CLC Calculus Vct Plc

 
TIDMISP 
 
INVESTEC STRUCTURED PRODUCTS CALCULUS VCT PLC 
 
15 DECEMBER 2010 
 
RECOMMENDED PROPOSALS TO APPROVE RELATED PARTY TRANSACTIONS AND NOTICE OF 
GENERAL MEETING 
 
SUMMARY 
 
The board of directors of the Company ("Board") are today sending a circular to 
shareholders ("Circular") with proposals to enter into related party 
transactions with Investec Structured Products and Calculus Capital Limited 
(the investment managers of the Company ("the Managers")). 
 
Shareholder authorities were obtained at a general meeting held on 6 September 
2010, which included approval to enter into management and performance 
incentive arrangements with the Managers in respect of the C ordinary shares of 
1p each ("C Shares") 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 proposed 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 a general 
meeting to be held on 7 January 2011 ("General Meeting"). 
 
THE C SHARES FUND MANAGEMENT AND PERFORMANCE INCENTIVE ARRANGEMENTS 
 
At the general meeting held in September, shareholders approved the amendment 
to the articles of association of the Company 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 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. 
 
SUPPLEMENTAL MANAGEMENT AGREEMENTS 
 
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. 
 
No annual management fee is payable to Investec Structured Products under its 
supplemental management agreement, whilst 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. 
 
The terms of these agreements will otherwise be materially the same as those 
for the arrangements for the ordinary shares fund. 
 
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, 
shareholder approval of these new arrangements with the Managers is required. 
 
PERFORMANCE INCENTIVE FEE ARRANGEMENTS 
 
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: 
 
  * 10 per cent. of the amounts paid by way of dividends or other 
    distributions, buybacks and any other proceeds received by holders of C 
    Shares (C Shareholder Proceeds) between 105.0p and 115.0p per C Share, such 
    amount to be paid within ten business days of the date of payment of the 
    relevant dividend or distribution pursuant to which a return of 115.0p per 
    C Share is satisfied; and 
 
  * thereafter, 10 per cent. of C Shareholder Proceeds, such amounts to be paid 
    within ten business days of the date of payment of the relevant dividend or 
    distribution 
 
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. 
 
RELATED PARTY TRANSACTIONS 
 
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 general meeting in September 
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 set out in the Circular 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 MANAGERS 
 
Calculus Capital 
 
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. 
 
Investec Structured Products 
 
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. 
 
FURTHER INFORMATION 
 
Shareholders will receive a copy of the Circular convening the General Meeting 
to be held on 7 January 2011 at which shareholders will be invited to approve 
the resolution in connection with the proposals. A copy of the Circular has 
also been submitted to the UK Listing Authority and will be shortly available 
for inspection at the National Storage Mechanism which can be accessed at the 
website www.hemscott.com/nsm.do 
 
For further information, please contact: 
 
Investment Manager to the Structured Products Portfolio 
 
Investec Structured Products 
 
Gary Dale 
 
Telephone: 020 7597 4065 
 
Investment Manager to the Venture Capital Portfolio 
 
Calculus Capital Limited 
 
Susan McDonald 
 
Telephone: 020 7493 4940 
 
 
END 
 

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