IMPORTANT INFORMATION
This document is issued by Cheyne Capital Management (UK) LLP (“Cheyne Capital”). Registered address: Stornoway House, 13 Cleveland Row, London, SW1A 1DH. Registered in England and Wales with company registration number OC321484.
Cheyne Capital is authorised and regulated in the United Kingdom by the Financial Conduct Authority and registered as an Investment Adviser in the United States of America with the Securities and Exchange Commission.
No sale of Interests will be made in any jurisdiction in which the offer, solicitation, or sale is not authorised or to any person to whom it is unlawful to make the offer, solicitation or sale. If any such offer of Interests is made, it will be made pursuant to the current Information Memorandum (“IM”) that contains material information not contained herein and to which prospective investors will be referred. Moreover, the specified terms applicable to the Interests described generally herein, and offered in the IM, will be governed by the terms of the applicable governing documents and IM. Any decision to invest in Interests should be made solely in reliance upon the IM or such agreement which contains important information concerning risk factors, performance and other material aspects of the Alternative Investment Fund (“AIF”), and which must be carefully read before any decision to invest is made. It is the responsibility of every person reading this document to satisfy himself as to the full observance of the laws of any relevant country, including obtaining any government or other consent which may be required or observing any other formality which needs to be observed in that country and which might be relevant to the subscription, purchase, holding, exchange, redemption or disposal of any investments.
Cheyne Capital is not liable for a breach of such legislation or for any losses relating to the accuracy, completeness or use of information in this communication, including consequential loss. This document does not constitute an offer to sell or solicitation of an offer to buy interests in any AIFs and may not be used to make such an offer. The information contained in this document, especially as regards portfolio construction/parameter-type information, reflects Cheyne Capital’s current thinking and may be changed or modified in response to its perception of changing market conditions, or otherwise, without further notice to you. Accordingly, the information herein, in respect of investment products and services relating to AIFs should be considered indicative of Cheyne Capital’s current opinion and should not be relied on in making any investment decisions. Any projections or analysis provided to investors and potential investors in evaluating the matters described herein may be based on subjective assessments and assumptions which may not prove valid. Any projections or analysis should not be viewed as factual and should not be relied upon as an accurate prediction of future results.
The portfolio risk management process includes an effort to monitor and manage risk but should not be confused with and does not imply low risk. AIF performance data contained herein is net of broker commission, advisory and management fees and expenses unless otherwise stated. The performance figures include the reinvestment of dividends and other earnings. Past results or experience are not indicative of future performance. The value of investments can go down as well as up and is not guaranteed. Investments that have an exposure to currencies other than the base currency of the AIF may be subject to exchange rate fluctuations. Interests may be subject to sudden and large falls in price or value resulting in a large loss on realisation which could equal the amount invested. Recipients are advised to seek independent advice regarding tax, accounting, and legal considerations. Occasionally and upon reasonable request, portfolio composition and related information can be provided to investors and third parties on a monthly basis, and pursuant to confidentiality undertakings to prospective investors; this is described further in the AIFs’ IM. Please contact Cheyne Investor Relations for further details.
No person has been authorised to give any information or to make any representation, warranty, statement or assurance not contained in the IM and if given or made should not be relied upon. Investment in the AIF is only suitable for sophisticated investors for whom an investment in the AIF does not constitute a complete investment programme and who fully understand and are willing to assume the risks involved.
Entities within the Cheyne Group, including AIFs, UCITS or accounts managed or advised by Cheyne Capital and its employees and advisors, may have positions in, and may effect transactions in, securities and instruments of issuers mentioned herein. Cheyne Capital has procedures in place which are designed to prevent its involvement in market abuse, including insider trading and market manipulation. In some instances Cheyne Capital will refrain from trading in relevant securities pursuant to these procedures.
EU Alternative Investment Fund Managers Directive
For the avoidance of doubt, Cheyne Real Estate Credit Holdings Fund III Inc is a non-EEA AIF.
As at the date of this document, the AIF has been notified, registered or approved (as the case may be and howsoever described) in accordance with the local law/regulations implementing the Alternative Investment Fund Managers Directive (Directive (2011/61/EU)) (the “AIFMD”) under Article 36 for marketing to professional investors into the following member states of the EEA (each a “Member State”): UK, Netherlands, Belgium, Sweden, Denmark, Norway and Finland. In relation to other Member States, this document may only be distributed and Shares may only be offered or placed in a Member State: (i) at the investor’s own initiative; or (ii) to the extent that this document may otherwise be lawfully distributed and the Shares may lawfully be offered or placed in that Member State.
Europe
Austria: Neither this document nor any other document in connection with the Shares in the alternative investment fund (“AIF”) is a prospectus according to the Austrian Investment Funds Act (Investmentfondsgesetz, InvFG), the Austrian Capital Markets Act (Kapitalmarktgesetz, KMG) or the Austrian Stock Exchange Act (Börsegesetz, BörseG) and has therefore not been drawn up, audited, approved, passported and/or published in accordance with the aforesaid acts. Neither the AIF nor Cheyne Capital is under the supervision of the Austrian Financial Market Authority or any other Austrian supervision authority.
Prospective purchasers of Shares in the AIF should note that the Shares in the AIF have not been and will not be offered in the Republic of Austria in the course of an offer to the public within the meaning of section 140 of the Austrian Investment Funds Act or section 176 of the Austrian Investment Funds Act or sec 1 para 1 no 1 of the Austrian Capital Markets Act but under circumstances which will not be considered as an offer to the public under any of the aforesaid acts. Therefore, the provisions of the Austrian Investment Funds Act and the provisions of the Austrian Capital Markets Act relating to registration requirements and to prospectus requirements do not apply and the Shares in the AIF have thus neither been registered for public distribution in Austria with the Austrian Financial Market Authority (Finanzmarktaufsichtsbehörde) nor been the subject matter of a prospectus compliant with the Austrian Investment Funds Act or the Austrian Capital Markets Act.
Denmark: In relation to Denmark, each purchaser of the Shares of the AIF represents and agrees that it has not marketed, offered or sold and will not market, offer or sell, directly or indirectly, any of the Shares of the Fund to any investors in Denmark unless in accordance with the Danish Act on Managers of Alternative Investment Funds etc. (Act no. 598 of 12 June 2013, as amended from time to time) (the “AIFM Act”), including the applicable executive orders issued pursuant thereto.
Finland: This document does not constitute an offer to the public in Finland. The Shares may not be offered or sold in Finland by means of any document to any persons other than “Professional Investors” as defined by the Finnish Mutual Funds Act (Sijoitusrahastolaki 29.1.1999/48), as amended. No action has been taken to authorise an offering of the Shares to the public in Finland and the distribution of this document is not authorised by the Financial Supervisory Authority in Finland. This document is strictly for private use by its holder and may not be passed on to third parties or otherwise publicly distributed. Subscriptions will not be accepted from any persons other than the person to whom this document has been delivered by the Fund or its representative. This document may not include all the information that is required to be included in a prospectus in connection with an offering to the public.
France: The Shares may not be offered directly or indirectly in the Republic of France and neither this document, which has not been submitted to the Autorité des marchés financiers, nor any offering material or information contained therein relating to the Fund, may be supplied in connection with any offer of the Shares in the Republic of France.
Germany: Each purchaser of Shares acknowledges that the AIF is not and will not be registered for public distribution in Germany. This document does not constitute a sales prospectus pursuant to the German Investment Act (Investmentgesetz) or the German Securities Prospectus Act (Wertpapierprospektgesetz). Accordingly, no offer of the Shares may be made to the public in Germany. This document and any other document relating to the Shares as well as information or statements contained therein, may not be supplied to the public in Germany or used in connection with any offer for subscription of the interests to the public in Germany or any other means of public marketing.
Greece: This material does not constitute or form part of any offer or invitation to subscribe for or purchase Shares in the AIF which is not registered under Greek law. Any distribution, advertisement or similar activities in Greece will constitute a violation of applicable law. Such distribution, advertisement or offer may only be effected with the prior permission of the Capital Market Commission.
Ireland: The distribution of this document and the offering or purchase of Shares is restricted to the individual to whom it is addressed. Accordingly, it may not be reproduced in whole or in part, nor may its contents be distributed in writing or orally to any third party and it may be read solely by the person to whom it is addressed and his/her professional advisers. Shares in the AIF will not be offered or sold by any person:
(a) otherwise than in conformity with the provisions of the European Communities (Markets in Financial Instruments) Regulations 2007, as amended; or
(b) in any way which would require the publication of a prospectus under the Investment Funds, Companies and Miscellaneous Provisions Act, 2005, as amended, and any regulations adopted pursuant thereto; or
(c) in Ireland except in all circumstances that will result in compliance with all applicable laws and regulations in Ireland.
Shares in the AIF will not in any event be marketed in Ireland except in accordance with the requirements of the Central Bank of Ireland. The Fund is not supervised by the Central Bank of Ireland and the Fund is not otherwise supervised or authorised in Ireland.
Italy: The Shares may not be offered, sold or delivered and this document or any circular, advertisement or other document or offering material relating to the Shares may not be published, distributed or made available in the Republic of Italy unless: (i) the Shares have been previously registered with the Bank of Italy and, as appropriate, with the Italian Securities and Exchange Commission (Consob); and (ii) the offering, sale or delivery of the Shares and publication or distribution of the IM (whichever is applicable) or of any other document or offering material is made in accordance with relevant Italian laws and regulations.
Liechtenstein: The shares offered are exclusively offered to a limited group of investors, in all cases and under all circumstances designed to preclude a public solicitation in Liechtenstein. This document may not be reproduced or used for any other purpose, nor be furnished to any other person other than those to whom copies have been personally sent. This offer is a private offer, this document and the transactions described therein are therefore not nor have been subject to the review and supervision of the Liechtenstein Financial Market Authority.
Luxembourg: This document and the securities referred to herein have not been registered with any Luxembourg authority. This document does not constitute and may not be used for or in connection with a public offer in Luxembourg of the securities referred to herein.
Monaco: The AIF may not be offered or sold, directly or indirectly, to the public in Monaco other than by a Monaco Bank or a duly authorised Monegasque intermediary acting as a professional institutional investor which has such knowledge and experience in financial and business matters as to be capable of evaluating the risks and merits of an investment in the AIF.
Netherlands: This document is not addressed to or intended for any individual or legal entity in the Netherlands except individuals or legal entities who qualify as qualified investors (as defined by section 1:1 of the Act on financial supervision (Wet op het financieel toezicht), as amended).
Spain: The AIF has not been authorised by or registered with the Spanish Securities Market Commission as a foreign collective investment scheme in accordance with section 15.2 of Law 35/2003 of 4 November 2003 on Collective Investment Schemes, as amended. Accordingly, the Shares of the Fund may not be offered or sold in Spain by means of any marketing activities as defined in section 2 of Law 35/2003, as amended.
Sweden: As at the date of this document, the Fund has been notified, registered or approved (as the case may be and howsoever described) in accordance with the local law/regulations implementing the Alternative Investment Fund Managers Directive (Directive (2011/61/EU)) (the “AIFMD”) for marketing to professional investors into Sweden.
Switzerland: The state of the origin of the Fund is the Cayman Islands. This document may only be distributed in or from Switzerland to qualified investors within the meaning of Art. 10 Para. 3, 3bis and 3ter CISA. The Representative in Switzerland is Acolin Fund Services AG, Affolternstrasse 56, CH-8050 Zurich, whilst the Paying Agent is Banque Cantonale de Geneve, 17 quai de I’lle, 1204 Geneve, Switzerland. The basic documents of the fund as well as the annual and semi-annual report may be obtained free of charge at the registered office of the Swiss Representative.
United Kingdom: The AIF is an unrecognised collective investment scheme and as such has not been approved or authorised for distribution or general offer in any jurisdiction and is only made available under Private Placement rules to sophisticated investors meeting the eligibility criteria described in the IM. These materials are not directed at, nor are they for distribution to, ‘retail customers’ as defined in the United Kingdom by the Financial Conduct Authority. The investment products specified are not recognised collective investment schemes for the purposes of the Financial Services and Markets Act 2000 of the United Kingdom (the “Act”). These materials are for persons who can legitimately receive the data under the Act (Financial Promotion Order 2005 as amended) or are persons to whom these materials may otherwise lawfully be distributed. This material is exempt from the scheme promotion restriction (in Section 238 of the Act) on the communication of invitations or inducements to participate in unrecognised collective investment schemes on the grounds that it is being issued to and/or directed at professional clients or eligible counterparties. Furthermore, to the extent permitted by law, neither Cheyne Capital, in its role as an alternative investment fund manager, nor any of its affiliates, agents, service providers or professional advisers assumes any liability or responsibility nor owes any duty of care for any consequences of any person acting or refraining to act in reliance on the information contained in this presentation or for any decision based on it.
Other Global Matters
United States of America: Interests in the AIF have not been and will not be registered under the US Securities Act (the “Securities Act”) of 1933 or qualified under any applicable state securities statute. The AIF is not and will not be registered as an investment company under the US Investment Company Act of 1940 (the “Investment Company Act”). There is no public market for the Shares and no such market is expected to develop in the future. The Shares offered hereby are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under the 1933 Act and applicable state securities laws pursuant to registration or exemption therefrom.
This document is not intended for distribution in the United States or for the account of U.S. persons (as defined in Regulation S under the Securities Act) except to persons who are “qualified purchasers” (as defined in the Investment Company Act) and “accredited investors” (as defined in Rule 501(a) under the Securities Act).
Offering materials for the offering of the Shares have not been filed with or approved or disapproved by the US Securities and Exchange Commission (“SEC”) or any other state or federal regulatory authority, nor has such regulatory authority passed upon or endorsed the merits of this offering or passed upon the accuracy or completeness of any offering materials. Any representation to the contrary is unlawful.
No sale of Interests will be made in any jurisdiction in which the offer, solicitation, or sale is not authorised or to any person to whom it is unlawful to make the offer, solicitation or sale. If any such offer of Interests is made, it will be made pursuant to the current IM that contains material information not contained herein and to which prospective investors will be referred. Moreover, the specified terms applicable to the Interests described generally herein, and offered in the IM, will be governed by the terms of the applicable governing documents and IM. Any decision to invest in Interests should be made solely in reliance upon the IM or such agreement which contains important information concerning risk factors, performance and other material aspects of the Fund, and which must be carefully read before any decision to invest is made. It is the responsibility of every person reading this document to satisfy himself as to the full observance of the laws of any relevant country, including obtaining any government or other consent which may be required or observing any other formality which needs to be observed in that country and which might be relevant to the subscription, purchase, holding, exchange, redemption or disposal of any investments. Cheyne Capital is not liable for a breach of such legislation or for any losses relating to the accuracy, completeness or use of information in this communication, including consequential loss. This document does not constitute an offer to sell or solicitation of an offer to buy interests in any Fund or product (“Funds”) and may not be used to make such an offer. The information contained in this document, especially as regards portfolio construction/parameter-type information, reflects Cheyne Capital’s current thinking and may be changed or modified in response to its perception of changing market conditions, or otherwise, without further notice to you. Accordingly, the information herein, in respect of investment products and services relating to Funds should be considered indicative of Cheyne Capital’s current opinion and should not be relied on in making any investment decisions. Any projections or analysis provided to investors and potential investors in evaluating the matters described herein may be based on subjective assessments and assumptions which may not prove valid. Any projections or analysis should not be viewed as factual and should not be relied upon as an accurate prediction of future results.
AIF investments involve significant risks. The investment objective of the Fund is to seek to generate attractive risk adjusted total rates of return a running cash flow yield from investments in commercial and residential collateralised securities, i.e. RMBS and CMBS, and commercial and residential collateralised loans in Western Europe. Investments will be predominantly mezzanine tranches of RMBS and CMBS and Mezzanine Loans. The portfolio risk management process includes an effort to monitor and manage risk but should not be confused with and does not imply low risk. AIF performance data contained herein is net of advisory and management fees and expenses unless otherwise stated. Past results or experience are not indicative of future performance. The value of investments can go down as well as up and is not guaranteed. Investments that have an exposure to currencies other than the base currency of the AIF may be subject to exchange rate fluctuations. Interests may be subject to sudden and large falls in price or value resulting in a large loss on realisation which could equal the amount invested. Recipients are advised to seek independent advice regarding tax, accounting, and legal considerations. Occasionally and upon reasonable request, portfolio composition and related information can be provided to investors and third parties on a monthly basis, and pursuant to confidentiality undertakings to prospective investors; this is described further in the AIFs’ IM. Please contact Cheyne Investor Relations for further details.
No person has been authorised to give any information or to make any representation, warranty, statement or assurance not contained in the IM and if given or made should not be relied upon. Cheyne Capital has not been sponsored, recommended or approved by the U.S. or any agency thereof. Investment in the AIF is only suitable for sophisticated investors for whom an investment in the AIF does not constitute a complete investment programme and who fully understand and are willing to assume the risks involved.
Australia: Cheyne Capital is exempt from the requirement to hold an Australian financial services licence under Class Order 03/1099. For the avoidance of doubt the law under which Cheyne Capital operates differs from Australian law. This document is not a prospectus or product disclosure statement under the Corporations Act 2001 (Cth) (Corporations Act) and does not constitute or involve a recommendation to acquire, an offer or invitation for issue or sale, an offer or invitation to arrange the issue or sale, or an issue or sale, of interests to a ‘Retail Client’ (as defined in Section 761G of the Corporations Act and applicable regulations) in Australia.
Bahrain: The document has not been approved by the Central Bank of Bahrain which takes no responsibility for its contents. No offer to the public to purchase the AIF units will be made in the Kingdom of Bahrain and this document is intended to be read by the addressee only and must not be passed to, issued to, or shown to the public generally.
Canada (Ontario): This confidential document pertains to the offering of the Shares described in this document only in those jurisdictions and to those persons where and to whom they may be lawfully offered for sale, and only by persons permitted to sell such Shares. This document is not, and under no circumstances is to be construed as an advertisement or a public offering of the Shares described in this document in Canada. No securities commission or similar authority in Canada has reviewed or in any way passed upon this document or the merits of the Shares described in this document and any representation to the contrary is an offence.
Hong Kong: This document has not been registered by the Registrar of Companies in Hong Kong. The AIF is a collective investment scheme as defined in the Securities and Futures Ordinance of Hong Kong (the “Ordinance”) but has not been authorised by the Securities and Futures Commission pursuant to the Ordinance. Accordingly, the Shares may only be offered or sold in Hong Kong to persons who are “professional investors” as defined in the Ordinance and any rules made under the Ordinance or in circumstances which are permitted under the Companies (Winding Up and Miscellaneous Provisions) Ordinance of Hong Kong and the Ordinance. In addition, this document may not be issued or possessed for the purposes of issue, whether in Hong Kong or elsewhere and the Shares may not be disposed of to any person unless such person is outside Hong Kong, such person is a “professional investor” as defined in the Ordinance and any rules made under the Ordinance or as otherwise may be permitted by the Ordinance.
Kuwait: This document is not for general circulation to the public in Kuwait. The Units have not been licensed for offering in Kuwait by the Kuwait Capital Markets Authority or any other relevant Kuwaiti government agency. The offering of the Units in Kuwait on the basis of a private placement or public offering is, therefore, restricted in accordance with Decree Law No. 31 of 1990 and the implementing regulations thereto (as amended) and Law No. 7 of 2010 and the bylaws thereto (as amended). No private or public offering of the Units is being made in Kuwait, and no agreement relating to the sale of the Units will be concluded in Kuwait. No marketing or solicitation or inducement activities are being used to offer or market the Units in Kuwait.
Qatar: The Units are only being offered to a limited number of investors who are willing and able to conduct an independent investigation of the risks involved in an investment in such Units. The promotional documentation does not constitute an offer to the public and is for the use only of the named addressee and should not be given or shown to any other person (other than employees, agents or consultants in connection with the addressee’s consideration thereof). The Fund has not been and will not be registered with the Qatar Central Bank or under any laws of the State of Qatar. No transaction will be concluded in your jurisdiction and any enquiries regarding the Units should be made to Cheyne Capital’s Investor Relations department.
Singapore: This document has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this document and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of Shares may not be circulated or distributed, nor may Shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor pursuant to Section 304 of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”) or (ii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.
UAE (inside DIFC): This information does not constitute or form part of any offer to issue or sell, or any solicitation of any offer to subscribe for or purchase, any securities or investment products in the UAE (including the Dubai International Financial Centre) and accordingly should not be construed as such.
Furthermore, this information is being made available on the basis that the recipient acknowledges and understands that the entities and securities to which it may relate have not been approved, licensed by or registered with the UAE Central Bank, the Dubai Financial Services Authority or any other relevant licensing authority or governmental agency in the UAE.
UAE (outside DIFC): This document, and the information contained herein, does not constitute, and is not intended to constitute, a public offer of securities in the United Arab Emirates and accordingly should not be construed as such. The Shares are only being offered to a limited number of sophisticated investors in the UAE who are either (a) an investment fund owned by federal or local government entities in the UAE, (b) an entity whose main object or purpose, or one of its objects, is to invest in securities and its investment in the Shares would be for its own account and not for the account of its clients or (c) an investment manager with authority to make and execute investment decisions.
The Shares have not been approved by or licensed or registered with the UAE Central Bank, the Securities and Commodities Authority or any other relevant licensing authorities or governmental agencies in the UAE. The document is for the use of the named addressee only and should not be given or shown to any other person (other than employees, agents or consultants in connection with the addressee’s consideration thereof).
Hedge Fund Standards Board (“HFSB”)
Cheyne Capital is a signatory of the HFSB and has its AIFs comply with the Best Practice Standards of the HFSB. No responsibility, duty of care or liability whatsoever (whether in contract or tort or otherwise including, but not limited to, negligence) is or will be accepted by the HFSB or the Board of Trustees of HFSB (the "Board of Trustees") to signatories, investors or any other person in connection with the Standards or any Conformity Statement or Disclosure Statement made by any signatory.
Neither HFSB nor the Board of Trustees is a regulator of the hedge fund industry and their role does not extend beyond being a custodian of the Standards. Neither HFSB nor the Board of Trustees will seek to enforce compliance with the Standards by signatories. The fact that a manager is a signatory to the Standards is not and should not be taken as an endorsement of such manager by HFSB or the Board of Trustees or as a representation by HFSB or the Board of Trustees that such signatory operates in conformity with the Standards. In determining whether to accept a manager's application to become a signatory (or whether to revoke a manager's status as a signatory), the Board of Trustees will be entitled to rely on the information provided to it by such manager without further investigation or verification.
Further, subject to any duties a Trustee may have under applicable law, it is not envisaged, or expected, that a Trustee will, when participating in any such decision of the Board of Trustees, take into consideration information which it may possess otherwise than in its capacity as a Trustee. For the avoidance of doubt, Trustees are acting as individuals.
HFSB and the Board of Trustees of HFSB do not accept any responsibility or liability for any loss or damage caused to any person who acts or refrains from acting as a result of anything contained in or omitted from the Standards or any Conformity Statement or Disclosure Statement made by any signatory or in reliance on the provisions of or material in the Standards or any Conformity Statement or Disclosure Statement made by any signatory, whether such loss or damage is caused by negligence or otherwise.