TIDMFAIR TIDMTTM TIDMTTM
RNS Number : 7179T
Fair Oaks Income Limited
29 March 2021
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, TO US PERSONS OR INTO ANY MEMBER
STATE OF THE EUROPEAN ECONOMIC AREA, THE UNITED STATES, CANADA,
AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA OR JAPAN OR ANY OTHER
JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.
29 March 2021
Fair Oaks Income Limited (the "Company")
(Incorporated in Guernsey under The Companies (Guernsey) Law,
2008, as amended, with registered number 58123 and registered as a
Registered Closed-ended Collective Investment Scheme with the
Guernsey Financial Services Commission)
Reorganisation Proposal and Placing Programme
Fair Oaks Income Limited today announces the publication of a
prospectus (the "Prospectus") and circular (the "Circular") in
relation to the Reorganisation Proposal and Placing Programme
Proposal.
Professor Claudio Albanese, Chairman, commented:
"The Board is pleased to put forward the Proposals, which
facilitate an extension of Shareholders' investments through a new
class of 2021 Shares deployed through the new Master Fund III ,
while also offering an option to elect for Realisation Shares and
establishing a twelve-month placing programme.
Master Fund III is characterised by a fixed investment period
and life, during which Fair Oaks will continue to utilise its
tactical approach to investing across the CLO capital structure,
seeking to take advantage of well-defined investment opportunities
in both control equity and secondary mezzanine securities.
The investment opportunity leverages Fair Oaks' in-depth
fundamental research, long track record and experience in
structuring and negotiating investments and ongoing monitoring of
the underlying portfolios. In addition to improving corporate
fundamentals, the potential for attractive risk-adjusted returns
for Shareholders is supported by the compelling financing levels
currently available to CLO equity investors, which have the
potential to benefit both new investments and the refinance or
reset of existing investments."
Further details in relation to the Proposals can be found in the
Circular and the Prospectus, which are available on the Company's
website at http://www.fairoaksincome.com .
The Prospectus has been approved by the Financial Conduct
Authority and will shortly be made available for inspection at The
National Storage Mechanism at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism .
Capitalised terms used in this announcement shall, unless
otherwise defined, bear the same meaning as in the Circular.
Enquiries
Fair Oaks Income Limited contact@fairoaksincome.com
www.fairoaksincome.com
Fair Oaks Capital Limited
Miguel Ramos Fuentenebro +44 (0)20 3034 0401
Numis Securities Limited (Joint Bookrunners,
Joint Brokers and Joint Financial Advisers)
Nathan Brown/ Matt Goss +44 (0)20 7260 1000
Liberum Capital Limited (Joint Bookrunners,
Joint Brokers and Joint Financial Advisers)
Chris Clarke/ Gillian Martin +44 (0)20 3100 2000
Reorganisation Proposal
Overview
The purpose of the proposed reorganisation is to allow those
Shareholders who wish to extend the life of their investment in the
Company beyond the planned end date of Master Fund II, to be able
to do so by having their 2017 Shares re-designated as 2021 Shares,
with such 2021 Shares investing in a new master fund, Master Fund
III, which will have a planned end date of 12 June 2028 and an
investment objective and policy substantially similar to that of
Master Fund II.
Those Shareholders who do not wish to extend the life of their
investment to participate in Master Fund III will need to make an
express election to have their existing 2017 Shares re-designated
as Realisation Shares, which will continue to participate solely in
Master Fund II.
Key features of the Shares
2021 Shares
-- The 2021 Shares are designed to enable Shareholders to extend
the life of their investment in the Company. As the 2021 Shares
will be substantively invested through Master Fund III, the 2021
Shares will have an expected life to the planned end date of Master
Fund III, being 12 June 2028 [1] .
-- Initially, Master Fund III's portfolio will comprise solely
its interest in Master Fund II . However, the 2021 Shares are
expected over time to benefit from the further diversification and
scale within Master Fund III's portfolio provided by newly
originated investments made at the time of the deployment of any
proceeds of the Placing Programme and also the reinvestment of
principal amounts distributed by Master Fund II .
-- The Investment Adviser believes that there are ongoing
investment opportunities available in the CLO market and therefore
that the 2021 Shares represent an attractive option for
Shareholders.
-- In respect of the 2021 Shares, the investment objective of
the Company will be to generate attractive, risk-adjusted returns,
principally through income distributions. On the basis of market
conditions as at the date of this document, the Company aims to
target a NAV total return of between 12 and 14 per cent. per annum
([2]) over the planned life of Master Fund III.
Realisation Shares
-- The Realisation Shares are designed to enable Shareholders to
maintain the life of their investment in the Company. As the
Realisation Shares will (continue to) be substantively invested
through Master Fund II , the Realisation Shares will have an
expected life to the planned end date of Master Fund II , being 12
June 2026[3].
-- The composition of Master Fund II 's portfolio will be
unchanged by the implementation of the Proposals. However, over
time Master Fund II 's portfolio will become less diversified as
its investments are realised.
-- In respect of the Realisation Shares, the investment
objective of the Company is to generate attractive, risk-adjusted
returns, principally through income distributions. On the basis of
market conditions as at the date of this document, the Company will
continue to target a NAV total return[4] of between 12 and 14 per
cent. per annum over the planned life of Master Fund II.
-- Based on the results of Shareholder consultations received to
date, it is expected that the Realisation Share class will
represent a relatively small proportion of the Company's share
capital and therefore the Realisation Shares are currently expected
to benefit from lower levels of secondary market liquidity than the
2021 Shares. The Realisation Shares may also have a greater
concentration of ownership than the 2021 Shares.
Shareholders should be aware that, even if the Reorganisation
Proposal becomes unconditional and the Proposals are implemented,
if the aggregate Net Asset Value (as at 31 March 2021) of the
existing 2017 Shares elected for Realisation Shares does not exceed
$30 million (equivalent to approximately 10 per cent. of the
aggregate Net Asset Value of the Company as at the latest
practicable date prior to the publication of the Circular),
existing 2017 Shares so elected will not be re-designated into
Realisation Shares and instead will be re-designated into 2021
Shares.
This condition has been established in recognition that, if the
Realisation Share class was created with an aggregate Net Asset
Value of less than $30 million, such a small Share class would be
expected to:
-- trade inefficiently in the secondary market (for example with
negligible trading liquidity and/or a material spread between the
quoted bid and offer prices); and
-- impose a disproportionate administrative and cost burden on
the Company (for example in establishing and maintaining the
associated separate custody arrangements and London Stock Exchange
quotation).
Secondary Market Placing
To the extent that Shareholders wish to consider realising their
investment in the Company, rather than hold either Realisation
Shares or 2021 Shares, then the Company has engaged its corporate
brokers, Numis Securities Limited and Liberum Capital Limited, to
seek to generate secondary market demand from Shareholders or new
investors willing to hold 2021 Shares. Numis Securities Limited and
Liberum Capital Limited can only execute bargains with Qualified
Investors. There can be no assurance as to the extent or price of
any demand that can be generated under this mechanism.
Re-designation of 2017 Shares and ring-fencing of assets
2017 Shares will be re-designated as 2021 Shares and,
proportionate to the Elections made and in relation to 2017 Shares,
as Realisation Shares. The Company's assets and liabilities will
thereafter be segregated into two pools which will be accounted for
separately and managed in accordance with the Company's investment
objective and the Revised Investment Policy.
Realisation Shares and 2021 Shares will in the future rank only
for dividends or other distributions declared, paid or made on the
respective share class after their re-designation.
Contribution Agreement
The Company has entered into the Contribution Agreement with
Master Fund II (acting by the General Partner), Master Fund III
(acting by the General Partner) and the General Partner. Under the
Contribution Agreement, upon the Effective Date, the Company will
transfer to Master Fund III such portion of the Company's limited
partnership interests in Master Fund II (as at the Effective Date)
which are attributable to those 2017 Shares which are to be
re-designated as 2021 Shares at the Effective Date pursuant to the
Reorganisation Proposal (the "Transferred Interest"). In
consideration for such transfer, the Company will receive a limited
partnership interest in Master Fund III which reflects an
equivalent value to the Transferred Interest which Master Fund III
receives from the Company.
The Contribution Agreement is conditional upon the Admission of
the re-designated 2021 Shares.
Distributions
Master Fund II will continue in accordance with the MFII
Partnership Agreement to distribute both its net income and all net
principal realised from CLO securities.
In respect of the limited partnership interests in Master Fund
II which will be held by the Company on behalf of the Realisation
Shares, it is intended that Master Fund II 's income distributions
will be used by the Company to pay dividends on the Realisation
Shares. It is intended that all future repayment of principal
received by the Company with respect to Master Fund II 's
underlying investments during the remainder of its life will be
used by the Company to make ad hoc returns of capital by way of a
compulsory partial redemption of Realisation Shares.
In respect of the limited partnership interests in Master Fund
II which will be held by Master Fund III, it is intended that
Master Fund II 's income distributions will be used by Master Fund
III to make income distributions to the Company, which in turn the
Company intends to use to pay dividends on the 2021 Shares. It is
intended that all future repayment of principal received by Master
Fund III with respect to Master Fund II 's underlying investments
during the remainder of its life will be used by Master Fund III
during its investment period to make new portfolio investments.
Dividends
The Company inte nds to pay quarterly dividends to holders of
Realisation Shares representing an amount in aggregate at least
equal to the gross income from investments received by the Company
in the relevant financial period attributable to the Realisation
Shares' interest in Master Fund II and Qualifying Short Term
Investments, less expenses of the Company.
The Board intends to pay quarterly dividends to holders of 2021
Shares representing an amount in aggregate at least equal to the
gross income received by the Company from investments in the
relevant financial year that are attributable to the 2021 Shares'
interest in Master Fund III and qualifying short term investments,
less a proportionate share of the expenses of the Company.
Duration of the Company
Currently, under the Existing Articles, the Company is required
to convene an extraordinary general meeting in 2024 but on or
before 12 June 2024 to propose to Shareholders the Continuation
Resolution. If that Continuation Resolution is passed by
Shareholders, a further Continuation Resolution will be proposed on
the nearest Business Day falling every two years thereafter. If a
Continuation Resolution is not passed, the Board shall draw up
proposals for the voluntary liquidation of the Company.
As part of the Reorganisation Proposal, a resolution is sought
at the Extraordinary General Meeting which, if passed, would amend
the Existing Articles so as to change the date by which the
Continuation Resolution is to be proposed to 12 June 2028, being a
date which aligns with the planned end date of Master Fund III, but
excluding possible extension periods of Master Fund III either (i)
through extending the time period during which further persons may
be admitted as limited partners of Master Fund III by up to two
additional consecutive one year periods at the discretion of the
General Partner; and/or (ii) by or Master Fund III's term otherwise
ending on a later date due to it continuing to hold any investment
in a CLO issuer which was made during the Commitment Period, or any
reset, upsize, reissue or re-financing thereof, and for which it
has acted as originator for risk retention purposes).
Investment Objective and Revised Investment Policy
The investment objective of the Company will be unchanged, which
is to generate attractive, risk-adjusted returns, principally
through income distributions.
The Company will continue as a feeder fund and will pursue its
investment objective and policies by investing directly in Master
Fund II and Master Fund III (with those assets of the Company
attributable to the Realisation Shares being invested in Master
Fund II and with those assets of the Company attributable to the
2021 Shares and C Shares being invested in Master Fund III).
The investment policy of the Company is to invest (either
directly and/or indirectly through Master Fund II and/or Master
Fund III) in US, UK and European CLOs or other vehicles and
structures which provide exposure to portfolios consisting
primarily of US, UK and European floating-rate senior secured loans
and which may include non-recourse financing. The Company
implements its investment policy by:
(i) with respect to those assets of the Company attributable to
the Realisation Shares: investing in Master Fund II; and
(ii) with respect to those assets of the Company attributable to
the 2021 Shares and C Shares: investing in Master Fund III.
The Company will at all times invest and manage its assets with
the objective of spreading investment risk and in accordance with
its investment policy. It will not invest in other listed closed
ended investment funds. The Company will not conduct any trading
activity which is significant in the context of its group as a
whole.
The Company may also invest in Qualifying Short Term Investments
if at any time the Company holds any un-invested cash.
The Company will not have any borrowings except for short term
borrowings for working capital and cash flow purposes. Such
borrowings may not exceed 20 per cent. of NAV in aggregate, and
also of the NAV of each Share class. If there is any short term
borrowing, assets of the Company may be pledged as security against
it.
In order to achieve an appropriate level of certainty for
Shareholders, the investment objectives and policies of Master Fund
II and Master Fund III have been entrenched in the MFII Partnership
Agreement and the MFIII Partnership Agreement respectively and
cannot be varied without an amendment to the respective agreements,
which in each case would require the consent of the limited
partners thereof holding commitments in aggregate which are equal
to or exceed 75 per cent. of the total commitments therein. No
amendments to the MFII Partnership Agreement and the MFIII
Partnership Agreement respectively may be made which would cause
the Company to be in breach of the Listing Rules of the FCA.
Placing Programme
The Placing Programme will open on 23 April 2021 and will close
on 25 March 2022 (or any earlier date on which it is fully
subscribed). The maximum number of 2021 Shares to be issued
pursuant to the Placing Programme is such number of 2021 Shares
under the Placing Programme as represents 20 per cent. of the 2021
Shares then in issue following the Effective Date and the maximum
number C Shares to be issued pursuant to the Placing Programme is
350 million, subject to any issues of 2021 Shares and/or C Shares
being capped at an aggregate issue value of US$350 million. Such
Shares will, subject to the Company's decision to proceed with a
Placing at any given time, be issued at the relevant Placing Price.
No 2021 Shares will be issued at a discount to the Net Asset Value
per 2021 Share at the time of the share issue. The Company will not
issue any 2021 Shares at a discount of 10 per cent. of more to the
middle market price of the 2021 Shares at the relevant time without
further Shareholder approval. C Shares will always be issued at
US$1 per C Share. The aggregate Net Proceeds of the Placing
Programme will depend on the number of Shares issued pursuant to it
and the relevant Placing Price in respect of each Placing under the
Placing Programme. The Directors intend to use the net proceeds of
each Placing, after costs, to invest in Master Fund III.
Extraordinary General Meeting (which also constitutes a class
meeting of the holders of the 2017 Shares)
In connection with the Proposals, the Extraordinary General
Meeting has been convened for 1.30 p.m. on 16 April 2021 at which
the Resolutions will be put to Shareholders to:
Resolution 1: adopt the New Articles;
Resolution 2: approve the re-designation of 2017 Shares as 2021
Shares, unless and to the extent that Elections
are made for the re-designation of 2017 Shares
as Realisation Shares (and provided that the aggregate
Net Asset Value (as at 31 March 2021) of the 2017
Shares elected for Realisation Shares exceeds
US$30 million), the re-designation of their 2017
Shares as Realisation Shares;
Resolution 3: authorise the Directors to issue new C Shares
and 2021 Shares and to do so on a non-pre-emptive
basis.
Action to be taken: Making an Election
(i) For those Shareholders wishing to extend the duration of
their investment in the Company:
Those Shareholders who wish to extend the duration of their
investment in the Company beyond the planned end date of Master
Fund II do not need to make an election.
However, such Shareholders should vote in favour of the
Resolutions. The Resolutions, if passed, will cause 2017 Shares to
be re-designated as 2021 Shares upon the Effective Date, unless and
to the extent that an Election is received from a Shareholder to
have their 2017 Shares re-designated as Realisation Shares.
(ii) For those Shareholders not wishing to extend the duration
of their investment in the Company:
Those Shareholders who do not wish to extend the duration of
their investment to participate in Master Fund III will need to
make an express election to have their existing 2017 Shares
redesignated as Realisation Shares upon the Effective Date. The
Realisation Shares will continue to participate solely in Master
Fund II.
Shareholders who do not make valid Elections (as well as
Excluded Shareholders) shall be deemed to have agreed to the
re-designation of all of their 2017 Shares as 2021 Shares with
effect from the Effective Date.
Overseas Shareholders should refer to the information in the
Circular under the heading "Overseas Shareholders".
Certain considerations and risks relating to the Proposals
The implementation of the Reorganisation Proposal carries with
it certain considerations and risks for Shareholders as described
below:
(i) Shareholders will need to consider the tax consequences of
the re-designation of their 2017 Shares based on their particular
circumstances. Please refer to the Circular for details relating to
taxation.
(ii) For those Shareholders wishing for their 2017 Shares to be
re-designated as 2021 Shares, please note there are risks in
participating in an investment in the 2021 Shares and Master Fund
III. You are advised to carefully consider the risk factors set out
in the "Risk Factors" section of the Prospectus, in particular,
those paragraphs relating to Master Fund III and to shares issued
pursuant to the Placing Programme.
(iii) Holders of 2021 Shares will, from the Effective Date,
continue to be exposed to the assets and liabilities of Master Fund
II (indirectly through the Company's participation in Master Fund
III, which will in turn hold a proportion of the interests in
Master Fund II ).
(iv) For those Shareholders wishing for their 2017 Shares to be
re-designated as Realisation Shares, please note there are risks in
participating in an investment in the Realisation Shares and Master
Fund II . You are advised to carefully consider the risk factors
set out in the "Risk Factors" section of the Prospectus, in
particular, those paragraphs relating to the Company and the
Company's investment in Master Fund II . Additionally, Shareholders
should be aware of the following considerations and risks in
respect of the Realisation Shares:
(i) The Realisation Shares have an expected life to the planned
end date of Master Fund II, being 12 June 2026[5].
(ii) The composition of Master Fund II's portfolio will be
unchanged by the implementation of the Proposals. However, over
time, Master Fund II's portfolio will become less diversified as
its investments are realised.
(iii) It is expected that the Realisation Share class will
represent a relatively small proportion of the Company's share
capital, therefore, the Realisation Shares are currently expected
to benefit from lower levels of secondary market liquidity than the
2021 Shares.
(iv) The Realisation Shares may also have a greater
concentration of ownership than the 2021 Shares.
(v) The Realisation Shares may not be created. As discussed
above, even if the Reorganisation Proposal becomes unconditional
and is implemented, the re-designation of existing 2017 Shares into
Realisation Shares is, furthermore, conditional upon the aggregate
Net Asset Value (as at 31 March 2021) of the existing 2017 Shares
elected for Realisation Shares exceeding US$30 million, and if this
condition is not met, existing 2017 Shares elected for Realisation
Shares will instead be re-designated into 2021 Shares upon the
implementation of the Reorganisation Proposal.
(vi) All Shareholders (irrespective of whether you wish to
remain solely invested in Master Fund II or to participate in
Master Fund III) should carefully consider the risk factors set out
in the "Risk Factors" section of the Prospectus.
Shareholders who are in any doubt as to the contents of the
Circular or as to the action to be taken should immediately seek
their own personal financial advice from an independent
professional adviser authorised under the Financial Services and
Markets Act 2000 (as amended).
Expected timetable
Date of the Circular 26 March 2021
Publication of the Prospectus 26 March 2021
==============================
Latest time and date for receipt 1.30 p.m. on 14 April 2021
of Forms of Proxy
==============================
Latest time and date for receipt 1.30 p.m. on 14 April 2021
of CREST Proxy Instructions
==============================
Latest time and date for receipt 1.00 p.m. on 16 April 2021
of Form of Election
==============================
Latest time and date for receipt 1.00 p.m. on 16 April 2021
of CREST Election Instructions
==============================
Record Date for entitlement to make close of business on 16 April
an Election 2021
==============================
Extraordinary General Meeting 1.30 p.m. on 16 April 2021
==============================
Results of the Extraordinary General 16 April 2021
Meeting
published
==============================
Results of the Elections published 19 April 2021
==============================
Effective Date 22 April 2021
==============================
Admission of the re-designated 2021 8.00 a.m. on 22 April 2021
Shares
==============================
Despatch of replacement share certificates week commencing 26 April
to the holders of Realisation Shares 2021
and 2021 Shares
==============================
Note: Each of the times and dates set out below is subject to
change. References to a time of day are to London time. Any changes
to the timetable will be notified by publication of a notice
through a regulatory information service.
Fair Oaks Income Limited
Fair Oaks Income Limited is a registered closed-ended investment
company incorporated in Guernsey. The Company was admitted to
trading on the Specialist Fund Market of the London Stock Exchange
(now the Specialist Fund Segment of the Main Market of the London
Stock Exchange) on 12 June 2014.
The Company will continue as a feeder fund and will pursue its
investment objective and policies by investing directly in Master
Fund II and Master Fund III (with those assets of the Company
attributable to the Realisation Shares being invested in Master
Fund II and with those assets of the Company attributable to the
2021 Shares and C Shares being invested in Master Fund III).
The investment policy of the Company is to invest (either
directly and/or indirectly through Master Fund II and/or Master
Fund III) in US, UK and European CLOs or other vehicles and
structures which provide exposure to portfolios consisting
primarily of US, UK and European floating-rate senior secured loans
and which may include non-recourse financing.
Dealing codes
The dealing codes for the 2021 Shares and Realisation Shares are
as follows;
2021 Share ISIN: GG00BNNLWT35
2021 Share SEDOL: BNNLWT3
2021 TIDM: FAIR
Realisation Share ISIN: GG00BF00L342
Realisation Share SEDOL: BF00L34
Realisation Share TIDM: FA17
Important Information
This announcement which has been prepared by, and is the sole
responsibility of, the directors of the Company, has been approved
for the purposes of section 21 of the FSMA by Fair Oaks Capital
Limited, which is authorised and regulated by the Financial Conduct
Authority.
This announcement is an advertisement and does not constitute a
prospectus relating to the Company and does not constitute, or form
part of, any offer or invitation to sell or issue, or any
solicitation of any offer to subscribe for, any shares in the
Company in any jurisdiction nor shall it, or any part of it, or the
fact of its distribution, form the basis of, or be relied on in
connection with or act as any inducement to enter into, any
contract therefor.
Recipients of this announcement who are considering subscribing
for 2021 Shares and/or C Shares are reminded that any such
subscription must be made only on the basis of the information
contained in the Prospectus which may be different from the
information contained in this announcement. Subscription for 2021
Shares and/or C Shares is subject to specific legal or regulatory
restrictions in certain jurisdictions. Persons distributing this
announcement must satisfy themselves that it is lawful to do so.
The Company assumes no responsibility in the event that there is a
violation by any person of such restrictions.
This information is for general guidance only and it is the
responsibility of any person or persons in possession of this
document to inform themselves of, and to observe, all applicable
laws and regulations of any relevant jurisdiction. This document
contains statements that are or may be forward-looking statements.
All statements other than statements of historical facts included
in this document may be forward-looking statements, including
statements that relate to the Company's future prospects,
developments and strategies.
Forward-looking statements are identified by their use of terms
and phrases such as "believe", "targets", "expects", "aim",
"anticipate", "projects", "would", "could", "envisage", "estimate",
"intend", "may", "plan", "will" or the negative of those,
variations or comparable expressions, including references to
assumptions. The forward-looking statements in this document are
based on current expectations and are subject to known and unknown
risks and uncertainties that could cause actual results,
performance and achievements to differ materially from any results,
performance or achievements expressed or implied by such
forward-looking statements. Factors that may cause actual results
to differ materially from those expressed or implied by such
forward-looking statements include, but are not limited to, those
described in the Risk Factors. These forward-looking statements are
based on numerous assumptions regarding the present and future
business strategies of such entity and the environment in which
each will operate in the future. All subsequent oral or written
forward-looking statements attributed to the Company, the General
Partner, Master Fund II, Master Fund III or any persons acting on
their behalf are expressly qualified in their entirety by the
cautionary statement above.
Each forward-looking statement speaks only as at the date of
this document. Except as required by law, regulatory requirement,
the UK Prospectus Regulation, the Prospectus Regulation Rules, the
Disclosure Guidance and Transparency Rules, the RCIS Rules and MAR,
neither the Company nor any other party intends to update or revise
these forward-looking statements, whether as a result of new
information, future events or otherwise. The contents of these
paragraphs relating to forward-looking statements are not intended
to qualify the statements made as to sufficiency of working capital
in this document.
This document does not constitute, and may not be used for the
purposes of, an offer to sell or issue or the solicitation of an
offer to buy or subscribe for any Shares to or from any person in
any jurisdiction in which such offer or solicitation is not
authorised or to any person to whom it is unlawful to make such
offer or solicitation. Investors should not subscribe for or
purchase any transferable securities referred to in this
announcement except on the basis of the information contained in
the Prospectus (and any supplementary prospectus).
The distribution of this document and the offer and sale of
Shares may be restricted by law and regulation. No action has been
taken or will be taken by the Company, Numis or Liberum that would
permit a public offering of the Shares, or possession or
distribution of this document, in any jurisdiction where action for
that purpose is required. Accordingly, persons into whose
possession this document comes are required to inform them about
and to observe such restrictions. Any failure to comply with these
restrictions may constitute a violation of the securities law of
any such jurisdictions.
Nothing contained in this document is intended to constitute
investment, legal, tax, accounting or other professional advice.
This document is for information only and nothing in this document
is intended to endorse or recommend a particular course of action.
Prospective investors must rely upon their own professional
advisers, including their own legal advisers and accountants, as to
legal, tax, investment or any other related matters concerning the
Company and an investment therein. Statements made in this document
are based on the law and practice currently in force in England and
Wales and in Guernsey, and are subject to change.
This document is not for distribution into the United States or
any other Restricted Jurisdiction. The issue of the Shares has not
been, and will not be, registered under the applicable securities
laws of the United States or any other Restricted Jurisdiction
("Restricted Jurisdiction" being each of Australia, Canada, Japan,
the Republic of South Africa and the United States) and, subject to
certain exceptions, the Shares may not be offered or sold directly
or indirectly within the United States or any other Restricted
Jurisdiction or to, or for the account or benefit of, any persons
within the United States or within any other Restricted
Jurisdiction.
The Shares have not been and will not be registered under the
United States Securities Act of 1933, as amended (the "Securities
Act") or any US state securities laws. The Shares may not be
offered, sold, pledged or otherwise transferred, directly or
indirectly, within the United States or to, or for the account or
benefit of, US Persons (as defined in Regulation S under the
Securities Act) unless the offer and sale of the Shares has been
registered un the Securities Act and the Company is registered
under the US Investment Company Act of 1940, as amended (the "US
Investment Company Act") or an applicable exemption from the
registration requirements of the Securities Act and the US
Investment Company Act are available.
The Shares have not been approved or disapproved by the SEC, any
US state securities commission or any other US regulatory authority
nor have any of the foregoing authorities passed upon or endorsed
the merits of the offering of the Shares or the accuracy or
adequacy of this document. Any representation to the contrary is a
criminal offence in the United States.
The Shares are subject to restrictions on transferability and
resale within the United States and may not be transferred or
resold in the United States except pursuant to a valid exemption
from the registration requirements of the Securities Act, the US
Investment Company Act and state securities laws.
Numis Securities Limited ("Numis"), which is authorised and
regulated in the UK by the FCA, is acting exclusively for the
Company and no one else in connection with the Placing Programme
and each Admission and will not regard any other person (whether or
not a recipient of this document) as its client in relation to the
Placing Programme and each Admission and will not be responsible to
anyone other than the Company for providing the protections
afforded to its clients or for providing advice in connection with
the Placing Programme and each Admission or any other matter
referred to in this document. This does not exclude or limit any
responsibilities which Numis may have under FSMA or the regulatory
regime established thereunder.
Liberum Capital Limited ("Liberum"), which is authorised and
regulated in the UK by the FCA, is acting exclusively for the
Company and no one else in connection with the Placing Programme
and each Admission and will not regard any other person (whether or
not a recipient of this document) as its client in relation to the
Placing Programme and each Admission and will not be responsible to
anyone other than the Company for providing the protections
afforded to its clients or for providing advice in connection with
the Placing Programme and each Admission or any other matter
referred to in this document. This does not exclude or limit any
responsibilities which Liberum may have under FSMA or the
regulatory regime established thereunder.
Other than the responsibilities or liabilities, if any, which
may be imposed on Numis or on Liberum by FSMA or any regulatory
regime established thereunder, neither Numis nor Liberum accepts
any responsibility whatsoever or make any representation or
warranty, express or implied, in respect of the contents of this
document, including its accuracy, completeness or verification, in
respect of any other statement made or purported to be made by it,
or on its behalf, in connection with the Company, document is, or
shall be relied upon as, a promise or representation in this
respect, whether as to the past or future. Numis (and its
affiliates) and Liberum (and its affiliates) accordingly disclaim
all and any liability, whether arising in tort, contract or
otherwise, which it/they might otherwise be found to have in
respect of this document or any such statement.
Information to distributors
Solely for the purposes of the product governance requirements
contained within (a) the UK's implementation of EU Directive
2014/65/EU on markets in financial instruments, as amended ("UK
MiFID II") and (b) the UK's implementation of Articles 9 and 10 of
Commission Delegated Directive (EU) 2017/593 supplementing UK MiFID
II, and in particular Chapter 3 of the Product Intervention and
Product Governance Sourcebook of the FCA (together, the "MiFID II
Product Governance Requirements"), and disclaiming all and any
liability whether arising in tort, contract or otherwise, which any
"manufacturer" (for the purposes of the MiFID II Product Governance
Requirements) may otherwise have with respect thereto, the C Shares
and the 2021 Shares have been subject to a product approval
process, which has determined that such securities to be issued
pursuant to any Placing are: (i) compatible with an end target
market of retail investors and investors who meet the criteria of
professional clients and eligible counterparties, each as defined
in the UK MiFID II; and (ii) eligible for distribution through all
distribution channels as are permitted by the UK MiFID II (the
"Target Market Assessment").
Notwithstanding the Target Market Assessment, distributors
should note that: (i) the price of the C Shares and the 2021 Shares
may decline and investors could lose all or part of their
investment; the C Shares and the 2021 Shares offer no guaranteed
income and no capital protection; (ii) an investment in the C
Shares or the 2021 Shares is compatible only with investors who do
not need a guaranteed income or capital protection, who (either
alone or in conjunction with an appropriate financial or other
adviser) are capable of evaluating the merits and risks of such an
investment and who have sufficient resources to be able to bear any
losses that may result therefrom, and (iii) the C Shares and the
2021 Shares will be admitted to the Specialist Fund Segment, which
is intended for institutional, professional, professionally advised
and knowledgeable investors who understand, or who have been
advised of, the potential risk from investing in companies admitted
to the Specialist Fund Segment. The Target Market Assessment is
without prejudice to the requirements of any contractual, legal or
regulatory selling restrictions in relation to any Placing.
Furthermore, it is noted that, notwithstanding the Target Market
Assessment, Numis and Liberum will only procure investors who meet
the criteria of professional clients and eligible
counterparties.
For the avoidance of doubt, the Target Market Assessment does
not constitute: (i) an assessment of suitability or appropriateness
for the purposes of the UK MiFID II; or (ii) a recommendation to
any investor or group of investors to invest in, or purchase, or
take any other action whatsoever with respect to the Shares. Each
distributor is responsible for undertaking its own Target Market
Assessment in respect of the Shares and determining appropriate
distribution channels.
Key information documents
In accordance with the UK PRIIPs Regulation, a key information
document is prepared in relation to the 2021 Shares, which is
available on the Company's website: https://www.fairoaksincome.com
and a key information document is prepared in relation to the
Realisation Shares, which is available on the Company's website:
https://www.fairoaksincome.com . If any tranche of C Shares is to
be issued under the Placing Programme, a key information document
in relation to such a tranche of C Shares will be prepared and made
available on the Company's website: https://www.fairoaksincome.com
.
It is the responsibility of each distributor of the Shares to
ensure that its "retail clients" in the UK are provided with a copy
of the key information document.
The Company is the manufacturer of the Shares for the purposes
of the UK PRIIPs Regulation and neither Numis nor Liberum is a
manufacturer for these purposes. Neither Numis nor Liberum makes
any representation, express or implied, or accepts any
responsibility whatsoever for the contents of the key information
document prepared by the Company in relation to the Shares nor
accepts any responsibility to update the contents of the key
information document in accordance with the UK PRIIPs Regulation,
to undertake any review processes in relation thereto or to provide
such key information document to future distributors of Shares.
Each of Numis, Liberum and their respective affiliates accordingly
disclaims all and any liability whether arising in tort or contract
or otherwise which it or they might have in respect of the key
information document prepared by the Company.
[1] excluding possible extension periods of Master Fund III
through extending the time period during which further persons may
be admitted as limited partners by up to two additional consecutive
one year periods at the discretion of the General Partner or Master
Fund III's term ending on a later date due to it continuing to hold
any investment in a CLO issuer which was made during the Commitment
Period, or any reset, upsize, reissue or re-financing thereof, and
for which it has acted as originator for risk retention
purposes).
[2] This is a target only and not a profit forecast. There can
be no assurance that this target will be met or that the Company
will make any distributions at all. This target return should not
be taken as an indication of the Company's expected or actual
current or future results.
[3] or if later, such date on which Master Fund II ceases to
hold any investment in a CLO issuer which was made during the
Commitment Period and for which Master Fund II has acted as
originator for risk retention purposes.
[4] This is a target only and not a profit forecast. There can
be no assurance that this target will be met or that the Company
will make any distributions at all. This target return should not
be taken as an indication of the Company's expected or actual
current or future results.
[5] or if later, such date on which Master Fund II ceases to
hold any investment in a CLO issuer which was made during the
Commitment Period and for which Master Fund II has acted as
originator for risk retention purposes.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
PDIXVLFLFXLBBBV
(END) Dow Jones Newswires
March 29, 2021 02:00 ET (06:00 GMT)
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