26 September 2018

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO, THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA OR JAPAN OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT. 

This announcement is an advertisement for the purposes of the Prospectus Rules of the UK Financial Conduct Authority ("FCA") and not a prospectus. This announcement does not constitute or form part of, and should not be construed as, an offer for sale or subscription of, or solicitation of any offer to subscribe for or to acquire, any ordinary shares in the Company in any jurisdiction, including in or into the United States, Canada, Australia, New Zealand, the Republic of South Africa or Japan. Investors should not subscribe for or purchase any ordinary shares referred to in this announcement except on the basis of information in the prospectus (the "Prospectus") published by M&G Credit Income Investment Trust plc (the "Company") in connection with the proposed admission of its ordinary shares to the premium listing segment of the Official List of the FCA and to trading on the main market for listed securities of London Stock Exchange plc (the "London Stock Exchange"). A copy of the Prospectus will shortly be available for inspection from the Company's registered office and on its website (www.mandg.co.uk/CreditIncomeInvestmentTrust).

 

LEI: 549300E9W63X1E5A3N24

 

M&G Credit Income Investment Trust plc

Publication of a prospectus and intention to IPO

 

M&G Credit Income Investment Trust plc (the "Company") announces the publication of a prospectus (the "Prospectus") in connection with an initial placing, offer for subscription and intermediaries offer (the "Initial Issue") of ordinary shares of one penny each in the capital of the Company (the "Ordinary Shares"). The Company is targeting an issue of in excess of 250 million Ordinary Shares at 100 pence per Ordinary Share (the "Issue Price") to raise gross proceeds in excess of £250 million.  The minimum size of the Initial Issue in £100 million (before expenses).

The Company has appointed M&G Alternatives Investment Management Limited (the "Investment Manager" or "M&G") to manage the Company's portfolio (the "Portfolio") with effect from admission. The Investment Manager is one of the longest established asset managers in Europe and has particular expertise in fixed income, with c.£188 billion under management as at 30 June 2018.

The Company aims to provide regular and attractive income with low asset value volatility by investing in a diversified Portfolio of public and private credit opportunities.  Over the longer term, it is expected that the Company will be mainly invested in private debt instruments and that the Portfolio will typically consist of 100+ holdings, with a minimum of 50 holdings. The Company will target an annualised dividend yield of LIBOR plus 2.5% (on the Issue Price) in respect of the Company's first financial period to 31 December 2019 while the net proceeds of the Initial Issue are being deployed. The Company will target an annualised dividend yield of LIBOR plus 4% (on the opening Net Asset Value per Ordinary Share) in respect of each financial year thereafter.*

 

The Prudential Assurance Company Limited intends to subscribe for the lower of (i) 80,000,000 Ordinary Shares and (ii) 25% of the Ordinary Shares to be issued pursuant to the Initial Issue. The Directors believe that this proposed investment strongly aligns the interests of the M&G with shareholders.

 

William Nicoll, Co-Head of Alternative Credit, M&G Investments, says: "The great financial crisis ten years ago has significantly changed Europe's financing landscape. Due to regulatory and other pressures, banks are no longer as dominant in some financing markets and new sources of private capital are now available to British businesses. By lending to businesses, projects and institutions, the Company has been designed with the aim of generating a regular and attractive level of income to investors through a diverse range of credit opportunities, most of which are sourced via our extensive in-house private credit teams."

 

David Simpson, Chair of the Company, says: "M&G is one of the most experienced and established managers in the private credit arena with a history of investing in these markets for over 20 years. We are excited to be able to offer exposure to this increasingly interesting and influential asset class and to provide non-institutional investors with access to M&G's expertise in private credit markets for the first time. The private credit markets can provide investors with assets that have strong covenants, lower volatility compared to corporate bonds and, in some cases, there is a premium when investing in assets with reduced liquidity.  Many of these private credit assets are suited to the closed-ended structure."

 

Applications will be made to the UK Listing Authority and to the London Stock Exchange for all of the Ordinary Shares issued pursuant to the Initial Issue to be admitted to the premium segment of the Official List and to trading on the premium segment of the London Stock Exchange's main market ("Admission"). It is expected that Admission will become effective, and that dealings in the Ordinary Shares issued pursuant to the Initial Issue will commence, at 8.00 a.m. on 14 November 2018.

 

The Prospectus also establishes a placing programme for the issue of up to 400 million Shares (which may be Ordinary Shares or C Shares) (the "Placing Programme").  The Placing Programme is flexible and may have a number of closing dates in order to provide the Company with the ability to issue Shares over a period of time. The Placing Programme is intended to satisfy market demand for Shares and to raise further money after the Initial Issue to increase the size of the Company and invest in accordance with the Company's investment policy.  The Placing Programme will open on 15 November and will close on 23 September 2019 (or any earlier date on which it is fully subscribed, or otherwise at the discretion of the Directors).

 

The value of investments will fluctuate, which will cause share prices to fall as well as rise and you may not get back the original amount you invested. There is no guarantee that the Company's objectives will be achieved. The Company may be exposed to the possibility that a debtor will not meet their repayment obligations. Changes in interest rates may adversely affect the market value of some of the Company's investments. Loans may be prepaid by issuers at short notice, as a result it may be difficult for the Company to locate and reinvest capital at an attractive price or at all, which may affect the Company adversely. As Shares trade via the secondary market, trading volumes may reduce, or Shares may trade at a discount to their respective net asset value, due to a variety of factors, such as market conditions, liquidity concerns or fund performance. Shareholders may also be unable to realise their investment at quoted market prices or at all. This is not an exhaustive list, and prospective investors should ensure they understand the risk profile of the Shares.

 

The Prospectus is available to view at www.mandg.co.uk/CreditIncomeInvestmentTrust and the National Storage Mechanism of the FCA at www.morningstar.co.uk/uk/nsm. Copies of the Prospectus will also be available from the Company's registered office at Beaufort House, 51 New North Road, Exeter, EX4 4EP.

 

Winterflood Securities Limited is acting as sole sponsor, financial adviser, bookrunner and Intermediaries Offer Adviser.

 

Expected Timetable

 

	2018
Publication of Prospectus and Initial Placing, Offer for Subscription and Intermediaries Offer open	26 September
Latest time and date for applications under the Offer for Subscription and from the Intermediaries in respect of the Intermediaries Offer	1.00 p.m. on 7 November
Latest time and date for receipt of commitments under the Initial Placing	2.00 p.m. on 8 November
Announcement of the results of the Initial Issue	8.00 a.m. on 9 November
Initial Admission and dealings in the Ordinary Shares issued pursuant to the Initial Issue commence	8.00 a.m. on 14 November
Crediting of CREST stock accounts in respect of the Ordinary Shares issued pursuant to the Initial Issue	14 November
Where applicable, definitive share certificates despatched in respect of the Ordinary Shares	week commencing 19 November 2018 (or as soon as possible thereafter)

 

Terms used in this announcement shall, unless the context otherwise requires, bear the meanings given to them in the Prospectus.

 

For further information please contact:

 

Winterflood Securities Limited	020 3100 0000
Darren Willis Andrew Marshall Neil Morgan Chris Mills

 

* The target dividend is a target only and not a profit forecast and there can be no assurance that such target will be met.

 

Further information on the Company

Investment Policy

The Company seeks to achieve its investment objective by investing in a diversified portfolio of public and private debt and debt-like instruments (''Debt Instruments''). Over the longer term, it is expected that the Company will be mainly invested in private Debt Instruments, which are those instruments not quoted on a stock exchange.

The Company operates an unconstrained investment approach and investments may include, but are not limited to:

• Asset-backed securities, backed by a pool of loans secured on, amongst other things, residential and commercial mortgages, credit card receivables, auto loans, student loans, commercial loans and corporate loans;
• Commercial mortgages;
• Direct lending to small and mid-sized companies, including lease finance and receivables financing;
• Distressed debt opportunities to companies going through a balance sheet restructuring;
• Infrastructure-related debt assets;
• Leveraged loans to private equity owned companies;
• Public Debt Instruments issued by a corporate or sovereign entity which may be liquid or illiquid;
• Private placement debt securities issued by both public and private organisations; and
• Structured credit, including bank regulatory capital trades.

The Company will invest primarily in Sterling denominated Debt Instruments. Where the Company invests in assets not denominated in Sterling it is generally expected that these assets will be hedged back to Sterling.

Investment restrictions

There are no restrictions, either maximum or minimum, on the Company's exposure to sectors, asset classes or geography. The Company, however, achieves diversification and a spread of risk by adhering to the limits and restrictions set out below.

Once fully invested, the Company's portfolio will comprise a minimum of 50 investments.

The Company may invest up to 30% of Gross Assets in below investment grade Debt Instruments, which are those instruments rated below BBB- by S&P or Fitch or Baa3 by Moody's or, in the case of unrated Debt Instruments, which have an internal M&G rating of below BBB-.

The following restrictions will also apply at the individual Debt Instrument level which, for the avoidance of doubt, does not apply to investments to which the Company is exposed through collective investment vehicles:

Rating	Secured Debt Instruments (% of Gross Assets)1	Unsecured Debt Instruments (% of Gross Assets)
AAA	5%	5%2
AA/A	4%	3%
BBB	3%	2%
Below investment grade	2%	1%
1 Secured Debt Instruments are secured by a first or secondary fixed and/or floating charge. 2This limit excludes investments in G7 Sovereign Instruments.

 

For the purposes of the above investment restrictions, the credit rating of a Debt Instrument is taken to be the rating assigned by S&P, Fitch or Moody's or, in the case of unrated Debt Instruments, an internal rating by M&G. In the case of split ratings by recognised rating agencies, the second highest rating will be used.

It is expected that the Company will typically invest directly, but it may also invest indirectly through collective investment vehicles which are expected to be managed or advised by an M&G Entity. The Company may not invest more than 20% of Gross Assets in any one collective investment vehicle and not more than 40% of Gross Assets in collective investment vehicles in aggregate. No more than 10% of Gross Assets may be invested in other investment companies which are listed on the Official List.

Unless otherwise stated, the above investment restrictions are to be applied at the time of investment.

Borrowings

The Company is expected to be managed primarily on an ungeared basis although the Company may, from time to time, be geared tactically through the use of borrowings. Borrowings would principally be used for investment purposes, but may also be used to manage the Company's working capital requirements or to fund market purchases of Shares. Gearing represented by borrowing will not exceed 30% of the Company's Net Asset Value, calculated at the time of draw down, but is typically not expected to exceed 20% of the Company's Net Asset Value.

Hedging and Derivatives

The Company will not employ derivatives for investment purposes. Derivatives may however be used for efficient portfolio management, including for currency hedging.

Cash management

The Company may hold cash on deposit and may invest in cash equivalent investments, which may include short-term investments in money market type funds (''Cash and Cash Equivalents'').

There is no restriction on the amount of Cash and Cash Equivalents that the Company may hold and there may be times when it is appropriate for the Company to have a significant Cash and Cash Equivalents position. For the avoidance of doubt, the restrictions set out above in relation to investing in collective investment vehicles do not apply to money market type funds.

Changes to the investment policy

Any material change to the Company's investment policy set out above will require the approval of Shareholders by way of an ordinary resolution at a general meeting and the approval of the UK Listing Authority.

Dividend policy and target returns

The Company intends to pay two dividends in respect of the first financial period following Initial Admission. The first interim dividend is expected to be declared in July 2019 and paid in August 2019 and the second interim dividend is expected to be declared in January 2020 and paid in February 2020. Thereafter the Company intends to pay dividends on a quarterly basis with dividends typically declared in January, April, July and October and paid in February, May, August and November in each financial year.

The Company will target an annualised dividend yield of LIBOR plus 2.5% (on the Issue Price) in respect of the Company's first financial period to 31 December 2019. The Company will target an annualised dividend yield of LIBOR plus 4% (on the opening Net Asset Value per Ordinary Share) in respect of each financial year thereafter. Where LIBOR materially changes or ceases to be provided, the Company shall determine a suitable replacement benchmark and shall notify investors accordingly. The Directors intend to apply the ''streaming'' regime to distributions of portfolio interest returns paid by the Company, such that these distributions are expected to be designated as payments of interest. If appropriate, in addition to, or instead of, interest distributions, the Company may also pay ordinary corporate dividends.

Investors should note that the target dividend is a target only and not a profit forecast and there can be no assurance that such target will be met.

Use of Proceeds

The Initial Gross Proceeds will be utilised in accordance with the Company's investment policy, to meet the costs and expenses of the Initial Issue and for working capital purposes.

It is currently expected that the Net Proceeds will be deployed in accordance with the Company's investment policy in the manner set out below.

The Company expects the Investment Manager to deploy the Net Proceeds in readily available public lower yielding assets within a period of three months after Initial Admission (subject to market conditions). Based on current market conditions, the Investment Manager then intends to transition the Company's portfolio of investments such that it mainly comprises private Debt Instruments in accordance with the Company's investment policy. It is currently expected that, subject to market conditions, such transition will be completed by the end of the first accounting period of the Company, i.e. by 31 December 2019. Once transitioned, the Company will seek to provide Shareholders with a diversified exposure to a range of underlying private Debt Instruments, many of which may not otherwise be accessible to Shareholders, in particular to individual investors.

The exact composition of the fully invested portfolio post-transition and the identity of specific investments will depend on market conditions and the continued availability of investments which satisfy the Company's investment policy. The Investment Manager will invest in a mixture of both floating rate and fixed rate Debt Instruments, and may at times be more heavily weighted towards one than the other depending on market conditions, and will manage the interest rate exposure through the use of derivatives.

Share Capital Management

As set out below, the Board has put in place appropriate strategies to seek to limit, as far as practicable, the extent to which the market price of the Ordinary Shares diverges from the Net Asset Value per Ordinary Share.

Premium Management

Once the proceeds of the Initial Issue have been fully invested, the Company intends to implement the Placing Programme. The Directors have authority to issue, in aggregate, up to 400 million Shares pursuant to the Placing Programme. Shareholders' pre-emption rights over this unissued share capital have been disapplied so that the Directors will not be obliged to offer any new Shares under the Placing Programme to Shareholders pro rata to their existing holdings; this ensures that the Company retains full flexibility, following Initial Admission, in issuing new Shares to investors. The minimum price at which Ordinary Shares may be issued pursuant to this authority is the prevailing published Net Asset Value per Ordinary Share at the time of issue plus a premium intended to at least cover the costs and expenses of the relevant Subsequent Placing (including, without limitation, any placing commissions). C Shares (if any) issued pursuant to this authority will be issued at 100 pence per C Share.

Further details of the Placing Programme are set out in Part 6 of the Prospectus.

Investors should note that the issuance of new Shares is entirely at the discretion of the Board, and no expectation or reliance should be placed on such discretion being exercised on any one or more occasions or as to the proportion of new Shares that may be issued.

Discount Management

The Directors have introduced discount control measures with two elements:

• periodic liquidity opportunities; and
• use of the Company's share buy-back authority where appropriate.

Liquidity opportunities

Before the Company's fifth annual general meeting in 2024, the Board will formulate and submit to Shareholders proposals (which may constitute a tender offer or other method of distribution) to provide Shareholders an opportunity to realise the value of their Ordinary Shares at Net Asset Value per Ordinary Share less costs. In all circumstances, the Board will seek to balance the interests of both continuing Shareholders and those electing to realise their investment with a view to minimising any reduction in the overall size of the Company.

Repurchase of Ordinary Shares

The Directors will consider repurchasing Ordinary Shares in the market if they believe it to be in Shareholders' interests and as a means of correcting any imbalance between the supply of and demand for the Ordinary Shares.

The Board

David Simpson (Chairman)

David Simpson is a qualified solicitor and was a partner at KPMG for 15 years until 2013, culminating as global head of M&A. Before that he spent 15 years in investment banking, latterly at Barclays de Zoete Wedd Ltd. He is chairman of Ecofin Global Utilities and Infrastructure Trust plc, a non-executive director of the British Geological Survey, a trustee of Cardiff University and a non-executive director of ITC Limited, a major listed Indian company. David graduated from Cambridge University with a degree in Economics and Law.

Richard Boléat (Non-executive Director)

Richard Boléat is a Fellow of the Institute of Chartered Accountants in England & Wales, having trained with Coopers & Lybrand in Jersey and the United Kingdom. After qualifying in 1986, he subsequently worked in the Middle East, Africa and the UK for a number of commercial and financial services groups before returning to Jersey in 1991. He was formerly a Principal of Channel House Financial Services Group from 1996 until its acquisition by Capita Group plc (''Capita'') in September 2005. Richard led Capita's financial services client practice in Jersey until September 2007, when he left to establish Governance Partners, L.P., an independent corporate governance practice. He currently acts as Chairman of CVC Credit Partners European Opportunities Limited, Phaunos Timber Fund Limited and Funding Circle SME Income Fund Limited, all of which are listed on the London Stock Exchange. He is regulated in his personal capacity by the Jersey Financial Services Commission and is a member of AIMA.

Barbara Powley (Non-executive Director)

Barbara Powley is a chartered accountant with over 30 years' experience in the investment trust industry. Prior to her retirement in March 2018 she was a director in BlackRock's closed end funds team from 2005 with responsibility for the oversight and administration of BlackRock's stable of investment trusts. From 1996 to 2005 she had a similar role at Fidelity. Barbara graduated from the University of York with a degree in Mathematics and Economics. She brings to the board her extensive knowledge of the investment trust sector and its regulatory requirements.

Mark Hutchinson (Non-executive Director)

Mark joined M&G in 1997 as Head of the Private Finance Group and has overseen the start of a number of activities including Private Placements, Leveraged Finance, Project & Infrastructure Finance and Structured Credit. In addition, he started the initiative for purchasing properties with long leases for Prudential's annuity funds in 2000. He continues to be involved in the development and growth of private assets within M&G.

Mark began his career in banking in 1980 with Midland Bank, going on to join Citibank and then in 1995, Bank of America, as a relationship manager for UK and global corporates.

Mark graduated from Cambridge University with a degree in Economics.

The Investment Manager

M&G is one of the longest established asset managers in Europe, managing c.£286 billion as at 30 June 2018. It has particular expertise in fixed income with c.£188 billion under management as at 30 June 2018 split c.£151 billion in public and c.£37 billion in private credit.

M&G's commitment to fixed income is long-standing. It began managing public credit portfolios in the 1970s and private assets since 1997, developing a deep understanding of the skills, expertise and strategies necessary to run successful fixed income portfolios. Since M&G was acquired by Prudential in 1999 it has strengthened its emphasis on fixed income, specifically building in-house credit research capabilities. It is indicative of M&G's commitment to credit investing that approximately two-thirds of its assets under management are in fixed income.

M&G is the largest private credit investor in Europe and second largest in the world. Its scale provides a competitive advantage in respect of access and asset sourcing enabling it to identify value from the widest possible opportunity set and to make investments that capture risks where they are most rewarded. Its disciplined focus on value ensures a selective approach and multiple teams of credit specialists offer depth of experience with a particular strength in origination of unusual or complex assets across the full credit universe. M&G has continued to drive the development of the private debt markets in Europe, whether in the leveraged loan, private placement or direct lending market through consistent investment and pioneering products and has an established track record of structuring long-term multi-asset credit solutions to meet client needs and take advantage of market opportunities.

The fixed income team

The Company will be managed by M&G's fixed income team which employs around 275 full-time investment professionals, including over 75 portfolio managers and over 110 analysts, covering a range of briefs, including public corporate bond and gilt mandates, Prudential's life and annuity funds, a variety of specialist private debt mandates and specialist asset-backed securities funds. The origination and structuring teams, organised as market specialists, draw on the expertise of M&G's team of over 30 public credit analysts with an average of around 13 years' experience.

Key personnel

The experienced team that will manage the Company's portfolio of investments will include:

Jeremy Richards, Lead Fund Manager

Jeremy joined Prudential Portfolio Managers in 1983 as a member of the actuarial department. He joined the fixed income team in 1985, and has been responsible since 1993 for managing the fixed income team in respect of Prudential's Life and Annuity funds.

Prior to this, Jeremy worked on bond research, going on to manage the UK and European fixed income portfolios for insurance and pensions clients. He was also a specialist in index-linked gilts and fixed income derivatives.

Jeremy graduated from the University of Manchester with a degree in Economics and is a Fellow of the Institute of Actuaries.

Adam English, Fund Manager

Adam joined M&G in 1999 and is a fixed income fund manager. His focus is on the analysis and investment of high yield debt and he manages public high yield debt for Prudential Life Fund.

Before joining M&G, Adam worked for the United Bank of Kuwait where he worked within the credit and high yield departments, with representation on the bank's credit committee.

Prior to this, he worked for Price Waterhouse, gaining membership of the Associate of Chartered Accountants.

Adam graduated from Christ Church College, Oxford University with a degree in Physics and is a CFA charterholder.

William Nicoll, Co-Head of Alternative Credit

William joined M&G in 2004 and is Co-head of Alternative Credit. He is responsible for the development of various products, including credit solutions for institutional investors, social housing and other aspects of non-bank lending.

Prior to joining M&G, William was Head of European Credit at Henderson Global Investors and before this had worked at Cazenove & Co in corporate bond research and fund management.

William graduated from Trinity College, Cambridge University with a degree in Natural Sciences. He is a CFA charterholder and a Chartered Fellow of the Chartered Institute for Securities and Investment.

Track Record

M&G manages three funds which have investment strategies which, although not directly comparable with that of the Company, share common characteristics being: (i) Prudential Life with Profits (''Prudential Life Fund''); (ii) M&G Alpha Opportunities Fund (''AOF''); and (iii) M&G Illiquid Credit Opportunities Fund (''ICOF'').

Prudential Life Fund was launched in 1865 and as at 30 June 2018 had an aggregate asset value of c.£20 billion in fixed income investments. Prudential Life Fund invests in a range of public and private assets on behalf of The Prudential Assurance Company Limited.

AOF was launched in April 2007 and as at 30 June 2018 had an aggregate asset value of c.EUR 8.5 billion. AOF aims to take advantage of highly diversified opportunities in liquid public and private credit markets, including but not limited to, investment grade and below investment grade corporate bonds, leveraged loans and asset backed securities.

ICOF was launched in May 2014 and as at 30 June 2018 had an aggregate asset value of c.£955 million. ICOF invests in a range of private and illiquid assets, such as direct lending, distressed debt and mezzanine asset back securities. The fund returns and excess returns over LIBOR on invested capital for Prudential Life Fund, AOF and ICOF respectively are set out below.

Net Fund return (%)	1 Year	2 Years	3 Years	4 Years	5 Years	10 Years	Since Inception**
Prudential Life with Profits***	1.95	4.62	7.22	6.02	5.83	6.98	7.51
M&G Alpha Opportunities Fund	1.16	4.16	2.98	2.50	3.09	3.88	3.53
M&G Illiquid Credit Opportunities Fund	4.39	8.11	5.82	5.56	-	-	5.46
3 month Libor	0.47	0.43	0.48	0.50	0.51	0.91	Life	AOF	ICOF
							3.77	1.48	0.50
Excess return (%)	1 Year	2 Years	3 Years	4 Years	5 Years	10 Years	Since Inception
Prudential Life with Profits	1.48	4.19	6.74	5.52	5.33	6.08	3.74
M&G Alpha Opportunities Fund	0.69	3.73	2.50	2.00	2.59	2.98	2.05
M&G Illiquid Credit Opportunities Fund	3.92	7.68	5.34	5.06	-	-	4.95

 

Source: Investment Manager track record, 30 June 2018 (unaudited). Excess returns to 3-month Libor excluding the impact of duration. **J. Richards has managed Prudential Life with Profits since July 1993. M&G Alpha Opportunities Fund launched in April 2007 and M&G Illiquid Credit Opportunities Fund launched in May 2014. ***This performance reflects the fixed income portion of Prudential Life with Profits only. All figures shown are net of fees and in the case of Prudential Life with Profits, performance is shown net of the highest annual average M&G fee rate for the period shown. Past performance is not a guide to future performance.

IMPORTANT NOTICE

This is a financial promotion and is not intended to be investment advice. The content of this announcement, which has been prepared by and is the sole responsibility of the Company, has been approved by M&G Alternatives Investment Management Limited solely for the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000 (as amended).

The information in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness. The material contained in this announcement is for information purposes only, is given as at the date of its publication (unless otherwise marked) and is subject to updating, revision and amendment. In particular, any proposals referred to herein are subject to revision and amendment.

The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

This announcement is not for publication or distribution, directly or indirectly, in or into the United States (including its territories and possessions, any state of the United States and the District of Columbia), Canada, Australia, New Zealand, the Republic of South Africa, or Japan or to US Persons (as defined below). The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

In member states of the European Economic Area ("EEA") other than the United Kingdom, this announcement is only addressed to and directed at persons who are "qualified investors" within the meaning of Article 2(1)(e) of the Prospectus Directive (Directive 2003/71/EC (and amendments thereto, including by Directive 2010/73/EU) and includes any relevant implementing measure in each Relevant Member State). Further, in relation to each member state in the EEA that has implemented the AIFM Directive, no Shares have been or will be directly or indirectly offered to or placed with investors in that member state at the initiative of or on behalf of the Company or the Investment Manager other than in accordance with the methods permitted in that member state.  

This announcement does not contain or constitute an offer for sale of, or the solicitation of an offer or an invitation to buy or subscribe for, Ordinary Shares to any person including in the United States, Canada, Australia, New Zealand, the Republic of South Africa, or Japan or in any jurisdiction to whom or in which such offer or solicitation is unlawful.

The Shares will be offered and sold only outside the United States in offshore transactions as defined in and in reliance on Regulation S ("Regulation S") under the United States Securities Act of 1933 (as amended) (the "US Securities Act") to persons who are not, and are not acting for the account or benefit of, US persons as defined in Regulation S ("US Persons"). The Shares have not been and will not be registered under the US Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States, and may not be offered or sold within the United States or to U.S. Persons, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction in the United States. There will be no public offer of the Shares in the United States. The Company has not been and will not be registered under the United States Investment Company Act of 1940, as amended (the "US Investment Company Act"), and investors will not be entitled to the benefits of the US Investment Company Act.

The Shares have not been approved or disapproved by the U.S. Securities and Exchange Commission, any state securities commission in the United States or any other U.S. regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of the offering of Shares or the accuracy of adequacy of the Prospectus. Any representation to the contrary is a criminal offence in the United States and any re-offer or resale of any of the Shares in the United States or to U.S. Persons may constitute a violation of U.S. law or regulation. Any person in the United States who obtains a copy of the Prospectus is requested to disregard it.

The offer and sale of Shares has not been and will not be registered under the applicable securities laws of any state, province or territory of Canada, Australia, New Zealand, the Republic of South Africa, or Japan. Subject to certain exceptions, the Shares may not be offered or sold in Canada, Australia, New Zealand, the Republic of South Africa, or Japan or to, or for the account or benefit of, any national, resident or citizen of Canada, Australia, New Zealand, the Republic of South Africa, or Japan.

Shares in the Company may only be offered or sold in or from within the Bailiwick of Guernsey either (i) by a person licensed to do so under the terms of the Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended (the "POI Law"), or (ii) to persons licensed under the POI Law or persons licensed under the Insurance Business (Bailiwick of Guernsey) Law, 2002, as amended, the Banking Supervision (Bailiwick of Guernsey) Law, 1994, as amended, the Insurance Managers and Intermediaries (Bailiwick of Guernsey) Law, 2002, as amended or the Regulation of Fiduciaries, Administration Businesses and Company Directors, etc., (Bailiwick of Guernsey) Law, 2000, as amended.

Subject to certain exemptions (if applicable), the Company shall not raise money in Jersey by the issue of Shares, and this document relating to the Shares shall not be circulated in Jersey, without first obtaining consent from the Jersey Financial Services Commission pursuant to the Control of Borrowing (Jersey) Order 1958, as amended. No such consents have been obtained by the Company. Subject to certain exemptions (if applicable), offers of securities in the Company may only be distributed and promoted in or from within Jersey by persons with appropriate registration under the Financial Services (Jersey) Law 1998, as amended. It must be distinctly understood that the Jersey Financial Services Commission does not accept any responsibility for the financial soundness of, or any representations made in connection with, the Company.

This announcement may include 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", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology.  All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding the Company's financial position, strategy, plans, proposed acquisitions and objectives, are forward-looking statements.  Forward-looking statements are subject to risks and uncertainties and, accordingly, the Company's actual future financial results and operational performance may differ materially from the results and performance expressed in, or implied by, the statements.  These factors include but are not limited to those described in the Prospectus.  These forward-looking statements speak only as at the date of this announcement and cannot be relied upon as a guide to future performance.  The Company, the Investment Manager and Winterflood Securities expressly disclaim any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect actual results or any change in the assumptions, conditions or circumstances on which any such statements are based unless required to do so by the Financial Services and Markets Act 2000, the Prospectus Rules of the Financial Conduct Authority, the EU Market Abuse Regulation or other applicable laws, regulations or rules.

Prospective investors should be aware that any investment in the Company should not be regarded as short-term in nature, involves a degree of risk, and could result in the loss of all or substantially all of their investment. Results can be positively or negatively affected by market conditions beyond the control of the Company or the Investment Manager which may be different in many respects from those that prevail at present or in the future, with the result that the performance of investment portfolios originated now may be significantly different from those originated in the past. Persons considering making such an investment should consult an authorised person specialising in advising on such investments.

Winterflood Securities Limited ("Winterflood Securities") is authorised and regulated by the Financial Conduct Authority. Winterflood Securities is acting exclusively for the Company and no-one else in connection with the Initial Issue and the Placing Programme. Winterflood Securities will not regard any other person as its client in relation to the subject matter of this announcement and will not be responsible to anyone other than the Company for providing the protections afforded to its clients, nor for providing advice in relation to the contents of this announcement or any transaction, arrangement or other matter referred to herein.

None of Winterflood Securities, the Company, or the Investment Manager, or any of their respective parents or subsidiary undertakings, or the subsidiary undertakings of any such parent undertakings, or any of such person's respective directors, officers, employees, agents, affiliates or advisers or any other person ("their respective affiliates") accepts (save where required by law) any responsibility or liability whatsoever for/or makes any representation or warranty, express or implied, as to this announcement, including the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.

This announcement does not constitute a recommendation concerning the proposed Initial Issue and/or the Placing Programme. Past performance is not a guide to future performance. Before purchasing any Shares, persons viewing this announcement should ensure that they fully understand and accept the risks that are set out in the Prospectus. Information in this announcement or any of the documents relating to the Initial Issue cannot be relied upon as a guide to future performance. The Initial Issue timetable may be influenced by a range of circumstances such as market conditions. There is no guarantee that the Initial Issue will occur and you should not base your financial decisions on the Company's intentions in relation to the Initial Issue or the information contained in this announcement. The contents of this announcement are not to be construed as legal, business or tax advice. Each prospective investor should consult his, her or its own legal adviser, financial adviser or tax adviser for legal, financial or tax advice.

INFORMATION TO DISTRIBUTORS

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("Directive 2014/65/EU"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing Directive 2014/65/EU; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the Shares have been subject to a product approval process, which has determined that the Ordinary Shares to be issued pursuant to the Initial Issue and any Shares which may be issued pursuant to any Subsequent Placing are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in Directive 2014/65/EU; and (ii) eligible for distribution through all distribution channels as are permitted by Directive 2014/65/EU (the "Target Market Assessment").

Notwithstanding the Target Market Assessment, distributors should note that: the price of the Shares may decline and investors could lose all or part of their investment; the Shares offer no guaranteed income and no capital protection; and an investment in the Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Initial Issue and any Subsequent Placing. Furthermore, it is noted that, notwithstanding the Target Market Assessment, Winterflood Securities will only procure investors who meet the criteria of professional clients and eligible counterparties.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of Directive 2014/65/EU; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Shares.

Each distributor is responsible for undertaking its own target market assessment in respect of the Shares and determining appropriate distribution channels.