ISIN: (SEE LIST BELOW)
We would like to thank you for the trust you have placed in us. We are honored to count you among the shareholders of “Carmignac Portfolio” (the “Fund”).
We hereby contact you in your capacity as shareholders of the sub-funds “Euro-Entrepreneurs” or “Grande Europe”. We would like to hereby inform you that the Board of Directors of the Fund has resolved to merge the assets and liabilities of these two sub-funds.
In this merger, as further explained in this notice:
- If you are a shareholder of “Euro-Entrepreneurs”, you will obtain shares in “Grande Europe”
- If you are a shareholder of “Grande Europe”, you will not be impacted.
This notice is issued and sent to you to provide appropriate and accurate information on the merger to enable you to make an informed judgement of the impact of the merger on your investment.
Without prejudice to notice requirements and free redemption/conversion rights, the merger will be processed automatically, and it is not subject to your prior approval or consent.
Should you disagree with the proposed merger, you have a right to request the redemption of the shares you own free of charge as further detailed in this notice.
The merger will take place on 16 November 2020.
2. SCOPE OF THE MERGER
The Fund, which includes both merging Sub-Funds is the SICAV, a Luxembourg-based undertaking for collective investment in transferable securities authorised by the CSSF under Part I of the law of 17 December 2010, on undertakings for collective investment, as amended (the “2010 Law”).
The Board of Directors has resolved to merge the assets and liabilities of the Sub-Fund “Euro-Entrepreneurs” (the “Merging Sub-Fund”) with the assets and liabilities of the Sub-Fund “Grande Europe” (the “Receiving Sub-Fund”; and together with the Merging Sub-Fund referred to as the “Merging Sub-Funds”) on 16 November 2020.
For the purpose of this merger, the terms of merger have been issued in accordance with the applicable provisions under the UCITS Directive and the Luxembourg Law and approved by the Luxembourg Financial Supervisory Authority (the “CSSF”).
3. TYPE OF THE MERGER
The merger will be the operation whereby (i) the Merging Sub-Fund will transfer its assets and liabilities to the Receiving Sub-Fund and (ii) the Merging Sub-Fund will to be dissolved, without going into liquidation, on the Effective Date
The merger shall be performed in accordance with the definition of "merger" in article 1 (20) (a) of the 2010 Law and as further described in Article 76 (1) of the 2010 Law as follows:
I. all the assets and liabilities of the Merging Sub-Fund shall be transferred to the Receiving Sub-Fund, as further described in these terms of merger, or, as the case may be, to the depositary of the SICAV, i.e. BNP Paribas Securities Services, Luxembourg branch (the “Depositary”);
II. the shareholders of the relevant class of shares of the Merging Sub-Fund become shareholders of the relevant class of shares of the Receiving Sub-Fund as described in these draft terms of merger; and
III. the Merging Sub-Fund will cease to exist on the Effective Date.
4. BACKGROUND AND RATIONALE OF THE MERGER
The reason for the merger is that the level of assets of the Merging Sub-Fund are at a level where the Merging Sub-Fund may no longer be managed in a financially sound manner. The Board of Directors believes that that the Merging Sub-Fund has limited prospects for growth which could make continued operations inefficient.
The assets of the Merging Sub-Fund have declined to 22.1 million EUR (of AuM as of 30/06/2020).
The Receiving Sub-Fund follows an equity strategy that has proven successful in terms of performance and asset gathering. The Receiving Sub-Fund has a long track record as it was launched on 30 June 1999. Since launch, the Sub-Fund has delivered a net cumulative performance of +141.58%, i.e. +4.29% annualised performance, combined with a 14.1% annualised volatility (A EUR Acc share class as of 30/06/2020). Past performance is not necessarily indicative of future performance and provides no guarantee of future results.
The Receiving Sub-Fund has reached the critical size in terms of assets of 447 million EUR (of AuM as of 30/06/2020).
By merging the Merging Sub-Fund into the Receiving Sub-Fund, the combined estimated values, together with the potential for new investments in the Receiving Sub-Fund should provide the benefit of greater fund size and therefore, economies of scale, with the expectation that this should enable relatively lower costs in the future compared to the total net asset value.
By merging the Merging Sub-Fund into the Receiving Sub-Fund, the shareholders of the Merging Sub-Fund will also benefit from an investment alternative that is very close to their current investment. The Merging Sub-Funds are both suitable for investors seeking to achieve exposure to European equity markets and they are both managed by the same investment team.
For these reasons, the Board of Directors concludes the interests of shareholders will be better served by merging the Merging Sub-Fund with the Receiving Sub-Fund.
5. EXPECTED IMPACT FOR THE INVESTORS
On the Effective Date, shareholders in the Merging Sub-Fund will receive new shares in accordance with the terms of merger and become shareholders in the relevant class of shares of the Receiving Sub-Fund.
The merger will be binding on all the shareholders of the Merging Sub-Fund who have not exercised their right to request the redemption of their shares, free of charge, within the timeframe set out below.
The shareholders of the Merging Sub-Fund will receive the corresponding shares of the Receiving Sub-Fund as follows:
Carmignac Portfolio Euro-Entrepreneurs
|A EUR Acc||LU1299304540|
|A USD Acc Hdg||LU1792392646*|
|E EUR Acc||LU1299304896*|
|E USD Acc Hdg||LU1299304201*|
|F EUR Acc||LU0992625326|
|F USD Acc Hdg||LU0992625755*|
|W EUR Acc||LU1623762686*|
|W GBP Acc||LU1299303906*|
|W GBP Acc Hdg||LU0992625672*|
Carmignac Portfolio Grande Europe
|A EUR Acc||LU0099161993|
|A USD Acc Hdg||LU0807689079|
|E EUR Acc*||LU0294249692|
|E USD Acc Hdg*||LU0992628775|
|F EUR Acc||LU0992628858|
|F USD Acc Hdg*||LU0992629070|
|W EUR Acc*||LU1623761951|
|W GBP Acc *||LU2206982626|
There is no British Pound hedged share class (W GBP Acc Hdg) in the Receiving Sub-Fund. Consequently, the shareholders of a British Pound hedged share class (W GBP Acc Hdg) in the Merging Sub-Fund will become shareholders in the non-hedged share class (W GBP Acc).
For the shareholders in the Receiving Sub-Fund, the merger will not have any foreseeable impact.
On implementation of the merger, shareholders in the Receiving Sub-Fund will continue to hold the equivalent shares in the Receiving Sub-Fund as before and there will be no change in the rights attaching to such shares.
The implementation of the merger will not affect the investment strategy, risk profile or fee structure of the Receiving Sub-fund. The implementation of the merger will result neither in changes to the articles of association or prospectus of Carmignac Portfolio, nor in changes to the key investor information documents (the “KIIDs”) of the Receiving Sub-Fund.
On implementation of the merger, the assets and liabilities of the Receiving Sub-Fund will increase as a result of the transfer to it of the Merging Sub-Fund’s assets and liabilities.
6. CHARACTERISTICS OF THE MERGING SUB-FUNDS
I. The Merging Sub-Funds are both European equity funds and suitable for investors seeking to achieve exposure to European equity markets.
II. The Merging Sub-Funds are managed by portfolio managers who are part of the same investment team at London branch of Carmignac Gestion Luxembourg SA (the “Management Company”).
III. The investment objective of the Merging Sub-Funds is to outperform their reference indices.
IV. The recommended investment horizon for the Merging Sub-Funds is five years.
V. The fees for the Merging Sub-Funds are identical.
VI. The base currency of the Merging Sub-Funds is EUR.
VII. The Merging Sub-Funds have the same synthetic risk and reward indicator (“SRRI”) of 6.
VIII. The Merging Sub-Funds apply the same method for global exposure (relative VaR).
IX. The level of expected leverage is the same for the Merging Sub-Funds.
X. In practice, the use of derivatives and securities with embedded derivatives is similar for the Merging Sub-Funds.
XI. The procedures that apply to matters such as dealing, subscription, redemption, switching and transferring of shares, method of calculating the net asset value are the same in both Sub-Funds (except for cut off times; see item (b) vii below)
I. The Merging Sub-Fund invests primarily in the small and mid-cap European equity markets, while the Receiving Sub-Fund invests primarily in the large and mega cap European equity markets.
II. In addition to its financial investment objective, the Receiving Sub-Fund applies Extra-Financial Analysis and seeks to invest sustainably for long-term growth by implementing a socially responsible investment approach.
III. The reference indicator for the Merging Sub-Fund is Stoxx Europe Small 200 and reference indicator for the the Receiving Sub-Fund i Stoxx Europe.
IV. The expected level of liquidity is higher for the Receiving Sub-Fund due to investment in European stocks with larger market capitalisation.
V. The Receiving Sub-Fund may invest in credit derivatives in a limited manner. The Merging Sub-Fund may not invest in these assets.
VI. There is no British Pound hedged share class (W GBP Acc Hdg) in the Receiving Sub-Fund.
VII. The deadlines for any orders to subscribe, redeem or convert the shares of the Merging Sub-Funds on a given Valuation day (the “Cut-off times”) are different as follows:
- before 3:00 pm CET for the Merging Sub-Fund.
- before 6:00 pm CET for the Receiving Sub-Fund.
The prospectuses of the Merging Sub-Funds are further illustrated in the comparative table enclosed hereto as Appendix 1.
7. RIGHTS OF THE INVESTORS
The merger is not subject to the prior approval or consent of the shareholders of the Merging Sub-Funds.
The shareholders of the Merging Sub-Funds have the right to request, without any charge (except for other than any local transaction fees that might be charged by local intermediaries on their own behalf and which are independent from the SICAV and the Management Company), the redemption or a switch of their shares. This right is limited to a period of thirty (30) days.
The shareholders of the Merging Sub-Fund who have not redeemed or converted their shares will, as of the Effective Date will become shareholders of the Receiving Sub-Fund and their shares will be automatically converted into shares of the Receiving Sub-Fund on the basis of the merger ratio calculated in accordance with these terms of merger.
The shareholders of the Merging Sub-Funds have the right to obtain access to and review the documentation related to the merger. For this effect, a copy of the following documents will be made available on request and free of charge to the shareholders of the Merging Sub-Funds at the Management Company’s registered office during normal office hours:
I. Terms of merger
II. The prospectus of the SICAV
III. The KIIDs of the Merging Sub-Funds
IV. The recent financial reports of the SICAV
V. Depository confirmation
VI. Audit report
8. VALUATION AND MERGER RATIO
For the purpose of calculating the merger ratio, the rules laid down in the Articles of association and the prospectus of the SICAV for the calculation of the net asset value will apply to determine the value of asset and liabilities of the Merging Sub-Funds.
The number of new shares in the Receiving Sub-Fund to be issued to each shareholder of the Merging Sub-Fund will be calculated on the Effective Date using a merger ratio calculated on the basis of the net asset value of the shares of the Merging Sub-Fund and of the shares in the Receiving Sub-Fund. The relevant shares in the Merging Sub-Fund will then be cancelled on the Effective Date without going into liquidation.
The merger ratio will be calculated as follows:
I. The net asset value per share of the relevant class of shares of the Merging Sub-Fund is divided by the net asset value per share of the relevant class of shares in the Receiving Sub-Fund.
II. The applicable net asset value per share of the Merging Sub-Fund and the net asset value per share of the Receiving Sub-Fund will be those having both been determined on the business day prior to the Effective Date.
The issue of new shares in the Receiving Sub-Fund in exchange for shares of the Merging Sub-Fund will not be subject to any charge.
In accordance with the above provisions, the net asset value per share in the Merging Sub-Funds will not necessarily be the same. Therefore, shareholders in the Merging Sub-Fund may receive a different number of new shares in the Receiving Sub-Fund than the number of shares they had previously held in the Merging Sub-Fund. The overall value of their holding will remain the same.
No cash payment shall be made to shareholders in exchange for the shares.
9. EFFECTIVE DATE
The merger takes place on 16 November 2020.
10. PROCEDURAL ASPECTS
As above-mentioned, the merger of the Merging Sub-Funds shall take place on the Effective Date. On this date, the assets and liabilities of the Merging Sub-Fund will be transferred to the Receiving Sub-Fund, shares of the Receiving Fund will be issued to the shareholders of the Merging Sub-Fund and the shares of the Receiving Sub-Fund will be cancelled.
Any accrued income in the Merging Fund will be included in the final net asset value of the Merging Fund and accounted for in the net asset value of the relevant share classes of the Receiving Fund after the Effective Date.
The accumulated performance fee of the Merging Fund, if any, will be crystallised and transferred as a liability to a payable account of the Receiving Fund. The performance fee of the Receiving Fund will be calculated in accordance with the terms of the Prospectus.
Any request for the subscription of the Merging Sub-Fund and any request free of charge for the redemption or switch of shares of the Merging Sub-Funds will be accepted prior to the Effective Date as follows:
I. Shares of the Merging Sub-Fund can be subscribed until 3.00 p.m. Luxembourg time on 23 October 2020. After 3.00 p.m. Luxembourg time on 23 October 2020 the possibility to subscribe for shares in the Merging Sub-Fund will be suspended.
II. Shares of the Merging Sub-Funds can be redeemed or converted, free of charges (with the exception of any local transaction fees that might be charged by local intermediaries on their own behalf and which are independent from the SICAV and the Management Company), from 9 October 2020 until 3.00 p.m. Luxembourg time on 9 November 2020.
III. After 3.00 p.m. Luxembourg time on 9 November 2020 the possibility to redeem or convert shares in the Merging Sub-Fund will be suspended.
IV. There is no suspension of the subscriptions in the Receiving Sub-Fund.
11. REBALANCING OF THE PORTFOLIOS
During the last five (5) business days preceding the Effective date, the portfolio of the Merging Sub-Fund may be invested more than normal in cash, so that it is expected that the Merging Sub-Fund will transfer to the Receiving Sub-Fund cash positions only. As a consequence, the Merging Sub-Fund will not be compliant with its investment objective and investment restrictions (including but not limited to rules for portfolio diversification, risk diversification and cash) stipulated in the Prospectus during the last five (5) business days preceding the Effective Date.
The merger will not have any material impact on the portfolio of the Receiving Sub-Fund, and it is not intended to undertake any rebalancing on the portfolio of the Receiving Sub-Fund before or after the merger. The merger will result in an inflow of cash into the Receiving Sub-Fund. The cash will subsequently be invested in accordance with the Receiving Sub-Fund’s investment policy.
12. COSTS OF THE MERGER
The Management Company will bear the legal, advisory and administrative costs and expenses associated with the preparation and completion of the merger.
13. AUDIT REPORT
In compliance with article 71 (1) of the 2010 Law, the Merging Sub-Fund shall entrust an auditor to validate the criteria adopted for valuation of the assets and, as the case may be, the liabilities and the calculation method of the merger ratio as well as the actual merger ratio (as set out in accordance with these terms of merger) on the date for calculating the merger ratio, as referred to in article 75 (1) of the 2010 Law.
A copy of the report(s) of the auditors will be made available on request and free of charge to the shareholders of the Merging Sub-Funds, as well as to the CSSF.
14. DEPOSITORY CONFIRMATION
The Depositary shall issue a confirmation, in accordance with the requirements of article 70 of the 2010 Law confirming that it has verified the type of merger and the UCITS involved, the Effective Date and that the rules applicable, respectively, to the transfer of the assets and liabilities and exchange of shares as set out herein are in accordance with the requirements of the 2010 Law.
The shareholders of the Merging Sub-Fund are invited to consult the KIIDs of the Receiving Sub-Fund which are available at the registered office of the Management Company and which are also available on www.carmignac.com. The attention of the shareholder of the Merging Sub-Fund is drawn to the importance of reading carefully the KIIDs of the Receiving Sub-Fund.
16. ADDITIONAL INFORMATION
Shareholders having any question relating to the above changes will be advised not to hesitate to contact their financial advisor or the Management Company.
The shareholders of the Merging Sub-Fund are invited to consult their own tax advisors in respect to the tax impact of the merger.
If you have any questions about the content of this letter, please contact your Financial Advisor. If you are a distribution partner of Carmignac and have any related inquiries from your clients, please contact your local Professional Client representative.
LU1299304540, LU1792392646, LU1299304896, LU1299304201, LU0992625326, LU0992625755, LU1623762686, LU1299303906, LU0992625672.
LU0099161993, LU0807688931, LU0807689079, LU0807689152, LU0294249692, LU0992628775, LU0992628858, LU2139905785, LU0992628932, LU0992629070, LU2154448133, LU1623761951.