BH Global Limited Mgt Fee Reduction & Mgt Agreement Amendments
April 12 2017 - 3:15AM
UK Regulatory
TIDMBHGG TIDMBHGU
THIS ANNOUNCEMENT INCLUDES INSIDE INFORMATION
BH Global Limited
(an authorised closed-ended collective investment scheme authorised by the
Guernsey Financial Services Commission and established as a non-cellular
company limited by shares under the laws of the Island of Guernsey with
registration number 48555)
12 April 2017
Management fee reduction and management agreement amendments
The board of directors (the "Board") of BH Global Limited ("BH Global" or the
"Company") announces that following discussion with the Company's manager,
Brevan Howard Capital Management LP (the "Manager"), the Company and the
Manager have agreed a reduction to the Company's management fee from two per
cent. to one per cent. of the Company's net asset value per annum and other
amendments to the Company's management agreement (the "Management Agreement").
The Board believes that the reduction in the management fee is a very positive
enhancement for investors and a significant affirmation by the Manager of its
ongoing commitment to the Company. The Company is grateful to the Manager for
its constructive help and assistance in agreeing these measures.
With retrospective effect from 1 April 2017:
* The management fee payable under the Management Agreement will be reduced
from two per cent. per annum to one per cent. per annum. As announced on
19 October 2016, no management fee will be payable on any
performance-related growth of the Company.
* Were the Management Agreement to be terminated by the Company, the
management fee would revert to two per cent. of the prevailing net asset
value in respect of the notice period, or in respect of any payment in lieu
of notice (as is currently the case).
* The Company may repurchase or redeem shares of either class in each
calendar year, including pursuant to the class closure and annual partial
capital return provisions contained in the Company's articles of
incorporation (the "Articles"), up to an aggregate number equal to five per
cent. of the shares of that class in issue as at 31 December in the prior
calendar year (the "Annual Buy Back Allowance") without making any payment
to the Manager.
* In the event that, in any calendar year, the aggregate number of shares
repurchased or redeemed by the Company exceeds the Annual Buy Back
Allowance for that class, the Company will be required to pay the Manager
an amount equal to two per cent. of the repurchase price of any share that
is repurchased or redeemed by the Company in excess of the Annual Buy Back
Allowance, including pursuant to the class closure and annual partial
capital return provisions contained in the Articles.
* In respect of the 2017 calendar year (and taking into account shares that
have already been repurchased by the Company since 1 January 2017), the
Annual Buy Back Allowance for the Company's Sterling share class will be
806,282 Sterling shares and for the US Dollar share class will be 152,269
US Dollar shares.
* The Board has agreed with the Manager that if, on the last business day in
March, June, September or December of any year, the net asset value of the
Company were to be below US$300 million (on the basis of the prevailing US
Dollar/Sterling exchange rate), the Board would convene a general meeting
of the Company's shareholders at which a special resolution proposing the
liquidation of the Company would be put forward. Were the resolution to be
passed, the Company would be liquidated and an amount equal to two per
cent. of the Company's net asset value (subject to a deduction in respect
of any amount of the Annual Buy Back Allowance for the relevant calendar
year that remains unused) would be paid to the Manager in addition to any
other fees due to the Manager up to the date of termination of the
Management Agreement.
These arrangements will become effective on execution of an amendment to the
Management Agreement, which the Company and the Manager propose to enter into
as soon as possible.
Commenting on the changes, the Chairman of BH Global, Sir Michael Bunbury,
said:-
"I am very pleased to be able to report agreement that, with effect from 1
April 2017, the annual management fee has been halved from two per cent. to one
per cent. The annual management fee represents the largest regular expense for
the Company, and the reduction will result in an annual saving of some US$4.5
million based on the current size of the Company.
The Company has agreed with the Manager that it may make a partial capital
return or buy back up to five per cent. of each class of share in each calendar
year free of a payment to the Manager. Beyond that five per cent., any
reduction in the number of shares in each class will trigger a payment to the
Manager of two per cent. of the repurchase price of such shares. The directors
are not recommending any partial capital return in 2017 in respect of the 2016
NAV increase.
The directors are mindful of the discount to NAV at which the shares have been
trading recently. The Board considers that the positive enhancement to
shareholder returns which the reduction in the management fee will bring,
coupled with the Board's intention to maintain a proactive approach to share
buybacks, should occasion a re-rating.
Overall the directors are unanimous in their view that this set of changes
materially enhances the investment proposition for BH Global as a low
volatility diversifier for portfolio construction. They look forward to the
Manager building on the success of 2016 which, as reported in the recently
published Annual Report, delivered growth of 6.60 per cent. in the NAV per
share of the Sterling share class."
Enquiries:
Brevan Howard:
Dan Riggs
020 7022 6236
Canaccord Genuity Limited:
David Yovichic
020 7523 8000
J.P. Morgan Cazenove:
William Simmonds
020 7742 4000
Northern Trust:
Sharon Williams
01481 745436
Important notices
Each of Canaccord Genuity Limited ("Canaccord"), which is authorised and
regulated by the Financial Conduct Authority in the United Kingdom, and J.P.
Morgan Securities plc, which conducts its UK investment banking activities as
J.P. Morgan Cazenove ("J.P. Morgan Cazenove"), which is authorised by the
Prudential Regulation Authority and regulated by the Prudential Regulation
Authority and the Financial Conduct Authority in the United Kingdom, is acting
exclusively for the Company and no-one else in connection with the matters
referred to in this announcement and will not be responsible to anyone other
than the Company for providing the protections afforded to customers of
Canaccord or J.P. Morgan Cazenove or for providing advice in relation to any
matter referred to herein.
This announcement does not constitute an offer or solicitation to acquire or
sell any securities in the Company.
Notwithstanding the proposals described in this announcement, there is no
guarantee that the Company will make any purchases of its own shares or that
any liquidation or class discontinuation vote will be held. Accordingly,
investors should not expect that they will necessarily be able to realise,
within a period which they would otherwise regard as reasonable, their
investment in the Company, nor can they be certain that they will be able to
realise their investment on a basis that necessarily reflects the value of the
Company's investment in Brevan Howard Multi-Strategy Master Fund Limited.
This announcement is not for distribution in or into the United States, Canada,
Australia or Japan or any other jurisdiction in which its distribution may be
unlawful. This announcement is not an offer of securities for sale in the
United States or elsewhere. The securities of the Company have not been and
will not be registered under the United States Securities Act of 1933, as
amended (the "Securities Act"), and may not be offered or sold in the United
States unless registered under the Securities Act or pursuant to an exemption
from such registration. The Company has not been and will not be registered
under the US Investment Company Act of 1940, as amended, and investors are not
entitled to the benefits of that Act. There has not been and there will be no
public offering of the Company's securities in the United States.
END
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