Proxy Solicitation & Information Statement • Dec 15, 2010
Proxy Solicitation & Information Statement
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If you are in any doubt about the action to be taken, you should immediately consult your stockbroker, solicitor, accountant or other independent financial adviser authorised pursuant to the Financial Services and Markets Act 2000.
If you have sold or otherwise transferred all of your shares in Investec Structured Products Calculus VCT plc (the Company), please send this document and accompanying documents, as soon as possible, to the purchaser or transferee or to the stockbroker, independent financial adviser or other person through whom the sale or transfer was effected for delivery to the purchaser or transferee.
(Registered in England and Wales with registered number 07142153)
Your attention is drawn to the letter from the Chairman of the Company set out on pages 6 to 9 of this document which contains a recommendation to vote in favour of the Resolution to be proposed at the meeting referred to below.
You will find set out at the end of this document notice of a General Meeting of the Company to be held at 1.30 p.m. on 7 January 2011 at the offices of Investec Structured Products, 2 Gresham Street, London EC2V 7QP to approve the Resolution to effect the Proposals contained herein.
To be valid, the form of proxy attached to this document should be returned not less than 48 hours before the meeting, either by post or by hand (during normal business hours only) to the Company's registrar, Capita Registrars, PXS, 34 Beckenham Road, Beckenham, Kent BR3 4TU. For further information on the meeting or the completion and return of a form of proxy, please telephone Capita Registrars between 9.00 a.m. and 5.00 p.m. (GMT) Monday to Friday (except UK public holidays) on telephone number 0871 664 0321 or, if telephoning from outside the UK, on +44 20 8639 3399. Calls to Capita Registrars' helpline (0871 664 0321) are charged at 10p per minute (including VAT) plus your service provider's network extras. Calls to Capita Registrars from outside the UK will be charged at applicable international rates. Different charges may apply to calls from mobile telephones and calls may be recorded and randomly monitored for security and training purposes. For legal reasons, Capita Registrars will be unable to give advice on the merits of the proposals or provide financial, legal, tax or investment advice.
| Page | |
|---|---|
| EXPECTED TIMETABLE | 2 |
| CORPORATE INFORMATION | 3 |
| DEFINITIONS | 4 |
| LETTER FROM THE CHAIRMAN | 6 |
| ADDITIONAL INFORMATION | 10 |
| NOTICE OF GENERAL MEETING | 16 |
| FORM OF PROXY | 19 |
| Latest time for receipt of forms of proxy for the General Meeting | 1.30 p.m. on 5 January 2011 |
|---|---|
| General Meeting | 1.30 p.m. on 7 January 2011 |
| C Share Offer opens | January 2011 |
|---|---|
| Allotment of C Shares | monthly |
| Admission of and dealings in C Shares | 3 Business Days following allotment |
| Certificates for C Shares dispatched | within 14 Business Days of allotment |
| C Share Offer closes | end April 2011 |
Christopher Paul James Wightman (Chairman) Arthur John Glencross Steven Guy Meeks Michael O'Higgins Mark Gary Rayward Philip Hilary Swatman Ian Robert Wohlman
(all of the registered office)
Beaufort House 51 New North Road Exeter EX4 4EP
Telephone: 01392 477 500
07142153
Manager and Promoter Investec Structured Products 2 Gresham Street London EC2V 7QP Telephone: 0207 597 4065 Website: www.investecstructuredproducts.com
Calculus Capital Limited 104 Park Street London W1K 6NF Telephone: 0207 493 4940 Website: www.calculuscapital.com
and Company Secretary Capita Sinclair Henderson Limited Beaufort House 51 New North Road Exeter EX4 4EP
Grant Thornton UK LLP 30 Finsbury Square London EC2P 2YU
Martineau No. 1 Colmore Square Birmingham B4 6AA
Singer Capital Markets Limited One Hanover Street London W1S 1YZ
Capita Registrars Northern House Woodsome Park Huddersfield West Yorkshire HD8 0GA
| ''Articles'' | the articles of association of the Company, as amended from time to time |
|---|---|
| ''August Circular'' | the circular to Shareholders dated 11 August 2010 |
| ''Board'' or ''Directors'' | the board of directors of the Company |
| ''Business Days'' | a day on which the clearing banks and foreign exchange markets settle payments and are open for general business in London |
| ''C Shareholder'' | a holder of C Shares |
| ''C Shareholder Proceeds'' | amounts paid by way of dividends or other distributions, share buy backs and any other proceeds or value received, or deemed to be received or offered, by C Shareholders, excluding any income tax relief on subscription |
| ''C Shares'' | C ordinary shares of 1p each in the capital of the Company (and each a ''C Share'') |
| ''C Shares Fund'' | the net assets of the Company attributable to the C Shares (including, for the avoidance of doubt, any income and/or revenue arising from or relating to such assets) |
| ''C Share Offer'' | the offer for subscription of C Shares to raise up to £25 million |
| ''CA 2006'' | Companies Act 2006, as amended |
| ''Calculus Capital'' | Calculus Capital Limited |
| ''Capita Registrars'' | a trading name for Capita Registrars Limited |
| ''Company'' | Investec Structured Products Calculus VCT plc |
| ''General Meeting'' | the general meeting of the Company to be held at 1.30 p.m. on 7 January 2011 |
| ''Interested Directors'' | Ian Wohlman (a director of Investec Bank plc, of which Investec Structured Products is a trading name of), Steve Meeks (previously a consultant to Investec Structured Products) and John Glencross (a director of Calculus Capital) |
| ''Investec Structured Products'' | the Investec Structured Products team within Investec Bank plc and a trading name of Investec Bank plc |
| ''Listing Rules'' | the listing rules of the UKLA |
| ''Managers'' | Investec Structured Products and Calculus Capital (and each a ''Manager'') |
| ''NAV'' or ''net asset value'' | the net asset value of a company calculated in accordance with that company's normal accounting policies |
| ''Ordinary Shareholder'' | a holder of Ordinary Shares |
| ''Ordinary Shares'' | ordinary shares of 1p each in the capital of the Company (and each an ''Ordinary Share'') |
| ''Ordinary Shares Fund'' | the net assets of the Company attributable to the Ordinary Shares (including, for the avoidance of doubt, any income and/or revenue arising from or relating to such assets) |
| ''Proposals'' | the proposals set out in this document in connection with the Related Party Transactions and the Resolution to be proposed at the General Meeting |
| ''Related Party Transactions'' | the management and performance incentive agreements the Company proposes to enter into with Investec Structured Products and Calculus Capital as set out on page 8 regarded as related party transactions under the Listing Rules |
|---|---|
| ''Resolution'' | the resolution being proposed at the General Meeting to approve the Related Party Transactions |
| ''September General Meeting'' | the general meeting of the Company held on 6 September 2010 |
| ''Shareholder'' | a holder of Shares |
| ''Shares'' | Ordinary Shares and/or C Shares, as the context permits (and each a ''Share'') |
| ''Singer Capital Markets'' | Singer Capital Markets Limited |
| ''Structured Products'' | notes and/or deposits and/or securities whose cash flow characteristics reflect the performance of an index or indices (which may or may not be linked to a market) |
| ''UKLA'' | the UK Listing Authority, being the Financial Services Authority acting in its capacity as the competent authority for the purposes of Part VI of the Financial Services and Market Act 2000 |
| ''Venture Capital Investments'' | shares in, or securities of, VCT qualifying companies held by a venture capital trust which meets the requirements described in Parts 6, Chapters 3 and 4 to the Tax Act |
| ''VCT'' or ''venture capital trust'' | a company satisfying the requirements of Chapter 3 of Part 6 of ITA 2007 for venture capital trusts |
(Registered in England and Wales with registered number 07142153)
Directors: Registered Office: Christopher Paul James Wightman (Chairman) Beaufort House Arthur John Glencross 51 New North Road Steven Guy Meeks Exeter Michael O'Higgins EX4 4EP Mark Gary Rayward Philip Hilary Swatman Ian Robert Wohlman
15 December 2010
Dear Shareholder
The Company was launched as a VCT in March 2010 and raised £3.8 million (before expenses) and the Board were encouraged by the level of investor demand for the original offer particularly given its late launch before the end of the 2009/2010 tax year.
However, as I wrote in my letter contained in the August Circular, the Board felt that the size of the Company should be increased in order to spread the costs base over a larger pool of assets and to allow a greater number and size of investments to be made to create a more diverse portfolio. In relation to this, Shareholder authorities were sought and obtained at the September General Meeting to raise further funds firstly through a top-up offer of Ordinary Shares and subsequently through an issue of C Shares.
Pursuant to these Shareholder approvals, the Company issued the top-up Ordinary Share offer in September 2010 which has raised a further £0.9 million (before expenses). The Board, together with the Managers, are now preparing for the launch of the C Share Offer, the funds raised from which will, as advised in the August Circular, be managed as a separate pool of assets.
The Shareholder authorities obtained at the September General Meeting included approval to enter into management and performance incentive arrangements with the Managers in respect of the C Shares Fund based on the expected return profile for the C Shares Fund. The Board and the Managers have considered the arrangements for the C Shares Fund further and, in order to match the expected return profile for the C Shares Fund, it is proposed to provide for new arrangements with the Managers in respect of the C Shares Fund.
The new management and performance incentive arrangements do not affect the arrangements in respect of the Ordinary Shares Fund but, under the Listing Rules, require approval from Shareholders which will be sought at the General Meeting.
At the September General Meeting, Shareholders approved the amendment of the Articles to provide for a new C Share class to be managed and accounted for as a separate fund and the proposed C Shares Fund management and performance incentive arrangements with both Calculus Capital and Investec Structured Products.
The arrangements approved were materially on the same terms as the Ordinary Shares Fund (as set out at paragraph 5.1 on pages 11 and 12 of this document), save that they would lag 12 months behind the Ordinary Shares Fund. As a result, it was intended that the supplemental management agreements with each Manager in respect of the C Shares Fund would be for an initial period up to 14 December 2016, the date by which it was intended to provide the C Shares Fund interim return. In addition, payment of C Shares Fund performance incentive fees would be subject to the C Shares Fund interim return being paid by 14 December 2016. When these arrangements were approved, the intended return profile for the C Shares Fund was still under consideration by the Board and the Managers and the approved arrangements were not entered into (the intention being to enter into such arrangements prior to the launch of the C Share Fund).
Following such consideration, the Board has determined it appropriate to set the intended interim return date by which 70p per C Share has been paid or offered to 14 March 2017 (rather than 14 December 2016 as previously approved). The C Shares Fund will also seek to pay or offer a further return of 45p per C Share on or before 14 March 2019 (i.e. achieving a total return of 115p per C Share). The movement of the interim return date from 14 December 2016 to 14 March 2017 is considered necessary to reflect falling interest rates since the launch of the Company resulting in different terms being available for the Structured Products element of the C Shares Fund portfolio compared to the Ordinary Shares Fund.
It is proposed that each management agreement with Investec Structured Products and Calculus Capital will now be for an initial period to 14 March 2017 (ie the revised proposed C Shares Fund interim return date), subject to either party serving 12 months' notice to expire on or after this date.
The terms of these agreements will otherwise be materially the same as those for the arrangements for the Ordinary Shares Fund described in paragraphs 5.1.1 and 5.1.2 on pages 11 and 12 of this document.
No annual management fee is payable to Investec Structured Products under its supplemental management agreement (which is described in paragraph 5.2.1 on page 13 of this document). An annual fee of 1 per cent. of the net assets of the C Shares Fund is payable to Calculus Capital under its supplemental management agreement (which is described in paragraph 5.2.2 on page 13 of this document).
As the previous Shareholder approval was in respect of arrangements for both Managers for a fixed term to 14 December 2016 rather than 14 March 2017 (and such arrangements were not entered into as explained above), Shareholder approval of these new arrangements with the Managers is required as set out below.
It is proposed that the Managers will each receive a performance incentive fee in respect of the C Shares Fund payable in cash of an amount equal to:
provided in each case that C Shareholders have received or been offered a C Shares Fund interim return of at least 70.0p per C Share on or before 14 March 2017 and at a least a further 45.0p per C Share having been received or offered for payment on or before 14 March 2019. In addition, performance incentive fees in respect of the C Shares Fund will only be payable in respect of dividends and distributions paid or offered on or before 14 March 2019.
The terms of this agreement will otherwise be materially the same as those for the arrangements for the Ordinary Shares Fund, as described in paragraph 5.1.3 on page 12 of this document.
As the previous Shareholder approval was in respect of performance incentive fee arrangements linked to a C Shares Fund interim return date of 14 December 2016 rather than 14 March 2017 (and such arrangements were not entered into as explained above), Shareholder approval of this new arrangement with the Managers is required as set out below.
Investec Structured Products and Calculus Capital are regarded as 'related parties' of the Company under the Listing Rules, being investment managers of a closed-ended investment fund.
The supplemental management agreements with each Manager and the performance incentive fee agreement with both Managers in respect of the C Shares Fund (as these are different to what was approved at the September General Meeting and not entered into) as set out above, are related party transactions (Related Party Transactions) requiring the approval of Shareholders pursuant to the Listing Rules. The Resolution to be proposed at the General Meeting seeks such approval.
It should be noted that the Proposals are in respect of the C Shares Fund alone and do not impact on the Ordinary Shares Fund. Approval from existing Shareholders is, however, required under the Listing Rules.
The Board intends to launch the C Share Offer as soon as possible after the approval of the Related Party Transactions have been approved at the General Meeting in January 2011.
If the Resolution is not passed, the Board, together with the Managers, will consider further the investment and return profile, as well as the management and performance incentive arrangements for the C Shares Fund, and decide whether or not a C Shares Offer should be launched.
Notice of the General Meeting, to be held at 1.30 p.m. on 7 January 2011 at the offices of Investec Structured Products, 2 Gresham Street, London EC2V 7QP, is set out at the end of this document.
The Resolution to be proposed will approve the Related Party Transactions with Investec Structured Products and Calculus Capital. The Resolution will be proposed as an ordinary resolution requiring the approval of at least 50 per cent. of the votes cast at the General Meeting.
Before taking any action, you are recommended to read the further information set out in this document. Should a Shareholder have any doubt as to what action to take you are recommended to consult an independent financial adviser.
Shareholders will find attached at the end of this document the form of proxy for use at the General Meeting. Whether or not you propose to attend the General Meeting, you are requested to complete and return the form of proxy attached so as to be received by Capita Registrars not less than 48 hours before the time appointed for holding of the General Meeting. Completion and return of a form of proxy will not prevent you from attending and voting in person at the General Meeting, should you wish to do so.
The Board, which has been so advised by Singer Capital Markets, considers the Related Party Transactions with Investec Structured Products and Calculus Capital to be fair and reasonable so far as the Shareholders of the Company are concerned. In providing its advice, Singer Capital Markets has taken into account the Board's commercial assessment of the Related Party Transactions.
Ian Wohlman is a director of Investec Bank plc (of which Investec Structured Products is a trading name), Steve Meeks is a former consultant to Investec Structured Products and John Glencross is a director of Calculus Capital (Interested Directors). The Interested Directors have not participated in the Board's consideration of the Related Party Transactions. The Interested Directors have agreed not to vote on the Resolution and have undertaken to take all reasonable steps to ensure that each of their associates will also not vote on the Resolution to be proposed at the General Meeting to approve the Related Party Transactions.
Investec Structured Products and Calculus Capital do not hold any Shares in the Company and will not, therefore, be entitled to vote on the Resolution to be proposed at the General Meeting to approve the Related Party Transactions. Investec Structured Products and Calculus Capital have undertaken to take all reasonable steps to ensure that its associates will also not vote on the Resolution to be proposed at the General Meeting to approve the Related Party Transactions.
The Board considers that the Proposals and the Resolution to be proposed at the General Meeting are in the best interests of the Company and its Shareholders as a whole.
The Board recommends that you vote in favour of the Resolution to be proposed at the General Meeting. The Board (other than the Interested Directors) intend to vote in favour of the Resolution in respect of their own holdings of 276,650 Shares (representing approximately 5.84 per cent. of the issued share capital of the Company), the Interested Directors having agreed to refrain from voting as set out above.
Yours faithfully
Christopher Wightman
Chairman
The Company and the Directors, whose names appear in paragraph 3 below, accept responsibility for the information contained in this document. To the best of the knowledge and belief of the Company and the Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information.
2.1 As at 14 December 2010 (this being the latest practicable date prior to the publication of this document), the issued share capital of the Company was as follows:
| Issued and fully paid | |||
|---|---|---|---|
| No. of Shares | £ | ||
| Ordinary Shares (1p each) | 4,738,463 | 47,384.63 |
2.2 As at 14 December 2010 (this being the latest practicable date prior to the publication of this document), no share or loan capital of the Company was under option or had been agreed, conditionally or unconditionally, to be put under option, nor did the Company hold any share capital in treasury.
all of Beaufort House, 51 New North Road, Exeter EX4 4EP (the registered office and principal place of business of the Company).
3.2 As at 14 December 2010 (this being the latest practicable date prior to publication of this document), the interests of the Directors and the employees of the Managers (in each case, and their immediate families) in the issued share capital of the Company were as follows:
| Shares held | % of issued share capital |
|
|---|---|---|
| Director | ||
| Chris Wightman | 10,000 | 0.21 |
| John Glencross | 25,000 | 0.53 |
| Steven Meeks | 20,550 | 0.43 |
| Michael O'Higgins | 205,500 | 4.34 |
| Mark Rayward | 50,875 | 1.07 |
| Philip Swatman | 10,275 | 0.22 |
| Ian Wohlman | 30,000 | 0.63 |
| Employees of Investec Structured Products | 801,640 | 16.92 |
| and Calculus Capital* |
(* including Investec Bank plc but excluding Directors.)
Save as set out below, as at 14 December 2010 (this being the latest practicable date prior to publication of this document), the Company is not aware of any person who, directly or indirectly, has an interest in the Company's capital or voting rights which is notifiable under UK law (under which, pursuant to CA 2006 and the Listing Rules and the Disclosure & Transparency Rules of the FSA, a holding of 3 per cent. or more must be notified to the Company).
| Shares held | % of issued share | ||
|---|---|---|---|
| capital | |||
| Michael O'Higgins | 205,500 | 4.34 |
also be terminated (inter alia) in circumstances of material breach by either party. Investec Structured Products has agreed not to receive a fee in relation to its appointment under this agreement. Investec Structured Products shall receive a commission of 0.75 per cent. of the amount invested in each Structured Product payable by the issuer of the relevant Structured Product (save for Structured Products issued by Investec Bank plc). Investec Structured Products has agreed under this agreement to meet the annual expenses of the Company in excess of 3.0 per cent. of the gross amount raised pursuant to the original offer. The agreement contains normal provisions indemnifying Investec Structured Products in respect of loss and/or liability incurred in the provision of services pursuant to the agreement (save in circumstances of its wilful default, negligence or fraud).
Investec Structured Products and Calculus Capital will each receive a performance incentive fee payable in cash of an amount equal to 10 per cent. of dividends and distributions paid to Ordinary Shareholders following the payment of such dividends and distributions provided that Ordinary Shareholders have received or been offered an interim return of at least 70p per Ordinary Share on or before 14 December 2015 and aggregate distributions of at least 105p per Ordinary Share have been paid (including the relevant distribution being offered). Such performance incentive fees will be paid within ten business days of the payment of the relevant dividend or distribution.
If the appointment of either of the Managers as investment manager to the Company is terminated by the Company as a result of a material breach by the Manager concerned of the provisions of the investment management agreement between it and the Company, no further performance incentive will be payable to the Manager concerned.
If the appointment of Investec Structured Products is terminated for any other reason, it will continue to be entitled to the performance incentive.
If the appointment of Calculus Capital is terminated for any other reason, it will be entitled to a performance incentive in respect of distributions paid during the period of five years after the date of termination, but the amount payable to it shall reduce pro rata during that period and no performance incentive will be payable in respect of distributions made thereafter.
5.1.4 A sponsorship and promoter's agreement dated 2 March 2010 between the Company (1), the Directors (2), Singer Capital Markets (3), Investec Structured Products (4) and Calculus Capital (5) whereby Investec Structured Products agreed to act as promoter in connection with the original offer for subscription of Ordinary Shares and Singer Capital Markets agreed to act as sponsor. The agreement contained warranties given by the Company, the Directors and the Managers to Singer Capital Markets and Investec Structured Products (as the promoter). The Company paid to Investec Structured Products a commission of 5.0 per cent. of the gross amount subscribed under the original offer for subscription of Ordinary Shares out of which all costs, charges and expenses of or incidental to the original offer for subscription of Ordinary Shares were paid (including the fees of Singer Capital Markets but excluding annual trail commission which is borne by the Company).
provided in each case that C Shareholders have received or been offered a C Shares Fund interim return of at least 70.0p per C Share on or before 14 March 2017 and at a least a further 45.0p per C Share having been received or offered for payment on or before 14 March 2019. In addition, performance incentive fees in respect of the C Shares Fund will only be payable in respect of dividends and distributions paid or offered on or before 14 March 2019.
The terms of this agreement will otherwise be materially the same as those for the arrangements for the Ordinary Shares Fund and as is more particularly described in paragraph 5.1.3 above.
Calculus Capital was established in 1999 and is authorised and regulated by the FSA. Its core investment team of Susan McDonald and John Glencross has been making tax efficient investments in unquoted companies since 1997. Calculus Capital has extensive experience of investing in energy, energy services, energy technology, leisure and catering, transportation and healthcare and these sectors are likely to be the target of investments by the Company. At the same time, Calculus Capital will also take advantage of value opportunities in other sectors as they arise.
The Structured Products are managed by the team at Investec Structured Products, a team within Investec Bank plc, which is part of the Investec group of companies. The Investec group is an international specialist banking organisation that provides a diverse range of financial products and services to a niche client base in three principal markets, the UK, South Africa and Australia, as well as certain other countries. Investec Structured Products has been recognised as a leading provider of Structured Products being awarded the Professional Adviser Best Structured Products Provider Award 2009 and 2010.
7.7 Singer Capital Markets has given and not withdrawn its written consent to the issue of this document and the inclusion of its name and the references to it in this document in the form and context in which they appear.
Copies of the following documents will be available at the offices of Martineau, 35 New Bridge Street, London EC4V 6BW for inspection during normal business hours on any day (Saturdays, Sundays and public holidays excepted) from the date of this document until the date of the General Meeting and also at the registered office of the Company:
15 December 2010
(Registered in England and Wales with registered number 07142153)
Notice is hereby given that a general meeting of Investec Structured Products Calculus VCT plc (''the Company'') will be held at 1.30 p.m. on 7 January 2011 at the offices of Investec Structured Products, 2 Gresham Street, London EC2V 7QP for the purposes of considering and, if thought fit, passing the following resolution which will be proposed as an ordinary resolution:
That the Related Party Transactions (as defined in the circular to shareholders of the Company dated 15 December 2010 (''Circular'')) with Investec Structured Products (a team within Investec Bank plc) and Calculus Capital Limited be and hereby are approved.
Dated 15 December 2010
Capita Sinclair Henderson Limited Beaufort House Secretary 51 New North Road
Exeter EX4 4EP
I/We (BLOCK CAPITALS PLEASE)..............................................................................................................
of .................................................................................................................................................................... being a shareholder(s) of the above-named Company, appoint the Chairman of the General Meeting or
........................................................................................................................................................................
for the following number of ordinary shares
........................................................................................................................................................................
to act as my/our proxy to vote for me/us and on my/our behalf at the General Meeting of the Company to be held at offices of Investec Structured Products, 2 Gresham Street, London EC2V 7QP at 1.30 p.m. on 7 January 2011 (see note 1 below) and at every adjournment thereof and to vote for me/us on my/our behalf as directed below.
Please indicate with an 'X' if this is one of multiple proxy instructions being given n
The proxy is directed to vote as follows:
| Ordinary Resolution | For | Against | Vote Withheld |
|
|---|---|---|---|---|
| To approve the Related Party Transactions. |
Signature............................................................................................ Dated ...........................................
Notes:
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Please also indicate by ticking the box provided if the proxy instruction is one of multiple instructions being given.
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