Table Of ContentTHIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.If you are in
any doubt about the contents of this document or as to the action you should take, you are recommended
immediately to seek your own financial advice from your stockbroker, bank manager, solicitor, accountant or
other independent financial adviser authorised pursuant to the UK Financial Services and Markets Act 2000 (as
amended), who specialises in advising on the acquisition of shares and other securities.
This document comprises an Admission Document which has been drawn up in accordance with the AIM Rules.
It does not constitute a prospectus as defined by the Prospectus Rules and has not been approved by or filed with
the UK Listing Authority. No offer of securities to the public (for the purposes of section 102B of FSMA) is being
made in connection with the Placing.
Details of the registered office of the Company and the names of the Directors appear on page12of this document.
The Directors accept both individual and collective responsibility for the information contained herein and for the
document’s compliance with the AIM Rules. To the best of the knowledge and belief of the Directors (who have
taken all reasonable care to ensure that such is the case) the information contained in this document is in
accordance with the facts and does not omit anything likely to affect the import of such information.
Potential investors should read the whole of this document. Your attention is drawn in particular to Part
III headed “RISK FACTORS” set out on pages28to37.
QANNAS INVESTMENTS LIMITED
(Incorporated under the laws of Jersey as a company with unlimited life, with registered number 109878)
Placing of 18,466,000 Ordinary Shares at $1.00 per Ordinary Share
Admission to trading on AIM
Nominated Adviser Broker
Deloitte Corporate Finance Daniel Stewart & Company Plc
Ordinary Share capital immediately following Admission
Authorised Issued
Number Number
Unlimited 19,698,302
Application is being made for all of the Ordinary Shares to be issued pursuant to the Placing to be admitted to
trading on AIM (the “Admission”). The Ordinary Shares are not dealt in on any other investment exchange and
no application is being or has been made for the Ordinary Shares to be admitted to any other such exchange. AIM
is a market designed primarily for emerging or smaller companies to which a higher investment risk tends
to be attached than to larger or more established companies. AIM securities are not admitted to the Official
List of the UK Listing Authority. A prospective investor should be aware of the risks of investing in such
companies and should make the decision to invest only after careful consideration and, if appropriate,
consultation with an independent financial adviser. Each AIM company is required pursuant to the AIM
Rules for Companies to have a nominated adviser. The nominated adviser is required to make a declaration
to the London Stock Exchange on admission in the form set out in Schedule Two to the AIM Rules for
Nominated Advisers. The London Stock Exchange has not itself examined or approved the contents of this
document.It is expected that Admission will take place and dealings in the Ordinary Shares will commence on
6March2012.
This document and its contents are for distribution only to (i) persons outside the United Kingdom to whom it is
lawful to communicate, or (ii) persons having professional experience in matters relating to investments who fall
within the definition of “investment professionals” in Article 19(5) of the Financial Services and Markets Act 2000
(Financial Promotion) Order 2005 (as amended), or (iii) high net worth companies, unincorporated associations
or partnerships and trustees of high value trusts as descried in Article 49(2) of the Financial Services and Markets
Act 2000 (Financial Promotion) Order 2005 (as amended) provided that in the case of persons falling into
categories (ii) or (iii), this document is only directed at persons who are also “qualified investors” as defined in
section 86 of the Financial Services and Markets act 2000 (each a “Relevant Person”). Persons of any other
description, including those who do not have professional experience in matters relating to investments, should
not rely on or act upon this document or its contents.
In relation to each member state of the European Economic Area which has implemented the Prospectus Directive
(each, a “Relevant Member State”), no Shares have been offered or will be offered pursuant to the Placing in
that Relevant Member State prior to the publication of a prospectus in relation to the Shares which has been
approved by the competent authority in that Relevant Member State, or, where appropriate, approved in another
Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance
with the Prospectus Directive, except that offers of Shares to the public may be made at any time under the
following exemptions under the Prospectus Directive, if they are implemented in that Relevant Member State: (a)
to any legal entity which is a qualified investor as defined in the Prospectus Directive; (b) to fewer than 100, or,
if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150
natural or legal persons (other than qualified investors as defined in the Prospectus Directive) in such Relevant
Member State; or (c) in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided
that no such offer of Shares shall result in a requirement for the publication of a prospectus pursuant to Article 3
of the Prospectus Directive or any measure implementing the Prospectus Directive in a Relevant Member State
and each person who initially acquires any Shares or to whom any offer is made under the Placing will be deemed
to have represented, acknowledged and agreed that it is a “qualified investor” within the meaning of Article 2(1)(e)
of the Prospectus Directive. For the purposes of this provision, the expression an “offer to the public” in relation
to any offer of Shares in any Relevant Member State means a communication in any form and by any means
presenting sufficient information on the terms of the offer and any Shares to be offered so as to enable an investor
to decide to purchase or subscribe for the Shares, as the same may be varied in that Relevant Member State by
any measure implementing the Prospectus Directive in that Relevant Member State and the expression
“Prospectus Directive” means Directive 2003/71/EC (and the amendments thereto, including Directive
2010/73/EU (the “2010 PD Amending Directive”), to the extent implemented in the Relevant Member State and
includes any relevant implementing measure in each Relevant Member State. The distribution of this document in
other jurisdictions may be restricted by law and therefore persons into whose possession this document comes
should inform themselves about and observe any such restrictions.
The Company has not been and will not be registered under the Investment Company Act. The Shares have not
been and will not be registered under the Securities Act or with any securities regulatory authority of any state or
other jurisdiction of the United States. The Shares may not be offered, sold, pledged, or otherwise transferred or
delivered within the United States or to, or for the account or benefit of, any US Person. In connection with the
Placing, the Shares are being offered and sold only outside the United States to, or for the account or benefit of,
investors that are not US Persons in “offshore transactions” within the meaning of, and in reliance upon, the
exemption from registration provided by Regulation S under the Securities Act.
In addition, prospective investors should note that the Shares may not be acquired by investors using assets of (i)
an employee benefit plan as defined in section 3(3) of the US Employee Retirement Income Security Act of 1974,
as amended (“ERISA”) (whether or not subject to the provisions of Title I of ERISA, but excluding plans
maintained outside the US that are described in Section 4(b)(4) of ERISA), (ii) a plan, individual retirement
account or other arrangement that is described in Section 4975 of the US Internal Revenue Code of 1986, as
amended (the “US Tax Code”) (whether or not such plan, account or arrangement is subject to Section 4975 of
the US Tax Code), (iii) an insurance company using general account assets, if such general account assets are
deemed to include assets of any of the foregoing types of plans, accounts or arrangements for purposes of Title I
of ERISA or Section 4975 of the US Tax Code, or (iv) an entity which is deemed to hold the assets of any of the
foregoing types of plans, accounts or arrangements that is subject to Title I of ERISA or Section 4975 of the US
Tax Code.
Investors may be required to bear the financial risks of this investment in the Shares for an indefinite period of
time. For a description of restrictions on offers, sales and transfers of Shares, see “Purchase and Transfer
Restrictions” beginning on page40of this document.
Deloitte Corporate Finance is acting as nominated adviser to the Company and no one else in connection with the
Placing or Admission and will not regard any other person as its client or be responsible to anyone other than the
Company for providing the protections afforded to clients of Deloitte Corporate Finance or for providing advice
in relation to the Placing or Admission or any matter referred to herein. Deloitte Corporate Finance’s
responsibilities as the Company’s nominated adviser under the AIM Rules are owed solely to the London Stock
Exchange and are not owed to the Company, to any Director or to any other person in respect of their decision to
acquire Ordinary Shares in reliance on any part of this document. Deloitte Corporate Finance is a division of
Deloitte LLP, which is authorised and regulated by the UK Financial Services Authority in respect of regulated
activities.
Daniel Stewart & Company Plc is acting as broker to the Company for the purposes of the AIM Rules and no one
else in connection with the Placing and Admission and will not regard any other person as its client or be
2
responsible to anyone other than the Company for providing the protections afforded to clients of Daniel Stewart
& Company Plc or for providing advice in relation to the Placing or Admission or any matter referred to herein.
Daniel Stewart & Company Plc is authorised and regulated by the UK Financial Services Authority in respect of
regulated activities.
A copy of this document has been delivered to the registrar of companies in accordance with Article 5 of the
Companies (General Provisions) (Jersey) Order 2002, and he has given, and has not withdrawn, his consent to its
circulation. It must be distinctly understood that, in giving these consents, neither the registrar of companies nor
the JFSC takes any responsibility for the financial soundness of the company or for the correctness of any
statements made, or opinions expressed, with regard to it. If you are in any doubt about the contents of this
document you should consult your stockbroker, bank manager, solicitor, accountant or other financial adviser. It
should be remembered that the price of securities and the income from them can go down as well as up.
This document may be circulated in Jersey only by persons who are registered by the JFSC in accordance with
the Financial Services (Jersey) Law 1998, as amended, for the conduct of financial services business and the
distribution of this document, or are exempt from such registration in accordance with the Financial Services
(Jersey) Law 1998, as amended.
The Company has been established in Jersey as a listed fund under a fast-track authorisation process. For the
purposes of Jersey regulation, it is suitable therefore only for professional or experienced investors, or those who
have taken appropriate professional advice. Regulatory requirements which may be deemed necessary in Jersey
for the protection of retail or inexperienced investors do not apply to listed funds. By investing in the Company
investors will be deemed to be acknowledging for the purposes of Jersey regulation that they are a professional or
experienced investor, or have taken appropriate professional advice, and accept the reduced requirements
accordingly. Investors are wholly responsible for ensuring that all aspects of the Company are acceptable to them.
Investment in listed funds may involve special risks that could lead to a loss of all or a substantial portion of such
investment. Unless investors fully understand and accept the nature of the Company and the potential risks
inherent in the Company they should not invest in the Company. Further information in relation to the regulatory
treatment of Listed Funds domiciled in Jersey may be found on the website of the JFSC at www.jerseyfsc.org. The
Directors of the Company have taken all reasonable care to ensure that the facts stated in this document are true
and accurate in all material respects, and that there are no other facts the omission of which would make
misleading any statement in the document, whether of fact or of opinion. All the Directors accept responsibility
accordingly.
This document includes statements that are, or may be deemed to be, “forward-looking statements”. These
forward-looking statements can be identified by the use of forward-looking terminology, including the terms
“believes”, “estimates”, “plans”, “projects”, “anticipates”, “expects”, “intends”, “may”, “will”, or “should” or, in
each case, their negative or other variations or comparable terminology. These forward-looking statements include
matters that are not historical facts and include statements regarding the Company or the Investment Manager’s
intentions, beliefs or current expectations.
By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and
circumstances. A number of factors could cause actual results and developments to differ materially from those
expressed or implied by the forward-looking statements including, without limitation, the factors described in
PartIII of this document. Forward-looking statements may and often do differ materially from actual results. Any
forward-looking statements in this document reflect the Company’s view with respect to future events and other
risks, uncertainties and assumptions relating to the Company’s operations and strategy. Save as required by law,
the Company has no obligation to release publicly the results of any revisions to any forward-looking statements
in this document that may occur due to any change in its expectations or to reflect events or circumstances after
the date of this document.
1March2012
3
CONTENTS
Page
KEY INFORMATION 5
EXPECTED TIMETABLE 11
PLACING STATISTICS 11
DIRECTORSAND ADVISERS 12
PART I INFORMATION ON THE COMPANY 14
PART II DIRECTORS, MANAGEMENT AND ADMINISTRATION 19
PART III RISK FACTORS 28
PART IV THE PLACING 38
PART V MARKET OVERVIEW 42
PART VI FINANCIAL INFORMATION 53
PART VII ADDITIONAL INFORMATION 56
DEFINITIONS 81
4
KEY INFORMATION
The following is a summary of the more detailed information set out in this document and should be read as
an introduction before reading the full text. Your particular attention is drawn to the risk factors set out in
Part III of this document. It is most important that any decision to acquire Ordinary Shares should be based
on consideration of this document as a whole.
Introduction
Qannas Investments Limited (“QIL” or the “Company”) is a newly incorporated, Jersey registered, closed-
ended investment company with an unlimited life. The Company has been established with the aim of
generating value for Shareholders by investing in opportunities where there is considered to be an element
of liquidity requirement or portfolio repositioning on the part of the vendor such that assets become available
at a discount to their intrinsic value. The Company’s objective is to achieve returns from the acquisition of
such assets and their subsequent disposal at a premium to the acquisition cost. The universe for investment
will include direct equity or debt investments in companies as well as limited partnership interests in private
equity funds. It is intended that investment opportunities will principally be in or sourced from the GCC
region.
The Company has appointed Abu Dhabi Capital Management Ltd. to act as its investment manager
(“ADCM” or the “Investment Manager”). ADCM is an unregulatedCayman Islands registeredalternative
investment management firm headed by Jassim Alseddiqi. The Investment Manager will manage the
Company’s portfolio with the aim of achieving its investment objective. The Investment Manager’s
investment team is based in Abu Dhabi and has experience making investments in the GCC region. The
Investment Manager intends to use its network and knowledge of the region to identify and exploit suitable
investment opportunities.
Investment policy
Investment objective
The Company’s investment objective is to generate value for Shareholders by investing in opportunities where
the Investment Manager considers there to be an element of liquidity requirement or portfolio repositioning on
the part of the vendor such that assets become available at a discount to their intrinsic value. The Company will
aim to acquire such assets and then to dispose of them at a premium to their acquisition cost.
Asset classes
The Company is not restricted in terms of the type of entity in which it may invest and the Company’s
portfolio may include, without limitation, equity or debt securities in public or private companies and limited
partner interests in private equity funds. Furthermore, there are no restrictions on the type of investment in
which the Company may invest. The acquisition of any financial investment or other investment other than
equity, debt or an interest in a limited partnership requires, however, the prior approval of theBoard.
Controlling stakes
Unless the Board determines otherwise in any particular case, the Company will not acquire a controlling
stake in any investee entity and will not seek to exercise control over or influence the day-to-day operational
management of any investee entity.
Diversification
Unless the Board (excluding the Common Director) determines otherwise in any particular case, the
following diversification guidelines shall apply to the Company’s portfolio:
• no single investment shall have an acquisition cost exceeding an amount equal to 20 per cent. of the
Company’s NAV as at the time of acquisition;
• no industry sector shall at the time of making an investment represent more than 30 per cent. of the
Company’s NAV;
5
• no single investment shall have an acquisition cost exceeding $10 million.
In addition, the Board’s prior approval will be required for the making of any investment which will result
in the aggregate value of the Company’s cash and near-cash assets being less than $1 million.
Derivatives
The Company may use equity, fixed income or currency derivatives such as forwards or futures, as it may
deem appropriate for hedging or investing purposes.
Gearing
The Company, on a case by case basis, may consider leveraging its investments and may do so if the
Investment Manager believes that there is a compelling economic opportunity to do so. Any borrowings will
typically be on a non-recourse basis. The Investment Manager may put in place aggregate borrowings of up
to $1 million on a recourse basis, but any greater amount of borrowing on a recourse basis is subject to the
prior approval of theShareholders.
Any material variation to the Company’s investment policy will require the consent of the Shareholders.
The investment opportunity
The Company considers that the GCC region displays attractive medium to long-term macro-economic
characteristics. This view is based on the natural resources of the GCC region plus the focus on development
by the regional governments through capital deployment in infrastructure projects. In addition, the GCC has
a relatively young and growing population. However, in the short-term, the Directors, as advised by the
Investment Manager, believe that a decline in asset prices and the unavailability of credit has created liquidity
concerns for a number of asset owners.
The Company will seek to capitalise on this opportunity to acquire quality assets at a price which it believes
is below their intrinsic value from vendors who are either seeking short-term liquidity or are in the process
of re-positioning their portfolios by divesting their non-core holdings. The Company will seek substantial
medium-term capital appreciation by investing in such assets with a view to exit within three to five years.
The Company believes that, by this time, an economic recovery will allow for the realisation of such assets
closer to their fundamental values. The Company also intends to exploit opportunities in the credit markets
by extending debt facilities to liquidity-constrained investors/businesses on terms which are attractive to the
Company.
Pursuant to its investment strategy, the Company has agreed to acquire the Seed Asset from Abu Dhabi
Capital Management LLCat cost, immediately following Admission. Further information on the Seed Asset
is provided on page7below, and is also contained in Part I of this document.
The investment strategy
The Directors have granted authority to the Investment Manager, pursuant to the Investment Management
Agreement, to manage on a discretionary basis the net proceeds of the Placing on behalf of the Company.
The Investment Manager will aim to build a portfolio of investments which it believes can be acquired at an
attractive discount to their intrinsic value hence offering an opportunity to generate attractive returns.
The Investment Manager currently intends to create a portfolio with approximately 80 per cent. of its
investment in the GCC and the balance in global opportunistic investments. Investments are expected to have
an average holding period of three to five years. The quantum of the Placing has been designed to minimise
uninvested cash and hence cash drag, and represents an amount of capital that the Investment Manager
considers can be deployed in a reasonable timeframe following Admission.
Upon or near completion of investment of the net proceeds of the Placing, the Company intends to undertake
additional equity issueswith a view to creating a portfolio of investments representing up to $200 million of
invested capital within three to four years of Admission, although there can be no guarantee that such issues
will be made within that period or at all. It is intended that the net proceeds of the Placing and subsequent
capital raises will be used to build a portfolio of approximately 20 investments.
6
The Investment Manager’s investment team is based in Abu Dhabi and has experience making investments
in the GCC region. The Investment Manager intends to use its network and knowledge of the region to
identify and exploit suitable investment opportunities.
The Company does not intend to focus its investments in a particular industry sector.
Target Return
The Company aims to generate a target gross IRR of 20 per cent. (before costs and payment of the
Performance Fees). There is no guarantee that any target return can be achieved. Investors should not place
any reliance on such target return in deciding whether to invest in the Company.
Seed Asset
RAK is an energy investment holding company with a 42.8 per cent. stake in DNO, which explores for oil
and natural gas in Yemen, Kurdistan, the Sultanate of Oman, the United Arab Emirates and Tunisia. DNOis
listed on the Oslo Stock Exchange. ADCM believes that an investment in RAK presents an attractive
investment opportunity for the Company. On 12 January 2012, Abu Dhabi Capital Management LLC, an
associate of ADCM, therefore acquired 13 million shares in RAK (representing 0.43 per cent. of RAK’s
issued share capital) for a consideration of $1,818,182(the “Seed Asset”), with the intention of transferring
it to the Company immediately following Admission. Although the Seed Asset is smaller than the anticipated
typical investment size, the Investment Manager believes it has significant upside potential for the Company.
As at 29 February 2012, being the last practicable date prior to the publication of this document, the value
of the Seed Asset based on the bid price for DNO’s shares was approximately $3.5million. The Company
has agreed, conditional upon Admission taking place, to acquire the Seed Asset from Abu Dhabi Capital
Management LLC at fullcostbeing $1,818,182from the proceeds of the Placing.
Directors
The Board of Directors is chaired by Chris Ward and includes Richard Prosser, Andrew Whelan and Jassim
Alseddiqi.
The Investment Manager
ADCM is an unregulated, Cayman Islands registered, alternative investment management firm with an
investment team based in Abu Dhabi, serving institutions and high net worth individuals. ADCM was
established in January 2011 and targets opportunistic investments in various sectors and geographies. Since
its establishment, ADCM has raised in excess of $70 million and has invested more than $48 million in
several investments. The funds have been raised predominantly from institutional investors and high net
worth individuals based in the UAE. ADCM has also raised funds from institutions in the United Kingdom,
Switzerland and Qatar. During 2011, ADCM executed several transactions, as set out in Table 1 below:
Table 1: Summary of ADCM Transactions
Size Unrealised Unrealised
Investment Type ($,M) Region IRR* Multiple* % Realised
ADCM SPEF Secondary 43.01 MENASA2, >100% 2.1x4 19
PE Fund US, Europe
Project Bingo Private Equity 2.0 MENASA2 >100% 2.2x4 29
Project Hyde Park Debt 17.0 UK 33% 1.1x5 10
Project Liquid Private Equity 7.4 MENASA3 >100% 2.1x4 41
Project OilCo Private Equity 3.0 MENA3 0% 1x4 Unrealised
* The IRR and multiple are calculated by reference to invested capital and net asset value as at31December 2011 adjusted for
distributions received as at the date of this document and as such do not represent fully realised returns.
1 Represents aggregate committed capital. Paid in capital as atthe date of this documentwas$19.1million.
2 Middle East, North Africa and South Asia
7
3 Middle East and North Africa
4 The net asset values in respect of these investments are based on valuations provided by the general partner of the underlying
private equity funds and have not been independently verified by the Company or the Investment Manager.
5 The net asset value in respect of this investment is based on the invested capital and associated annual coupon and assumes that
debt is recoverable in full.
In June 2011, ADCM held the final closing of its Secondary Private Equity Fund (“SPEF”). SPEF seeks to
realise capital appreciation via the purchase of stakes in private equity funds in the secondary market. To
date, SPEF has raised $43 million and has invested approximately $19 million in six opportunities. As at the
date of this document, the net asset value of SPEF was 2.1 times the paid in capital.
In addition to SPEF, ADCM has raised approximately $17 million for a bridging loan facility provided to
Northacre Plc (“Northacre”), a London-based residential real estate developer with a track record of
development projects in significant areas of Westminster, Kensington and Chelsea. The loan to Northacre
was provided to meet working capital requirements and to pay off outstanding debt.The bridge loan facility
raised by ADCM was through the purchase of a Eurobond issued by Northacre which has a term of 18 to 24
months and an annual coupon of 33 per cent. The Eurobond is secured against future dividends from
Northacre’s projects, and by a corporate guarantee given by the holding company, Northacre Plc. Northacre
has recently received a dividend distribution of $1.8 million from its Lancaster Gate project, which shall be
used towards the servicing of this debt facility.
ADCM has also raised approximately $12 million for other direct and secondary investments for other
projects.
Investment opportunities are sourced through ADCM’s existing network of contacts, and through leads from
several brokers and/or third-party referrals.
Potential investors’ attention is drawn to the risks relating to the Investment Manager set out on pages30to
32of this document.
The Investment Manager’s Fees
There will be no management fees charged by the Investment Manager in consideration for its management
of the Company.
The Company shall, in consideration for the provision of services pursuant to the Investment Management
Agreement, issue to the Investment Manager, or to such affiliate of the Investment Manager (including
directors or employees of the Investment Manager or such affiliate) as the Investment Manager may direct,
a number of Ordinary Shares (“Founder Shares”) equal to 6.67 per cent. of the Ordinary Shares issued to
Shareholders(excluding the Founder Sharessoissuedandany Ordinary Shares issued to any placing agent
or other adviser in consideration for services provided to the Company in connection with the issue of
Ordinary Shares) pursuant to: (a) the Placing; and (b) any subsequent issue of Ordinary Shares (excluding
any sales of Ordinary Shares out of treasuryand any Ordinary Shares issued pursuant to the general authority
to issue up to one per cent. of the issued share capital of the Company on a non pre-emptive basis in any 12-
month rolling period), rounded down to the nearest whole number of Ordinary Shares. Founder Shares shall
be issued to the Investment Manager, or to such affiliate of the Investment Manager (including directors or
employees of the Investment Manager or such affiliate) as the Investment Manager may direct, at the same
time as the Ordinary Shares are issued to other Shareholders.
In addition, the Investment Manager will be entitled to be paid a performance fee by the Company
(“Performance Fee”). The Performance Fee will only become payable once the Company has made
aggregate distributions in cash to Shareholders (which shall, without limitation, include the aggregate
amount of all dividends paid to Shareholders, the aggregate price of all Ordinary Shares repurchased and
cancelled or redeemed by the Company and any payments made in a winding-up of the Company) (“Cash
Distributions”) equal to:
(a) the aggregate gross proceeds of issuing Ordinary Shares, whether pursuant to the Placing or otherwise
(the “Contributed Capital”); plus
8
(b) such amount as is equal to a simple 7 per cent. per annum return on the Contributed Capital from the
date of issue of the Ordinary Shares to which such Contributed Capital relates to the date of the
repayment by the relevant distribution (the “Preferred Return”),
following which, until such time as the Company issues further Ordinary Shares, there will, with respect to
any furtherCash Distributions to Shareholders, be a 100 per cent. catch up to the Investment Manager until
the Investment Manager has received as a performance fee 20 per cent. of all amounts so distributed in excess
of Contributed Capital with, thereafter, all amounts distributed by the Company being split 20/80 per cent.
between the Investment Manager’s performance fee and the Cash Distributions to the Shareholders
respectively.
Where the Company issues further Ordinary Shares following payment of a Performance Fee(such issue or
issues before the next payment of a Performance Fee forming “Subsequent Capital Raising”), the Investment
Manager will only become entitled to further Performance Fee payments once the Company has made
aggregateCash Distributionsto Shareholdersfollowing the Subsequent Capital Raise,equal to:
(a) the aggregate gross proceeds of issuing Ordinary Shares pursuant to the Subsequent Capital Raise (the
“Subsequent Contributed Capital”); plus
(b) such amount as is equal to a simple 7 per cent. per annum, return on the Subsequent Contributed
Capital, from the date of issue of the Ordinary Shares to which such Subsequent Contributed Capital
relates, to the date of repayment by the relevant distribution,
following which, until such time as the Company issues further Ordinary Shares, there will, with respect to
any furtherCash Distributions to Shareholders, be a 100 per cent. catch up to the Investment Manager until
the Investment Manager has received as a performance fee 20 per cent. of all amounts so distributed
following the Subsequent Capital Raise in excess of Subsequent Contributed Capital with, thereafter, all
amounts distributed by the Company being split 20/80 per cent. between the Investment Manager’s
performance fee and theCashDistributions to the Shareholders respectively.
Distribution policy
Income
The Company aims to provide Shareholders with an attractive total return, which is expected to comprise
primarily capital growth, although there is also the potential for distribution of income to be made throughout
the Company’s life. The nature of the Company’s investment objective and strategy is such that the timing
and amount of investment income cannot be predicted. Accordingly, the Company does not currently intend
to pay regular dividends but may choose to do so from time to time as is determined to be appropriate by the
Board.
Capital
The Board has discretion as to whether the capital proceeds of realising investments comprised in the
Company’s portfolio will be reinvested or distributed to Shareholders and will, in conjunction with the
Investment Manager, consider the most appropriate action whenever portfolio investments are realised in
light of available investment opportunities at the relevant time. When returning and/or distributing capital to
Shareholders, the Directors will do so in such manner they consider efficient.
The payment of dividends, if any, in the future will depend on the availability of distributable reserves, cash
resources and the working capital requirements of the Company. Any dividends or other distributions made
to Shareholders will be paid in US Dollars.
Conflicts of Interest and Allocation of Investment Opportunities
Conflicts of Interest
Where an investment decision is or may reasonably be seen to be the subject of a potential conflict of interest
through which the directors of the Investment Manager or the Investment Manager itself may accrue some
9
financial benefit, the prior approval of the board of Directors of the Company or a committee of the board
of Directors (excluding Jassim Alseddiqi, who is a director of both the Company and the Investment
Manager) shall be obtained.
Allocation of Investment Opportunities
The Investment Manager acts as investment manager of SPEF and may in the future manage other funds or
accounts (together, the “Other Accounts”), whose investment objectives and/or philosophies are the same
as, overlap with, or are complementary to, the investment strategies and/or philosophies pursued by the
Company; and both the Company, SPEF and such Other Accounts may be eligible to participate in the same
investment opportunities. Additionally, investment opportunities may become closed or limited with respect
to new investments due to size constraints or other considerations. Moreover, the Company and/or such
Other Accounts may not be eligible or appropriate investors in all potential investment opportunities. As a
result of these and other factors, the Company may be precluded from making a specific investment.
It is the policy of the directors of the Investment Manager to allocate investment opportunities fairly and
equitably among the Company, SPEF and any Other Accounts to the extent possible over a period of time.
The directors of the Investment Manager, however, will have no obligation to purchase, sell or exchange any
investment for the Company which the directors of the Investment Manager may purchase, sell or exchange
for one or more Other Accounts if the Investment Manager believes in good faith at the same time the
investment decision is made that such transaction or investment would be unsuitable, impractical or
undesirable for the Company.
In relation to potential conflicts in the allocation of investment opportunities between the Company, SPEF
and Other Accounts, as a general policy, investment opportunities will be allocated pro-rata based on the
relative available funds of such accounts. However, the directors of the Investment Manager may also take
into consideration other factors such as the investment programme of the Company, SPEF and the Other
Accounts, tax consequences, legal or regulatory restrictions, including those that may arise in various
different international jurisdictions, the relative historical participation in the investment, the difficulty of
liquidating an investment for more than one account, new accounts with a substantial amount of investable
cash and such other factors considered relevant by the directors of the Investment Manager. Such
considerations may result in allocations among the Company and Other Accounts on other than a pari passu
basis (which may result in different performances among them). The Company will not acquire securities
from or sell securities to Other Accounts, unless the directors of the Investment Manager believe that such a
purchase is in the interests of the Shareholders of the Company, and such transaction is approved by a
majority of the Company’s independent Directors.
Commitments to invest
The Company has received commitments to invest $18.466million in aggregate pursuant to the Placing.
Potential investors’ attention is specifically drawn to Part III of this document headed “RISK
FACTORS”.
10
Description:The Company has appointed Abu Dhabi Capital Management Ltd. to act as its investment manager. (“ADCM” or the “Investment Manager”). ADCM is an unregulated Cayman Islands registered alternative investment management firm headed by Jassim Alseddiqi. The Investment Manager will manage
