Regulatory Information

Investor Reporting Disclosure

Alternative Investment Fund ('AIF' or the 'Company'): Hansa Trust PLC
Alternative Investment Fund Manager ('AIFM'):

Investment Manager:
Maitland Institutional Services Limited (the ‘Manager’)

Hansa Capital Partners LLP
Date of disclosure: 31/03/2017

1. IMPORTANT INFORMATION

Introduction

Pursuant to the Alternative Investment Fund Managers Directive, this investor reporting disclosure document is provided to all new investors in the AIF located in the European Economic Area (‘EEA’) and also to EEA investors in AIFs located outside the EEA, solely to make particular information available to investors prior to any investment being made. The Manager, the Company and its Directors will not be responsible to persons other than the Company’s shareholders for their use of this document, nor will they be responsible to any person (including the Company’s shareholders) for any use which they may make of this document. This document is being made available to investors in the Company at www.hansatrust.com.

This document should be viewed in conjunction with the Company’s annual report and audited financial statements for the year to 31 March 2016 (the “Annual Report”). Capitalised terms in this document shall have the meaning given in the Company’s Annual Report unless the context otherwise requires.

This document does not purport to provide complete details of the AIF and potential investors should not solely rely upon this document when determining whether to make an investment. Furthermore, investors should refer to the risks and disclaimers contained within the Annual Report.

This document does not constitute, and may not be used for the purposes of, an offer or solicitation to buy or sell, or otherwise undertake investment activity in relation to, the Company’s shares.

This document is not a prospectus and it is not intended to be an invitation or inducement to any person to engage in any investment activity. This document is not intended to include all the information which investors and their professional advisers may require for the purpose of making an informed decision in relation to an investment in the Company.

No advice given

The Manager, the Company and its Directors are not advising any person in relation to any investment or other transaction involving shares in the Company. Recipients must not treat the contents of this document or any subsequent communications form the Manager, the Company or any of its affiliates, officers, Directors, employees or agents, as advice relating to financial, investment, taxation, accounting, legal, regulatory or any other matters. Prospective investors must rely on their own professional advisers, including their own legal advisers and accountants, as to legal, tax, accounting, regulatory, investment or any other related matters concerning the Company and to an investment in its shares.

Overseas investors

The distribution of this document in certain jurisdictions may be restricted and accordingly persons into whose possession this document comes are required to inform themselves about and to observe such restrictions. The shares have not been, and will not be, registered under the United States Security Act of 1933 (as amended) or the securities laws of any states of the United States or under any of the relevant securities laws of Canada, Australia, the Republic of South Africa or Japan or their respective territories or possessions. Accordingly, the shares may not (unless an exemption from such Act or such laws is available) be offered, sold or delivered, directly or indirectly, in or into the United States, Canada, Australia, the Republic of South Africa or Japan. The Company is not registered under the United States Investment Company Act 1940 (as amended) and investors will not be entitled to the benefits of such legislation.

Prospective investors must inform themselves as to (a) the legal requirements within their own countries for the purchase, holding, transfer or other disposal of shares; (b) any foreign exchange restrictions applicable to the purchase, holding, transfer or other disposal of shares which they might encounter; and (c) the income and other tax consequences which may apply in their own countries as a result of the purchase, holding, transfer or other disposal of shares.

2. Performance Summary

The historical performance of the Company can be found within the Company’s Factsheets, which are published on its website: www.hansatrust.com.

Investors should note that past performance of the Company is not necessarily indicative of future performance. Capital may be at risk as the value of investments may go down as well as up and is not guaranteed, therefore investors may not get back the amount originally invested. There can be no guarantee that the investment objective of the Company will be achieved or provide the returns sought by the Company or its investors.

3. Risk Factors

Material risk factors relating to the Company and its shares can be found in the Annual Report, which can be found on the Company’s website: www.hansatrust.com.

4. Particulars of the AIF and service providers

4a

Domicile, legal form, legislation and country of incorporation

The Company is a UK based Investment Trust incorporated in the UK and listed on the London Stock Exchange.

4b

Process by which the AIF may change its investment strategy or investment policy, or both

The investment strategy and policy may only be materially changed by resolution of the Shareholders.

Any change in investment strategy or investment policy which does not amount to a material change to the investment policy may be made by the Board without shareholder approval.

4c

Legal description of the contractual relationship entered into for the purpose of investment

The Company’s shares are admitted to the Official List of the UKLA and to trading on the main market of the London Stock Exchange. Accordingly, the Company’s shares may be purchased and sold on the main market of the London Stock Exchange. The Board does not envisage that new shares will be issued by the Company to persons other than market makers in the Company’s shares. Issuances of shares will be governed by English law. While the Company will typically have shareholder authority to buy back shares, shareholders do not have the right to have their shares purchased by the Company.

4d

Identity of  the  Alternative Investment Fund Manager (AIFM) and administrator

Maitland Institutional Services Limited, a private limited company incorporated under the laws of England and Wales on 18 May 2007 serves as AIFM and administrator for the Company and has the responsibility for the portfolio and risk management of the assets of the Company.

4e

Identity of the Investment Manager

Hansa Capital Partners LLP a limited liability partnership incorporated under the laws of England and Wales with registered number OC309528 serves as the Investment Manager of the Company and is authorised and regulated by the Financial Conduct Authority in the United Kingdom.

4f

Identity of AIF’s auditor

Grant Thornton UK LLP, a limited liability partnership incorporated in England and Wales with registered number OC307742, serves as the Company’s auditor.

4g

Identity of AIF's depositary & custodian

BNP Paribas Securities Services (the “Depositary”) acts as depositary and custodian for the Company under the depositary agreement between the Company, the Depositary and the Manager dated 10 June 2014 to undertake various functions including safekeeping of assets and the monitoring of cashflows, changes in issued share capital and the valuation of assets.

BNP Paribas Securities Services is a company registered at the Companies Register of Paris under number 552 108 011, whose registered office is at 3, rue d’Antin – 75002, Paris, France and is acting through its London branch whose office is at 10 Harewood Avenue, Marylebone, London, NW1 6AA.

4h

Identity of AIF’s registrar

Capita Registrars Limited incorporated under the laws of England and Wales with registered number 02605568 and has been appointed as the Company’s registrar to maintain the Company’s register.

5. Investment Strategy, Objectives and Restrictions

5a

AIF's investment strategy and objectives, summary of the type of assets in which AIF may invest, investment techniques that may be employed on behalf of the Fund, investment restrictions, circumstances in which the AIF may use leverage, the types and sources of leverage permitted, restrictions on the use of leverage and collateral and asset reuse arrangements and the maximum level of leverage which the AIFM is entitled to employ on behalf of the AIF

Investment Objectives

To increase the assets of the Company over the medium-long term by investing in a diversified and multi-strategy portfolio of international, financial securities. Some of these securities may constitute a significant proportion of the capital of some of the investee companies or of the assets of some of the investee funds in the portfolio (with Board consent).

The Company’s benchmark is the three-year rolling average of the five-year U.K. government bond plus 2% with coupons reinvested. The total return of net asset value over five years is expected to exceed the total return of the benchmark.

The investment objectives and restrictions apply initially to the Company’s appointed Investment Manager. Following the implementation of the  Alternative  Investment Fund Managers Directive, this document will apply to the Company’s appointed Alternative Investment Fund Manager (“AIFM”) and its delegated Portfolio Manager function. References to ‘Manager’ or ‘Investment Manager’ in the remainder of this document are deemed to apply to the current Investment Manager and future AIFM and Portfolio Manager.

Restrictions

1.  Compliance with Sections 1158 and 1159 of the CTA 2010

(a) The Manager is to ensure that the Company at all times complies with its investment trust company status as set out in Sections 1158 and 1159 of the CTA 2010, and

(b) Manage the Company’s cash in order to enable the Board to comply with the minimum retention test as defined in CTA 2010, and also Para 19 of SI 2011/2999 The Investment Trust (Approved Company) (Tax) Regulations 2011

 

Note: references above to the Sections 1158 and 1159 of CTA 2010 are to that section of the legislation as subsequently amended by the Finance Act 2011 and Statutory Instrument 2011/2999 The Investment Trust (Approved Company) (Tax) Regulations 2011

2. Conflicts of Interest

Approval of the Board is required before:

(a) Any transaction can be made in a company or fund of which the investment manager, or any person connected with the investment manager, is a director, trustee or a material shareholder.

(b) Any transaction can be made in any security of any company or fund of which the investment manager is the manager or the adviser.

(c) Any transaction can be made in any company or fund, which is being promoted or advised, by the Manager or its associate.

3. Banking Facilities

The Manager is expected to operate within banking facilities as determined from time to time by the Board.

4. Risk and Liquidity

Approval of the Board is required before:

(a) Any investment transaction can be made investing in excess of 10% of the portfolio's value either in unquoted securities or in funds that require in excess of 180 days in order to redeem them. The 10% limit excludes the existing investment in Ocean Wilsons Holdings Ltd. The Board will be kept notified following any such transaction if the transaction does not exceed the 10% limit.

(b) An investment can be made in a derivative instrument.

(c) At the time of investment in an investment sector, its market value would exceed within one of the following bands within the portfolio:

i. Core Funds 0-40%
ii. UK Equity Special Situations 0-40%
iii. Eclectic & Diversifying Assets 0-40%

Note: No further investment may be made in Ocean Wilsons Holdings Ltd or Wilson Sons Ltd.

(d) An investment greater than 5% of the Company’s net asset value (at the time of the investment) can be made in the securities of any company/fund.

(e) An investment, which constitutes more than 5% of the share capital of the investee company or more than 15% of the net asset value of a fund, can be made.

5b

Investment  techniques  that  may  be employed on behalf of the AIF

To increase the assets of the Company over the medium-long term by investing in a diversified and multi-strategy portfolio of international, financial securities.

6. Issue and sale of units or shares

6a

Procedure  and  conditions  for  the issue and sale of units or shares

The Company’s Ordinary Shares are admitted to the Official List of the UKLA and to trading on the main market of the London Stock Exchange. Accordingly, the Company’s Ordinary Shares may be purchased and sold on the main market of the London Stock Exchange.

New shares may be issued only at a premium to net asset value, at the Board’s discretion.

While the Company will typically have shareholder authority to buy back shares, shareholders do not have the right to have their shares purchased by the Company.

7. Fees, Charges and Expenses

7a

A description of all fees, charges and expenses, and the maximum amounts directly or indirectly borne by investors

The Portfolio Manager shall be entitled to a management fee of 1% per annum based on the net asset value of the portfolio, plus net income, less the net asset value of the holding in Ocean Wilsons Holdings Limited (“Chargeable NAV”).

The Fee shall be payable monthly in arrears by the Company. The Fee shall be calculated at each month end based upon the Chargeable NAV as reported to the market by the Administrator on the last day of that month. The Fee will be 1% of the Chargeable NAV pro-rated for the number of days in the month for which the fee is due against a 365 day year.

The Portfolio Manager shall be entitled to be reimbursed by the Company on invoice all commissions, transfer fees, registration fees, stamp duty and similar liabilities, the fees of any advisers appointed pursuant to Clause 12 and any other costs incurred on behalf of the Company otherwise than in the ordinary course of its duties as an investment manager and such other reasonable expenses as the Company and the Portfolio Manager may agree from time to time (plus VAT (if applicable)) properly incurred in the performance of its duties under this Agreement.

The AIFM is entitled to receive an annual fee to be calculated as percentages of the Company’s net assets (7 basis points on the first £49,999,999.99 of net assets, 5 basis points on net assets between £50 million and £100 million and 3 basis points on net assets in excess of £100 million), subject to a minimum annual fee of £20,000.

The Administrator is entitled to receive an annual fee to be calculated as percentages of the Company’s net assets (6 basis points on the first £99,999,999.99 of net assets, 5 basis points on net assets between £100 million and £200 million and 4 basis points on net assets in excess of £200 million), subject to a minimum of £75,000.

The fees payable to the Depositary by the Company will be
(i) a minimum safekeeping fee of £8,500 per annum, although the fee may be greater dependent on the level of transaction fees incurred during the year and is payable monthly in arrears and
(ii) a Depositary fee calculated as percentages of the Company’s net assets (1.75 basis points on the first £99,999,999.99 of net assets, 1.5 basis points on net assets between £100 million and £200 million and 1.25 basis points on net assets in excess of £200 million), subject to a minimum annual fee of £15,000 in the first year and
£25,000 for each year thereafter.

8. Liquidity Risk Management

8a

Description  of  the  AIF's  liquidity  risk management

The AIFM maintains a liquidity management policy to monitor the liquidity risk of the Company. Shareholders have no right to redeem their Ordinary Shares from the Company. There is no guarantee that there will be a liquid market in the Ordinary Shares.

Further details regarding the risk management process and liquidity management shall be available from the AIFM, on request.

9. Valuation

9a

Publication of net asset value

The Net Asset Value is calculated and reported daily to the London Stock Exchange.

9b

Summary description of the AIF's valuation procedure

As the Company’s business is investing in financial assets, with a view to profiting from their total return in the form of income received and increases in fair value, investments are designated at fair value through profit or loss on initial recognition in accordance with IAS 39. The Company manages and evaluates the performance of
these investments on a fair value basis, in accordance with its investment strategy and information about the investments is provided on this basis to the Board of Directors.

Investments are recognised and de-recognised on the trade date. For listed investments fair value is deemed to be bid market prices or closing prices for SETS stocks sourced from the London Stock Exchange. SETS is the London Stock Exchange’s electronic trading service, covering most of the market including all FTSE 100 constituents and most liquid FTSE 250 constituents, along with some other securities.

Unquoted investments are stated at fair value through profit or loss as determined by using various valuation techniques, in accordance with the International Private Equity and Venture Capital Valuation Guidelines. These include using recent arms-length market transactions between knowledgeable and willing parties where available.

10. Fair Treatment of Investors

10a

Brief description on how a fair treatment of investors is ensured

The AIFM will treat all of the Company’s investors fairly.  The principles of treating investors fairly include, but are not limited to:

  • Acting in the best interests of the Company and of the Shareholders;
  • Ensuring that the investment decisions taken for the account of the Company are executed in accordance with the Company’s investment policy and objective and risk profile;
  • Ensuring that the interests of any group of Shareholders are not placed above the interests of any other group of Shareholders;
  • Ensuring that fair, correct and transparent pricing models and valuation systems are used for the Company;
  • Preventing undue costs being charged to the Company and Shareholders;
  • Taking all reasonable steps to avoid conflicts of interests and, when they cannot be avoided, identifying, managing, monitoring and, where applicable, disclosing those conflicts of interest to prevent them from adversely affecting the interests of Shareholders; and
  • Recognising and dealing with complaints fairly.

The Company maintains and operates organisational, procedural and administrative arrangements and implements policies and procedures designed to manage actual and potential conflicts of interest.

11. Delegation

11a

Description of any portfolio management or risk management function delegated by the AIFM

The  AIFM  has  delegated  its  portfolio  management  function  to  Hansa  Capital Partners LLP.

11b

Description of other AIFM management functions delegated by the AIFM

No AIFM management functions are delegated, other than those functions referred to in 11a above.

11c

Description of any safe-keeping function delegated by the depositary

None.

11d

Description of any conflict of interest that may arise pursuant to any of the delegations described above

None.

12. Additional Disclosure Requirements

12a

Most recent AIF Annual Report

The Annual Report and Audited Financial Statements have been published and can be found on the Company’s website: www.hansa.trust.com

12b

Description of how the following periodic disclosure items will be disclosed to investors:

(i) the percentage of the AIF's assets that are subject to special arrangements arising from their illiquid nature;

(ii) any new arrangements for managing the liquidity of the AIF;

(iii) the current risk profile of the AIF and the risk management systems employed by the AIFM to manage those risks;

(iv) any changes to the maximum level of leverage which the AIFM and the Investment Manager may employ on behalf of the Company as well as any right of the re-use of collateral or any guarantee granted under the leveraging arrangement; and

(v) the total amount of leverage employed by the Company.

These items will be communicated to investors in the Company’s Annual Report and Audited Financial Statements, which can be found on the Company’s website.

12c

Description on how the AIFM complies with requirements relating to professional liability risk

01 December 2016 to 30 November 2017
Professional  Indemnity  Insurance  (including  Professional  Positions  Liability)  and Crime Insurance - GBP 60,000,000
Directors & Officers Liability Insurance - GBP 15,000,000

12d

Remuneration Policy

The remuneration policy of the AIFM, which describes how remuneration and benefits are determined and awarded, and the associated governance arrangements, is available at www.maitlandgroup.com or on request from the registered office of the AIFM free of charge.

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