Investment Policy (adopted on 2nd October 2014)
Investing strategy – asset allocation – geographic focus and sector focus
The Board will seek to realise the Company’s Properties in an orderly manner, such realisations to be effected at such times, on such terms and in such manner as the Board (in its absolute discretion) may determine.
Assets or companies in which the Company can invest
The Company will not make any investments in new properties.
However, this will not preclude the Board (in its absolute discretion) from making any investment in existing Properties in the following circumstances:
- where the Board, as advised by the Manager, believes such investment is to protect or enhance the value and saleability of such Property;
- where the Company is contractually committed to make such investment;
- authorising the expenditure of such capital as is necessary to: (i) acquire any joint venture party’s interests in any of the Company’s existing investments; or (ii) carry out any construction necessary to maximise value and saleability of any existing Property; and
- entering into any contract or other arrangement with any third party to realise all or any part of its existing Properties.
These above restrictions will not preclude the Company making investments in short dated cash or near cash equivalent securities, which form part of its cash management practices.
Strategy by which the investing policy will be achieved
The Board and the Manager will investigate a number of approaches to realisation of its Properties, which will include, but not be limited to, sales of individual assets or groups of assets or a sale of the entire portfolio (or a combination of such methodologies).
The Board and the Manager may decide to appoint independent advisers to assist in the execution of the New Investing Policy, including, but not limited to, property valuers and property agents.
Whether investments will be active or passive investments
The Manager assumes a proactive approach to every Property project in the Company’s Property portfolio.
Holding period for investments
The New Investing Policy includes an orderly realisation of the Company’s Properties with a view to maximising returns for Shareholders. Accordingly, the Board will seek to realise the Company’s Properties and exercise all legal rights of the Company in such manner and on such timescale as the Directors see fit, with a view to ensuring that returns to shareholders are maximised.
Spread of investments and maximum exposure limits
The Company does not have a prescribed policy in relation to the spread of investments or maximum exposure limits.
The realisation of the Company’s Properties over time, may result in the Company having a reduction in the diversification of investments. However, the realisation of the Company’s Properties over time will also result in the reduction of the Company’s overall investment in real estate assets.
Policy in relation to gearing and cross holdings
Given that the New Investing Policy is to seek to exit the Company’s Properties as soon as practicable, it is not expected that the Company will secure additional debt financing other than where the Company believes it is required to protect or enhance the value and saleability of such Property.
Other than the requirement for the Manager to manage any potential conflicts of interest, and the requirement to invest in accordance with its New Investing Policy, there are no other investing restrictions.
Nature of returns that the Company will seek to deliver to Shareholders
Under the New Investing Policy, the Board will seek to return any surplus funds to Shareholders when appropriate. The net proceeds of all Property realisations will be returned to Shareholders, at the Board's discretion, having regard to:
- the requirement to invest further funds in the Company’s existing Property projects only to protect or enhance the value and saleability of such Property, and/or where the Company is contractually committed to make such investment;
- the Company's operational cost requirements and running costs (including the fees payable under the amendments to the Existing Management Agreement);
- the cost and tax efficiency of individual transactions and/or distributions; and
- Isle of Man Companies Act 2006.
It is expected that surplus capital will be returned to Shareholders over time in a manner which may involve dividends, share buy-backs, voluntary tender offers, dividends and/or capital reductions. The decision to make any such returns, the method through which such returns are effected, as well as the quantum and timing of any such returns will be at the sole discretion of the Board.
Pending future returns of value to Shareholders, all of the Company’s funds (whether in the form of cash or otherwise) will be kept under the control of the Board or as it may direct.
Management of liabilities
The Company will endeavour, at the direction of the Board (in its absolute discretion), to manage all actual or potential material liabilities, risks or exposures of the Company (including, without limitation, any existing contractual commitments, disputes (potential or actual) and litigation (threatened or actual)) in a manner consistent with the orderly realisation of the Company’s Properties.
The Directors, the Manager and any member of the Charlemagne Group and any of their shareholders, officers, employees, agents and affiliates ("Interested Parties") may be involved in other financial, investment or other professional activities which may on occasion cause conflicts of interest with the Company. The Manager (or any other Interested Party) may, for example, make investments on its own behalf or for other clients. Situations may arise in which the Manager's own account activities or those of its affiliates or those made on behalf of other clients may disadvantage the Company.