Press release, 14 June, 2010
• Prosperity Quest II Limited - a closed-ended investment company managed by
Prosperity Capital Management, one of the largest managers of equity portfolios
investing in Russia and other CIS countries - to be listed on NASDAQ OMX
Stockholm.
• Prosperity Quest II Limited will invest primarily in a portfolio of small to
medium-sized listed and unlisted companies within Russia and the CIS region.
• Target fund size: approximately SEK 3.5 billion. Price per share: SEK 100.
• Private placement to institutional investors and a public offering to retail
investors in Sweden.
• Subscription period: 15 June - 7 July 2010.
• Expected first day of trading: 16 July 2010.
Mattias Westman, Founding partner of Prosperity Capital Management comments:
"Prosperity Capital Management, one of the largest managers investing in Russia
and the CIS region, has an unmatched 14-year track record, with the Prosperity
Quest Fund ranked according to Morningstar data as the best performing fund in
the world over the last decade in any asset class with dollar based annual
returns of more than 46% since the launch in 1999. Our Russia-focus, active
management and strong and stable Moscow-based team provide a solid base for a
successful launch of Quest II - the team is the same and we have done this
before.”
Alexander Branis, Chief Investment Officer of Prosperity Capital Management
comments:
"In Russia there are a number of companies benefiting from company
restructuring and sector-based consolidation. Both processes drive strong
productivity gains and, in turn, shareholder value. Over the years, Prosperity
Capital Management has found, invested in, and helped transform many such
companies, working with ambitious, determined and talented Russian management
teams. We know of many more such firms that are seriously under-valued, but
ready for such investment. That's why we're launching Quest II.”
Press conference today at 12.15 CET (a light buffet will be served from 11.45
CET)
A press conference will be held today at Grand Hotel, Bolinderska Palatset, in
Stockholm where Mattias Westman, Founding partner, Alexander Branis, Chief
Investment Officer, and Tomas Olsson, COO and responsible for investor
relations, will present Prosperity Quest II and the future plans.
For further information, please contact Lars Mattson, Quest II IR contact, on
tel. +46 (0)706 10 25 80.
Background and reasons for the public offering
Prosperity Capital Management Limited (“PCM”, or the “Manager”) is a leading
investment manager focused on Russia and the CIS region with experience since
1996. As at 30 April 2010, the PCM Group managed, sub-managed or advised in
respect of a total of eleven funds and investment mandates with total assets
under management of approximately US$4.1 billion. Among the most successful
funds managed by the Manager are The Russian Prosperity Fund, launched in 1996,
and The Prosperity Quest Fund, launched in 1999.
Following the turmoil in the financial markets triggered by the global
financial crisis, the Manager believes that there are significant investment
opportunities in Russia and the CIS region. Based on this belief, the Manager
is seeking to raise a new closed-ended investment fund which will have two
components: a listed feeder fund (Prosperity Quest II Limited, or the
“Company”) and an unlisted feeder fund (Prosperity Quest II Unlisted Limited,
or the “Unlisted Feeder”), each of which feeds into a master fund called PQII
Master Fund LP (the “Master Fund”), in a master/feeder structure. To offer
liquidity to investors, the Company's shares will be listed on NASDAQ OMX
Stockholm. The Manager believes NASDAQ OMX Stockholm to be a suitable market
place for listing of the Company's shares since many companies that have the
majority of their operations in Russia and the CIS region have received risk
capital financing in Stockholm.
The investment objective of the Company (investing through the Master Fund, as
explained below) is to achieve capital growth over a term of approximately four
years by investing primarily in a portfolio of small to medium-sized listed and
unlisted companies and other entities in Russia and other CIS countries, across
a range of sectors, such as energy, mining, power, telecommunications,
financial services, consumer and retail. The value creation strategy is to seek
investments which the Manager believes are available at a discount to their
fundamental value and consolidate the investment portfolio, including the
assets (the “Assets”) received in exchange for shares in the Company or the
Unlisted Feeder from certain institutional investors (“Asset Subscribers”),
with the aim of building a diversified portfolio of minority holdings in
respect of which the Master Fund will seek to act as an influential minority
investor.
The Company has been established, together with the Unlisted Feeder, to invest
all of the proceeds of the Global Offer and the Placing (as discussed below) in
the Master Fund (the Company, the Unlisted Feeder and the Master Fund are
collectively referred to as the “Fund Vehicles”). Interests in the Unlisted
Feeder will not be listed on any securities exchange or offered to retail
investors. The Unlisted Feeder will provide professional investors who prefer a
traditional private investment fund structure with access to the same assets
and investment strategy, through the Master Fund, as the Company.
The Manager will seek actively to manage the Master Fund's portfolio. During
the first 18 months (the “Investment Period”), the Manager will seek to invest
the assets of the Master Fund according to the investment policy of the Fund
Vehicles. During the period beginning on the day following the end of the
Investment Period and ending on the day falling 30 months after such day (the
‘‘Realisation Period''), the Manager will seek to realise the Master Fund's
investments and will not be permitted to reinvest the proceeds of any such
realisations in new investments. The Manager sees a well defined investment
horizon, as well as a relatively short divestment period, as suitable given the
investment strategy of investing mainly in less liquid securities, which the
Manager believes are available at a discount to their fundamental value. The
Manager believes that it is unlikely that these valuations will remain at their
current low levels over time.
The Manager, companies within the same group as the Manager and/or individuals
who indirectly control the Manager intend to invest US$10 million in the
Company and the Unlisted Feeder, allocated on a pro rata basis to the amounts
raised in cash under the Global Offer by the Company and the Placing by the
Unlisted Feeder.
Prosperity Quest II in brief
The Company and the Unlisted Feeder are both authorised closed-ended investment
companies with limited liability incorporated in Guernsey. The Master Fund is
an authorised closed-ended investment fund, registered as a limited partnership
in Guernsey. The Master Fund's general partner, Prosperity Quest II GP Limited
(the “General Partner”) is a Guernsey company which is a subsidiary of the
Manager and is licensed and regulated in Guernsey. The Master Fund, through
which all investments will be made (via specially set up holding subsidiaries),
together with each feeder fund is managed by Prosperity Capital Management
Limited. Both the Company and the Unlisted Feeder have separate boards made up
of non-executive directors, a majority of which are independent, with the main
purpose of supervising the Manager on behalf of investors.
The Company, the Master Fund and the Unlisted Feeder have appointed the Manager
as the investment manager in respect of the Master Fund's investment programme,
for the benefit of the Master Fund, the Company and the Unlisted Feeder.
Subject to the overall supervision and control of the Company's board of
directors, as well as the board of directors of the Unlisted Feeder and the
General Partner, the Manager is responsible for the investment programme of the
Master Fund and, therefore, the Company's investment portfolio.
About the Global Offer
The Global Offer consists of two components - the Offer and the Directed Asset
Offer:
The Offer consists of
• a public offering in Sweden of shares in the Company for cash;
• a private placement of shares in the Company to institutional investors in
various jurisdictions for cash
The Directed Asset Offer consists of
• a private placement of shares in the Company to Asset Subscribers in exchange
for securities of companies and other entities established or having their
principal operations in Russia and other CIS countries which meet the
investment objective of the Fund Vehicles.
The Global Offer, which comprises the offering of shares in the Company for
cash or Assets, together with the offering of shares in the Unlisted Feeder for
cash or Assets (the “Placing”), is targeted to raise total proceeds of
approximately SEK 3.5 billion. The Global Offer and/or the Placing may be
increased in size to reflect market demand, but in no event will the total
proceeds of the Global Offer and the Placing, after full exercise of the
Over-allotment Option referred to below, exceed SEK 7.5 billion. The Global
Offer and/or the Placing may also be decreased in size to reflect market
demand, although if the Company does not receive subscriptions in the Global
Offer (whether for cash or from Asset Subscribers) representing proceeds of at
least SEK 1.5 billion, the Company will not proceed with the Global Offer or
admission on NASDAQ OMX Stockholm.
The Global Offer may be also terminated and withdrawn if, in the discretion of
the Company's board of directors and Carnegie Investment Bank AB (publ)
(“Carnegie”), as Lead Manager, the ratio of proposed subscriptions for cash to
proposed subscriptions for Assets is insufficient to provide trading liquidity
for the shares following admission on NASDAQ OMX Stockholm. In addition, the
Company's board of directors may terminate and withdraw the Global Offer at any
time prior to admission in its sole discretion. Notification of any such
termination and withdrawal will be made by a press release and simultaneous
notification to NASDAQ OMX Stockholm and the SFSA.
The Company will grant Carnegie an over-allotment option under which the
Company can issue additional shares up to an aggregate number equivalent to 15%
of the total number of shares sold in the Global Offer to cover
over-allotments, if any.
Timetable - key dates
Subscription period in the Offer: 15 June - 7 July 2010
Subscription period in the Directed Asset Offer: 15 June - 28 June 2010
Announcement of the outcome of the Directed Asset Offer: 30 June 2010
Announcement of the results of the Global Offer: 8 July 2010
Payment and settlement in the Offer: 13 July 2010
First day of trading: 16 July 2010
Prospectus
Subscription forms and the prospectus can be obtained from Carnegie on
www.carnegie.se. The prospectus can also be obtained from
www.prosperityquesttwo.com, www.avanza.se or www.nordnet.se.
Advisors
Carnegie is acting as Lead Manager and Sole Bookrunner and Handelsbanken
Capital Markets is acting as Co-Lead Manager in connection with the Global
Offer and the Placing. Debevoise & Plimpton, Hannes Snellman and Ogier are
acting as legal advisors to Prosperity Capital Management and Latham & Watkins
is acting as legal advisor to Carnegie.
For further information, please contact
Tomas Olsson, COO of Prosperity Capital Management and responsible for investor
relations, +44 7834 666 213.
Liam Halligan, Chief Economist of Prosperity Capital Management, + 44 7801 799
279.
Important notice
This document is an advertisement and not a prospectus. Investors should not
subscribe for any securities of the Company except on the basis of information
in the Prospectus dated 11 June 2010 that has been published by the Company in
connection with the proposed admission of its shares to trading on NASDAQ OMX
Stockholm.
This document does not constitute an offer of, or the solicitation of an offer
to buy or subscribe for, ordinary shares of the Company in the United States,
or to any person in any other jurisdiction to whom or in which such offer or
solicitation is unlawful and, in particular, is not for distribution in the
Russian Federation, the United States, Australia, Canada or Japan. Securities
may not be offered or sold in the United States absent registration or an
exemption from registration under the U.S. Securities Act of 1933, as amended.
This document is not directed to such persons whose participation is
conditional upon the performance of further prospectus, registration or other
measures in addition to those prescribed by Swedish law.
This press release and the information contained in it are not being issued in
the Russian Federation the United States, Australia, Canada or Japan and may
not be distributed in the Russian Federation, the United States, Australia,
Canada or Japan.
In any member state of the EEA (other than Sweden), the shares of the Company
will only be available to, and any invitation, offer or agreement to subscribe,
purchase or otherwise acquire such shares will be engaged in only with,
qualified investors (as defined in Article 2 of Directive 2003/71/EC of the
European Parliament and of the Council). Persons other than relevant persons
and other qualified investors should not act or rely on this document or any of
its contents.
This document does not constitute an invitation or inducement to engage in
investment activity within the meaning of the UK Financial Services and Markets
Act 2000. This document is directed only at (a) persons who are outside the
United Kingdom, or (b) persons who are investment professionals within the
meaning of Article 19(5) of the Financial Services and Markets Act 2000
(Financial Promotion) Order 2005 (the “Order”), or (c) persons falling within
Article 49(2)(a) to (d) (“high net worth companies, unincorporated associations
etc”) of the Order, or (d) other persons to whom it may otherwise lawfully be
communicated (all such persons together being referred to as “relevant
persons”).
The Lead Manager and Sole Bookrunner is acting for the Company and no-one else
in connection with the Global Offer and will not be responsible to anyone other
than the Company for providing the protections afforded to their respective
clients or for providing advice in relation to the Global Offer or any other
matter referred to herein.
This announcement contains certain forward-looking statements. Forward-looking
statements relate to expectations, beliefs, projections, future plans and
strategies, anticipated events or trends and similar expressions concerning
matters that are not historical facts. In some cases, forward-looking
statements can be identified by terms such as “anticipate,” “believe,” “could,”
“estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “should,” “will”
and “would” or the negative of those terms or other comparable terminology. By
their nature, forward-looking statements involve known and unknown risks and
uncertainties because they relate to events, and depend on circumstances that
may or may not occur in the future. Forward-looking statements are not
guarantees of future performance. Potential investors should not place undue
reliance on these forward-looking statements. Any forward-looking statements
are only made as at the date of this announcement and the Company neither
intends nor assumes any obligation to update forward-looking statements set
forth in this document, except as required by law or other applicable
regulation. Except as required by applicable law, the Company undertakes no
obligation to update or revise publicly any forward-looking statements, whether
as a result of new information, future events or otherwise.
Information contained in this document is not an offer, or an invitation to
make offers, sell, purchase, exchange or transfer any securities or other
financial instruments in Russia or to or for the benefit of any Russian person,
and does not constitute an offering to investors who are not "qualified
investors" (as defined in the Federal Law on Securities Market of the Russian
Federation) or advertisement of any securities or other financial instruments
in Russia. This information must not be passed on to third parties or
otherwise be made publicly available in Russia. The shares in the Company have
not been and will not be registered in Russia or admitted to public placement
and/or public circulation in Russia. The shares in the Company are not
intended for “placement” or “circulation” in Russia except as permitted by
Russian law.
