EEA Select Opportunities Investment Company plc

Investment Objectives

The Fund was incorporated as an open-ended investment company in the Isle of Man to provide investors with an opportunity to benefit from capital growth in excess of The Royal Bank of Scotland PLC base rate at the beginning of each financial year, plus 1 percentage point (the “Benchmark”).

Investment Process and Methodology

The Fund intends to achieve its investment objective by investing in a focused portfolio of equity investments long and short targeting absolute return. The Fund’s investments shall consist of either undervalued situations with a catalyst to crystalise the undervaluation or strong, well-managed businesses where underlying value, based on free cash flow, is temporarily not reflected in the share price. The Fund may elect to invest with or without a hedge.Investment instruments which maybe purchased by the Fund will include quoted equities (both in the United Kingdom and elsewhere), contracts for differences (“CFDs”), futures and options (both traded and OTC).

Investment Restrictions and Borrowing Powers

The Directors in conjunction with the Investment Manager will apply investment strategies which deem appropriate under prevailing economic and market conditions to seek appreciation in Net Asset Value per Share, subject to the investment restrictions set out below within the powers given under the Articles:

  1. The Fund will not take legal or management control of any issuer in which the Fund may invest, nor will it purchase securities for the purpose of exercising control or management of that issuer.
  2. The Fund may borrow and give security therefor. At present it is envisaged that borrowings will be incurred (i) to meet redemptions which would otherwise result in the Fund having prematurely to realise investments or to meet timing differences arising on the settlement of investments within the Fund; such borrowings will be limited to an amount equal to 100 % of the Net Asset Value at the time of borrowing, and (ii) for the purposes of gearing through CFDs with a gearing limit of 5 times Net Asset Value.
  3. The Fund may not enter into transactions involving commodities or commodity contracts, invest in any commodity.
  4. The Fund will not purchase or sell real estate or any option, right or interest therein, provided that the Fund may invest in securities issued by companies which invest in real estate.
  5. The Fund may not write any option unless, adequate liquid assets are set aside to cover the exercise price of the securities for a put option, or sufficient underlying securities are maintained to cover the position.
  6. Except as set out above, there are no restrictions or other limits imposed on the investments which may be made by the Fund.

Distributions

It is not intended to distribute to holders of Shares any income by way of dividend. The Fund’s incomes, including all dividends, interest and investment gains will be accumulated.

Investment Manager

EEA Fund Management Limited (the “Investment Manager”) has been appointed by the Fund to provide investment management and advisory services in relation to the investment and reinvestment of the Fund’s assets within the investment policy laid down from time to time by the Directors.The Investment Manager was incorporated with limited liability in England and Wales on 20 August 2003. It is authorised and regulated by the Financial Services Authority of the United Kingdom in the conduct of investment business in the United Kingdom. The Investment Manager is a private company founded by Simon Shaw. The Investment Manager currently manages a range of funds in the UK with an aggregate value in excess of £400 million.

Prime Broker

Goldman Sachs International (the “Prime Broker”) provides prime brokerage services to the Fund under the terms of the prime brokerage documents entered into between the Fund and the Prime Broker. In its capacity as prime broker, the Prime Broker executes purchase and sale orders for the Fund, and clear and settle such orders and orders executed by other brokers. In addition, the Prime Broker may enter into off-exchange contracts with the Fund as principal.

The Prime Broker will also provide the Fund with credit facilities and short selling facilities. The Prime Broker is regulated in the conduct of its investment business and registered with the FSA. The Prime Broker has financial resources in excess of US$200 million. The ultimate holding company of Goldman Sachs International is The Goldman Sachs Group, Inc. which has a As3/A+ long term ratings with Moody’s and Standard and Poor’s respectively.

As custodian, the Prime Broker is responsible for the safekeeping of all the investments and other assets of the Fund delivered to it other than those transferred to the Prime Broker as collateral or margin (the “Custody Assets”). The Prime Broker will identify, record and hold the Custody Assets in such a manner that the identity and location thereof can be identified at any time and so that the Custody Assets shall be readily identifiable as property belonging to, and held for the benefit of, the Fund and as separate from any of the Prime Broker’s own property or that of its other customers.

The Fund’s obligations to the Prime Broker will be secured by way of a first priority perfected security interest over the Custody Assets. Collateral shall be passed from the Fund to the Prime Broker free and clear of any liens, claims, charges or encumbrances or any other interest of Fund or any third party and accordingly the Prime Broker may deal with, lend, dispose of, pledge, charge or otherwise use all collateral for its own purposes and shall be obliged to redeliver equivalent collateral to the Fund on satisfaction by the Fund of all its obligations to the Prime Broker and its affiliates. The Fund will not be required to park collateral (excluding cash) with a market value in excess of 200 per cent. of the value of the Fund’s obligations to the Prime Broker.

The Prime Broker will have no decision making discretion relating to the investment of the assets of the Fund. The Prime Broker is a service provider to the Fund and is not responsible for the preparation of this Offering Memorandum or the activities of the Fund, and therefore accepts no responsibility for any information contained in this Offering Memorandum.

The Directors and the service providers may have conflicts of interest in relation to their duties to the Fund. However, each shall, at all times, pay regard to its obligation to act in the best interest of the Fund and the parties will ensure that all such potential conflicts of interest are resolved fairly and in the interests of shareholders. When allocating investment opportunities, the Investment Manager will ensure that all such investments will be allocated in a fair and equitable manner.

Full details of the Fund can be obtained by reading the Offering Document