OFFERING MEMORANDUM GLOBAL HIGH INCOME …...OFFERING MEMORANDUM OF GLOBAL HIGH INCOME FUND LTD. (A...

OFFERING MEMORANDUM

OF

GLOBAL HIGH INCOME FUND LTD.

(A Cayman Islands Exempted Company, registered as an administered mutual fund with

the Cayman Islands Monetary Authority)

FEBRUARY 2017

RELATING TO THE OFFERING OF PARTICIPATING, NON-VOTING SHARES, OF US$0.001 PAR

VALUE EACH, DESIGNATED INTO THE FOLLOWING CLASSES:

CLASS A USD SHARES, CLASS A EUR SHARES, CLASS A GBP SHARES, CLASS A SGD SHARES,

CLASS A HKD SHARES

AND

CLASS B USD SHARES, CLASS B EUR SHARES, CLASS B GBP SHARES, CLASS B SGD SHARES,

CLASS B HKD SHARES

AND

CLASS C USD SHARES, CLASS C EUR SHARES, CLASS C GBP SHARES, CLASS C SGD SHARES,

CLASS C HKD SHARES

Investment Manager Hypa Asset Management Ltd

Clifton House

75 Fort Street

PO Box 1350

Grand Cayman

KY1-1108

Cayman Islands

THIS OFFERING MEMORANDUM (THIS “OFFERING MEMORANDUM”) IS

SUBMITTED TO YOU ON A CONFIDENTIAL BASIS SOLELY IN CONNECTION

WITH YOUR CONSIDERATION OF AN INVESTMENT IN GLOBAL HIGH INCOME

FUND LTD. (THE “FUND”). BECAUSE OF THE CONFIDENTIAL NATURE OF THIS

OFFERING MEMORANDUM, ITS USE FOR ANY OTHER PURPOSE MAY INVOLVE

SERIOUS LEGAL CONSEQUENCES. THIS OFFERING MEMORANDUM MAY NOT

BE REPRODUCED IN WHOLE OR IN PART, AND IT MAY NOT BE DELIVERED TO

ANY PERSON WITHOUT THE PRIOR WRITTEN CONSENT OF THE BOARD OF

DIRECTORS OF THE FUND.

GLOBAL HIGH INCOME FUND LTD. – OFFERING MEMORANDUM – PAGE 2

GLOBAL HIGH INCOME FUND LTD. (the “Fund”) is a Cayman Islands exempted

company incorporated on 29 July 2014 to operate as an open ended investment fund. This

Offering Memorandum relates to the offering of participating, non-voting shares, of

US$0.001 par value each (the “Shares”), designated into the following classes of Shares

(each being referred to herein as a “Class”): Class A USD Shares, Class A EUR Shares,

Class A GBP Shares, Class A SGD Shares, Class A HKD Shares (“Class A Shares”) and

Class B USD Shares, Class B EUR Shares, Class B GBP Shares, Class B SGD Shares, Class

B HKD Shares (“Class B Shares”) and Class C USD Shares, Class C EUR Shares, Class C

GBP Shares, Class C SGD Shares and Class C HKD Shares (“Class C Shares”).

The Directors, whose names are set out in the directory below, and the Investment Manager

(as defined below) accept responsibility for the information contained in this Offering

Memorandum. To the best of the knowledge and belief of the Directors and the Investment

Manager (who have taken all reasonable care to ensure that such is the case) the information

contained in this Offering Memorandum is in accordance with the facts and does not omit

anything likely to affect the importance of such information.

The Fund is a mutual fund under the Cayman Islands Mutual Funds Law (as revised) (the

“Mutual Funds Law”). As a mutual fund, the Fund has been registered, as an administered

mutual fund under Section 4(1)(b) of the Mutual Funds Law, with and is subject to the

regulation and supervision of the Cayman Islands Monetary Authority (“Monetary

Authority”). The Monetary Authority has supervisory and enforcement powers to ensure

compliance with the Mutual Funds Law. Regulation under the Mutual Funds Law entails

the filing of prescribed details in respect of this Offering Memorandum and the filing of the

Fund's audited accounts annually with the Monetary Authority.

As a regulated mutual fund, the Monetary Authority may at any time instruct the Fund to

have its accounts audited (in addition to the mandatory annual audit) and to submit them to

the Monetary Authority within such time as the Monetary Authority specifies. In addition,

the Monetary Authority may ask the Directors of the Fund to give the Monetary Authority

such information or such explanation in respect of the Fund as the Monetary Authority may

reasonably require to enable it to carry out its duties under the Mutual Funds Law. Failure

to comply with these requests by the Monetary Authority may result in substantial fines

being imposed on the Directors of the Fund and may result in the Monetary Authority

applying to the court to have the Fund wound up.

The Fund will not, however, be subject to supervision in respect of its investment activities

or the constitution of the Fund's investment portfolio by the Monetary Authority or any other

governmental authority in the Cayman Islands, although the Authority does have power to

investigate the activities of the Fund in certain circumstances.

The Monetary Authority is prohibited by the Mutual Funds Law from disclosing any

information relating to the affairs of a mutual fund other than disclosure required for the

effective regulation of a mutual fund or when required or permitted to do so by law or by a

court.

Neither the Monetary Authority nor any other governmental authority in the Cayman Islands

has commented upon or approved the terms or merits of this Offering Document and makes

no warranty or representation as t o the suitability of the Fund for investment purposes.


There is no investment compensation scheme available to investors in the Cayman Islands.

The Shares are offered solely on the basis of this Offering Memorandum and those

documents expressly incorporated by reference herein which shall include any supplement

to this Offering Memorandum and, when published, the most recent annual report and

accounts of the Fund and, if later, the half-yearly report and accounts.

Distribution of this Offering Memorandum without such report and accounts, where

available, is not authorised. Any information or representations not contained within this

Offering Memorandum may not be relied upon as having been authorised by the Fund or the

Directors and should be disregarded. This Offering Memorandum contains information in

relation to the Fund and the offering of Shares at the date hereof. It is subject to subsequent

changes in applicable law and neither the delivery of this Offering Memorandum nor the

allotment or issue of Shares shall create any implication whatsoever that there has been no

change in such law or the affairs of the Fund since the date hereof.

Prospective investors should carefully read this Offering Memorandum. However, the

contents of this Offering Memorandum should not be considered to be legal or tax advice,

and each prospective investor should consult with its own counsel and advisers as to all

matters concerning an investment in the Fund.

The base currency of the Fund is the US Dollar. As the Fund’s Net Asset Value (as defined

below) will be calculated in US Dollars, each holder of Shares, and not the Fund, will bear

the risk of any foreign currency exposure resulting from differences, if any, in the value of

the US Dollar relative to the Functional Currency of the Class of Share in which such

shareholder subscribes. Certain of the assets of the Fund may be held in securities and other

investments which are denominated in other currencies. The Fund, however, values its

investments and other assets in U.S. Dollars. Accordingly, the value of such assets may be

affected favourably or unfavourably by fluctuations (to the extent unhedged) in currency

rates. The Fund may, in its discretion, decide to prepare financial statements and report to its

shareholders in other currencies. The Fund will not pursue a currency hedging policy.

Prospective investors whose assets and liabilities are predominantly in other currencies

should also take into account the potential risk of loss arising from fluctuations in value

between the U.S. Dollar and such other currencies. Prospective investors should also note

that there can be no assurance that any hedges which are in place from time to time will be

effective.


Restrictions on Distribution

The distribution of this Offering Memorandum and the offering of Shares in certain

jurisdictions is restricted. There will be no public offering of Shares and no offer to sell (or

solicitation of an offer to buy) is being made in any jurisdiction in which such offer or

solicitation would be unlawful. It is the responsibility of any recipient of this Offering

Memorandum to confirm and observe all applicable laws and regulations. The following

information is provided as a general guide only:

Cayman Islands: The Fund is prohibited from making any invitation to the public of the

Cayman Islands to subscribe for the shares. “Public” for these purposes shall have the same

meaning as ‘Public in the Islands’ as defined in the Mutual Funds Law. Non-resident or

exempted companies and certain other non-resident or exempted entities established in the

Cayman Islands and engaged in offshore business may however be permitted to subscribe.

European Members States: The Investment Manager does not currently intend to market

the Fund in any EEA jurisdiction. However, to the extent the Investment Manager does

decide to market the Fund in any EEA jurisdiction, the distribution of Shares will be

exclusively made to, and directed at, those persons in such EEA jurisdiction to whom the

Fund may be marketed in accordance with the local private placement rules of such

jurisdiction.

Whilst the Investment Manager may not be actively marketing the Fund in any EEA

jurisdiction, it is possible that investors domiciled in or with a registered office in such

jurisdiction may nevertheless contact the Investment Manager to request information about

the Fund (including, potentially, for a copy of this Offering Memorandum) at their own

initiative, without being asked or prompted by the Investment Manager to do so (a “Reverse

Solicitation Investor”). The Investment Manager may, in its discretion, decide to provide

such information about the Fund as requested by a Reverse Solicitation Investor, but always

only in accordance with any restrictions or conditions imposed by that jurisdiction.

Singapore: This Offering Memorandum does not relate to a collective investment scheme

which is authorized under Section 286 of the Securities and Futures Act, Chapter 289 of

Singapore (the “SFA”) or recognized under Section 287 of the SFA. The Fund is not

authorized or recognized by the Monetary Authority of Singapore (the “MAS”) and the

Shares are not allowed to be offered to the retail public in Singapore. This Offering

Memorandum and any other document or material issued in connection with the offer or sale

of the Shares is not a prospectus as defined in the SFA. Accordingly, statutory liability under

the SFA in relation to the content of prospectuses would not apply. Each Prospective

Investor should consider carefully whether the investment is suitable for the Prospective

Investor.

The recipient of this Offering Memorandum should note that the offering of Shares is subject

to the terms of this Offering Memorandum and the SFA. Pursuant to Section 305 of the

SFA, read with Regulation 32 and the Sixth Schedule to the Securities and Futures (Offers

of Investments) (Collective Investment Schemes) Regulations 2005 (the “Regulations”), the

MAS has been notified in relation to the offer of Shares in the Fund, and in accordance with

the SFA and the Regulations, the Fund has been entered into the list of restricted schemes

maintained by the MAS for the purposes of the offer of Shares in the Fund to accredited

investors and other relevant persons as defined in and pursuant to Section 305 of the SFA.


Accordingly, the offer or invitation to subscribe for or purchase Shares in the Fund, which

is the subject of this Offering Memorandum, is an exempt offer made only: (i) to

“institutional investors” pursuant to Section 304 of Chapter 289 of the SFA (ii) to “relevant

persons” pursuant to Section 305(1) of the SFA, (iii) to persons who meet the requirements

of an offer made pursuant to Section 305(2) of the SFA, or (iv) pursuant to, and in

accordance with the conditions of, other applicable exemption provisions of the SFA. The

MAS assumes no responsibility for the contents of this Offering Memorandum.

No exempt offer of the Shares for subscription or purchase (or invitation to subscribe for or

purchase the Shares) may be made, and no document or other material (including this

Offering Memorandum) relating to the exempt offer of Shares may be circulated or

distributed, whether directly or indirectly, to any person in Singapore except in accordance

with the restrictions and conditions under the SFA. By subscribing for Shares pursuant to

the exempt offer under this Offering Memorandum, you are required to comply with

restrictions and conditions under the SFA in relation to your offer, holding and subsequent

transfer of Shares.

Save where Shares acquired are of the same class as (or, in the case of Shares acquired

pursuant to Section 304 of the SFA, can be converted into Shares of the same class as) other

Shares in the Fund an offer for which has previously been made in or accompanied by a

prospectus (as defined in Section 283 of the SFA) and which are listed for quotation on a

securities exchange (as defined in Section 2 of the SFA), any subsequent sale of the Shares

acquired pursuant to an initial offer made in reliance on an exemption under Section 304 or

Section 305 of the SFA may only be made pursuant to the requirements of Sections 304A

or 305A of the SFA, as the case may be, and Regulation 36 of the Regulations.

Further, save where Shares acquired are of the same class as other Shares in the Fund an

offer for which has previously been made in or accompanied by a prospectus (as defined in

Section 283 of the SFA) and which are listed for quotation on a securities exchange (as

defined in Section 2 of the SFA), where Shares are subscribed or purchased under Section

305 of the SFA by: (a) a corporation (which is not an accredited investor (as defined in

Section 4A of the SFA)) the sole business of which is to hold investments and the entire

share capital of which is owned by one or more individuals, each of whom is an accredited

investor (as defined in Section 4A of the SFA); or (b) a trust (where the trustee is not an

accredited investor (as defined in Section 4A of the SFA)) which sole purpose is to hold

investments and each beneficiary of the trust is an individual who is an accredited investor

(as defined in Section 4A of the SFA), securities (as defined in Section 2 of the SFA) of such

corporation or the beneficiaries’ rights and interest (howsoever described) in such trust shall

not be transferred within six (6) months after the corporation has acquired any Shares in the

Fund pursuant to an offer made in reliance on an exemption under Section 305 of the SFA

or Shares in the Fund are acquired for the trust pursuant to an offer made in reliance on an

exemption under Section 305 of the SFA, unless:

(i) that transfer is made only to an institutional investor (as defined in Section

4A of the SFA) or to a relevant person as defined in Section 305(5) of the SFA;

(ii) that transfer arises from an offer referred to in Section 275(1A) of the SFA

(in relation to securities of a corporation referred to in paragraph (a) above) or that

transfer arises from an offer that is made on terms that such rights or interest are

acquired at a consideration of not less than S$200,000 (or the equivalent thereof in


the applicable currency) for each transaction, whether such amount is to be paid for

in cash or by exchange of securities or other assets (in relation to a trust referred to

in paragraph (b) above);

(iii) no consideration is or will be given for the transfer; or

(iv) the transfer is by operation of law.

United Arab Emirates: The Shares offered hereby are not regulated under the laws of the

United Arab Emirates (“UAE”) relating to funds, investments or otherwise. Neither the Fund

nor this Offering Memorandum is licensed or approved by the UAE Central Bank, the

Emirates Securities Commodities Authority, the Dubai Financial Services Authority, or any

other relevant regulatory authority in the UAE. This Offering Memorandum is strictly

private and confidential and is being distributed to a limited number of

sophisticated/professional investors. This Offering Memorandum does not constitute a

public offer, or an advertisement or solicitation to the public, is intended only for the

individual recipients hereof to whom this Offering Memorandum is personally provided,

and may not be reproduced or used for any other purpose. The Shares may not be offered or

sold directly or indirectly to the public in the UAE.

United States: There will be no offering of Shares in the United States or to any US Person.

THE SHARES ARE SUITABLE FOR SOPHISTICATED INVESTORS, WHO DO NOT REQUIRE

IMMEDIATE LIQUIDITY FOR THEIR INVESTMENTS, FOR WHOM AN INVESTMENT IN THE FUND

DOES NOT CONSTITUTE A COMPLETE INVESTMENT PROGRAMME, AND WHO FULLY

UNDERSTAND AND ARE WILLING TO ASSUME THE RISKS INVOLVED IN THE FUND’S

INVESTMENT PROGRAMME. SUBSCRIBERS FOR SHARES MUST REPRESENT THAT THEY ARE

ACQUIRING THE SHARES FOR INVESTMENT.

OTHER THAN REGISTRATION WITH THE CAYMAN ISLANDS MONETARY AUTHORITY, THE

OFFERING OF SHARES HEREBY HAS NOT BEEN FILED WITH OR APPROVED OR DISAPPROVED

BY ANY REGULATORY AUTHORITY OF ANY COUNTRY OR JURISDICTION. NEITHER HAS THE

CAYMAN ISLANDS MONETARY AUTHORITY NOR ANY OTHER GOVERNMENTAL OR

REGULATORY AUTHORITY IN ANY SUCH OTHER COUNTRY OR JURISDICTION PASSED UPON

OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THIS

OFFERING MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL. THE

SHARES ARE NOT REGISTERED FOR SALE, AND THERE WILL BE NO PUBLIC OFFERING OF THE

SHARES.

THIS IS NOT AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER TO BUY THE SHARES

DESCRIBED HEREIN IN ANY JURISDICTION TO ANY PERSON OR ENTITY TO WHOM IT IS

UNLAWFUL TO MAKE SUCH AN OFFER OR SALE.



OFFERING MEMORANDUM CONTENTS

DIRECTORY. ........................................................................................................................ 8

THE FUND .......................................................................................................................... 15

INVESTMENT PROGRAMME. ......................................................................................... 16

THE INVESTMENT MANAGER. ..................................................................................... 19

MANAGEMENT FEE AND INCENTIVE FEE ................................................................... 20

CERTAIN RISK FACTORS. .............................................................................................. 23

OTHER ACTIVITIES OF THE INVESTMENT MANAGER; POTENTIAL ................... 33

CONFLICTS OF INTEREST .............................................................................................. 33

EXECUTION OF PORTFOLIO TRANSACTIONS……… ............................................. 36

DIRECTORS. ...................................................................................................................... 36

INVESTMENT COMMITTEE TO THE FUND ................................................................. 40

ADMINISTRATOR. ............................................................................................................ 41

CUSTODIAN ....................................................................................................................... 43

GENERAL. .......................................................................................................................... 43

CAPITAL STRUCTURE OF THE FUND .......................................................................... 44

OFFERING OF SHARES. ................................................................................................... 45

REDEMPTION OF SHARES…. ......................................................................................... 48

COMPULSORY REDEMPTION OF SHARES. ................................................................ 49

DETERMINATION OF NET ASSET VALUE. ................................................................. 50

SUSPENSION OF REDEMPTIONS; SUSPENSION OF THE DETERMINATION

OF NET ASSET VALUE .................................................................................................... 51

OTHER FEES AND EXPENSES…. ................................................................................... 52

TAX ASPECTS ................................................................................................................... 53

REGULATORY MATTERS. .............................................................................................. 54

ANTI-MONEY LAUNDERING REGULATIONS. ........................................................... 59

FISCAL YEAR. ................................................................................................................... 60

LEGAL COUNSEL ............................................................................................................. 60

INDEPENDENT PUBLIC AUDITORS; REPORTS .......................................................... 60

MISCELLANEOUS. ........................................................................................................... 61

DEFINITIONS. .................................................................................................................... 61



DIRECTORY

DIRECTORS

Simon James Welsh

Margaret Thompson

INVESTMENT MANAGER

Hypa Asset Management Limited

Clifton House, 75 Fort Street,

P.O. Box 1350 Grand Cayman, KY1-1108

Cayman Islands

ADMINISTRATOR

Forbes Hare Fund Services

c/o Forbes Hare Trust Company Limited

Cassia Court

Camana Bay

Suite 716, 10 Market Street

Grand Cayman KY1-9006

Cayman Islands

AUDITORS

Crowe Horwath Cayman Ltd.

Grand Pavilion Commerce Centre PO Box 30851

Grand Cayman, KY1-1204

Cayman Islands

LEGAL ADVISERS TO THE FUND

As to matters of Cayman Islands law: Appleby (Cayman) Ltd.

Clifton House, 75 Fort Street


Cayman Islands

CUSTODIAN

Global Custodial Services Ltd.

The Old Barn, Oasts Business Village

Red Hill, Wateringbury

Kent, ME18 5NN, United Kingdom

REGISTERED OFFICE:

Global High Income Fund Ltd.

c/o Estera

Clifton House, 75 Fort Street


Cayman Islands


SUMMARY OF TERMS

The following is a summary of certain information set forth more fully elsewhere in this

Offering Memorandum. This summary should be read in conjunction with and is qualified

in its entirety by, and potential investors should refer to, the more detailed information set

out in the corresponding sections of this Offering Memorandum, any supplements to this

Offering Memorandum, the Memorandum of Association and Articles of Association (the

“Articles”) of the Fund and the material contracts referred to herein.

Defined terms used herein are as described in the “Definitions” section of this Offering

Memorandum.

THE FUND:

The Fund is a Cayman Islands exempted company incorporated on 29 July 2014 to operate

as an open ended investment fund. The Fund was initially registered as a Section 4(3)

regulated mutual fund under the Mutual Funds Law with the Monetary Authority on 24 June

2015 and commenced its business activities on 1 April 2016. The Fund has previously offered

its Class A Shares and Class B Shares to investors. The Fund is now making Class C Shares

available for subscription, together with the Fund's existing Classes of Shares, on the terms

set out in this Offering Memorandum. Accordingly the Fund has been re-registered as an

administered mutual fund under Section 4(1)(b) of the Mutual Funds Law.

INVESTMENT PROGRAMME:

The Fund’s investment objective is to generate consistently high levels of income from a

diversified and international portfolio of asset-backed corporate bonds, debt and loan

instruments issued by small to medium sized companies. The Fund can invest in any

currency, country or sector to maximise risk adjusted returns and to pursue prudent

diversification. Issuer selection is controlled with both quantitative and qualitative analysis

with a focus on the identification and measurements of all risks, especially default risk. The

targeted income of the Fund is 10% per annum net of Fund fees.

There can be no assurance that the investment objective of the Fund will be achieved, and

certain investment practices to be employed by the Fund can, in some circumstances,

substantially increase any adverse impact on the Fund’s investment portfolio.

INVESTMENT MANAGER:

Hypa Asset Management Limited, a Cayman Islands exempted company, has been

appointed as investment manager of the Fund. The directors of the Investment Manager are

Simon James Welsh and Marc Hounsell. In addition, Mr. Welsh is the sole shareholder of

the Investment Manager. Biographies for Messrs Welsh and Hounsell are set out on pages 36

and 40 below.

The Investment Manager has a restricted licence, reference 1231532 issued by the Monetary

Authority on 24 June 2015, to carry out “securities investment business” as a “securities

manager and/or securities advisor” to the Fund, in compliance with the Securities Investment

Business Law (as revised) of the Cayman Islands. The Investment Manager is not otherwise

required to register, and is not registered, with any other regulator.


The Investment Manager is the sole holder of the Founder Shares of the Fund.

MANAGEMENT FEE AND INCENTIVE FEE:

Pursuant to the Investment Management Agreement, the Fund pays to the Investment

Manager a monthly Management Fee in arrears equal to 0.0833% (1.00% annualised) of the

Net Asset Value per Share of the relevant Class as at the relevant monthly Valuation Day for

Class A Shares and Class B Shares. For Class C Shares the Fund pays to the Investment


Net Asset Value per Share as at the relevant monthly Valuation Day. The Investment

Manager may in its sole discretion, increase, reduce or waive any Management Fees at any

time, including, in particular, during any wind-down of the Fund’s business.

The Fund may also pay to the Investment Manager an Incentive Fee that will be calculated

and accrued annually equal to 1/5th (20%) of the increase in the Net Asset Value per Share

of the relevant Class (other than Special Situation Shares as defined below) per calendar year

as compared to the hurdle adjusted High Watermark. The hurdle to achieve an incentive fee

is 10% per annum. Apart from the Incentive Fee that may be payable to the Investment

Manager the appreciation in Net Asset Value per Share is attributable to Fund investors.

The calculation of the Incentive Fee will include the Net Asset Value of any income

previously paid by the Fund to investors.

The Incentive Fee is calculated in arrears in respect of each Calculation Period and is payable

within 30 days of the end of each Calculation Period. The Fund may establish other Classes

of Shares which may differ in terms of the fees charged, among other things. The Investment

Manager may, at its sole discretion, rebate fees to shareholders or pay a portion of such fees

to a third party.

No Incentive Fee shall be paid with respect to any Special Situation Shares (as defined

below) until such time as the relevant Special Situation Investment (as defined below) is

disposed of or the Directors determine that it should no longer be classified as a Special

Situation Investment.

RISK FACTORS:

The investment programme of the Fund is speculative and entails substantial risks some of

which are detailed under “Certain Risk Factors”.

OTHER ACTIVITIES OF MANAGEMENT

CONFLICTS OF INTEREST:

Certain inherent conflicts of interest, actual and potential, arise from the fact that the

Investment Manager and/or its affiliates, including Hypa Management LLP, a UK

partnership of which Simon Welsh is a founding partner, authorised by the Financial

Conduct Authority to offer advisory services and the distribution of financial products,

provides investment advisory and structuring services to the Fund and the UK PLCs (as

defined below) in which the Fund invests and may carry on investment activities for other

clients, including other investment funds, client accounts and proprietary accounts in which

the Fund has no interest and whose respective investment programmes may or may not be


substantially similar. Simon Welsh is a Director of the Fund, the sole shareholder and a

director of the Investment Manager, a member of the Fund's Investment Committee and he

may also provide directorial and other services to various vehicles the Fund invests through

further to the Fund Strategy, as detailed on pages 12 and 13, including Bay Consultancy

Ltd., a Seychelles International Business Company, which has been appointed by Hypa

Management LLP as security trustee in relation to the underlying bonds, or other debt or

loan instruments, issued by the "underlying companies" (as defined below).

DIRECTORS:

Whilst the Directors are responsible for the overall management and control of the Fund,

they have delegated all day-to-day activities to service providers described herein. The

Directors intend to meet regularly to review and assess the investment policies and

performance of the Fund, and generally to supervise the conduct of its affairs. For this

purpose, the Directors will receive periodic reports from the Investment Manager detailing

the performance of the Fund and providing an analysis of its investment portfolio. The

Investment Manager will provide such other information as may from time to time be

reasonably required by the Directors for the purpose of such meetings.

ADMINISTRATOR:

Forbes Hare Fund Services, a division of Forbes Hare Trust Company Limited, a licensed

Mutual Fund Administrator under the Mutual Funds Law of the Cayman Islands, has been

retained by the Fund to perform certain administrative, accounting, investor and registrar

services.

The Administrator will also provide the principal office for the Fund in accordance with the

requirements of Section 4(1)(b) the Mutual Funds Law.

The Administrator’s principal place of business is located at:

Forbes Hare Fund Services

c/o Forbes Hare Trust Company Limited

Cassia Court

Camana Bay

Suite 716, 10 Market Street

Grand Cayman KY1-9006

Cayman Islands

CUSTODIAN:

Global Custodial Services Ltd. has been retained by the Fund to arrange custody for the

Fund’s bond investments.

THE SHARES:

The Fund has an authorised share capital of US$50,000 divided into ten (10) non-

participating voting Founder Shares, par value US$1.00, and 49,990,000 non-voting,

participating shares, par value US$0.001 per share (the “Shares”), which are available for

issue hereunder in the following classes (each being referred to herein as a “Class”): Class

A USD Shares, Class A EUR Shares, Class A GBP Shares, Class A SGD Shares, Class A


HKD Shares (Class A Shares) and Class B USD Shares, Class B EUR Shares, Class B GBP

Shares, Class B SGD Shares, Class B HKD Shares (Class B Shares) and Class C USD

Shares, Class C EUR Shares, Class C GBP Shares, Class C SGD Shares Class C HKD Shares

(Class C Shares). The Fund will also issue further Classes and or series of Shares and may

issue Shares which may have different rights, privileges and terms in the future and which

may be sold in other currencies.

OFFERING OF SHARES:

Class A Shares and Class B Shares were available for issue at an issue price of US$100 per

share for Class A/B USD Shares, EUR 100 per Share for Class A/B EUR Shares, GBP £100

per Share for Class A/B GBP Shares, SGD$100 per Share for Class A/B SGD Shares and

HKD$100 per Share for Class A/B HKD Shares during the Initial Offer Period. Thereafter,

Class A Shares and Class B Shares are available for subscription on Subscription Days at the

relevant Net Asset Value per Class A Share and/or Class B Share as at the Valuation Point

on that Subscription Day. Subscription Days are monthly, on the last Business Day of each

month.

Class C Shares are initially available for issue at an issue price of US$100 per Share for Class

C USD Share, EUR 100 per share for Class C EUR Shares, GBP £100 per share for Class C

GBP Shares, SGD$100 per Share for Class C SGD Shares and HKD$100 per Share for Class

C HKD Shares. Following the first issue of any such Classes of Shares, Class C Shares are

available for subscription on Subscription Days at the relevant Net Asset Value per Class C

Share, as at the Valuation Point on that Subscription Day. Subscription Days are monthly,

on the last Business Day of each month.

The Fund reserves the right to charge a sales charge, which is deducted from an investor’s

subscription, and to pay such charge to the relevant intermediary. The sales charge is

negotiated with intermediaries and investors on a case by case basis.

MINIMUM SUBSCRIPTION:

Unless otherwise determined by the Directors, the minimum initial subscription for Class A

Shares and Class B Shares is US$100,000 or its equivalent in another currency and thereafter,

the minimum subscription for additional Class A Shares and Class B Shares is US$50,000

or its equivalent in another currency.

The minimum initial subscription for Class C Shares is US$10,000 or its equivalent in

another currency and thereafter, the minimum subscription for additional Class C Shares is

US$5,000 or its equivalent in another currency.

SALE AND TRANSFER RESTRICTIONS:

Shares may only be offered, sold and transferred to Qualifying Investors. The Fund will not

register the transfer of any Shares, except with the prior written consent of the board of

Directors (or its designee), which consent may be granted or withheld by the board of

Directors (or its designee) in its sole discretion. In general, the only means of disposing of

Shares will be by tendering such Shares to the Fund for redemption pursuant to the terms

described herein. The board of Directors, in its discretion, may require that all costs and

expenses incurred in connection with the transfer of Shares, including, but not limited to, the

legal fees of the Fund, shall be paid by the transferees.


REDEMPTIONS:

Subject to the restrictions described herein, Shares may generally be redeemed on each

Redemption Day, defined as quarterly on the last Business Day of March, June, September

and December each year. Written notice of Redemption must generally be received by the

Administrator at least 90 days’ prior to the Redemption Day. The redemption of Shares will

be suspended whenever the calculation of the Net Asset Value is suspended. The Directors

or their designees may waive notice or redemption fee requirements or permit redemptions

under such other circumstances and on such conditions as they, in their sole and absolute

discretion, deem appropriate.

In order to facilitate the investment process, it is recommended Shares should be held for at

least 5 years. Where Shares have been acquired on more than one date, they will be redeemed

on a “first in, first out” basis.

Partial redemptions may be refused at the discretion of the Directors if, immediately

following such redemption, the value of such shareholders Shares would be less than the

Minimum Holding. Shares will be redeemed at a per Share price based on the Net Asset

Value per Share of the relevant Class (less payment of any charges, including, without

limitation, the Incentive Fee, with respect to the redeemed Shares) as at the Valuation Point

on the applicable Redemption Day.

Payment of the redemption proceeds for redeemed Shares will be made as soon as possible

and the Fund will use its best endeavours to pay redemption proceeds within 15 Business

Days of the Redemption Day.

In circumstances where the Fund is unable to liquidate assets in an orderly manner in order

to fund redemptions, or where the value of the assets and liabilities of the Fund cannot

reasonably be determined, the Fund may take longer than the time period mentioned above

to effect settlements of redemptions, may effectuate only a portion of a requested redemption

or may even suspend redemptions and, as such, the Fund will only settle payment of

redemptions upon realization of sufficient assets to meet such payments on a case by case

basis.

The Fund may also suspend redemptions of the Shares of any Class in such other

circumstances in which the Directors, deem it to be in the interests of the Fund to do so,

including in circumstances in which the determination of the Net Asset Value of the relevant

Class has not been suspended. In the discretion of the Directors, the Fund may extend the

length of the redemption notice period if the Directors deem such an extension as being in

the best interest of the Fund and the non-redeeming shareholders.

Shares held by or for the account of anyone who is not a Qualifying Investor or where the

value of the Shares is below the Minimum Holding may be subject to compulsory

redemption. Shares may also be compulsorily redeemed at par value only in order to give

effect to the Incentive Fee provisions and the sales charge provisions. The Fund Directors

also reserve the right to execute a compulsory redemption at par value at any time for any

investor.

SPECIAL SITUATION INVESTMENTS

The Directors may on the advice of the Investment Manager designate an existing or


prospective investment made by the Fund as a Special Situation Investment. If this happens,

each shareholder will have a pro rata proportion of their Shares converted into Special

Situation Shares by way of compulsory redemption of their existing Shares and use of the

redemption proceeds by the Fund to subscribe for the Special Situation Shares. The Directors

may on the advice of the Investment Manager determine that a Special Situation Investment

should no longer be classified as a Special Situation Investment. Upon such determination

or on any disposal of a Special Situation Investment, all Special Situation Shares in the

applicable Class will be automatically converted on a pro rata basis (by way of compulsory

redemption and the use of the redemption proceeds to subscribe for Shares of the relevant

Class) into Shares of the Class which the holders of such Special Situation Shares initially

held (or, in the event that the relevant shareholder is no longer holding Shares of that initial

Class, into such Classes as may be determined by the Directors). If the Shares of any

shareholder have been previously redeemed (other than its Special Situation Shares), the

Fund may compulsorily redeem such shareholder’s Special Situation Shares rather than

convert those Special Situation Shares into Shares of another Class.

For purposes of calculating the Management Fee with respect to Special Situation Shares,

the investments that are allocated to such Special Situation Shares will be valued at the lower

of cost (or carrying value as of the date such investment was allocated to the Special Situation

Shares) or fair value. The Management Fee will accrue on Special Situation Shares held by

such shareholder and be paid, during the relevant period, upon the conversion of the relevant

Special Situation Shares to another Class of Shares or until the relevant Special Situation

Shares are redeemed and the proceeds returned to the relevant shareholder (as the case may

be).

NET ASSET VALUE:

The Net Asset Value of the Fund will be equal to its total assets less its total liabilities as of

any Valuation Day. The Net Asset Value per Share is generally determined by first allocating

any increase or decrease in the Net Asset Value of the Fund for the period of calculation

among all of the issued Shares of the Fund pro rata in accordance with their Net Asset Value

at the beginning of such period. Any Incentive Fee or Management Fee determined with

respect to a particular Share will be debited against the Net Asset Value of such Share.

OTHER FEES AND EXPENSES:

The Administrator receives from the Fund on a monthly basis a fee equal to a percentage of

the Net Asset Value of the Fund (subject to a minimum monthly fee). The Administrator is

also reimbursed for all out-of-pocket expenses as agreed with the Fund.

The Fund is responsible for its own initial organisational costs and expenses, and its on-

going operating costs and expenses.

TAXATION:

On the basis of current Cayman Islands law and practice, the Fund should not be liable to

taxation in the Cayman Islands. In the event any Shares are transferred, such transferring

shareholder may be liable for stamp duty in the receiving jurisdiction. Potential investors

should consult their own advisors regarding tax treatment by the jurisdiction applicable to

them. Investors should rely only upon advice received from their own tax advisors based

upon their own individual circumstances and the laws applicable to them.


REGULATORY MATTERS:

The Fund falls within the definition of a “mutual fund” in terms of the Mutual Funds Law

and accordingly is subject to regulation under that law. As a mutual fund, the Fund has been

registered, as an administered mutual fund under Section 4(1)(b) of the Mutual Funds Law,

with and is subject to the regulation and supervision of the Monetary Authority. The

Directors may, in their sole discretion, make such regulatory filings with respect to the Fund,

in such countries as the directors may determine although it is not anticipated that the Fund

will be qualified for public sale in any country. The Investment Manager has a restricted

licence, reference 1231532 issued by the Monetary Authority on 24 June 2015, to carry out

“securities investment business” as a “securities manager and/or securities advisor” to the

Fund, in compliance with the Securities Investment Business Law (as revised) of the Cayman

Islands. The Investment Manager is not otherwise required to register, and is not registered,

with any other regulator.

INCOME:

The Fund has a targeted income of 10% per annum, net of Fund fees. The income is not

guaranteed and may be changed at the discretion of the Directors, in consultation with the

Investment Manager.

FISCAL YEAR:

The Fund’s full fiscal year ends on 31 December of each year. The first fiscal year of the

Fund will end on 31 December 2016.

AUDITORS; REPORTS TO SHAREHOLDERS:

Crowe Horwath Cayman Ltd. has been retained as the independent auditor of the Fund. An annual report and audited financial statements will be sent to shareholders as soon as

practicable or at the latest within six months of the end of each fiscal year. Shareholders will also receive a half- yearly report prepared by an accountant on behalf of the Investment

Manager, incorporating unaudited financial statements and a quarterly performance report,

prepared by the Investment Manager.

LEGAL COUNSEL:

Appleby (Cayman) Ltd. acts as legal adviser to the Fund as to Cayman Islands law in

connection with the offering of Shares. Appleby (Cayman) Ltd. also acts as counsel to the

Investment Manager. In connection with the offering of Shares and on-going advice to the

Fund, the Investment Manager and its affiliates, Appleby (Cayman) Ltd. will not be

representing shareholders of the Fund. No independent legal adviser has been retained to

represent shareholders of the Fund.

SUBSCRIPTION FOR SHARES:

Persons interested in subscribing for Shares will be required to complete, execute and return

to the Administrator, an application form and any additional documentation necessary to

complete the application.

THE FUND

The Fund is an exempted company incorporated in the Cayman Islands on 29 July 2014


under the provisions of the Companies Law (as revised) of the Cayman Islands with

registration number 290290. Its objects, as set out in its Memorandum of Association, are

unrestricted subject to compliance with Cayman Islands law.

The Fund commenced its business activities on 1 April, 2016. The Fund has previously

offered its Class A Shares and Class B Shares to investors. The Fund is now making Class C

Shares available for subscription, together with the Fund's existing Classes of Shares, on the

terms set out in this Offering Memorandum.

INVESTMENT PROGRAMME:

The Fund’s investment objective is to generate consistently high levels of income from a

diversified and international portfolio of asset-backed corporate bonds, debt and loan

instruments issued by small to medium sized companies and also referred to in this Offering

Memorandum as underlying companies. The Fund can invest in any currency, country or

sector to maximise risk adjusted returns and to pursue prudent diversification. Issuer

selection is controlled with both quantitative and qualitative analysis with a focus on the

identification and measurements of all risks, especially default risk. The Fund's targeted

income is 10% per annum, net of Fund fees.

Fund Summary

Diversified Fund investing in asset-backed corporate bonds, debt or loan

instruments.

Focused on small to medium sized companies with strong near-term cash flow

generation.

Fund's targeted income is 10% per annum, net of Fund fees.

Thorough investment process including country, sector and company research and

financial ratio analysis.

Open ended Fund with a recommended 5 year plus investment term.

Following the Initial Offer Period the Fund allows monthly subscriptions on each

Subscription Day.

Quarterly redemption facility with 90 days’ notice on each Redemption Day of

March, June, September and December each year.

Fund Strategy

The Fund specialises in lending indirectly to small to medium sized companies (“underlying

companies”) generally via UK PLCs (defined below) in loan packages free of complex

clauses, options and other features.

The Fund will invest in the underlying companies through the UK PLCs which will issue

bonds to the Fund and, in turn, the UK PLCs will hold the underlying bonds, or other debt

or loan instruments, issued by the underlying companies from inception to redemption thus

avoiding the potential realisation of a loss on a bond sale due to interest rate movements and

other factors during the life of the loan. This ‘buy and hold’ strategy also reduces the Fund

costs via the absence of trading fees.

The Investment Manager and its affiliate's appraise the underlying companies and the bonds,

or other debt or loan instruments, to be issued by the underlying companies very carefully,


selecting firms that are predicted to generate high levels of cash-flow in the near term and

through the duration of the bond, or other debt or loan instrument. To further protect the

interests of the Fund, only asset-backed bonds, or other debt or loan instruments, secured on

the assets and equity of the underlying companies will be considered.

UK PLCs

The Fund will generally invest in secured asset-backed bonds, issued by UK Public Limited

Companies (“UK PLCs”), which UK PLCs will be independently audited by PKF Littlejohn

LLP. The Fund, as the bondholder, will take a debenture security over the assets of each UK

PLC, which debenture security will be held on the Fund’s behalf by Bay Consultancy Ltd.,

a Seychelles International Business Company, as security trustee to protect the interests of

the Fund and its investors in the event of default.

Capital raised by the Fund through the offering of its Shares will be used to make loans to

the UK PLCs, by way of the Fund purchasing asset back bonds issued by the UK PLCs,

which bonds will carry a fixed interest rate over a prescribed term. The UK PLCs will in

turn lend the proceeds of their bond issuances to pre-vetted underlying companies, whose

business strategies and ability to meet their debt obligations have been examined and

undergone extensive due diligence by a specialist due diligence company, currently Bay

Consultancy Ltd. Hypa Management LLP will advise the Investment Manager, the Fund and

UK PLCs on the structuring of these bond and loan arrangements with the underlying

companies.

Global Custodial Services Ltd has been retained by the Fund to take physical custody of the

bond instruments once issued by the UK PLCs to the Fund. Global Custodial Services Ltd

is also the custodian and payment agent for the UK PLCs.

The UK PLCs bond’s offering documents are subject to legal due diligence and review by

Lewis Silkin LLL, a City of London based law firm.

Hypa Management LLP receives a fee of 1% per annum from the UK PLCs in relation to

advisory services provided in connection with the structuring of the bonds acquired by the

Fund.

The underlying companies will utilise the capital borrowed from the UK PLCs in accordance

with the terms of the loan or debt instruments entered into with the UK PLCs, for investment

in a variety of asset classes and jurisdictions. To date however, all such investments have

been completed within the United Kingdom. The loan or debt instruments will be structured

to ensure that the underlying companies pay a fixed interest rate over a prescribed term, with

interest payment dates ranging from every 3 months to every 12 months, to meet the UK

PLCs obligations under the bonds acquired the Fund. The term of the bonds, and

consequently that of the underlying loan or debt instruments, will typically range from 12

months to 5 years with interest payments on the bonds being aligned to meet the Fund's

targeted income of 10% per annum, net of Fund fees.

The Fund, as the bondholder, will take a debenture security over the assets of each UK PLC,

which debenture security will be held on the Fund’s behalf by Bay Consultancy Ltd. as

security trustee. In turn, each UK PLC will take a security interest, as deemed necessary by

the Investment Committee and Investment Manager, over the contractual rights and or other


assets of the underlying companies to fully protect the interests of the UK PLC and indirectly

those of the Fund and its investors.

The bonds held by the Fund, and the loan or debt instruments entered into by the UK PLCs

with the underlying companies, will be formally reviewed on a monthly basis by the

Investment Manager to ensure that the issuing companies, in each case, remain able to meet

their repayment obligations on an ongoing basis. The boards of directors of the UK PLCs,

pursuant to the terms of the bonds, will be required to immediately advise the Fund if a

material event has occurred that may impact the UK PLCs or the relevant underlying

company's ability to meet its payment obligations going forward.

Corporate Bonds

There are a number of risks associated with investing in corporate bonds including, but not

limited to; default risk, market risk, company specific risk, interest rate risk and credit rating

risk. The Investment Manager believes its investment philosophy, bond selection process

and attention to detail minimises these risks and that Fund's investors are rewarded with high

levels of income potential and a high degree of capital protection to compensate them for

the risks that remain.

The Investment Manager’s approach to limiting the impact of risks on the Fund

includes:

Diversification across companies, sectors, countries, rating and bond duration.

A preference for companies with strong cash flow generation.

Asset backed securitised lending only.

Avoidance of high risk company ‘recovery’ scenarios.

Use of financial ratio analysis including short term liquidity analysis (cash ratio)

and longer term solvency testing (interest coverage and debt to equity).

Comprehensive due-diligence, risk analysis and stress testing.

A focus on bond issuers with a clean corporate history of prior borrowing and

repayments.

A policy of buy at inception and hold until redemption.

A Fund portfolio of clean and simple loans, avoiding complex bond options.

Investment Restrictions

The policy of the Fund is to maintain a diversified corporate bond, debt and loan portfolio so

as to spread the investment risk. The Investment Manager, in consultation with the Directors

of the Fund, has adopted the following investment restrictions and guidelines with regards

to the Fund. By the 3rd anniversary of the Fund launch the Fund will not:

(A) invest more than 20% of its gross assets in a single company, bond, debt or loan;

(B) invest more than 20% of gross assets in long term instruments with a remaining

duration of more than 5 years;

(C) invest less than 25% of gross assets in shorter term instruments realisable in less than

2 years duration;

(D) invest more than 35% of gross assets in a single country;

(E) invest less than a minimum of 10% of gross assets in liquid instruments which may


include, but are not limited to cash or iShares Corporate Bonds;

Except where specified to the contrary, the above restrictions apply as at the date of the

relevant transaction or commitment to invest. Changes in the investment portfolio of the

Fund will not have to be effected merely because any of the limits contained in such

restrictions would be breached as a result of any appreciation or depreciation in value, or by

reason of the receipt of any right, bonus or benefit in the nature of capital or of any scheme

or arrangement for amalgamation, reconstruction or exchange or by reason of any other

action affecting every holder of the relevant investment. However, no further relevant

securities will be acquired until the limits are again complied with.

Neither the Administrator nor the Custodian is responsible for monitoring adherence to the

investment restrictions of the Fund.

The Investment Manager, in consultation with the Directors of the Fund, reserve the right to

amend any of the above restrictions, and also to add further restrictions, from time to time

without the consent of, or notice to the shareholders.

The investment programme of the Fund is speculative and may entail substantial risks.

Since market risks are inherent in all securities investments to varying degrees, there

can be no assurance that the investment objective of the Fund will be achieved. In fact,

certain investment practices described above can, in some circumstances, potentially

increase the adverse impact on the Fund’s investment portfolio. (See “Certain Risk

Factors”).

THE INVESTMENT MANAGER

Hypa Asset Management Limited, an exempted company incorporated in the Cayman

Islands on 29 July 2014, has been appointed as Investment Manager to the Fund. The

directors of the Investment Manager are Simon James Welsh and Marc Hounsell. In addition,

Mr. Welsh is the sole shareholder of the Investment Manager. Biographies for Messrs Welsh,

and Hounsell are set out on pages 36 and 40 below.

Whilst the Directors have ultimate authority over the management and administration of the

Fund, they have delegated the day-to-day investment management of the Fund's assets to

the Investment Manager and certain administrative responsibilities to the Administrator.

Accordingly, the Investment Manager is responsible for investing and managing the assets

of the Fund in accordance with the terms of the Investment Management Agreement with the

Fund. The Investment Manager may further sub-delegate any or all of its duties pursuant to

the Investment Management Agreement.




Business Law (as revised) of the Cayman Islands. The Investment Manager is not otherwise

required to register, and is not registered, with any other regulator.

The Investment Manager and its affiliates (including its and their partners, directors, officers,

members and employees) may subscribe directly or indirectly for Shares and may invest a

proportion of the Incentive Fee into the Fund.


The Investment Manager was appointed pursuant to an Investment Management Agreement

with the Fund. Under the Investment Management Agreement, the Investment Manager has

full discretion, to invest the assets of the Fund in a manner consistent with the investment

objective, policies and restrictions described in this Offering Memorandum.

The Investment Manager is entitled to receive a Management Fee and may receive an

Incentive Fee as detailed under “Management Fee and Incentive Fee” below.

The Investment Management Agreement will continue to be in force until terminated by any

party upon 90 days’ notice in writing to the other party. It may be terminated forthwith by

any party on immediate written notice if any other party commits any material breach of its

obligations and fails to remedy the breach within 30 days of receipt of written notice

requiring the same, or if the other party is dissolved or otherwise is unable to pay its debts,

becomes insolvent or enters into insolvency proceedings.

Neither the Investment Manager, its members or the directors, shareholders, officers,

employees or members of their respective affiliates, nor their respective legal representatives

(each an “Indemnified Party”) shall be liable to the Fund or its shareholders for any loss

arising in connection with the performance by the Investment Manager of its obligations

except those resulting from the wilful default, actual fraud or Gross Negligence of or any

material breach of the Investment Management Agreement by the Indemnified Party. The

Fund has agreed to indemnify and hold harmless each Indemnified Party from and against

any and all losses, liabilities, damages, expenses or costs suffered, incurred or sustained by

such Indemnified Party, except those resulting from such Indemnified Party’s wilful default

,fraud or Gross Negligence or any material breach of the Investment Management

Agreement by such Indemnified Party.

MANAGEMENT FEE AND INCENTIVE FEE



Net Asset Value per Share of the relevant Class as at the relevant monthly Valuation Day for

Class A Shares and Class B Shares. For Class C Shares the Fund pays to the Investment


Net Asset Value per Share as at the relevant monthly Valuation Day.

The Investment Manager may in its sole discretion, reduce or waive any Management Fees

at any time, including, in particular, during any wind-down of the Fund’s business.


Special Situation Investments will be valued at the lower of cost (or carrying value as of the

date on which the Special Situation Investment was designated as such) or fair value. The

Management Fee will accrue on Special Situation Shares held by such shareholder and be

paid, during the relevant period, upon the conversion of the relevant Special Situation Shares

to another Class of Shares or until the relevant Special Situation Shares are redeemed and

the proceeds returned to the relevant shareholder (as the case may be).

The Fund may also pay to the Investment Manager an Incentive Fee that will be calculated

and accrue annually equal to 1/5th (20%) of the increase in the Net Asset Value per Share

(other than Special Situation Shares as defined below) per calendar year as compared to the


hurdle adjusted High Watermark. The hurdle to achieve an incentive fee is 10% per annum.

Apart from the Incentive fee that maybe payable to the investment manager the appreciation

in Net Asset Value per Share is attributable to Fund investors.

The calculation of the Incentive Fee will include the Net Asset Value of any income

previously paid by the Fund to investors.

The Incentive Fee is calculated in arrears in respect of each Calculation Period and is payable

within 30 days of the end of each Calculation Period. The Fund may establish other classes

of shares which may differ in terms of the fees charged, among other things. The Investment

Manager may, at its sole discretion, rebate fees to shareholders or pay a portion of such fees

to a third party.

No Incentive Fee will be paid unless the Net Asset Value per Share exceeds the hurdle

adjusted High Watermark. Where Shares are redeemed other than at the end of a Calculation

Period, any Incentive Fee accrued in respect of those Shares shall crystallise and become

due and charged in the normal manner described above. If the Investment Management

Agreement is terminated other than at the end of a Calculation Period, the date of termination

will be deemed to be the end of the then-current Calculation Period and the Management

Fee and Incentive Fee will be calculated to such date and payable within 30 days of such

date.

The Investment Manager may, at its sole discretion, rebate fees to shareholders and any such

rebate may be used to subscribe for additional Shares. The Investment Manager may, at its

sole discretion, pay a portion of the Management Fee and/or the Incentive Fee to

intermediaries, placement agents or other third parties.

The Fund may establish other Classes of Shares which may differ in terms of the fees

charged, among other things.

The Management Fee and Incentive Fee are based in part upon unrealised gains (as well as

unrealised losses) and that such unrealised gains and/or losses may never be realised.

OTHER FEES

Hypa Management LLP, a UK partnership authorised by the Financial Conduct Authority

to offer advisory services and the distribution of financial products, provides investment

management services to the Fund and the UK PLCs in which the Fund invests. Simon Welsh

is a founding partner of Hypa Management LLP. Hypa Management LLP receives a fee of

1% per annum from the UK PLCs in relation to advisory services provided in connection

with the structuring of the bonds acquired by the Fund.

EQUALISATION

If an investor subscribes for Shares at a time when the Net Asset Value per Share of that

Class is other than the hurdle adjusted High Watermark of the relevant Class, certain

adjustments will be made to reduce inequities that could otherwise result to the subscriber or

to the Investment Manager.


(A) If Shares are subscribed for at a time when the Net Asset Value per Share is less

than the hurdle adjusted High Watermark of the relevant Class, the investor will be

required to pay an Incentive Fee with respect to any subsequent appreciation in the

value of those Shares. With respect to any appreciation in the value of those Shares

from the Net Asset Value per Share of that Class at the date of subscription up to

the hurdle adjusted High Watermark of that Class, the Incentive Fee will be charged

at the end of each Calculation Period by redeeming at par value such number of the

investor’s Shares of that Class as have an aggregate Net Asset Value (after accrual

for any Incentive Fee) equal to 20% of any such appreciation (a “Incentive Fee

Redemption”). The aggregate Net Asset Value of the Shares of that Class so

redeemed (less the aggregate par value which will be retained by the Fund) will be

paid to the Investment Manager as an Incentive Fee. Incentive Fee Redemptions

are employed to ensure that the Fund maintains a uniform Net Asset Value per

Share of each Class. As regards the investor’s remaining Shares of that class, any

appreciation in the Net Asset Value per Share of those Shares above the hurdle

adjusted High Watermark of the relevant Class will be charged an Incentive Fee in

the normal manner described above.

(B) If Shares are subscribed for a time when the Net Asset Value per Share of that Class

is greater than the hurdle adjusted High Watermark of the relevant Class, the

investor will be required to pay an amount in excess of the then current Net Asset

Value per Share of that Class equal to 20% of the difference between the then

current Net Asset Value per Share of that Class (before accrual for the Incentive

Fee) and the hurdle adjusted High Watermark of that Class (an “Equalisation

Credit”). The Equalisation Credit ensures that all holders of Shares of the same

Class in the Fund have the same amount of capital at risk per Share.

The additional amount invested as the Equalisation Credit will be at risk in the Fund and will

therefore appreciate or depreciate based on the performance of the Shares subsequent to the

issue of the relevant Shares. In the event of a decline as at any Valuation Day in the Net

Asset Value per Share of those Shares, the Equalisation Credit will also be reduced by an

amount equal to 20% of the difference between the Net Asset Value per Share of that class

(before accrual for the Incentive Fee) at the date of issue and as at that Valuation Day. Any

subsequent appreciation in the Net Asset Value per Share of that Class will result in the

recapture of any reduction in the Equalisation Credit.

At the end of each Calculation Period, if the Net Asset Value per Share (before accrual for

the Incentive Fee) exceeds the hurdle adjusted High Watermark of the relevant Class, that

portion of the Equalisation Credit equal to 20% of the excess, multiplied by the number of

Shares of that Class subscribed for by the shareholder, will be applied to subscribe for

additional Shares of that Class for the shareholder. Additional Shares of that Class will

continue to be so subscribed for at the end of each Calculation Period until the Equalisation

Credit, as it may have appreciated or depreciated in the Fund after the original subscription

for Shares of that Class was made, has been fully applied. If the Shares of a shareholder are

redeemed by the Fund before the Equalisation Credit has been fully applied, the shareholder

will receive additional redemption proceeds equal to the Equalisation Credit then remaining

multiplied by a fraction, the numerator of which is the number of Shares of that Class being

redeemed and the denominator of which is the number of Shares of that Class held by the

shareholder immediately prior to the redemption in respect of which an Equalisation Credit

was paid on subscription.


CERTAIN RISK FACTORS

An investment in the Fund involves a high degree of risk, including the risk that the

entire amount invested may be lost. The Fund invests in strategies and investment

techniques with significant risk characteristics, including the risks arising from the volatility

of currency markets.

No guarantee or representation is made that the investment programme will be successful or

that the Fund’s returns will exhibit low correlation with an investor’s other investments.

Prospective investors should consider the following additional factors in determining

whether an investment in the Fund is a suitable investment.

Limited Operating History

There is a limited operating history upon which prospective investors may base an evaluation

of the likely performance of the Fund. The past performance of the Investment Manager

may not be indicative of the future performance of the Fund.

Dependence on the Investment Manager

The success of the Fund depends upon the ability of the Investment Manager to develop and

implement investment strategies that achieve the Fund's investment objective. If the

Investment Manager were to become unable to participate in the management of the Fund,

the consequence to the Fund could be material and adverse and could lead to the premature

termination of the Fund.

General Risks of Investing in Debt Securities

Generally, debt securities will decrease in value when interest rates rise and increase in value

when interest rates decline. The Net Asset Value of the Fund will fluctuate with interest rate

changes and the corresponding changes in the value of the securities in the Fund. The value

of debt securities is also affected by the risk of default in the payment of interest and principal

and price changes due to such factors as general economic conditions and the issuer’s

creditworthiness. Corporate debt securities may not pay interest or their issuers may default

on their obligations to pay interest and/or principal amounts. Certain of the debt securities

that may be included in the Fund from time to time may be unsecured, which will increase

the risk of loss in case of default or insolvency of the issuer. Global financial markets have

experienced a significant re-pricing beginning in 2008 that has contributed to a reduction in

liquidity and the availability of credit, enhancing the likelihood of default by some issuers

due to diminishing profitability or an inability to refinance existing debt.

Fixed Income Securities

The Fund may invest in bonds or other fixed income securities, including, without limitation,

commercial paper and “higher yielding” (including non-investment grade) (and, therefore,

higher risk) debt securities. The Fund will therefore be subject to credit, liquidity and interest

rate risks. Higher-yielding debt securities are generally unsecured and may be subordinated

to certain other outstanding securities and obligations of the issuer, which may be secured

on substantially all of the issuer's assets. The lower rating of debt obligations in the higher-

yielding sector reflects a greater probability that adverse changes in the financial condition


of the issuer or in general economic conditions or both may impair the ability of the issuer

to make payments of principal and interest. Non-investment grade debt securities may not

be protected by financial covenants or limitations on additional indebtedness. In addition

evaluating credit risk for debt securities involves uncertainty because credit rating agencies

throughout the world have different standards, making comparison across countries difficult.

Also, the market for credit spreads is often inefficient and illiquid, making it difficult to

accurately calculate discounting spreads for valuing financial instruments. It is likely that a

major economic recession could disrupt severely the market for such securities and may

have an adverse impact on the value of such securities. In addition, it is likely that any such

economic downturn could adversely affect the ability of the issuers of such securities to

repay principal and pay interest thereon and increase the incidence of default for such

securities.

Default Risk

There is a risk that the issuer, being the UK PLC or the underlying companies, will be unable

to return all or some of the capital and interest payments. In the bond markets this is known

as a default. The equivalent in the equity market would be a company going bankrupt or

falling into administration. If an investor takes advantage of a diversified bond Fund that

invests in many bonds, a default in one bond won’t jeopardise all of the investor’s money.

Fund managers usually place limits on how much of the Fund’s capital can be invested in

one bond, company, sector or country to control exposure to default risk.

In instances where the Fund or the UK PLC has security over the borrowed capital and the

issuer (being the UK PLC or the underlying company) defaults, the Fund or the UK PLC

may be able to recover all or some of the debt in the event of default by taking ownership of

the secured assets. The Fund’s or the UK PLC’s ability take ownership of the assets and to

realise the return of capital is dependent on parties including the security trustee, assigned

to protect the interests of the Fund, as well as the directors of the UK PLCs.

Interest Rate Risk

Fixed-income securities, which include bonds, treasury bills and commercial paper, pay a

fixed rate of interest. The value of fixed-income securities will rise and fall as interest rates

change. For example, when interest rates fall the value of an existing bond will rise because

the coupon rate on that bond is greater than prevailing interest rates. Conversely, if interest

rates rise, the value of an existing bond will fall.

Liquidity Risk

Liquidity is an indicator of how easily an investment may be converted into cash. An

investment may be less liquid if it is not widely traded or if there are restrictions on the

exchange where the trading takes place. Certain securities in which the Fund invests may be

unlisted, distressed or otherwise illiquid. The valuation of these securities is subject to a

significant amount of subjectivity and discretion and there is no guarantee that fair value will

be realized by the Fund on the sale of these securities. Investments with low liquidity can

have significant changes in market value.

Allocation of Liabilities among Classes of Shares – Cross-Class Liability

The Fund has the power to issue Shares in Classes or series. The Articles provide for the


manner in which the liabilities are to be attributed across the various Classes or series

(liabilities are to be attributed to the specific Class or series in respect of which the liability

was incurred). However, the Fund is a single legal entity and there is no limited recourse

protection for any Class or series. Accordingly, all of the assets of the Fund will be available

to meet all of its liabilities regardless of the class or series to which such assets or liabilities

are attributable. In practice, cross class liability will usually only arise where any separate

Class of Shares becomes insolvent and is unable to meet all of its liabilities. In this case, all

of the assets of the Fund attributable to other separate Classes of Shares may be applied to

cover the liabilities of the insolvent Classes of Shares. The Fund may seek to limit such

cross-class liability contractually by including language limiting recourse to assets

attributable to a particular Class in contracts with service providers, counterparties and other

third parties with whom the Fund contracts but there can be no assurance given that such

contractual limitation will be available or enforceable.

Illiquid Instruments

The Fund may invest a significant portion of its assets in illiquid investments. The Fund may

not be able to readily dispose of such illiquid investments and, in some cases, may be

contractually prohibited from disposing of such investments for a specified period of time.

An investment in the Fund is suitable only for certain sophisticated investors who do not

require immediate liquidity for their investments. Where appropriate, positions in the Fund's

investment portfolio that are illiquid and do not actively trade will be marked to market,

taking into account actual market prices, market prices of comparable investments and/or

such other factors (e.g., the tenor of the respective instrument) as may be appropriate. To the

extent that marking an illiquid investment to market is not practicable, an investment will

be carried at fair value, as reasonably determined by the Directors or their delegate. There is

no guarantee that fair value will represent the value that will be realised by the Fund on the

eventual disposition of the investment or that would, in fact, be realised upon an immediate

disposition of the investment.

Illiquidity of Shares

Transfers of Shares are restricted; there is no market for Shares and Shares are not

redeemable at the option of the shareholder. Under certain circumstances redemptions may

be suspended, or the payment of redemption proceeds may be substantially delayed, as

described elsewhere in this Offering Memorandum. The Fund may invest part of its assets

in illiquid investments (usually through Special Situation Shares). The Fund may not be

able to readily dispose of such illiquid investments and, in some cases, may be contractually

prohibited from disposing of such securities for a specified period of time. For the avoidance

of any doubt, Special Situation Shares may not be redeemed by a shareholder.

Variation of Share Rights

The Articles provide that all or any of the special rights attached to any Class of Shares

(unless otherwise provided by the terms of issue of those Shares) may be varied or abrogated

in a materially adverse manner by the Directors with the consent in writing of at least 70%

of the holders of that Class of Shares or with the sanction of a resolution passed by the

holders of not less than 70% of that Class of Shares as, being entitled to do so, vote in person

or by proxy at a separate meeting of the holders of such Shares.


Income/Redemptions in Cash or Kind

Whilst the Fund is not required to distribute cash or other property to the shareholders on a

regular basis the Fund’s target income is 10% per annum. The proposed income is not

guaranteed and is dependent on the income yielding potential of Fund investments.

Notwithstanding the foregoing, the Directors may settle redemptions in specie or in kind.

The Directors, in consultation with the Investment Manager, will determine which assets of

the Fund will be used to settle redemptions in kind and these assets will be either distributed

to redeeming shareholders or transferred to a special purpose vehicle set up specifically for

that purpose and securities in that vehicle will be transferred to redeeming shareholders. By

investing in the Fund, prospective investors will be deemed to have agreed to be registered

as the holder of securities in these special purpose vehicles. Redeemed shareholders

receiving their redemption payment in kind will be responsible for all custody and other

costs involved in changing the ownership of the relevant assets from the Fund to the

redeeming shareholder and all on-going custody costs in respect of such securities or assets.

The redemption in specie terms and conditions do not apply to Class B Shares which are only

available to investors with the prior approval of the Fund Directors.

Side Letters

The Fund or the Investment Manager may enter into “side letter” agreements with certain

shareholders pursuant to which they may give one or more shareholders different fee terms

and access to more frequent and/or more detailed information regarding the Fund’s securities

positions, performance and finances. As a result, certain shareholders may be better able to

assess the prospects and performance of the Fund than other shareholders. Subject to

applicable law, the Fund does not intend to disclose the terms of such side letter agreements

and does not intend to disclose the identities of the shareholders that have entered into such

agreements with the Fund or the Investment Manager.

Access to Information

The Fund will generally provide shareholders with half yearly unaudited information,

prepared by an accountant on behalf of the Investment Manager, regarding the Fund’s

performance. To the extent permitted by applicable laws, the Fund, however, may give one

or more shareholders access to more frequent and/or more detailed information regarding

the Fund’s securities positions, performance and finances than it provides to all shareholders

generally. As a result, certain shareholders may be better able to assess the prospects and

performance of the Fund than other shareholders. The Fund may enter into separate letter

agreements with particular shareholders in respect of any such matters.

Investments in Unlisted Securities

The Fund may invest in unlisted debt securities. Because of the absence of any trading

market for these investments, it may take longer to liquidate, or it may not be possible to

liquidate these positions than would be the case for publicly traded securities. Although these

securities may be resold in privately negotiated transactions, the prices realised on these

sales could be less than those originally paid by the Fund. Further, companies whose

securities are not publicly traded will generally not be subject to public disclosure and other

investor protection requirements applicable to publicly traded securities.


Risk of Event Driven Investing

Event driven investing requires the Investment Manager to make predictions about (i) the

likelihood that an event will occur and (ii) the impact such event will have on the value of a

company's securities. If the event fails to occur or it does not have the effect foreseen, losses

can result. For example, the adoption of new business strategies or completion of asset

dispositions or debt reduction programs by a company may not be valued as highly by the

market as the Investment Manager had anticipated, resulting in losses. In addition, a

company may announce a plan of restructuring which promises to enhance value and fail to

implement it, resulting in losses to investors. In liquidations and other forms of corporate

reorganisations, the risk exists that the reorganisation either will be unsuccessful, will be

delayed or will result in a distribution of cash or a new security, the value of which will be

less than the purchase price to the Fund of the security in respect of which such distribution

was made.

The consummation of mergers and tender and exchange offers can be prevented or delayed

by a variety of factors, including: (i) opposition of the management or shareholders of the

target company, which will often result in litigation to enjoin the proposed transaction; (ii)

intervention of a governmental or other regulatory agency; (iii) efforts by the target company

to pursue a “defensive” strategy, including a merger with, or a friendly tender offer by, a

company other than the offeror; (iv) in the case of a merger, failure to obtain the necessary

shareholder approvals; (v) market conditions resulting in material changes in securities

prices; (vi) compliance with any applicable securities laws; and (vii) inability to obtain

adequate financing. Because of the inherently speculative nature of event driven investing,

the results of the Fund's operations may be expected to fluctuate from period to period.

Accordingly, investors should understand that the results of a particular period will not

necessarily be indicative of results that may be expected in future periods.

Global Economic and Market Conditions

The Fund may invest in currencies and debt securities traded in various markets throughout

the world, including in emerging or developing markets, some of which are highly controlled

by governmental authorities. Such investments require consideration of certain risks

typically not associated with investing in currencies or securities of developed markets. Such

risks include, among other things, trade balances and imbalances and related economic

policies, unfavourable currency exchange rate fluctuations, imposition of exchange control

regulation by governments, withholding taxes, limitations on the removal of funds or other

assets, policies of governments with respect to possible nationalization of their industries,

political difficulties, including expropriation of assets, confiscatory taxation and social,

economic or political instability in foreign nations. These factors may affect the level and

volatility of securities prices and the liquidity of the Fund's investments.

Unexpected volatility or illiquidity could impair the Fund's profitability or result in losses.

The economies of countries differ in such respects as growth of gross domestic product, rate

of inflation, currency depreciation, asset reinvestment, resource self-sufficiency and balance

of payments position. Further, certain economies are heavily dependent upon international

trade and, accordingly, have been and may continue to be adversely affected by trade

barriers, exchange controls, managed adjustments in relative currency values and other

protectionist measures imposed or negotiated by the countries with which they trade. The

economies of certain countries may be based, predominantly, on only a few industries and

may be vulnerable to changes in trade conditions and may have higher levels of debt or


inflation.

During 2008 and particularly during the third quarter the global financial services industry

and securities markets experienced significant and adverse conditions including substantially

increased volatility, losses resulting from declining asset values, defaults on securities and

reduced liquidity. These events have resulted in the failure of certain financial services firms

and led other firms to seek mergers with commercial banks. While uncertainty surrounding

the credit crisis and expectations for economic contraction has, in the short term, led to an

increase in overall market volatility and increased trading volume in certain markets, this

trend may not continue. Accordingly, any reduction in trading volumes or market liquidity

could adversely affect the Fund's investments in a material fashion.

Legal Risk

Many of the laws that govern private and foreign investment, debt securities transactions and

other contractual relationships in certain countries, particularly in developing countries, are

new and largely untested. As a result, the Fund may be subject to a number of unusual risks,

including inadequate investor protection, contradictory legislation, incomplete, unclear and

changing laws, ignorance or breaches of regulations on the part of other market participants,

lack of established or effective avenues for legal redress, lack of standard practices and

confidentiality customs characteristic of developed markets and lack of enforcement of

existing regulations.

Furthermore, it may be difficult to obtain and enforce a judgment in certain countries in

which assets of the Fund are invested. There can be no assurance that this difficulty in

protecting and enforcing rights will not have a material adverse effect on the Fund and its

operations. In addition, the income and gains of the Fund may be subject to withholding

taxes imposed by foreign governments for which shareholders may not receive a full foreign

tax credit. Furthermore, it may be difficult to obtain and enforce a judgment in a court outside

of the Cayman Islands.

Regulatory controls and corporate governance of companies in some developing countries

may confer little protection on minority shareholders. Anti-fraud and anti-insider trading

legislation is often rudimentary. The concept of fiduciary duty to shareholders by officers

and directors is also limited when compared to such concepts in Western markets. In certain

instances management may take significant actions without the consent of shareholders and

anti-dilution protection also may be limited.

Availability of investment strategies

The success of the Fund’s investment activities will depend on the Investment Manager’s

ability to identify investment opportunities as well as to assess the import of news and events

that may affect the financial markets. Identification and exploitation of the investment

strategies to be pursued by the Fund involves a high degree of uncertainty. No assurance can

be given that the Investment Manager will be able to locate suitable investment opportunities

in which to deploy all of the Fund’s assets or to exploit discrepancies in the currency,

securities and derivatives markets.

Incentive Fee

The Investment Manager receives an Incentive Fee from the Fund, based upon the


appreciation, if any, in the net assets of the Fund. The Incentive Fee theoretically may create

an incentive to make investments that are riskier or more speculative than would be the case

if such arrangement were not in effect. In addition, because the Incentive Fee is calculated

on a basis which includes unrealised appreciation, it may be greater than if such

compensation were based solely on realised gains.

Concentration of investments

Although it is the policy of the Fund to diversify its investment portfolio, the Fund may at

certain times hold relatively few investments. The Fund could be subject to significant losses

if it holds a large position in a particular investment that declines in value or is otherwise

adversely affected, including default of the issuer, subject to the limitations imposed in the

“Investment Restrictions” above.

Leverage and financing risk

The Fund may invest in instruments such as bonds relating to companies that are leveraged.

While leverage presents opportunities for increasing a company’s and therefore the Fund’s

total return, it has the effect of potentially increasing losses as well. Accordingly, any event

which adversely affects the value of an investment by the Fund would be magnified to the

extent the company is leveraged.

Derivatives

The Fund may utilise both exchange-traded and over the counter derivative contracts, such

as futures, options and currency swaps for hedging purposes. These instruments are highly

volatile and expose investors to a high risk of loss. The low initial margin deposits normally

required to establish a position in such instruments permit a high degree of leverage. As a

result, depending on the type of instrument, a relatively small movement in the price of a

contract may result in a profit or a loss which is high in proportion to the amount of funds

actually placed as initial margin and may result in unquantifiable further loss exceeding any

margin deposited.

Transactions in over-the-counter contracts may involve additional risk as there is no

exchange market on which to close out an open position. It may be impossible to liquidate

an existing position, to assess the value of a position or to assess the exposure to risk. To the

extent that the Fund writes uncovered options on investments, it could incur an unlimited

loss.

Highly Volatile Markets

The prices of financial instruments in which the Fund may invest can be highly volatile. Price

movements of forward and other derivative contracts in which the Fund’s assets may be

invested are influenced by, among other things, interest rates, changing supply and demand

relationships, trade, fiscal, monetary and exchange control programs and policies of

governments, and national and international political and economic events and policies. The

Fund is subject to the risk of failure of any of the exchanges on which its positions trade or

of its clearinghouses.

Counterparty Risk

Some of the markets in which the Fund may effect transactions are “over-the-counter” or


“interdealer” markets. The participants in such markets, although regulated, are typically not

subject to credit evaluation and the same regulatory oversight as are members of “exchange-

based” markets. Exchange members normally settle through the exchange and not

bilaterally. This exposes the Fund to the risk that a counterparty will not settle a transaction

in accordance with its terms and conditions because of a dispute over the terms of the

contract (whether or not bona fide) or because of a credit or liquidity problem, thus causing

the Fund to suffer a loss.

Amortisation of Organisational Costs and Valuation of Investments

The policies adopted in relation to the amortisation of organisational costs and the valuation

of investments may not be in accordance with the International Financial Reporting

Standards (“IFRS”). Where this is the case and the difference is material, the financial

statements, which utilise IFRS, will be prepared on a different basis to that used in the

calculation of the Net Asset Value. Any such difference will not impact on the calculation

of the Net Asset Value for the purposes of subscriptions, redemption or relevant fees.

Exchange Rate Fluctuations; Currency Considerations

Whilst the Fund’s base currency is US Dollar Shares and Shares of the Fund are denominated

in US Dollars, they are offered and will be issued, and distributions and redemptions will be

made, in the applicable Functional Currency subscribed for by each investor. Certain of the

assets of the Fund may be held in securities and other investments which are denominated

in other currencies. The Fund, however, values its investments and other assets in U.S.

Dollars. Accordingly, the value of such assets may be affected favorably or unfavorably by

fluctuations (to the extent unhedged) in currency rates. The Fund’s Net Asset Value will be

determined in US Dollars. The Fund may however prepare financial statements and report

to its shareholders in other currencies.

The Fund will incur costs in connection with conversions between various currencies.

Currency exchange dealers realise a profit based on the difference between the prices at

which they are buying and selling various currencies. Thus, a dealer normally will offer to

sell currency to the Fund at one rate, while offering a lesser rate of exchange should the Fund

desire immediately to resell that currency to the dealer. The Fund will conduct its currency

exchange transactions either on a spot (i.e., cash) basis at the spot rate prevailing in the

currency exchange market, or through entering into forward exchange or options contracts

to purchase or sell currencies.

Prospective investors whose assets and liabilities are predominantly in other currencies

should also take into account the potential risk of loss arising from fluctuations in value

between the U.S. Dollar and such other currencies. Prospective investors should also note

that there can be no assurance that any hedges which are in place from time to time will be

effective.

The Fund will not pursue a currency hedging policy.

Net Asset Value Considerations

The Net Asset Value per Share is expected to fluctuate over time with the performance of

the Fund’s investments. A shareholder may not fully recover his initial investment upon

compulsory redemption if the Net Asset Value per Share of the relevant Class at the time of


such redemption is less than the initial offer price and/or the subscription price paid by such

shareholder. In addition, where there is any conflict between IFRS and the valuation

principles set out in the Articles and this document in relation to the calculation of Net Asset

Value the latter principles shall take precedence.

Payment of Redemption Proceeds

Calculation and payment of redemption proceeds (where relevant) will generally be based

on estimated and unaudited data. Accordingly, adjustments and revisions may be made

following the year-end audit of the Fund. The Directors have the discretion to decide whether

to pay a shareholder the whole amount of any redemption proceeds prior to a year-end audit

of the Fund, in which case such adjustments and revisions to the Fund’s accounts may either

increase or decrease the amount payable.

Tax Considerations

Where the Fund invests in investments that are not subject to withholding tax at the time of

the acquisition, there can be no assurance that tax may not be withheld in the future as a

result of any change in applicable laws, treaties, rules or regulations or the interpretation

thereof. The Fund will not be able to recover such withheld tax and so any change would

have an adverse effect on the Net Asset Value. Where the Fund sells investments short that

are subject to withholding tax at the time of sale, the price obtained will reflect the

withholding tax liability of the purchaser. In the event that in the future such investments

cease to be subject to withholding tax, the benefit thereof will accrue to the purchaser and

not the Fund.

Business, Legal and Regulatory Risks of Hedge Funds

It may be difficult to obtain and enforce a judgment in certain countries in which assets of

the Fund are invested. There can be no assurance that this difficulty in protecting and

enforcing rights will not have a material adverse effect on the Fund and its operations. In

addition, the income and gains of the Fund may be subject to withholding taxes imposed by

foreign governments for which shareholders may not receive a full foreign tax credit.

Furthermore, it may be difficult to obtain and enforce a judgment in a court outside of the

Cayman Islands. Legal, tax and regulatory changes could occur during the term of the Fund

that may adversely affect the Fund. The regulatory environment for hedge funds is evolving,

and changes in the regulation of hedge funds may adversely affect the value of investments

held by the Fund and the ability of the Fund to obtain the leverage it might otherwise obtain

or to pursue its trading strategies. In addition, the securities and futures markets are subject

to comprehensive statutes, regulations and margin requirements. Regulators and self-

regulatory organisations and exchanges are authorised to take extraordinary actions in the

event of market emergencies. The regulation of derivatives transactions and funds that

engage in such transactions is an evolving area of law and is subject to modification by

government and judicial action. The effect of any future regulatory change on the Fund could

be substantial and adverse.

Orderly Realisation

It is anticipated that any Suspension would ordinarily be temporary. However, there may be

situations in which the circumstances giving rise to the Suspension continue to be present


for a considerable period of time with the result that the Directors, in consultation with the

Investment Manager, may consider it appropriate to keep the Suspension in place for an

extended period on the basis that the circumstances giving rise to the Suspension still exist.

During any such period of Suspension, the Directors may, in consultation with the

Investment Manager, determine that the Fund be managed with the objective of informally

winding down the affairs of the Fund and returning the Fund's assets to Shareholders in an

orderly manner, without appointment of a liquidator or recourse to a formal liquidation

process (“Orderly Realisation”).

In circumstances where the Directors decide to proceed with an Orderly Realisation, they

may resolve to continue the Suspension until the Orderly Realisation has been completed.

Unlike a formal liquidation, the informal wind down of the Fund’s affairs through an Orderly

Realisation leaves the Directors’ powers intact and allows the continued management of the

Fund’s portfolio. That management is however directed to reducing the Fund’s portfolio to

cash (to the extent reasonably practicable, as advised by the Investment Manager) and to

returning such cash as well as all other assets of the Fund to the Shareholders, the Directors

using any means permitted by applicable law in their discretion including, but not limited to,

by way of dividend, distribution, and share repurchase. The Directors shall promptly

communicate to Shareholders any resolution to proceed with an Orderly Realisation of the

Fund.

During an Orderly Realisation, the Directors, in consultation with the Investment Manager,

shall seek to establish what they consider to be a reasonable time by which the Orderly

Realisation should be effected (“Realisation Period”). Any resolution to undertake an

Orderly Realisation and the process thereof shall be deemed to be integral to the business of

the Fund and may be carried out with a minimum of formality (i.e. without recourse to a

formal process of liquidation or any other applicable bankruptcy or insolvency regime). The

Directors, in consultation with the Investment Manager, may at any time (A) resolve to cease

the Orderly Realisation within the Realisation Period and recommence active trading if the

circumstances so permit or (B) extend the Realisation Period if the Investment Manager

recommends to the Directors that additional time is needed to effect the Orderly Realisation.

The Directors, in consultation with the Investment Manager, shall establish what they

consider to be a reasonable extension of the Realisation Period. The Directors shall promptly

communicate to Shareholders any resolution to cease the Orderly Realisation or extend the

Realisation Period.

During any Suspension for the purposes of an Orderly Realisation, it is possible that the

Directors or the Investment Manager will determine that investments are required to be made

by the Fund in order to safeguard the value of the Fund’s investment portfolio or in order to

permit the Fund to effect redemptions of Shares. Such investments may include, but are not

limited to, the subscription for equity interests in special purpose vehicles or using the Fund’s

assets to maintain margin cover.

An Orderly Realisation may be effected more than once during the lifetime of the Fund.

Terrorist Action

There is a risk of terrorist attacks causing significant loss of life and property damage and

disruptions in global markets. Economic and diplomatic sanctions may be in place or


imposed on certain states and military action may be commenced. The impact of such events

is unclear, but could have a material effect on general economic conditions and market

liquidity.

Risk of Litigation

The Fund may be subject to litigation from time to time. Such litigation can be time-

consuming and expensive, and can frequently lead to unpredicted delays or losses. The Fund

could be named as a defendant in a lawsuit or regulatory action. The outcome of such

proceedings, which may materially adversely affect the value of the Fund, may be impossible

to anticipate, and such proceedings may continue without resolution for long periods of time.

Litigation may consume substantial amounts of the Investment Manager’s time and

attention, often to an extent disproportionate to the amounts at stake in the litigation.

The foregoing list of risk factors does not purport to be a complete enumeration or

explanation of the risks involved in an investment in the Fund. Prospective investors

should read this entire Offering Memorandum and consult with their own legal, tax

and financial advisers before deciding to invest in the Fund. No assurance can be made

that profits will be achieved or that substantial losses will not be incurred.

OTHER ACTIVITIES OF THE INVESTMENT MANAGER

CONFLICTS OF INTEREST

The Fund is subject to a number of actual and potential conflicts of interest.

Simon Welsh is a director of the Fund and of the Investment Manager and is also a member

of the Fund's Investment Committee. He is also a founding partner of Hypa Management LLP,

which entity provides investment advisory and structuring services to the Fund and the UK

PLCs. Mr Welsh may also be a member of or provide directorial and other services to vehicles

in or through which the Fund invests, further to the Fund's investment strategy as detailed on

pages 16 to 19, for which he or an affiliated entity may receive a fee or other remuneration. The

fiduciary duties of the Directors of the Fund may compete with or be different from the

interests of the Investment Manager. Furthermore, only the Directors of the Fund may

terminate the services of the Investment Manager and appoint and or remove members of

the Investment Committee. No investment shall be made without being subject to internal

compliance policies and approval procedures of the Investment Manager.

Certain inherent conflicts of interest, actual and potential, arise from the fact that the

Investment Manager and its affiliates and their respective members, partners, principals,

managers, officers, affiliates and employees (collectively, the “Management Affiliates”) may

engage in other activities, including providing investment management and advisory services

to other investment funds, client accounts and proprietary accounts in which the Fund will

have no interest and whose respective investment programmes may or may not be

substantially similar (the “Other Accounts”), and shall not be required to refrain from any

activity, to disgorge profits from any such activity or to devote all or any particular amount of

time or effort to the Fund and its affairs. The Management Affiliates are not restricted from

forming managed accounts or other funds, from entering into other investment advisory

relationships, or from engaging in other business activities, even though such activities may

be in competition with the Fund and/or may involve substantial time and resources of one or

more of the Management Affiliates. These activities could be viewed as creating a conflict of


interest in that the time and effort of the Management Affiliates will not be devoted exclusively

to the business of the Fund, but will be allocated between the business of the Fund and other

business activities of the Management Affiliates. The Investment Manager is aware of these

potential conflicts and is committed to ensuring that sufficient resources, including human

capital, are made available to meet its management responsibilities to the Fund and such Other

Accounts.

The Investment Manager and any of the Management Affiliates may give advice or take

action with respect to any Other Accounts (including those that have investment objectives

and/or investment strategies similar to the Fund’s) which may be the same as or differ from

the advice given or the timing or nature of any action taken with respect to investments of

the Fund. In addition, the Management Affiliates may have a conflict of interest in rendering

advice to a client because the financial benefit from managing some other client’s account

may be greater (e.g., such account generates higher fees or allocations tied to either higher

percentages earned or larger amounts of capital investment by the Investment Manager or

another Management Affiliate), which may provide an incentive to favour the Other

Account. The portfolio strategies employed for such Other Accounts could conflict with the

transactions and strategies employed in managing the Fund’s portfolio and affect the prices

and availability of the investments and instruments in which the Fund invests. Conversely,

participation in specific investment opportunities may be appropriate, at times, for both the

Fund and such other investment programmes. In such case, participation in such

opportunities will be allocated on an equitable basis, taking into account such factors as the

relative amounts of capital available for new investments, relative exposure to short-term

market trends, and the respective investment programs and portfolio positions of the Fund

and the other investment programs. Such considerations may result in allocations of certain

investments on other than a pari passu basis.

The Investment Manager and its members, officers and employees devote as much of their

time to the activities of the Fund as is determined necessary and appropriate, in their absolute

discretion.

The Investment Manager and its affiliates are not restricted from forming additional

investment funds, from entering into other investment management relationships or from

engaging in other business activities, even though such activities may be in competition with

the Fund and/or may involve substantial time and resources of the Investment Manager and

its affiliates.

The Management Affiliates may trade in securities for their own accounts, subject to

restrictions and reporting requirements as may be required by law or as determined by the

Directors, the Investment Manager or Investment Committee. To the extent permitted under

applicable law, the Fund may engage in certain transactions with its affiliates provided the

terms thereof are commercially reasonable, as determined by the board of Directors.

In furtherance thereof, the Investment Manager may, on behalf of the Fund, for liquidity,

portfolio rebalancing, trade allocation or other reasons, purchase investments from, sell

investments to or enter into agreements with Other Accounts (i.e., “cross transactions”). The

terms of any such cross transactions will be commercially reasonable and will not be

materially less favourable to the Fund than those available in the market. Expenses incurred

in a cross transaction will be allocated equitably in the sole discretion of the Investment

Manager between the Fund and the Other Accounts that are parties to the cross transaction.


Similarly, if a transaction is cancelled, any costs incurred will be allocated equitably in the

sole discretion of the Investment Manager between the Fund and the Other Accounts that

are parties to the cross transaction.

As disclosed above, Directors of the Investment Manager may also be Directors of the Fund,

or have other interests, in companies that offer bond structuring services or companies that

introduce bond investment opportunities to the Investment Committee for the Fund, as

further documented on page 33, as well as the security trustee. The Fund may also invest in

other investment opportunities in which a Director of the Fund, the Investment Manager and

its members, officers and employees and/or members of the Investment Committee to the

Fund have a direct or indirect interest.

The Fund will generally invest in secured asset-backed bonds, issued by UK PLCs, which

UK PLCs will be independently audited by PKF Littlejohn LLP. The Fund, as the

bondholder, will take a debenture security over the assets of each UK PLC, which debenture

security will be held on the Fund’s behalf by Bay Consultancy Ltd., a Seychelles

International Business Company, as security trustee to protect the interests of the Fund and

its investors in the event of default.

Hypa Management LLP receives a fee of 1% per annum from the UK PLCs in relation to

advisory services provided in connection with the structuring of the bonds acquired by the

Fund.

The Investment Manager may open “average price” accounts with brokers. In an “average

price” account, purchase and sale orders placed during a trading day on behalf of all accounts

of the Investment Manager, its affiliates and their clients are combined, and investments

bought and sold pursuant to such orders are allocated among such accounts on an average

price basis.

Subject to internal compliance policies and approval procedures of the Investment Manager,

members, officers and employees of the Investment Manager may engage, from time to

time, in personal trading of investments and other instruments, including investments and

instruments in which the Fund may invest.

The Directors and Administrator may also provide services to other parties which are similar

to the services provided to the Fund. However, the Directors will ensure that all such

potential conflicts of interest are disclosed to the board of the Directors and resolved fairly

and in the interest of shareholders.

Subject to applicable law, any of the service providers (including the Directors) may deal,

as principal or agent, with the Fund, provided that such dealings are on normal commercial

terms negotiated on an arm’s length basis. The above is not necessarily a comprehensive list

of all potential conflicts of interest.

EXECUTION OF PORTFOLIO TRANSACTIONS

The Investment Manager utilises various brokers and dealers to execute portfolio

transactions. Portfolio transactions for the Fund are allocated to brokers and dealers based

on a number of factors, including commissions/price, the ability of the brokers and dealers

to effect the transactions and the brokers’ and dealers’ facilities, reliability and financial


responsibility. The Investment Manager need not solicit competitive bids and does not have

an obligation to seek the lowest available commission cost. The broker may use part of the

relevant commission to pay for certain services related to the execution of transactions on

behalf of customers and/or the provision of investment research received by the Investment

Manager.

It is intended that such arrangements will assist the Investment Manager in the provision of

investment management services to the Fund. The Investment Manager may agree that a

broker shall be paid a commission exceeding the amount another broker would have charged

for the same transaction if, in the good faith of the Investment Manager, the amount of the

commission is reasonable in relation to the value of the brokerage and other services

provided or paid for by such broker.

Director Regulation

Each of the Directors has registered with the Monetary Authority pursuant to The Directors

Registration and Licensing Law (as amended) (“DRL Law”). Pursuant to the DRL Law, any

new or additional director of the Fund must register with the Authority before being

appointed to the board of Directors.

DIRECTORS

The Fund has two Directors, each of whom serves in accordance with the laws of the Cayman

Islands and in accordance with the Articles. The Directors act in a non-executive,

supervisory capacity and their primary function is to supervise the general conduct of the

affairs of the Fund. Whilst the Directors are responsible for the overall management and

control of the Fund, they have delegated all day-to-day activities to service providers

described herein. The Directors intend to meet regularly to review and assess the investment

policies and performance of the Fund, and generally to supervise the conduct of its affairs.

For this purpose, the Directors will receive periodic reports from the Investment Manager

detailing the performance of the Fund and providing an analysis of its investment portfolio.

The Investment Manager will provide such other information as may from time to time be

reasonably required by the Directors for the purpose of such meetings.

The Fund’s directors (each, a “Director”), and their business experience, are as follows:

Simon James Welsh

Fund Director

Simon Welsh is a Director of Hypa Asset Management Limited, the Investment Manager

to the Fund, and a founding partner of Hypa Management LLP, a UK partnership authorised

by the Financial Conduct Authority to offer advisory services and the distribution of

financial products. His role includes due diligence, product structuring with a focus on tax

efficiency and regulatory compliance, raising funds and ongoing monitoring of the firm’s

investments. To date Simon has currently structured and administered more than 10

investment funds investing in a range of asset classes primarily fixed interest, property and

renewable energy. Previously between 1998 and 2004, Mr Welsh was an equity derivatives

broker for ICAP (the world’s largest inter dealer broker) where he was responsible for the

arranging of over-the-counter and listed trades on Europe’s leading stock indices, including

MIB and SMI indices and stocks, AEX and BEL OTC and broking listed trades on the


ESTOXX 50.

Margaret Thompson

Fund Director

Margaret Thompson is currently the Managing Director of Forbes Hare Trust Company in

the Cayman Islands, having previously served as Director Operations for Alternative

Investment Solutions Ltd., a Swiss based Investment Manager.

Margaret has over 25 years’ experience in the financial services industry, 18 of which have

been in the Cayman Islands and the remainder in Switzerland, Europe and the Channel

Islands. Her experience covers mutual funds, hedge funds, fund of funds, investment

operations, trusts, unit trusts, partnerships, private banking, investment banking, offshore

companies and compliance. Her depth and breadth of knowledge has been gained through

tenure with the Vontobel group, Citigroup, MeesPierson and Lloyds Bank International. She

has served on the boards of funds, investment management companies, banks, trust

companies, private investment companies and special purpose vehicles, registered in Jersey,

Guernsey, the British Virgin Islands, Cayman Islands, Bahamas, and Ireland. She is a Notary

Public for the Cayman Islands, a member of the Cayman Islands Directors Association and

a member of the Society of Trust and Estate Practitioners.

Directors and Services

Margaret Thompson acts as a non executive director to the Fund under the terms of a director

services agreement between Forbes Hare Fund Services (FHFS), the trading name of the

fund services division of Forbes Hare Trust Company Limited, a licensed Mutual Fund

Administrator under the Mutual Funds Law (as revised) of the Cayman Islands.

Remuneration

The remuneration payable to the Directors for the services provided is set out in the Director

Services Agreement.

Indemnity

FHFS and the Directors shall not be liable for any loss, costs, expenses or damage

whatsoever which the Fund may sustain or suffer as a result of or in the course of the

discharge of their respective duties hereunder other than loss or damage arising by reason of

the dishonesty, fraud and wilful default of FHFS and/or the Director.

The Fund shall indemnify and hold harmless to the fullest extent permitted by Cayman

Islands law on a full indemnity basis FHFS and the Director or any fund or entity associated

with FHFS or any directors, officers, shareholder or employee thereof against all actions,

suits, proceedings, claims, demands, costs and expenses which may be made against FHFS

and/or the Director in respect of any loss or damage sustained or suffered by any third party

in connection with the provision of services described in or the performance of the Director

Services Agreement, otherwise than by reason of the dishonesty, fraud and wilful default of

FHFS and/or the Director as aforesaid. The Fund shall advance any expenses incurred by

the relevant indemnified party in defending the relevant proceedings. The indemnified party


shall reimburse the Fund for any such advances in the event that a judgment is given against

the indemnified party which finds him to have acted with dishonesty, fraud and wilful

default.

Neither FHFS nor Margaret Thompson shall be liable for acting upon any instructions,

authorisations or notifications given by any Authorised Person, unless at the time such

Instructions were given, FHFS or Margaret Thompson, as the case may be, had actual

knowledge that such person had no such authority to give such Instructions.

For the avoidance of doubt, no provision of the Director Services Agreement shall require

FHFS or Margaret Thompson to:

A. do anything which may be illegal or contrary to any applicable law or regulation; or

B. expend or risk its own funds or otherwise incur any expense or other financial liability

in the performance of any of its duties and obligations if the repayment of such funds

or adequate indemnity against such risk, expense or other financial liability is not

assured to it within reasonable time.

For the avoidance of doubt, FHFS and the Director, in connection with their respective

obligations under the Director Services Agreement, shall not be responsible for the

operational management of the Fund, the commercial structuring of the business of the Fund

or for the rendering of investment, commercial, accounting, legal or any other advice to the

Fund or any other person in that regard.

Termination

The Director Services Agreement is subject to termination by FHFS or the Fund giving not

less than forty five days’ notice in writing to the other party.

Delegation

The Directors have delegated the performance of day-to-day operations of the Fund to

service providers including the Investment Manager and Administrator. Additional Directors

may be appointed from time to time. The Fund’s Articles provide for the appointment of

alternate Directors who have all of the rights and powers of the Director(s) in whose stead

such persons are appointed.

None of the Directors has, at the date of this Offering Memorandum, or has had since

incorporation, any interest, direct or indirect, in any transactions which are unusual in their

nature or significant to the business of the Fund other than as disclosed in this Offering

Memorandum. The annual remuneration for Directors which, under the Articles, is

determined by the Directors, is not expected to exceed US$25,000 per Director. Where a

Director is an employee or director of the Investment Manager such fees will be waived. A

Director is not required to retire upon reaching a certain age. Simon James Welsh is

remunerated by the Investment Manager and therefore will not receive remuneration from

the Fund. Margaret Thompson, Director, is remunerated by the Fund only.

The Directors may, with the prior approval of the shareholders, fix the emoluments of


Directors with respect to services to be rendered in any capacity to the Fund.

The Directors may exercise all the powers of the Fund to borrow money and to mortgage or

charge its undertakings, property and uncalled capital or any part thereof, to issue debentures,

debenture stock and offer securities whenever money is borrowed as security for any debt,

liability or obligation of the Fund or any third party.

No Director has:

(A) any unspent convictions in relation to indictable offences; or

(B) been bankrupt or the subject of a voluntary arrangement, or has had a receiver appointed

to any of his assets; or

(C) been a director of any company which, while he was a director with an executive

function or within 12 months after he ceased to be a director with an executive function, had

a receiver appointed or went into compulsory liquidation, creditors’ voluntary liquidation,

administration or company voluntary arrangements, or made any composition or

arrangement with its creditors generally or with any class of its creditors; or

(D) been a partner of any partnership, which while he was a partner or within 12 months

after he ceased to be a partner, went into compulsory liquidation, administration or

partnership voluntary arrangement, or had a receiver appointed to any partnership asset; or

(E) had any public criticism by statutory or regulatory authorities (including professional

bodies); or

(F) been disqualified by a court from acting as a director or from acting in the management or conduct of affairs of any company.

Except as otherwise disclosed in this Offering Memorandum, none of the Directors, nor any

connected person, the existence of which is known to or could with reasonable diligence be

ascertained by that Director, whether or not through another party, has any interest in the

Shares of the Fund, nor have they been granted any options in respect of the Shares of the

Fund.

The Articles contain, inter alia, provisions relating to Directors as follows:

(A) provided a Director who is in any way, whether directly or indirectly, interested in a

contract or proposed contract with the Fund declares (whether by specific or general notice)

the nature of his interest at a meeting of the Directors, that Director may vote in respect of

any contract or proposed contract or arrangement notwithstanding that he may be interested

therein and if he does so his vote shall be counted and he may be counted in the quorum at

any meeting of the Directors at which any such contract or proposed contract or arrangement

shall come before the meeting for consideration;

(B) a Director may hold any other office or place of profit under the Fund (other than the

office of Auditor) in conjunction with his office of Director for such period and on such terms

(as to remuneration and otherwise) as the Directors may determine;

(C) every Director, alternate Director, the Secretary, Assistant Secretary, or other officer for

the time being and from time to time of the Fund (but not including the Fund's auditors) and

the personal representatives of the same shall, in the absence of wilful neglect or default,

be indemnified and secured harmless out of the assets and funds of the Fund against all

actions, proceedings, costs, charges, expenses, losses, damages or liabilities incurred or

sustained by him in or about the conduct of the Fund's business or affairs or in the execution

or discharge of his duties, powers, authorities or discretions, including without prejudice to

the generality of the foregoing, any costs, expenses, losses or liabilities incurred by him in

defending (whether successfully or otherwise) any civil proceedings concerning the Fund or


its affairs in any court whether in the Cayman Islands or elsewhere;

(D) no Director, alternative Director, Secretary, Assistant Secretary or other officer of the

Fund (but not including the Fund's Auditors) shall be liable:

(i) for the acts, receipts, neglects, defaults or omissions of any other Director or officer or

agent of the Fund;

(ii) for any loss on account of defect of title to any property of the Fund;

(iii) on account of the insufficiency of any security in or upon which any money of the Fund

shall be invested; or

(iv) for any loss incurred through any bank, broker or other similar person.

INVESTMENT COMMITTEE TO THE FUND

Investments potentially acquired by the Fund are researched, appraised and processed via an

investment committee of the Fund (the “Investment Committee”). The Investment

Committee's role is to protect the interests of the Fund’s investors, act with prudence and

appraise investments with expertise. The Investment Committee also formally records the

Fund’s investment decision process and the reasons supporting such decisions, which must

be unanimous.

In addition to his appointment as a Director of the Fund and as a director of the Investment

Manager, Simon James Welsh is also a member of the Fund's Investment Committee, along

with Marc Hounsell and Mike Young, CFA, who's biographies are set out below.

The members of the Investment Committee receive no direct remuneration from the Fund,

although may recover reasonable costs, expenses and disbursements incurred for holding

Investment Committee meetings.

Marc Hounsell

Marc Hounsell is a Director of Hypa Asset Management Limited which has a licence

reference 1231532 issued on 24 June 2015 from the Cayman Islands Monetary Authority to

offer investment management services. Mr Hounsell’s responsibilities within the Hypa team

include capital raising, managing key relationships in Europe and the Middle East and as a

member of the Hypa corporate strategy management team. Prior to joining Hypa Mr

Hounsell managed intermediary relationships for Project Kudos Ltd, a specialist investment

product distributor and was part of a team that raised over $US500m for funds and other

investment structures. Prior to Project Kudos Mr Hounsell formed Intelligent Partnerships

in 2007 which developed and managed distribution channels for real estate developers and

renewable energy companies seeking capital, raising more than $US60m. Earlier in his

career Mr Hounsell worked as a property broker transacting deals valued at ten-of-millions

of dollars. Previously a professional golfer Marc remains a keen and highly competent

competitor.

Mike Young, CFA

With more than two decades of investment industry experience Mr Young has near unrivalled

experience in every aspect of the investment process. Extensively qualified Mr Young has

passed the followed investment, finance and business qualifications: Saudi Capital Market

Authority CME 2 Securities Operations, Saudi Capital Market Authority CME 1

Regulations, Chartered Financial Analyst Level 1, 2 & 3, Securities Institute Diploma

Module in Interpretation of Financial Statements, Securities Institute Certificate in Corporate


Finance, UK Society of Investment Professionals Investment Management Certificate,

Financial Planning Certificate Level 1, 2 & 3, Diploma in Business Management, London

School of Economics Certificate in Introductory MacroEconomics and BTEC Certificate in

Business & Finance Part 1.

Mr Young has significant experience co-ordinating the design, preparation and launch of

regulated investment funds. Previously Mr Young worked with Prudential, Standard Life,

Baring Asset Management and SHUAA Capital Saudi Arabia focusing on business

development, capital raising, product development, training and the provision of investment

advice to high net worth investors and institutions. Prior to joining the investment industry

Mr Young served in the British Army as an Intelligence Corps Analyst for 4 years in the

UK, Northern Ireland and Cyprus and represented his squadron in numerous sports including

cross country running.

Mike Young, CFA, will receive remuneration from the Investment Manager for services to

the Fund’s Investment Committee. No remuneration will be paid by the Fund.

ADMINISTRATOR

Forbes Hare Fund Services (Administrator) is the trading name of the fund services

division of Forbes Hare Trust Company Limited, a licensed Mutual Fund Administrator

under the Mutual Funds Law of the Cayman Islands.

Services

The Administrator has been appointed pursuant to an Administration Agreement

(Administration Agreement) between the Administrator and the Fund. In accordance with

the Administration Agreement the Administrator is responsible, under the ultimate

supervision of the Fund’s board of Directors, for certain matters pertaining to the

administration of the Fund, including: (i) maintaining the Fund’s accounts; (ii) calculating

the Fund’s Net Asset Value; (iii) communicating with Shareholders; (iv) processing of the

issue, transfer and redemption of Shares; (v) maintenance of the Fund’s register of

participating Shareholders; (vi) performing due diligence on Shareholders and prospective

shareholders in the Fund in accordance with Cayman Islands anti-money laundering

regulations and procedures; (vii) providing the Fund’s principal office in the Cayman Islands

for the purposes of Section 4(1)(b) of the Mutual Funds Law and (viii) performing such

other services as may be agreed.

Remuneration

The remuneration payable by the Fund to the Administrator, for the services provided, is

calculated as a percentage of the Net Asset Value of the Fund at rates set out in the

Administration Agreement. The Administrator’s fees accrue monthly and are charged to the

Fund at the end of each month, or at such other times as agreed by mutual consent. The

Administrator is entitled to reimbursement of its out-of-pocket expenses. The Administrator

is also entitled to additional remuneration in respect of exceptional matters in such amount

as may be agreed between the Fund and the Administrator.


Liability

In calculating the Net Asset Value of the Fund, the Administrator may rely, without further

inquiry, upon information and communications received in good faith from any source,

including the Fund, the Investment Manager, the Custodian, the Directors and any prime

broker, pricing agent or an investment manager or administrator of any fund or investment

vehicle in which the Fund is invested; and any automatic pricing services (whether such

automatic pricing services are chosen by the Administrator, the Fund or the Investment

Manager). The Administrator shall not be liable for any loss suffered by the Fund or any

Shareholder by reason of any error in the calculation of the Net Asset Value of the Fund

resulting from any inaccuracy in any such information or the failure by such persons to

provide any information relevant to the calculation of the Net Asset Value of the Fund.

The Administrator will not be responsible for valuing the Fund’s investments and, in

providing services to the Fund, will not act as guarantor or offeror of the Shares in any

respect nor will the Administrator be responsible for monitoring any investment restrictions

or compliance with the investment restrictions and therefore will not be liable for any breach

thereof.

The Administrator has no responsibility with respect to trading activities, the functions of

the Investment Manager, Directors or any other service provider appointed by the Fund, the

management or performance of the Fund, or the accuracy or adequacy of this Offering

Memorandum.

Cap on Liability

Unless caused by their actual fraud, the maximum aggregate liability of the Administrator

under the Administration Agreement shall be limited to an amount not exceeding three times

the fees paid to the Administrator for the services under the Administration Agreement

during the twelve month period prior to: (a) the final non-appealable determination of

liability by a court of the Cayman Islands; or (b) the termination of the Administration

Agreement; whichever is greater. However, no such cap on liability applies if liability is

found to arise from fraud.

In addition, the Administrator and the other indemnified persons under the Administration

Agreement are entitled to receive advances from the Company to cover the cost of defending

proceedings claims and demands. However, all such advances will be repaid to the Fund if

a court of the Cayman Islands determines that there is no entitlement to indemnification.

Delegation

The Administrator may delegate the whole or any part or parts of its functions, powers,

discretions, duties and obligations hereunder and/or, employ and pay an agent or delegate to

perform or assist in performing any or all of the services, duties and obligations required to

be performed under the Administration Agreement by the Administrator; Provided always

that the Administrator shall remain liable for any loss or damage which the Fund may sustain

or suffer arising by reason of the fraud or wilful default of any such delegate or agent, as if


such fraud or wilful default of such delegate or agent were its own, unless the Fund shall

expressly agree otherwise in writing to hold such agent only so responsible.

Indemnity

The Administrator shall not be responsible for any loss or damage which the Fund, any

Shareholder or any former Shareholder may sustain as a result of providing the services

under the Administration Agreement other than a loss or damage arising by reason of the

actual fraud or wilful default of the Administrator. The Fund shall indemnify the

Administrator against all claims and demands which may be made against the Administrator

in respect of any loss or damage sustained or suffered by any third party, otherwise than by

reason of the fraud or wilful default of the Administrator.

Termination

The Administration Agreement is subject to termination by the Administrator or by the Fund

upon ninety days’ written notice.

CUSTODIAN

Global Custodial Services Ltd has been retained by the Fund to arrange custody for the bond

investments of the Fund. The Custodian is not liable for any loss arising in connection with

the performance by the Custodian or its nominees, agents and sub-custodians of their

obligations except those resulting from gross negligence or wilful default. The appointment

of the Custodian may be terminated on 60 days’ prior notice.

Global Custodial Services Ltd will not be responsible for any monitoring compliance with

the investment policy of the Fund and shall only be responsible for performing the functions

described in this document.

GENERAL

Except as provided in the Administration Agreement and the Custodian Agreement, the

Administrator and the Custodian are under no duty to supervise compliance with the

investment objection, investment policy, investment restrictions, borrowing restrictions or

operating guidelines in relation to the Fund.

None of the Administrator, the Custodian, or their employees, service providers or agents

are directly involved in the business affairs, organization, sponsorship or management of the

Fund, and are not responsible for the preparation or issue of the Offering Memorandum other

than the descriptions in respect of itself under the sections entitled “Administrator” and

“Custodian” above. Neither shall the Custodian be liable for the Fund’s assets held by other

parties, if any, appointed from time to time by the Fund; nor for the custody of any bilateral

private deals, non-listed derivatives or other non-tradable instruments.

CAPITAL STRUCTURE OF THE FUND

The Fund has an authorised share capital of US$50,000 divided into 10 non-participating

voting Founder Shares, par value US$1.00, and 49,990,000 non-voting, participating shares,

par value US$0.001 per share, which are available for issue hereunder as Class A USD


Shares, Class A EUR Shares, Class A GBP Shares, Class A SGD Shares, Class A HKD

Shares and Class B USD Shares, Class B EUR Shares, Class B GBP Shares, Class B SGD

Shares, Class B HKD Shares and Class C USD Shares, Class C EUR Shares, Class C GBP

Shares, Class C SGD Shares and Class C HKD Shares. The Fund will also issue further

classes of shares and may issue other shares which may have different rights, privileges and

terms in the future and which may be sold in other currencies.

Save as described herein, the Shares have identical rights and privileges. Subject to the terms

of the Articles, authorised but unissued Shares may be re-designated and/or issued at the

discretion of the Directors and there are no pre-emption rights with respect to the issue of

additional Shares or any other class of Share. No capital of the Fund is under option or

agreed to be put under option.

The Class A Shares and Class B Share and Class C Shares carry an equal right to any

dividends, income or other distributions (if any). The Fund may increase or reduce its

authorised share capital, divide or combine all or any of its share capital into shares of smaller

amount or larger amount as the case may be. Class C Shares incur a higher annual

management fee relative to Class A Shares and Class B Shares;



Net Asset Value of the Shares as at the relevant monthly Valuation Day for Class A Shares

and Class B Shares. For Class C Shares the Fund pays to the Investment Manager a monthly

Management Fee in arrears equal to 0.0833% (1.00% annualised) of the Net Asset Value of

the Shares as at the relevant monthly Valuation Day. The Investment Manager may in its

sole discretion, increase, reduce or waive any Management Fees at any time, including, in

particular, during any wind-down of the Fund’s business.

The rights attaching to a Class of shares may not be varied or abrogated in a materially

adverse manner without the approval by resolution (in writing or in general meeting) of at

least 70% of the holders of that Class in accordance with the Articles. Save as described

above, the holders of the Class A Shares and Class B Shares and Class C Shares shall have

no voting rights.

The Founder Shares confer no economic benefit other than the right to a return of paid-up

capital (the nominal par value of such shares) on a winding-up subject to the prior return of

paid-up capital on Class A Shares and Class B Shares and Class C Shares. All Founder Shares

are held by the Investment Manager, who accordingly has the exclusive right to vote on all

matters, including, without limitation, in relation to:

(A) a change of name for the Fund;

(B) the appointment or removal of any Director;

(C) any amendments to the Articles, including those in relation or incidental to the creation

of one or more additional classes or sub-classes of shares;

(D) the winding-up of the Fund; and

(E) to increase the authorised capital of the Fund, including by the addition of other

currencies.

If the Fund is wound up, the liquidator shall apply the assets of the Fund in such manner and

order as required by the applicable law governing such proceedings in the satisfaction of


creditors’ claims. Subject to the requirements of the law governing the liquidation

proceedings, the assets of the Fund available for distribution shall be first applied in

repayment to the relevant shareholders pari passu of the nominal amount of the Class A

Shares and Class B Shares and Class C Shares. Any surplus assets then remaining shall then

be applied in repayment to the relevant shareholders pari passu of the nominal amount of

the Founder Shares. Any further surplus assets shall be divided between the Classes (other

than the Founder Shares) pro rata according to their relative Net Asset Values and then

within such Classes pari passu according to the number of shares held.

SPECIAL SITUATION INVESTMENTS

The Investment Manager may designate an existing or prospective investment made by the Fund as a Special Situation Investment.

If this happens, each shareholder will have a pro rata proportion of their existing

shareholding converted into Special Situation Shares by way of compulsory redemption of

their existing Shares and use of the redemption proceeds by the Fund to subscribe for the

Special Situation Shares.

The Investment Manager may determine that a Special Situation Investment should no

longer be classified as a Special Situation Investment. Upon such determination or on any

disposal of a Special Situation Investment, all Special Situation Shares in the applicable Class

will be automatically converted on a pro rata basis (by way of compulsory redemption and

the use of the redemption proceeds to subscribe for Shares of the relevant Class) into Shares

of the Class which the holders of such Special Situation Shares initially held (or, in the event

that the relevant shareholder is no longer holding Shares of that initial Class, into such

Classes as may be determined by the Directors). If the Shares of any shareholder have been

previously redeemed (other than its Special Situation Shares), the Fund may compulsorily

redeem such shareholder’s Special Situation Shares rather than convert those Special

Situation Shares into Shares of another Class.


the investments that are allocated to such Special Situation Shares will be valued at the lower

of cost (or carrying value as of the date such investment was allocated to the Special Situation

Shares) or fair value. The Management Fee will accrue on Special Situation Shares held by

such shareholder and be paid, at the rate earned by the Fund, as determined by the board of

Directors, upon the conversion of the relevant Special Situation Shares to another Class of

Shares or until the relevant Special Situation Shares are redeemed and the proceeds returned

to the relevant shareholder (as the case may be).

OFFERING OF SHARES

Class A Shares and Class B Shares were available for issue at an issue price of US$100 per

share for Class A/B USD Shares, EUR 100 per Share for Class A/B EUR Shares, GBP £100

per Share for Class A/B GBP Shares, SGD$100 per Share for Class A/B SGD Shares and

HKD$100 per Share for Class A/B HKD Shares during the Initial Offer Period.

Class C Shares are initially available for issue at an issue price of US$100 per Share for Class

C USD Share, EUR 100 per share for Class C EUR Shares, GBP £100 per share for Class C

GBP Shares, SGD$100 per Share for Class C SGD Shares and HKD$100 per Share for Class


C HKD Shares.

Thereafter, Shares are available on each Subscription Day at the relevant Net Asset Value

per Share of the relevant Class as at the Valuation Point on the Subscription Day. Fractional

Shares may be issued rounded to 4 decimal points.

The minimum initial subscription amount for Class A Shares and Class B Shares is

US$100,000 or its equivalent in another currency. The minimum subscription amount for

additional Class A Shares and Class B Shares is US$50,000 or its equivalent in another

currency.

The minimum initial subscription amount for Class C Shares is US$10,000 or its equivalent

in another currency. The minimum subscription amount for additional Class C Shares is

US$5,000 or its equivalent in another currency.

The Fund reserves the right to charge a sales charge, which is deducted from an investor’s

subscription, and to pay such charge to the relevant intermediary. The sales charge is

negotiated with intermediaries and investors on a case by case basis. Shares are issued in

registered, book-entry form (meaning that no share certificates will be issued).

Subscriptions for Shares must be in the currency of denomination of the relevant Class of

Shares being subscribed for, or such other currency as may be specified in the relevant

supplement to this Offering Memorandum unless the Directors otherwise agree to accept

subscriptions in any freely convertible currency approved by the Investment Manager, in

which case such subscriptions will be converted into the relevant Class currency or such

other currency as may be specified in a relevant supplement to this Offering Memorandum

at the rate of exchange available to the Investment Manager and any currency conversion

costs will be deducted from such subscription monies.

Applicants for Shares must send their properly completed irrevocable application form

(together with any required additional documentation) by fax or email, at least 7 Business

Days immediately preceding the last Business Day of the Initial Offer Period or relevant

Subscription Day, as the case may be, with all original documents to follow immediately by

mail, to the Administrator so as to be received by 12:00 p.m. (Cayman Islands time) on the

last Business Day of the Initial Offer Period or Subscription Day, as the case may be, and so

that cleared funds in US Dollars, British Pounds, Euros, Singapore Dollars or Hong Kong

Dollars are received by the same time. If these conditions are not satisfied, then the

application will be held over until the first Subscription Day following satisfaction of these

conditions.

The Fund reserves the right to reject any application in whole or in part in which event the

unused subscription monies will be returned to the applicant, without interest and at the risk

and cost of the applicant. Shares will not be available for subscription during any period that

the calculation of the Net Asset Value has been suspended. The Directors reserve the right

to close the Fund or a Class to new subscriptions (for all or just new investors) at any time.

Where a subscription for Shares is accepted, the Shares will be treated as having been issued

with effect from the relevant Subscription Day notwithstanding that the subscriber for those

Shares may not be entered in the Fund's register of members until after the relevant

Subscription Day. The subscription monies paid by a subscriber for Shares will accordingly


be subject to investment risk in the Fund from the relevant Subscription Day.

Investor Requirements

Shares may not be issued, or transferred, to or for the benefit of any person other than a

Qualifying Investor. The Fund will not register the transfer of any Shares, except with the

prior written consent of the board of Directors (or its designee), which consent may be granted

or withheld by the Board of Directors (or its designee) in its sole discretion. In general, the

only means of disposing of Shares will be by tendering such Shares to the Fund for

redemption pursuant to the terms described herein. The board of Directors, in its discretion,

may require that all costs and expenses incurred in connection with the transfer of Shares,

including, but not limited to, the legal fees of the Fund, shall be paid by the transferees.

A Qualifying Investor is any person:

(A) (For all Share Classes) whose acquisition or holding of Shares would not cause the

Fund, or the shareholders as a whole, to suffer any tax, fiscal, legal, regulatory, pecuniary or

material administrative disadvantage which it or they would not otherwise have suffered,

and

(B) (For Class A Shares and Class B Shares only), who warrants at the time of investment

that:

(i) its ordinary business or professional activity includes the buying and selling of

investments whether as principal or agent; or

(ii) (natural persons) individual net worth, or joint net worth with spouse, exceeds US$1

million (or equivalent in another currency), or

(iii) (institutions) assets under discretionary management exceed US$5 million (or

equivalent in another currency); and

(C) (For all Share Classes) who warrants expressly that it:

(i) has the knowledge, expertise and experience in financial matters to evaluate the risks of

investing in the Fund;

(ii) is aware of the risks inherent in investing in the assets in which the Fund invest and the

method by which the assets of the Fund are held and/or traded; and

(iii) can bear the risk of loss of its entire investment; and

(D) (For all Share Classes) Who warrants that it is not a US Person; and

(E) (For all Share Classes) who holds the shares to the value of at least the Minimum Holding.

In order to transfer shares, a share transfer form available from the Administrator must be

completed. The proposed transferee will also be required to complete and sign an application

form in the same format as that required for a new subscription. The transfer will only be

effective upon registration thereof, provided the Directors, in their absolute discretion, may

decline to register or suspend any share transfer. Subject as aforesaid, the Shares are freely

transferable.

REDEMPTION OF SHARES

Subject to the restrictions described herein, Shares may generally be redeemed on each

Redemption Day. Written notice of Redemption must generally be received by the

Administrator at least 90 days’ prior to the Redemption Day. The redemption of Shares will

be suspended whenever the calculation of the Net Asset Value is suspended. The Directors

or their designees may waive notice or redemption fee requirements or permit redemptions


under such other circumstances and on such conditions as they, in their sole and absolute

discretion, deem appropriate.

In order to facilitate the investment process, it is recommended Shares should be held for at

least 5 years. Where Shares have been acquired on more than one date, they will be redeemed

on a “first in, first out” basis.

Partial redemptions may be refused at the discretion of the Directors if, immediately

following such redemption, the value of such shareholders Shares would be less than the

Minimum Holding. Shares will be redeemed at a per Share price based on the Net Asset

Value per Share of the relevant Class (less payment of any charges, including, without

limitation, the Incentive Fee, with respect to the redeemed Shares) as at the Valuation Point

on the applicable Redemption Day.

Payment of the redemption proceeds for redeemed Shares will be made as soon as possible

and the Fund will use its best endeavours to pay redemption proceeds within 15 Business

Days of the Redemption Day.

Shares held by or for the account of anyone who is not a Qualifying Investor or where the

value of the Shares is below the Minimum Holding may be subject to compulsory

redemption. Shares may also be compulsorily redeemed at par value only in order to give

effect to the Incentive Fee provisions and the sales charge fee provisions. The Fund Directors

also reserve the right to execute a compulsory redemption at par value at any time for any

investor.

Redemption proceeds should be paid to the shareholder’s bank account net of bank charges.

Redemption payment to a party other than the shareholder will not be entertained.

A redemption may at the discretion of the Directors, be effected in specie by the

appropriation of assets of the relevant value (determined conclusively by the Directors or

their delegate in good faith) in satisfaction of the redemption request provided that the

interests of the remaining shareholders as a whole are not thereby materially prejudiced.

The redemption in specie terms and conditions do not apply to Class B Shares which are only

available to investors with the prior approval of the Fund Directors.

The Directors may establish reserves or holdbacks for estimated accrued expenses, liabilities

and contingencies (even if such reserves or holdbacks are not otherwise required by

generally accepted accounting principles) which could reduce the amount of a distribution

upon redemption.

Shares may not be redeemed when the calculation of the Net Asset Value is suspended.

Payment of redemption proceeds will be withheld or delayed if information required to

satisfy verification of identity checks is not provided in a timely manner.

In circumstances where the Fund is unable to liquidate assets in an orderly manner in order

to fund redemptions, or where the value of the assets and liabilities of the Fund cannot

reasonably be determined, the Fund may take longer than the time periods mentioned above

to effect settlements of redemptions and, as such, the Fund will only settle payment of


redemptions upon realization of sufficient assets to meet such payments on a case by case

basis.

Without limiting the foregoing, in the event that the Fund receives any request for

redemption in respect of any one Redemption Day, either singly or when aggregated with

other redemption requests, representing more than 10% of the number of Shares of any Class

outstanding and the Directors determine that the redemption of such volume of Shares of

that Class would materially prejudice the interests of the other shareholders of that Class or

otherwise materially and adversely affect the Fund, the Directors may scale down, on a pro-

rata basis, each request for redemption with respect to such Redemption Day so that not

more than 10% of the issued and outstanding Shares of the relevant Class shall be redeemed

on such relevant Redemption Day. Each such redemption request shall be treated with

respect to the unsatisfied balance as if a further request has been made by the redeeming

shareholder in respect of the next following Redemption Day until the request for redemption

is satisfied in full.

The Fund may withhold a portion of any proceeds of redemption if necessary to comply with

any applicable legal or regulatory requirements.

If the Fund has restricted the number of Shares which may be redeemed on any Redemption

Day or suspended or delayed the payment of redemption proceeds, the Articles prevent a

shareholder which has submitted a redemption request from presenting a petition to wind up

the Fund or bringing similar proceedings in any jurisdiction where the right to bring such a

petition or similar proceedings results from the shareholder’s position as a contingent

creditor of the Fund pending completion of such redemption process.

The Fund may also suspend redemptions of the Shares of any Class in such other

circumstances in which the Directors, deem it to be in the interests of the Fund to do so,

including in circumstances in which the determination of the Net Asset Value of the relevant

Class has not been suspended. In the discretion of the Directors, the Fund may extend the

length of the redemption notice period if the Directors deem such an extension as being in

the best interest of the Fund and the non-redeeming shareholders.

The Fund may withhold a portion of any proceeds of redemption if necessary to comply with

any applicable legal or regulatory requirements.

COMPULSORY REDEMPTION OF SHARES

The Fund may compel the redemption of all of a shareholder’s Shares at any time, in the

Directors’ sole and absolute determination, including, but not limited to, where the

shareholder is not a Qualifying Investor. The Directors may charge any shareholder receiving

such a notice any legal, accounting or administrative costs associated with such compulsory

redemption.

In the event of a compulsory redemption, the redemption price will be determined as of the

close of business on such date specified by the Directors in their notice to the shareholder. A

shareholder whose Shares are compulsorily redeemed will have no shareholder rights after

the close of business on the date on which the notice of compulsory redemption was issued.

Shares may also be compulsorily redeemed for the purposes of the payment of the Incentive


Fee and/or the sales charge.

DETERMINATION OF NET ASSET VALUE

In accordance with the provisions of the Articles and under the overall supervision and

direction of the Directors, in consultation with the Investment Manager, the Administrator

will determine the Net Asset Value and the Net Asset Value per Share of each Class as at the

Valuation Point on a Valuation Day. The Fund’s Net Asset Value will be determined in US

Dollars. The Fund may however prepare financial statements and report to its shareholders

in other currencies. For the purposes of determining the Net Asset Value per Share of each

Class, separate Class Accounts are maintained in the books of the Fund. The issue price of

each Share is credited to the relevant Class Account. At each Valuation Day, the increase or

decrease in the Net Asset Value of the Fund is allocated to the Class Accounts on the basis

of their previous relative Net Asset Values. No account will be taken of any adjustments (e.g.

due to subscriptions or redemptions), costs or investment proceeds or losses which are solely

for the account of particular Classes and which are allocated to the relevant Classes.

The following valuation principles relate to the Fund:

(A) any security which is listed or quoted on any securities exchange or similar electronic

system and regularly traded thereon will be valued at the closing price, as at the relevant

Valuation Day, and as adjusted in such manner as the Directors, in their sole direction, think

fit, having regard to the size of the holding. When prices are available on more than one

exchange or system for a particular security the price will be the closing price on the

exchange which constitutes the main market for such security or the one which the Directors

in their sole discretion determine provides the fairest criteria in ascribing a value to such

security;

(B) any security which is not listed or quoted on any securities exchange or similar

electronic system or, if being so listed or quoted, is not regularly traded thereon or in respect

of which no prices as described above are available will be valued at its probable realisation

value as determined by the Directors in good faith having regard to its cost price, the price

at which any recent transaction in the security may have been effected, the size of the holding

having regard to the total amount of such security in issue, and such other factors as the

Directors in their sole discretion deem relevant in considering a positive or negative

adjustment to the valuation;

(C) investments, other than securities, which are dealt in or traded through a clearing firm

or an exchange or through a financial institution will be valued by reference to the most

recent official settlement price quoted by that clearing house, exchange or financial

institution. If there is no such price, then the average will be taken between the lowest offer

price and the highest bid price at the close of business on any market on which such

investments are or can be dealt in or traded, provided that where such investments are dealt

in or traded on more than one market, the Directors may determine at their discretion which

market shall prevail;

(D) investments, other than securities, which are not dealt in or traded through a clearing

firm or an exchange or through a financial institution will be valued on the basis of the latest

available valuation provided by the relevant counterparty;

(E) deposits will be valued at their cost plus accrued interest; and

(F) Any value (whether of an investment or cash) other than in U.S. Dollars will be

converted into U.S. Dollars at the rate (whether official or otherwise) which the Investment

Manager deems applicable as at the Valuation Point on the relevant Valuation Date, having

regard, among other things, to any premium or discount which they consider may be relevant


and to costs of exchange.

The Directors may, at their discretion, permit any other method of valuation to be used if

they consider that such method of valuation better reflects value and is in accordance with

good accounting practice. Special Situation investments will be valued at cost or at fair value

in accordance with IFRS.

To the extent feasible, expenses, fees and liabilities will be accrued in accordance with IFRS.

Reserves (whether or not in accordance with IFRS) may be made for estimated or accrued

expenses, liabilities or contingencies.

The Directors have, subject to the discretions set out above, delegated to the Administrator

the determination of the Net Asset Value and the Net Asset Value per Share. In calculating

the Net Asset Value and the Net Asset Value per Share, the Administrator may rely on, and

will not be responsible for the accuracy of, financial data furnished to it by third parties

including automatic processing services, brokers, market makers or intermediaries, the

Investment Manager and any administrator or valuations agent of any other collective

investment arrangement into which the Fund invests. If and to the extent that the Investment

Manager is responsible for calculating the price of any asset of the Fund, the Administrator

may accept, use and rely on such price, without verification, in determining the Net Asset

Value of the Fund and shall not be liable to the Fund, any shareholder or any other person

in doing so. The Net Asset Value per Share of the relevant Class on any Valuation Day is

calculated by dividing the Net Asset Value by the number of Shares in issue of that Class as

at the close of business on that Valuation Day.

SUSPENSION OF REDEMPTIONS; SUSPENSION OF THE DETERMINATION

OF NET ASSET VALUE

The Directors may suspend redemption rights (including the right to receive redemption

proceeds), in whole or in part, and/or suspend the determination of Net Asset Value and/or

subscription rights for the whole or any part of any period when the Directors determine it

is appropriate to so (“Suspension”). This may include but is not limited to:

(A) during any period in which any stock exchange on which a Substantial Portion (as

defined below) of the Fund’s investments are quoted is closed, other than for ordinary

holidays and weekends, or during periods in which dealings in such stock exchange are

restricted or suspended and such restriction affects a Substantial Portion of the Fund’s

investments;

(B) during any period in which, in the opinion of the Investment Manager, disposal of a

Substantial Portion of the investments by the Fund would not be reasonable or practical;

(C) during any breakdown in the means of communication normally employed in

determining the price or value of a Substantial Portion of the Fund’s investment or current

prices in any securities market, or when for any other reason the prices or values of a

Substantial Portion of the Fund’s investment cannot be reasonably or promptly ascertained;

(D) during any period in which the transfer of funds involved in the realisation or acquisition

of a Substantial Portion of the Fund’s investments cannot be effected at normal rates of

exchange;

(E) when there exists in the opinion of the Directors a state of affairs where disposal of the

Fund’s assets, or the determination of the Net Asset Value of the Shares, would not be

reasonably practicable or would be seriously prejudicial to the shareholders; and


(F) for any period during which the redemption of Shares would cause a breach or default

under any covenant in any agreement entered into by the Fund for borrowing or cash

management purposes.

For the purposes of paragraphs (A) to (D) above, “Substantial Portion” shall mean 25% or

more.

Any suspension of redemptions, subscriptions or the determination of Net Asset Value, as

the case may be, shall take effect at such time as the Directors shall declare and, thereafter,

subject to the discretion of the Directors to effect redemptions or subscriptions that are not

dependent upon the determination of the Net Asset Value, there shall be no redemptions,

subscriptions or determination of Net Asset Value, as the case may be, until the Directors

shall declare any such suspension to be at an end. The Directors shall declare an end to such

suspension when the condition giving rise to the suspension ceases to exist.

All shareholders will be notified immediately by the Administrator of any suspension of

redemptions, subscriptions or determination of Net Asset Value or of any reinstatement

following a suspension thereof and all reasonable steps will be taken to bring any suspension

to an end as soon as possible.

OTHER FEES AND EXPENSES

The Administrator receives from the Fund on a monthly basis a fee in accordance with the

Administration Agreement.

The Administrator is reimbursed by the Fund for all out-of-pocket expenses reasonably

incurred as agreed with the Fund in accordance with the Administration Agreement.

The Fund also pays the costs and expenses of:

(A) all transactions carried out by it or on its behalf (including costs and expenses (including

travel expenses) incurred by the Investment Manager in sourcing and researching investment

opportunities); and

(B) the administration of the Fund and/or including:

(i) the charges and expenses of legal advisers and auditors, including in relation to due

diligence on potential investments;

(ii) brokers’ commissions (if any), borrowing charges on securities sold short and any issue

or transfer taxes chargeable in connection with any securities transactions;

(iii) fees payable in respect of market price services, dealing systems and data feeds utilised

by the Investment Manager;

(iv) all taxes and corporate fees payable to governments or agencies;

(v) directors’ fees (if any) and expenses;

(vi) interest on borrowings, including borrowings from the Custodian (if any);

(vii) such expenses incurred by the Investment Manager in soliciting subscriptions for

Shares as shall be approved by the Directors;

(viii) communication expenses with respect to investor services and all expenses of meetings

of shareholders and of preparing, printing and distributing any offering memorandum,

financial and other reports, subscription and redemption documents, proxy forms, notices to

shareholders and similar documents;

(ix) the cost of insurance (if any) for the benefit of the Fund;

(x) litigation and indemnification expenses and extraordinary expenses not incurred in the


ordinary course of business;

(xi) the costs of maintaining the Fund’s registered office in the Cayman Islands and of

maintaining the Fund’s exempted company status and mutual fund registration in the Cayman

Islands;

(xii) the costs of the Administrator providing the Fund’s principal office in the Cayman

Islands for the purposes of Section 4(1)(b) of the Mutual Funds Law; and

(xiii) all other organisational and operating expenses.

The total costs and expenses of establishing the Fund will be borne out of the proceeds of

the initial issue of Shares and may at the discretion of the Directors be amortised on a straight

line basis over the first accounting year of the Fund. Although the amortisation of the Fund’s

organisational costs is a divergence from IFRS, the Directors believe that doing so is more

equitable than requiring the initial shareholders of the Fund to, in effect, bear all of the Fund’s

organisational costs as would otherwise be required under IFRS. Such divergence may result

in a qualification in any opinion given to the Fund by its auditors.

TAX ASPECTS

The discussion herein is for informational purposes only. Each prospective shareholder

should consult its professional tax advisor with respect to the tax aspects of an investment

in the fund. Tax consequences may vary depending upon the particular status of a prospective

shareholder. In addition, special considerations (not discussed herein) may apply to persons

who are not direct shareholders in the fund but who are deemed to own shares as a result of

the application of certain attribution rules.

There is, at present, no direct taxation in the Cayman Islands and interest, dividends and

gains payable to the Fund will be received free of all Cayman Islands taxes. The Fund is

registered as an “exempted company” pursuant to the Companies Law. The Fund has

received an undertaking from the Governor in Cabinet of the Cayman Islands to the effect

that, for a period of twenty years from the date of such undertaking, no law that thereafter is

enacted in the Cayman Islands imposing any tax or duty to be levied on profits, income or

on gains or appreciation, or any tax in the nature of estate duty or inheritance tax, will apply

to any property comprised in or any income arising under the Fund, or to the shareholders

thereof, in respect of any such property or income. An annual registration fee is payable by

the Fund to the Registrar of Companies in the Cayman Islands which is calculated by

reference to the nominal amount of its authorised share capital; at current rates the fee is

approximately US$854 per annum in the case of the Fund. In addition, a mutual fund

registration fee, currently approximately US$4,268, is payable by the Fund on an annual

basis to the Monetary Authority.

General

The receipt of dividends or income (if any) by shareholders, the redemption or transfer of

Shares and any distribution on a winding-up of the Fund may result in a tax liability for the

shareholders according to the tax regime applicable in their various countries of residence,

citizenship or domicile. Shareholders resident in or citizens of certain countries which have

anti-offshore fund legislation may have a current liability to tax on the undistributed income

and gains of the Fund. The Directors, the Fund and each of the Fund’s agents shall have no

liability in respect of the individual tax affairs of shareholders.


REGULATORY MATTERS

The Fund falls within the definition of a “mutual fund” in terms of the Mutual Funds Law

and accordingly is subject to regulation under that law. As a mutual fund, the Fund has been

registered, as an administered mutual fund under Section 4(1)(b) of the Mutual Funds Law,

with and is subject to the regulation and supervision of the Monetary Authority.

The Fund will comply with the Mutual Funds Law by a simple registration with the Monetary

Authority. Such registration does not imply that the Monetary Authority or any other

regulatory authority in the Cayman Islands has passed upon or approved this Offering

Memorandum or the offering of the Shares hereunder. To effect the required registration

the Fund is required to provide to the Monetary Authority a summary of the terms of the

Offering of the Shares of each Class and to provide details of the various agents of the Fund

along with a copy of this Offering Memorandum. The Fund is also required to file with the

Monetary Authority audited financial statements annually within six months of each

financial year-end, pay to the Monetary Authority a prescribed annual fee and file an annual

return with the Registrar of Companies in the Cayman Islands. The Fund must notify the

Monetary Authority of any changes in the details of the summary of the terms of the Offering

of Shares by the Fund and of any change in certain of the Fund’s agents as filed on initial

registration and supply copies of any supplements to or revision of this Offering

Memorandum.

As a regulated mutual fund, the Monetary Authority may at any time instruct the Fund to

have its accounts specially audited and to submit such accounts to the Monetary Authority

within such time as the Monetary Authority may specify. In addition, the Monetary

Authority may, whenever it considers it necessary, examine, including by way of on-site

inspections or in such other manner as it may determine, the affairs or business of the Fund,

or request such information or such explanation of the Fund, to enable the Monetary

Authority to carry out its duties under the Mutual Funds Law and to satisfy itself that the

provisions of the Mutual Fund Law and applicable anti-money laundering regulations are

being complied with by the Fund.

The Fund must give the Monetary Authority access to or provide at any reasonable time all

records relating to the Fund and the Monetary Authority may copy or take an extract of a

record to which the Monetary Authority is given access. The Mutual Funds Law provides

for substantial fines for failure to comply with any such requests by the Monetary Authority

and the Monetary Authority may apply to the court to have the Fund wound up in accordance

with the Cayman Islands Companies Law.

The Monetary Authority is prohibited by the Mutual Funds Law from disclosing any

information relating to the affairs of a mutual fund other than disclosure required for the

effective regulation of a mutual fund or when required to by law or by the court or any

provision under the Mutual Funds Law.

The Monetary Authority may take certain actions if the Monetary Authority is satisfied that

a regulated mutual fund is likely to become unable to meet its obligations as they fall due or

is carrying on or is attempting to carry on business or is winding up its business voluntarily

in a manner that is prejudicial to its investors or creditors. The powers of the Monetary

Authority include, inter alia, the power to terminate the Fund, require the substitution of the

Directors of the Fund, to appoint a person to advise the Fund on the proper conduct of its


affairs or to appoint a person to assume control of the affairs of the Fund. There are other

remedies available to the Monetary Authority including the ability to apply to the court for

approval of other actions.

Notwithstanding the foregoing, Investors must appreciate that no Cayman Islands authority

has passed upon the content of this offering document or the merits of an investment in the

Fund.

The Fund is not registered under the United States Investment Company Act of 1940. The

Investment Manager is not registered in any other jurisdiction. Accordingly, the Investment

Manager is not subject to regulatory requirements with respect to the Fund that are applicable

to persons that are so registered.

Save as aforesaid, it is not anticipated that any regulatory filings will be made in any country

or that the Fund will be qualified for sale in any country.




Business Law (as revised) of the Cayman Islands.

AIFMD

The EU Alternative Investment Fund Managers Directive (2011/16/EU) (the “AIFMD”) may

result in considerable cost or other burdens for the Fund and/or the Investment Manager. The

provisions of the AIFMD are in the process of being implemented into the laws of individual

member states of the EU and, broadly, the AIFMD will regulate an alternative investment

fund manager (an “AIFM”) based in the EU and the marketing of securities of an alternative

investment fund in the EU.

In order to obtain authorisation to manage or market an alternative investment fund in the

EU, an AIFM will be required to comply with numerous obligations in relation to its own

operations and any alternative investment fund that it manages, which may create significant

compliance costs and burdens.

It is possible that the Fund or the Investment Manager may be required to take significant

measures to comply with the AIFMD or that either of them may not be able to comply with

the AIFMD, whether in part or at all. Compliance with the requirements of the AIFMD may

be costly or could require significant amendments to be made to the structure of the Fund or

the Investment Manager. The Directors and the Investment Manager will monitor the

position under the AIFMD and may take or propose steps in the future to address the

AIFMD’s requirements. It should be noted that any regulatory changes arising from

implementation of the AIFMD may be costly to the Fund or the Investment Manager or may

impair the ability of the Investment Manager to manage the investments of the Fund, or limit

the ability to market Shares in the future, each of which may materially adversely affect the

Fund’s ability to carry out its investment approach and achieve its investment objective or

impact adversely on returns to Shareholders.

EU Savings Directive

The EU Savings Directive requires withholding of tax or exchange of tax information on


interest paid to EU resident individuals and certain EU intermediary entities in certain limited

circumstances. Distributions made by the Fund or income derived from the sale or

redemption of the Shares in the Fund should generally not be subject to the EU Savings

Directive withholding tax or exchange of information. However, if an investor in the Fund

were to hold its Shares through a professional nominee that is based in an EU member state

it is possible that the EU Savings Directive may apply to distributions made by the Fund to

the investor or to the income derived by the investor from the sale or redemption of the

Shares in the Fund. Whether the EU Savings Directive would apply in any given case would

depend upon the circumstances surrounding the relevant investor and the manner in which

the EU Savings Directive has been implemented in the relevant EU member state. In light

of the foregoing, investors should consult with their own legal advisors as to the possible

application of the EU Savings Directive to any distributions or income that they receive in

connection with their Shares in Fund. Further, On November 10, 2015, the European Council

repealed the EUSD with effect from January 1, 2016 (January 1, 2017 in the case of Austria)

in order to avoid overlap with the requirements of the CRS (as defined below) and other tax

information reporting regimes. It is anticipated that the Cayman Islands, together with those

other jurisdictions which have adopted EUSD-equivalent legislation, will also give

consideration in due course to the repeal of their EUSD-equivalent legislation in the light of

the introduction of the CRS regime.

FATCA

The Cayman Islands government and the United States have entered into a Model 1

intergovernmental agreement (“US IGA”) and the Cayman Islands Government has passed

the Tax Information Authority (International Tax Compliance) (United States of America)

Regulations, 2014 (“US Regulations”). Under the US Regulations, the Fund will not be

required to enter into a separate agreement directly with the IRS, but would instead be

required to register with the IRS and comply with the US Regulations. Under the US

Regulations, the Fund will be a “Reporting Cayman Islands Financial Institution”

(“Reporting FI”) and will be obliged to make annual filings with the Cayman Islands Tax

Information Authority (“TIA”), which will include providing information in relation to

Shareholders who are Specified US Persons (as defined in the US Regulations) or an entity

that is identified as having one or more controlling persons who are Specified US Persons.

The TIA will automatically exchange such information with the IRS annually from 2015

onwards.

As a Reporting FI located in a Model 1 IGA country, the Fund would be a “Registered

Deemed-Compliant Foreign Financial Institution” under FATCA. Failure by the Fund to

comply to the US Regulations is a criminal offence under Cayman Islands law and eventually

this may result in the Fund being deemed to be “Non-participating Financial Institution”

under the terms of the US IGA and could ultimately result in withholding being applied on

certain US source income.

Shareholders will be required to furnish appropriate documentation certifying as to their US

or non-US tax status and the identity of their controlling persons, together with such

additional tax information as the Fund may from time to time request.

The Fund will pass on the costs of non-compliance to any Shareholder that fails to provide

the necessary information, including any withholding or penalties to which the Fund may

become subject. Ultimately the Fund may compulsorily redeem a Shareholder’s entire


interest in the Fund.

Shareholders are encouraged to consult with their own tax advisers regarding their tax status

and the applicability of this legislation on their investment in the Fund.

United Kingdom Intergovernmental Agreement

The Cayman Islands has also signed an intergovernmental automatic information exchange

agreement with the United Kingdom (“UK IGA”) (and is in the process of negotiating and

agreeing similar agreements with other United Kingdom Overseas Territories and Crown

Dependencies), modelled on the US IGA and has passed the Tax Information Authority

(International Tax Compliance) (United Kingdom) Regulations, 2014 (“UK Regulations”).

Under the UK Regulations, the Fund will also be a Reporting FI and will be obliged to make

annual filings with the TIA which will include providing information in relation to

Shareholders who are Specified United Kingdom Persons (as defined in the UK IGA) any

direct or indirect United Kingdom Specified Persons which invest in the Fund. The TIA will

automatically exchange such information with HMRC annually from 2015 onwards.

A Shareholder that is resident in the United Kingdom for tax purposes or is an entity that is

identified as having one or more controlling persons that is resident in the United Kingdom

for tax purposes will be required to provide information to the Fund which identifies such

United Kingdom tax resident persons and the extent of their respective investment in the

Fund.

Failure to provide such information may subject the Fund to investigation and it is a criminal

offence not to comply with the Cayman Islands law, but there is no element of withholding

under the UK IGA.

Common Reporting Standard

In February 2014, the OECD announced the ‘Common Reporting Standard’ (CRS),

intended to become an international standard for financial account reporting. The CRS

requires the collection by each participant jurisdiction of information regarding tax residents

of other CRS participant jurisdictions. In October 2014, the Cayman Islands Government

signed up to the multi-lateral competent authority agreement (“MCAA”) that is being

adopted by those countries committing to the CRS. Cayman Islands regulations, which

require extensive due diligence to be undertaken on new and pre-existing accounts, were

enacted on 16 October 2015 with a view to commencing reporting on such accounts during

2017. The MCAA and reporting obligations under the CRS are similar to the UK IGA and

are expected to replace the UK IGA from 2017 onwards.

Details of the CRS and the jurisdictions in respect of which reporting will be required can

be found at http://www.oecd.org/tax/transparency/automaticexchangeofinformation.htm.

By investing (or continuing to invest) in the Fund, investors shall be deemed to acknowledge

that:

1 the Fund (or its agent) may be required to disclose to the TIA certain confidential

information in relation to the investor, including but not limited to the investor’s

http://www.oecd.org/tax/transparency/automaticexchangeofinformation.htm


name, address, tax identification number (if any), social security number (if any) and

certain information relating to the investor’s investment;

2 the TIA may be required to automatically exchange information as outlined above

with the IRS, HMRC and other foreign fiscal authorities located in Future Reporting

Jurisdictions;

3 the Fund (or its agent) may be required to disclose to the IRS, HMRC and other

foreign fiscal authorities located in Future Reporting Jurisdictions certain

confidential information when registering with such authorities and if such

authorities contact the Fund (or its agent directly) with further enquiries;

4 the Fund may require the investor to provide additional information and/or

documentation that the Fund may be required to disclose to the TIA, IRS, HMRC or

other foreign fiscal authorities located in Future Reporting Jurisdictions;

5 in the event an investor fails to provide the requested information and/or

documentation, whether or not such failure actually leads to compliance failures by

the Fund, or a risk of the Fund or its investors being subject to withholding tax under

the relevant legislative or inter-governmental regime, the Fund reserves the right to

take any action and/or pursue all remedies at its disposal including, without

limitation, compulsory redemption or withdrawal of the investor concerned; and

6 no investor affected by any such action or remedy shall have any claim against the

Fund (or its agent) for any form of damages or liability as a result of actions taken

or remedies pursued by or on behalf of the Fund in order to comply with any of the

US IGA, the UK IGA or the MCAA, or any of the relevant underlying legislation.

The Fund will pass on the costs of non-compliance to the Shareholder. Ultimately the Fund

may compulsorily redeem a Shareholder’s entire interest in the Fund.

Shareholders are encouraged to consult with their own tax advisers regarding their tax status

and the applicability of this legislation on their investment in the Fund.

Changes in Law

All laws, including laws relating to taxation in the Cayman Islands and other jurisdictions

are subject to change without notice.

The summary above does not address tax considerations that may be applicable to certain

Shareholders under the laws of jurisdictions other than the Cayman Islands. The Fund has

no present plans to apply for any certifications or registrations, or to take any other actions

under the laws of any jurisdictions that would afford the relief to local investors therein from

the normal tax regime otherwise applicable to an investment in the Shares. It is the

responsibility of all persons interested in purchasing the Shares to inform themselves as to

any income or other tax consequences arising in the jurisdictions in which they are resident

or domiciled for tax purposes, as well as any foreign exchange or other fiscal or legal

restrictions relevant to their particular circumstances in connection with the acquisition,

holding, or disposition of the Shares. The value of the Fund’s investments may also be


affected by repatriation and exchange control regulations.

ANTI-MONEY LAUNDERING REGULATIONS

As part of the Fund's responsibility for the prevention of money laundering, the Fund and its

delegates, including the Investment Manager and the Administrator (including their

respective affiliates, subsidiaries or associates) will require a detailed verification of the

applicant's identity and the source of payment(s).

The Fund, the Investment Manager and the Administrator reserve the right to request such

information as is necessary to verify the identity of an applicant, and the application form

contains a full list of the documentation and information required in order to verify identity.

In the event of delay or failure by the applicant to produce any information required for

verification purposes, the Fund or the Investment Manager or the Administrator will refuse

to accept the application and the subscription monies relating thereto.

If any person who is resident in the Cayman Islands has a suspicion that a payment to the

Fund (by way of subscription or otherwise) contains the proceeds of criminal conduct that

person is required to report such suspicion pursuant to applicable anti-money laundering

legislation.

The Fund, or any directors or agents domiciled in the Cayman Islands, may be compelled to

provide information, subject to a request for information made by a regulatory or

governmental authority or agency under applicable law; e.g. by the Cayman Islands Monetary

Authority, either for itself or for a recognised overseas regulatory authority, under the

Monetary Authority Law (as revised), or by the Tax Information Authority, under the Tax

Information Authority Law (as revised) or Reporting of Savings Income Information

(European Union) Law (as revised) and associated regulations, agreements, arrangements

and memoranda of understanding. Disclosure of confidential information under such laws

shall not be regarded as a breach of any duty of confidentiality and, in certain circumstances,

the Fund, director or agent, may be prohibited from disclosing that the request has been made.

By subscribing, applicants consent to the disclosure by the Fund, the Investment Manager

and the Administrator of any information about them to regulators and others upon request

in connection with anti-money laundering and similar matters in the Cayman Islands and in

other jurisdictions.

The Fund may impose additional requirements from time to time to comply with all

applicable anti-money laundering laws and regulations, including the USA Patriot Act if

relevant.

In addition, many jurisdictions are in the process of changing or creating anti-money

laundering, embargo and trade sanctions, or similar laws, regulations, requirements (whether

or not with force of law) or regulatory policies and many financial intermediaries are in the

process of changing or creating responsive disclosure and compliance policies (collectively

"Requirements") and the Fund could be requested or required to obtain certain assurances

from applicants subscribing for Shares, disclose information pertaining to them to

governmental, regulatory or other authorities or to financial intermediaries or engage in due

diligence or take other related actions in the future.


It is the Fund's policy to comply with Requirements to which it is or may become subject to

and to interpret them broadly in favour of disclosure. Each applicant will be required to agree

in the application form, and will be deemed to have agreed by reason of owning any Shares,

that it will provide additional information or take such other actions as may be necessary or

advisable for the Fund (in the sole judgment of the Fund and/or Administrator) to comply

with any Requirements, related legal process or appropriate requests (whether formal or

informal) or otherwise. Each applicant by executing the application form consents, and by

owning Shares is deemed to have consented, to disclosure by the Fund and its agents to

relevant third parties of information pertaining to it in respect of Requirements or

information requests related thereto. Failure to honour any such request may result in

redemption by the Fund or a forced sale to another investor of such applicant's Shares.

The Fund is subject to laws which restrict it from dealing with persons that are located or

domiciled in sanctioned jurisdictions. Accordingly, the Fund will require investors to

represent that they are not named on a list of prohibited entities and individuals maintained

by the US Treasury Department's Office of Foreign Assets Control (“OFAC”) or under the

European Union (“EU”) and United Kingdom (“UK”) Regulations (as extended to the

Cayman Islands by statutory instrument), and is not operationally based or domiciled in a

country or territory in relation to which current sanctions have been issued by the United

Nations, EU or UK (collectively “Sanctions Lists”). Where an investor is on a Sanctions

List, the Fund may be required to cease any further dealings with the investor's interest in

the Fund, until such sanctions are lifted or a licence is sought under applicable law to

continue dealings.

FISCAL YEAR

The Fund’s fiscal year ends on 31 December of each year. The first fiscal year of the Fund

will end on 31 December 2016.

LEGAL COUNSEL

Appleby (Cayman) Ltd. acts as legal advisers to the Fund as to Cayman Islands law in

connection with the offering of Shares. Appleby (Cayman) Ltd. also acts as legal advisers to

the Investment Manager and its affiliates. In connection with the offering of Shares and on-

going advice to the Fund, the Investment Manager and its affiliates, Appleby (Cayman) Ltd.

will not be representing shareholders of the Fund. No independent legal advisers have been

retained to represent shareholders of the Fund.

INDEPENDENT PUBLIC AUDITORS; REPORTS

Crowe Horwath Cayman Ltd. have been retained as the independent auditor of the Fund. An annual report and audited financial statements of the Fund, prepared in accordance with

IFRS, will be sent to shareholders as soon as practicable or at the latest within six months of the end of each fiscal year. Half yearly unaudited interim reports of the Fund, incorporating

unaudited accounts, prepared by an accountant on behalf of the Investment Manager, will also be sent to shareholders within four months of the end of the period to which they relate.

Since the date of incorporation, the Fund has not commenced operations, no accounts have

been prepared and no dividends or income have been paid. Copies of the Fund’s constitutional documents and annual and periodic reports of the Fund may be inspected and

obtained at the registered office of the Fund. The Investment Manager will also provide quarterly performance reports to Fund investors.


MISCELLANEOUS

There are no legal, arbitration or other proceedings pending or threatened against the Fund

nor have there been since its incorporation.

As at the date of this Offering Memorandum, the Fund has no loan capital (including term

loans) outstanding or created but unissued, and no outstanding mortgages, charges,

debentures or other borrowings, including bank overdrafts and liabilities under acceptances

or acceptance credits, hire purchase or finance lease commitments, guarantees or other

contingent liabilities.

Copies of the following documents are available for inspection by Shareholders of the Fund,

during normal business hours, at the registered office of the Investment Manager:

(A) the Amended and Restated Memorandum and Articles of Association of the Fund;

(B) the material contracts referred to herein; and

(C) the Companies Law (as revised) of the Cayman Islands.

The annual audited financial statements of the Fund will be sent to shareholders and

prospective investors on request.

DEFINITIONS

“Administration Agreement” the administration agreement between the Fund and the

Administrator (as amended and/or restated from time to time)

“Administrator” Forbes Hare Fund Services, a division of Forbes Hare Trust Company

Limited, or any additional, successor or replacement administrator and registrar

“Articles” the Amended and Restated Memorandum and of Association and Articles of

Association of the Fund, as amended from time to time

“Business Day” any day other than Saturday or Sunday on which banks in the Cayman

Islands are open for normal banking business or such other day as the Directors may

determine from time to time as a Business Day

“Calculation Period” a period of 12 months ending on the last Business Day of a calendar

year, with the first Calculation Period commencing on the date hereof or such shorter or

longer period as the Directors may in their sole discretion determine

“Class” a class of shares of the Fund

“Class Account” a separate account established in the books of the Fund in respect of each

Class

“Class A Shares” the Class A USD Shares, Class A EUR Shares, Class A GBP Shares, Class

A SGD Shares and Class A HKD Shares as the case may be

“Class B Shares” the Class B USD Shares, Class B EUR Shares, Class B GBP Shares, Class

B SGD Shares and Class B HKD Shares as the case may be


“Class C Shares” the Class C USD Shares, Class C EUR Shares, Class C GBP Shares, Class

C SGD Shares and Class C HKD Shares as the case may be

“Custodian” Global Custodial Services Ltd or any additional, successor or replacement

custodian

“Custodian Agreement” the custodian agreement between the Fund and the Custodian (as

amended and/or restated from time to time)

“Directors” the directors of the Fund from time to time including any duly constituted

committee thereof

“Founder Shares” voting shares of par value US$1.00 in the Fund

“Fund” Global High Income Fund Ltd.

“Gross Negligence” means a standard of misconduct beyond negligence whereby a person

acts with reckless disregard for the consequences of his action or inaction

“High Watermark” the higher of the subscription price and the highest Net Asset Value per

Share as at the end of any subsequent Calculation Period

“IFRS” International Financial Reporting Standards

“Incentive Fee” the incentive fee payable by the Fund to the Investment Manager

“Indemnified Party” each of the Investment Manager, its members and the directors,

shareholders, officers, employees and members of their respective affiliates, and their

respective legal representatives

“Initial Offer Period” means the period during which the Shares were first offered for

subscription at a fixed price which commenced on or about 9.00 am (Cayman Islands time)

on 23 January 2015 and closed at 5.00 pm (Cayman Islands time) on 29 April 2016

“Investment Management Agreement” the investment management agreement between the

Fund and the Investment Manager (as amended and/or restated from time to time)

“Investment Manager” Hypa Asset Management Limited

“Management Fee” the management fee payable by the Fund to the Investment Manager

“Minimum Holding” US$100,000, or its equivalent in another currency which may be

imposed at the discretion of the Directors

“Monetary Authority” the Cayman Islands Monetary Authority

“Mutual Funds Law” the Mutual Funds Law (as revised) of the Cayman Islands, including

any revision or amendment thereto

“Net Asset Value” the value of all the assets of the Fund or a Class less all the liabilities of


the Fund or a Class, as applicable

“Net Asset Value per Share” the Net Asset Value of the relevant Class divided by the number

of shares of that Class in issue or deemed to be in issue

“Qualifying Investor” a person who is eligible to acquire or hold Shares, directly or

indirectly, in accordance with applicable laws and regulations as further described under

“Offering of Shares - Investor Requirements”

“Redemption Day” each Valuation Day of March, June, September and December and/or

such other day or days as the Directors may determine from time to time

“Securities Investment Business Law” the Securities Investment Business Law (as revised)

of the Cayman Islands

“Shares” the Class A Shares and Class B Shares and Class C Shares, where the context

requires, participating shares of other Classes to be issued in the future

“Special Situation Investment” means an investment which the Directors or the Investment

Manager (as the case may be) determine is illiquid or otherwise not freely tradable

“Special Situation Shares” means a Class of Shares created by the Fund which are not

redeemable at the option of shareholders and to which the Directors or the Investment

Manager (as the case may be) may allocate Special Situation Investments from time to time

“Subscription Day” each Valuation Day and/or such other day or days as the Directors may

determine from time to time

“Substantial Portion” 25% or more

“United States” the United States of America (including the states and District of Columbia)

and any of its territories, and any other areas subject to its jurisdiction

“US Person” a citizen or resident of the United States, a corporation, partnership or other

entity created or organised in or under the law of the United States or any person falling

within the definition of the term “US person” under Regulation S promulgated under the

Securities Act of 1933 of the United States, as amended

“Valuation Day” the last Business Day of each month, and/or such other Business Day as

determined by the Directors from time to time

“Valuation Point” the close of business in the last relevant market to close on a Valuation

Day, or such other date and time as determined by the Directors from time to time

In this Offering Memorandum, unless otherwise stated, all references to:

• “US Dollars” and “US$” are to the lawful currency of the United States, “British Pounds”

and “GBP” are to the lawful currency of the United Kingdom and “Euros” and “EUR” the

lawful currency of the Euro-Zone and “Singapore Dollars” and “SGD” are to the lawful

currency of Singapore and “Hong Kong Dollars” and “HKD” are to the lawful currency of


Hong Kong;

• time is to Cayman Islands time; and

• statutes are to Cayman Islands statutes.

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