Catella Fondförvaltning AB Special Funds - PDF

PROSPECTUS Catella Fondförvaltning AB Special Funds Catella Balanserad Catella Credit Opportunity Catella Hedgefond The prospectus for the funds listed above been prepared in accordance with the Swedish

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PROSPECTUS Catella Fondförvaltning AB Special Funds Catella Balanserad Catella Credit Opportunity Catella Hedgefond The prospectus for the funds listed above been prepared in accordance with the Swedish Alternative Investment Fund Managers Act ('AIFMA') and Swedish Financial Supervisory Authority (Finansinspektionen) Regulations FFFS 2013:10 regarding alternative investment fund managers. This document, the fund rules and the key investor information documents for the aforementioned funds together make up the prospectus. RISK INFORMATION Investment in fund units is subject to risk. The money invested could either increase or decrease in value and it is not certain that you will be able to recover all of your investment. Historical return is no guarantee of future return. For further information, please contact us using the details below for a complete prospectus, key investor information, annual and semi-annual report. You find all documents at 22 NOVEMBER AIF MANAGER Catella Fondförvaltning AB Box 7328, Stockholm, Sweden Main number: +46 (0) Customer Service: +46 (0) Fax: +46 (0) Corporate registration number: Company founded: 12 June 1996 Share capital: SEK 5,000,000 The company is insured against third-party liability. Legal form: Limited company Registered office and head office: Stockholm Ownership: The company is part of the Catella Group. Board of directors: Knut Pedersen, Chairman, CEO Catella AB (publ) Lars H. Bruzelius, Senior Partner BSI & Partners Peter Friberg, Registered Psychologist, Studentpsykologen Johan Nordenfalk, COO Catella AB (publ) and acting CEO of the AIF Manager Thomas Raber, MD Alvine Capital Management Ltd Ando Wikström, CFO Svenska Hyreshus AB (SHH) (publ) Executive management: Erik Kjellgren, CEO and Head of Fund Operations Lena Andersson, Head of Business Support Marcus Andersson, Manager Middle Office Peter Elmhorn, Head of Sales Helena Frykehag, Chief Risk Officer Elisabeth Hult, Compliance Officer Catella Fondförvaltning AB (the AIF Manager ) is regulated by the Swedish Financial Supervisory Authority ( The Swedish Financial Supervision Authority ). The AIF Manager was authorised on 30 December 1997 pursuant to the Swedish Securities Funds Act (1990:1114) and re-authorised 22 December 2004 pursuant to the Swedish Investment Funds Act (2004:46) ('IFA'). In addition, the AIF Manager has been authorised since 29 March 2010 to engage in discretionary portfolio management, and since 3 December 2014 is authorised under the Swedish Alternative Investment Fund Managers Act (2013:561). The AIF Manager also manages the UCITS funds Catella Avkastningsfond, Catella Reavinstfond, Catella Småbolagsfond and Catella Sverige Index, and the special funds ICA Banken Modig, ICA Banken Måttlig and ICA Banken Varlig. 22 NOVEMBER DELEGATION AGREEMENTS The AIF Manager has engaged KPMG AB to manage the AIF Manager's internal auditing; and ISEC Services AB to manage fund portfolio administration for the funds. The AIF Manager has identified no material conflicts of interest related to the delegation agreements. DISTRIBUTION The AIF Manager has agreements with distributors on the sale and marketing of the Funds. See Appendix 2. DEPOSITARY Fund assets are held in custody by Skandinaviska Enskilda Banken AB (publ), Stockholm, Sweden, as the depositary ('the Depositary'). The Depositary's primary business is banking and financial services and related business. The duties of the Depositary include accepting and holding in custody Fund property and ensuring that sales and redemptions, etc., of fund units are carried out in compliance with applicable rules. THE FUNDS The information in this prospectus relates to the special funds Catella Balanserad, Catella Credit Opportunity and Catella Hedgefond ('the Fund' or the Funds ). The Funds are special funds regulated by The Swedish Financial Supervision Authority. LEGAL STATUS OF THE FUNDS AND KEY LEGAL CONSEQUENCES OF INVESTMENT IN ANY OF THE FUNDS Investors in a Fund obtain units at a value equal to the invested capital and thus become unit holders. A unit holder has the right to redeem units on the terms and conditions stated in the fund rules for the Fund and, where applicable, to receive dividends. When units are redeemed, cash is paid to the unit holder in an amount equal to the current value of the units redeemed. The Fund is not a legal person and cannot acquire rights or assume obligations. Nor may the Fund institute legal action before a court of law or other public authority. The AIF Manager represents unit holders in all legal and financial matters concerning the Fund, takes decisions concerning the property included in the Fund and exercises the rights derived from the property. In the management of the Fund, the AIF Manager acts solely in the retail interests of unit holders and management is based on the objectives and investment strategy of the Fund. The assets of the Fund are held by the Depositary, Skandinaviska Enskilda Banken AB (publ), which ensures that a unit holder will not be adversely affected if the AIF Manager were to experience financial distress. The fund rules regulate the terms and conditions for the fund saver and are appended to this prospectus. PARTICULAR INFORMATION ABOUT FUNDS-OF-FUNDS Catella Balanserad is a fund-of-funds and invests mainly in funds established in Sweden and Luxembourg. Catella Balanserad may also invest in funds established in other EEA and non-eea countries. The underlying funds are specified in the monthly reports on the Fund. 22 NOVEMBER FAIR TREATMENT All units in the Funds are of equal size and confer equal rights to the property of the Funds. However, a single Fund may include units of various types, or 'fund es'. Fund es in the same fund may be subject to different terms and conditions with respect to dividends, charges, minimum subscription amounts and the currency in which units are subscribed and redeemed. The units within a unit are of equal size and confer equal rights to the property included in the Fund. This means that the AIF Manager applies the principle of fair treatment of unit holders, adjusted for any terms and conditions that apply to a particular unit. The AIF Manager may, where applicable, enter into agreements by which the AIF Manager pays compensation based on, and amounting to a maximum of, the management charge against the AIF Manager's managed funds. The contracts are typically made with distributors (such as banks, insurance brokers and securities companies) which broker the AIF Manager's funds on commission by the AIF Manager, but may in special cases also exist with other investors. Compensation is paid in the form of a percentage of the management charge, fixed and where relevant variable, that the AIF Manager draws on the capital invested by a distributor or investor. Compensation may also be paid to investors that make use of the AIF Manager's Funds as a component of combined structured products. FUND UNIT CLASSES Catella Credit Opportunity and Catella Hedgefond have various unit es. Only the A SEK retail unit in each fund is currently open for trade. Other unit es are not currently open for trade. The unit es differ in terms of currency, charges and the minimum deposit, as described in greater detail in this prospectus and in the fund rules. UNIT HOLDER REGISTER The AIF Manager maintains a register of all unit holders and their holdings. Unit holders receive reports in the form of half-yearly and annual statements. Fund units may also be nominee registered with a bank or securities company, which means that the unit holder is anonymous to the AIF Manager. In these cases, it is the bank or securities company that bears responsibility towards the client for registration of the holding and distribution of information from the AIF Manager. SALES (SUBSCRIPTION) AND REDEMPTIONS OF FUND UNITS The Funds are open for trade daily. Requests for sale (subscription) and redemption of fund units received by the AIF Manager by 3:00 pm on a full banking day and by 11:00 am on a half banking day are settled at the selling/redemption price for that day. Payment for fund units must be in the Fund s bank account with the Depositary by 3:00 pm or 11:00 am, respectively, on the same banking day on which the AIF Manager receives the request. Requests received after 3:00 pm or 11:00 am, as above, are settled at the selling/redemption price for the next banking day. The selling price and redemption price are thus unknown as of the date of the request. The AIF Manager posts information on selling and redemption prices for fund units each banking day on the AIF Manager s website. 22 NOVEMBER The terms and conditions of sales and redemptions of units in the Funds are otherwise provided in Section 9 of the fund rules for each Fund. Further information about sales and redemptions (as well as the required forms) is available on the AIF Manager's website or may be obtained from Customer Service on +46 (0) LIMITATION OF SALES AND REDEMPTION ORDERS Sales and redemptions take place at a price unknown to the unit holder and cannot be limited. Information about selling and redemption prices may be obtained from the AIF Manager. Requests for sales and redemptions may be withdrawn only if the AIF Manager consents. ANNUAL REPORT, HALF-YEARLY REPORT AND THE LATEST CALCULATED NET ASSET VALUE (NAV) OF FUND UNITS. The AIF Manager prepares annual reports and half-yearly reports for each Fund. Upon request, the documents shall be sent free of charge to unit holders and shall be available at the AIF Manager and the Depositary not later than four months after the end of the financial year (for the annual report) and two months after the end of the half-year (half-yearly report). The documents are also available on the AIF Manager's website. The latest calculated net asset value (NAV) of one fund unit in each fund and, where appropriate, each unit is published on the AIF Manager's website. CESSATION OF THE FUNDS OR TRANSFER OF FUND OPERATIONS If the AIF Manager decides that a Fund should cease or that the management of a Fund, following authorisation by The Swedish Financial Supervision Authority, shall be transferred to another AIF manager, all unit holders will be informed in the manner prescribed by The Swedish Financial Supervision Authority. If The Swedish Financial Supervision Authority withdraws the AIF Manager s authorisation or if the AIF Manager enters into liquidation or is declared bankrupt, management of a Fund shall immediately be taken over by the Depositary. AUDITOR PricewaterhouseCoopers AB, Stockholm, Sweden. The principal auditor is Patrik Adolfsson. PRINCIPLES AND PROCEDURES FOR VALUATION OF FUND ASSETS Valuation of the property included in a Fund is based on current fair value (market value). See the respective Fund rules for further information about valuation of Fund assets. COMPENSATION FOR INCORRECT UNIT VALUATION If a calculated unit value is found to be incorrect, the AIF Manager applies the Guidelines of the Swedish Investment Fund Association for managing compensation for incorrect unit values. This means that unit holders adversely affected by a material error are compensated. RISK AND RISK MANAGEMENT Savings in funds always entails a certain measure of risk-taking, which means that investors are at risk of recovering less than the amount they invested. Risk is normally higher for savings in a dedicated equity fund than in fixed-income or mixed funds. The main risks that may occur in connection with savings in funds are covered briefly below. The list is not exhaustive. 22 NOVEMBER Market risk: The market for an asset, such as the price of a share, may rise or fall in price. Liquidity risk: It may not be possible to trade a security at the intended time without a significant reduction in price or substantial costs. Currency risk: The value of an investment may be affected by movements in exchange rates. Credit/counterparty risk: An issuer or counterparty may suspend payments. Interest risk: The sensitivity of a fixed-income fund to movements in market interest rates. Operational risk: Risk connected to the operations of the AIF Manager, such as IT systems, personnel, administration, etc. The AIF Manager has ified the Funds according to the EU standard for risk ification, whereby the AIF Manager applies a seven-band scale known as a 'Synthetic Risk and Reward Indicator', where 1 indicates the lowest risk and 7 the highest risk. The ification of each Fund is disclosed in the key investor information documents for the Fund. AMENDMENTS OF FUND RULES The AIF Manager is able to amend the fund rules for the Funds. Such amendments are subject to approval by The Swedish Financial Supervision Authority. Amendments may affect the characteristics of a Fund or a unit, such as investment strategy, fees and charges and risk profile. The Swedish Financial Supervision Authority may decide that the AIF Manager must inform unit holders about the changes and that the amended fund rules may not be applied until a certain time has elapsed since the decision to approve the amendments. REMUNERATION To promote sound risk management in the Funds, the AIF Manager has adopted a remuneration policy that states, among other things, the basic principles for how remuneration to the company's employees shall be determined and paid. In summary, the remuneration policy means that the AIF Manager s remuneration system shall be designed so that it benefits the long-term interests of both the AIF Manager and the managed Funds, and that remuneration paid by the AIF Manager must not jeopardise the AIF Manager's long-term earnings or financial position. Nor may the compensation systems applied result in incentives for employees to trade in a manner that is in conflict with the interests of the Funds, their investors and other clients. Full details of the AIF manager's remuneration policy are made available on the AIF manager's website. A printout of the information is provided free of charge on request. TAX RULES FOR UNIT HOLDERS The Fund is a separate taxable entity, but is not subject to tax on the income of the assets included in the Fund. Instead it is the unit holders that are taxed using a standard income (see below). 22 NOVEMBER Capital gains tax Individuals who are fully taxable in Sweden should report capital gains and capital losses on the divestment of units in the Fund as income from capital at a tax rate of 30 percent. Divestment includes sales and redemptions. The same rules apply to estates on condition that the deceased was fully taxable in Sweden. Capital gains and capital losses are calculated as the difference between the sale price (less any fees) and the tax basis amount. The tax basis amount is the purchase price paid for the divested fund units. The tax basis amount is normally calculated using the average cost method. Standard taxation From income year 2012, individuals who are fully taxable in Sweden and who own units in the Fund must report a standard income for the value of the fund holding at the beginning of the year. The standard income should be reported as income from capital at 30 percent tax. The same rules apply to estates on condition that the deceased was fully taxable in Sweden. Miscellaneous If the Fund is linked to an investment savings account, endowment, IPS or premium pension, special tax rules apply. For legal persons and foreign unit holders, other special tax rules apply. Statements for tax returns The Management Company provides statements for tax returns showing gains and losses from the sale or redemption of units in the Fund, standard income and any dividends. Statements are provided for individuals and Swedish estates. MARKETING OF FUND UNITS IN ANOTHER EEA COUNTRY Catella Hedgefond and Catella Credit Opportunity are marketed to professional investors in Finland, Luxembourg, the Netherlands, Norway and the United Kingdom. LIABILITY AND CAPITAL REQUIREMENTS If a unit holder suffers a loss due to the AIF Manager's breach of this law or the fund rules for the Funds, the AIF Manager shall be liable to compensate the unit holder for the loss. The AIF Manager shall, according to AIFMA Chapter 8 Section 28, pay compensation for loss caused to the Fund or its unit holders through breach of this law, other statutes that regulate the AIF Manager's operations, fund rules, or the articles of association. The equivalent shall apply if the Depositary has caused loss to unit holders or the AIF Manager. Further information concerning professional liability and certain limitations of liability is found in Section 16 of the fund rules. Capital requirements According to AIFMA, the AIF manager is subject to certain capital requirements in order, among else, to cover potential exposure to professional liability due to error or negligence in its activities. Information about capital adequacy, including the capital base and capital requirements connected to credit, market and operational risks (cost risks) and risks of potential liability claims is published quarterly on the AIF Manager's website, 22 NOVEMBER PRIME BROKERS A prime broker is, for example, a bank that offers services to professional investors primarily to finance or execute transactions in financial instruments as counterparty and which may also provide other services such as clearing and settlement of trades, custodial services, securities lending, customised technology and operational support facilities. The AIF Manager uses Skandinaviska Enskilda Banken (publ) as prime broker for the Catella Hedgefond and Catella Credit Opportunity funds. Other Funds have no prime broker. The prime broker is used, for example, in connection with securities lending, whereby the Funds may lend shares to the primary broker against a predetermined interest rate. Furthermore, the primary broker may be used in connection with short-selling and trading in OTC derivatives. The fund receives collateral with low market and credit risk as surety for the equity loans. The use of the bank as prime broker by the Funds means that the AIF Manager transfers some responsibility for the management of the Fund to the primary broker. Skandinaviska Enskilda Banken AB (publ) is also the depositary for the Funds, which to some extent brings a risk of conflicts of interest. This risk is manged by the bank segregating the provision of prime broker services from its activities as a depositary. The bank also has established procedures for identifying, managing, monitoring and reporting any conflicts of interest that arise in the relevant areas of operation at the bank. LIQUIDITY RISK MANAGEMENT The liquidity risk in the Funds is attributable to the Funds' commitments and holdings. The commitments consist of the ability of unit holders in the Funds to sell their units under the terms and conditions set forth in the respective fund rules for the Funds and other commitments in the Funds, for example, those that may arise upon issuance of derivatives or short positions in equities. On an ongoing basis, the AIF Manager verifies that all Funds have an appropriate composition of liquid assets and that the commitments are within the frameworks that apply to each Fund. For this purpose, there are both risk measurements that are monitored and may be limited, as well as procedures that must be applied before the Funds makes investments. Regular stress tests are carried out to ascertain that the risk measurements and limits are appropriate and adequate. If the stress tests indicate a need for new or changed risk measurements or limits, an oversight process is initiated. If the risk measurement or limits indicate that the liquidity risk in a Fund is significantly higher than appropriate according to the Fund's risk profile, the AIF Manager must prepare an action plan to manage the liquidity risk. Liquidity risk may be higher in special funds than in UCITS funds, among els
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