PTARMIGAN GLOBAL EQUITY FUND

INVESTMENT MANAGERS

Ptarmigan Capital has been appointed as Investment Manager to manage the investment and re-investment of the assets of the Compartment. Ptarmigan is a UK based, FCA regulated investment manager which manages directly invested portfolios for individuals, families and trusts. It has an experienced in-house research team with particular expertise in listed global equity security selection and portfolio construction.


INVESTMENT OBJECTIVE AND STRATEGY
The Investment Objective of the Compartment is to provide long term capital growth, measured in USD, primarily through investment in equities and equity-linked securities of global companies, as defined hereafter.

The Compartment will focus on companies listed mainly in the United States, Canada, United Kingdom, European Union, Switzerland, Iceland, Norway, Japan, Hong Kong, Australia, New Zealand and Singapore with market capitalisations generally above USD 1 billion at the time of acquisition. The Compartment may invest up to 10% of net assets in securities of issuers listed in other countries, including emerging market countries. The Compartment will not be constrained to any sector. Investment exposure will be achieved through equities and equity-linked securities, such as shares and depositary receipts. Investors should refer to the "Risk Warning" section for special risk considerations applicable to this Compartment.

The Compartment will be managed using a bottom-up, research driven investment process to construct a concentrated portfolio of typically 25-30 of the Investment Manager's highest conviction investment ideas designed for any economic environment, with a strong focus on valuation. Investment ideas are identified either by ‘inference’ or by ‘observation’. Inference is where the Investment Manager observes an economic or market event and uses his experience to identify a potential investment which may benefit from the event. Observation is where the Investment Manager observes material outperformance or underperformance of a specific security, or where one company highlights the potential investment advantages of another company. The Investment Manager analyses each potential idea against a rigorous framework to answer the following questions:
 

• Market Power – Why can a company continue to generate free cash flow (the cash generated by a company after accounting for capital expenditures to maintain or expand its assets base, representing the cash available for distribution to investors)?
• Cash Flow Potential – Why can a company grow free cash flow per share?
• Strategic Alignment – Will management act to grow free cash flow per share?
• Key External Factors – What risks are outside management’s control?
• Significant Risks – What risks can management mitigate?
• Fundamental Valuation – What is the ‘fair’ price for the shares?
• Market Sentiment – Why might the current share price be different from the ‘fair price’?

To achieve sufficient diversification, the Investment Manager uses four “Styles” corresponding to different stages of the economic cycle and will own a mix of holdings which will perform differently in different economic environments. The Investment Manager will generally hold five to eight holdings in each style at any time.

The four “Styles” are:

• Defensive Growth which are equities the Investment Manager believes will benefit relative to the equity market from falling inflation expectations and a weakening economy,
• Defensive Value which are equities the Investment Manager believes benefit relative to the equity market from rising inflation expectations and a weakening economy,
• Cyclical Growth which are equities the Investment Manager believes benefit relative to the equity market from falling inflation expectations and a strengthening economy, and
• Cyclical Value which are equities the Investment Manager believes benefit relative to the equity market from rising inflation expectations and a strengthening economy.

This investment approach will always be subject to rigorous risk analysis and disciplined risk management procedures, including diversification, a conservative approach to liquidity, prudent exposure limits, and loss minimization procedures through stringent loss cutting practice. Investment risk will be assessed primarily by drawdown, but also by the volatility of returns.

The Compartment has a clear decision-making structure. Any member of the Compartment’s investment management team may research a security, but a single team member is allocated decision making responsibility within one of the four “Style” groups. They have ultimate responsibility over the holdings and weights within their allocated style group, subject to a maximum number of holdings in each style group, and the overall weight allocated to each style group which is determined by the Chief Investment Officer of Ptarmigan Capital Ltd.


INVESTMENT RESTRICTIONS

For the avoidance of doubt, the Compartment will not invest more than 10% of its net asset in UCITS and other UCIs (including open-ended exchange traded funds whose underlying belong to the Compartment's investment universe) (as defined under "Investment Restrictions" 1. (A) (1) d)).

Subject to the limits set out in section "Investment Restrictions", the Compartment may hold no more than 20% of its net assets in bank deposits at sight, such as cash held in current accounts with a bank accessible at any time, for ancillary liquidity purposes in normal market conditions.

Under normal market conditions, the Compartment may invest in liquid assets and short-term debt instruments (including deposits, money market instruments and money market funds) of any kind in order to achieve its investment goals and for treasury purposes.

In exceptional market circumstances and on a temporary basis, the Compartment may hold up to 100% of its net assets in liquid assets and investment grade debt instruments (including money market instruments).

Further, the investments in this Compartment shall remain subject to fluctuation in exchange rate as the underlying investment will predominantly be in USD, EUR, GBP, HKD, JPY and CAD while the functional currency of the Compartment is USD. As such, 100% of the Compartment’s investments may be exposed to foreign currency exchange risk.


SUSTAINABILITY APPROACH
The Investment Manager will consider sustainability and ESG risks in its investment decision making process (the "Sustainability Risks"), but will not exclude any security purely on the basis of the Sustainability Risks.

The material ESG risk factors are analysed alongside traditional financial factors and are considered in forming investment decisions.

Data collection is mainly through primary sources drawn from public documents provided by companies with supplementation from third party sources. The result of the ESG risk score will not be binding on the Investment Manager which will at its discretion decide to divest or engage with a company when considering Sustainability Risks integration.

While the Investment Manager will integrate ESG and Sustainability Risks in its investment decision making process, the Investment Manager does not currently consider principal adverse impacts of investment decisions on sustainability factors.

The Compartment does not promote environmental or social characteristics within the meaning of SFDR (article 8) nor is it classified as pursuing a sustainable investment objective (article 9). The investments underlying this Compartment do not take into account the EU criteria for environmentally sustainable economic activities.