THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO, THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY MEMBER STATE OF THE EUROPEAN ECONOMIC AREA.

This announcement is an advertisement and does not constitute a prospectus and investors must subscribe for or purchase any shares referred to in this announcement only on the basis of information contained in the Prospectus and not in reliance on this announcement. Copies of the Prospectus, subject to any applicable law, will shortly be available for viewing at the National Storage Mechanism at https://data.fca.org.uk/#/nsm/nationalstoragemechanism and on the Company's website. This announcement does not constitute, and may not be construed as, an offer to sell or an invitation to purchase investments of any description or a recommendation regarding the issue or the provision of investment advice by any party. No information set out in this announcement is intended to form the basis of any contract of sale, investment decision or any decision to purchase shares in the Company.

23 September 2021

Castelnau Group Limited

Initial Public Offering on the Specialist Fund Segment of the LSE’s Main Market and Publication of Prospectus

Castelnau Group Limited (“Castelnau” or the “Company”) today announces that it has published a prospectus (the “Prospectus”) in connection with an initial public offering (“IPO”) to admit its shares to the Specialist Fund Segment (“SFS”) of the London Stock Exchange’s Main Market. Castelnau is targeting an issue in excess of 170 million ordinary shares of no par value ("Ordinary Shares") at a price of £1.00 per Ordinary Share via an initial placing (“Initial Placing”), an offer for subscription (“Offer for Subscription”) (together the “Initial Issue”) and the issue of Ordinary Shares as consideration for the acquisition of a seed portfolio (“Consideration Shares”). A subsequent placing programme (the “Placing Programme”) will allow the Company to issue up to a further 300 million shares, in aggregate, in the twelve months from the date of the Prospectus.

Castelnau was incorporated with limited liability in Guernsey under the Companies Law on 13 March 2020 as a closed-ended company limited by shares. The Company’s investment objective is to compound shareholders’ capital at a higher rate of return than the FTSE All Share Total Return Index over the long term.

Phoenix Asset Management Partners Limited (“Phoenix” or the “Investment Manager”) will be the Investment Manager to the Company, led by Gary Channon (CIO and CEO of Phoenix). Phoenix manages approximately £1.3 billion across three funds; the Phoenix UK Fund, Aurora Investment Trust Plc, and the Huginn Fund.

Castelnau currently holds investments in two unlisted companies, Rawnet and Ocula Technologies, with existing clients of the Investment Manager committing to transfer holdings in four underlying investee portfolio companies (Dignity Plc, Hornby Plc, Phoenix S.G. Limited (the principal asset of which is a 58.1 per cent holding in Stanley Gibbons Group plc), and WLS International Ltd) on Initial Admission (the "Target Assets"), in exchange for the issue of the Consideration Shares.

Key highlights and investment rationale

  • Proven track record and governance – Castelnau will benefit from the Investment Manager’s experience of value investing over the past twenty-three years, with value investor Gary Channon as CIO. The Phoenix UK Fund has outperformed the FTSE All-Share by more than 6% per annum (gross) since inception in 1998, generating an 11.6% annualised gross return. Furthermore, at least one director from Phoenix will sit on the board of each of Castelnau’s portfolio companies serving to maintain the investment and transformation ethos across the portfolio.
  • Experienced and committed cornerstone investor – Sir Peter Wood, British entrepreneur and innovator, has committed to make a cornerstone investment of £25 million in the Initial Placing, via his wholly owned and controlled investment vehicle SPWOne. Sir Peter has a long track record of entrepreneurial success, founding, building, and investing in disruptive businesses and brands including Direct Line Insurance and Gocompare.com. Furthermore, the Investment Manager has entered into non-binding heads of terms with SPWOne to establish a proposed 50/50 joint venture between the Company and SPWOne to identify new investment opportunities to which the Castelnau toolbox of knowledge and techniques can be applied along with Sir Peter’s business expertise and acumen.
  • Clear and direct investment methodology – Benefitting from the experience of Phoenix, Castelnau is clear in its investment approach for generating value creation: identify traditional businesses that are suffering from digitisation of commerce; apply a proprietary toolbox of methods to transform these businesses into valuable winners; generate significant upside shareholder value; hold for the very long-term and continue to re-invest capital at high rates of return; and lastly, to float minority positions to recognise value.
  • Significant upside to intrinsic value - Castelnau’s holdings will be seeded from Phoenix-managed funds and include four companies (including holdings in three listed entities) which the Investment Manager has significant control or influence over and where it sees the biggest upside to the intrinsic value.
  • Attractive valuation of private assets - The fund will contain three private holdings, with potential to add a further substantial position via the joint venture with SPWOne. WLS International (Cambium Group) is being seeded at a post-pandemic valuation as weddings were severely impacted in 2020 and the first half of 2021. Recent trading has been significantly above pre-pandemic levels, offering significant scope for near-term valuation uplifts.

Joanne Peacegood, Independent Chair of Castelnau, said:

“Listing Castelnau on the London Stock Exchange is an important next step for the Company and our investors.  The growth potential of Castelnau’s traditional businesses and enabling companies is hugely exciting and we anticipate generating attractive returns for our shareholders by using the Investment Manager's toolbox of modern techniques to transform old economy businesses into valuable long-term winners.   We are obviously delighted that an entrepreneur as respected as Sir Peter Wood is not only making a cornerstone investment in Castelnau via SPWOne but is also bringing his vast experience and expertise to help develop the Group’s businesses and identify new investment opportunities.  Together with the unique and highly successful approach of Phoenix and Gary Channon as our Investment Manager, it’s a compelling combination which should benefit all Castelnau stakeholders.” 

Gary Channon, CIO and CEO of Phoenix Asset Management Partners Limited, said:

“Phoenix’s success is based on an investment approach which has been continuously refined through experience, and which has delivered returns well in excess of the market. Castelnau is an evolution of that approach applied to whole companies. This is something we have done within Phoenix for a number of years as we have developed and applied a business philosophy along with a toolbox of techniques and methodologies to transform investee companies. Castelnau will build on that work as we continue the transformation of the holdings within the initial portfolio and identify new businesses with a sound core franchise but are suffering from the changes going on in commercial life, such as the rise of ecommerce which can be transformed through embracing the best of modern techniques.  It’s an approach which will enable them to thrive and deliver value beyond their current valuations.  We’re very pleased to be joining forces with Sir Peter and that Castelnau will be able to benefit from the outstanding track record that he and the SPWOne team have in building market leading brands, transforming industries through digitisation and creating significant value.”

Sir Peter Wood, Chairman of SPWOne, said:

“Over more than twenty years, Gary has built up a fantastic track record of long-term outperformance, delivering excellent returns for investors through Phoenix’s bespoke approach of exceptionally in-depth analysis of undervalued companies.  I’ve known Gary for many years and we share the same long-term outlook and belief in the importance of building great British companies over time, rather than simply focusing on the short-term.  The growth opportunities for Castelnau and its businesses are considerable and I’m very much looking forward to working with the Company and with Phoenix to ensure that they are successfully realised.”
 

The Company

Castelnau was incorporated with limited liability in Guernsey on 13 March 2020 as a closed-ended company limited by shares. The Company’s investment objective is to compound shareholders’ capital at a higher rate of return than the FTSE All Share Total Return Index over the long term.

Target Return: The Company will seek to grow the long-term shareholder value of its portfolio companies through direct engagement. The Company’s investment objective is one of capital growth and it is anticipated that returns for shareholders will derive primarily from capital gains. Castelnau will target 10 to 15 per cent. more per annum than the return of the FTSE All-Share Total Return Index and a minimum Net Asset Value total return of 20 per cent. per annum.

Investment Policy: The Company will draw on the knowledge, experience, and expertise accumulated by the Investment Manager over the past twenty-three years. The Company will follow a high conviction investment strategy. Companies in Castelnau’s portfolio will typically have the following five core characteristics:

  • supplying products or services that are or have the potential to be ‘best in class’;
  • an addressable market much greater than its current customer base;
  • capable of benefiting significantly from digitisation;
  • a culture that would benefit from modernisation; and
  • trading at a price that doesn’t reflect its future value potential.

Initial Portfolio: Following Initial Admission and the acquisition of the Target Assets, the initial portfolio (“Initial Portfolio”) will comprise investments in:

Portfolio Company Market % of Co. held Description and Investment case
Dignity Plc Premium Main Up to 19.0% The UK’s leading funeral provider with Gary Channon as CEO. Has a significant opportunity to grow the business by building a winning price and service proposition, making better use of its crematorium assets and using the internet to grow its customer base.
Hornby Plc AIM Up to 49.7% Hobby and toy business which owns brands including Hornby, Airfix and Scalextric. Attractive long-term potential to take its portfolio of brands to a global market as it connects to and grows its passionate hobbyists.
Phoenix SG Limited Private company but main asset is   AIM quoted 31% Phoenix SG Limited is a private holding company, the principal asset of which is an approximately 58.1 per cent. holding in The Stanley Gibbons Group plc ("Stanley Gibbons").
Stanley Gibbons is a UK business trading in stamps, coins, medals and banknotes. From the new foundation created it has the potential to build on its world leading reputation, to reach a bigger audience for stamps and coins, grow its auction business and make more of its heritage, intellectual property, and unique lifetime guarantee.
WLS International Ltd Private 19% WLS International Ltd is a private holding company which is the parent company of The Cambium Group UK Holdings Limited (the "Cambium Group").
The Cambium Group is one of the UK's leading wedding gift businesses, operating wedding gift list services, an online homeware outlet and a wedding planning and resource platform. Strong trading coming out of the pandemic with revenues nearly double 2019 peak. Low post pandemic valuation offers significant upside scope.
Rawnet Limited ("Rawnet") Private 100% A digital agency and a long-term digital partner of the Investment Manager. The Investment Manager believes that Rawnet has significant potential future value both as a driver of existing portfolio company value and as a digital marketing company in its own right.
Ocula Technologies Limited ("Ocula") Private 77% A data analytics start-up which will seek to provide companies with advanced data analytics to drive optimisation. Ocula is run by Gerry Buggy a successful technology executive with over twenty years experience (currently Chief Strategy Officer of FDTechnologies).

On Initial Admission the Initial Portfolio is expected to have a total market value of approximately £123 million.

Fees: No annual management fee will be paid to the Investment Manager but the Investment Manager is entitled to a performance fee dependent upon the performance of the Company's investments. In order for the Investment Manager to earn a performance fee, the total NAV return must have outperformed the FTSE All Share Total Return Index over a 3-year period. The performance fee will be equal to one-third of such outperformance and will be satisfied wholly by the issue of new Ordinary Shares to the Investment Manager.

Background to Castelnau

The Investment Manager has an investment philosophy and approach that is inspired and influenced by some of the great investors such as Warren Buffett, Phil Fisher, Charlie Munger and John Maynard Keynes. These philosophies have been built into a “Phoenix approach”, which the Investment Manager has continuously refined using experience of application and analysis and learning. This has turned the philosophical approach into a proprietary technical approach which has been applied to the investments managed by the Investment Manager and has helped to deliver long term outperformance.

Building on the investment management team’s experience of investing in private companies and companies where they have control or influence, and in particular in respect of what is now the Cambium Group, the Investment Manager has built a “Castelnau Toolbox”, essentially a way of standardising the Investment Manager’s critical knowledge and techniques that can be applied to a specific type of investee company, which can be assessed and improved through application over time. At the heart of this is the Investment Manager’s insight that there are businesses with a core franchise that are suffering from the changes going on in the marketplace (such as the rise of e-commerce), which, if they could embrace the best of modern techniques, would allow these businesses to thrive and ultimately deliver value not recognised in their current valuations.

In addition, the Company will own businesses that are considered by the Investment Manager to be “enablers”, and which can be used to enable the business transformations of investee companies. These businesses are Rawnet, a digital marketing and software development company, and Ocula, a data science company. These are portfolio companies that will be able to build their capabilities with investee companies and then sell those capabilities externally. These companies could ultimately deliver value to shareholders, both through the “enabling” process with investee companies and also through their own valuations as standalone businesses. Following the acquisition of the Target Assets, the Investment Manager expects that two of the private company investments in the Initial Portfolio will undertake an IPO within three years of Initial Admission.

In summary, the Company has been established to apply modern techniques to traditional businesses, which it owns, controls and influences, with the intention of creating sustainable long-term value for shareholders.

The Company has a majority independent Board of non-executive Directors. The Directors will meet at least four times a year, inter alia, to review and assess the Company’s investment policy and strategy, the risk profile of the Company, the Company’s investment performance, the performance of the Company’s service providers, including the Investment Manager and the Administrator, and generally to supervise the conduct of its affairs.

The Investment Manager

Phoenix has been investing in UK listed equities for 23 years using a long-term business-like approach. Phoenix’s investment process aims to identify great businesses and management through intensive primary research. The Investment Manager is known for the depth of its research which can often last many years before making an investment. Once an investment is made, the investment team maintains this intensive approach to research by monitoring the competitive landscape of investments.

This dedication to reducing risk through knowledge is where the Investment Manager believes it differentiates itself from other investors. As the research process has matured and the processes have improved, the Investment Manager has found itself in situations where it is able to contribute genuine insight to the discussions about competitor analysis, capital allocation and the long-term strategy of holdings.

This direct engagement has evolved into an extension to the investment process. Phoenix has spent six years iteratively learning and formalising the way in which it accumulated business insight, contacts and monitoring systems and how these can contribute to the success of the investments it makes. This has included direct engagement with management and occasionally direct intervention to facilitate changes to the board composition and strategy of investee companies.

As the Investment Manager’s assets under management have grown and proportional stakes in businesses have become larger, this has become an increasingly useful part of the process. The ability to add insight, optimise board composition and refine strategy can both limit the downside of an investment and increase the probability of favourable outcomes.

The formation of Castelnau is the next stage in the evolution of the Investment Manager’s investment process. After many years of active application of new principles and processes, it is the right time to bring the relevant businesses together in a single vehicle. This will give the holdings the permanent capital they need to think truly long-term, together with the liquidity of a London Stock Exchange quote.

Expected timetable

Initial Issue
Initial Placing opens 23 September 2021
Offer for Subscription opens 23 September 2021
Latest time and date for receipt of completed Application Forms under the Offer for Subscription and payment in full or settlement of the relevant CREST instruction 11:00 a.m. on 12 October 2021
Latest time and date for receipt of Initial Placing orders Midday on 12 October 2021
Announcement of the results of the Initial Issue 14 October 2021
Initial Admission of the Ordinary Shares and dealings commence 8:00 a.m. on 18 October 2021
CREST accounts credited in respect of Ordinary Shares issued in uncertificated form as soon as practicable after 8:00 a.m. on 18 October 2021
Certificates despatched in respect of Ordinary Shares issued in certificated form Within 10 Business Days of admission
Subsequent Issues under the Placing Programme
Placing Programme opens 18 October 2021
Placing Programme closes 22 September 2022

Notes:

(1)    References to times above are to London times unless otherwise specified.
(2)    All times and dates in the expected timetable may be adjusted by the Company. Any material changes to the timetable will be notified via an RIS.

Publication of Prospectus

A copy of the Prospectus will shortly be available on the Company’s website at www.castelnaugroup.com, subject to certain access restrictions. A copy of the Prospectus will also be submitted to the National Storage Mechanism and will shortly be available for inspection at https://www.fca.org.uk/markets/primary-markets/regulatory-disclosures/national-storage-mechanism.

The information required to be made available to investors in the Company before they invest (the "Article 23 Disclosures"), pursuant to the requirements of the FCA Rules implementing the EU Alternative Fund Managers Directive (Directive 2011/61/EU) of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers in the United Kingdom and related UK laws (including Commission Delegated Regulation (EU) No 231/2013, as it forms part of UK law by virtue of the European Union (Withdrawal) Act 2018) is available for inspection on the Company's website at www.castelnaugroup.com. The information required to be made available to investors in the Company is set out in Chapter 3.2 of the Investment Funds sourcebook of the FCA Handbook.

The Initial Issue

The Company is targeting an issue in excess of 170 million Ordinary Shares pursuant to: (i) the Initial Issue (comprising the Initial Placing and the Offer for Subscription) and (ii) the issue of the Consideration Shares in connection with the acquisition of the Target Assets. Ordinary Shares will be issued pursuant to the Initial Issue at an Issue Price of £1.00 per Ordinary Share. In addition, the Consideration Shares will be issued at a deemed issuance price of £1.00 per Ordinary Share.

The Offer for Subscription will remain open until 11.00 a.m. on 12 October 2021 and the Initial Placing will remain open until midday on 12 October 2021. If the Initial Issue is extended, the revised timetable will be notified via a Regulatory Information Service announcement.

The total number of Ordinary Shares to be issued pursuant to the Initial Issue, and therefore the Initial Gross Proceeds, are not known as at the date of this document but will be notified by the Company via a Regulatory Information Service announcement and the Company’s website prior to Initial Admission.

Sir Peter Wood, British entrepreneur and innovator, has committed to make a cornerstone investment of £25 million in the Initial Placing, via his investment vehicle SPWOne.

Application will be made for the Ordinary Shares to be issued pursuant to the Initial Issue to be admitted to trading on the Specialist Fund Segment of the Main Market. It is expected that Initial Admission will become effective and dealings in the Ordinary Shares will commence at 8.00 a.m. on 18 October 2021.

The Placing Programme

The Company also intends to put in place a Placing Programme with the flexibility to issue up to a further 300 million Ordinary Shares and/or C Shares in aggregate. The Articles contain the C Share rights, full details of which are set out in paragraph 4 of Part 8 of the Prospectus.

The Placing Programme will be flexible and may have a number of closing dates in order to provide the Company with the ability to issue Shares on appropriate occasions over a period of time. The Placing Programme is intended to satisfy market demand for the Shares and to raise further money for investment in accordance with the Company's investment policy. The Placing Programme is designed to give the Board the flexibility to include pre-emptive elements in any future issue. The Placing Programme will open on 18 October 2021 and will close on 22 September 2022 (or an earlier date on which it is fully subscribed, or otherwise at the discretion of the Directors).

Liberum Capital Limited is acting as financial adviser and sole bookrunner in relation to the Initial Issue, and with effect from Initial Admission, will act as the Company's corporate broker.

The Legal Entity Identifier of the Company is 213800PED8RFUBMK1T64 and it is incorporated in Guernsey. The ISIN of the Ordinary Shares is GG00BMWWJM28 and the SEDOL is BMWWJM2. The ISIN of the C Shares is GG00BMWWJN35 and the SEDOL is BMWWJN3.

Except where the context requires otherwise, defined terms herein shall have the meanings given to them in the Prospectus.

- Ends –

Enquiries

Phoenix Asset Management Limited
+44 (0) 208 600 0100
Gary Channon
Steve Tatters
Lorraine Smyth

Liberum Capital Limited
+44 (0) 20 3100 2000
Chris Clarke
Darren Vickers
Owen Matthews
Will King

Citigate Dewe Rogerson
+44 (0) 20 7638 9571
Chris Barrie
Caroline Merrell
Toby Moore

Important Information

Liberum Capital Limited ("Liberum") is authorised and regulated by the Financial Conduct Authority. Liberum is acting exclusively for the Company in connection with the matters described in this announcement and are not acting for or advising any other person, or treating any other person as their respective client, in relation thereto and will not be responsible for providing the regulatory protection afforded to its clients or advice to any other person in relation to the matters contained herein.  This does not exclude any responsibilities or liabilities of Liberum under the Financial Services and Markets Act 2000 ("FSMA") or the regulatory regime established thereunder.

This announcement 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 Phoenix Asset Management Partners Limited ("Phoenix") solely for the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000 (as amended).

This announcement is not an offer to sell or a solicitation of any offer to buy any securities in the Company in the United States, Australia, Canada, the Republic of South Africa, Japan, or in any other jurisdiction where such offer or sale would be unlawful.

This communication is not for publication or distribution, directly or indirectly, in or into the United States of America. This communication is not an offer of securities for sale into the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration. No public offering of securities is being made in the United States.

The Company has not been and will not be registered under the US Investment Company Act of 1940 (the "Investment Company Act") and, as such, holders of the Company's securities will not be entitled to the benefits of the Investment Company Act.  No offer, sale, resale, pledge, delivery, distribution or transfer of the Company's securities may be made except under circumstances that will not result in the Company being required to register as an investment company under the Investment Company Act.

Moreover, the Company's securities will not be registered under the applicable securities laws of Australia, Canada, the Republic of South Africa, Japan or any member state of the EEA. Subject to certain exceptions, the Company's securities may not be offered or sold in Australia, Canada, the Republic of South Africa, Japan or any member state of the EEA or to, or for the account or benefit of, any national, resident or citizen of, Australia, Canada, the Republic of South Africa, Japan or any member state of the EEA. The Initial Issue and the distribution of this announcement, in certain jurisdictions may be restricted by law and accordingly persons into whose possession this announcement is received are required to inform themselves about and to observe such restrictions.

Neither the content of the Company's website, nor the content on any website accessible from hyperlinks on its website for any other website, is incorporated into, or forms part of, this announcement nor, unless previously published by means of an RIS announcement, should any such content be relied upon in reaching a decision as to whether or not to acquire, continue to hold, or dispose of, securities in the Company.

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 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 value of shares and the income from them is not guaranteed and can fall as well as rise due to stock market and currency movements. When you sell your investment you may get back less than you originally invested. Figures refer to past performance and past performance should not be considered a reliable indicator of future results.

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", "might", "will" or "should" or, in each case, their negative or other variations or similar expressions. 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. These forward-looking statements speak only as at the date of this announcement and cannot be relied upon as a guide to future performance.

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. Subject to their respective legal and regulatory obligations (including under the Prospectus Regulation Rules), the Company, the Investment Manager and/or Liberum expressly disclaim any obligations or undertaking to update or revise any forward-looking statements contained herein to reflect any change in expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based unless required to do so by law or any appropriate regulatory authority, including FSMA, the Prospectus Regulation Rules, the Disclosure Guidance and Transparency Rules, the Prospectus Regulation and UK MAR.

None of the Company, the Investment Manager and/or Liberum, or any of their respective affiliates, accepts 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 or associated companies, 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 the announcement or its contents or otherwise arising in connection therewith. The Company, the Investment Manager and Liberum, and their respective affiliates, accordingly disclaim all and any liability whether arising in tort, contract or otherwise which they might otherwise have in respect of this announcement or its contents or otherwise arising in connection therewith.

INFORMATION TO DISTRIBUTORS

Solely for the purposes of the product governance requirements contained within PROD 3 of the FCA's Product Intervention and Product Governance Sourcebook (the "Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the Product Governance Requirements) may otherwise have with respect thereto, the Shares have been subject to a product approval process, which has determined that the Shares to be issued pursuant to the Initial Issue and Subsequent Placings 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 COBS 3.5 and 3.6 of the FCA's Conduct of Business Sourcebook, respectively; and (ii) eligible for distribution through all distribution channels as are permitted by the Product Governance Requirements (the "Target Market Assessment"). 

Notwithstanding the Target Market Assessment, distributors should note that: (a) 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; (b) 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, and (c) the Shares will be admitted to the Specialist Fund Segment, which is intended for institutional, professional, professionally advised and knowledgeable investors who understand, or who have been advised of, the potential risk from investing in companies admitted to the Specialist Fund Segment. 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/or Subsequent Placings. Furthermore, it is noted that, notwithstanding the Target Market Assessment, Liberum 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 the FCA's Conduct of Business Sourcebook; 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.

UK PRIIPS REGULATION

In accordance with the UK PRIIPs Regulation, a key information document prepared by the Investment Manager in relation to the Ordinary Shares is available on the Company’s website: www.castelnaugroup.com. It is the responsibility of each distributor of Ordinary Shares to ensure that its “retail clients” are provided with a copy of the key information document.

The Investment Manager is the manufacturer of the Ordinary Shares for the purposes of the UK PRIIPs Regulation and neither the Company nor Liberum is a manufacturer for these purposes. Neither the Company nor Liberum makes any representations, express or implied, or accepts any responsibility whatsoever for the contents of the key information document prepared by the Investment Manager in relation to the Ordinary Shares or any other key information document in relation to the Shares prepared by the Investment Manager in the future nor accepts any responsibility to update the contents of any key information document in accordance with the UK PRIIPs Regulation, to undertake any review processes in relation thereto or to provide such key information document to future distributors of Shares. Each of the Company, Liberum and their respective affiliates accordingly disclaim all and any liability whether arising in tort or contract or otherwise which it or they might have in respect of any key information document prepared by the Investment Manager.

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