Harvest stargate fund version en11 f4 october 2012

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  • 1. Investment Manager: Harvest Financial Services Ltd, Regulated by the Cyprus Securities and Exchange Commission, License Number 021/03 –Member of the Investor Protection Fund (TAE), Harvest Stargate Fund Ltd: Registered and Regulated by the Central Bank of Cyprus As an international Collective Investment Scheme Law No 47 (1) of 1999 (ICIS). OCTOBER 2012 (V4EN)CONTACT: Telephone + 357 22 552800 andy@harvestgroup.com.cyThis document is for informational purposes only. This document does not constitute an offer, an invitation to offer,or a recommendation to enter into any transaction, nor does it constitute investment advice. This material does not constitute a solicitation to buy or sell securities in any jurisdiction in which such a solicitation is not authorized or to any person to whom it is unlawful to make such a solicitation,
  • 2. Executive Summary Fund Structure Indicative Summary TermsFinal Maturity • Open Ended investments Unlimited holding period. Minimum Holding two Years.Currency • EUR or currency equivalent on the subscription date.Principal Protection • Some underline assets bear the principal protection of the issuer of the underlineProvider assets. The fund therefore offers soft capital protection only on selected underline assets that bare issuers guarantees.Form • Shares – ICIS UNITSNotional • [●] MM, minimum 1MMIssue Price • NAVRedemption Amount • The shares will be redeemed on the NAV: • The Shares may be redeemed prior to that on a monthly basis after year 2 . • Share Price (t) – Early Redemption Premium, whereby the Early Redemption Premium is initially 4%, and then decreasing by 1% on each anniversary of the Issue Date, until reaching 0%Additional Investments • Investors will be able to subscribe additional amounts in the fund on a monthly basis, with rounds of 10,000 EUROInitial Allocation into • The Initial Allocation of the Issuer to the Underlying Fund will be equal to 100%;the Underlying Fund thereafter the Trading Administrator will adjust the allocation between the assets of the Issuer in accordance with the Rebalancing Rules.Investment Manager • Harvest Financial Services Ltd -Transaction Fees • Investment Manager Fees: 2.0% annual management fees on NAV and an incentive – performance fee of 20% of annual returns in excess of 10% 2
  • 3. Risk StatementsInvestment Horizon: The fund has a minimum holding period of 2 years with unlimited duration. Investors must maintain capital for this period.Non-Reliance on Historic Past performance does not guarantee future performance; investment in the fund should be based uponReturns: a complete assessment of their terms.Limitations of Simulated Certain presentations and back-testing or other statistical analysis materials that may have beenReturns: provided in connection with explanations of the mechanics and/or potential returns of the Notes use pro forma analysis and hypothetical circumstances to estimate how the Reference Portfolio may have performed prior to its actual existence. Harvest provides no assurance or guarantee that the Notes will operate or would have operated in the past in a manner consistent with those materials. As such, any historical returns projected in such material, or any hypothetical simulations based on this analysis, provided in relation to the fund may not reflect the performance of, and are no guarantee or assurance in respect of the performance or returns of, the fund.Non-Linear Returns: Absent the occurrence of a Knock Out, the return on the Notes will be based on the performance of the Reference Portfolio over time. As such it is not possible to predict the return on the fund simply by reference to the initial and final values of the Reference Portfolio. The application of the Fund’s Mechanics may result in an opportunity cost when the return on the fund is compared to either a direct investment in the Reference Portfolio or as the underline assets principal protected investment where the exposure to the Reference Portfolio is achieved through a conventional call option issued by the product providers.Clean Up Event: If there is a significant reduction in either the value of the Reference Portfolio or, shortly after issuance of the fund, a rapid decline in interest rates, a Clean Up Event may occur. Under both such circumstances, the return on the fund will cease to offer any potential capital gain as a function of the future performance of the Underlying Fund and will effectively become that of the remaining asset classes.Credit Risk: The value of the fund may decline dramatically based on market conditions. Investors understand that there are risks involved and capital may decline due to market conditions and valuations. Past performance is not guaranteed for future returns.Disclosure of Investor It may be required for purposes of the Investment Manager’s compliance procedures to disclose to theIdentity: name of the initial investor in the fund. LIMITED OFFER 3
  • 4. Table of ContentsBenefits of the Harvest Stargate Fund Ltd,Summary: A Multi-Asset Fund offering several key Advantages.The Benefit of Investing in International Collective Investment Funds (ICIS):Given the recent volatility in stock markets worldwide, we wish to give investors an update on the benefits of holdingICIS, as part of a balanced and diversified portfolio.The Harvest Stargate Fund Ltd, offers individual investors access to a unique multi-asset, multi manager investmentmethodology usually only used by sophisticated institutional investors. The fund’s objective is to deliver returns inexcess of those offered by traditional investment funds, by the careful and active allocation of the portfolio acrossthree key asset classes, combined with the active selection of the best performing underline fund managers. The fundprovides diversification-the foundation of a successful portfolio. The fund invests in three strategies each managedby a leading specialist manager.Investing in just one asset class carries with it a higher degree of risk and the Harvest Stargate Fund Ltd adopts anactive asset allocation policy that ensures the fund invests across a spread of asset classes that offer the best riskadjusted return. In addition, Harvest Stargate Fund Ltd and its advisors, Harvest Financial Services Ltd, aim to selectthe best performing funds for each asset class which are then analyzed on an ongoing basis. NEW ISSUE OCTOBER 2012 – LIMITED OFFERING 4
  • 5. IntroductionThe Harvest Financial Services Ltd, is a leading investment management company, based in NicosiaManager Cyprus. Harvest Financial Services Ltd was established in March 2000 by Harvest Advisors Ltd, as a spin-off from Harvest Financial Group. Harvest Financial Services Ltd, is regulated by the Cyprus Securities & Exchange Commission with license number 021/03. Harvest Financial Services Ltd provides a wide range of mutual funds, hedge funds and portfolio management advisory services. Its investment team has over 14 years experience in: Tailored portfolio construction- the construction and management of diversified, high quality fund portfolios, tailored to the needs of private and institutional clients. Distribution of Hedge Funds- the distribution of a wide range of fund of hedge fund products for both the institutional and retail markets. Structured Products – the structuring and management of products linked to hedge funds. Traditional Investment portfolio Management – The construction and management of traditional, predominantly long / short portfolios. 5
  • 6. HARVEST STARGATE FUND LTD- BENEFITSRISK MANAGEMENT PERFORMANCE - RETURN RESEARCH COMPANY SELECTION RISK MANAGEMENT COMPLIANCE Reporting 6
  • 7. Harvest Financial Services Ltd Manager’s StyleIntegrated Fund Management Competitive Fund Management 7
  • 8. THE IMPORTANCE OF ASSET CLASSESThe The most popular traditional asset classes are cash, bonds, equities, real estate,Fund futures, forex and energy hedge funds. Harvest Stargate Fund Ltd, combines these asset classes, with the exception of cash, in order to create the next generation of multi asset Global Macro investments. The different asset classes will perform their best at different stages of a normal investment cycle. When building a portfolio, it is therefore essential that it should not only be spread between different asset classes, but should also make an allocation to the asset class that is likely to provide the best return in the following year. Whilst equities may be rising, bonds or property could be falling, and when equities fall, hedge funds could perform well. The Stargate Fund is an aggressive market neutral fund with a return objective of 10- 15% annually with a standard deviation of approximately 4%-7%. It allocates capital among managers who have stated investment objective of returns in excess of 15% per annum. It is expected that the fund will have higher than average volatility but through diversification of strategies can mitigate drawdowns during bear market environments. In positive market periods, the fund should produce returns above market benchmarks. HIGH RETURNS POTENTIAL 8
  • 9. INVESTMENT FOCUS GEOGRAPHIC AREAScientists recently discovered a massive offshore reserve of an estimated 122 trillion cubic feet ofnatural gas called the Levant Basin Province. While it is one of the worlds richest natural gas reserves,the Levant Basin Province is located between countries with endless amounts of mutual hatred. Itstraddles the sea borders of Israel, Lebanon, Palestine, the Republic of Cyprus. The largest sectiondiscovered so far, the Leviathan gas field, is believed to possibly contain, alongside natural gas, 4.2billion barrels of oil. Leviathan straddles the Israeli-Lebanese maritime border. 9
  • 10. Example of the investment Strategy: Zero Coupon +Direct Investment 1/3 Strategy • The standard way to create capital protected notes for a variety of underlying asset types • The initial investment strategy of the Harvest Stargate Fund Ltd is allocated (1/3 of its assets) into or through structured funds and High Yield Treasuries and Bonds: – Buying a zero coupon bond that will mature at 100 at the maturity of the transaction [cost of zero coupon bond = 75]. Buying the Underlying Fund (or an option on the Fund if such can be created) using [100% - price of zero coupon = 25]. RISKY: Payoff Payoff dependent on e.g. at €50 Underlying Fund €25 Redemption Underlying Fund Of €100+50 Zero Coupon RISKLESS: Bond Zero coupon €75€100 invested Matures Bond will mature Price of At €100 at €100, to repay Zero Principal in full Coupon Bond T=0 Maturity e.g.5- 7 years • This structure is the oldest and simplest principal protection strategy – TOTAL RETURN OF UNDERLYING FUND: 50/25 = 200.0% – TOTAL RETURN OF INVESTMENT: 150/100 = 150.0% 10
  • 11. Fund Structure 1/3 of the fund’s assets are investment into protected asset classes with 100% Initial Participation or Real Estate Assets.• Part Portfolio Capital protection is composed of 2 parts: 1. A dynamic rebalancing between an investment into the Underlying Fund and a zero coupon bond.  Objective: to ensure that funds are invested in the Underlying Fund for the maximum time possible  Through the fund structure it is possible to capture 100% of the performance of the Underlying Fund 2. An unconditional put at 100% at maturity  To ensure full repayment of 1/3 capital, in case the dynamic rebalancing is insufficient Part 2: Put Option Investment SPV € 100 ISSUER Put Option Investor at Guaranteed Amount (Issuer) at Maturity Fund Units Hellenic Bank PLC Administrator Part 1: € 100 initially € 0 initially HFS as the fund managerDetermines the proportion Zero Coupon Bond Underlying Fund Dynamic Rebalancing (Riskless) of Assets investedin the Underlying Fund or the 0-Coupon Bond Or Real Estate Assets 11
  • 12. Successful Investment Strategy• The Harvest Stargate Fund Ltd, offers individual investors access to unique multi-asset, multi manager investment strategy usually only used by sophisticated institutional investors and hedge fund managers. The principal questions faced by any private investor today are: how to allocate their investable funds between the various asset classes available; how would this asset allocation should be regularly reviewed, and; how they can be certain that they’re in the best possible funds run by the best possible fund managers. The Harvest Stargate fund’s objective is to deliver returns in excess of those offered by traditional investment funds, by the careful and active allocation of the portfolio across the five key asset classes-bonds, equities, property, capital protected funds and commodities-combined with the active selection of the best performing underlying fund managers. • Primary Fund strategy focused on undervalued Equity Long/Short equities in Europe and US either directly or through selected highly rated mutual funds. Investments in the CY and GR markets will take an opportunistic approach based on fundamental catalysts that will yield capital gains for the fund. • Secondary strategy overlaying portfolio focused on Capital Protected different products. The addition of capital protected notes as the strategy yields stability and earns possible coupons for the fund. • Tertiary strategy overlaying portfolio focused on currency management and occasional non-equity Global Macro/Real opportunities such as bonds, forex, commodities and Estate real estate funds and property assets.1/3 of the Funds assets are allocated into this dynamic strategy which offers stability and growth. 12
  • 13. Experienced and Accessible Investment Manager• Founded in Cyprus in 1998 (EPEY since 2003) – Harvest Financial Services Limited (“HFS”) is a Cyprus based fund management group, providing discretionary portfolio management services to high net worth individuals, institutions and mutual funds both in Cyprus and abroad (www.harvestgroup.com.cy)• Head Office in Nicosia – Key management and staff nearby and available to investors to answers questions regarding investment strategy, performance, Harvest Stargate Fund Ltd mechanics and administration.• Regulated by the Cyprus Securities and Exchange Commission License Number 021/03• Affiliated with some of the World’s most prestigious investment service Providers 13
  • 14. The Fund’s Asset Allocation ProcessFinancial Instrument’s Equities Futures/Options GOLD Fund’s Underline Strategies Energy Focus 60% ENERGY EAST MED RUSSIA Real Estate GLOBAL ENERGY DIVERSIFICATION 14
  • 15. Primary Strategy: FOCUS ON NATURAL GAS COMPANIES • Primary Strategy: FOCUS ON ENERGY-NATURAL GAS AND OIL (60% ASSET ALLOCATION) • The First and core strategy seeks to buy undervalued equities either on an individual or sector basis and hold them for capital appreciation and income for the medium term. The Fund will engage models prior in investing in speculative investments and simulate possible return vs. risk prior of entering in such transactions. • The strategy also seeks to identify major changes of direction in key markets through independent analysis of relevant macro-economic factors, trend developments and investor sentiment. Harvest seeks to vary overall market exposure accordingly, either through further allocations/reductions to existing holdings or investment/divestments in market heavy weights. The strategy does not aim at a particular geographical exposure but rather is driven by a sector approach. Historically, Europe and US have provided the main holdings for the strategy, but Israel and Russia are currently in focus. Other 10% US 20% UK 5% Greece 15% Continental Europe 20% Cyprus 15% – Global gas use over South East Europe 15% next 30 years (bcm): Tamar and Leviathan: the two biggest 􀂙 2000 - 2,527 deep-water Gas discoveries of the past 10 years 􀂙 2010 - 3,377 􀂙 2020 - 4,254 􀂙 2030 - 5,047EAST MED INVESTMENT OPPORTUNITIES 15
  • 16. MED ENERGY Primary Strategy: Equities Long / Short / Hedged GLOBAL MACRO PRIMARY STRATEGY 60% Weight of Portfolio (FOCUS ON MED ENERGY)• Delek Energy, Delek Drilling and Avner, Nobel Energy, Lukoil, initiating coverage on the fund diversification policy. Triple digit upside potential of an oil discovery. Symbols: (DELKG.TA), (AVNRP.TA), (DEDRP.TA), (DLEN.TA), (NBL. NYSE), (LUKOIL. DR) (CUSIP 677862104), MICEX (Moscow), Gazprom (OGZPY), TOTAL OIL (TOT.NYSE), (GAS.CSE).• The value of the Levithan, Tamar, and the Cyprus Aphrodite Reserves (12) can be derived from two sources: The value of the natural gas reserves and the value of the oil potential. The current share prices do not reflect value of oil potential. Ratio share price partially reflects an oil discovery, highest upside potential from an oil discovery. Levithan oil results likely in early 2012. US-based Noble Energy has discovered gas in Block 12 of Cyprus’ Exclusive Economic Zone (EEZ) and the reserve is thought to be 30-40% higher than estimates. Tamar was discovered in 2009 and holds an estimated 8.7 tcf (246 bcm) of natural gas. It is expected to come on-stream in 2013 and investment is estimated at $4 bln. Peak production for the first phase is targeted at 1.0-1.2 bln cfd. Leviathan was discovered in December 2010 with reserves estimated at 16 tcf (453 bcm). It is estimated its production life would be 2017-48 with gas sold from two LNG trains, each with a capacity of 7.5 mln tons/year. The first would come on-stream in 2017, the second in 2020. Total development costs would amount to $14 bln. It forecasts that 75% of the LNG would be shipped to Europe and the remaining 25% to Asia. 16
  • 17. INDUSTRY GROWTH LNG World LNG Production May Double by 2016 35 Peru Malaysia 30 Indonesia Brunei 25 Australia 20 Bcf/day Nigeria Yemen 15 UAE Oman 10 Qatar 5 Egypt Algeria - Trinidad 2007 2009 2011 2013 2015LNG hub in Cyprus seems most likely:Cyprus seems to be gaining popularity as a potential hub for a future LNG facility that would help pump naturalgas upstream from the Israeli and adjacent Cypriot offshore fields and use the island to transport the product tocustomers. Two reports have cited the current geopolitical climate in the Middle East and North Africa asreinforcing the case for Israeli gas, while looking at Cyprus as an alternative solution to lengthy and politicallysensitive pipelines in other countries. Recent natural gas discoveries halfway between Cyprus and Israel at theTamar and Leviathan fields estimates gas reserves at 25 tr. cubic feet (705 bln cu.m.), enough to meet domesticdemand for several decades, and enough to transform Israel into an energy exporter, the Middle East EconomicSurvey. 17
  • 18. INDUSTRY FOCUS – RECENT DEVELOPMENTS “With the increasing financial burdens clouding Europes future, it is crucial to ascertain how we canexplore new opportunities to gauge how the new discoveries will help pave the way out of an economiccrisis and lead to forming new business alliances, shape difficult strategic relations and of coursedetermine how new energy will bring about a wealth of positive change in old waters”.•Cypriot minister: Block 12 gas production by 2017•Block 12, owned 70% by Noble Energy and 30% by Delek, has an estimated 8 trillion+ cubic feet of gas, justunder half the size of the nearby Israeli Leviathan field.•Cypriot Minister of Commerce, Industry and Tourism Mr. Neoklis Sylikiotis says that Noble Energy Inc. (NYSE:NBL) plans to begin a second round of drilling at Block 12 in 2013, begin production by 2017, and begin exportsby 2019. Noble Energy owns 70% of Block 12, and Delek Group Ltd. (TASE: DLEKG) units Avner Oil and Gas LP(TASE: AVNR.L) and Delek Drilling LP (TASE: DEDR.L) each own 15%. Block 12 has an estimated 8 trillion cubicfeet of gas, just under half the size of the nearby Israeli field, Leviathan, owned by the same companies togetherwith Ratio Oil Exploration (1992) LP (TASE:RATI.L)•Mr. N Sylikiotis added that Cyprus expects to earn €300 million from its offshore gas and oil concessions.•According to the "Cyprus Mail" today, "In the government gazette edition of August 17, the US firm invited bids for twoseparate contracts which, taken jointly, suggest that it is pressing forward with the natural gas field - approximately ninemonths after it announced a significant find there." It adds, "Subsea testing costs around US$350 million. Analysts saythe total tab for developing the Block 12 prospect, including all the facilities for subsea testing as well as the pipelines,could come to $3.5 billion."•Published by Globes [online], Israel business news - www.globes-online.com - on August 22, 2012 18
  • 19. INTERNATIONAL INTEREST• Novatek Shows Interest in Cyprus Offshore Oil, Gas Licenses• By Stelios Orphanides and Anna Shiryaevskaya - Apr 5, 2012 6:17 PM GMT+0300• OAO Novatek (NVTK), Russia’s second-biggest natural-gas producer, is looking at bidding for licenses to explore off Cyprus after the island nation’s first gas discovery attracted global companies.• Leonid Mikhelson, Novatek’s billionaire chief executive officer, flew to Cyprus for talks yesterday, Neoklis Sylikiotis, Cyprus’ commerce and industry minister, told reporters in Nicosia today. The country is accepting applications for a second licensing round until May 11.• Houston-based Noble Energy Inc. (NBL) reported the first discovery off Cyprus’s coast in December, with results from the Cyprus A-1 well indicating as much as 8 trillion cubic feet of gas. The find prompted “a lot of interest” in the area, Sylikiotis said.• Cypriot President Demetris Christofias also met with Mikhelson and a Russian delegation including OAO Gazprombank Chairman Andrei Akimov, said Phidias Pilides, the chairman of the Cyprus Chamber of Commerce and Industry.• Novatek’s press service confirmed the company is considering participating in the announced tenders.• The Siberian company’s natural-gas production and sales are now limited to Russia where state- run OAO Gazprom (GAZP), the world’s biggest producer, controls the pipeline network and exports. Novatek ended a concession agreement last year to its only exploration project outside Russia, the El-Arish project in Egypt, after drilling didn’t find commercial prospects. 19
  • 20. INTERNATIONAL INTEREST – FUTURE DEVELOPMENTS• Gas Liquefaction• The Russian gas producer may invest in Cyprus’s gas industry, including gas production, transport and processing, if it is successful in the licensing round, Pilides said by phone from Nicosia. Liquefaction and petrochemical projects may follow, he said. Chinese companies have already submitted proposals for construction of a gas facility, Sylikiotis said last week.• Cyprus must hold a “considerable” stake in a proposed liquefaction plant to export its gas, Sylikiotis said on March 28. As construction costs will be “extremely high,” Cyprus is seeking “multiparty cooperation with the involvement of other important countries and energy giants,” he said at the time. 20
  • 21. INTERNATIONAL INTEREST – KEY PLAYERS• Israel Opportunity lists unit on Cypriot Stock Exchange• Cyprus Opportunity and Norways AGR are bidding for two Cypriot offshore exploration licenses.• 22 July 12, Amiram Barkat• Cyprus Opportunity Energy plc (CSE: GAS), a subsidiary of Israel Opportunity - Oil and Gas Exploration Ltd. listed its shares for trading on the Cyprus Stock Exchange last week, at a market value of €14 million. Sources inform Globes that Cyprus Opportunity plans to hold a public offering in 2013. It is a sister company of Israel Opportunity Energy Resources LP (TASE: ISOP.L). Cyprus Opportunity is controlled by Israeli, Norwegian, and Cypriot shareholders. The Israeli shareholders are Rony Halman and Uri Aldubi, the general partners of Israel Opportunity. The Norwegian shareholders are the owners of AGR Group Inc., which is jointly bidding with Cyprus Opportunity for two of the offshore exploration licenses that the Cypriot government is offering - Block 2 and Block 8.• The two companies submitted their bids on May 11, as part of the 2nd Licensing Round tender for 12 offshore licenses. Cyprus Opportunity acquired 2D seismic data on which it has already performed preliminary analysis as part of its business strategy. The Cypriot government is due to publish the results of the tender in November. Cyprus Opportunity says that even if it does not win in the tender, it will continue to operate in the Cypriot offshore oil and gas exploration business through joint ventures with third parties.• Israel Opportunity owns 5-10% of the five of the deep-water Pelagic licenses - Aditya, Ishai, Lela, Yahav, and Yoad - covering 500,000 acres 170 west of Haifa, between Leviathans Ratio Yam and Block 12, which includes the Aphrodite structure, in Cypruss exclusive economic zone (EEZ). Israel Opportunity owns 10% of the licenses, Beny Steinmetz and Teddy Sagi each own 42.5%, and AGR owns 5%.• Cyprus says that Cyprus Opportunity is the first oil and gas exploration company to list on the stock exchange. The Cyprus Stock Exchange is still recovering from a corruption and insider trading scandal from almost ten years ago.• 25 consortia have filed 15 bids for the 12 licenses. Industry sources believe that the size of the signature fee that the bidders will offer the Cypriot government will be an important factor in selecting the winners. The Cypriot government and the gas developers will sign production sharing contracts.• Published by Globes [online], Israel business news - www.globes-online.com - on July 22, 2012 21
  • 22. INDUSTRY FOCUS – REGIONAL EFFECTS• Shekel appreciation and “Dutch disease” to be mitigated through a SWF With Israel’s current account surplus likely to get even bigger in the future, concerns have been raised about “Dutch disease”, i.e. a large appreciation of the shekel damaging the competitiveness of Israel’s non-energy exports. While further shekel appreciation appears very likely, we think the extent of appreciation can be reduced through the establishment and careful management of a SWF that would help to sterilize a large part of the natural gas-related FX inflows.• The real game-changer could be oil Geological tests suggest a possibility that, in addition to natural gas, Israel might also find sizeable quantities of offshore oil. While the ‘probability of success’ is currently considered to be low, our calculations suggest that, in the event of success, oil could potentially deliver a boost to GDP growth, the budget and the external balance that might potentially be even bigger than the impact from natural gas. This would also imply a larger appreciation potential for the shekel and an even greater requirement to manage the resulting macroeconomic challenges through a carefully managed sovereign wealth fund. More meaningful results of geological tests on oil are expected in late 2013. 22
  • 23. EAST MED DEVELOPMENTS• The east Mediterranean island is working with Israel, 300 miles (480 kilometers) south across the sea, on plans to build a pipeline to link their gas fields before the fuel is liquefied for export to Europe or Asia, Israeli Prime Minister Benjamin Netanyahu said Feb. 16. 2012 23
  • 24. Geographic MapSource: Delek Energy 24
  • 25. Important Legal Note• The material provided herein is for informational purposes only. It does not constitute an offer to sell or a solicitation of an offer to buy any securities relating to any of the products referenced herein, notwithstanding that any such securities may be currently being offered to others. Any such offering will be made only in accordance with the terms and conditions set forth in the Offering Memorandum pertaining to such fund. Alternative investments such as hedge funds and ICIS are subject to less regulation than other types of pooled investment vehicles, may be illiquid and can involve a significant use of leverage, making them substantially riskier than the other investments, including any products which may be shown as comparison herein. Prior to investing, investors are strongly urged to review carefully the Offering Memorandum (including the risk considerations described therein), and all related fund documents, to ask such additional questions of the Investment Manager as they deem appropriate, and to discuss any prospective investment in the Fund with their legal and tax advisers in order to make an independent determination of the suitability and consequences of an investment.• This presentation does not constitute an offer or solicitation to any person in any jurisdiction in which such offer or solicitation is not authorized or to any person to whom it would be unlawful to make such offer or solicitation. It is the responsibility of any person or persons in possession of this material to inform themselves of and to observe all applicable laws and regulations of any relevant jurisdiction. Prospective investors should inform themselves and take appropriate advice as to any applicable legal requirements and any applicable taxation and exchange control regulations in the countries of their citizenship, residence or domicile which might be relevant to the subscription, purchase, holding, exchange, redemption or disposal of any investments.• Investment in ICIS Funds are suitable only for sophisticated investors for whom an investment in such fund does not constitute a complete investment program and who fully understand, and are willing to assume and understand, the risks involved. While the given material is subject to change and, although based upon information which we consider reliable, it is not guaranteed as to accuracy or completeness. No person has been authorized to give any information or to make any representation, warranty, statement or assurance not contained in the Offering Memorandum and, if given or made, such other information or representation, warranty, statement or assurance may not be relied upon.• Past performance is not a guide to future performance and the value of investments and the income derived from those investments can go down as well as up. Future returns are not guaranteed and a loss of principal may occur. Harvest Financial Services Ltd makes no warranty or representation that the security and or recommendation/the fund made are appropriate for all recipients and investors.• Opinions expressed are current opinions as of the date appearing in this material only. No part of this material may be i) copied, photocopied or duplicated in any form, by any means; or ii) redistributed without Harvest Financial Services Ltd prior written consent. 25
  • 26. IMPORTANT INFORMATION“The Central Bank of Cyprus shall not be liable by virtue of its recognition of the ICIS or byreason of its exercise of the functions conferred on it by the International Collective InvestmentSchemes Law. Recognition of the ICIS does not constitute a warranty by the Bank as to thecreditworthiness or financial standing of the various parties to the ICIS”.Supervision of ICISIn accordance with section 3 of the Law, the Central Bank of Cyprus is the regulatory andsupervisory authority in the Republic of Cyprus for ICIS, their managers and trustees.An ICIS must sell, redeem or repurchase its units at the request of unit holders, in accordancewith its constitutional documentation. Units may not be issued as partly paid and may not besold unless the equivalent of the net issue price is paid. Basic Rules for the calculation of sale,redemption or repurchase price can be found in “Regulations on the valuation of theproperty of an ICIS”.TaxationAny gains or profits generated by an ICIS of any type, including a unit trust or an investmentlimited partnership, are subject to an effective tax rate of 0,425%, while no further tax isimposed on any dividends or other distributions made by an ICIS to its unit holders. Theincome of managers and trustees, if not permanent residents of the Republic, which isgenerated from services they offer to ICIS is exempt from income tax. 26
  • 27. Professionals Professionals• Fund Regulator: Central Bank of Cyprus,• Investment Manager Regulator: Cyprus Securities & Exchange Commission.• Investment Manager – Harvest Financial Services Ltd• Internal Auditor: KPMG Advisory Services Ltd• Administrator – Hellenic Bank Public Ltd• Custodian - Hellenic Bank Public Ltd• Auditors – PKP Professional Services Ltd• Legal Advisor – Drakos & Efthymiou - Tornaritis Law• Hellenic Bank Public Ltd• Wall Street Global LLC• Interactive Brokers LLP• Deutsche Bank Securities Israel Ltd- via Hellenic Bank PLC.• XNET European Broker Systems 27