CONFIDENTIAL OFFERING SUPPLEMENT
in respect of the offer of Investor Shares in
Woodman Credit Opportunities II Fund
(the “Fund”)
a distinct sub-fund
(which is licensed by the Malta Financial Services Authority Q’MESA”)
as a Professional Investor Fund promoted to Qualifying Investors)
of
Woodman Funds SICAV p.l.c.
(the “Company”)
(a collective investment scheme organised as a multi-fund company with variable share capital under the
laws of the Republic of Malta and licensed by the MFSA under the
Investment Services Act (Chapter 370 of the Laws of Malta))
The Company was registered on the 23 August, 2011
The Fund was licenced by the MESA on the 11t November, 2014
This Offering Supplement is dated
th
5
November, 2015
This Offering Supplement is an updated version of the Offering Supplement
th
November, 2014
dated 11
This Offering Supplement has to be read as forming part of and in conjunction with the
Offering Memorandum currently in issue by the company in respect of the offer of Investor
Shares in any and all sub-funds established from time to time by the Company and
containing general information in respect of the company and all such sub-funds.
L
;.
Offering Supplement Copy number:
Distributed to:
amc
I
Woodman Funds SICAV plc.
—
Woodman credit Opportunities H Fund Offering Supplement
page 1
IMPORTANT INFORMATION
This confidential Offering Supplement relates to the offer of Investor Shares in the Woodman Credit
Opportunities II Fund (the “Fund”), a closed-ended distinct sub-fund of the Woodman Funds SICAV p.l.c.
(the “Company”), being a Professional Investor Fund available to Qualifying Investors (as defined under the
‘Definitions’ below), and having the characteristics described in more detail herein. The Fund is established
as a distinct (segregated) sub-fund of the Company in terms of the SICAV Regulations. Accordingly, the
assets and liabilities of the Fund shall be treated, for all intents and purposes of law, as a patrimony separate
from the assets and liabilities of each other distinct sub-fund of the Company, pursuant to such Regulations,
as explained in more detail in the Offering Memorandum supplemented by this Offering Supplement (in
particular under the part titled ‘Segregated Funds’ under the section ‘Key Features’ thereof). Unless
otherwise specified or the context otherwise requires, reference in this Offering Supplement to the Fund
refers to the Woodman Credit Opportunities II Fund.
THE COMPANY IS LICENSED BY THE MFSA TO CARRY OUT THE ACTIVITIES OF A COLLECTIVE
INVESTMENT SCHEME IN RESPECT OF, AND TO OPERATE, THE WOODMAN CREDIT
OPPORTUNITIES II FUND AS A PROFESSIONAL INVESTOR FUND WHICH IS AVAILABLE ONLY
TO INVESTORS QUALIFYING AS QUALIFYING INVESTORS. ACCORDINGLY FUND SHARES MAY
ONLY BE OFFERED AND SOLD (AND SUBSEQUENTLY RESOLD, TRANSFERRED, ASSIGNED OR
TRANSMITTED ‘CAUSA MORTIS’) TO QUALIFYING INVESTORS MAKING THE RESPECTIVE
DECLARATION AS CONTAINED IN THE QUALIFYING INVESTOR DECLARATION FORM AS PER
APPENDIX I OF THIS OFFERING SUPPLEMENT.
PIFs ARE NON-RETAIL SCHEMES AND, THEREFORE, THE PROTECTION NORMALLY ARISING AS
A RESULT OF THE IMPOSITION OF THE MFSA’S INVESTMENT AND BORROWING
RESTRICTIONS AND OTHER REQUIREMENTS TO RETAIL SCHEMES, DO NOT APPLY FOR PIFs.
PIFs AVAILABLE TO QUALIFYING INVESTORS ARE NOT SUBJECT TO ANY RESTRICTIONS ON
THEIR INVESTMENT OR BORROWING POWERS (OTHER THAN BORROWING RESTRICTIONS
APPLICABLE TO PROPERTY FUNDS AND THOSE SET OUT IN THE OFFERING MEMORANDUM,
INCLUDING THIS OFFERING SUPPLEMENT). FURTHER THEY ARE NOT REGULATED TO THE
SAME DEGREE AS RETAIL COLLECTIVE INVESTMENT SCHEMES.
IN ADDITION, INVESTORS IN PIFs ARE NOT PROTECTED BY ANY STATUTORY COMPENSATION
ARRANGEMENTS IN THE EVENT OF THE COMPANY’S OR THE FUND’S FAILURE. THUS THE
DEGREE OF RISK TO WHICH THEY MAY BE EXPOSED MAKES THEM UNSUITABLE FOR MEMBERS
OF THE GENERAL PUBLIC.
THE MFSA HAS MADE NO ASSESSMENT OR VALUE JUDGEMENT ON THE SOUNDNESS OF THE
COMPANY OR THE FUND OR FOR THE ACCURACY OR COMPLETENESS OF STATEMENTS MADE
IN RESPECT THEREOF.
REFERENCE IS MADE TO THE SECTION TITLED ‘IMPORTANT INFORMATION’ IN THE OFFERING
MEMORANDUM SUPPLEMENTED BY THIS OFFERING SUPPLEMENT, AND TO THE TERMS AND
CONDITIONS AND RESTRICTIONS OF OFFERING AND SALE, RISK WARNINGS, CAUTIONS AND
DISCLAIMERS MADE THEREIN, WHICH APPLY FULLY TO THE OFFERING AND SALE OF
INVESTOR SHARES IN THE FUND AND WHICH ARE INCORPORATED BY REFERENCE AND
DEEMED TO BE REPEATED HEREIN.
INVESTMENT IN THE FUND SHOULD BE REGARDED AS A HIGH RISK AND LONG-TERM
INVESTMENT. THERE IS NO ASSURANCE THAT THE INVESTMENT OBJECTIVES OF THE FUND
WILL BE ACHIEVED. THE VALUE OF INVESTMENTS AND OF INVESTOR SHARES IN THE FUND
CAN GO DOWN AS WELL AS UP AND PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE
OF FUTURE PERFORMANCE. YOUR ATTENTION IS DRAWN TO THE SECTION OF THIS
OFFERING SUPPLEMENT AND OF THE OFFERING MEMORANDUM WHICH IT SUPPLEMENTS
TITLED ‘RISK FACTORS’ AND ‘GENERAL RISK FACTORS’ RESPECTIVELY.
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
page 2
The Directors of the Company, whose names appear and who have signed this Offering Supplement at the
end of this section ‘Important Information’, are the persons responsible for the information contained in
this Offering Supplement. To the best of the knowledge and belief of the Directors (who have taken
reasonable care to ensure such is the case) the information contained in this Offering Supplement is in
accordance with facts and does not omit anything likely to affect the import of such information. The
Directors accept responsibility accordingly. The Board of Directors of the Company have approved the
contents of this Offering Supplement.
This confidential Offering Supplement has to be read as forming part of and one and the same
document with and must be read only and in conjunction with the Offering Memorandum
currently in issue by the Company, before investing in the Fund, and the offering of Investor
Shares in the Fund is strictly based on both such documents together and qualified by the
information, terms and conditions made in each of them.
This Offering Supplement has been issued under Maltese law and regulations prevailing at the date thereof.
Statements made in this Offering Supplement are, except where otherwise stated, based on the law and
practice currently in force in Malta on the date thereof and are subject to changes therein.
Applications for the purchase of Fund Shares are accepted only on the basis of the current version of this
Offering Supplement and of the Offering Memorandum which it supplements. Any person relying on the
information contained in this Offering Supplement and the Offering Memorandum which it supplements,
which was current at the date shown on the respective front page, should check with the Investment
Manager or Administrator of the Fund that such document is the most current version, and that no revisions
or additions have been made thereto nor corrections published to the information contained therein since
the date shown.
COPIES OF THIS OFFERING SUPPLEMENT AND OF THE OFFERING MEMORANDUM ARE
AVAILABLE FROM THE REGISTERED OFFICE OF THE INVESTMENT MANAGER AND
ADMINISTRATOR OF THE FUND.
This Offering Supplement has been approved by the Directors of the Company, who hereby confirm their
approval by appending their signature thereto below:
Mr. Torben Degn
Director
_______________________________________
Mr. Guido Mizzi
Director
_______________________________________
Mrs. Marise Muscat
Director
_______________________________________
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
page 3
Table of Contents
IMPORTANT INFORMATION ......................................................................................................................... 2
TABLE OF CONTENTS....................................................................................................................................... 4
DEFINITIONS .................................................................................................................................................... 6
DIRECTORY .......................................................................................................................................................12
KEY FEATURES OF THE FUND.......................................................................................................................14
INVESTMENT OBJECTIVE AND INVESTMENT POLICIES, INVESTMENT AND FINANCING
RESTRICTIONS OF THE FUND......................................................................................................................17
INVESTMENT OBJECTIVE ...................................................................................................................................... 17
INVESTMENT POLICIES......................................................................................................................................... 17
SUBSCRIPTION MONIES COMMITMENT POLICY ....................................................................................................... 18
HEDGING TECHNIQUES ........................................................................................................................................ 18
BORROWING AND INVESTMENT RESTRICTIONS ....................................................................................................... 18
CHANGE IN INVESTMENT OBJECTIVE, POLICIES AND RESTRICTIONS ......................................................................... 19
RISK FACTORS .................................................................................................................................................20
GENERAL ............................................................................................................................................................ 20
POTENTIAL LACK OF DIVERSIFICATION .................................................................................................................. 20
DIVIDENDS ......................................................................................................................................................... 20
EFFECT OF PERFORMANCE FEES ............................................................................................................................ 21
EFFECT OF COMMITMENT FEES ............................................................................................................................. 21
NO REDEMPTION RIGHT DURING TERM .................................................................................................................. 21
FINAL REDEMPTION RISK ..................................................................................................................................... 21
DEFAULTING INVESTORS OR INVESTORS MANDATORILY REDEEMED ......................................................................... 22
LIQUIDITY RISK .................................................................................................................................................. 22
SUBSEQUENTLY ADMITTED INVESTORS .................................................................................................................. 23
CAPITAL CALLS ON INVESTORS’ COMMITTED FUNDS ............................................................................................... 23
RISKS OF SUSPENSION OF NET ASSET VALUE DETERMINATION BY UNDERLYING TARGETS .......................................... 24
LACK OF PUBLICLY AVAILABLE INFORMATION REGARDING UNDERLYING INVESTMENTS ............................................... 24
VALUATION OF UNDERLYING INVESTMENTS AND CALCULATION OF NAV OF THE FUND ............................................... 24
UMBRELLA STRUCTURES ...................................................................................................................................... 25
DUPLICATION OF OPERATING EXPENSES ................................................................................................................ 25
LACK OF OPERATING HISTORY OF UNDERLYING TARGETS AND PORTFOLIO MANAGERS .............................................. 25
DIVIDENDS BY UNDERLYING EXPOSURES ............................................................................................................... 25
INTEREST RATE RISK, FIXED-INCOME DEBT SECURITIES AND OTHER DEBT INVESTMENTS ......................................... 25
UNDERLYING INVESTMENT IN SECURED LOANS AND UNSECURED DEBT .................................................................... 26
UNDERLYING INVESTMENTS IN SUBORDINATED LOANS ........................................................................................... 26
INVESTMENT IN EQUITY SECURITIES ..................................................................................................................... 26
UNDERLYING INVESTMENT IN UNDERVALUED ASSETS ............................................................................................. 27
UNDERLYING INVESTMENTS IN INTELLECTUAL PROPERTY RIGHTS ............................................................................ 27
INVESTMENTS IN START-UP AND SMALLER COMPANIES ........................................................................................... 28
INVESTMENTS IN FOREIGN AND EMERGING MARKETS.............................................................................................. 28
ASSET, INDUSTRY, REGIONAL SPECIFIC RISKS AND GENERAL MARKET AND OTHER RISKS AFFECTING THE UNDERLYING
INVESTMENTS ..................................................................................................................................................... 28
UNLISTED OR NON-RATED INVESTMENTS .............................................................................................................. 29
LACK OF SUPERVISION ......................................................................................................................................... 29
CREDIT RISK AND COUNTERPARTY RISK ................................................................................................................ 29
CURRENCY EXCHANGE RISK ................................................................................................................................. 29
INSTITUTIONAL RISK ........................................................................................................................................... 30
RISKS OF LEVERAGE AND SPECIAL TECHNIQUES USED BY UNDERLYING TARGETS ...................................................... 30
USE OF DERIVATIVES .......................................................................................................................................... 30
LIMITATION OF LIABILITY, INDEMNIFICATION , OTHER CONTINGENT LIABILITIES ...................................................... 31
CONFLICTS OF INTERESTS .................................................................................................................................... 32
FUNCTIONARIES .............................................................................................................................................33
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
page 4
INVESTMENT MANAGER........................................................................................................................................ 33
ADMINISTRATOR ................................................................................................................................................. 34
SAFE-KEEPING ARRANGEMENTS ............................................................................................................................. 35
FEES, CHARGES AND EXPENSES .................................................................................................................36
MANAGEMENT FEE AND PERFORMANCE FEE ........................................................................................................... 36
ADMINISTRATION FEE ......................................................................................................................................... 36
COMMITMENT FEE ............................................................................................................................................... 37
STRUCTURING FEES AND ATTRIBUTION OF COMPANY’S GENERAL EXPENSES ............................................................... 37
OTHER EXPENSES................................................................................................................................................ 38
OPERATIONAL DETAILS ................................................................................................................................40
REFERENCE CURRENCY ........................................................................................................................................ 40
VALUATION METHODOLOGY ................................................................................................................................. 40
SHARE CLASS/ES ................................................................................................................................................. 40
SUBSCRIPTION / COMMITMENT APPLICATION PROCEDURE AND SUBSCRIPTION PRICE ................................................ 41
Applications for Commitments and Commitment Processing Days ......................................................... 41
Closing Period and Total Commitments Sought ....................................................................................... 41
Commitments and Minimum Investment Requirement ............................................................................ 41
Initial Subscriptions..................................................................................................................................... 43
Capital Calls ................................................................................................................................................. 43
Defaulting Fund Investors .......................................................................................................................... 45
Subscriptions ‘in specie’ .............................................................................................................................. 46
DIVIDEND POLICY ............................................................................................................................................... 46
RECALLABILITY OF DIVIDENDS.............................................................................................................................. 47
REDEMPTIONS .................................................................................................................................................... 48
Compulsory Redemption and Total Redemption ...................................................................................... 48
REDEMPTIONS ON FINAL LIQUIDATION .................................................................................................................. 49
ALLOCATION OF PROCEEDS .................................................................................................................................. 50
APPENDIX I – QUALIFYING INVESTOR DECLARATION FORM ...........................................................53
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
page 5
Definitions
In this Offering Supplement the following terms shall, unless otherwise expressly stated or the context
otherwise requires, have the following meanings respectively assigned to them:
“Business Day”
a day on which banks are normally open for business in Luxembourg
(except Saturday) or such other day as the Directors may determine from
time to time;
“Capital Calls”
The calls made by the Company on all Fund Investors from time to time,
by means of a Drawdown Notice, to pay further Subscriptions (up to their
respective undrawn Commitments) for the subscription of additional
Fund Shares by them at the Offer Price by not later than the Call
Settlement Date, as provided under the part titled ‘Capital Calls’ under
the section ‘Operational Details’ below, or as the case may be (and where
applicable), to pay such portion of the dividend which is recalled by the
Company, as provided under the part titled ‘Recallability of Dividends’
under the section titled ‘Operational Details’ below;
“Call Settlement Date”
The date specified in the Drawdown Notice for the payment of a Capital
Call, which shall not be a date earlier than one (1) week from the date
of the Drawdown Notice;
“Closing Date”
The closing date for the receipt of Commitments (defined below) in the
Fund, being 12:00 noon (CET) on the final day of the Closing Period
(defined below);
“Closing Period”
The period commencing on the Licence Issue Date and ending on the
earlier of (i) total Commitments from all Fund Investors reaching USD
300 million or (ii) 30th June 2015, during which an investor may apply for
and commit to the subscription of Fund Shares (and pay the subscription
price for the Initial Subscriptions) at the Offer Price in accordance with
the procedure and on the terms and subject to the conditions set out in
this Offering Supplement;
“Commitment
Application”
The application for subscriptions and commitments to subscribe to Fund
Shares submitted to the Company by a prospective Fund Investor, in the
form determined by the Company, and for the avoidance of doubt,
references in the Offering Memorandum and in the Articles to the
Subscription Form shall for all intents and purposes, with respect to the
Fund, be deemed and construed as a reference to such Commitment
Application;
“Commitment Fee”
The one-time Commitment Fee payable by each Fund Investor together
with his Initial Subscription, which shall be equivalent to one per cent
(1%) of the respective Commitments of such Fund Investor, and shall
not form part of and shall be in addition to his said Commitments, which
Fee shall be payable in full to the Investment Manager, as provided in
the part titled ‘Commitment Fee’ under the section ‘Fees, Charges and
Expenses’ below;
“Commitment
Processing Day”, “First
Commitment
Processing
Day”,
“Earlier Commitment
Processing Day” and
“Commitment Processing Day” shall mean such day/s during the Closing
Period as of which the processing of Commitment Applications received
from prospective Fund Investors up to 12:00 noon (CET) of such day
shall be processed, which shall be:
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
page 6
“Final
Commitment
Processing Day”
(a) the first such Commitment Processing Day being the last
Business Day of the month during the Closing Period when the
Minimum Total Commitments of USD 50 million is achieved
(herein also referred to as the “First Commitment Processing
Day”); and
(b) thereafter, the last Business Day of each subsequent month
during the Closing Period (if any), including the Closing Date
(such Closing Date also referred to as the “Final Commitment
Processing Day” and any earlier Commitment Processing Day
during the Closing Period, including the First Commitment
Processing Day, also referred to as an “Earlier Commitment
Processing Day”)
Provided, for the avoidance of doubt, that:
(i)
should the First Commitment Processing Day in terms of the
criteria set out in paragraph (a) above, be the Closing Date, then
references in this Offering Supplement to the First Commitment
Processing Day shall in such circumstances be construed as
references to such Closing Date; and
(ii) the Closing Date shall always be a Commitment Processing Day,
even when the Minimum Total Commitments is not achieved
during the Closing Period, in which case the Commitment
Applications (if any) received up to such Closing Date shall be
processed and rejected as of such Closing Date as provided
under the part titled ‘Closing Period and Total Commitments
Sought’ under the section ‘Operational Details’ below;
“Commitments”
The total capital committed by a Fund Investor for subscription of Fund
Shares through the Commitment Application submitted by him and to
the extent such Commitment Application has been accepted by the
Company, and for the avoidance of doubt this shall at any time include
the portion of such capital which has already been paid at that time by
the Fund Investor (through Initial Subscriptions and/or Subscriptions
pursuant to subsequent Capital Calls) as well as the portion thereof which
is still undrawn/uncalled and/or unpaid at that time including (to the
extent applicable) any amounts representing dividends and other
distributions made by the Company and received by the Fund Investor
from time to time, to the extent that they constitute recallable
distributions and which are added to and be deemed to form part of the
undrawn/uncalled and/or unpaid commitments in terms of and in the
circumstances contemplated under the part titled ‘Recallability of
Dividends’ in the section titled ‘Operational Details’ below, but shall
exclude (for the avoidance of doubt) the Commitment Fee paid by such
Fund Investor together with (and in addition to) his Initial Subscription;
“Drawdown Notice”
The written notice by which the Company makes Capital Calls on Fund
Investors, as provided under the part titled ‘Capital Calls’ under the
section ‘Operational Details’ below, or as the case may be calls for the
repayment by Fund Investors of dividends or other distributions
receveived by them made by the Company as contemplated under the
part titled ‘Recallability of Dividends’ under the section titled ‘Operational
Details’ below;
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
page 7
“Final Liquidation”
The final liquidation of all the underlying assets of the Fund and the
subsequent final distribution of proceeds by the Fund, in accordance with
the process described herein;
“Final
Date”
The day when all the Fund Shares will be redeemed pursuant to Final
Liquidation, as determined by the Directors on or prior to the expiry of
the Term;
Redemption
“Fund”
The Woodman Credit Opportunities II Fund, a distinct sub-fund of and
established by the Company represented and constituted by the class/es
of shares in the Company described below in this Offering Supplement
and referred to herein as the Fund Shares, which form the subject-matter
of the offering made herein;
“Fund Share”
a share in the Company without any nominal value assigned to it and
forming part of any class of shares constituting or comprised in the Fund
as described below in this Offering Supplement, and having the rights
provided for or described under the Articles, the relative terms of issue
of such share, this Offering Supplement and the Offering Memorandum;
“Fund Investor”
a registered holder of Fund Share/s in the Fund;
“Hurdle
Rate”
or
“Preferred Return”
The rate equivalent to 8% p.a., applied, on a non-compounded basis, to
the total Subscriptions invested in the Fund from the respective
Commitment Processing Day (in case of Initial Subscriptions) or, as the
case may be, the respective Call Settlement Date (in the case of
Subscriptions pursuant to Capital Calls);
“Initial Subscription”
The initial Subscription paid by a Fund Investor at Commitment
Application stage, as provided under the part titled ‘Initial Subscriptions’
under the section ‘Operational Details’ below, excluding (for the
avoidance of doubt) the Commitment Fee paid by such Fund Investor
together with (and in addition to) such Initial Subscription;
“Investment Period”
The period starting from the Closing Date and ending on the fourth (4th)
anniversary of such Closing Date, which period may, at the discretion of
the Directors, be extended by up to two (2) additional one-year periods;
“Licence Issue Date”
11th November, 2014 being the date on which the licence in respect of
the Fund has been issued by the MFSA;
“Minimum
Commitments”
USD fifty million (USD 50,000,000), being the minimum aggregate
amount of Commitments sought from all Fund Investors during the
Closing Period;
Total
“Offer Price”
USD100 per Fund Share, being the offer price of the Fund Shares
subscribed or committed for during the Closing Period (even though
subscribed after such Closing Period pursuant to Capital Calls);
“Offering
Memorandum”
The latest updated version of the Offering Memorandum supplemented
by this Offering Supplement (and by the offering supplement/s issued in
respect of other sub-fund/s established by the Company, if any) issued
by the Company in respect of the offer of Investor Shares in any and all
sub-funds established from time to time by the Company and containing
general information in respect of the Company and all such sub-funds,
which on the date of this Offering Supplement bears the date of 9th July,
2014, including any future updates thereto that may be issued by the
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
page 8
Company from time to time, and (where the context so requires)
including also this Offering Supplement;
“Qualifying Investor”
means a person who meets one or more of the following criteria:
(i)
a body corporate which has net assets in excess of EUR750,000
or USD 750,000 (or equivalent in another currency) or which is
part of a group which has net assets in excess of EUR750,000 or
USD 750,000 (or equivalent in another currency);
(ii)
an unincorporated body of persons or association which has net
assets in excess of EUR750,000 or USD 750,000 (or equivalent in
another currency);
(iii)
a trust where the net value of the trust’s assets is in excess of
EUR750,000 or USD 750,000 (or equivalent in another currency);
(iv)
an individual, or in the case of a body corporate, the majority of
its board of directors or in the case of a partnership its general
partner, who has reasonable experience in the acquisition and/or
disposal of:
-
funds of a similar nature or risk profile;
-
property of the same kind as the property, or a substantial
part of the property, to which the Fund relates;
(v)
an individual, whose net worth or joint net worth with that
person’s spouse, exceeds EUR750,000 or USD 750,000 (or
equivalent in another currency);
(vi)
a senior employee or director of Services Providers to the Fund;
(vii)
a relation or close friend of the promoters of the Fund, limited to
a total of 10 persons;
(viii) an entity with (or which is part of a group with) EUR3.75 million
or USD 3.75 million (or equivalent in another currency) or more
under discretionary management, investing on its own account;
(ix)
the investor qualifies as a Professional Investor Fund promoted to
Qualifying Investors (as defined herein) or Extraordinary
Investors (as defined in the Investment Services Rules for
Professional Investor Funds issued by the MFSA and in the
Offering Memorandum);
(x)
an entity (body corporate or partnership) wholly owned by
persons or entities satisfying any of the criteria listed in (i) to (ix)
above which is used as an investment vehicle by such persons or
entities,
OR such other person as may from time to time be prescribed in the
MFSA rules or otherwise by the MFSA as falling under the definition of
Qualifying Investor;
“Qualifying
Investor
Declaration Form”
the standard declaration form, as attached to this Offering Supplement
(Appendix I) and to the standard Commitment Application or (as
applicable) the standard Transfer Registration Form relative to Fund
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
page 9
Shares which must be completed and signed by (or on behalf of) a
Qualifying Investor prior to investing in the Fund and whereby he/she/it
confirms that he/she/it qualifies as a Qualifying Investor;
“Service Provider(s)”
as applicable, the Administrator, the Investment Manager and any other
Service Provider appointed in respect of the Fund, as the context may
require;
“Subscriptions”
The investment amount each of the Fund Investors has paid for the
subscription of Fund Shares at the Offer Price, in the form of an Initial
Subscription and thereafter in the form of Subscriptions pursuant to
Capital Calls, but excluding (for the avoidance of doubt) the Commitment
Fee paid by each Fund Investor together with (and in addition to) his
Initial Subscription;
“Term”
The term / duration of the Fund which shall be the period starting from
the Closing Date and ending on the tenth (10th) anniversary of such
Closing Date;
“Valuation Day”
a day with reference to which the NAV of the Fund and/or the NAV per
Fund Share is calculated in accordance with the valuation methods, rules
and principles set out herein, the Offering Memorandum and/or the
Articles, which shall (without prejudice to the powers of the Directors or
authorised Service Provider/s described herein and/or under the Offering
Memorandum, in particular under the part ‘Valuation of Assets,
Calculation and Suspension of Calculation of NAV’ under the section
‘Buying and Selling’ of the Offering Memorandum) be quarterly on the
last Business Day of the months of March, June, September and
December of every year (and which calculation will in normal
circumstances be made, as of the said Valuation Day, within sixty (60)
Business Days from such Valuation Day): provided that the first Valuation
Day of the Fund shall be the Valuation Day (determined as aforesaid)
next following the Closing Date; provided further that (without prejudice
to the powers of the Directors or authorised Service Providers mentioned
above) the Directors may from time to time determine such other date
or dates in a calendar quarter (in addition to the last Business Day of the
months referred to above) as a Valuation Day for the purposes of the
Fund by giving notice thereof to the Fund Investors, and such additional
date or dates shall for all intents and purposes be and be deemed to be
a Valuation Day of the Fund.
Unless otherwise expressly defined herein or the context otherwise requires, capitalised terms
used herein and defined in the Offering Memorandum supplemented by this Offering
Supplement shall have the same meanings herein as therein.
Unless otherwise expressly defined for any specific purpose or part/s hereof or unless the context otherwise
requires, in this Offering Supplement:
(i) words importing any gender include all other genders; words importing the singular number only
include the plural number and ‘vice versa’;
(ii) words which import the whole are to be treated as including reference to any part of the whole; words
importing individuals include legal persons and ‘vice versa’;
(iii) references to the Offering Supplement or to any other document are to be construed as reference to
the Offering Supplement or to that other document as modified, amended, varied, supplemented, or
replaced from time to time;
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
page 10
(iv) any reference to an Appendix, Annex, section, part or heading is to the relevant Appendix, Annex,
section, part or heading of this Offering Supplement;
(v) reference to any international, European or other regional or local statute or statutory provision
(including any subordinate legislation), Directive, Regulation or legislative instrument includes any
statute or statutory provision, Directive, Regulation or legislative instrument which amends, extends,
consolidates or replaces the same, or which has been amended, extended, consolidated or replaced
by the same, and includes any orders, legislation, instruments or other subordinate legislation made
under the relevant statute or statutory provision, Directive, Regulation or legislative instrument; and
(vi) any phrase introduced by the words "including", "include", "in particular" or any similar expression is
to be construed as illustrative only and shall not be construed as limiting the generality of any preceding
words.
The headings in this Offering Supplement are included for convenience only and are to be ignored in its
construction.
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
page 11
DIRECTORY
Company’s Registered Office:
Palazzo Pietro Stiges, 103, Strait Street, Valletta VLT1436,
Malta
Directors of the Company:
Torben Degn
Dorfstrasse 75, CH-6332 Hagendorn, Switzerland
Tel: +41 78 749 1169
Fax: +41 41 725 0459
Guido Mizzi
T6B 18 Favray Court, Tigne Point, Midi, Sliema TP01, Malta
Tel: +356 7949 0059
Marise Muscat
23, Flat 2, Kendall Court, Paul Borg Olivier Street, Birkirkara
BKR 4310, Malta
Tel: +356 7944 0005
Secretary of the Company:
TCV Management and Trust Services Limited
Palazzo Pietro Stiges, 103, Strait Street, Valletta VLT1436,
Malta
Tel: +356 2123 1345 / 2123 2271
Fax: +356 2124 4291 / 2123 1298
Investment Manager of the
Fund:
Woodman Asset Management AG
Poststrasse 26, CH-6300, Zug, Switzerland
Tel: +414 1725 0444
Fax:+414 1725 0459
Administrator of the Fund:
Credit Suisse Fund Services (Luxembourg) SA
5, Rue Jean Monnet, L-2180, Luxembourg
Tel: +352 4361 611
Fax:+352 4361 61505
Auditors
PricewaterhouseCoopers
167, Merchants Street, Valletta, VLT 1174, Malta
Tel.: +356 21 247 000
Fax: +356 21 244 768
Lead Malta Legal Advisors:
MamoTCV Advocates
Palazzo Pietro Stiges, 103, Strait Street, Valletta VLT1436,
Malta
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
page 12
Tel.: +356 2123 1345 / 2123 2271
Fax: +356 2124 4291 / 2123 1298
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
page 13
KEY FEATURES OF THE FUND
This is a brief summary of the principal features specific to the Woodman Credit Opportunities II Fund that
are more fully addressed in the full text of this Offering Supplement and the Offering Memorandum.
Company
Woodman Funds SICAV p.l.c.
Fund
Woodman Credit Opportunities II Fund, a closed-ended fund.
Investment Objective
Fund’s
Currency
Reference
The investment objective of the Fund is the generation of income and
capital preservation by investing in a diversified portfolio of illiquid credit
investments, mainly through credit exposed collective investment
schemes and illiquid privately structured income generating investments
exposed to debt.
United States Dollar.
Accounting Period
1st January of each year and ending on the last day of December of that
same year.
Class/es of Fund Shares
WCOFII Class ‘A’ Shares, being a class of ordinary non-voting Shares in
the Company having such rights and restrictions as set out herein, the
Offering Memorandum and/or the Articles.
Closing Period
The period commencing on the Licence Issue Date and ending on the
earlier of (i) total Commitments from all Fund Investors reaching USD
300 million or (ii) 30th June 2015.
Minimum
Total
Commitments sought
USD 50 million.
Minimum
Investment
requirement / Minimum
Commitment Amount (per
Fund Investor)
Initial Subscriptions
USD 2,000,000 (excluding the Commitment Fee and excluding also for
the avoidance of any doubt, any amounts representing dividends and
other distributions made by the Company and received by the relevant
Fund Investor from time to time, to the extent that they constitute
recallable distributions and which are added to and are deemed to form
part of the undrawn/uncalled and/or unpaid commitments in terms of
and in the circumstances contemplated under the part titled 'Recallability
of Dividends' in the section titled 'Operational Details' below), subject to
the relevant rules laid down under the part titled ‘Commitments and
Minimum Investment Requirement’ under the section ‘Operational
Details’ below (including the discretion of Directors to accept lower
amounts, as provided in the said part).
1% of respective Commitments for the first admitted Fund Investors
whose Commitment Applications are processed as of the First
Commitment Processing Day during the Closing Period, and for
subsequently admitted Fund Investors whose Commitment Applications
are processed as of any subsequent Commitment Processing Day, an
Initial Subscription equivalent to such percentage of their respective
Commitment which reflects the same percentage of the respective
Commitments of previously admitted Fund Investors which have already
been paid by them (through Initial Subscriptions and/or Capital Calls)
up to the relevant time.
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
page 14
Capital Calls
Commitment Fee
From time to time during the Term by Drawdown Notice subject to at
least 1 week prior notice.
1% of respective Commitments, payable by each Fund Investor together
with (and in addition to) its Initial Subscription, and payable in full to
the Investment Manager.
Eligible Investors
Qualifying Investors.
Offer Price
USD 100 per Fund Share.
Redemptions
The Fund is closed-ended and, accordingly, no requests for redemptions
of Fund Shares will be accepted during the Investment Period and
thereafter until Final Liquidation, and all Fund Shares will be redeemed
on the Final Redemption Date (subject to what is stated under the
heading `Redemptions’ in the section titled ‘Operational Details’ below).
Administration Fees
An annual administration fee payable quarterly in arrears ‘pro rata
temporis’ by and out of the assets of the Fund to the Administrator as
per the following sliding scale, subject to a minimum Administration Fee
of $30,000 per annum which shall be waived for the first 6 months after
the Closing Period:
Net Asset Value (i.e. pricing NAV)
of the Fund
First $0 to $50,000,000
Administration Fee
Next $50,000,001 to $100,000,000
4 basis points per annum
Next $100,000,001 to $200,000,000
3 basis points per annum
Any amount over $200,000,000
2 basis points per annum
5 basis points per annum
See the relevant rules laid down under the section titled ‘Fees, Charges
and Expenses’ hereunder.
The Administrator shall also receive a transfer agent fee of $150 in
respect of every capital call/distribution (per Fund Investor) as more
fully explained in the section titled ‘Fees, Charges and Expenses’
hereunder.
Management Fee
A fee equivalent to 1.20% of the Net Asset Value of the Fund per annum
payable quarterly in arrears ‘pro rata temporis’ by and out of the assets
of the Fund.
See the relevant rules laid down under the section titled ‘Fees, Charges
and Expenses’ hereunder.
Performance Fee
10% of excess (if any) over Subscriptions plus Preferred Return (not
compounded), payable on Final Liquidation.
See the relevant rules laid down under the part titled ‘Allocation of
Proceeds’ under the section ‘Operational Details’ hereunder.
Dividends
Fund Shares held by Investors are distributor shares and shall
accordingly entitle their holders to receive dividends declared by the
Directors (expected to be declared on a quarterly basis), which dividends
may be recalled by the Company, subject to the Directors having the
discretion to decide not to declare any dividends in any given period.
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
page 15
See the relevant rules laid down under the parts titled ‘Dividend Policy’
and ‘Recallability of Dividends’ respectively under the section titled
‘Operational Details’ hereunder.
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
page 16
Investment Objective and Investment Policies, Investment and Financing Restrictions of the
Fund
Investment Objective
The investment objective of the Fund is the generation of income and capital preservation by investing in
a diversified portfolio of illiquid credit investments, mainly through credit exposed collective investment
schemes and illiquid privately structured income generating investments exposed to debt.
Investment Policies
The Fund will seek to attain its investment objective by investing in a diversified portfolio of carefully
selected illiquid credit opportunities, a substantial part whereof will consist (though not exclusively) of units
and capital participations of closed-ended or otherwise illiquid collective investment schemes and other
pooled investment vehicles, primarily private equity limited partnerships (typically closed-ended) and hedge
funds (typically with relatively long lock-up periods) which will have an investment focus on credit
investments with a high income component and may themselves invest (or potentially invest) in loans either
directly through direct origination or by acquiring or participating in a single loan or portfolio of loans, or
indirectly through structured debt, equity or other instruments or securities invested by them (hereinafter
referred to as the “Underlying Targets”). The Underlying Targets may accordingly invest in a variety of
direct lending, debt, and income generating royalty and credit-related transactions and investments and
other structured securities and financial instruments to or issued by or related to entities or projects in
various sectors and industries around the world, including ‘inter alia’ royalty stream investments, royaltybacked loans or bonds, structured royalties, secured or unsecured loans, senior and subordinated corporate
debt securities, convertible debt, mezzanine debt securities and other mezzanine lending or investments,
loan participations, bridge loans, loan portfolios, distressed debt and distressed debt-securities, derivatives
and warrants or equity related to the relevant Underlying Target’s debt investments, structured credit and
hybrid and other structured investments.
The Underlying Targets will typically (although not invariably) be regulated in their own jurisdiction,
although the level of regulation will vary from one jurisdiction to another and from one Underlying Target
structure and another, and some Underlying Targets may also be unregulated. The Fund will typically invest
in non-listed Underlying Targets. The Underlying Targets may have a global and/or regional focus and may
also have a sectorial or broad focus in terms of their investments. The entities invested in by the Underlying
Targets may be start-up or "small cap" or "mid cap" entities. The Fund may through its investment in such
Underlying Targets as aforesaid, be indirectly investing in a variety of financial instruments of an unlimited
range of issuers, industries of sectors.
The Fund will invest in the Underlying Targets principally through capital contributions and acquisitions of
capital participations/interest made and/or committed to be made by the Fund in such Underlying Targets.
Additionally the Fund may also generally invest in bonds, notes and other securities (including possibly
equity and/or preferred shares) offered through private placement and issued by entities which may invest
the proceeds thereof in various projects and assets, including assets with an exposure to debt and possibly
also in direct loans or acquisitions of loans. Furthermore the Fund may enter into co-investments
arrangements with the Underlying Targets referred to above and with other collective investment schemes
and entities and other industry specialists to obtain exposure to loans and other credit investments through
(and which exposures will be wrapped up and / or structured in the form of) securities (whether debt,
equity or other securities) and other structured financial instruments (such co-investments and the aforesaid
private placement securities which may be invested in from time to time by the Fund hereinafter together
referred to as the “Additional Investments” and collectively with the investments in Underlying Targets
mentioned above referred to as the “Underlying Exposures”).
As a result of the Fund’s investment portfolio composition described above and the nature and structure of
its investments in the Underlying Exposures, the Fund will not originate loans to third parties directly, nor
it will acquire portfolios of loans or direct interest in loans which give rise upon investment to a direct
relationship between the Fund as a lender and the underlying borrower/s of the loans, and the contractual
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
page 17
relationship of the Fund upon effecting such investments will be limited to the Underlying Targets or the
respective issuers of the Additional Investments (securities or structured instruments) referred to above.
The Investment Manager has the overall responsibility for the investment policy of the Fund and has the
authority to determine the asset allocation and selection process of the Fund’s portfolio in accordance with
the investment restrictions set out below, as well as the flexibility, subject to the prior consent of the
Company, to select investment advisors and managers to assist it in its management functions.
The description of the Fund’s investment strategy is not intended to be exhaustive. The exact details may
vary over time. There is no assurance that the investment strategy to be adopted will be profitable or that
a Fund Investor will not lose some or all of its investment.
Subscription Monies Commitment Policy
The Fund’s policy is to make Capital Calls as close as possible to the time needed for making its underlying
investments and/or to cover its expenses and liabilities arising from time to time and to commit the total
available amount of the Subscriptions it receives from time to time, after deduction of any applicable fees
and expenses due by the Fund and after reasonable reserves have been made to cover the running costs
and actual, future or contingent liabilities of or attributable to the Fund and other liquidity requirements, to
the underlying investments to be made by the Fund, as indicated above.
Until the Subscriptions are fully utilised by the Fund, the unutilised monies as well as any cash held for
liquidity purposes as aforesaid, may be held by the Fund with any credit or financial institution in demand
or short-term fixed cash deposits. Any proceeds received by the Fund from any such deposits before or
after the Closing Date and during the Term, may at the discretion of the Board, be made available for
distribution to the Fund Investors by way of dividends or be reinvested by the Fund, which dividends may
be recalled by the Company subject to the rules set out under the part titled ‘Recallability of Dividends’
under the section titled ‘Operational Details’ hereunder.
Hedging Techniques
The Fund reserves the right to use foreign exchange derivatives and transactions, techniques and
instruments, primarily in the form of foreign exchange forwards, to hedge against currency exchange risks
that the Fund may be exposed to.
Borrowing and Investment Restrictions
The Fund (through the Company) may seek financing for liquidity purposes, without restriction, but no
financing for investment (leverage) will be utilised, except for leverage through the use of foreign exchange
derivatives as aforesaid, which leverage (through such derivatives) shall be limited to a maximum of fifty
per cent (50%) of the NAV of the Fund at any one time: it being provided for the avoidance of doubt, that:
(i)
the Fund may procure borrowings or other financing to cover any shortfall of money needed
for or in consequence of investments, expenses or liabilities by Fund Investors who default on
their obligation to make Capital Calls or by the mandatory redemption of a Fund Investor, and
this shall not be deemed to be a breach of the above-mentioned leverage restriction; and
(ii)
the above-mentioned leverage restriction applies to the Fund but not to or with respect to the
Underlying Targets and issuers of the Additional Investments, which may be leveraged to any
extent.
With effect from six (6) months following the expiry of the Closing Period, the Investment Manager shall
apply the following investment allocation restrictions:

The Fund’s maximum exposure to Additional Investments consisting of private placement securities
shall be limited to forty per cent (40%) of the total Commitments (including the called / paid and
the uncalled / unpaid portions thereof); and
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
page 18

The Fund may invest up to forty per cent (40%) of total Commitments (including the called / paid
and the uncalled / unpaid portions thereof) in Additional Investments consisting of co-investment
arrangements referred to above.
The Fund may invest up to hundred per cent (100%) of its Commitments in Underlying Targets.
Save as otherwise provided herein, the Fund shall not be subject to any borrowing or investment restrictions.
For the avoidance of doubt, the Fund may start investing as aforesaid its funds (principally the Subscriptions
received, whether through Initial Subscriptions or pursuant to Capital Calls) at any time, even during and
before the expiry of the Closing Period – see the part titled ‘Closing Period and Total Commitments Sought’
under the section ‘Operational Details’ below. The Fund will focus on its investment allocation and generally
its investment and reinvestment activities during the Investment Period (and possibly before the Investment
Period, during the Closing Period as aforesaid), and the period following such Investment Period up to the
expiry of the Term will be mainly dedicated to the orderly liquidation of investments with the objective to
effect the Final Liquidation as soon as practicable after the Investment Period and by not later than the
expiry of the Term, provided that this shall be without prejudice to the right of the Fund to make at such
time any investments which are deemed beneficial to the Fund and Fund Investors and whose maturity and
other characteristics do not conflict with the said objective .
Change in Investment Objective, Policies and Restrictions
The Fund’s investment objective and policies set out above, shall, in the absence of unforeseen
circumstances, be adhered to throughout the Investment Period.
However, if at any time the investment objective of the Fund is changed, such changes shall be notified to
Fund Investors in advance of the change with a notification period of at least thirty (30) calendar days.
During the said notification period, Fund Investors shall not be entitled to request the redemption of their
Fund Shares as a result of such changes (since the Fund is a closed-ended one). However, the changes in
investment objective will be subject to and will only become effective upon the approval of the holders of
three-fourths of the issued Fund Shares in the Fund, in the absence of which such investment objective will
remain unchanged.
The Directors or the Investment Manager (subject to the instructions and directions given by the Directors),
may, at their sole discretion, alter the investment policies and borrowing and investment restrictions listed
above, provided that any change thereof shall be notified to the Fund Investors in advance and shall be
subject to the approval of the holders of three-fourths of the issued Fund Shares in the Fund.
In all cases, changes to the investment objective and policies, borrowing and investment restrictions of the
Fund as set out herein will be subject to the prior approval of the MFSA as and to the extent required by
law and the rules of MFSA.
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
page 19
Risk Factors
THIS SECTION AIMS TO SET OUT THE RISK FACTORS SPECIFIC TO THE FUND AND SHOULD BE
READ IN CONJUNCTION WITH THE MORE GENERAL OR GENERALLY APPLICABLE RISKS
LISTED IN THE SECTION TITLED “GENERAL RISK FACTORS” OF THE OFFERING
MEMORANDUM, WHICH RISKS SHALL (SAVE AND TO THE EXTENT THAT THE CONTEXT
OTHERWISE REQUIRES) APPLY FULLY TO THIS FUND AND AN INVESTMENT THEREIN AND ARE
ACCORDINGLY INCORPORATED BY REFERENCE AND DEEMED TO BE REPEATED HEREIN.
AN INVESTMENT IN THE FUND INVOLVES SIGNIFICANT FINANCIAL, OPERATIONAL AND
OTHER RISKS, INCLUDING THE RISK OF LOSS OF THE ENTIRE AMOUNT INVESTED, AND MAY
NOT BE SUITABLE FOR ALL INVESTORS.
THE RISKS LISTED BELOW AND IN THE OFFERING MEMORANDUM SHOULD NOT BE
CONSIDERED AS AN EXHAUSTIVE LIST AND EXPLANATION OF ALL RISKS INVOLVED IN
INVESTING IN FUND SHARES. PROSPECTIVE INVESTORS ARE STRONGLY RECOMMENDED TO
READ THE ENTIRE OFFERING MEMORANDUM (INCLUDING THIS OFFERING SUPPLEMENT)
AND TO INVESTIGATE, ANALYSE AND CAREFULLY CONSIDER, AND TO CONSULT THEIR
PROFESSIONAL ADVISORS REGARDING THE LEGAL, TAX, FINANCIAL OR OTHER
CONSEQUENCES OF AN INVESTMENT IN THE FUND IN THE LIGHT OF THEIR PERSONAL
CIRCUMSTANCES AND THE INHERENT RISKS OF SUCH AN INVESTMENT, INCLUDING THE
FOLLOWING.
General
This is to be considered as a Fund involving high risk and investment therein should be regarded as a longterm investment. There is no assurance that the Fund’s investment approach will be successful or that its
investment objective, as delineated in this Offering Supplement, will be achieved. The Fund could realise
substantial or complete losses. The price of Fund Shares may go down as well as up and Fund Investors
may not realise their initial investment. There is no guarantee against losses (including complete losses)
resulting from an investment in the Fund. Historical performance over any particular period will not
necessarily be indicative of the results that may be expected in future periods. The Fund is a newly formed
entity and therefore, the Fund does not have any established track record, which could be utilised as a basis
for evaluating its potential performance.
Potential Lack of Diversification
Save as otherwise expressly stated herein the Fund does not have any formal policy with respect to
diversification of its holdings and the Underlying Exposures may themselves have concentration of
investments in specific asset class/es, issuers, counterparties, countries, sectors and industries. Therefore,
the Fund may at times be less diversified and more volatile. A significant percentage of the investments
(direct or underlying) may, at any time, be highly concentrated and accordingly may be subject to more
rapid change in value than would be the case if there were a requirement to maintain a wide diversification
of investments. Although the Fund intends to follow a policy of seeking to spread risk through investment
diversification, this may not be the case at all times and there is no assurance that it will be able to do so
effectively or that any diversification policy adopted will mitigate the risk of loss.
Dividends
Although the Fund Shares are distribution shares, the Directors have the discretion to decide not to
recommend any dividends in any given distribution period (reference is made in this respect to the warning
given under the heading ‘Dividend Policy’ under the section titled ‘Operational Details’ of this Offering
Supplement) and direct that the relevant funds be retained to satisfy or to establish reserves for the Fund’s
current or anticipated operational needs and obligations. In such cases, Fund Investors will not realise a
dividend return on their investment during such period. Furthermore any dividend distributions made and
received by the Fund Investors during the Investment Period may be recalled by the Company (acting
through the Investment Manager) within three (3) years from the effective date of distribution as
contemplated in the part titled ‘Recallability of Dividends’ under the section titled ‘Operational Details’
hereunder.
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
page 20
Effect of Performance Fees
The Investment Manager will receive a Performance Fee from the assets of the Fund based on a percentage
of profits. Performance fees may create an incentive for the Investment Manager to make investments that
are riskier or more speculative than would be the case in the absence of such incentive compensation
arrangements.
Whilst being subject to the Hurdle Rate / Preferred Return payable to Fund Investors, the amount of
Performance Fees payable to the Investment Manager is not subject to any cap or maximum amount, and
the higher the profits of the Fund, the higher will the Performance Fee be.
Effect of Commitment Fees
Each Fund Investor will be liable to pay, together with (and in addition to) his Initial Subscription, a onetime Commitment Fee which will be fully payable to the Investment Manager. Such Commitment Fee shall
be calculated as a percentage of the respective full Commitments of such Fund Investor, and no portion of
such Commitment Fee shall at any time be refundable to the Fund Investor, even if the Fund does not
utilise and draw the full Commitments of such Fund Investor during the Term.
No redemption right during Term
The Subscriptions made by Fund Investors during the Closing Period and thereafter pursuant to Capital
Calls are tied in to the Fund for the Term, and realisation of one’s investment in the Fund is only possible
on Final Liquidation in accordance with the procedure set out in this Offering Supplement, unless Fund
Investors transfer their Fund Shares to third parties before such Final Liquidation, which transfers are
however subject to the restrictions and conditions set out in the Offering Memorandum. In the event that
the Fund’s investment objective is changed, Fund Investors shall not be entitled to redeem their Fund
Shares; however, the change in investment objective shall be subject to the approval of the holders of
three-fourths of the issued Fund Shares.
Final Redemption Risk
Realisation of the underlying assets of the Fund depends entirely on the final realisation of the assets of
and final distributions made by the Underlying Targets, or (as the case may be) on the redemption and
payment at maturity made by issuers, partners or arrangers of Additional Investments, or on the earlier
transfer of the Fund’s interests in such Underlying Exposures to third parties.
Although the Investment Manager will seek to invest in Underlying Exposures with a respective investment
term or maturity and an expected date of realisation of underlying assets and final distribution of respective
assets or final payment to their investors (including the Fund) which is adequate to ensure a proper
realisation of the Fund’s assets and final distribution of proceeds to and redemption of Fund Shares held by
the Fund Investors on Final Liquidation as soon as possible after the Investment Period and prior to the
Term, there may be certain market, economic or other factors or circumstances prevailing at the relevant
time which delay (even substantially) the proper realisation of assets and final distributions or payments by
the Underlying Targets or issuers of Additional Investments or which negatively affect the price, terms and
conditions of such realisation, or which in some cases may otherwise lead to distributions in kind by
Underlying Targets or issuers to their investors (including the Fund) upon their respective final liquidation
or maturity. All of this can significantly negatively affect the timeliness of the Final Liquidation of the Fund
or the amount of distributions received by the Fund and therefore the amount of distributions received by
Fund Investors on the Final Redemption Date, or may lead the Fund to affect itself distributions in kind to
Fund Investors on the Final Redemption Date which may not be suitable (in terms of their liquidity or
otherwise), or may also lead the Fund to sell, distribute or otherwise dispose of its investments to third
parties at a disadvantageous time or price which will again negatively impinge upon the amount of
distributions received by Fund Investors on the Final Redemption Date. Furthermore, the transfer of the
Fund’s interests in the Underlying Exposures to third parties may be subject to various restrictions in terms
of the respective offering documents, terms of investment or issue, contractual arrangements or the laws
of the relevant jurisdictions where they are established or issued or to which they are otherwise subject.
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
page 21
There can be no assurance that the liquidation of the Fund and the final distribution of its assets will be
able to be executed expeditiously.
Defaulting Investors or Investors Mandatorily Redeemed
If a Fund Investor fails to pay a Capital Call when due, and the additional Capital Calls paid by the nondefaulting Fund Investors and/or borrowings by the Fund and/or other actions taken by the Fund to cover
the shortfall (as permitted herein), are inadequate to cover the defaulted Capital Call, the Fund may be
unable to pay its obligations when due, including calls received by it from Underlying Targets or issuers of
other Underlying Exposures to pay any portions of undrawn contributions committed by the Fund or other
calls for payments due by the Fund. As a result the Fund may be subjected to significant penalties or other
negative consequences that could materially adversely affect the returns to all Fund Investors (including
the non-defaulting ones). The same situation may arise in case of Fund Investors whose investment in the
Fund is mandatorily redeemed.
In addition, a Fund Investor who fails to pay a Capital Call when due may incur significant economic losses
and other consequences as a result of its default, including the possible forfeiture of its Fund Shares. A
Fund Investor whose investment in the Fund is mandatorily redeemed may also incur consequences which
could have a material adverse effect on the realisation proceeds of its investment in the Fund.
Furthermore, in the event that a Fund Investor fails to pay capital, being recalled by the Company and
being an entire or a part of dividend/s previously distributed to Fund Investors, as the case may be, the
Fund may itself fail to comply with any recycling or reinvestment obligation or investors’ clawback or
giveback obligations entered into with the Underlying Targets and Underlying Exposures, which situations
may also subject the Fund to penalties and other negative consequences.
Reference is here made to the parts titled ‘Defaulting Fund Investors’, ‘Compulsory Redemption’ and
‘Recallability of Dividends’ under the section ‘Operational Details’ below.
Liquidity Risk
Apart from the liquidity risks which may be faced by the Fund at the stage of or in connection with final
redemption (as explained in more detail under the risk factor titled ‘Final Redemption Risk’ above) as well
as liquidity problems which may be created in the exceptional circumstance of a defaulting investor who
fails to pay Capital Calls (as explained in more detail under the risk factor titled ‘Defaulting Investors or
Investors Mandatorily Redeemed’), the Fund will be subject to liquidity risk on a continuing basis in view of
the fact that its investments will primarily be illiquid investments. Whilst the Fund will have no redemption
obligations during its Term until the final redemption of all Fund Shares to be made on the Final Redemption
Date, the Fund will have on-going liquidity needs, principally the operational costs that it will incur on an
on-going basis as well as the payments to be made pursuant to commitments it will undertake with
Underlying Targets and issues of other Underlying Exposures. Whilst the Fund’s portfolio will typically
consist of income-generating investments which should produce regular cash-flows to meet these liquidity
needs, such cash-flows and the frequency thereof are not guaranteed and may be dependant on the
discretion of the Underlying Targets or issuers of Underlying Exposures (see the risk factor titled ‘Dividends
by Underlying Investments’) or may be negatively affected by default on the part of these Underlying
Targets or issuers (see the risk factor titled ‘Credit Risk and Counterparty Risk’). In such cases, the Fund
may be constrained to finance its liquidity needs (i) through bank or other forms of financing, which may
not be easily available (also in view of the illiquid nature of the assets which may be offered by the Fund
as collateral) or may not be available at reasonable prices or interest rates, or (ii) through realisation of
some of the Fund’s assets, which may be inherently not possible due to the closed-ended characteristics or
maturity term or lock-in periods or transfer restrictions applicable to such assets, or may be difficult due to
their illiquid nature or other factors affecting the relevant market at the relevant time as well as several
economic factors, all of which can significantly impinge on the targeted price of sale and/or on the time
frame set for the sale, possibly making it difficult to find a willing buyer for them or to sell them at a
reasonable price or at their fair market value within the time-frame desired. The lack of liquidity of these
investments will also affect the prices and values thereof.
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
page 22
Subsequently Admitted Investors
If the Minimum Total Commitments is reached on any day during the Closing Period before the month of
June 2015, there will be one or more Commitment Processing Days during the Closing Period (“Earlier
Commitment Processing Day/s”), in addition to the Closing Date (“Final Commitment Processing Day”), as
of which Commitment Applications by prospective Fund Investors already received up to 12:00 noon (CET)
of the Earlier Commitment Processing Day will be processed, and the Directors may also thereafter, during
such Closing Period, make Capital Calls from Fund Investors whose Commitment Application has been
processed and accepted as of any such Earlier Commitment Processing Day, and the Fund may use the
Initial Subscriptions and Subscriptions received pursuant to such Earlier Commitment Processing Day/s and
Capital Calls to fund investments and pay expenses and liabilities of the Fund and other permissible purposes
– see the part titled ‘Closing Period and Total Commitments Sought’ under the section ‘Operational Details’
below. Fund Investors who submit their Commitment Applications later and whose Commitment
Applications are processed and accepted on subsequent Commitment Processing Days will subscribe or
commit for Fund Shares at the same Offer Price as earlier admitted Fund Investors. Such subsequent Fund
Investors will be required to pay, as their Initial Subscription, such amount as will ensure that the amounts
paid by each Fund Investor admitted up to that date (including Initial Subscriptions and Capital Calls paid
by previously admitted Fund Investors) on a percentage basis relative to their respective Commitments is
the same (see the part titled ‘Initial Subscriptions’ under the section ‘Operational Details’ below) but no
other adjustments will be made during the Closing Period to reflect any fluctuation in value of portfolio
investments (if any) already made or expenses and liabilities already incurred by the Fund before the
admission of such subsequent Fund Investors and no Valuation Days will occur during the Closing Period,
and the Offer Price will be deemed to be the NAV per Fund Share during the whole of the Closing Period
for all intents and purposes hereof and the law. The above-mentioned risk is minimised by the fact that
the Closing Period is relatively short and also that no substantial Capital Calls are expected to be made from
earlier Fund Investors during the Closing Period, especially during the early days thereof. Furthermore,
earlier admitted Fund Investors will, on Final Liquidation, be compensated for the slightly longer period for
which they have committed and paid their funds by way of investment in the Fund, by having a first priority
claim over any distributable proceeds available on Final Liquidation, after repayment of capital
(Subscriptions) to all Fund Investors, up to an amount which pays them the Preferred Return (not
compounded) for the period during which they were investing in the Fund in anticipation of subsequently
admitted Fund Investors, all as explained under the part titled ‘Allocation of Proceeds’ under the section
‘Operational Details’ below. This compensation through this Preferred Return, however is not certain and
there may be no distributable proceeds in excess of Subscriptions paid by Fund Investors and, even where
there result such excess proceeds, such compensation will not necessarily reflect (and may be more or less
than) the fluctuation in value of portfolio investments or expenses and liabilities incurred by the Fund prior
to the admission of subsequent Fund Investors as aforesaid.
Capital Calls on Investors’ Committed Funds
Upon accepting Commitment Applications submitted by prospective Fund Investors during the Closing
Period, the Company will be entering into agreements with such Fund Investors for the purpose of such
Investors committing funds for the subscription at a future date (as and when the Company makes Capital
Calls on them) to Fund Shares at a specific price, namely the Offer Price, which may on eventual subscription
as of the respective Call Settlement Date be issued at a discount to the Net Asset Value of the Fund Shares
applicable as at such Call Settlement Date – see the part titled ‘Capital Calls’ under the section titled
‘Operational Details’ below. Should the Company issue Fund Shares at a discount with respect to their
current NAV, in terms of such agreements as aforesaid, there will be a risk of dilution to the Net Asset Value
of the Fund.
Furthermore, while investors entering into such agreement with the Company for the purpose of committing
funds for the subscription to Fund Shares on future Call Settlement Dates at the pre-agreed Offer Price,
would in effect be subscribing for such Fund Shares at a discount if the NAV per Fund Share prevailing as
at the relevant Call Settlement Date exceeds the pre-agreed Offer Price, on the other hand, if the NAV per
Fund Share prevailing as at the relevant Call Settlement Date is lower than the pre-agreed Offer Price, the
investor would, in effect, be paying a premium for such shares.
However, the above-mentioned risk is mitigated by being spread amongst all Fund Investors, who will have
the same pro rata share of paid Subscriptions relative to their respective Commitments and who will receive
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
page 23
pro rata Capital Calls in proportion to their respective Commitments. In the case of Fund Investors investing
and committing higher amounts than others (subject to the Minimum Investment Requirement), the total
discount or (as the case may be) premium gained or suffered by them will be magnified.
Risks of Suspension of Net Asset Value Determination by Underlying Targets
The Underlying Targets in which the Fund invests may be subject to temporary suspensions in the
determination of their net asset values or the values of their portfolio assets. This will affect the ability of
the Fund to correctly and/or timely calculate its NAV.
Lack of Publicly Available Information Regarding Underlying Investments
Investment in the Underlying Targets as well as other Underlying Exposures will typically be offered on a
private placement basis or on the basis of specifically structured arrangements and, unlike more regulated
funds or investments registered for distribution to the public, these may be subject to limited regulatory,
disclosure and reporting requirements. Accordingly, only a relatively small amount of publicly available
information about Underlying Targets and issuers or arrangers of Additional Investments, their holding and
performance, may be available to the Investment Manager in managing and assessing the investments of
the Fund. For other information relating to these underlying investments, the Investment Manager may
need to rely upon the respective portfolio managers or issuers themselves and other agents.
Investors should recognize that the Investment Manager's ability to monitor the Fund's portfolio will be
affected by the amount, timeliness and quality of information available with respect to its underlying
portfolio investments and respective portfolio managers or issuers and their investment operations, and
that the Investment Manager may have no means of independently verifying much of the information so
supplied.
Valuation of Underlying Investments and Calculation of NAV of the Fund
The NAV of the Fund and per Fund Share is not audited (except at fiscal year-end) and shall be calculated
primarily by reference to the reporting made available by the Underlying Targets, in so far as the assets of
the Fund consist of investments in such Underlying Targets. These will normally report and value their
investments in line with generally accepted principles applied in the valuation of investments of this nature.
In valuing its investments, the Fund will need to rely primarily on the non-audited financial information
provided or reported by portfolio managers or administrators of the Underlying Targets. In calculating their
respective net asset value or values of their respective assets, the Underlying Targets and portfolio
managers may in turn have a limited ability to procure accurate market quotations for purposes of valuing
some of their investments, which may require the portfolio managers to estimate, in accordance with their
valuation policies, the value of the Underlying Target’s investments on a certain valuation date. In the
respective portfolio managers’ discretion, an independent appraisal of such investments may not be sought
and obtained. Further, because of the overall size and concentration in particular markets, the maturities
of positions that may be held by the Underlying Targets from time to time and other factors, the liquidation
values of the Underlying Targets’ investments may differ significantly from the interim valuations of these
investments derived from their valuation methods.
If financial information used by any Underlying Target or respective portfolio manager or valuer to
determine the value of the relevant assets is incomplete, inaccurate, or if such value does not adequately
reflect the value of the relevant holdings and assets, the NAV of the Fund and per Fund Share may be
adversely affected producing over- or under- estimated NAVs which may in turn lead to the over-payment
or under-payment of fees due to the Service Providers.
The above risks may also apply in case of investments of the Fund which consist of Additional Assets, where
the valuation thereof by the Fund may rely to some extent on information derived from the respective
issuers or arrangers.
In addition, the valuation dates on or by reference to which the Underlying Targets’ net asset value or
values of their respective assets are calculated may not coincide with the Valuation Day of the Fund. As a
result, the calculation of the Net Asset Value for the Fund may be made on the basis of net asset values for
underlying investments which are either estimated (in the event that no published net asset value is
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
page 24
available) or are historic net asset values, which estimated or historic net asset values may vary from the
actual value of the net assets of the respective Underlying Targets as at the Valuation Day of the Fund.
Umbrella Structures
Some of the Underlying Targets in which the assets of the Fund are invested may have an umbrella or
multi-class structure. Any sub-fund or separate class of such umbrella or multi-class structure in which the
Fund may invest may be liable to debts of the other sub-funds or classes and to the risk of cross-liability
depending on the regulations and applicable laws of its jurisdiction.
Duplication of Operating Expenses
In investing in the Shares of the Fund which in turn invests in Underlying Targets, a Fund Investor may
indirectly incur the fees and costs of two forms of investment management (including performance fees),
advisory and other services, the fees and expenses paid by the Fund to its agents and Service Providers,
and the fees and expenses paid by the Underlying Targets to their respective agents and service providers.
All fees and operating expenses to which Underlying Targets and portfolios are subject must be more than
offset by increases in the value of their respective investments, or the value of the Fund's investment therein
will decline.
Lack of Operating History of Underlying Targets and Portfolio Managers
Certain Underlying Targets and respective managers in which or with whom the Fund may invest will be
newly organized and therefore will have no, or only a limited, operating history and track record. Of course,
even where such track record exists, past performance achieved by them is not necessarily indicative of
future results.
Dividends by Underlying Exposures
Although the Fund will typically invest in Underlying Exposures on the basis that these will pay out dividends,
interests or other regular payments, the relevant general partners or directors or portfolio managers or
other relevant decision-makers may have discretion to decide not to recommend any dividends in any given
year or period, or the relevant payment may otherwise be suspended or be based on performance of the
relevant underlying assets which may not be achieved during any period or periods. In such cases, the
Fund’s prospects of income-generation (and resultant cash-flows) may be negatively affected and the Fund
may effectively find itself in a position that it may realise a return on its investment in such Underlying
Exposures only on realisation of such investment. Furthermore the legally binding offering documents or
other contractual agreements regulating the terms and conditions of issuing and holding of shares, units or
interests, as the case may be, in the Underlying Exposures may contain provisions which stipulate that any
such dividends, interests or other regular payments made by the said Underlying Exposures, may, within a
specified period of time and under predefined and specified circumstance be recalled from the Fund, being
an investor into the relevant Underlying Exposures.
Interest Rate Risk, Fixed-Income Debt Securities and other Debt Investments
The Fund may (as permitted by and subject to its investment policies described above) directly invest in
one or more issues of bonds or other debt securities offered through private placement, as well as in interest
rate sensitive structured financial instruments, and may also indirectly take positions in fixed income, debt
securities and other interest rate sensitive financial instruments through its investments in the Underlying
Exposures, and will therefore be exposed to the risks typically associated with such investments. These may
fall in value if interest rates change. Generally, the prices of debt securities rise when interest rates fall,
whilst their prices fall when interest rates rise. Longer term debt securities are usually more sensitive to
interest rate changes.
Price changes in fixed-interest securities are influenced predominantly by interest rate developments in the
capital markets, which in turn are influenced by macro-economic factors. Fixed-interest securities could
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
page 25
suffer in value and liquidity when capital market interest rates rise, while they could increase in value and
liquidity when capital market interest rates fall.
The price changes also depend on the term or residual time to maturity of the fixed-interest securities. In
general, fixed-interest securities with shorter terms have less price risks than fixed-interest securities with
longer terms. However, they generally have lower returns and, because of the more frequent due dates of
the securities portfolios, involve higher re-investment costs.
Furthermore, fixed-income securities investments are also subject to risks associated to the issuers of such
securities who may default in the payment of the principal and/or interest on such investment. In addition,
lack or inadequacy of collateral or credit enhancement for a debt instrument may affect its credit risk – see
other risk factors outlined above and below, in particular ‘Underlying Investment in Secured Loans and
Unsecured Debt’, ‘Underlying Investments in Subordinated Loans’ and ‘Credit Risk and Counterparty Risk’.
Underlying Investment in Secured Loans and Unsecured Debt
The Underlying Exposures may be secured or may be invested in or referenced to loans which are secured.
These investments may be subject to the risk that the respective security interests are not properly or fully
perfected. Compounding these risks, the collateral securing debt investments will often be subject to
casualty or devaluation risks. Furthermore, the collateral securing the Underlying Exposures or their
investments may be or become insufficient to secure the obligations arising therefrom, including as a result
of a decrease in the value of such collateral. In addition, the characterization of an Underlying Exposure or
of an investment of an Underlying Exposure as senior debt or senior secured debt does not mean that such
debt will necessarily have repayment priority with respect to all other obligations of the relevant borrower,
and borrowers may have and/or may be permitted to incur other debt and liabilities that rank equally with
or senior to the senior loans constituted by the Underlying Exposures or in which the Underlying Exposures
are invested (which higher priority may be established by contract or even by operation of law).
Furthermore, the Underlying Exposures may constitute or be invested in unsecured indebtedness, whereas
all or a significant portion of the respective issuer’s or borrower’s senior indebtedness may be secured. In
such situations, the ability of the Fund or of the issuers of the Underlying Exposures to influence an issuer’s
or borrower’s affairs, especially during periods of financial distress or following an insolvency, is likely to be
substantially less than that of senior creditors.
Furthermore, bankruptcy, insolvency and other relevant laws (including those relating to fraudulent acts by
the borrower / issuer) in the jurisdiction to which the borrower or issuer is subject may adversely affect,
suspend, change or even invalidate the use, benefit and protection afforded by collateral, set-off and other
security interests securing repayment and/or even the actual rights of repayment of secured or unsecured
debt.
Underlying Investments in Subordinated Loans
The Fund will also indirectly invest, through the Underlying Exposures, in subordinated loans and the
Underlying Exposures themselves may be subordinated to other indebtedness of the respective issuer. If a
borrower defaults on his loans or indebtedness, or in the event of the bankruptcy of a borrower, the
subordinated loan / indebtedness will be satisfied only after the senior loans / indebtedness are repaid in
full. Accordingly, the Fund or the issuers of the Underlying Exposures may not be able to take the steps
necessary or sufficient to protect their investments in a timely manner or at all. In addition, subordinated
loans / indebtedness may not always be protected by financial covenants or limitations upon additional
indebtedness and may have limited liquidity. If a borrower declares bankruptcy, the creditor of the
subordinated loan / indebtedness may not have full or any recourse to the assets of the borrower, or the
assets of the borrower may not be sufficient to satisfy the loan / indebtedness.
Investment in Equity Securities
The Fund may also invest in Underlying Exposures which consist of or are structured as or are referenced
to, and in Underlying Targets or issuers of other Underlying Exposures investing in, equity or equity-related
securities, warrants and securities of a share-like character, which will therefore be exposed (and the Fund
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
page 26
will accordingly be directly or indirectly exposed) to the risks typically associated with such investments,
including the general risk of broad market declines and risks associated to issuers of securities. Experience
has shown that equities and securities of a share-like character may be subject to strong price fluctuations.
That is why they offer the possibility of considerable price gains, but also involves the corresponding risks.
Prices of such securities are influenced above all by the profits or otherwise of individual enterprises and
sectors, demand and supply relationship, as well as macro-economic developments and political and market
factors which determine the expectations of the securities markets and the movement of prices.
Underlying Investment in Undervalued Assets
The Underlying Exposures may also be invested in or exposed to undervalued loans and other assets as
part of their investment strategy. The identification of investment opportunities in undervalued loans and
other assets is a difficult task, and there is no assurance that such opportunities will be successfully
recognised or acquired. While investment in undervalued assets offer opportunity for above-average capital
appreciation, these investments involve a higher degree of financial risk and can result in substantial or
complete losses.
The Underlying Exposures may incur substantial losses related to assets purchased on the belief that they
were undervalued by their sellers, if they were not in fact undervalued at the time of purchase. In addition,
the issuers of Underlying Exposures may be required to hold such assets for a substantial period of time
before realising their anticipated value, and there is no assurance that the value of the assets would not
decline further during such time. Moreover, during this period, a portion of such issuers’ assets would be
committed to those assets purchased, thus preventing the issuers of Underlying Exposures from investing
in other opportunities.
The above will indirectly affect the Fund and its investments and respective values.
Underlying Investments in Intellectual Property Rights
A portion of the Underlying Targets’ portfolio may consist of, and other Underlying Exposures may be
invested or referenced to, royalty-related investments such as royalty stream investments and royaltybacked notes. The Underlying Target’s or Underlying Exposure issuer’s right to receive payments in relation
to royalty stream or other such investments may depend, in part, on trade secrets, know-how and
technology which are not protected by patents. This information is typically protected through
confidentiality agreements with parties that have access to such information and who may breach the
agreements and disclose the confidential information which may have an adverse effect on the payments
that the Underlying Target or relevant issuer would receive.
Furthermore there is a risk that third parties may use the patents, patent applications and/or other
intellectual property rights on which the royalty streams and other related investments depend without
authorisation from the licensor or in the case of royalty streams, without otherwise paying royalties to the
licensor.
The success of the Underlying Target’s or relevant issuer’s investments will frequently depend, at least in
part, on the existence of valid and enforceable claims of issued patents and/or claims in pending patent
applications in the respective jurisdictions and/or possibly on other forms of registered and/or unregistered
intellectual property rights. The patents, patent applications, and/or other intellectual property rights on
which these royalty streams or other investments depend may be successfully challenged, invalidated,
rendered unenforceable or otherwise compromised, and third parties may successfully assert ownership or
other rights thereto or thereon, thereby materially affecting the investment of the Underlying Target or
relevant issuer. Furthermore, whilst the value of the Underlying Target’s or relevant issuer’s investments in
royalty related investments may be highly dependent on the prosecution, maintenance, defence and/or
enforcement of the patents, patent applications and other intellectual property rights, in most, if not all
cases, the Underlying Target or relevant issuer (and more so the Fund) has no ability to control these
activities and must rely on the willingness and ability of the licensor or its designee to undertake these
activities, however there can be no assurance that these third parties will seek to vigorously prosecute,
maintain, enforce or defend such rights. Any failure to successfully prosecute, maintain, enforce or defend
such rights could have a material adverse effect on the respective investment.
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
page 27
Investments in Start-up and Smaller Companies
The Underlying Targets may be subject to no specific rules, requirements or restrictions on the size,
operating experience or geographical location of the companies or undertakings in which they invest. These
may accordingly inter alia invest in small companies or undertakings which may lack management depth or
the ability to generate internally or obtain externally the funds necessary for growth. Companies and
undertakings with new products or services could sustain significant losses if projected markets do not
materialise. Further, such companies or undertakings may have, or may develop, only a regional market for
products or services and may be adversely affected by purely local events. Such companies or undertakings
may be small factors in their industries and may face intense competition from larger companies and entail
a greater risk than investment in larger companies and undertakings. Finance to or securities of these
"small cap" or "mid cap" entities often involve significantly greater risks than the securities of the so-called
“blue-chip” companies. As smaller companies or undertakings do not have the financial strength, diversity
and resources of larger companies, and will usually have limited product lines, markets and financial
resources, they may find it more difficult to operate in periods of economic slowdown or recession.
Furthermore smaller companies and undertakings may be dependent for their management or success on
one or two key individuals and if their services were to become unavailable, this could adversely affect the
performance of such companies or undertakings to a considerable extent. In addition, the relatively small
capitalisation of such entities could make the market in their securities and investments in them less liquid
and, as a consequence, their price more volatile than investments in larger companies. All this will impact
the value of investments of the Underlying Targets and portfolios and indirectly of the Fund.
Investments in Foreign and Emerging Markets
The Fund may invest in Underlying Targets and other Underlying Exposures established or issued anywhere,
which may in turn be invested or referenced to assets situated anywhere, possibly also in emerging
countries. They can also be serviced by entities and/or transact with counterparties, established in such
countries
Emerging markets investments historically have been less liquid and more volatile and involve greater risks
than comparable investments in developed markets and usually involve higher brokerage commissions and
costs. Such markets are also typically subject to lower levels of government supervision and regulation
than those in more mature economies. These markets may also be subject to significant custody, clearance
and settlement risks and delays. The emerging markets also have different clearance and settlement
procedures and in certain markets there have been times when settlements have been unable to keep pace
with the volume of securities transactions, making it difficult to conduct such transactions. The inability to
make intended purchases or disposals due to settlement problems or delays could lead to the loss of
attractive investment opportunities or losses due to subsequent declines in value of the relevant securities.
Investments in certain foreign securities and investments may be subject to greater risks than investments
in more established securities markets due to a variety of other factors including currency controls and
currency exchange rates fluctuations, changes in governmental administration or economic or monetary
policy, political or social instability, changed circumstances in dealings between nations and diplomatic
relations, expropriation, confiscatory taxation, potential restrictions on foreign investment and repatriation
of capital and potential difficulties in enforcing contractual obligations. There may be less publicly available
information about foreign issuers and borrowers in certain countries and such issuers and borrowers may
not be subject to uniform accounting, auditing and financial reporting standards, practices and disclosure
requirements comparable to those in more developed countries.
Emerging countries’ economies may be based, predominantly, on only a few industries and may be
vulnerable to changes in trade conditions and may have high levels of debt or inflation. Investors should be
aware that any downturn in the economies of emerging countries might adversely affect the servicing and
ultimate repayment of the investments in and underlying investments of the Underlying Exposures and
consequently negatively affect the Fund.
Asset, Industry, Regional Specific Risks and General Market and Other Risks Affecting the
Underlying Investments
The Underlying Exposures (and consequently the Fund) will also be indirectly affected by financial, marketrelated, regional and other risks typically associated with the operations, industries, sectors, investments
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
page 28
and assets of the issuers or borrowers in which they are invested, which will have direct or indirect effect
on the value of the Underlying Exposures’ investments, as well as by macro-economic risks affecting the
markets or classes of markets generally, all of which will depend on several economic, political, social and
other factors having varying and possibly considerable negative effects on volatility, price movements,
marketability, liquidity, yield and other characteristics of the said investments.
Unlisted or Non-Rated Investments
The Fund will typically invest in non-listed Underlying Exposures and the issuers of such Underlying
Exposures will themselves typically invest in non-listed and non-tradable securities, instruments and
investments that are unrated or rated below investment grade. Although these investments may provide
for higher gain and income, they entail greater risk (particularly credit and liquidity risks) than investment
grade investments.
Sub-investment grade or non-rated securities and investments involve significant risk exposure as there is
greater uncertainty regarding the issuer’s or borrower’s capacity to honour its payment obligations in
accordance with the terms of issue or underlying financing agreement. The lower is the rating of a sub
investment grade investment, the lower is the protection (if at all) afforded against credit defaults by the
respective issuers / borrowers. Changes in the credit ratings of an investment or in the perceived ability of
the issuer/borrower to make payments may also affect the investment’s market value. Moreover,
investments in unquoted securities can be subject to risks not normally associated with quoted securities.
These risks mainly relate to the lack of liquidity of the market, as well as the risk that it is normally more
difficult to determine the value of such unlisted securities in view of the lack of readily available quoted
prices as in the case of listed securities. See other risks outlined below, in particular ‘Credit Risk and
Counterparty Risk’.
Lack of Supervision
The Fund may invest in Underlying Targets and issuers of other Underlying Exposures which are, and their
respective investments may be, established or issued in countries where no supervision may be exercised
in respect thereof by regulators or where supervision may be less than that obtaining in more regulated
countries. Although the Fund will follow policies which are intended to ensure that in any such event other
safeguards are available for the protection of its underlying investments, such protection may be less
effective than if supervision was exercised directly by a regulator.
Credit Risk and Counterparty Risk
The Fund may be directly or indirectly (through the Underlying Exposures) investing in debt, structured and
other securities and instruments, and will accordingly be subject to the risk of a decline in the credit of the
issuer or the counterparty (including the prime broker/s or broker/s acting as counterparty to, or providing
borrowing and other trading facilities in connection with, the relevant transaction) and the risk that the
issuers or counterparties may not make payments or may default on such securities, instruments or related
transactions.
If there is a failure or default by the issuer or counterparty, the Fund or the issuers of the Underlying
Exposures (as the case may be) may not receive one hundred per centum (100%) of its contractual
entitlement unless its payment rights and such transactions are adequately guaranteed, secured or
collateralised. Transactions and instruments entered into and invested in by the Fund or the issuers of
Underlying Exposures may not be adequately guaranteed, secured or collateralised or guaranteed, secured
or collateralised to any extent.
Furthermore, an issuer of securities or a counterparty suffering an adverse change in its financial condition
could lower the credit quality of the relevant instrument, leading to greater price volatility of such
instrument. A lowering of the credit rating of an instrument may also offset the instrument’s liquidity,
making it more difficult to sell.
Currency Exchange Risk
The Fund’s assets and liabilities may be denominated in currencies different to its Reference Currency,
thereby exposing the Fund to currency exchange risk. Furthermore, the Underlying Exposures may be
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
page 29
exposed or referenced to investments, assets and liabilities denominated in currencies different to their
respective reference currency, thereby indirectly exposing the Fund to additional currency exchange risk.
The Fund, and the issuers of Underlying Exposures, may use techniques and instruments to hedge against
currency risk, but there is no guarantee that such hedging initiatives will be successful in achieving their
purpose. Reference is also made to the general risk warning regarding foreign exchange risk in the Offering
Memorandum.
Institutional Risk
The Fund, the Underlying Targets and issuers of other Underlying Exposures may also be subject to the
institutional and operational risks and risks of default by any brokerage firms, custodians and other entities
which they may use in undertaking transactions in their securities and/or for safe-keeping of such securities,
which may encounter financial difficulties that may affect the Fund’s, the Underlying Targets’ or other
Underlying Exposures issuers’ rights over investments and returns thereon.
Risks of Leverage and Special Techniques Used by Underlying Targets
The Fund may be exposed to leverage through its foreign exchange hedging derivatives. Underlying Targets
and issuers of other Underlying Exposures, in which the Fund may invest, may invest in financial instruments
and/or use special investment techniques which entail significantly higher risks than those to which
traditional, benchmark-driven strategies may be subject. These may also be leveraged, including (without
limitation) through the use of derivative instruments.
The borrowing of funds for investment purpose and the use of the leverage option creates an opportunity
for greater yield and total return, but may also result in greater losses. It is accordingly a high risk / high
reward option and can significantly negatively or positively affect the performance of the Fund and its
investments in Underlying Exposures.
Use of Derivatives
Subject to the investment restrictions set out above, the Fund may invest in derivative instruments, primarily
foreign exchange forwards for the purposes of hedging against foreign exchange risks that the Fund may
be exposed to. The Underlying Targets may themselves invest in derivative transactions and employ
techniques and instruments for the purpose of hedging and efficient portfolio management and possibly
also by way of investment. Other Underlying Exposures may also embed, contain or involve the use of
derivative instruments. The Fund and the Underlying Exposures will therefore be exposed to the risks
associated with such transactions and techniques.
Derivatives are subject to a number of risks, including market risk and the risk of mispricing or improper
valuation. They also involve the risk that changes in the value of the derivative may not correlate with the
underlying reference which can lead to the non-achievement of the intended hedging effect or to exposure
to the risk of loss.
Derivative instruments, especially when traded in large amounts, may not be liquid in all circumstances,
and there is no assurance that a liquid secondary market will exist for such instruments, so that in volatile
markets the Fund or (as the case may be) the relevant issuers of the Underlying Exposures may not be able
to close out a position without incurring a loss. In addition, daily limits on price fluctuations and speculative
position limits on exchanges on which transactions in derivative instruments may be conducted may prevent
prompt liquidation of positions, subjecting the Fund or Underlying Exposures to the potential of greater
losses.
Derivative transactions may contain a degree of leverage and trading in derivative instruments will magnify
the gains and losses.
Derivative instruments that may be purchased or sold by the Fund (subject to its investment policies and
to what is stated above) or the Underlying Targets or otherwise embedded or used in other Underlying
Exposures may include over-the-counter instruments not traded on an exchange. The risk of nonperformance by the counterparty to such an instrument may be greater and the ease with which the Fund
or Underlying Targets or other issuers of Underlying Exposures can dispose of or enter into closing
transactions with respect to such an instrument may be less than in the case of an exchange traded
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
page 30
instrument. In addition, significant disparities may exist between “bid” and “asked” prices for derivative
instruments that are not traded on an exchange. Derivative instruments not traded on exchanges are also
not subject to the same type and level of government regulation and supervision as exchange traded
instruments, and many of the protections afforded to participants in a regulated environment and on
organized exchanges (such as the performance guarantee of an exchange clearing house) may not be
available in connection with such transactions.
Investment in derivative transactions may expose the investor to risks of significant losses and to loss of
more than the principal amount invested (although stop-loss techniques and similar measures could be
used to contain such losses). Derivative transactions may also expose the investor to other risks, such as
premature termination of the transaction, adverse changes in market conditions and substantial costs for
creating and maintaining the transaction. Suitable derivative transactions may not be available in all
circumstances.
Furthermore, if market conditions are analysed incorrectly, hedging strategies that are employed may not
be optimal, or other adverse conditions prevail, the hedging activities of the Fund or the Underlying Targets
or other Underlying Exposures’ issuers could result in a loss, regardless of the intent with which the positions
were established. Moreover, a specific hedge may not be available in respect to a particular investment
and, even if available, may not perfectly match the position which is sought to be hedged. Hedging
techniques also may increase volatility.
As provided above, the Fund will primarily invest in foreign exchange forward contracts. A forward contract
is an obligation to purchase or sell an underlying asset, including currency, for an agreed price at a future
date, and may be settled in cash. Forward transactions, which are typically traded over-the-counter, have
an increased counterparty risk. If a counterparty defaults, the Fund may not get the expected payment or
delivery of assets. This may result in the loss of the unrealised profit.
Other different derivative instruments (e.g. options, futures, swaps etc.) in which any of the Underlying
Targets may invest or which may be involved in other Underlying Exposures will also be subject to specific
risks applicable to them and their respective characteristics.
Limitation of Liability, Indemnification, Other Contingent Liabilities
The Directors of the Company and the Service Providers to the Fund or their respective delegates may,
under their respective agreements or terms of appointment, have their liability limited to a specified
maximum amount and may contain other limitations of liability, including generally the restriction of liability
solely to acts or omissions resulting from fraud, wilful default or gross negligence on the part of such
person/s, which means that such agreements and terms of appointment may ‘inter alia’ exclude or limit
liability for acts or omissions resulting from ordinary negligence (as opposed to gross negligence).
Furthermore, these are or may be indemnified by the Company in certain circumstances, as a result of
which there is a risk that the assets of the Fund will be used to indemnify such person/s or satisfy its/their
liabilities as a result of its/their activities in relation to the Fund. Reference is made to the section titled
‘Functionaries’ below in this Offering Supplement and to the part titled ‘Liability and Indemnification’ under
the section ‘Functionaries & Officials of the Company’ in the Offering Memorandum supplemented by this
Offering Supplement.
Similarly, the terms of investment of the Underlying Exposures will typically include exculpation and
indemnification provisions that will limit the circumstances under which the respective general partner or
directors, issuers, arrangers and respective Service Providers and others can be held liable to the issuer of
the relevant Underlying Exposure or to investors in the relevant Underlying Exposure, as a result of which
investors in such Underlying Exposures may have a more limited right of action in certain cases than they
would in the absence of such limitations. Furthermore, as a result of the indemnifications owed by any
issuer of Underlying Exposure to these, which may be material, returns to investors (including the Fund)
may be adversely affected, and such investors may be required to provide unpaid commitments or even to
return amounts distributed to them to fund such indemnity obligations of the issuers of Underlying Exposure.
The same risk of the Fund (as an investor of any Underlying Exposure) receiving unexpected calls for
payment of undrawn commitments and/or to return amounts distributed to it, as well as the risk of being
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
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requested to increase its capital commitment to the Underlying Exposure , may arise with respect to other
contingent liabilities or funding requirements of the issuers of Underlying Exposure, including to cover fees
and expenses as well as shortfalls from defaulting, excused or terminating investors in the Underlying
Exposure.
Conflicts of interests
The Investment Manager appointed by the Company and responsible to determine the asset allocation and
selection process of the Fund’s portfolio may receive fees, commissions, monetary and other non-monetary
benefits from the issuers or other arrangers of Underlying Exposures in which the Fund may invest in or
transact with, leading to potential conflicts of interest. Without prejudice to any distributions made by the
Underlying Exposures to the Fund from time to time, the Investment Manager shall be entitled to partake
from revenue generated by one of the Underlying Targets, i.e. Chorus Credit Fund I LP, and Chorus Capital
GP Limited (its General Partner), Chorus Capital Asset Management Limited (its Manager) and Chorus Capital
Management Limited (its Investment Manager) in accordance with and subject to the specific terms and
conditions agreed to by the respective parties, which may lead to potential conflicts of interest situations.
These distributions may create an incentive for the Investment Manager to select underlying investments
which are more speculative or subject to a greater risk of loss than other underlying investments in which
the Manager has no financial interest.
Should a conflict of interest arise, the Investment Manager will endeavour to ensure that the Fund and Fund
Investors shall not be disadvantaged and it will make available or procure that is made available to the
Company upon request the relevant documentation necessary to evidence such fees, benefits and
commissions being received and retained by the Manager from the underlying investments of the Fund,
including the Investment Manager’s financial interest in the Underlying Target declared in the preceding
paragraph, but the Investment Manager shall not, save where expressly required under the Investment
Management Agreement, have an obligation to pay any such fees, benefits and commissions (or any part
thereof) to the Company / the Fund.
Reference is generally made to the heading “Conflicts of Interest” under the section titled “Functionaries &
Officials of the Company” of the Offering Memorandum supplemented by this Offering Supplement which
indicatively sets out the respective conflicts or potential conflicts of interests of the Investment Manager
and other Service Providers including the Directors.
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
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Functionaries
Investment Manager
The Company has appointed Woodman Asset Management AG as the Investment Manager of the Fund.
Woodman Asset Management AG is a company registered under the laws of Switzerland in the Commercial
Register of the Canton of Zug, with registration number CH-170.3.035.470-0, and with registered/head
office at Poststrasse 26, CH-6300, Zug, Switzerland.
Woodman Asset Management AG has been authorised on the 6th January, 2014, by the Swiss Financial
Market Supervision Authority (FINMA) as a regulated asset manager of collective investments.
The Investment Manager provides and/or may from time to time in future provide management and ancillary
services to other funds and entities in and/or outside Malta, as well as to other existing and/or future subfunds of the Company. Apart from being the Investment Manager of the Fund, Woodman Asset
Management AG is currently also the majority Founder Shareholder of the Company and one of the directors
of Woodman Asset Management AG is also a Director of the Company.
By an agreement between the Company and the Investment Manager (the "Management Agreement"), the
Investment Manager was appointed to act as investment manager of the Fund. The Investment Manager
will assume the responsibility of the day-to-day management of the Fund as well as the discretionary
investment management functions, decision-making and duties with respect to investments of the Fund,
which shall be taken and performed in accordance with the applicable investment objective and policies of
the Fund.
The Investment Manager is entitled to receive a management fee, details of which are given under the part
titled ‘Management Fee and Performance Fee’ under the section ‘Fees, Charges and Expenses’ below in this
Offering Supplement, as well as a performance fee from the assets of the Fund on Final Liquidation, in the
circumstances and as provided under the part titled ‘Allocation of Proceeds’ under the section ‘Operational
Details below. The Investment Manager is also entitled to receive reimbursement from the assets of the
Fund of all its out-of-pocket expenses, incurred in connection with the Fund, as more fully described in the
Management Agreement.
The Investment Manager may, subject to the approval of the Company, retain sub-managers and delegate
to them management functions in respect of all or part of the investments and assets of the Fund. The
Investment Manager may also, without the need for approval from the Company, appoint investment
advisors, consultants and other third parties to assist it in the performance of its duties, in particular to give
non-binding recommendations and advice with respect to the investments and transactions of the Fund.
However the final discretionary management decisions are (except to the extent delegated to third party
sub-managers as permitted by law and/or by MFSA Rules) at the sole discretion of the Investment Manager,
subject to the directions and instructions of the Board from time to time, and the Investment Manager will
retain full responsibility for the performance of its duties under the Management Agreement.
The Investment Manager may also, subject to the written approval of the Company, appoint distributors,
placement agents or other intermediaries and referees or client introducers to promote the Fund and/or to
sell or assist in selling the Fund Shares in accordance with this Offering Supplement and the law and subject
to such terms and conditions approved in advance by the Company.
The fees, remuneration, commissions and reimbursement of expenses payable to such sub-managers,
investment advisors, consultants and other third parties and those payable to such distributors, placement
agents and other intermediaries, referees or client introducers will be paid as provided under the part titled
‘Management Fee and Performance Fee’ under the section ‘Fees, Charges and Expenses’ below.
The Investment Manager does not assume any responsibilities for activities not explicitly provided for in the
Management Agreement.
The Investment Manager and the Company are entitled to terminate the Management Agreement by giving
three (3) months notice to the other party in writing. The Management Agreement may also terminate or
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
page 33
be terminated upon the occurrence of specified events, for example, the insolvency of any party or in case
of breach of obligations by the other party.
The Management Agreement contains provisions whereby the Company agrees to indemnify (out of the
assets of the Fund) the Investment Manager against actions, claims and expenses not arising from its
fraud, wilful default or negligence including unjustifiable failure to perform in whole or in part its
obligations under the Management Agreement. In the absence of the foregoing, the Investment Manager
will not be liable to the Company, the Fund or any Fund Investor.
The Investment Manager can be contacted at:
Woodman Asset Management AG
Poststrasse 26,
CH-6300, Zug,
Switzerland
Tel:
+41 41 725 0444
Fax:
+41 41 725 0459
E-mail:
[email protected]
Website:
www.woodman.ch
Administrator
The Company has appointed Credit Suisse Fund Services (Luxembourg) SA, as the Administrator of the
Fund. Credit Suisse Fund Services (Luxembourg) SA is a service company of Credit Suisse Group AG and
has been established in 1993 as a joint stock company. The Administrator is established under the laws of
Luxembourg with registration number B45.727, and is also a member of the Luxembourg Stock Exchange.
Credit Suisse Fund Services (Luxembourg) SA is regulated by the Commission de Surveillance du Secteur
Financier (“CSSF”), being the competent authority in charge of the approval, oversight and control of
investment funds and firms in Luxembourg, and is licensed to provide brokerage, commission agent and
investment fund distributor services. Furthermore, the Administrator is also licensed by the Government of
Luxembourg to provide central administration and accounting for undertakings for collective investment
schemes.
The Administrator acts as administrator to various other collective investment schemes established abroad,
and may from time to time provide such services to any funds in Malta, including other sub-funds established
by the Company from time to time.
By an agreement between the Company and the Administrator (the "Administration Agreement"), the
Administrator was appointed to act as administrator of the Fund and as the NAV Calculator in respect of
the Fund. The Administrator will perform certain administrative functions and services in relation to the
Fund, including ‘inter alia’: calculation of the NAV; transfer agency services; keeping of the Register; Fund
accounting, preparation of financial statements and specific reporting services relating to its duties; coordination of payments from or to Fund Investors and payments of fees due to Service Providers of the
Fund.
The Administrator is not responsible for any trading or investment decisions of or with respect to the Fund
(all of which will be made by the Investment Manager), or for the effect of such trading decisions on the
performance of the Fund. The Administrator does not assume any responsibilities for activities not explicitly
provided for in the Administration Agreement.
The Administrator is entitled to receive fees out of the assets of the Fund for its administrative and other
services, details of which are given under the section ‘Fees, Charges and Expenses’ below and to receive
reimbursement from the assets of the Fund of all its out-of-pocket expenses, incurred in connection with
the Fund, as more fully described in the Administration Agreement.
The Administrator may, subject to the written approval of the Company, sub-contract parts of its services
to third parties.
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
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The Administrator and the Company are entitled to terminate the Administration Agreement by giving three
(3) months notice to the other party in writing. The Administration Agreement may also terminate or be
terminated upon the occurrence of specified events, for example, the insolvency of any party or in case of
breach of obligations by the other party.
The Administration Agreement contains provisions whereby the Company agrees to indemnify (out of the
assets of the Fund) the Administrator against actions, claims and expenses not resulting from its fraud,
wilful default or negligence including unjustifiable failure to perform in whole or in part its obligations under
the Administration Agreement. In the absence of any of the foregoing, the Administrator will not be liable
to the Company or the Fund or the Fund Investors.
The Administrator can be contacted at:
Credit Suisse Fund Services (Luxembourg) SA
5, Rue Jean Monnet,
L-2180,
Luxembourg
Tel:
Fax:
Website:
+352 4361 611
+352 4361 61505
www.credit-suisse.com
Safe-keeping arrangements
In the light of the fact that investments of the Fund will basically consist of participations and investments
in private equity or other illiquid unlisted collective investment schemes and other pooled investment
vehicles, private placement securities and other privately structured investments exposed to debt (the
Underlying Exposures), the Company has not felt the need to appoint and has not appointed a Custodian
in respect of the Fund and the assets thereof, although in future a custodian may be appointed.
Contract notes, partnership deeds, subscription agreements, certificates or allotment advices and other
documentation relating to and/or evidencing the Fund’s interests in the Underlying Exposures will be held
by the Board of Directors collectively under lock and key arrangements in a safe place as may be predetermined or pre-approved by the Directors, or may also be placed in safe-deposit box arrangements
entered into by the Company for the Fund with a credit or financial institution in a reputable jurisdiction.
The Company (for the Fund) may also from time to time enter into safe keeping arrangements in respect
of such documents relating to the Fund’s investments in the Underlying Exposures and any other
investments from time to time held by the Fund (in accordance with and as permitted by the Fund’s
investment objective and policies described above) with any appropriate entity, including if deemed
advisable at the relevant time, with any custodian bank/s or prime broker.
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
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Fees, Charges and Expenses
Management Fee and Performance Fee
The Investment Manager will receive out of the assets of the Fund, for the performance of its investment
management services under the Management Agreement, an ‘ad valorem’ annual management fee (the
“Management Fee”), in the amount of 1.20% of the NAV of the Fund per annum (exclusive of VAT, if any),
payable quarterly in arrears ‘pro rata temporis’.
This fee shall be calculated and accrued for by the Fund as at each Valuation Day and is calculated at the
annual rate set forth above on the basis of the quarterly NAV of the Fund calculated as of such Valuation
Day: provided that such fee shall, during the Closing Period, be calculated on the last Business Day of the
relevant quarter on the basis of aggregate Subscriptions actually received up to such last Business Day
(which aggregate Subscriptions shall, during such Closing Period, during which there will be no Valuation
Day, constitute the NAV of the Fund for all intents and purposes hereof and of law); provided further, for
the avoidance of doubt, that such fee shall not (during or after the Closing Period) take into consideration
any uncalled and unpaid Commitments of Fund Investors. Such fee shall be payable quarterly in arrears as
aforesaid, immediately after completion of the calculation of the fee applicable for the preceding quarter.
If the Management Agreement is terminated or the Fund is dissolved as of any day other than a Valuation
Day, the Investment Manager will be paid a pro-rated Management Fee based upon the ratio that the
number of days from the day next succeeding the immediately preceding Valuation Day through the date
of such event bears to the total number of days in the period commencing from the day next succeeding
the immediately preceding Valuation Day and expiring on the first Valuation Day following such event.
In addition, the Investment Manager is entitled to a performance fee in the circumstances specified and as
provided under the part titled ‘Allocation of Proceeds’ under the section ‘Operational Details’ below.
The fees, remuneration, commissions and reimbursement of expenses due to sub-managers, investment
advisors, consultants and other third parties (if any) appointed by the Investment Manager to assist the
Investment Manager, and those payable to distributors, placement agents or other intermediaries and
referees or client introducers appointed by the Investment Manager to promote the Fund and/or to sell or
assist in selling the Fund Shares, as referred to under the part titled ‘Investment Manager’ under the section
‘Functionaries’ above shall, unless otherwise agreed with the Company, be paid by the Investment Manager
out of the said Management Fee and/or Performance Fee or otherwise by such Investment Manager.
Where any of such persons as aforesaid are appointed directly by the Company (and not by the Investment
Manager), the fees, remuneration, commissions and reimbursement of expenses due to them shall be
payable by the Company (out of the assets of the Fund), unless otherwise agreed with the Investment
Manager or any other Service Provider or unless they fall to be discharged by any other third party.
The Investment Manager shall be entitled to partake from revenue generated by the investment into one
of the Underlying Targets, i.e. Chorus Capital Credit Fund I LP, and Chorus Capital GP Limited (its General
Partner), Chorus Capital Asset Management Limited (its Manager) and Chorus Capital Management Limited
(its Investment Manager) in accordance with and subject to the specific terms and conditions agreed to by
the respective parties and shall not have an obligation to pay any revenue so generated (or any part thereof)
to the Company / the Fund.
Administration Fee
The Administrator shall receive, for the performance of its administration services under the Administration
Agreement, an ‘ad valorem’ annual administration fee (the “Administration Fee”), payable quarterly in
arrears ‘pro rata temporis’ out of the assets of the Fund, in such amount (exclusive of VAT, if any) calculated
as per the following sliding scale based on the Net Asset Value of the Fund, and subject to a minimum
Administration Fee of thirty thousand United States Dollars ($30,000) per annum being waived for the first
six (6) months after the Closing Period:
Net Asset Value (i.e. pricing NAV) of the Fund
Administration Fee
First $0 to $50,000,000
5 basis points per annum
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
page 36
Next $50,000,001 to $100,000,000
4 basis points per annum
Next $100,000,001 to $200,000,000
3 basis points per annum
Any amount over $200,000,000
2 basis points per annum
Such Administration Fee shall be calculated and accrued for by the Fund as at each Valuation Day and is
calculated at the annual rate set forth above on the basis of the quarterly NAV of the Fund calculated as of
such Valuation Day: provided that such fee shall, during the Closing Period, be calculated on the last
Business Day of the relevant quarter on the basis of aggregate Subscriptions actually received up to such
last Business Day (which aggregate Subscriptions shall, during such Closing Period, during which there will
be no Valuation Day, constitute the NAV of the Fund for all intents and purposes hereof and of law);
provided further, for the avoidance of doubt, that such fee shall not (during or after the Closing Period)
take into consideration any uncalled and unpaid Commitments of Fund Investors. Such fee shall be payable
out of the assets of the Fund on a quarterly basis in arrears as aforesaid, immediately after completion of
the calculation of the fee applicable for the preceding quarter.
The Administrator is also entitled to receive out of the assets of the Fund a transfer agent fee of $150 in
respect of every capital call for additional Subscriptions/distribution (per Fund Investor).
Commitment Fee
The Fund shall not charge any subscription fees (entry fees) in respect of the subscription of Fund Shares,
except for a one-time Commitment Fee payable by each Fund Investor together with his Initial Subscription,
which shall be equivalent to one per cent (1%) of the respective Commitments of such Fund Investor. Such
Commitment Fee shall be payable in full by the Fund to the Investment Manager within thirty (30) days
following receipt thereof from the relevant Fund Investor, and accordingly such Commitment Fee shall not
form part of the assets of the Fund and shall not be reflected in the NAV of the Fund. For the avoidance
of doubt:
-
such Commitment Fee shall not form part of, and shall be in addition to, the relevant Fund Investors’
Commitments and his Initial Subscription (or any other Subscriptions made by him); and
-
whilst the Commitment Fee is calculated as a percentage of the Fund Investor’s full Commitments,
no portion of such Commitment Fee shall at any time be refundable to the Fund Investor, even if
the Fund does not utilise and draw the full Commitments of such Fund Investor during the Term.
Structuring Fees and attribution of Company’s general expenses
In addition to the fees and expenses referred to above, the Fund will be liable to pay out of its assets any
and all expenses which specifically relate to the formation, structuring and organisation of the Fund, which
expenses may, for NAV / Fund pricing purposes, be amortised over a period of up to sixty (60) months or
such shorter period as the Directors may determine, so long as the Fund is in operation, whether or not
this is consistent with International Financial Reporting Standards (IFRSs) (although the Company’s and the
Fund’s annual accounts will be prepared in accordance with IFRSs) . Reference is here made to the part
titled ‘Structuring and Organisation Expenses’ under the section ‘Fees, Charges and Expenses of the
Company’ of the Offering Memorandum.
The Fund will also be liable to pay out of its assets any and all operating expenses incurred in connection
with or otherwise specifically attributable to the Fund, including on a non-exhaustive basis legal, accounting,
auditing, governmental and competent authorities’ licensing fees, filing and other fees and charges.
In addition, the Fund will also be liable to pay out of its assets its portion of the fees and reimbursements
due to the Directors of the Company and of the audit and legal fees incurred by the Company in general
and of all expenses arising in respect of legal, arbitration or administrative proceedings involving the
Company in general as well as of all other general expenses and liabilities of the Company (and any VAT or
other tax having a similar effect which may be payable in respect of any of the above) which are not specific
to any one or more (but not all) sub-fund/s of the Company, as provided and subject to what is stated
herein, in the Offering Memorandum (see in particular the section titled ‘Fees, Charges and Expenses of the
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
page 37
Company’ of the Offering Memorandum), in the Articles and/or the terms of issue of Fund Shares, which
portion will normally be on an equal attribution basis with all other sub-funds of the Company established
at the relevant time of payment (subject always as aforesaid). If any such expenses and liabilities relate
or are attributable solely to the Fund, such expenses and liabilities (and any VAT or other tax having a
similar effect which may be payable in respect thereof) shall be solely allocated and attributable to and
constitute a liability of and be paid exclusively by and out of the assets of the Fund. If any such expenses
and liabilities relate or are attributable solely to one or more specific sub-funds of the Company (but not to
all), including the Fund, such expenses and liabilities (and any VAT or other tax having a similar effect which
may be payable in respect thereof) shall be solely allocated and attributable to and constitute a liability of
and be paid exclusively by and out of the assets of the relevant sub-funds (including the Fund), equally
between them.
Other Expenses
The Administrator, the Investment Manager and other Service Providers are or may be entitled to recover
out-of-pocket expenses, incurred in the performance of their duties in connection with the Fund, out of the
assets of the Fund, as more fully described in the agreements respectively appointing them.
Save to the extent that the same may be waived or otherwise discharged by the Investment Manager or
any other person, the Fund shall also bear the following expenses and liabilities (in addition to those
mentioned above under this section) which may be incurred from time to time and which shall be paid out
of its assets:
(i)
All taxes, expenses, obligations and liabilities which may be incurred in connection with the
acquisition and disposal of the assets of the Fund or otherwise in connection with or pursuant to
the investments of the Fund;
(ii)
All taxes which may be payable on or in respect of the assets, income and expenses chargeable to
the Fund (including any VAT or other tax having a similar effect which may be or become payable
in respect of any of the remuneration, fees, charges, costs and expenses referred to under this
heading ‘Fees, Charges and Expenses’);
(iii)
All third party brokerage, bank and other charges incurred in relation to the Fund’s business
transactions;
(iv)
All fees and expenses due to any third party valuer, dealer, distributor or other third party supplier
of services to or in connection with the Fund;
(v)
All expenses incurred in connection with the publication and/or supply of information to the Fund
Investors, and in particular, without prejudice to the generality of the foregoing, the cost of
preparing and printing and distributing any reports specific to the Fund, any report to the MFSA or
any other regulatory authority that is specific to the Fund, this Offering Supplement (or updates or
amendments thereto or replacements thereof), any costs of publishing or disclosing quotations of
prices and notices specific to the Fund in the press or otherwise to Fund Investors and the costs of
obtaining a rating for Fund Shares by a rating agency, and all stationery, printing and postage costs
and other costs in connection with the preparation and distribution of cheques, warrants, tax
certificates, statements and other documents specific to the Fund;
(vi)
On-going governmental and competent authorities’ licensing, filing and other fees and charges
relating specifically to the Fund;
(vii)
All expenses incurred in the registration or licensing or other authorisation of the Fund with any
government agencies or regulatory authorities in any jurisdiction where registration or licensing or
authorisation is available or necessary and in having the Fund Shares listed or dealt on any stock
exchange or any other regulated market;
(viii)
To the extent not already covered above, all expenses and liabilities incurred in connection with the
operation, promotion and management of the Fund, including, without limitation to the generality
of the foregoing, costs incurred in keeping the Register of Fund Investors, costs of any translations,
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
page 38
insurance premiums, association membership dues, other ordinary expenses and liabilities and all
non-recurring and qualified items of expenditure and liabilities as may arise specific to the Fund.
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
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Operational Details
Reference Currency
The Reference Currency for the Fund is the USD.
Valuation Methodology
For the purposes of calculating the NAV of the Fund and per Fund Share as at each Valuation Day:
(i)
the value of the Fund’s participations in the Underlying Targets shall be the last determined and
available values of such participations as provided by the respective Underlying Targets or shall be
based (and calculated proportionally to the Fund’s share of total participations in the respective
Underlying Target) on the last determined and available net asset values of such Underlying Targets
as provided by them respectively (after taking into account any distributions received by the Fund
during the period covered by the calculation); and
(ii)
the value of the Fund’s investments in other Underlying Exposures shall be determined in accordance
with the rules and principles set out in Appendix II of the Offering Memorandum;
provided that: (i) if in the reasonable judgement of the Directors the value of any such Fund’s investments
produced through the aforesaid methodology is not representative of the fair value of such investments;
and/or (ii) if and to the extent that this is necessary or desirable to comply with applicable laws or accounting
rules, then the value of such investments shall be determined by an independent professional valuer
appointed by the Directors for such purpose on a fair and equitable basis. Additional fees directly linked to
such valuations would be charged to the Fund.
Any professional valuer appointed as aforesaid shall:
(a)
be an independent person from the Company, its Directors or any Service Provider to the Fund;
(b)
be of good standing with recognised and relevant qualifications and an authorised member of a
Recognised Professional Body in relation to the assets being valued; and
(c)
be appointed by the Directors, in consultation with the Auditors of the Company.
Share Class/es
The Fund is on the date hereof constituted by one class of Investor Shares, namely WCOFII Shares, being
a class of ordinary non-voting shares, currently denominated in USD (referred to herein as the “Fund
Shares”), and having such rights and restrictions as set out herein, in the Offering Memorandum, the Articles
and/or any other terms of issue thereof. Subject to what is stated and any conditions contained in this
Offering Supplement, in the Offering Memorandum and/or in the Articles, Fund Shares are transferable to
third parties and enjoy equal rights participating equally in the profits of the Fund accordingly. For the
avoidance of doubt, and without prejudice to the provisions and restrictions relating to transfer of investor
Shares in the Offering Memorandum and/or in the Articles, a transfer of Fund Shares made by the relevant
Fund Investor to another person may only be validly made if the transferee agrees and undertakes in favour
of the Company to take and hold the relevant Fund Shares subject to the same conditions, warranties,
obligations and restrictions pursuant to which the said Fund Shares were held by the transferring Fund
Investor, and in particular (but without limitation to the generality of the aforesaid) that the transferee
assumes the commitment and capital call obligations of the transferor, failing which such transfer shall not
be valid and shall not be recognised and registered in the Register by the Company.
The Fund Shares shall be available for subscription to Qualifying Investors who satisfy such other criteria
and requirements, and subject to such restrictions, as set out in the Offering Memorandum and this Offering
Supplement. Reference is here made to the sections titled ‘Important Information’ and ‘General Information’
and other sections of the Offering Memorandum regarding the eligibility and other requirements and
restrictions on investment and general information about the nature of Shares in the Company.
The Fund Shares will be distributor shares, as explained under the heading “Dividend Policy” in this Offering
Supplement.
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
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Subscription / Commitment Application Procedure and Subscription Price
Applications for Commitments and Commitment Processing Days
With respect to the Fund, applications for subscriptions and commitments to subscribe to Fund Shares on
the respective Commitment Application in the form determined by the Company, together with all other
accompanying documentation and information requested by the Company or the Administrator shall be
received from Qualifying Investors no later than 12:00 noon (CET) of the Closing Date.
Without prejudice to other criteria and requirements and restrictions as may be set out herein, in the
Offering Memorandum, in the Articles and/or the Commitment Application relative to the Fund, Commitment
Applications may only be accepted if received from or on behalf of Qualifying Investors and if accompanied
by a Qualifying Investor Declaration Form, in the form attached as Appendix I hereto, together with the
standard Commitment Application relative to the Fund, signed by or on behalf of the applicant.
Such applications and accompanying documentation, will be processed by the Administrator as of the next
applicable Commitment Processing Day (whether an Earlier Commitment Processing Day or the Final
Commitment Processing Day/Closing Date), and written confirmation of acceptance (where applicable) will
be sent to the applicant, together with written confirmation of the number and value of the first Fund Shares
issued and allotted to such applicant in consideration of his Initial Subscription as provided below, as soon
as practicable thereafter.
Closing Period and Total Commitments Sought
The Closing Period shall commence on the Licence Issue Date and end on the earlier of (i) total
Commitments (whether called / paid or uncalled / unpaid) from all Fund Investors reaching USD 300 million
or (ii) 30 June 2015.
The minimum aggregate amount of Commitments sought from all Fund Investors during the Closing Period
shall be USD 50 million (Minimum Total Commitments), and unless and until such Minimum Total
Commitments is reached, no Earlier Commitment Processing Days shall occur, and if such Minimum Total
Commitments is not reached by the Closing Date, all Commitment Applications will be rejected as of the
Final Commitment Processing Day / Closing Date and the Fund will not be launched. On the other hand,
once this Minimum Total Commitments is reached on any day during the Closing Period before the month
of June 2015, there will be one or more Earlier Commitment Processing Day/s ahead of the Final
Commitment Processing Day on the Closing Date, which will occur on the last Business Day of each month
during the Closing Period up to (and including) the month of June 2015, and Commitment Applications by
prospective Fund Investors received up to 12:00 noon (CET) of the relevant Earlier Commitment Processing
Day will be processed as of such Earlier Commitment Processing Day. The Directors may, in their discretion,
at any time during the Closing Period, make Capital Calls from Fund Investors whose Commitment
Application has been processed and accepted as of any such Earlier Commitment Processing Day. The
Fund may use the Initial Subscriptions and Subscriptions received pursuant to such Earlier Commitment
Processing Day/s and Capital Calls (as provided below) to fund investments and pay expenses and liabilities
of the Fund and other permissible purposes, even before the expiry of the Closing Period.
Commitments and Minimum Investment Requirement
By submitting a Commitment Application, the relevant applicant will be entering into a legally binding
contract with the Company, which shall become binding on the Company if and when such Commitment
Application is accepted by the Company (acting through the Administrator) as provided in the Offering
Memorandum (in particular under the part titled ‘Terms and Conditions of Issue and Holding’ under the
section ‘Buying and Selling’ thereof), whereby such applicant will inter alia irrevocably commit funds by way
of investment in Fund Shares (the total amount of such committed funds constituting the relevant Fund
Investor’s Commitments), of an amount not less than the Minimum Investment set out below, which funds
will be paid partly through the Initial Subscription to be paid by the relevant Fund Investor on or pursuant
to the relevant Commitment Processing Day as provided below, and partly through Subscriptions to be paid
by such Fund Investor on or before the respective Call Settlement Dates pursuant to Capital Calls made by
the Company from time to time as provided below. By submitting such Commitment Application and by
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
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entering into the legally binding contract constituted thereby as aforesaid, the relevant applicant will (in
addition and without prejudice to the other terms and conditions, declarations, representations, warranties
and undertakings contained elsewhere in this Offering Supplement, in the Offering Memorandum, the
Articles and the Commitment Application) inter alia be declaring, warranting and undertaking to the
Company to duly and timely comply with the provisions of this section dealing inter alia with the payment
of Initial Subscription (and the accompanying Commitment Fee in addition to such Initial Subscription) and
subsequent Subscriptions pursuant to Capital Calls received from the Company, as well as calls made by
the Company for repayment of dividends previously received by the relevant Fund Investor as contemplated
in the part titled ‘Recallability off Dividends’ below, and will also be acknowledging and agreeing to be fully
subject to the consequences contemplated herein for failure to make any such payments for any reason
whatsoever.
A copy of any and all such Commitment Applications (and the contracts constituted thereby as aforesaid)
shall be kept at the registered office of the Company and shall be available for inspection by MFSA officials
during compliance visits.
The Minimum Investment requirement per Fund Investor in respect to this Fund is USD 2,000,000 (or the
equivalent in another currency accepted by the Company), which amount shall be exclusive (net) of the
Commitment Fee payable by such Fund Investor together with his Initial Subscription, and shall also be
exclusive, for the avoidance of doubt, of any amounts representing dividends and other distributions made
by the Company and received by the relevant Fund Investor from time to time, to the extent that they
constitute recallable distributions and which are added to and are deemed to form part of the
undrawn/uncalled and/or unpaid commitments in terms of and in the circumstances contemplated under
the part titled ‘Recallability of Dividends’ below. The said Minimum Investment requirement shall apply on
a per Fund basis, such that an investor wishing to subscribe for or commit for subscription of Fund Shares
as well as Investor Shares of any class in any other sub-fund established by the Company must commit and
satisfy the full Minimum Investment requirement applicable to the Fund Shares (as specified above) in
addition to (and not on an aggregate basis with) the Minimum Investment requirement applicable in respect
of Investor Shares in the other sub-fund in terms of the respective Offering Supplement issued by the
Company in respect of such other sub-fund.
For the avoidance of doubt, the said Minimum Investment requirement per Investor applies with reference
to the total Commitments of such Investor, whether called/paid or uncalled/unpaid, and shall accordingly
be calculated by taking into account the Subscriptions (excluding the Commitment Fee) from time to time
already paid by such Fund Investor (in the form of Initial Subscriptions or pursuant to subsequent Capital
Calls) and undrawn/uncalled and/or unpaid Commitments, but shall exclude and be in addition to any
amounts representing dividends and other distributions made by the Company and received by the relevant
Fund Investor from time to time, to the extent that they constitute recallable distributions and which are
added to and are deemed to form part of the undrawn/uncalled and/or unpaid commitments in terms of
and in the circumstances contemplated under the part titled ‘Recallability of Dividends’ below. The
provisions of this Offering Supplement and of the Offering Memorandum relating to the Minimum
Investment requirement shall be construed accordingly.
The Directors may, in their absolute discretion, in any particular case or cases, by resolution, waive the
aforesaid Minimum Investment requirement in respect of any Fund Investor, and accept a Commitment
Application for a lower amount of Commitments, provided that in no case shall a Commitment Application
be accepted for Commitments less than the minimum investment amount which is at the relevant time
prescribed by the MFSA rules or otherwise required by the MFSA in respect of a Qualifying Investor Fund.
For the avoidance of doubt, any such lower amount of Commitments so accepted by the Directors in any
particular case and with respect to any Commitment Application shall for all intents and purposes hereof
and of law be deemed to be and to satisfy the Minimum Investment requirement as applicable to such case
and to such application.
Save as modified by the provisions hereof, the provisions of the part titled ‘Minimum Investment
Requirement’ under the section titled ‘Buying and Selling’ in the Offering Memorandum shall apply to the
Fund and investments therein.
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
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The Company will make Capital Calls from all Fund Investors from time to time as deemed necessary or
advisable for the operations of the Fund as provided under the part titled ‘Capital Calls’ below, but the Fund
need not utilise and draw the full Commitments of Fund Investors during the Term, provided that during
such Term it shall make such Capital Calls as will result in any Investor having paid Subscriptions not less
than the minimum investment amount prescribed by the MFSA rules or otherwise required by the MFSA in
respect of a Qualifying Investor Fund.
Initial Subscriptions
All prospective Fund Investors will, at Commitment Application stage, pay a portion of their respective
Commitment (Initial Subscription) as follows:
-
in respect of Commitment Applications processed as of the First Commitment Processing Day
occurring during the Closing Period (whether the first Earlier Commitment Processing Day, or the
Closing Date where the Minimum Total Commitments is only reached on any day during the Closing
Period after the last Business Day of May 2015 such that there are no Earlier Commitment
Processing Days during the Closing Period), the respective Fund Investors shall pay an Initial
Subscription equivalent to one per cent (1%) of their respective Commitment;
-
in respect of Commitment Applications processed as of any subsequent Commitment Processing
Day (hereinafter in this paragraph referred to as the “Relevant Commitment Processing Day”), the
respective Fund Investors shall pay an Initial Subscription equivalent to such percentage of their
respective Commitment, as notified to such Fund Investors by the Administrator, which reflects the
same percentage of the respective Commitments of previously admitted Fund Investors (whose
Commitment Application has been processed as of any Earlier Commitment Processing Day) which
has been paid by them to the Fund up to the Relevant Commitment Processing Day, by way of
Initial Subscriptions and Subscriptions pursuant to Capital Calls received by them up to such Day.
This will ensure that the amounts paid by each Fund Investor admitted up to any Commitment
Processing Day and upon the Closing Date (through Initial Subscriptions and any Subscriptions
pursuant to Capital Calls) on a percentage basis relative to their respective Commitments is the
same.
The Initial Subscription due by each Fund Investor will be notified in writing to him (even by electronic mail)
by the Administrator on or as soon as practicable after the respective Commitment Processing Day as of
which his Commitment Application is to be processed, and such Fund Investor will pay the same, together
with the Commitment Fee, in Cleared Funds and in full (with all wire transfer costs and other charges and
expenses in connection with the transfer of funds at the charge of the remitter) into the Designated Account
of the Fund (details of which will be set out in the Commitment Application) by not later than five (5)
Business Days from the date of such notification.
When the Commitment Application is accepted by the Company, and provided the respective Initial
Subscription and Commitment Fee have been paid as aforesaid, such Initial Subscription (but not the
Commitment Fee, which shall be payable in full to the Investment Manager) shall be issued and allotted as
Fund Shares at the Offer Price (including fractions, where necessary) to the relevant Fund Investor.
Written confirmation will be sent to Fund Investors as soon as practicable after the relevant Commitment
Processing Day, of the number and value of Fund Shares purchased.
Capital Calls
The Company will from time to time, by means of a written notice (herein referred to as the “Drawdown
Notice”) make calls (Capital Calls) on all Fund Investors to pay further Subscriptions, up to their respective
undrawn Commitments, for the subscription of additional Fund Shares by them at the Offer Price, by not
later than the date specified in the Drawdown Notice (the Call Settlement Date), which Call Settlement Date
shall not be a date earlier than one (1) week from the date of the Drawdown Notice, and the following rules
shall apply to such Capital Calls.
Capital Calls may be made at any time and from time to time at the discretion of the Company in order to
fund investments of the Fund, pay and meet expenses, obligations and liabilities of the Fund (including
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
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payment / funding and other obligations and liabilities of the Fund towards the issuers of Underlying
Exposures (including inter alia any recycling, reinvestment, givebacks and clawbacks obligations of the Fund
vis-à-vis its Underlying Exposures) as well as to cover the shortfall created by a Fund Investor/s defaulting
on his/their payment of Capital Calls or whose investment in the Fund is mandatorily redeemed), and other
purposes as deemed necessary or advisable by the Directors in connection with the operation of the Fund,
provided that:
-
for the avoidance of doubt, Capital Calls may even be made during (and/or for settlement during)
the Closing Period on all Fund Investors whose Commitment Application has at the relevant time
already been processed and accepted as of any Earlier Commitment Processing Day (on a
proportionate basis to the respective Commitments of such Fund Investors), and subsequently
admitted Fund Investors will then “catch-up” with such previously admitted Fund Investors’ pro
rata portion of paid Commitments, by paying an Initial Subscription which reflects the same paid
pro rata portion of the respective Commitment as that of previously admitted Fund Investors, all as
provided under the part ‘Initial Subscriptions’ above; and
-
following the Investment Period, Capital Calls will be made mainly to enable the Fund to pay and
meet and set aside reserves for actual or anticipated expenses, obligations and liabilities of the
Fund as aforesaid, including the funding of transactions to which the Fund has committed during
the Investment Period, keeping in mind the need and objective to procure an orderly liquidation of
investments and Final Liquidation as soon as practicable after the Investment Period by not later
than the expiry of the Term, provided that this shall be without prejudice to the right of the Fund
to make at such time any investments which are deemed beneficial to the Fund and Fund Investors
and whose maturity and other characteristics do not conflict with the said objective.
Capital Calls shall be made on all Fund Investors existing at the relevant time, strictly on a proportionate
basis to their respective Commitments.
As provided above, the Fund need not utilise and draw the full Commitments of Fund Investors during the
Term, provided that during such Term it shall make such Capital Calls as will result in any Investor having
paid Subscriptions not less than the minimum investment amount prescribed by the MFSA rules or otherwise
required by the MFSA in respect of a Qualifying Investor Fund.
Subscriptions pursuant to Capital Calls must be paid by the respective Fund Investors in Cleared Funds and
in full (with all wire transfer costs and other charges and expenses in connection with the transfer of funds
at the charge of the remitter) into the Designated Account of the Fund (as indicated in the Commitment
Application or otherwise as indicated in the relevant Drawdown Notice) by not later than the Call Settlement
Date. The Subscriptions paid by Fund Investors shall be issued and allotted as Fund Shares at the Offer
Price (including fractions, where necessary) to the respective Fund Investors, as of the Call Settlement Date.
Written confirmation will be sent to Fund Investors as soon as practicable after the relevant Call Settlement
Date, of the number and value of Fund Shares purchased.
As provided above, Fund Shares subscribed and issued pursuant to Capital Calls, whenever such calls are
made, will be so subscribed and issued at the Offer Price. At the actual time of subscription, however, the
NAV of the Fund may be higher or lower than the Offer Price fixed at inception by virtue hereof, which
means that Fund Investors may effectively be subscribing for Fund Shares as of a Call Settlement Date at
a discount or at a premium to the NAV applicable at the relevant time. Reference is made to the risk
warning titled ‘Capital Calls on Investors’ Committed Funds’ under the section ‘Risk Factors’ above.
For the avoidance of doubt, any amount of the respective Commitment of a Fund Investor which is paid by
him, whether through an Initial Subscription or through subsequent Capital Calls made on such Fund
Investor, will generally reduce the uncalled / undrawn portion of his Commitment by an equivalent amount,
provided that any distributions made to or received from time to time by such Fund Investors will be added
back to such uncalled / undrawn portion of his Commitment and such distributions may be recallable in
accordance with the rules set forth in the part titled ‘Recallability of Dividends’ hereunder.
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
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Defaulting Fund Investors
If a Fund Investor fails to pay a Capital Call by the respective Call Settlement Date, he shall automatically
(upon the lapse of such Call Settlement Date), and without the need of any notice to this effect, be and be
deemed to be in default of his commitment and capital call obligations towards the Company, and the
Directors may at any time thereafter in their discretion (by virtue hereof and of the contract between the
Company and the defaulting Fund Investor established by his submission of and the acceptance by the
Company of the said Fund Investor’s Commitment Application), exercise one or more of the following
remedies against such defaulting Fund Investor, to the greatest extent permitted by law, and by submitting
his Commitment Application and by entering into the legally binding contract with the Company constituted
thereby (as provided under the part titled ‘Commitments and Minimum Investment Requirement’ above),
each Fund Investor would be irrevocably authorising the Company (by way of security in favour of the
Company for the performance of his obligations to pay Capital Calls when due) to take any measure, sign
any document and make any other act on his behalf in pursuance of or in connection with any such
remedy/ies:
(a) suing the defaulting Fund Investor (even in arbitration) for specific performance and/or damages
caused by the default (including, without limitation, the costs and expenses of arranging for,
servicing and payment of interests on any borrowings to cover the shortfall as well as any penalties
and/or other consequences incurred by the Fund for any failure to perform its commitment and
other obligations towards issuers of Underlying Exposures and other third parties and other liabilities
whatsoever incurred towards any person or entity as a result of such default by the Fund Investor);
(b) charging interest on late payments by the defaulting Fund Investor (by way of penalty for mere
delay, which penalty shall not be subject to any abatement by any court) at the lesser of (i) the
Hurdle Rate and (ii) the maximum rate allowed by applicable law, by notice in writing served on
such defaulting Fund Investor, which interest shall run from the respective Call Settlement Date on
which the defaulted Capital Call should have been paid;
(c) ceasing to pay any distributions otherwise payable to the defaulting Fund Investor (which
distributions shall accrue to the Fund and the defaulting Fund Investor shall absolutely forfeit his
rights thereto, and such forfeiture shall be taken into account in making final allocations and
distributions on the Final Redemption Date as provided below) until the defaulting Fund Investor
has paid all outstanding Capital Calls due by him, interest charged to him and damages caused by
his default;
(d) if such default continues for a period of five (5) Business Days after written notice thereof to the
defaulting Fund Investor, declaring as forfeited and actually forfeiting, by resolution of the Directors,
any or all of the Fund Shares of the defaulting Fund Investor (in the Directors’ discretion) as well
as any declared but not yet paid dividends or other distributions on such Fund Shares, in favour of
the Fund, which forfeited Fund Shares may then be cancelled by the Company, with the respective
NAV accruing to the NAV of the Fund and the remaining Fund Shares within the Fund or may be
sold, re-allotted or otherwise disposed of by the Company in such manner and on such terms as
the Directors think fit, with the consideration, if any, given for the Fund Shares on any sale, reallotment or other disposition thereof as aforesaid being retained by and accrued within the NAV of
the Fund, and the Directors may execute or authorise any person to execute, on behalf of the
Company, a transfer of the Fund Shares so forfeited in favour of the Company (and/or, where
necessary or advisable, on behalf of the defaulting Fund Investor) in favour of the person to whom
the Fund Shares are sold, re-allotted or disposed of, who shall thereupon be registered as the
holder of the said Fund Shares in the Register;
(e) if such default continues for a period of five (5) Business Days after written notice thereof to the
defaulting Fund Investor, causing a forced sale of any or all of the Fund Shares of the defaulting
Fund Investor (in the Directors’ discretion) to any person, potentially at a reduced price than the
Fund Shares’ current NAV or market value or for no consideration other than the assumption of the
defaulting Fund Investor’s commitment and capital call obligations by the transferee, and in case a
consideration is realised, to retain therefrom (and accrue it to the NAV of the Fund) such amount
as is necessary to compensate the Fund for damages caused by the default of the defaulting Fund
Investor and/or for interest charged to him, and the Directors may execute or authorise any person
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
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to execute, on behalf of the defaulting Fund Investor, a transfer of the Fund Shares in favour of
the transferee, who shall thereupon be registered as the holder of the said Fund Shares in the
Register;
(f) determining (acting reasonably) or procuring the determination (at the defaulting Fund Investor’s
expense) the damages caused to the Fund by the default of the defaulting Fund Investor for any
and all purposes hereof, and such determination by the Directors or procured by them shall be final
and binding on the defaulting Fund Investor.
For the avoidance of doubt:
(i)
to the extent allowed by law, the aforesaid remedies shall be cumulative and the exercise of
any such remedy shall not preclude the exercise of any other remedy; and
(ii)
unless the Directors elect to terminate (which they are authorised to do) the defaulting Fund
Investor’s uncalled Commitments, the defaulting Fund Investor will continue to remain
obligated to pay Capital Calls to the Fund up to the full amount of its uncalled Commitments.
In addition and without prejudice to the above-mentioned remedies against the defaulting Fund Investors,
the Directors may also take any action as they reasonably deem appropriate and prudent in respect of and
to cover the shortfall from the defaulting Fund Investor and the negative consequences this could have for
the Fund, including without limitation:
(1) making Capital Calls on the non-defaulting Fund Investors to cover such shortfall, but up to their
respective undrawn Commitments; or
(2) permitting one or more of the other Fund Investors to cover the shortfall in such manner and under
such terms and conditions agreed with him/them;
(3) causing the Fund to borrow in respect of the shortfall;
(4) making a fresh offer of Fund Shares and/or for commitments to subscribe for Fund Shares under
such terms and conditions as they deem fit in the general interests of the Fund.
Subscriptions ‘in specie’
The Company is entitled at its sole discretion (but only after consultation with and approval by the
Investment Manager), but shall not be obliged, to accept Subscriptions for Fund Shares (whether Initial
Subscriptions or Subscriptions pursuant to Capital Calls) ‘in specie’ as provided and subject to the rules set
out under the heading ‘Subscriptions ‘in specie’ ’ under the section ‘Buying and Selling’ of the Offering
Memorandum and the relevant provisions of the Articles, which shall apply ‘mutatis mutandis’ with such
adjustments thereto as may be deemed appropriate by the Directors at the relevant time particularly in
view of the fact that the Fund is a closed-ended Fund and in view of the offering methodology of the Fund
(but subject always to any relevant mandatory provisions of law or MFSA rules in respect thereof).
Dividend Policy
The Company shall issue Fund Shares as distribution shares and accordingly as a policy, income earned by
the Fund shall, as far as possible and practicable and subject to the applicable laws, be distributed in the
form of quarterly dividends on the Fund Shares held by the Fund Investors as deemed appropriate by the
Board during the Term. Such dividends will typically consist of cash-flow earnings and returns generated
by the Fund from the underlying investments, any proceeds (mainly in the form of bank interest) received
from any Subscription monies not utilised (and until utilised) or other monies/ investment proceeds
deposited with banks and financial institutions, and if so determined by the Directors (in consultation with
and with the approval of the Investment Manager) the proceeds of the sale or other disposition or realisation
of any underlying assets.
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
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While the Fund generally intends to make quarterly dividends
distributions from the Fund to the Fund Investors will be at the
direct, in their discretion, that amounts available for distribution
satisfy, or establish reserves for, any of the Fund’s current or
Investment Period, for reinvestment.
as aforesaid, the amount and timing of
discretion of the Directors who may also
be retained in the Fund (i) to be used to
anticipated obligations or (ii) during the
Dividends available for distribution by the Fund for any period generally will be distributed among the Fund
Investors pro rata to their respective Commitments. However, such distributions will be adjusted for
defaults or sanctioned Fund Investors and other limited circumstances.
No dividends will be declared during or in respect of any period during the Closing Period.
The Company shall be entitled at its sole discretion (and without being obliged to do so) to pay dividends
to Fund Investors ‘in specie’ as provided and subject to the relevant provisions of the Offering Memorandum
and the Articles.
For the avoidance of doubt, any dividends / distributions made to or received from time to time by any
Fund Investor may be recalled subject to the rules set out under the part titled ‘Recallability of Dividends’
below. Without prejudice to the aforesaid, Fund Investors should however note that any such dividends /
distributions made to or received from time to time by the Fund up to 5th November, 2015, will not be
recallable and as such the terms and conditions set out under the part below titled ‘Recallability of Dividends’
regulating Payments (as defined below) will not apply in respect of such dividends and/or distributions
received, irrespective of whether such dividends/distributions may have originated and/or been funded by
any distribution, dividend or other payments received by the Fund from its Underlying Exposures which may
themselves be subject to; (a) any recycling or reinvestment provision of any Underlying Exposure; and/or
(b) any clawback or giveback provision of any Underlying Exposure.
Recallability of Dividends
The Company shall be entitled at its sole discretion to recall any dividends, distributions or such other
payments (hereinafter referred to collectively as ‘Payments’) made to Fund Investors from time to time
during the Investment Period in accordance with the Dividend Policy set out above, under the following
conditions:
Payments may be recalled to the extent that they originate and were funded by any distribution, dividend
or other payments received by the Fund from its Underlying Exposures which may themselves be subject
to; (a) any recycling or reinvestment provision of any Underlying Exposure; and/or (b) any clawback or
giveback provision of any Underlying Exposure.
Distributed Payments received in the aforementioned scenarios can be recalled by the Investment Manager
(acting for the Company) at any time within three (3) years from the effective date of the distribution, and
the procedure, terms and conditions regulating the calls to be made by the Company on all Fund Investors
to pay further Subscriptions under the part titled ‘Capital Calls’ in this section above shall apply mutadis
mutandis to the recallability of Payments by the Company; provided for the avoidance of any doubt that (i)
the aggregate amount that may be recalled by the Company shall never exceed twenty five (25%) of the
Fund Investors’ original Commitment (i.e. the Commitment made by the relevant Fund Investor in his
Commitment Application, excluding any Payments which are received by such Fund Investor and are
recallable by the Company and which are added to and are deemed to form part of the undrawn/uncalled
and/or unpaid original Commitments in terms of this part 'Recallability of Dividends'; and (ii) the Payments
so recalled shall be paid by the relevant Fund Investor within the same time-limits and by following the
same procedure set out in the part titled 'Capital Calls' above, but for the avoidance of doubt these shall be
paid in cash to the Company and the Company will not issue Fund Shares in respect thereof. Without
prejudice to what is stated above (including in paragraph b) of the immediately preceding proviso) these
Payments shall, until recalled by the Company and paid by the relevant Fund Investor, for all intents and
purposes form part of and be deemed to form an integral part of the undrawn/uncalled and/or unpaid
Commitment of the respective Fund Investor/s.
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
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The rights and remedies given to and/or that may be exercised by the Company against defaulting Fund
Investors who fail to pay a Capital Call as further detailed under the part titled ‘Defaulting Fund Investors’
above (including without limitation the irrevocable authorisations granted to the Company by the Fund
Investors in respect of such rights and remedies), shall apply mutadis mutandis herein in cases where a
Fund Investor defaults on calls made by the Company for the repayment of Payments as set out under this
part titled 'Recallability of Dividends'.
Redemptions
The Fund will not accept any request for redemption of Fund Shares during the Investment Period and
thereafter, until Final Liquidation and all Fund Shares will be redeemed on the Final Redemption Date
(subject to what is stated below).
Compulsory Redemption and Total Redemption
Without prejudice to the provisions of the part titled ‘Defaulting Fund Investors’ above, a Fund Investor
may be required to transfer his Fund Shares (in whole or in part) or to request the Company to redeem
the same, and the Company may mandatorily redeem Fund Shares of any Fund Investor, at any time, even
before Final Liquidation, in the instances mentioned in, and in accordance with and subject to the relevant
provisions of, the Offering Memorandum and/or the Articles (see in particular the provisions of the heading
‘Mandatory Redemptions’ under the section ‘Buying and Selling’ of the Offering Memorandum, hereinafter
such provisions referred to as the “Relevant OM Provisions”) which provisions shall apply ‘mutatis mutandis’
with such adjustments thereto as may be deemed appropriate by the Directors at the relevant time
particularly in view of the fact that the Fund is a closed-ended Fund (but subject always to any relevant
mandatory provisions of law or MFSA rules in respect thereof), and (without prejudice to the powers of the
Directors to adjust such provisions as aforesaid) such provisions shall with respect to the Fund apply and
be read and construed with the following modifications / clarifications:
(i)
for the avoidance of doubt, a transfer of Fund Shares made by the relevant Fund Investor to
another person pursuant to a Mandatory Redemption Notice (as defined in the Relevant OM
Provisions) may only be validly made if the transferee agrees and undertakes in favour of the
Company to take and hold the relevant Fund Shares subject to the same conditions, warranties,
obligations and restrictions pursuant to which the said Fund Shares were held by the transferring
Fund Investor, and in particular (but without limitation to the generality of the aforesaid) that
the transferee assumes the commitment and capital call obligations of the transferor, failing
which such transfer shall not be valid and shall not be recognised and registered in the Register
by the Company and the Company shall be entitled to proceed to exercise the other remedies
contemplated in the Relevant OM Provisions and herein;
(ii) with a view to cover the shortfall of committed capital which would otherwise be created from
the mandatory redemption and/or to mitigate the negative consequences that such mandatory
redemption could have for the Fund, the Company shall be entitled, in its sole discretion:
-
in lieu of the mandatory redemption of the relevant Fund Shares by the Company (whether
such mandatory redemption is specifically requested by the relevant Fund Investor, or is
deemed to be so requested pursuant to the Relevant OM Provisions), to sell any or all of the
relevant Fund Shares (in the Directors’ discretion) on behalf of the relevant Fund Investor to
any person, potentially at a reduced price than the Fund Shares’ current NAV or market value
or for no consideration other than the assumption of the relevant Fund Investor’s
commitment and capital call obligations by the transferee, and in case a consideration is
realised, to retain therefrom (and accrue it to the NAV of the Fund) such amount (established
by the Directors, acting reasonably) as is necessary to compensate the Fund for damages
caused by the relevant ground of mandatory redemption mentioned under the Relevant OM
Provisions as applicable to the particular case, and the Directors may execute or authorise
any person to execute, on behalf of the relevant Fund Investor, a transfer of the Fund Shares
in favour of the transferee, who shall thereupon be registered as the holder of the said Fund
Shares in the Register;
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
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-
to mandatorily redeem the relevant Fund Shares at the then applicable NAV (or NAV
determined pursuant to an ‘ad hoc’ valuation) as provided in the Relevant OM Provisions, but
in addition to deductions for expenses incurred in making the mandatory redemption (as
contemplated in the Relevant OM Provisions), the Company shall also be entitled to deduct
from the redemption proceeds such amount (established by the Directors, acting reasonably)
as is necessary to compensate the Fund for damages caused by the relevant ground of
mandatory redemption mentioned under the Relevant OM Provisions as applicable to the
particular case and by the mandatory redemption (including, without limitation, the costs and
expenses of arranging for, servicing and payment of interests on any borrowings to cover
the shortfall created by the mandatory redemption as well as any penalties and/or other
consequences incurred by the Fund for any failure to perform its commitment and other
obligations towards issuers of Underlying Exposures and other third parties and other
liabilities whatsoever incurred towards any person or entity as a result of such mandatory
redemption).
The Company (acting through the Directors) shall have the power to determine (acting reasonably) or
procure the determination of (at the relevant Fund Investor’s expense) the damages caused to the Fund by
the ground of mandatory redemption applicable to the particular case and by the mandatory redemption
for any and all purposes hereof, and such determination by the Directors or procured by them shall be final
and binding on the relevant Fund Investor.
By submitting his Commitment Application and by entering into the legally binding contract with the
Company constituted thereby (as provided under the part titled ‘Commitments and Minimum Investment
Requirement’ above), each Fund Investor would be irrevocably authorising the Company (by way of security
in favour of the Company for the performance of his obligations as a Fund Investor) to take any measure,
sign any document and make any other act on his behalf in pursuance of or in connection with any
remedy/ies mentioned above.
Without prejudice to what is stated above, the Directors may take any action as they reasonably deem
appropriate and prudent in respect of and to cover the shortfall from any mandatory redemption and the
negative consequences this could have for the Fund, including without limitation those set out in paragraphs
(1) to (4) of the part titled ‘Defaulting Fund Investors’ above.
Furthermore, the Company may effect a total redemption of all the Fund Shares issued in the Fund, and
the Fund may be closed (and its Licence surrendered to MFSA) at such times (even before Final Liquidation)
and in such instances and subject to such consents required from Fund Investors as are mentioned in, and
in accordance with and subject to the relevant provisions of, the Offering Memorandum and/or the Articles
(see in particular the provisions of the heading ‘Total Redemptions in a Fund’ under the section ‘Buying and
Selling’ and the part titled ‘Duration, Closure and Winding Up’ under the section ‘General Information’ of
the Offering Memorandum), which shall apply ‘mutatis mutandis’ with such adjustments thereto as may be
deemed appropriate by the Directors at the relevant time particularly in view of the fact that the Fund is a
closed-ended Fund (but subject always to any relevant mandatory provisions of law or MFSA rules in respect
thereof), and for the avoidance of doubt, in case of such total redemption as aforesaid, the date set for
such total redemptions shall be deemed to be the Final Redemption Date for the purposes hereof, and the
redemptions and allocation of proceeds shall be conducted on such Final Redemption Date as provided
under the part titled ‘Allocation of Proceeds’ below (notwithstanding anything contained in the Offering
Memorandum and/or the Articles).
Redemptions on Final Liquidation
Besides any dividends or distributions received during the Term, on Final Liquidation the Fund Investors will
receive (by way of redemption proceeds) the proceeds from their investment as provided under the part
‘Allocation of Proceeds’ below and will accordingly have their Fund Shares redeemed on the Final
Redemption Date and no redemption requests will be accepted before (as provided and subject to what is
stated above).
The underlying investments may be realised individually, or as a portfolio, during the Investment Period of
the Fund (with the possibility of reinvestment) and/or thereafter up to Final Liquidation.
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
page 49
The process of realisation of the Fund’s portfolio and the process leading to Final Liquidation will involve
the liquidation or sale to third parties of the Fund’s participations and interests in the Underlying Targets
and the Additional Investments of the Fund, and in the case of liquidation of such investments by the
Underlying Targets or other issuers of Underlying Exposures themselves, it will in turn involve and depend
on the liquidation or sale by such Underlying Targets or issuers of their underlying investments and
distribution of the proceeds to the Fund (and other investors in such Underlying Exposures) as may be
applicable. The proceeds (after payment of all the expenses and liabilities of or attributable to the Fund)
will be available for distribution to the Fund Investors (and possibly also to the Investment Manager) on
the Final Redemption Date in accordance with the procedure described under the heading ‘Allocation of
Proceeds’ below.
In view of what is stated above, whilst it is the intended policy of the Fund to realise all underlying assets
and conclude the Final Liquidation as soon as practicable after the Investment Period and prior to the expiry
of the Term, the precise timing of the conclusion of the process leading to Final Liquidation cannot be
anticipated at this time, and the Final Redemption Date may not occur before a substantial period of time
following the end of the Investment Period. Reference is also made to the risk factor entitled ‘Final
Redemption Risk’ under the section ‘Risk Factors’ above.
Payments of such proceeds to Fund Investors will be made as provided in the part titled ‘Payment in respect
of Redemptions’ under the section ‘Buying and Selling’ and the part titled ‘Payments to Shareholders’ under
the section ‘General Information’ of the Offering Memorandum. The Company is entitled at its sole
discretion (but only after consultation with and approval by the Investment Manager) but shall not be
obliged to effect such redemption payments ‘in specie’ as provided and subject to the rules set out under
the heading ‘Redemptions ‘in specie’ ’ under the section ‘Buying and Selling’ of the Offering Memorandum
and the relevant provisions of the Articles.
Allocation of Proceeds
The net distributable proceeds and assets resulting to the Fund following realisation of its investments
pursuant to the Final Liquidation process (and net of all the expenses and liabilities of or attributable to the
Fund incurred or accrued up to the Final Redemption Date) will be allocated and distributed to and among
the Fund Investors on Final Redemption Date as follows, and the Performance Fee payable to the
Investment Manager (if any) on such Final Liquidation will be calculated as follows:
(1)
Fund Investors shall be paid back the total amount of Subscriptions they invested in the Fund, after
taking into account and deducting therefrom any dividends received by Fund Investors during the
Term or, in the event that there are not sufficient distributable proceeds and assets on Final
Liquidation to cover repayment of all such Subscriptions (less dividends) to all Fund Investors as
aforesaid, a proportionate amount of such Subscriptions pro rata to the number of Fund Shares
respectively held by them in the Fund;
(2)
In the event of any surplus distributable proceeds and assets following payment under paragraph
(1) above or, where no payment under such paragraph (1) is due in view of the fact that dividends
paid to Fund Investors during the Term equal or exceed Subscriptions, the surplus proceeds and
assets or (where no payment under paragraph (1) is due) the full proceeds and assets available for
distribution, shall be distributed as follows:
(a)
if and to the extent that the said surplus proceeds and assets or (where no payment under
paragraph (1) is due) the full proceeds and assets available for distribution would, together
with any Excess Dividends (as defined hereunder), be equal to or less than the value arrived
at by applying the Hurdle Rate (not compounded) to the total Subscriptions invested in the
Fund from the respective Commitment Processing Day (in case of Initial Subscriptions) or,
as the case may be, the respective Call Settlement Date (in the case of Subscriptions
pursuant to Capital Calls), these shall be distributed as follows:
(i)
firstly to pay to Fund Investors whose Commitment Application has been processed
as of an Earlier Commitment Processing Day (to the exclusion of those whose
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
page 50
Commitment Application has been processed on the Closing Date / Final Commitment
Processing Day), by order of preference between such Fund Investors according to
the chronology of the periods during which they were investing in the Fund (whether
through Initial Subscriptions and/or through Subscriptions paid pursuant to Capital
Calls) in anticipation of subsequently admitted Fund Investors during the Closing
Period, a sum equivalent to the Hurdle Rate applied (not compounded) to their
respective specific Subscriptions (whether by way of Initial Subscriptions or by way
of Capital Calls) from the date of payment of such specific Subscription up to the
Closing Date, as shown in the Example A detailed below, such that earlier admitted
Fund Investors will, on Final Liquidation, be compensated for the slightly longer
period for which they have committed and paid their funds by way of investment in
the Fund, by having a first priority claim over any distributable proceeds available on
Final Liquidation, after repayment of capital (Subscriptions) to all Fund Investors, up
to an amount which pays them the Preferred Return (not compounded) for the period
during which they were investing in the Fund in anticipation of subsequently admitted
Fund Investors; and
(ii)
(b)
the balance remaining from the payment under paragraph (2)(a)(i) shall be
distributed to all the Fund Investors pro rata to the number of Fund Shares held by
them;
if and to the extent that the said surplus proceeds and assets or (where no payment under
paragraph (1) is due) the full proceeds and assets available for distribution would, together
with any Excess Dividends (as defined hereunder), exceed the value arrived at by applying
the Hurdle Rate (not compounded) to the total Subscriptions invested in the Fund from the
respective Commitment Processing Day (in case of Initial Subscriptions) or, as the case may
be, the respective Call Settlement Date (in the case of Subscriptions pursuant to Capital
Calls), such excess shall be distributed as follows:
(i)
firstly to effect payments to Fund Investors to the extent necessary to ensure that
all Fund Investors would have received (after taking into account any and all
dividends received by them during the Term) a sum equivalent to the total amount
of Subscriptions they invested in the Fund (in terms of paragraph (1) above) plus a
Preferred Return (calculated not on a compounded basis) on the total Subscriptions
invested in the Fund from the respective Commitment Processing Day (in case of
Initial Subscriptions) or, as the case may be, the respective Call Settlement Date (in
the case of Subscriptions pursuant to Capital Calls); and
(ii)
the balance remaining after the payment in (2)(b)(i) will be distributed, as to ninety
percent (90%) to the Fund Investors, to be calculated ‘pro rata’ to the number of
Fund Shares held by them, and as to the remaining ten percent (10%) to the
Investment Manager by way of Performance Fee.
For the purposes hereof:
- The term “Excess Dividends” shall mean the amount (if any) by which the total dividends paid to Fund
Investors at any time and from time to time during the Term exceeds the total amount of Subscriptions
invested in the Fund by Fund Investors; and
- The term 'dividends' shall exclude such dividends which have been recalled by the Company and repaid
by the relevant Fund Investor during the Investment Period in terms of the part titled 'Recallability of
Dividends' above.
The whole process will be verified and monitored by the Administrator and/or the Auditors.
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
page 51
Example A:
Calculation of payment under paragraph (2)(a)(i) above
Assume that:
-
The First Commitment Processing Day (i.e. the last Business Day of the month during the Closing
Period when the Minimum Total Commitments of USD 50 million is achieved) is the last Business
Day of March 2015, with 2 investors (A Investors) admitted to the Fund paying USD 20,000 each
by way of Initial Subscription (1% of USD 2 million Commitment each);
-
The second Earlier Commitment Processing Day is the last Business Day of April 2015, with 3
investors (B investors) admitted to the Fund paying USD 20,000 each by way of Initial Subscription
(1% of USD 2 million Commitment each);
-
Then A and B Investors receive a Capital Call for USD 60,000 each to be settled on 15 th May 2015
(Call Settlement Date);
-
The third Earlier Commitment Processing Day is the last Business Day of May 2015, with 2 investors
(C investors) admitted to the Fund paying USD 80,000 each by way of Initial Subscription (since
such C Investors had USD 2 million Commitment each, like A and B Investors, but they pay an
Initial Subscription which is 4% of their respective Subscription, to match the 4% paid portion of
the Commitment of A and B Investors up to such Earlier Commitment Processing Day);
-
The Final Commitment Processing Day / Closing Date is on the 30th June 2015 with 20 investors (D
investors) admitted to the Fund paying USD 80,000 each by way of Initial Subscription (since such
D Investors had USD 2 million Commitment each, like A, B and C Investors, but they pay an Initial
Subscription which is 4% of their respective Subscription, to match the 4% paid portion of the
Commitment of A, B and C Investors up to such Final Commitment Processing Day / Closing Date).
The priority payment under paragraph 2(a)(i) above shall take place as follows:
-
Firstly, each A Investor receives a sum equivalent to the Hurdle Rate applied (not compounded) to
USD 20,000 (i.e. its Initial Subscription) calculated pro rata from the First Commitment Processing
Day up to the Second Commitment Processing Day;
-
Secondly, each A and B Investor receives a sum equivalent to the Hurdle Rate applied (not
compounded) to USD 20,000 (i.e. its Initial Subscription) calculated pro rata from the Second
Commitment Processing Day up to 15th May 2015 (the Call Settlement Date) plus a sum equivalent
to the Hurdle Rate applied (not compounded) to USD 80,000 (i.e. its Initial Subscription plus paid
Capital Call) calculated pro rata from the 15th May 2015 (the Call Settlement Date) up to the Third
Commitment Processing Day;
-
Thirdly, each A, B, and C Investor receives a sum equivalent to the Hurdle Rate applied (not
compounded) to USD 80,000 (representing, in the case of an A or a B Investor its Initial Subscription
plus paid Capital Call, and in the case of a C Investor its Initial Subscription) calculated pro rata
from the Third Commitment Processing Day up to the Final Commitment Processing Day / Closing
Date.
D Investors will not participate in the priority payment under paragraph 2(a)(i) above.
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
page 52
Appendix I – Qualifying Investor Declaration Form
Scheme/Company:
Woodman Funds SICAV p.l.c.
Fund:
Woodman Credit Opportunities II Fund
This section should be completed by the Qualifying Investor or his/ her /its duly authorized agent.
Tick the boxes below as appropriate
The investment is being made directly by the investor (not through a duly authorised agent)
I hereby confirm that I am eligible to be treated as a “Qualifying Investor”, since I satisfy
the definition thereof in light of the positive response(s) that I have given to the
question(s) below. I certify that I have read and understood the general Offering
Memorandum and the Fund-specific Offering Supplement issued by the Company
(together the “Offering Document”) including the mandatory risk warnings.
The investment is not being made directly by the investor but through a duly authorised
agent
I hereby confirm that I have been properly appointed as a duly authorised agent of a
prospective investor in the Fund described above. I certify that my principal is eligible to
be treated as a “Qualifying Investor” since my principal satisfies the definition thereof in
light of the positive response(s) that I have given to the question(s) below in respect of
my principal. I certify that my principal has read and understood the Offering Document
including the mandatory risk warnings.
I qualify / My Principal qualifies [delete as applicable] as a “Qualifying Investor”, as I am/ he/ she/ it is:
Yes
i.
a body corporate which has net assets in excess of EUR750,000
or USD 750,000 (or equivalent in another currency) or which is
part of a group which has net assets in excess of EUR750,000
or USD 750,000 (or equivalent in another currency);
ii.
an unincorporated body of persons or association which has net
assets in excess of EUR750,000 or USD 750,000 (or equivalent
in another currency);
iii.
a trust where the net value of the trust’s assets is in excess of
EUR750,000 or USD 750,000 (or equivalent in another
currency);
iv.
an individual, or in the case of a body corporate, the majority
of its board of directors or in the case of a partnership its
general partner, who has reasonable experience in the
acquisition and/or disposal of funds of a similar nature or risk
profile, or property of the same kind as the property, or a
substantial part of the property, to which the Fund relates;
v.
an individual whose net worth or joint net worth with that
person’s spouse, exceeds EUR750,000 or USD 750,000 (or
equivalent in another currency);
vi.
a senior employee or director of Service Providers to the Fund;
vii.
a relation or a close friend of the promoters of the Fund;
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
No
page 53
viii.
an entity with (or which are part of a group with) EUR3.75
million or USD 3.75 million (or equivalent in another currency)
or more under discretionary management investing on its own
account;
ix.
a Professional Investor Fund promoted to Qualifying Investors
or Extraordinary Investors (all such terms as defined in the
Investment Services Rules for Professional Investor Funds
issued by the MFSA and in the Offering Document);
x.
an entity (body corporate or partnership) wholly owned by
persons or entities satisfying any of the criteria listed above
which is used as an investment vehicle by such persons or
entities.
Name of investor:
Name of duly authorised
agent
(where
applicable):
Signature:
Title/ Capacity in which
signed:
Date:
In the case where the applicant is a company or partnership, the Qualifying Investor Declaration Form is
required from the directors or general partners of the applicant, whilst in the case of a trust, by the trustee.
In the case of joint applicants, all applicants should individually satisfy the eligibility criteria to be treated
as Qualifying Investors and the Qualifying Investor Declaration Form should be made and signed by (or on
behalf of) all of them (subject to the exception relating to spouses as provided in the Offering Document).
Woodman Funds SICAV p.l.c. – Woodman Credit Opportunities II Fund Offering Supplement
page 54

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Meet Conor Woodman

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