also directors of the Property Advisor and they are therefore considered to have an
interest in any agreement between the Company and the Property Advisor.
Reliance on relationships and key individuals
The success of the Fund depends largely upon Crosslane and the expertise of the Non-Executive Directors. The Fund’s success depends on the ability of the
Directors to manage these relationships and the ability and willingness of each of the Property Advisor, the Property Manager and the Promoter to continue
to provide the services under the terms of their contracts with the Fund. The termination provisions of these contracts do not include termination on notice
by the Fund and may not be terminated on any change of control. Any or all of the Promoter, the Property Advisor and the Property Manager Agreement’s
each include the provision of 12 months’ notice to the Fund and in this event the Fund may not be able to source an alternative provider of equivalent
services. In this event the Fund could be adversely affected and it may be the case that the Fund determines to liquidate its assets, distribute the proceeds
and that the Fund is wound up.
19
Use of Special Purpose Vehicles
Property investments will be made via SPV's which may take the form of limited liability partnerships, unit trusts and or via joint ventures. This may introduce
risks not directly linked to real estate investment. For example, in the case of joint venture structures the possibility exists that the joint venture partner may
have interests and objectives that become inconsistent with those of the Fund, or that the partner becomes bankrupt. Such events may cause the Fund to
lose control over certain aspects of a particular investment, and/or lead to litigation. The involvement of sub contractors may similarly lead to disputes over
the fulfilment of contracts for services.
Fees Payable Regardless of Profit
The Fund will incur obligations to pay costs. The Fund will also incur obligations to pay the management fees and all operating, legal, accounting, auditing,
marketing, travel and other fees and expenses, including the costs of offering investments in the Fund. These expenses will be payable regardless of whether
the Fund makes a profit. Moreover, the terms of the performance fee are such that amounts may become payable under this arrangement based on
unrealised profits in the property portfolio. Such unrealised profits may never be realised in cash terms for the Fund if the property market declines before the
relevant Student Accommodation can be sold.
Abortive Costs
The purchase of the properties is subject to the continued availability of the parties agreeing the terms of the sale contract, the transfer and formal exchange
and completion of the documents. There is a risk that the Fund may not be able to proceed as intended, in which case any transaction costs incurred by
the Fund in respect of such purchase will be abortive costs borne by the Fund.
Leverage / Lending
The Fund has a gearing policy by which it may borrow up to 100% of the ungeared NAV at any point during the life of the Fund. Borrowings will amplify the
positive effects of rising prices for investors, but will also exacerbate the detrimental effects of falling values. Hence the volatility of NAV (which is an accepted
measure of risk) will increase as gearing increases. Material falls in the value of invested properties, or banks enforcing their security covenants, could result
in the Fund losing some or all of its assets and as a consequence investors losing some or all of their investment.
Availability and terms of bank finance
The Directors intend to seek facilities as and when needed to finance future additions to the portfolio and, if rental income is insufficient to cover all the
operating costs of the Fund, to finance the working capital needs of the Fund. It is not certain that such facilities will be able to be secured at levels or on
terms acceptable to the Directors. Any amounts that are secured under a bank facility are likely to rank ahead of shareholders’ entitlements and,
accordingly, should the Fund’s assets not grow at a sufficient rate to cover the costs of establishing and operating the Fund’s debt, shareholders may not
recover their initial investment.
The banks lending to the Fund may choose not to renew existing facilities when they mature and/or may choose to withdraw from lending to the Fund due
to changes in their own banking policy or an inability to agree lending terms. Were this to happen, it may not be possible to replace the bank loans on such
favourable terms, or at all, in which case the development and profitability of the Fund might be adversely affected.
In the event that the Fund enters into a bank facility agreement(s) or arrangement(s), such agreement(s) or arrangement(s) may contain financial covenants.
In particular, the agreement may require that the value of a specific property exceeds a fixed percentage of the value of any loan drawn down. If the value
of the specific property falls such that any financial covenant is breached, or if any other covenant is breached, the Fund may be required to sell, in a
limited time, part or all of that asset, potentially in circumstances where there has been a downturn in land or property values generally, such that the
realisation proceeds do not reflect the valuation of the land or property. Amounts arising under any bank facilities will rank ahead of shareholders’ entitlement
and shareholders’ returns may, therefore, be adversely affected by an early repayment.
Variable rate bank loans after initial facility period
Following the expiry of the initial loan terms, if the Fund requires additional bank borrowings, the bank borrowings will have to be renegotiated. This may result
in the terms of any new bank borrowings being more expensive, or it may, in extreme circumstances, not be possible to arrange any further bank borrowings
which may result in a large portion of the Fund being liquidated. In these situations, the NAV of the Fund could be adversely affected and the investors’
entire subscription may be lost.
No Investors’ compensation scheme
The Investors’ Compensation Scheme as established by the GFSC is not available for claims relating to investment in the Fund. Investors in the Fund are not
eligible for payment of any compensation under the Collective Investment Scheme (Compensation of Investors) Rules 1988 made under the Law.
Future Performance & Returns / No forecasts
Past and current performance does not imply that future trends will follow the same or similar pattern. Projections made in this Information Memorandum
may not be achieved. Investment in real property, in which the Fund is engaged, involves significant risk and is illiquid in nature. There is a significant risk that
Investors will not get back a part of, or any of, their investment. There can be no assurance that the Fund's investment objective will be achieved and
investment results may vary substantially over time.
This is a new Fund with no operating history. No representation is or can be made as to the future performance of the Fund. The assumptions are assumptions
only and these may or may not be realised. For example, rates of bank interest may be higher. No guarantees as to investment performance, income
distribution or capital gains are given, either expressly or by implication in this Information Memorandum.
There can be no assurance that the Fund’s management or realisation strategies will be successful and the Fund’s objective may not be met.
Economic conditions
The financial operations of the Fund may be adversely affected by general economic conditions, by conditions within any European property market or by
the particular financial condition of the property vendors and other parties doing business with the Fund. There could also be a currency risk to the Fund’s
investments in a European country that is ejected (or chooses to leave) the Euro.
Concentration of Investments
The Fund will invest all of its assets, to the extent not retained in cash, in the Student Accommodation sub-sector of the commercial property market and,
accordingly, diversification will be limited. The Fund could be subject to significant losses if it holds a particular investment that declines in value or is otherwise
adversely affected. There may also be occasions when the Fund has a concentration or risk in any one country location, property type or counterparty.
Legislation
The information in this document is based on the Directors’ understanding of current law, regulations and practice in the European countries it intends to
invest in. Changes to these laws, regulations and practices may adversely affect rent values, income levels, growth prospects and tax liabilities. Neither the
Fund, the Directors, the Promoter, the Sponsor, the Administrator nor any of their advisors can accept responsibility if there is any change in the law, in Her
Majesty's Revenue and Customs practice or in the tax treatment of the Fund or of any investors in the Fund.
20
Changes in taxation and laws
This document is prepared in accordance with current taxation rules and laws in Guernsey. Guernsey taxation practices and their interpretation of the law
may differ from that set out in the Taxation section. In addition, legislation and practice may also change over time. A change in the interpretation of the
taxation position or a change in the taxation treatment of the Fund or any of its assets may alter the net return to Investors. As the Fund will be operating in
a variety of European jurisdictions, it could be impacted negatively (as well as positively) by rule changes;
The regulatory and tax environments are evolving and may be subject to modification by government, judicial or regulatory action, which may adversely
affect the value of the investments held by the Fund. The effect of any such change on the Fund is impossible to predict.
Taxation relating to certain classes of investor
The comments in this Information Memorandum relating to taxation are intended to be a brief description of some of the tax consequences of acquiring
Shares in the Fund. The comments are based on current understanding of applicable law and country taxation practices as at the date of this Information
Memorandum. They do not apply to certain classes of UK investors such as financial traders who hold property as trading stock or to non-UK resident Investors.
Prospective investors who are in any doubt as to their position should consult their authorised financial advisor. Investors should seek their own advice on the
taxation consequences of investment in the Fund as the Promoter, Administrator and the Fund’s legal and taxation advisors, or any other advisor, take no
responsibility in this regard.
Inflation
Inflation is an economic risk that can erode the value of any investment with fixed income characteristics. Upwards-only rent reviews and rental growth
prospects can mitigate the eroding effect of inflation, but the level of rental growth will depend upon whether the occupational demand, inter alia, for
properties exceeds supply between rent review dates.
Currency Risk
Any change in foreign exchange rates from existing levels may limit the growth in property prices or cause them to fall, which would affect the value of the
Portfolio. Since investors’ subscriptions are geared through bank loans, this could reduce or even eliminate the NAV per Share of the Fund and an Investor’s
entire subscription may be lost. Owing to the Fund’s investments in various European countries in non Base Currency assets additional risks may occur if the
Euro or Sterling were devalued owing to structural changes within the Eurozone countries.
Hedging Risk
Losses from a hedging position may exceed the amount invested in such instruments. A hedge may not be effective in eliminating all of the risks inherent
in any particular position and there can be no guarantee that suitable instruments for hedging will be available at times when the Fund wishes to use them.
Whilst the Directors of the Fund have the ability to hedge the currency risks of both the non-Base Currency net assets and the non-Base Currency Share
Classes they will not be obliged to do so and, if such hedging is carried out, there can be no assurance that it will be successful and it may negate certain
profits which the Fund may otherwise have earned or incur a loss.
Credit Risk
The Fund will also be exposed to credit risk of the relevant counterparty with respect to relevant payments under derivative instruments. Any failure by a
counterparty to make payments due under a derivative instrument will reduce the Fund's income. The use of derivatives transactions for the purpose of
hedging interest rate risk gives no assurance that it will be successful and it may negate certain profits which the Fund may otherwise have earned or incur
a loss.
Interest Rate Risk
Any change in interest rates from existing levels may limit the growth in property prices or cause them to fall, which would affect the value of the portfolio.
Since investors’ subscriptions are geared through bank loans, this could reduce or even eliminate the NAV per Share of the Fund and an investor’s entire
subscription may be lost.
21
PART XI - GENERAL INFORMATION
Incorporation
The Fund was incorporated in Guernsey (registered number 56015) on 13th December 2012 and is governed by the Companies Law. It has been established
as an incorporated cell for the purpose of the Companies Law and is an incorporated cell of Victus Capital ICC Limited, an incorporated cell company
incorporated in Guernsey (registered number 56012) on 12th December 2012.
The objects and powers of the Fund are not restricted by its Memorandum and Articles of Incorporation.
Share Capital
The Fund does not have a fixed authorised share capital and may issue an unlimited number of shares subject to and in accordance with the authority
contained in the Articles. The Directors may allot and issue shares as Management Shares of no par value or as Shares of no par value.
All Shares shall be issued designated by reference to different Classes and on or before the allotment of any Share the Directors shall determine the Class
to which such Shares shall belong.
All Shares will be issued in registered form.
Management Shares
The Management Shares are non-redeemable. A holder of Management Shares is entitled to one vote on a show of hands or one vote for each
Management Share on a poll. The Management Shares do not carry any right to dividends. In a winding up the holders of Management Shares are entitled
to receive sums up to the amount paid up on such Management Shares.
One Management Shares was issued for cash at £1.00 upon and for the purpose of incorporation of the Fund and is beneficially owned by the Promoter.
Shares
Shares are redeemable and holders of Shares are entitled on each Dealing Day to offer Shares for redemption subject to such limitation as may be specified
in the Information Memorandum or in the Articles.
A holder of Shares is entitled to one vote on a show of hands or one vote for each Share on a poll.
On a winding up, the holders of Shares are entitled to participate in the distribution of capital pro rata according to their relative Net Asset Values to the
number of Shares in the relevant Class Fund and pari passu according to the number of Shares held.
Income attributable to the Shares shall be accumulated and reflected in the Net Asset Value of such Shares.
The Articles provide that unless the Directors determine in respect of any Share Class that all income shall be accumulated, the holders of Shares shall be
entitled to receive and participate in dividends and other distributions of the Fund resolved to be distributed in respect of any accounting period.
The Directors have determined that all income attributable to all Share Classes shall be accumulated and reflected in the Net Asset Value of the Shares.
Winding up Procedure
The Fund may be wound up at any time by a special resolution of the Fund. The Fund shall be wound up in any of the circumstances specified in the Law
or the Rules.
As soon as practicable after the Fund falls to be wound up, a liquidator will realise the property of the Fund and, after payment of all liabilities and costs,
distribute the proceeds of the realisation to Shareholders, applied in respect of each Share Class pro-rata to the number of Shares of each Share Class. The
holders of Management Shares are entitled to be paid only the amount paid up thereon.
General Meetings
The first general meeting must be held within eighteen months of incorporation and thereafter a general meeting must be held once at least in each
subsequent calendar year but so that not more that fifteen months may elapse between one annual general meeting and the next. At each such annual
general meeting shall be laid copies of the Fund's most recent accounts, Directors' report and the auditor's report. Other meetings of the Fund are called
extraordinary general meetings.
A general meeting of the Fund (other than an adjourned meeting) must be called by notice of at least fourteen (14) clear days. A general meeting may
only be called by shorter notice if all the members entitled to attend and vote so agree.
Notice of a general meeting must be sent to every member entitled to attend and vote thereat and to every Director and every alternate Director registered
as such. The notice must state the time, date and place of the meeting together with the general nature of the business to be dealt with at the meeting. It
must also specify any special business to be put to the meeting and contain the information required in accordance with the Companies Law in respect
of the particular type of resolution that is proposed to be put to the meeting.
Shareholders representing more than 10% of such of the capital of the Fund as carries the right to vote at general meeting (excluding any capital held as
treasury shares) may, in writing, request the Directors to convene a meeting.
The quorum for a general meeting shall be two or more shareholders holding 5% or more of the voting rights applicable at such meeting present in person
or by proxy provided that, if the Fund shall have only one shareholder entitled to attend and vote at the general meeting, that shareholder shall constitute
a quorum. The quorum for a meeting reconvened following an adjournment and for all purposes at such a reconvened meeting shall be those shareholders
present in person or by proxy.
Voting Rights
At any meeting of shareholders of the Fund, resolutions may be passed by a show of hands at the meeting unless a poll is demanded. A poll may be
demanded by the Chairman, by not less than five (5) Shareholders having the right to vote on the resolution or one or more shareholders with not less than
10% of the total voting rights of all shareholders having the right to vote on the resolution.
22
Articles of Incorporation
The following is a summary of certain of the provisions of the Articles of Incorporation of the Fund.
(a) Class Funds
(i)
In order to calculate the Net Asset Value of each Share Class the Directors will establish a separate sub account or fund (“Class Fund”) in the books
of the Fund and the Directors shall be entitled to and shall treat the Shares representing any particular Class Fund as if they were shares in a
separate company and as if that particular Class Fund constituted assets and liabilities of a separate company.
(ii)
An amount equal to the proceeds of issue of each Share Class will be credited to the relevant Class Fund account and redemption payments will
be debited against the relevant Class Fund. The increase or decrease in Net Asset Value over the relevant valuation period will be calculated,
apportioned and allocated to the relevant Class Fund.
(iii)
The amount of any applicable foreign exchange item, performance related, placing or distributor or other fees, hedging costs, hedging gain or
loss, pre-paid expenses, profit, other gain or income, liabilities or expenses relating to any valuation period that shall be attributed by the Directors
to a specific Class Fund shall be added or deducted from the Class Fund as applicable (after allocation of the portion of increase or decrease
in the Net Asset Value referred to above).
(iv)
In the case of a prepaid expense, asset, profit, gain, income, loss or liability (including expenses) which the Directors do not consider is attributable
to a specific Share Class, the Directors shall have the discretion to determine the basis upon which any such prepaid expense, asset, profit, gain,
income, loss or liability (including expenses) shall be allocated between Class Funds and the Directors shall have power at any time and from time
to time to vary such allocation.
(b) Variation of rights and alteration of capital
(i)
Subject to the Companies Law, if at any time the share capital is divided into different classes of shares, the rights attached to any class (unless
otherwise provided by the terms of issue) may, whether or not the Fund is being wound up, be varied with the consent in writing of the holders of
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
the shares of that class. The quorum for a variation of class rights meeting is two (2) or more members present holding at least one-third of the
voting rights of that class or, if there is only one (1) such member, that member.
(ii)
The special rights attached to any class of shares having preferential rights shall (unless otherwise expressly provided by the conditions of issue of
such shares) be deemed not to be varied by:(1)
the creation, allotment or issue of further shares ranking pari passu therewith;
(2)
the creation, allotment or issue of Management Shares;
(3)
the creation, allotment, issue or redemption of Shares of any other class;
(4)
payment of a dividend on the Shares of any other Share Class where the dividend is paid out of the class fund attributable to that other
Share Class;
(5)
the exercise by the Directors of their discretions with respect to the attribution of assets, profits and liabilities or the transfer of assets between
class funds attributable to the various Share Classes;
(6)
if the Fund shall be wound up, by the exercise by the liquidator of his powers; or
(7)
the conversion of Shares of any Share Class into Shares of another Share Class.
(iii)
The Fund may not issue any shares other than Shares (of any class) and Management Shares without the prior approval of an ordinary resolution
of the holders of the Shares taken together as a single class.
(iv)
The Fund may by ordinary resolution:
(v)
(1)
consolidate and divide all or any of its share capital into shares of larger amount than its existing shares;
(2)
subdivide all or any of its shares into shares of a smaller amount, provided the proportion between the amount paid and the amount, if any,
unpaid on each reduced share shall be the same as that proportion in the case of the share from which the reduced share was derived;
(3)
convert shares with par value into shares of no par value;
(4)
cancel any shares which, at the passing of the resolution, have not been taken or agreed to be taken by any person and diminish the
amount of its share capital by the amount of the shares so cancelled;
(5)
convert all or any of its shares the nominal amount of which is expressed in a particular currency or former currency into shares of a nominal
amount of a different currency, the conversion being effected at the rate of exchange (calculated to not less than 3 significant figures)
current on the date of the resolution or on such other day as may be specified therein;
(6)
where its share capital is expressed in a particular currency or former currency, denominate or redenominate it, whether by expressing its
amount in units or subdivisions of that currency or former currency, or otherwise.
The Fund may reduce its share capital, any capital account or any share premium account in any manner and subject to any confirmation or
consent required by the provisions of the Companies Law.
(c) Issue and Transfer of Shares
(i)
Subject to the Articles and unless otherwise stated in this Information Memorandum, the unissued shares in the Fund shall be at the disposal of the
Board which may allot, grant options over or otherwise dispose of them to such persons on such terms and conditions and at such times as they
think fit, provided no share shall be issued at a discount except in accordance with the Companies Law and so that the amount payable on
application on each share shall by fixed by the Board.
23
(ii)
Subject to such of the restrictions noted below under the heading “Non-Qualified Holders”, any shareholder may transfer in writing all or any of his
shares in any form that the Directors may accept.
(iii)
The Directors shall have power to impose such restrictions as they may think necessary for the purpose of ensuring that no shares are acquired or
held by any person in breach of the laws or requirements of any country or governmental authority or for such other reasons which may have an
adverse effect on the Fund or its shareholders.
(d) Repurchase Of Shares
The Fund may, at the discretion of the Board, purchase any of its own shares whether or not they are redeemable and may pay the purchase price in
respect of such purchase to the fullest extent permitted by the Companies Law.
(e) Non-Qualified Holders
f)
(i)
The Directors shall have power (but shall not be under any duty) to impose such restrictions as they may think necessary for the purpose of ensuring
that no Shares in the Fund are acquired or held by any U.S. Person or any person in breach of the Rules or the law or requirements of any country
or governmental authority or which would cause the Fund or any investment manager or adviser of the Fund to be in breach of any such law or
requirement or in any other circumstances which, in the opinion of the Directors, might cause the Fund a pecuniary, tax, legal, regulatory, fiscal,
administrative or other disadvantage or expense. In such circumstances, the Directors may serve a notice upon the person requiring that person
to transfer such Shares to a person who is qualified or entitled to own the same or to request in writing the redemption of such shares.
(ii)
If any such person upon whom such a notice is served as aforesaid does not within fifteen (15) days after service of such notice transfer such Shares
or give a written request in respect thereof as aforesaid, he shall be deemed forthwith upon the expiration of thirty (30) days to have given a request
for redemption in respect of all his Shares.
Directors
(i)
Unless otherwise determined by the Board the minimum number of Directors shall be three (3) and the maximum number of Directors shall be
five (5). A majority of the Directors shall not be resident in the United Kingdom.
(ii)
A share qualification for a Director may be fixed by the Fund in general meeting and unless and until so fixed no qualification shall be required.
(iii)
The Directors shall be entitled to such remuneration as may be determined by the Directors not exceeding in aggregate £250,000 per annum,
capped at £50,000 per Director, to include remuneration for acting as director of the Company and any SPV acquired by the Fund but excluding
the daily fee referred to in paragraph (iv) below, or such higher amount as may be voted by the Fund by ordinary resolution.
(iv)
The Directors are also entitled to be paid all travelling, hotel and other expenses properly incurred by them in attending and returning from
meetings of the Directors or any committee of the Directors or general meetings of the Fund or in connection with the business of the Fund. In
addition, any Director engaged in exceptional travel or work at the request of the Board shall be entitled to receive a daily fee of £750 per day.
(v)
Unless the transaction or proposed transaction is between the Director and the Fund and it is to be entered into in the ordinary course of the
Fund’s business and on usual terms and conditions, a Director must, immediately after becoming aware of the fact that he is interested in a
transaction or proposed transaction with the Fund, disclose to the Board in accordance with Section 162 of the Companies Law the nature and
monetary value (if quantifiable) of that interest or the nature and extent of that interest.
(vi)
A general disclosure to the Board to the effect that a Director has an interest (as director, officer, employee, member or otherwise) in a party
and is to be regarded as interested in any transaction which may after the date of the disclosure be entered into with that party is sufficient
disclosure of interest in relation to that transaction.
(vii)
Nothing in paragraphs (f) (v) and (f) (vi) applies in relation to remuneration or other benefit given to a Director, insurance purchased or
maintained for a Director in accordance with Section 158 of the Companies Law or qualifying third party indemnity provision provided for a
Director in accordance with Section 159 of the Companies Law.
(viii) Provided he has disclosed such interest to the Board in accordance with the Companies Law, a Director who is interested in a transaction
entered into, or to be entered into, by the Fund, may vote and be counted in the quorum at a meeting at which a matter relating to the
transaction arises and may sign a document relating to the transaction on behalf of the Fund.
(ix)
Subject to paragraph (f)(x) a Director is interested in a transaction to which the Fund is a party if the Director:(1)
is a party to, or may derive a material benefit from, the transaction;
(2)
has a material financial interest in another party to the transaction;
(3)
is a director, officer, employee or member of another party (other than a party which is an associated company) who may derive a
material financial benefit from the transaction;
(4)
is the parent, child or spouse of another party who may derive a material financial benefit from the transaction; or
(5)
is otherwise directly or indirectly materially interested in the transaction.
(x)
A Director is not interested in a transaction to which the Fund is a party if the transaction comprises only the giving by the Fund of security to
a third party which has no connection with the Director, at the request of the third party, in respect of a debt or obligation of the Fund for
which the Director or another person has personally assumed responsibility in whole or in part under a guarantee, indemnity or security.
(xi)
A Director may hold any other office or place of profit under the Fund (other than Auditor) in conjunction with his office of Director for such
period and on such terms (as to remuneration and otherwise) as the Board may determine and no Director or intending Director shall be
disqualified by his office from contracting with the Fund either with regard to his tenure of any such other office or place of profit or as vendor
purchaser or otherwise nor shall any such contract or any contract or arrangement entered into by or on behalf of the Fund in which any
Director is in any way interested be liable to be avoided nor shall any Director so contracting or being so interested be liable to account to
the Fund for any profits realised by any such contract or arrangement by reason of such Director holding that office or of the fiduciary
relationship thereby established.
(xii)
Any Director may act by himself or his firm in a professional capacity for the Fund and he or his firm shall be entitled to remuneration for
professional services as if he were not a Director provided that nothing contained within the Articles shall authorise a Director or his firm to act as
Auditor to the Fund.
24
(xiii) The Directors may appoint any person to act as a Director, such person to hold office until the next annual general meeting, when he or she
will be eligible for re-election. A Director may be removed in certain circumstances, including if he resigns by written notice, if he has
absented himself from meetings of the Board for a consecutive period of twelve (12) months and the Board resolves that his office shall be
vacated, if he is requested to resign by written notice signed by all his co-Directors, if the Fund in general meeting declares that he shall
cease to be a Director or if he becomes ineligible to be a Director in accordance with Section 137 of the Companies Law.
(xiv) At the first annual general meeting all the Directors shall retire from office, and at every subsequent annual general meeting one of the
Directors who is subject to retirement by rotation shall retire.
(xv)
Subject to the provisions of the Law, the Directors to retire by rotation shall be those who have been longest in office since they were last
elected or re-elected, but as between persons who became or were last re-elected Directors on the same day those to retire shall (unless
otherwise agreed by the Board) be determined by lot.
(xvi) Without prejudice to the powers of the Board, the Fund in general meeting may appoint any person to be a Director either to fill a casual
vacancy or as an additional Director.
(xvii) A Director shall cease to hold office if he resigns, if he has absented himself from meetings of the Board for a consecutive period of twelve
months and the Board has resolved that his office shall be vacated, if he dies or becomes of unsound mind or incapable, if he becomes
insolvent, if he is required to resign by written notice signed by all his co-Directors, if the Fund in general meeting shall declare that he shall
cease to be a Director or if he becomes ineligible to be a Director under the Companies Law.
(g) Borrowing Powers
(i)
Subject to this Information Memorandum the Board may exercise all the powers of the Fund to borrow money, to give guarantees and to
mortgage, pledge or charge all or part of its undertaking, property and uncalled capital and to issue debentures and other securities whether
outright or as collateral security for any liability or obligation of the Fund or of any third party.
(h) Indemnities
(i)
The Directors, Secretary and officers for the time being of the Fund and their respective heirs and executors shall, to the extent permitted by
Section 157 of the Companies Law, be fully indemnified, and it shall be the duty of the Directors to pay, out of the assets and profits of the
Fund from and against all actions expenses and liabilities which they or their respective heirs or executors may incur by reason of any
contract entered into or any act in or about the execution of their respective offices or trusts except such (if any) as they shall incur by or
through their own negligence, default, breach of duty or breach of trust respectively and none of them shall be answerable for the acts
receipts neglects or defaults of the others of them or for joining in any receipt for the sake of conformity or for any bankers or other person
with whom any moneys or assets of the Fund may be lodged or deposited for safe custody or for any bankers or other persons into whose
hands any money or assets of the Fund may come or for any defects of title of the Fund to any property purchased or for insufficiency or
deficiency of or defect in title of the Fund to any security upon which any moneys of the Fund shall be placed out or invested or for any loss
misfortune or damage resulting from any such cause as aforesaid or which may happen in or about the execution of their respective offices
or trusts except the same shall happen by or through their own negligence, default, breach of duty or breach of trust.
(ii) The Directors may agree to such contractual indemnities for the benefit of the Secretary, officers, employees and other agents and contracting
parties as they may from time to time, deem fit.
(iii) Notwithstanding paragraphs (h)(i) and (h)(ii), the Board may purchase and maintain, at the expense of the Fund, insurance for the benefit of the
Directors, Secretary, officers, employees and other agents and/or to cover corporate reimbursement of such Directors, Secretary, officers, employees
and other agents.
(i)
Suspension of dealings
The Directors may declare suspension of the determination of the Net Asset Value of the Fund or Share Class in the following circumstances:
(i)
during any period when any of the principal markets or stock exchanges on which a substantial part of the investments of the Fund or Share Class
are quoted is closed, otherwise than for ordinary holidays, or during which dealings thereon are restricted or suspended;
(ii) during any period when, as a result of political, economic, military or monetary events or any circumstances outside the control, responsibility and
power of the Directors, disposal or valuation of a substantial part of the investments is not reasonably practicable without this being seriously
detrimental to the interests of the Shareholders or if in the opinion of the Directors the Net Asset Value cannot be fairly calculated;
(iii) if any breakdown occurs in the means of communication normally employed in determining the value of the investments or when for any reason
the current prices on any market of a substantial part of the investments cannot be promptly and accurately ascertained;
(iv) if as a result of exchange restriction or other restrictions affecting the transfer of a funds, transactions on behalf of the relevant Share Class of the
Fund are rendered impracticable, or purchases, sales, deposits and withdrawals of the relevant assets cannot be effected at the normal rates of
exchange;
(v) if requests for redemption received by the Fund exceed ten percent (10%) of the Net Asset Value of the Fund or a Share Class of the Fund;
(vi) if a resolution to wind up the Fund has been passed; or
(vii) if a resolution or determination to wind up a particular Share Class of the Fund has been duly passed or made.
(j)
Conversion
Provided that the Directors may in their absolute discretion reject any application to convert in whole or in part where they consider it to be in the interests
of the Fund or the members or of the holders of any class of Shares to do so, a holder of Shares of any Class (the “Original Class") on any relevant Dealing
Day in respect of the Original Class may exchange all or any of such Shares for Shares of another Class or type (the “New Class") on certain terms, and
subject to certain conditions including, but not limited to, the following:
(i)
conversion of the Shares of the Original Class shall be effected by the redemption of such Shares of the Original Class and by the allotment and
issue of Shares of the New Class, such redemption, allotment and issue taking place on the relevant Dealing Day in accordance with the Articles;
and
25
(ii) the number of Shares of the New Class to be issued shall be determined by the Directors in accordance with the following formula:N = K x RP x CF
______________
SP
where:
N
is the number of Shares of the New Class to be issued; and
K
is the number of Shares of the Original Class; and
RP is the Redemption Price per Share of the Original Class calculated in accordance with the provisions of the Articles and this Information
Memorandum;
CF is the currency conversion factor determined by the Directors on the relevant Dealing Day (or at the time of any recalculation of the Redemption
Price or Subscription Price, as the case may be) as representing the effective rate of exchange between the currency in which the original class
is designated and the currency in which the new class is designated, taking into account the effective costs of making such exchange, and if
both classes are designated in the same currency, the currency conversion factor shall be one (1); and
SP is the Subscription Price per Share of the New Class calculated in accordance with the provisions of the Articles and this Information
Memorandum.
General
(i)
Save as otherwise disclosed herein, no share or loan capital of the Fund is under option or agreed, conditionally or unconditionally, to be put under
option.
(ii) There are no provisions of Guernsey law which confer pre-emption rights on existing shareholders on the allotment of equity securities for cash.
(iii) None of the Directors nor any member of their respective immediate families has any interest in the share or loan capital of the Fund the existence
of which is known to, or could with reasonable diligence, be ascertained by, the relevant Director.
(iv) None of the Directors has a service contract with the Fund, and no such contract is proposed.
(v) No loan or guarantee has been granted or provided by the Fund to or for the benefit of any Director.
(vi) Save as otherwise disclosed herein, none of the Directors nor any member of their respective immediate families has or has had any interest in any
transaction or transactions which are or were unusual in their nature or conditions or significant to the business of the Fund and which were effected
by the Fund since its incorporation.
(vii) The Fund has not since its incorporation been nor is it engaged in any legal or arbitration proceedings and no legal or arbitration proceedings are
pending or threatened against the Fund which may have or have had a significant effect on the financial position of the Fund.
(viii) The Fund has no loan capital outstanding, no loan capital created but unissued, no loans or any other borrowing or indebtedness or any contingent
liabilities, nor have they given any guarantees.
(ix) The Fund does not have nor has it had any employees since its incorporation.
(x) The principal place of business and registered office of the Fund is that of the Administrator.
(xi) The Promoter, the Administrator, the Custodian and any of their respective affiliates and employees will not be liable to account to the Fund or the
Shareholders for any profit made from dealings with the Fund or entities to which the Fund provide finance or from dealing in Shares.
Material Agreements
Promoter Agreement
The Promoter was appointed by the Fund, pursuant to the Promoter Agreement on 8 January 2013. Pursuant to the Promoter Agreement, the Promoter has
agreed to engage sales agents to market interests in the Fund.
In consideration of its services under the Promoter Agreement, the Promoter will be entitled to an annual fee, a performance fee, a debt arrangement fee,
an equity arrangement fee and reimbursement of its costs in relation to the provision of financial performance data, each fee as described in Part VIII of
this Information Memorandum.
The Promoter Agreement also contains an indemnity in favour of the Promoter (and certain associated individuals) from the Fund against losses or liabilities
it may suffer in carrying out its obligations unless such losses or liabilities arise from an act or omission of the Promoter, if the Promoter is acting outside of its
scope of authority or there has been fraud, gross negligence wilful misconduct, bad faith or a material breach of the Promoter Agreement.
The Promoter can terminate the Promoter Agreement on 12 months' notice. The Fund cannot terminate on notice the Promoter Agreement nor can the Fund
terminate on a change of control of the Promoter. The Promoter Agreement can be terminated if either the Fund or the Promoter is wound-up, has an
administrator or receiver appointed in respect of it, makes an arrangement with its creditors or commits a material breach of the Promoter Agreement that
has not been remedied.
Property Advisor Agreement
The Property Advisor was appointed by the Fund, pursuant to the property advisor agreement on 8 January 2013.
Pursuant to the property advisor agreement, the Property Advisor has agreed to provide a range of property advisory services as set out therein. Such services
include evaluating potential property investments that fit within the Fund's investment criteria as described in this Information Memorandum and making
recommendations and ongoing advice in respect of the same. The Property Advisor is also under an obligation under this agreement to provide ongoing
reporting in respect of all properties acquired directly or indirectly by the Fund.
26
The Property Advisor may advise the Fund to acquire one of three types of properties: trading Student Accommodation assets, assets that are already
developed that may require some redevelopment to enhance their value or land that has planning permission for Student Accommodation being the
predominant use that requires development. Following a recommendation, the Fund then has a period of time to consider whether to proceed with the
purchase and if it does the Property Advisor will prepare detailed heads of terms for further consideration.
The Fund is unable to buy or develop properties without a recommendation to do so from the Property Advisor and the Fund is unable to appoint a person
other than the Property Advisor to provide similar services.
The Property Advisor shall be paid certain transactional fees that are summarised in Part VIII.
The property advisory agreement contains a limitation of liability in favour of the Property Advisor in relation to the carrying out of its services provided the
Property Advisor is not acting outside of its scope of authority and there has been no fraud, gross negligence wilful misconduct, bad faith or a material breach
of the property advisor agreement.
The property advisory agreement also contains an indemnity in favour of the Property Advisor (and certain associated individuals) from the Fund against
losses or liabilities it may suffer in carrying out its obligations unless such losses or liabilities arise from an act or omission of the Property Advisor, if the Property
Advisor is acting outside of its scope of authority or there has been fraud, gross negligence, wilful misconduct, bad faith or a material breach of the property
advisor agreement.
The Property Advisor can terminate the property advisor agreement on 12 months' notice. The Fund cannot terminate on notice the property advisor
agreement nor can the Fund terminate on a change of control of the Property Advisor. The property advisor agreement can be terminated if either the Fund
or the Property Advisor is wound-up, has an administrator or receiver appointed in respect of it, makes an arrangement with its creditors or commits a material
breach of the property advisor agreement that has not been remedied.
In order to secure the acquisition of certain properties needing development work the Fund may enter into forward purchase option agreements. These
agreements will, if required, be negotiated with the relevant vendor (which may be related to Crosslane) and may provide for the consideration to be treated
as a loan by the Fund to the vendor (secured where possible by way of second charge). The agreed acquisition price will represent a discount to the final
market value of the property. The forward purchase option agreements will oblige the Fund to purchase the relevant investment or will enable the Fund to
force the sale of the relevant investment to the Fund once any development work has been completed in accordance with the agreed Development
Management Agreement.
The Property Advisor may delegate development functions with the consent of the Fund. The terms of any such Development Management Agreement
are to be agreed between the Fund and the Property Advisor other than in relation to fees that are summarised in Part VIII.
Property Management Agreement
Following any property being acquired the Fund, the relevant SPV and the Property Manager will enter into a property management agreement in respect
of that property. Each property management agreement will provide that the Property Manager will provide property management services to the Fund and
each SPV which will include the marketing and letting of the accommodation at each property to potential students.
In consideration of its services under the Property Management Agreement, the Property Manager will be entitled to an annual fee as described in Part VIII.
Each property management agreement states that the Property Manager, or any person it properly delegates its role to, shall not be liable to the Fund or
an SPV in respect of the performance by it of its obligations unless any loss arises following a material breach of the property management agreement from
the failure to comply with applicable conduct of business rules of a relevant regulatory authority or from the negligence, wilful default or fraud of the Property
Manager or any such delegate.
The Property Manager can terminate the Property Management Agreement on 12 months' notice. The Fund cannot terminate on notice the Property
Management Agreement nor can the Fund or an SPV terminate on a change of control of the Property Manager. The Property Management Agreement
can be terminated if either the Fund, the SPV or the Property Manager is wound-up, has an administrator or receiver appointed in respect of it, makes an
arrangement with its creditors or commits a material breach of the Property Management Agreement that has not been remedied.
Custodian Agreement
The Custodian was appointed by the Fund, pursuant to the Custodian Agreement between the Fund and the Custodian dated 8 January 2013, to act as
the custodian of the Fund. Custodian fees are described in Part VIII.
The Custodian's responsibilities include performing and discharging all the duties of the custodian of the Fund under and in accordance with the Custodian
Agreement, the Law and the Rules, including a responsibility to take reasonable care to ensure that the methods used by the Administrator in calculating
the prices at which Shares are issued or redeemed are in accordance with the Articles and this Information Memorandum and that the Fund is properly
administered by the Administrator in accordance with its obligations under the Rules.
The Custodian's terms of appointment limit the assets of the Fund for which the Custodian has direct custodial responsibility to the shares in SPVs wholly owned
by the Fund and the loans made by the Fund to such SPVs.
The Custodian Agreement provides that the Custodian may employ, directly or indirectly, one or more sub-custodians to assist with the performance of its
functions. The Custodian will not be liable to the Fund in respect of a sub-custodian except where any loss or damage is caused by the Custodian having
failed to exercise reasonable skill, care and diligence in its selection of that sub-custodian or having failed to satisfy itself as to the ongoing suitability of that
sub-custodian to provide custodian services to the Fund.
The Custodian Agreement contains an indemnity from the Fund in favour of the Custodian against all claims and demands which may be made against
the Custodian in respect of any loss or damage sustained or suffered by any person as a direct or indirect result of the performance by the Custodian of its
duties under the Custodian Agreement, save where such loss or damage occurs by reason of negligence, fraud, dishonesty, lack of good faith, breach of
a term or condition of the Custodian Agreement, reckless disregard or wilful default of the Custodian its directors, officers, employees, delegates, servants
or agents. In the event of any claim by the Custodian, the Custodian Agreement limits the Custodian's recourse to the assets of the Fund (and, in particular,
the relevant Share Class of the Fund to which the claim relates) and the Custodian shall in respect of such claim have no further recourse against any other
assets of the Fund or the ICC or any other incorporated cell of the ICC.
In the event of the Custodian wishing to retire, the Directors shall use their best endeavours to find some other corporation having the qualifications under
the Law to be the custodian of the Fund within six months and in default the retiring Custodian may nominate such a corporation to take its place with the
written approval of the Directors, (such approval not to be unreasonably withheld). Subject thereto, the Custodian Agreement may be terminated by the
Custodian giving not less than three months' notice in writing to the Fund or by the Fund giving not less than three months' notice in writing to the Custodian.
The Custodian Agreement may also be terminated by either party forthwith on notice in writing to the other if that other shall commit any material breach
of its obligations under the Custodian Agreement and shall fail to remedy such breach within thirty days of receipt of notice requiring the breach to be
27
remedied or if such other party shall go into liquidation or if an administrator or a receiver is appointed over any of the assets of the Fund, or its affairs are
declared to be en état dé désastre. The Fund may also terminate the appointment of the Custodian forthwith upon notice in writing if the Custodian ceases
to be resident in Guernsey for fiscal purposes or if it ceases to be licensed under the Law.
Administration Agreement
The Administrator was appointed by the Fund, pursuant to the Administration Agreement between the Fund and the Administrator dated 8 January 2013, to
act as the administrator, secretary and registrar of the Fund. Administration fees are described in Part VIII.
The Administration Agreement permits the Administrator to delegate its functions and duties provided that where functions have been delegated to the
Promoter in relation to SPVs, the costs and expenses of the Promoter in that connection will be met directly by the Fund.
The Administration Agreement contains an indemnity from the Fund in favour of the Administrator against any loss or damage suffered by the Fund arising
out of any error of judgement or oversight or mistake of law on the part of the Administrator made in good faith in the absence of fraud, negligence or wilful
default, and against all claims and demands (including costs and expenses arising therefrom or incidental thereto) in relation to any loss or damage suffered
by any third party in the absence of any fraud, negligence or wilful default by the Administrator.
The Administration Agreement may be terminated by either the Fund or the Administrator giving not less than six months' notice in writing. It is also terminable
at any time in certain circumstances including, inter alia, in the case of material breach which has not been remedied within 30 days of notice having been
given and in the event of the winding up or insolvency of the Fund.
The Directors shall use their reasonable endeavours to find a suitable, qualified corporation to act as administrator in place of the retiring Administrator. Should
the Directors be unable to find a corporation as aforesaid within six months, the Administrator serving on the Fund notice of its wish to retire, the Administrator
may then nominate such corporation to take its place as administrator.
So long as there are any issued and outstanding Shares, the Administrator shall not be entitled to retire without the appointment of a new administrator in its
place.
Sponsor Agreement
The Sponsor was appointed by the Fund, pursuant to the sponsor agreement dated 8 January 2013, to act as the sponsor to the Fund in connection with
the listing of the Shares of the Fund on the Official List of the CISX. Sponsor fees are described in Part VIII.
The sponsor agreement contains an indemnity from the Fund in favour of the Sponsor against liability arising as a result of carrying out the services pursuant
to the Sponsor agreement, save where such liability occurs as a result of some act of gross negligence, fraud, bad faith or wilful default on the part of the
Sponsor, or where the Sponsor is in breach of the warranties given under the Sponsor agreement.
The Sponsor agreement may be terminated by either the Sponsor or the Fund by giving not less than sixty days' notice in writing to the other. The Sponsor
agreement may also be terminated immediately if either party has committed a material breach and fails to make good such breach within thirty days of
being requested to do so, goes into liquidation (otherwise than pursuant to a voluntary liquidation for the purpose of restructuring or amalgamation upon
terms agreed by the Sponsor), is unable to pay its debts as they fall due, is declared bankrupt, takes any steps for its winding up or dissolution or enters into
any composition with its creditors or suffers any similar action in consequence of default. The Sponsor agreement may also be terminated immediately
should it become illegal for either party to carry out its obligations under the Sponsor agreement or should the listing be cancelled.
DOCUMENTS AVAILABLE FOR INSPECTION
Copies of the following documents may be inspected free of charge at the registered offices of the Fund and the Administrator (where the statutory records
of the Fund are held) during usual business hours on each week day (Saturdays, Sundays and public holidays excepted):
(a) the Fund's Memorandum and Articles of Incorporation;
(b) the Memorandum and Articles of Incorporation of the Company;
(c) each of the Material Agreements and any amendments thereto;
(d) this Information Memorandum (including Supplements);
(d) the latest Annual Reports and Financial Statements of the Fund and the Company;
(e) the Companies (Guernsey) Law, 2008 as amended, the Collective Investment Schemes (Compensation of Investors) Rules 1988 and the Registered
Collective Investment Schemes Rules 2008; and
(f) the Application Form.
28
PART XII - DEFINITIONS
“Administration Agreement”
the administration, secretarial and registrar agreement between the Fund and the Administrator
“Administrator”
Ardel Fund Services Limited
“Admission”
the admission of an unlimited number of Shares to the Official List of the CISX
“Articles”
the Articles of Incorporation of the Fund as amended from time to time
“Auditor”
BDO Limited who are chartered accountants or such similarly qualified auditor as may be appointed
from time to time by the Fund, in accordance with the Articles.
“A Share”
a Share of the Fund being available for subscription by investors as defined in the relevant
Supplement to this Information Memorandum
“B Share”
a Share of the Fund being available for subscription by investors as defined in the relevant
Supplement to this Information Memorandum
“Base Currency”
Pound Sterling
“Business Day”
any day (other than a Saturday or Sunday) on which banks in Guernsey London and Luxembourg are
open for normal banking business
“Cell”
an incorporated cell of the Company established in accordance with the Articles and the
Companies Law
“CHF”
Swiss Francs, the currency of Switzerland
“CISX”
the Channel Islands Stock Exchange, LBG
“Class”
a class of Shares in the Fund
“Companies Law”
the Companies (Guernsey) Law, 2008, as amended
“Company”
Victus Capital ICC Limited, an authorised open-ended incorporated cell investment company with
registered number 56012
“Crosslane”
Crosslane Fund Managers LLP, Crosslane Property Advisor (Guernsey) Limited and
Prime Student Living Limited
“Custodian”
Royal Bank of Canada (Channel Islands) Limited and/or such other person or persons from time to
time appointed by the Fund
“Custodian Agreement”
the custodian agreement between the Fund and the Custodian
“Dealing Day”
the second Business Day of each calendar month or such other day as the Directors may determine
“Development Management Agreement”
means an agreement on such other terms as the Fund, the applicable SPV and the Property Advisor
will enter into in order to procure future development, refurbishment, enhancement or similar in
relation to a property asset acquired by the fund.
“Development Management Fee”
means a fee payable to the Property Advisor in accordance with a Development Management
Agreement entered into between the Fund and the Property Advisor, payable by the Fund.
“Directors” or “Board”
the board of Directors of the Fund
“Designated Manager”
Ardel Fund Services Limited
“Financial Year”
each financial year of the Fund ending on 31 August of each calendar year or such other date as
the Directors shall determine from time to time having given due notice to all holders of shares in the
Fund
“Fund”
Victus European Student Accommodation Fund IC Limited, an incorporated cell of the Company,
incorporated in Guernsey under registration number 56015
“GFSC” or “Commission”
Guernsey Financial Services Commission
“Higher Education”
education beyond secondary level, especially education at college or university level
29
“Information Memorandum”
this document and any relevant Supplement
“Initial Closing Date”
the end date of the Initial Offer Period
“Initial Offer Period”
the initial offering period during which the Shares will be offered to potential investors at such Initial
Price as the Directors may determine (which period may for the avoidance of doubt be shortened
or extended at the discretion of the Directors)
“Illiquid Investment”
includes investments of the Fund for which (i) the principal markets or exchanges upon which they
are quoted, listed, traded or dealt in are either restricted or suspended; (ii) after consultation with the
Promoter the Directors do not believe that it is possible to obtain a price that reflects their underlying
value; or (iii) the Directors, in their absolute discretion, have determined that such investment shall be
an "Illiquid Investment" for any reason.
“Initial Price”
the price at which Shares of any Class will be issued initially
“Law”
The Protection of Investors (Bailiwick of Guernsey) Law, 1987 as amended
“Luxembourg Administrator”
the administrator of SPV(s) incorporated in Luxembourg
“Management Share”
a management share of no par value in the capital of the company
“Material Agreements”
the material agreements set out in Part XI General Information
“Minimum Redemption”
the minimum amount which may be redeemed at any time (currently, in respect of the Shares, these
can be found in the relevant Supplement which may be varied from time to time at the sole
discretion of the Directors)
“Minimum Subscription”
the minimum amount which may be initially subscribed for Shares at any time (currently, in respect
of the Shares, these can be found in the relevant Supplement which may be varied from time to
time at the sole discretion of the Directors)
“Net Asset Value" or "NAV”
the net asset value of the Fund or a Class of Shares of the Fund as the case may be calculated in
accordance with the Articles
“Non-Qualified Holder”
a person who is not qualified to hold Shares, as defined in the Articles
“Notional Share”
GBP Share Class used for the asset allocation of Share Classes into the Participating Portfolio
“Offer”
the offer of Shares for subscription as described in this Information Memorandum and any relevant
Supplement
“Participating Portfolio”
total of Net Assets held on a commingled basis by all Share Classes
“Paying Agent”
the Administrator
“Preliminary Net Asset Value”
Gross Net Asset Value less any fees (except for the Performance Fee) due at the present Valuation
Point
“Promoter”
Crosslane Fund Managers LLP
“Promoter Agreement”
the promoter agreement between the Fund and the Promoter
“Property Advisor”
Crosslane Property Advisor (Guernsey) Limited
“Property Manager”
Prime Student Living Limited
“Redemption Notice Period”
by no later than 5pm (Guernsey time) not less than 60 days prior to the intended Dealing Day.
“Redemption Notice”
formal request to redeem Shares
“Redemption Price”
the Net Asset Value per Share, adjusted for any redemption fee, determined in accordance with
the Articles
“Registrar”
Ardel Fund Services Limited
“RICS”
Royal Institution of Chartered Surveyors
“Rules”
the Registered Collective Investment Schemes Rules 2008
“Secretary”
Ardel Fund Services Limited
30
“Shares”
redeemable shares of no par value in the capital of the Fund, unless otherwise indicated
“Share Class”
a class of Shares, unless otherwise indicated
“Sponsor”
the sponsor to the CISX listing, Mourant Ozannes Securities Limited
"SPV"
special purpose vehicle
“Sterling”, “Pound Sterling”, “GBP” and “£”
Pounds Sterling, the lawful currency of the United Kingdom
“Student Accommodation”
is defined as a privately owned and managed purpose-built accommodation of not less than 50
bedrooms predominantly for student use
“Subscription Price”
Net Asset Value per Share determined in accordance with the Articles
“Supplement”
a supplement appended to and forming part of this document prepared in respect of each of the
A Shares and B Shares
“US Dollars”, “USD” and “US$”
the currency of the United States of America
“U.S. Person”
as defined under Regulation S under the U.S. Securities Act of 1933 as amended or as otherwise
defined by the Directors from time to time
“U.S. Securities Act”
the U.S. Securities Act of 1933, as amended
“Valuation Point”
midnight in Guernsey on the last Business Day of each calendar month or such other time as the
Directors may determine
“Valuation Agent”
the independent property valuer(s) appointed by the Directors from time to time, the current being
Savills, Knight Frank and/or JLL.
31
B SHARES SUPPLEMENT
Share Classes and Minimum Subscription Amounts
Shares designated as B Shares are available for issue in the following Share Class.
GBP Class B Shares
EUR Class B Shares
CHF Class B Shares
Initial subscription
Additional investment
GBP 1,000,000
EUR 1,000,000
CHF 1,500,000
GBP 300,000
EUR 300,000
CHF 450,000
Initial offer price - 1.00 GBP, 1.00 EUR and 1.00 CHF
Minimum Holding Redemption Amount
The Directors have determined in accordance with the Articles that the minimum redemption amount for B Shares will be the same as the additional
investment levels stated above. Requests below this amount will not be accepted. The minimum holding in the Fund will be the same as the initial subscription amount or such other amount as the Director’s may determine from time to time.
Redemption Fee
No redemption fee applies.
Where a redemption has required the disposal of underlying assets in the Fund's property portfolio, the Administrator may deduct the pro rata fees, costs,
associated loan costs, any tax charges and any other directly associated redemption costs from the redemption proceeds.
Transfer Fee
There is no charge to transfer Shares between a seller and any buyer of Shares.
Conversion Fee
There is no charge to convert Shares of one Share Class to Shares of another Share Class.
32