African Bank impact and treatment for Investors in the Mi-Plan range of Unit Trusts The dramatic drop in the share price of African Bank, culminating in the company being placed under curatorship, has been widely published. Mi-Plan would like to inform investors of the impact of any exposure to African Bank across its range of funds post the decision by the SARB, as well as the creation of a MiPlan IP Enhanced Income ABIL Retention Fund to house all illiquid ABIL assets. In summary: Mi-Plan funds hold no equity or preference share exposure to African Bank Investments Limited, other than a holding of 0.02 % through our industry peer tracking Beta fund. Our investors have therefore been spared the effect of the equity losses in all our other funds. While not exposed to the equity market or any money market instruments, Mi-Plan has limited exposure to African Bank through three senior and one subordinated bond held in the Mi-Plan IP Enhanced Income Fund. Under direction from portfolio manager Rowan Williams-Short we have acted prudently and written down this exposure as follows. In line with the guidance provided by the SARB that senior debt is to be transferred to the new good bank at 90% of face value, we have adjusted the value of those instruments accordingly. In the complete absence from any authority of how to price subordinated debt, we applied the most conservative treatment possible, and written the value of this debt down to zero, notwithstanding our belief that in due course, it will be shown to have some value. In order to ensure that investors are in a position to benefit from any recovery, as well as to ensure we treat all clients fairly in so far as client’s liquidity, we have, effective close of business on 15 August housed these illiquid assets in a separate fund (“MiPlan IP Enhanced Income ABIL Retention Fund”). This treatment follows Guidance note 6 issued on15 August by the Registrar of Collective Investments, effectively allowing for the creation of a separate fund to house the ABIL debt until liquidity returns to the market. It is important that Investors are aware that the separation of the liquid and illiquid assets into two funds does not result in a loss of value to investors. Directors: ALH Turpin PAL Turpin Registration No. 2008/001568/07 Vat: 4260214152 Registered as a Financial Service provider 9383 Investors in the MiPlan IP Enhanced Income Fund will as of the 15 August 2014 have their investments split into two portfolios: - The Miplan IP Enhanced Income Fund will house all assets except for the ABIL Instruments and will price daily and offer daily liquidity. The fund will hold 95.22 % of investors’ holdings in the MiPlan IP Enhanced Income Fund prior to the setup of the MiPlan IP Enhanced Income ABIL Retention Fund. - The remaining 4.78 % will be transferred to the “MiPlan IP Enhanced Income ABIL Retention Fund” which will hold all ABIL instruments. The latter fund will levy no fees or charges. Liquidity will be provided once these instruments mature or are able to be sold. Such proceeds will be exchanged for units of equivalent value in the MiPlan IP Enhanced Income Fund The resultant exposure and effect of this write down on the performance on our funds is illustrated below. Fund MI-PLAN IP Enhanced Income * MI-PLAN IP Inflation Plus 3 * MI-PLAN IP Inflation Plus 5 * MI-PLAN IP Inflation Plus 7 * ABIL Exposure on Performance impact 15 Aug 2014 -2.08% 4.78% -0.32% 0.73% -0.04% 0.08% -0.15% 0.34% *Held via MiPlan IP Enhanced Income Abil Retention Fund We do believe that these actions, while being prudent, are necessary to ensure all our investors’ best interests are protected. We will update investors as information becomes available. In the interim please contact me us should you require further information. Yours Sincerely Anton Turpin Managing Director 18 August 2014 Directors: ALH Turpin PAL Turpin Registration No. 2008/001568/07 Vat: 4260214152 Registered as a Financial Service provider 9383
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