JZ Capital Ptnrs Ltd Notice of EGM

 
TIDMJZCP TIDMJZCC TIDMJZCN 
 
JZ CAPITAL PARTNERS LIMITED (the "Company") 
(a closed-end collective investment scheme incorporated with limited liability 
           under the laws of Guernsey with registered number 48761) 
 
                           LEI: 549300TZCK08Q16HHU44 
 
                    Notice of Extraordinary General Meeting 
 
                                      and 
 
                     Recommended Proposals in respect of: 
 
Buy Back Authorities relating to a Tender Offer (or a series of Tender Offers) 
                     and resultant Off-Market Acquisitions 
 
                                      and 
 
       The Company's proposed investments in Spruceview Capital Partners 
 
29 May 2019 
 
Unless otherwise defined herein, capitalised terms used in this document have 
the meanings given to them in the circular published by the Company dated 29 
May 2019 (the "Circular"). 
 
Notice of Extraordinary General Meeting 
 
Notice is hereby given that the Extraordinary General Meeting ("EGM") of the 
Company will be held at the offices of Northern Trust International Fund 
Administration Services (Guernsey) Limited, Trafalgar Court, Les Banques, St 
Peter Port, Guernsey GY1 3QL, Channel Islands at 1.15 p.m. on 27 June 2019 (or 
as soon thereafter as the annual general meeting of the Company convened for 
the same day and place has been concluded or adjourned). 
 
The purpose of the EGM is to consider and, if thought fit, approve the 
Company's proposed: (i) return of capital to Ordinary Shareholders by way of a 
Tender Offer (or a series of Tender Offers) and resultant Off-Market 
Acquisitions in respect of the Company's Ordinary Shares (the "Buy Back 
Proposal"), and (ii) investments in Spruceview Capital Partners jointly with 
David W. Zalaznick and John (Jay) W. Jordan II (together, the JZAI Founders who 
are the founders and principals of Jordan/Zalaznick Advisers, Inc., the 
Company's investment adviser) (or their respective affiliates) which would be 
considered a Related Party Transaction of the Company under Chapter 11 of the 
Listing Rules (with which the Company voluntarily complies and insofar as the 
Listing Rules are applicable to the Company by virtue of its voluntary 
compliance) ("Spruceview Capital Partners") (the "Spruceview Proposal" and 
together with the Buy Back Proposal, the "Proposals") and as more fully 
described below. 
 
Buy Back Proposal 
 
As announced by the Company on 8 May 2019, among other strategic initiatives, 
the Company intends to return, by way of a Tender Offer (or a series of Tender 
Offers), approximately US$100 million of capital to Ordinary Shareholders at a 
maximum discount to net asset value of 5 per cent. 
 
The Buy Back Authorities which the Company is requesting as part of the Buy 
Back Proposal are intended to allow the Company to return capital to Ordinary 
Shareholders by way of a Tender Offer (or a series of Tender Offers) and 
resultant Off-Market Acquisitions in respect of the Company's Ordinary Shares. 
 
The Tender Offers are intended to be generated from the proceeds of 
realisations that are planned for this calendar year and the next. As announced 
on 8 May, the Company also intends to use certain of the proceeds from such 
realisations to reduce the Company's debt by approximately US$100 million 
during the same period. 
 
As the Tender Offers are intended to take place over the course of this 
calendar year and the next, the Board may request further approvals from 
Ordinary Shareholders for the same purpose in the future. 
 
The Buy Back Authorities needed to effect Tender Offers are being sought in the 
form of: 
 
 a. a general authority to make Market Acquisitions of Ordinary Shares by way 
    of a Tender Offer (or a series of Tender Offers) (being the Market 
    Acquisition Authority); and 
 b. an authority to make Off-Market Acquisitions of Ordinary Shares as a result 
    of any Market Acquisitions of Ordinary Shares made by way of any Tender 
    Offers (being the Off-Market Acquisition Authority), 
 
in each case, as set out and described in further detail below. 
 
Market Acquisition Authority 
 
The Market Acquisition Authority will give the Company authority to make Market 
Acquisitions of Ordinary Shares by way of a Tender Offer (or a series of Tender 
Offers). 
 
The maximum number of Ordinary Shares which may be purchased under the Market 
Acquisition Authority is 12,091,959 Ordinary Shares representing approximately 
14.99 per cent. of the Ordinary Shares in issue as at 28 May 2019. 
 
The minimum and maximum prices that may be paid for each Ordinary Share 
purchased pursuant to the Market Acquisition Authority will be 95 per cent. and 
100 per cent. respectively of the Company's net asset value (before dividends) 
per Ordinary Share by reference to the Company's most recently announced net 
asset value announced via a Regulatory Information Service prior to the 
announcement of any Tender Offer.  Such minimum and maximum prices are to be 
adjusted for any disposal or buy back of Shares to the extent not taken into 
account in such most recently announced net asset value figure translated into 
sterling by reference to the exchange rate quoted by Bloomberg as at market 
close on the tender closing date in respect of any Tender Offer. 
 
Off-Market Acquisition Authority 
 
The Off-Market Acquisition Authority will give the Company authority to make 
Off-Market Acquisitions of Ordinary Shares as a result of any Market 
Acquisitions of Ordinary Shares made by way of any Tender Offers. 
 
The Off-Market Acquisitions are to be made under the Off-Market Acquisition 
Authority in pursuance of the terms of a contract included in the Company's 
Articles of Incorporation and as prescribed by an arrangement included within 
the Articles referred to as the CFC Buy Back Arrangement. The CFC Buy Back 
Arrangement applies in circumstances where the Company makes acquisitions of 
its Ordinary Shares pursuant to a Market Acquisition Authority including in the 
case of a Tender Offer. Shareholders are reminded that the purpose of any 
Off-Market Acquisitions and the CFC Buy Back Arrangement is to allow the 
Company to make acquisitions of its Ordinary Shares in a way that reduces the 
risk of the Company being or becoming a Controlled Foreign Corporation. 
 
The price that each large US Ordinary Shareholder to whom the CFC Buy Back 
Arrangement applies will be entitled to receive (and that will be paid by the 
Company) for each Ordinary Share acquired by the Company under the CFC Buy Back 
Arrangement is the CFC Buy Back Arrangement Price. The CFC Buy Back Arrangement 
Price is the volume weighted average price payable per Ordinary Share agreed to 
be purchased by the Company on the relevant trading day pursuant to a Market 
Acquisition Authority. The CFC Buy Back Arrangement Price is therefore expected 
to be the same as the price per Ordinary Share described above at which the 
Company's Ordinary Shares are bought back pursuant to the Market Acquisition 
Authority. 
 
Further details of the CFC Buy Back Arrangement are included in the Circular of 
the Company published in connection with the Proposals as well as a separate 
circular published by the Company dated 20 April 2017. 
 
Each of the Buy Back Authorities are proposed in addition to any subsisting 
authorities of the Company to buy back the Company's Shares including any buy 
back authorities that may be granted by Ordinary Shareholders at the Company's 
forthcoming Annual General Meeting to be held on 27 June 2019. If granted by 
Ordinary Shareholders, the Buy Back Authorities will expire at the conclusion 
of any extraordinary general meeting of the Company to renew them or on 27 
December 2020, whichever is the earlier. 
 
The details of any Tender Offer, including the eligibility of those Ordinary 
Shareholders entitled to participate, how certain Ordinary Shareholders may 
participate and the Tender Offer terms and conditions, will be sent to 
Shareholders by separate shareholder circular(s) at the time the Company 
decides to undertake a Tender Offer under the Market Acquisition Authority if 
granted by Ordinary Shareholders. 
 
Spruceview Proposal 
 
As mentioned above, the Company is also proposing to make further investments 
jointly with the JZAI Founders (or their respective affiliates) in Spruceview 
Capital Partners which includes its affiliated funds from time to time, and in 
particular CERPI. The joint investment is intended to be used for both 
Spruceview Capital Partners' general corporate purposes and investments in its 
affiliated funds from time to time, and in particular CERPI. CERPI is an 
investment fund established and managed by Spruceview Capital Partners for its 
client, a Mexican retirement fund administrator. 
 
Spruceview Capital Partners, a portfolio investment of the Company in which it 
has made previous joint investments with the JZAI Founders (or their respective 
affiliates), is an asset management business in the United States and aims to 
address the demand from corporate pensions, endowments, family offices and 
foundations for fiduciary management services through an Outsourced Chief 
Investment Officer model as well as specific products per asset class. 
Spruceview has developed significant client relationships by creating 
particularised strategies and funds for its targeted client base, including in 
Canada and Mexico. In 2018, Spruceview launched a US middle market private 
equity fund-of-funds and continues to provide investment oversight to a 
European private credit fund-of-funds and portfolios for family office clients. 
Also in 2018, Spruceview expanded its mandate with an international packaged 
foods company to provide investment oversight to the pension funds of its 
Mexican subsidiary, in addition to those of its Canadian subsidiary, which 
Spruceview has advised since 2016. As mentioned above, Spruceview Capital 
Partners also established CERPI for its client, a Mexican retirement fund 
administrator. As the general partner of CERPI, Spruceview Capital Partners was

required to make co-investments in CERPI. These investments were permitted to 
be made by various affiliates of Spruceview Capital Partners, including the 
Company and the JZAI Founders. 
 
As also mentioned above, the Company has made previous joint investments in 
Spruceview Capital Partners with the JZAI Founder (or their respective 
affiliates), of US$30 million in total (with US$30 million also being 
contributed by the JZAI Founders (or their respective affiliates)). 
Shareholders should also note, in March 2019 the Company further increased its 
investment together with the JZAI Founders (or their respective affiliates) in 
Spruceview Capital Partners by an additional US$1.475 million from the Company 
(with a further US$1.475 million to be contributed by the JZAI Founders (or 
their respective affiliates)). This increase was considered by the Company not 
to be a material change to the terms of the existing shareholder approval and, 
therefore, Ordinary Shareholder approval was not obtained for such increase. 
All of the Company's increased investment of US$1.475 million, has been used to 
support Spruceview Capital Partner's share of the above mentioned co-investment 
in CERPI. 
 
The Company is now proposing to invest a further US$15 million (with a further 
US$15 million to be contributed by the JZAI Founders (or their respective 
affiliates)) in Spruceview Capital Partners which includes its affiliated funds 
from time to time, and in particular CERPI. As with the previous joint 
investments in Spruceview Capital Partners, the proposed joint investment will 
be on the same terms and conditions as between the Company and the JZAI 
Founders, being 50:50 economically, but with certain structural features 
intended to afford each side appropriate US tax protections. The joint 
investment is intended to be used for Spruceview Capital Partners' general 
corporate purposes and investments in its affiliated funds from time to time, 
and in particular to support Spruceview Capital Partners' share of any further 
co-investment required in CERPI. 
 
The Company's proposed investments in Spruceview Capital Partners, being a 
material change to the terms of the existing shareholder approval, would be 
considered a Related Party Transaction under Chapter 11 of the Listing Rules 
(with which the Company voluntarily complies and insofar as the Listing Rules 
are applicable to the Company by virtue of its voluntary compliance). 
 
Jordan/Zalaznick Advisers, Inc. ("JZAI") is the Company's investment adviser 
and, under the Listing Rules, would therefore be considered a Related Party of 
the Company. As founders and principals of JZAI, the JZAI Founders are 
associates of JZAI and would also be considered Related Parties of the Company. 
In addition, each of the JZAI Founders are substantial shareholders of the 
Company as they are each entitled to exercise or to control the exercise of 10 
per cent. or more of the votes able to be casted at a general meeting of the 
Company. As such, each of the JZAI Founders are considered to be Related 
Parties of the Company on this basis as well. The Company's proposed 
investments in Spruceview Capital Partners which involves the JZAI Founders as 
Related Parties of the Company would be considered to be arrangements whereby 
the Company and its Related Parties invest in or provide finance to another 
undertaking or asset. Accordingly, the JZAI Founders as Related Parties and the 
Spruceview Proposal as arrangements between them would be considered a Related 
Party Transaction under Chapter 11 of the Listing Rules, insofar as the Listing 
Rules are applicable to the Company by virtue of its voluntary compliance with 
the same. 
 
As such, the Spruceview Proposal, as a Related Party Transaction of the 
Company, requires approval of Ordinary Shareholders for the Company to invest 
together with the JZAI Founders in Spruceview Capital Partners. 
 
Notice of EGM and Shareholder Circular 
 
Further details of both Proposals are included in the Notice convening the EGM 
and the Circular of the Company published in connection with the Proposals. 
 
The Notice convening the EGM is being distributed to members of the Company and 
will shortly be uploaded to the Company's website at www.jzcp.com. Copies of 
the Circular the Company is posting to Shareholders are available for viewing, 
during normal business hours, at the registered office of the Company at 
Trafalgar Court, Les Banques, St Peter Port, Guernsey GY1 3QL and will shortly 
be available for viewing at www.morningstar.co.uk/uk/nsm. The notice convening 
the EGM is also included within the Circular. 
 
For further information: 
 
Ed Berry / Kit Dunford                  +44 (0) 20 3727 1046 / 1143 
FTI Consulting 
 
David Zalaznick                         +1 (212) 485 9410 
Jordan/Zalaznick Advisers, Inc. 
 
Sam Walden                              +44 (0) 1481 745385 
Northern Trust International Fund 
Administration Services (Guernsey) 
Limited 
 
About JZCP 
 
JZ Capital Partners ("JZCP") is one of the oldest closed-end investment 
companies listed on the London Stock Exchange. It seeks to provide shareholders 
with a return by investing selectively in US and European microcap companies 
and US real estate. JZCP receives investment advice from Jordan/Zalaznick 
Advisers, Inc. ("JZAI") which is led by David Zalaznick and Jay Jordan. They 
have worked together for more than 35 years and are supported by teams of 
investment professionals in New York, Chicago, London and Madrid. JZAI's 
experts work with the existing management of microcap companies to help build 
better businesses, create value and deliver strong returns for investors. For 
more information please visit www.jzcp.com. 
 
 
 
END

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