THIS ANNOUNCEMENT INCLUDES INSIDE
INFORMATION
BH Global
Limited
(an authorised closed-ended
collective investment scheme authorised by the Guernsey Financial
Services Commission and established as a non-cellular company
limited by shares under the laws of the Island of Guernsey with
registration number 48555)
12 April
2017
Management fee
reduction and management agreement amendments
The board of directors (the “Board”) of BH Global Limited (“BH
Global” or the “Company”) announces that following discussion with
the Company’s manager, Brevan Howard Capital Management LP (the
“Manager”), the Company and the Manager have agreed a reduction to
the Company’s management fee from two per cent. to one per cent. of
the Company’s net asset value per annum and other amendments to the
Company’s management agreement (the “Management
Agreement”).
The Board believes that the reduction in the management fee is a
very positive enhancement for investors and a significant
affirmation by the Manager of its ongoing commitment to the
Company. The Company is grateful to the Manager for its
constructive help and assistance in agreeing these
measures.
With retrospective effect from 1 April 2017:
- The management fee payable under the Management Agreement will
be reduced from two per cent. per annum to one per cent. per
annum. As announced on 19 October
2016, no management fee will be payable on any
performance-related growth of the Company.
- Were the Management Agreement to be terminated by the Company,
the management fee would revert to two per cent. of the prevailing
net asset value in respect of the notice period, or in respect of
any payment in lieu of notice (as is currently the
case).
- The Company may repurchase or redeem shares of either class in
each calendar year, including pursuant to the class closure and
annual partial capital return provisions contained in the Company’s
articles of incorporation (the “Articles”), up to an aggregate
number equal to five per cent. of the shares of that class in issue
as at 31 December in the prior calendar year (the “Annual Buy Back
Allowance”) without making any payment to the Manager.
- In the event that, in any calendar year, the aggregate number
of shares repurchased or redeemed by the Company exceeds the Annual
Buy Back Allowance for that class, the Company will be required to
pay the Manager an amount equal to two per cent. of the repurchase
price of any share that is repurchased or redeemed by the Company
in excess of the Annual Buy Back Allowance, including pursuant to
the class closure and annual partial capital return provisions
contained in the Articles.
- In respect of the 2017 calendar year (and taking into account
shares that have already been repurchased by the Company since
1 January 2017), the Annual Buy Back
Allowance for the Company’s Sterling share class will be 806,282
Sterling shares and for the US Dollar share class will be
152,269 US Dollar shares.
- The Board has agreed with the Manager that if, on the last
business day in March, June, September or December of any year, the
net asset value of the Company were to be below US$300 million (on the basis of the prevailing US
Dollar/Sterling exchange rate), the Board would convene a general
meeting of the Company’s shareholders at which a special resolution
proposing the liquidation of the Company would be put
forward. Were the resolution to be passed, the Company would
be liquidated and an amount equal to two per cent. of the Company’s
net asset value (subject to a deduction in respect of any amount of
the Annual Buy Back Allowance for the relevant calendar year that
remains unused) would be paid to the Manager in addition to any
other fees due to the Manager up to the date of termination of the
Management Agreement.
These arrangements will become effective on execution of an
amendment to the Management Agreement, which the Company and the
Manager propose to enter into as soon as possible.
Commenting on the changes, the Chairman of BH Global, Sir
Michael Bunbury, said:-
“I am very pleased to be able to report agreement that, with
effect from 1 April 2017, the annual
management fee has been halved from two per cent. to one per
cent. The annual management fee represents the largest
regular expense for the Company, and the reduction will result in
an annual saving of some US$4.5
million based on the current size of the Company.
The Company has agreed with the Manager that it may make a
partial capital return or buy back up to five per cent. of each
class of share in each calendar year free of a payment to the
Manager. Beyond that five per cent., any reduction in the
number of shares in each class will trigger a payment to the
Manager of two per cent. of the repurchase price of such
shares. The directors are not recommending any partial
capital return in 2017 in respect of the 2016 NAV increase.
The directors are mindful of the discount to NAV at which the
shares have been trading recently. The Board considers that the
positive enhancement to shareholder returns which the reduction in
the management fee will bring, coupled with the Board’s intention
to maintain a proactive approach to share buybacks, should occasion
a re-rating.
Overall the directors are unanimous in their view that this set
of changes materially enhances the investment proposition for BH
Global as a low volatility diversifier for portfolio
construction. They look forward to the Manager building on
the success of 2016 which, as reported in the recently published
Annual Report, delivered growth of 6.60 per cent. in the NAV per
share of the Sterling share class.”
Enquiries:
Brevan Howard:
Dan Riggs
020 7022 6236
Canaccord Genuity Limited:
David Yovichic
020 7523 8000
J.P. Morgan Cazenove:
William Simmonds
020 7742 4000
Northern Trust:
Sharon Williams
01481 745436
Important notices
Each of Canaccord Genuity Limited (“Canaccord”), which is
authorised and regulated by the Financial Conduct Authority in the
United Kingdom, and J.P. Morgan
Securities plc, which conducts its UK investment banking activities
as J.P. Morgan Cazenove ("J.P. Morgan Cazenove"), which is
authorised by the Prudential Regulation Authority and regulated by
the Prudential Regulation Authority and the Financial Conduct
Authority in the United Kingdom,
is acting exclusively for the Company and no-one else in connection
with the matters referred to in this announcement and will not be
responsible to anyone other than the Company for providing the
protections afforded to customers of Canaccord or J.P. Morgan
Cazenove or for providing advice in relation to any matter referred
to herein.
This announcement does not constitute an offer or solicitation
to acquire or sell any securities in the Company.
Notwithstanding the proposals described in this announcement,
there is no guarantee that the Company will make any purchases of
its own shares or that any liquidation or class discontinuation
vote will be held. Accordingly, investors should not expect
that they will necessarily be able to realise, within a period
which they would otherwise regard as reasonable, their investment
in the Company, nor can they be certain that they will be able to
realise their investment on a basis that necessarily reflects the
value of the Company’s investment in Brevan Howard Multi-Strategy
Master Fund Limited.
This announcement is not for distribution in or into
the United States, Canada, Australia or Japan or any other jurisdiction in which its
distribution may be unlawful. This announcement is not an
offer of securities for sale in the
United States or elsewhere. The securities of the
Company have not been and will not be registered under the United
States Securities Act of 1933, as amended (the “Securities Act”),
and may not be offered or sold in the
United States unless registered under the Securities Act or
pursuant to an exemption from such registration. The Company
has not been and will not be registered under the US Investment
Company Act of 1940, as amended, and investors are not entitled to
the benefits of that Act. There has not been and there will
be no public offering of the Company’s securities in the United States.
END