KEY INVESTOR INFORMATION DOCUMENT

Transcription

1 KEY INVESTOR INFORMATION DOCUMENT This document provides you with key investor information about this fund. It is not marketing material. The information is required by law to help you understand the nature and the risks of investing in this fund. You are advised to read it so you can make an informed decision about whether to invest. FCP Laffitte Risk Arbitrage Ucits Part I : FR OBJECTIVES AND INVESTMENT POLICY Laffitte Risk Arbitrage Ucits is categorized as a «diversified» OPCVM. The FCP s objective is to achieve an absolute performance, uncorrelated to the equity market. The performance of the Fund can not be compared to any benchmark index. Nevertheless, the performance a posteriori can be compared to EONIA capitalized annualized. The Fund implements arbitrage strategies, mainly on the equity market, having an impact on the allotment or structure of the capital of a company in particular mergers and acquisitions. The investment strategy is based on a fundamental analysis reinforced by a quantitative analysis (proprietary tools) and on an optimization of the portfolio allocation. The Fund s positions are managed dynamically. Hedging strategies taking advantage of the decline of single stock or the equity markets can be put in place. The analysis of the risk / reward ratio for each arbitrage enables the Fund s managers to delineate the most appropriate instruments. In the majority of cases operations are initiated on companies listed in Europe and North America and in other geographical aeras. Investments used may apply to all sectors. Investments used may apply to all sectors, provided that the following specifications on financial instruments are observed : Stocks on all market capitalizations with a 10% limit on small capitalizations ; Derivatives listed on equity and indices markets in the U.S. and in Europe ; CFD, Equity Swaps: derivatives that allow the take advantage of upward or downward movements of a security without holding it ; Positions on the interest rate market (interest rate swap, interest rate futures), Forex market (FX swaps, forward) to hedge the portfolio; Securities embedding derivatives. To fulfil its objectives, the FCP Laffitte Equity Arbitrage may have a gross exposure greater than 200% as it is not monitored using a linear methodology but a probabilistic one with a Value at Risk (VaR) limit. The gross exposure is the sum of long and short positions. The FCP may invest up to 10% in units of harmonised or nonharmonised funds complying with the four criteria of the article R of the Code Monétaire et Financier. The FCP may be invested as well in short term notes, short term deposit and other money market instruments. These securities could be issued by Countries or Corporates with no limit in rating. In particular market conditions, the FCP may invest up to 100% of its assets in these instruments. Allotment of revenues: capitalization. Subscriptions and redemptions: Daily liquidity, subscriptions and redemptions applications are centralized at the custodian at 11:00 am (Paris time) one business day preceding the valuation date D. The payment related to purchases occurs in D+3 on the basis of net asset value in D and in D+5 for redemptions. The recommended holding period is 3 years. RISK RETURN PROFILE Lower Risk Typically lower rewards Higher Risk Typically higher rewards Signification of the indicator: This indicator measures the level of risk at which your investment may be exposed and the Fund s expected return. Historical data used to compute it are not a reliable indicator of future performance. The risk category of the Fund is not guaranteed and may shift over time. The lowest category does not mean «riskfree». The calculation of this indicator is mainly based on the changes in the Net Asset Value per unit of the FCP and on the risks linked to the Fund s arbitrage strategies. The Fund s display a grade of 3 on a scale ranking from 1 to 7 (1 being the less risky category). Important risks not taken into account by the indicator and that may cause a significant drop OPCVM s NAV: Impact of techniques used, as the use of derivatives or leverage; Counterparty risk linked to the use of OTC derivatives; Credit risk linked to the investment on credit or monetary markets. This product does not embed any capital guarantee. The investor may loose a part of its initial investment. Laffitte Risk Arbitrage Ucits «I» Unit Key Investor Information Document

2 FEES The charges you pay are used to pay the costs of running the Fund, including the costs of marketing and distribution. These charges reduce the potential growth of your investment. One off charges taken before or after you invest Entry charge 0% Exit charge 0% The indicated percentage is the maximum that might be taken out your money before it is invested and before the proceeds of your investment are paid out. This percentage may be lower than the indicated rate. The investor can consult his advisor or distributor to know what the charges will be for entry and exit. Charges taken for the Fund over a year Ongoing charges* 1.56% of the assets Charges taken from the fund under specific conditions Performance Fees 15% included VAT of any positive return the fund achieves above Eonia capitalized. The commission for the exercise 2014/15: 0.48%. * Investors should be aware that the figures indicated for «Ongoing charges» and «Performance fees» are based on the expected fees of the first exercise that will close on June 30 th, 2014 and this figure may change in the future. For further information regarding the charges, please refer to pages 14 and 15 of the Offering Memorandum for this OPCVM, available on the website Ongoing charges exclude performance fees and portfolio transaction costs, except in the case of an entry/exit charge paid by the OPCVM when buying or selling units in another type of collective investment. PAST PERFORMANCES 10.00% 9.00% 8.00% 7.00% 6.00% 5.00% 4.00% Annual performance of the OPCVM compared to EONIA Capitalised Fund Eonia Capitalised Notice Past performances are not a reliable indicator for future performances. The performance indicated is net of all costs. The performance mentioned is also net of all fees with the exception of the entry or exit charges that may apply on «I» shares. 3.00% 2.00% 1.00% 0.00% 1.32% 0.10% Date of creation of the OPCVM : 10/06/2009 Date of creation of the Unit I: 01/07/2013 Currency: Euro PRACTICAL INFORMATION Major changes within the period: none Custodian: RBC INVESTOR SERVICES BANK France SA. Prospectus/annual report/semi annual report: these documents can be obtained free of charge and sent within a week, upon written request sent from the holder to the following address: LAFFITTE CAPITAL MANAGEMENT, rue Saint Augustin, PARIS France. Tél Website: these documents are available as well on Other practical types of information, notably the Net Asset Value, are available in the office of the Investment Company. Tax regime: The Investor should note that depending on your tax legislation, capital gains and incomes linked to the holding of shares of the OPCVM may be subject to taxation. We advise you to contact the marketer of the OPCVM regarding that matter. Laffitte Capital Management may be held liable solely on the basis of any statement contained in this document that is misleading, inaccurate or inconsistent with the relevant parts of the Fund s prospectus. The Fund is accredited by France and regulated by the Autorité des Marchés Financiers. Laffitte Capital Management is regulated by the Autorité des Marchés Financiers. The Key Investor Information Document has been updated and is accurate as of October 05, Laffitte Risk Arbitrage Ucits «I» Unit Key Investor Information Document

3 KEY INVESTOR INFORMATION DOCUMENT This document provides you with key investor information about this fund. It is not marketing material. The information is required by law to help you understand the nature and the risks of investing in this fund. You are advised to read it so you can make an informed decision about whether to invest. FCP Laffitte Risk Arbitrage Ucits Part A : FR OBJECTIVES AND INVESTMENT POLICY Laffitte Risk Arbitrage Ucits is categorized as a «diversified» OPCVM. The FCP s objective is to achieve an absolute performance, uncorrelated to the equity market. The performance of the Fund can not be compared to any benchmark index. Nevertheless, the performance a posteriori can be compared to EONIA capitalized annualized. The Fund implements arbitrage strategies, mainly on the equity market, having an impact on the allotment or structure of the capital of a company in particular mergers and acquisitions. The investment strategy is based on a fundamental analysis reinforced by a quantitative analysis (proprietary tools) and on an optimization of the portfolio allocation. The Fund s positions are managed dynamically. Hedging strategies taking advantage of the decline of single stock or the equity markets can be put in place. The analysis of the risk / reward ratio for each arbitrage enables the Fund s managers to delineate the most appropriate instruments. In the majority of cases operations are initiated on companies listed in Europe and North America and in other geographical aeras. Investments used may apply to all sectors. Investments used may apply to all sectors, provided that the following specifications on financial instruments are observed : Stocks on all market capitalizations with a 10% limit on small capitalizations ; Derivatives listed on equity and indices markets in the U.S. and in Europe ; CFD, Equity Swaps: derivatives that allow the take advantage of upward or downward movements of a security without holding it ; Positions on the interest rate market (interest rate swap, interest rate futures), Forex market (FX swaps, forward) to hedge the portfolio; Securities embedding derivatives. To fulfil its objectives, the FCP Laffitte Equity Arbitrage may have a gross exposure greater than 200% as it is not monitored using a linear methodology but a probabilistic one with a Value at Risk (VaR) limit. The gross exposure is the sum of long and short positions. The FCP may invest up to 10% in units of harmonised or nonharmonised funds complying with the four criteria of the article R of the Code Monétaire et Financier. The FCP may be invested as well in short term notes, short term deposit and other money market instruments. These securities could be issued by Countries or Corporates with no limit in rating. In particular market conditions, the FCP may invest up to 100% of its assets in these instruments. Allotment of revenues: capitalization. Subscriptions and redemptions: Daily liquidity, subscriptions and redemptions applications are centralized at the custodian at 11:00 am (Paris time) one business day preceding the valuation date D. The payment related to purchases occurs in D+3 on the basis of net asset value in D and in D+5 for redemptions. The recommended holding period is 3 years. RISK RETURN PROFILE Lower Risk Typically lower rewards Higher Risk Typically higher rewards Signification of the indicator: This indicator measures the level of risk at which your investment may be exposed and the Fund s expected return. Historical data used to compute it are not a reliable indicator of future performance. The risk category of the Fund is not guaranteed and may shift over time. The lowest category does not mean «riskfree». The calculation of this indicator is mainly based on the changes in the Net Asset Value per unit of the FCP and on the risks linked to the Fund s arbitrage strategies. The Fund s display a grade of 3 on a scale ranking from 1 to 7 (1 being the less risky category). Important risks not taken into account by the indicator and that may cause a significant drop OPCVM s NAV: Impact of techniques used, as the use of derivatives or leverage; Counterparty risk linked to the use of OTC derivatives; Credit risk linked to the investment on credit or monetary markets. This product does not embed any capital guarantee. The investor may loose a part of its initial investment. Laffitte Risk Arbitrage Ucits «A» Unit Key Investor Information Document

4 FEES The charges you pay are used to pay the costs of running the Fund, including the costs of marketing and distribution. These charges reduce the potential growth of your investment. One off charges taken before or after you invest Entry charge 0% Exit charge 0% The indicated percentage is the maximum that might be taken out your money before it is invested and before the proceeds of your investment are paid out. This percentage may be lower than the indicated rate. The investor can consult his advisor or distributor to know what the charges will be for entry and exit. Charges taken for the Fund over a year Ongoing charges* 2.08% of the assets Charges taken from the fund under specific conditions Performance Fees 20% included VAT of any positive return the fund achieves above Eonia capitalized. The commission for the exercise 2014/15: 0.37%. * Investors should be aware that the figures indicated for «Ongoing charges» and «Performance fees» are based on the expected fees of the first exercise that will close on June 30 th, 2014 and this figure may change in the future. For further information regarding the charges, please refer to pages 14 and 15 of the Offering Memorandum for this OPCVM, available on the website Ongoing charges exclude performance fees and portfolio transaction costs, except in the case of an entry/exit charge paid by the OPCVM when buying or selling units in another type of collective investment. PAST PERFORMANCES 6.00% 4.00% Annual performance of the OPCVM compared to EONIA Capitalised 4.79% 3.33% 4.09% Notice Past performances are not a reliable indicator for future performances. The performance indicated is net of all costs. 2.00% 0.00% 2.00% 4.00% 6.00% 0.43% 0.88% 0.74% 0.24% 0.09% 0.10% Fund Eonia Capitalised 5.91% The performance mentioned is also net of all fees with the exception of the entry or exit charges that may apply on «A» shares. Date of creation of the OPCVM : 10/06/2009 Currency: Euro PRACTICAL INFORMATION Major changes within the period: Change of status of the FCP from ARIA EL to UCITS on 04/21/2010. Custodian: RBC INVESTOR SERVICES BANK France SA. Prospectus/annual report/semi annual report: these documents can be obtained free of charge and sent within a week, upon written request sent from the holder to the following address: LAFFITTE CAPITAL MANAGEMENT, rue Saint Augustin, PARIS France. Tél Website: these documents are available as well on Other practical types of information, notably the Net Asset Value, are available in the office of the Investment Company. Tax regime: The Investor should note that depending on your tax legislation, capital gains and incomes linked to the holding of shares of the OPCVM may be subject to taxation. We advise you to contact the marketer of the OPCVM regarding that matter. Laffitte Capital Management may be held liable solely on the basis of any statement contained in this document that is misleading, inaccurate or inconsistent with the relevant parts of the Fund s prospectus. The Fund is accredited by France and regulated by the Autorité des Marchés Financiers. Laffitte Capital Management is regulated by the Autorité des Marchés Financiers. The Key Investor Information Document has been updated and is accurate as of October 05, Laffitte Risk Arbitrage Ucits «A» Unit Key Investor Information Document

5 KEY INVESTOR INFORMATION DOCUMENT This document provides you with key investor information about this fund. It is not marketing material. The information is required by law to help you understand the nature and the risks of investing in this fund. You are advised to read it so you can make an informed decision about whether to invest. FCP Laffitte Risk Arbitrage Ucits Part S : FR OBJECTIVES AND INVESTMENT POLICY Laffitte Risk Arbitrage Ucits is categorized as a «diversified» OPCVM. The FCP s objective is to achieve an absolute performance, uncorrelated to the equity market. The performance of the Fund can not be compared to any benchmark index. Nevertheless, the performance a posteriori can be compared to EONIA capitalized annualized. The Fund implements arbitrage strategies, mainly on the equity market, having an impact on the allotment or structure of the capital of a company in particular mergers and acquisitions. The investment strategy is based on a fundamental analysis reinforced by a quantitative analysis (proprietary tools) and on an optimization of the portfolio allocation. The Fund s positions are managed dynamically. Hedging strategies taking advantage of the decline of single stock or the equity markets can be put in place. The analysis of the risk / reward ratio for each arbitrage enables the Fund s managers to delineate the most appropriate instruments. In the majority of cases operations are initiated on companies listed in Europe and North America and in other geographical aeras. Investments used may apply to all sectors. Investments used may apply to all sectors, provided that the following specifications on financial instruments are observed : Stocks on all market capitalizations with a 10% limit on small capitalizations ; Derivatives listed on equity and indices markets in the U.S. and in Europe ; CFD, Equity Swaps: derivatives that allow the take advantage of upward or downward movements of a security without holding it ; Positions on the interest rate market (interest rate swap, interest rate futures), Forex market (FX swaps, forward) to hedge the portfolio; Securities embedding derivatives. To fulfil its objectives, the FCP Laffitte Equity Arbitrage may have a gross exposure greater than 200% as it is not monitored using a linear methodology but a probabilistic one with a Value at Risk (VaR) limit. The gross exposure is the sum of long and short positions. The FCP may invest up to 10% in units of harmonised or nonharmonised funds complying with the four criteria of the article R of the Code Monétaire et Financier. The FCP may be invested as well in short term notes, short term deposit and other money market instruments. These securities could be issued by Countries or Corporates with no limit in rating. In particular market conditions, the FCP may invest up to 100% of its assets in these instruments. Allotment of revenues: capitalization. Subscriptions and redemptions: Daily liquidity, subscriptions and redemptions applications are centralized at the custodian at 11:00 am (Paris time) one business day preceding the valuation date D. The payment related to purchases occurs in D+3 on the basis of net asset value in D and in D+5 for redemptions. The recommended holding period is 3 years. RISK RETURN PROFILE Lower Risk Typically lower rewards Higher Risk Typically higher rewards Signification of the indicator: This indicator measures the level of risk at which your investment may be exposed and the Fund s expected return. Historical data used to compute it are not a reliable indicator of future performance. The risk category of the Fund is not guaranteed and may shift over time. The lowest category does not mean «riskfree». The calculation of this indicator is mainly based on the changes in the Net Asset Value per unit of the FCP and on the risks linked to the Fund s arbitrage strategies. The Fund s display a grade of 3 on a scale ranking from 1 to 7 (1 being the less risky category). Important risks not taken into account by the indicator and that may cause a significant drop OPCVM s NAV: Impact of techniques used, as the use of derivatives or leverage; Counterparty risk linked to the use of OTC derivatives; Credit risk linked to the investment on credit or monetary markets. This product does not embed any capital guarantee. The investor may loose a part of its initial investment. Laffitte Risk Arbitrage Ucits «S» Unit Key Investor Information Document

6 FEES The charges you pay are used to pay the costs of running the Fund, including the costs of marketing and distribution. These charges reduce the potential growth of your investment. One off charges taken before or after you invest Entry charge 0% Exit charge 0% The indicated percentage is the maximum that might be taken out your money before it is invested and before the proceeds of your investment are paid out. This percentage may be lower than the indicated rate. The investor can consult his advisor or distributor to know what the charges will be for entry and exit. Charges taken for the Fund over a year Ongoing charges* 0.68% of the assets Charges taken from the fund under specific conditions Performance Fees 0% * Investors should be aware that the figures indicated for «Ongoing charges» and «Performance fees» are based on the expected fees of the first exercise that will close on June 29 th, 2012 and this figure may change in the future. For further information regarding the charges, please refer to pages 14 and 15 of the Offering Memorandum for this OPCVM, available on the website Ongoing charges exclude performance fees and portfolio transaction costs, except in the case of an entry/exit charge paid by the OPCVM when buying or selling units in another type of collective investment. PAST PERFORMANCES 9.00% 7.00% 5.00% 3.00% 1.00% 1.00% Annual performance of the OPCVM compared to EONIA Capitalised 7.41% 0.43% 5.51% 0.88% 5.78% 2.94% 0.24% 0.09% 0.10% Notice Past performances are not a reliable indicator for future performances. The performance indicated is net of all costs. The performance mentioned is also net of all fees with the exception of the entry or exit charges that may apply on «A» shares. Date of creation of the OPCVM : June 10 th, 2009 Currency: Euro 3.00% 5.00% Fund Eonia Capitalised 4.62% Major changes within the period: Change of status of the FCP from ARIA EL to UCITS on 04/21/2010. PRACTICAL INFORMATION Custodian: RBC INVESTOR SERVICES BANK France SA. Prospectus/annual report/semi annual report: these documents can be obtained free of charge and sent within a week, upon written request sent from the holder to the following address: LAFFITTE CAPITAL MANAGEMENT, rue Saint Augustin, PARIS France. Tél Website: these documents are available as well on Other practical types of information, notably the Net Asset Value, are available in the office of the Investment Company. Tax regime: The Investor should note that depending on your tax legislation, capital gains and incomes linked to the holding of shares of the OPCVM may be subject to taxation. We advise you to contact the marketer of the OPCVM regarding that matter. Laffitte Capital Management may be held liable solely on the basis of any statement contained in this document that is misleading, inaccurate or inconsistent with the relevant parts of the Fund s prospectus. The Fund is accredited by France and regulated by the Autorité des Marchés Financiers. Laffitte Capital Management is regulated by the Autorité des Marchés Financiers. The Key Investor Information Document has been updated and is accurate as of October 05, Laffitte Risk Arbitrage Ucits «S» Unit Key Investor Information Document

7 LAFFITTE RISK ARBITRAGE UCITS OFFERING MEMORANDUM COMPLIANT WITH THE UCITS DIRECTIVE 29 31, rue Saint Augustin Paris France

8 DISCLAIMER This document is a free translation into English of the prospectus issued in French and it may include errors and/or omissions. It is provided solely for the convenience of English speaking users. This prospectus should be read in conjunction with, and construed in accordance with French law. 2

9 TABLE OF CONTENTS OFFERING MEMORANDUM 5 I GENERAL CHARACTERISTICS 5 1. FORM OF THE FUND 5 2. SUMMARY OF THE INVESTMENT OFFER 5 II. PLAYERS 7 III MANAGEMENT AND OPERATIONS 8 1. GENERAL CHARACTERISTICS 8 Characteristics of the Units or Shares 8 Closing date 8 Tax regime 8 2. SPECIAL PROVISIONS 8 Classification 8 Management Objective 8 Benchmark 8 Risk Profile 11 Guarantee or protection 13 Subscribers and the investor profile typology 13 Allotment of results 13 Initial value and amounts of subscription 14 Terms of subscription and redemption 14 Fees and commissions 14 IV. MARKETING INFORMATION 15 V. INVESTMENT GUIDELINES 16 VI. RULES FOR THE ASSESSMENT AND THE ACCOUNTING OF ASSETS 16 FUND RULES 18 3

10 4

11 OFFERING MEMORANDUM Laffitte Risk Arbitrage is a UCITS Fund I GENERAL CHARACTERISTICS 1. FORM OF THE FUND Name: LAFFITTE RISK ARBITRAGE UCITS Legal form of the Fund: Fonds Commun de Placement (FCP), governed by French law and established in France Creation date and projected term: created on June 10 th, 2009 for 99 years. 2. SUMMARY OF THE INVESTMENT OFFER ISIN code A Units: I Units: S Units: FR FR FR Allocation of income Currency Recommended minimum investment period Frequency of the NAV calculation Capitalisation Euro 3 years Daily Closing date of the annual exercise Last NAV in June NAV at inception Unit A : ,13 Unit I : ,00 Unit S : ,90 Minimum initial subscription for A and S Units for I unit* Minimum subsequent subscription None Subscribers concerned A and I Unit are open to all subscribers and, in particular, to institutional investors for Unit I. S Unit is dedicated to staff and managers of the asset management company. The Units must not in any circumstances be offered, distributed or transferred: (i) in the United States of America, in any of its States or in any other political subdivision of the United States of America, or (ii) to or on behalf of or for the direct or indirect benefit of any United States Person (as defined in Regulation S of the "United States Securities Act" of 1933). 5

12 The latest annual documents (annual report) will be sent to you within one week, on your request to the Management Company: LAFFITTE CAPITAL MANAGEMENT rue Saint Augustin Paris Phone : e mail: sales@laffittecapital.com All additional information can be obtained by contacting Laffitte Capital Management Company at the above address. The AMF website france.org contains additional information regarding the list of regulatory documents and the set of provisions related to the protection of investors. 6

13 II. PLAYERS Management Company : Custodian : Statutory Auditor : LAFFITTE CAPITAL MANAGEMENT SAS was authorized to do business on 03/10/2007 authorization number is GP Legal status: Société Anonyme par Actions Simplifiée Registered office and postal address: 29 31, rue Saint Augustin Paris RBC INVESTOR SERVICES BANK France SA Legal status: Société Anonyme Regulatory authorities: CECEI and the regulatory Banking Commission Registered office and postal address: 105, rue Réaumur Paris PwC Sellam represented by: Frédéric Sellam Registered office and postal address: Avenue des Champs Elysées PARIS Centraliser of subscription and redemption orders : RBC INVESTOR SERVICES BANK France SA Legal status: Société Anonyme Headquarters and postal address: 105, rue Réaumur Paris Accounting administrator: Marketer: RBC INVESTOR SERVICES France SA Legal status Société Anonyme Postal address: 105, rue Réaumur Paris LAFFITTE CAPITAL MANAGEMENT SAS was authorized to do business on 03/10/2007 authorization number is GP Legal status: Société Anonyme Simplifiée Registered office and postal address: rue Saint Augustin Paris The management company may use other marketers in the future. 7

14 III MANAGEMENT AND OPERATIONS 1. GENERAL CHARACTERISTICS Characteristics of the Units or Shares Isin code: Unit A: FR Unit I: FR Unit USD: FR Unit S: FR Nature of the rights attached to the class of shares: Each subscriber has a joint ownership right concerning the assets of the Fund and in proportion to the number of shares owned. Registration and management of liability: the shares are recorded at Euroclear France and follow the normal procedures of payments and delivery. The units are held by the depositary as liabilities: RBC Dexia Investor Services Bank France S.A. 105, rue Réaumur Paris. Voting rights: No voting rights are attached to the shares. Decisions are made by the Management Company. Please note that information on changes in the Fund's operating methods are given to bearers either individually, or by way of press, or by any other means complying with the currently applicable regulations. Form shares: Bearer. Decimalisation: Yes (thousandths). Closing date The last NAV was calculated in June. The first closing took place in June Tax regime The Fund is not subject to income tax. Shareholders, however, may be subject to tax on the amounts paid by the Fund, if applicable, or when selling shares in the Fund. The tax regime applicable to the amounts paid by the Fund and to the Fund s unrealised and realised capital gains and losses depends on the tax rules applicable to the investor's specific situation, his tax residence and/or the investment jurisdiction of the Fund. If the investor is not sure of his tax situation, he/she must consult a tax advisor or a consultant. Certain amounts paid by the Fund to non residents in France are likely to be subject to withholding tax. 2. SPECIAL PROVISIONS Classification LAFFITTE Risk Arbitrage UCITS is a Ucits III Fonds Commun de Placement classified as «Diversified». Management Objective The fund goal is to achieve a performance un correlated to the equity market. In other respects, the fund has an objective to maintain a volatility level below 5%. Benchmark The objective of the management team is to obtain an absolute performance by using different arbitrage strategies, mainly alternatives. The performance of these funds is not assessed in relation to the evolutions of a benchmark. The objective of the management team is to obtain an absolute performance by using different arbitrage strategies, mainly alternatives. The performance of the funds is not assessed in relation to the evolution of a benchmark. Nevertheless, the performance may be compared ex post to the yearly capitalized EONIA for Units quoted in Euro and compared to capitalized Fed Fund Effective Rate US for units quoted in Dollar. EONIA (Euro Overnight Index Average) corresponds to the daily zero risk interest rate in the Euro zone. It is calculated by the European Central Bank. 8

15 Fed Fund Effective Rate US represents the volume weighted average of interest rates at which depository institutions lend balances at the Federal Reserve to other depository institutions overnight. The rate is released by the Federal Reserve. Investment Strategy The fund s objective is to implement arbitrage strategies by using a three pronged approach: a fundamental analysis linked to a statistical probabilistic analysis and an optimization of the portfolio s allocation based on the risk/reward of each position. In doing so, the Fund Management team has built proprietary analysis tools designed as databases to process and analyse the available data for each of the arbitrage; and use the results of past arbitrages to detect the best opportunities The statistical probabilistic analysis helps the asset manager to estimate the faire value of a merger arbitrage spread by computing the probability of success of the offer and the potential fall of the stock if the offer fails. The decisions of the asset managers are mainly discretionary. Decisions are taken on a daily basis and are traded in a dynamic way. There is weekly review of the fund s strategies by the managers. Positions are traded «Long / Short», i.e. the purchase of a stock is compensated by the sale of another one. The dispersion of the arbitrages among various techniques and markets help the managers to build a diversified portfolio. The split between various arbitrages depends on market conditions and takes into account stop loss considerations to reduce the potential losses. The strategies are mainly implemented in Europe and in North America. A small part of the portfolio can be invested in other geographic zones (notably in Japan or countries outside of the Organisation for Economic Cooperation and Development). Investments cover all financial sectors and in every type of market capitalization with a limit of 10% for the small capitalizations, under the conditions set forth in the specifications of the financial instruments used. The fund can be invested in CFD «Contract For Differences» and/or OTC equity swaps in order to replicate long or short positions. CFD and equity swaps are simple instruments. The underlying assets are equities. These instruments allow the managers to sell and borrow a stock in the same contract. The asset managers can take positions on equity or index derivatives to hedge or expose the portfolio. The FCP may be invested on securities embedding derivatives like subscription rights or convertible bonds that give immediate or deferred access to the capital of a company In order to cover its cost of financing and its rate exposure, the FCP can also invest on worldwide interest rate markets (interest rate swaps, interest rate Futures), FX markets (FX Swaps, Forward FX) and secure its rate of financing with Total Return Swaps and options strategies. The gross exposure level is the sum of long and short positions. The indicative gross exposure is 170%. It can be broken down as follows: 130% long and 40% short. However, under certain circumstances, the Fund may have a greater gross exposure. The FCP may invest up to 10% of its cash in units of harmonised or non harmonised funds complying with the four criteria of the article R of the Code Monétaire et Financier. The FCP may be invested as well in short term notes, short term deposit and other money market instruments. These securities could be issued by Countries or Corporates with no limit in rating, including speculative «high yield» bonds. The different strategies in the fund are: 1 Description of the investment strategies: Primary Strategy : Merger Arbitrage on announced deals Principle of the strategy Buy or sell shares (or other securities) involved in the form of a cash takeover bid, of an exchange offer, a squeeze out or mergers. These strategies are implemented only when the operation is officially announced in the market. 9

16 The natural order of things would be to purchase the target company at a discount compared to the value implied by the offer and hold the securities until the settlement of the offer. If the offer is in company shares from the buyer (or if the offer is mixed), a selling position is initiated on the shares of the acquiring company in order to take advantage of the difference between the implied value of the offer and market price of the target. If the probability of success of the operation seems insufficient, the inverse position can be set up (sale of the target) in the case of a takeover or sale of the target and purchase of the purchaser in the case of a stock offer. It is also possible that the target company is the subject of a counter bid in this case it is possible to buy the target shares at a higher price than the current implied value of the first bid. Secondary Strategy : Corporate Action Arbitrages and non announced deals To improve the efficiency of management, two strategies may be put into place: Arbitrage of corporate actions provides an attractive risk/reward because these offers were issued without conditions. Arbitrage Preferential Subscription Rights / Underlying shares: These include the purchase of Subscription rights when they are quoted below their nominal value and the sale of the underlying securities of the subscription (equities, convertible warrants...), or the reverse if the subscription right is quoted above their theoretical value. Arbitrage is balanced if the quantity of stocks in the short position is exactly the same as the number that DPS will get upon subscription. There are two types of Subscription rights: with or without payment of the new share at strike. Share Class Arbitrage : Share Class arbitrage consists in buying and selling different equity classes of the same issuer. These classes may be ordinary shares, saving shares, preferred shares, bearer shares etc The spread between different classes depends on the liquidity of each security, the dividend, the voting right, the borrowing cost and the probability of conversion The natural position is to anticipate a conversion of a saving or preferred share into an ordinary share but the opposite position may be taken if the spread is tight. This kind of arbitrage is also applicable to securities of the same issuer quoted on different places such as American Depositary Receipt (ADR) quoted in USD or American Depositary Shares (ADS) in Canada, denominated in CAD. The sale of ADR or ADS against the buying of the underlying stock is possible because the ordinary shares can be converted into ADR or ADS. The operations in non announced deals The pre announcement that is to say not formally announced but widely expected present a risk which is higher than that of the rest of the portfolio in exchange for much more attractive yields. This strategy is more dynamic than the others, and the management team favours arbitrage of announced mergers and acquisitions. In practice, these operations can work on the same principle as the one mentioned above for announced mergers and acquisitions. It is to capture the under valuation in the market for the target of the offer compared to its theoretical value determined by the potential terms of the offer. These strategies should therefore also be within the analytical framework of announced mergers and acquisitions. 2 Description of Assets (except derivatives) used to reach the investment objectives: The assets may be invested as follow: a) Between 0% and 100% in equities In most cases, the transactions are related to the shares of companies. There may be circumstances where the operation is extended to other types of financial instruments such as (convertible bonds, debt securities, subscription warrants). The analysis of the risk / reward on investment helps to determine what instrument or instruments will be the most adequate. b) Between 0% and 100% in money market instruments The fund is long cash. The cash management consists in investing on the money market. The FCP may be invested as well in short term notes, short term deposit and other money market instruments. These securities could be issued by Countries or Corporates with no limit in rating, including speculative «high yield» bonds. In specific market conditions, the exposure to these instruments may amount to 100%. 10

17 c) Between 0% and 10% in units of Funds: The selected funds might be of all types, in particular monetary funds. These funds may be harmonised or non harmonised funds complying with the four criteria of the article R of the Code Monétaire et Financier. The Fund will be allow to invest in other funds managed by the Management Company. The exposure on this asset class is made in order to diversify the portfolio, enhance cash management and optimize the Fund s performance. 3 Derivatives instruments The management team can take positions on vanilla forward securities (Futures and options on stocks, indices and dividends) on French and foreign markets, listed or OTC. It may also take positions on interest rates (interest rate swaps, futures rates), on currencies (fx swap, forward foreign exchange) to hedge the portfolio. The fund can be invested in CFD «contract for differences» and/or OTC equity swaps in order to replicate long or short positions. CFDs and equity swaps are simple instruments. The underlying assets are equities. These instruments allow the managers to sell and borrow a stock in the same contract. In terms of performance, CFDs reflect the same performance as the underlying shares. The Fund uses mainly OTC contracts on a single stock, equivalent to the holding or short selling of this stock CFDs are used through a convention and the counterparties are selected according to a strict procedure. CFDs may embed a risk of liquidity. 4 Securities embedding derivatives The FCP may invest in warrants listed in France or on any other market as well in subscription rights, certificates, Euro Medium Term Notes (EMTN), in convertibles bonds of different types (bonds convertibles in actions, bonds convertibles in subscription rights, bonds payable stocks, bonds with a conversion and or exchange option in existing or new shares (OCEANE)) and more generally all financial instrument embedding a derivative allowing immediate or differed access to the capital of a company, with the objective of hedging or expose the portfolio. The over exposure to the market through derivatives is limited to 100%. 5 Cash loans The fund reserves the possibility of borrowing cash up to 10% of its net assets in compliance with existing regulations. 6 Securities lending/borrowing The FCP may use temporary sales of financial instruments to fulfil its investment objective. These operations may amount up to 100% of the net assets. Risk Profile The investments of customers will be invested mainly in financial instruments selected by the Investment Company. These instruments will follow developments, evolutions and the ups and downs of the market. Given the nature of the activities of the FCP, performance can fluctuate significantly, depending on the period. The performance over a period of time is not in any way a sign of future performance. Potential investors have to consider these following factors in order to estimate if their investment objective reflects this profile of risk taker. By decreasing importance, the main risks are the following: Main risks The risk of capital loss The fund offers no capital guarantee or protection. Investors may not get back the total value of their initial investment. Risk linked to the equity market The strategies implemented are mainly Long/Short i.e. consist in purchasing a security and compensating it by the sale of another security or by a hedging operation using derivatives. However, the whole portfolio can have a significant residual net exposure to the market. A residual short exposure may lead to a significant fall of the fund s NAV if the market goes up. This risk may cause a significant fall of the fund s Net asset Value. 11

18 Leverage risk Due to the fact that the products require a low initial payment, a minimal variation of the underlying assets can generate a gain or loss of a significant proportion of the initial investment. The management of the fund can use the leverage through borrowing cash or securities and by using financial instruments. This leverage enhances the potential gains but also heightens the risk of loss. This risk may cause a significant fall of the fund s Net asset Value. Counterparty risk Considering the OTC instruments, the fund could bear a counterparty risk. This risk measures the loss that could occur in case of default by counterparty. A case of default may cause a significant fall of the fund s Net asset Value. Specifically, the operating rules and the guarantees linked to these operations (collateral and margin calls) respect the rules and regulations applicable to this kind of instruments. Credit risk Credit risk is the risk that the issuer quality declines or that the issuer defaults. This risk is lies in the fact that the bond or debt instrument issuer may not pay back the coupons or the principal. This default or the decline of the issuer quality may cause a significant fall of the Net Asset Value. Interest rate Risk Assets of the fund may be invested on the money market. The return of these investments is negatively linked to a fall of the interest rates. Furthermore, the evolution of the interest rate curve has an impact on the return of merger arbitrage positions specifically on cash bid with a long timetable. This risk may cause a significant decline of the Net Asset Value. Discretionary risk linked to the strategies of arbitrage implemented in the fund Risk of not fulfilling the fund s objective Considering the fund s strategy, the main risk taken by the investor leans on the fund manager s capacity to correctly estimate the fair value of a company and to anticipate any event that could have an impact on its value. Globally it depends on its capacity to correctly evaluate the risk/reward of the arbitrages. The risk of a merger or acquisition failure The evolution of the probabilities of failure (success rate) with a merger acquisition determines the evolution of the spread on the strategy. In the case of a normal strategy, the withdrawal of an operation can lead to a significant drop in the stock of the target company and possibly a rise in shares of the predatory company in the case of a public offer of exchange. The risk is all the more important as the offer(s) premium at the announcement is generous and when the probability of a noncompletion of the transaction is high. In the case of reverse deals strategies (selling position on the target company by an offer and possibly buying the purchaser), initiated on the basis of expectations of failure of merger, the risk lies in the success of the offer. Risk of non correlation between stocks The risk of mean reversion (non correlation) occurs when a supposed stable statistical relationship between two shares is not confirmed by the market following a shock on the pair. In order to limit this risk, a statistical review over a past period has to validate the effectiveness of the pair trade. Dividend Risk A non anticipated change in the dividend amount significantly influences the profitability of the strategy arbitrage. Loan and Borrowing Risk In the case of an increase of the fee paid to the lender of the short sale securities, the profitability of the strategy may be significantly reduced. Furthermore if the lender recalls the loan, the position has to be bought back even if market conditions are not suitable Each of these risks may cause a significant drop of the Net Asset Value. 12

19 Other risks Currency Risk The fund can purchase and sell securities in currencies other than the currency of the fund (EUR). To limit the potential adverse impact of a contrary trend in the foreign exchange markets, the fund may have recourse to enter into a policy of covering the currency risk. Risk linked to investment in emerging market securities The fund reserves the right to invest in non OECD countries. The shares of these countries provides less liquidity than the large caps in developed countries; and certain securities from these countries can be difficult to handle if the securities are not negotiable, or are no longer negotiable on a momentary basis. This situation is due in particular to the absence of trade in the market or due to the regulatory restrictions. As a result, the possession of such securities can result in exceptions to the normal functioning of the fund in accordance with the rules and regulations of the scheme. In addition, a market decline could be more marked and faster than in developed countries, the net asset value could decline more sharply and more rapidly. Risk linked to investment in small capitalizations Punctually the fund can invest in small capitalization companies i.e. companies whose capitalization is below 150M. The liquidity for these securities is thinner and the market s fall may be amplified compared to the effect on medium and big capitalizations. Any of these risks may cause a significant fall of the fund s Net asset Value. The list of risks cannot be full. Potential investors may ask for advises before subscribe. Guarantee or protection LAFFITTE RISK ARBITRAGE UCITS offers no capital guarantee or protection. Subscribers and the investor profile typology None of the Units of the Fund are or will be registered according to the United States Securities Act As a consequence, the Fund s Units must not in any circumstances be offered, distributed or transferred: (i) in the United States of America, in any of its States or in any other political subdivision of the United States of America, or (ii) to or on behalf of or for the direct or indirect benefit of any United States Person (as defined in Regulation S of the "United States Securities Act" of 1933). Unit A and I: Unit A and I are opened to all subscribers and in particular to institutional investors for Unit I. The Unit has been created on July 1 st, Unit S: Unit S is exclusively dedicated to staff and managers of the asset management company who have a permanent position and at least a three month seniority status. The subscribers can be extended to include family members up to the first lineage. The subscription has to be approved by the investment management company s executive committee. The Fund may be included in a life insurance contract. The subscriber targets an absolute performance independent to the equity markets. The amount that is reasonable to invest in mutual funds depends on the individual situation of each investor. In order to determine the amount, we must take into account your financial capacity / personal assets, current needs up to 3 years but also your desire to take risks, or conversely, to emphasize a prudent investment. It is also strongly recommended to diversify your investments sufficiently so as not to expose them to only the risks of this fund. By buying this fund, the subscriber accepts all the risks mentioned in the risk profile. Allotment of results The revenue for the fund is fully capitalized. 13

20 Initial value and amounts of subscription Type of Unit Isin Code Currency Initial Value Minimum amount for the first subscription Minimum amount for the next subscription A FR Euro , Euros none I FR Euro , Euros none S FR Euro , Euros none Terms of subscription and redemption Terms of subscription and redemption: Subscriptions and redemptions applications are centralized at the depository at 11h00 (Paris time) one business day preceding the valuation date D. Subscriptions are made into amounts or in the number of units and redemptions only in the number of units on the basis of unknown prices. The payment related to purchases occurs in D+2 on the basis of net asset value in D and in D+4 for redemptions. In case of redemption and subscription the same day for the same number of units by the same holder, the payments will occur in D+2. Date and frequency of the net asset value The frequency is daily. If the validation date D occurs on an official holiday in France or the Stock Exchange is closed, it will be dated on the preceding trading day. This information is published on the website of the company: Financial institution responsible for receiving subscriptions/redemptions: RBC DEXIA INVESTOR SERVICES BANK France S.A., 105, rue Réaumur PARIS. Fees and commissions Subscriptions and redemption fees: The subscription and redemption fees increase the subscription price paid by the investor or decrease the redemption price. The fees paid by the fund offset the costs incurred by the fund to invest or divest the entrusted assets. The fees which are not paid to the fund are returned to the Management Company, the marketer, and so on. For A, I and S units: Maximum fees paid by the investor and debited at the moment of the subscriptions and redemptions Basis Rates Subscription fee not earned by the fund NAV x number of units None Subscription fee earned by the fund NAV x number of units None Redemption fee not earned by the fund NAV x number of units None Redemption fee earned by the fund NAV x number of units None Operating costs and management fees: These fees cover all expenses charged directly to the fund, except for transaction costs. The transaction fees include the cost of (Brokerage, Stock Market taxes, etc.) and settlement commissions, if any that could be paid to the custodian and the management company. Other fees that can be added to the operating costs and management fees: - Performance fees: a commission is charged to the Fund since the fund has exceeded its goals; - Transaction commissions charged to the Funds; - A part of the securities lending commissions. The operating costs and management fees are directly paid by the Fund. 14