The new domicile for LHV Persian Gulf Fund shall be Luxembourg
In order to improve the accessibility of LHV Persian Gulf Fund for foreign investors, the new domicile of the fund is going to be Luxembourg. The investment management function of the fund portfolio remains in Estonia and re-domiciliation is not going to have any material impact on current investors.
LHV Persian Gulf Fund offers an opportunity otherwise unique in Europe to invest into companies listed on the equity markets of the rapidly growing the GCC (Gulf Cooperation Council) countries, incl. Bahrain, Oman, Qatar, Kuwait, the United Arab Emirates and Saudi Arabia. For that reason the fund has been popular among foreign investors with the majority of the fund size being attributable to the aggregate holding of foreign residents.
In order to fulfill the highest requirements imposed on assets managers on an international level and to further develop the institutional investors’ access to the attractive investment opportunities present in the GCC markets, LHV Persian Gulf Fund is being re-domiciled into Luxembourg.
The re-domiciliation shall be carried out through a cross-border merger in which LHV Persian Gulf Fund participates as the merging fund and SEF-LHV Persian Gulf Fund (SICAV, UCITS) as the receiving fund. Prior to the merger, the receiving fund has no investors nor assets or liabilities. After the merger, the unit-holders of LHV Persian Gulf Fund are going to become shareholders of SEF-LHV Persian Gulf Fund.
The fund shall continue to invest into the GCC region based on the current strategy. Current management company, LHV Asset Management (AS LHV Varahaldus), together with the fund manager Joel Kukemelk will remain responsible for the investment management of the portfolio of the fund. Joel Kukemelk has worked in LHV for almost 9 years and has been a fund manager for LHV Persian Gulf Fund for over four years. No action is required in relation to the merger by the clients who wish to remain investors to the fund.
The domicile of the fund is going to change through merger on April 13, when in the course of a corporate action class A and class B units of LHV Persian Gulf Fund are redeemed and SEF-LHV Persian Gulf Fund shares are issued to the investors. For every class A unit, a share is issued; in case of class B units, the number of shares to be issued are determined on the basis of the following formula: number of class B units times class B unit net asset value divided by class A unit net asset value. SEF is a SICAV (société d’investissement à capital variable – investment company with variable capital) which has appointed Swedbank Management Company S.A., an entity part of the Swedbank Group, as its management company.
According to Joel Kukemelk, the fund manager of LHV Persian Gulf Fund and a member of the Management Board of LHV Asset Management, all parties are going to benefit from this re-domiciliation. “LHV Persian Gulf Fund has invested into the countries of the energy rich Middle Eastern region since 2008 and the fund is because of its unique investment focus one of the best investment solutions for investors to participate in the growth of this rapidly developing region” said Kukemelk. “In the first half of the year, the Saudi Arabian market is expected to open for qualified foreign investors and that would increase the investors’ interest toward the entire GCC region. As, in the eyes of the financial world, Luxembourg as a domiciliation country is perceived as a recognized sign of quality next to the name of a fund, it should raise the attractiveness of the fund for the investors.” added Kukemelk.
“We are very pleased that the lengthy preparations for the cross-border merger with a Luxembourg based fund are now coming to an end” said Mihkel Oja, the chairman of the board of LHV Asset Management. “Luxembourg is the most popular investment fund domiciliation country in Europe. The volume of the investment funds established in Luxembourg is over 3 000 billion euros and a quarter of investment funds which are offered in at least 3 countries, have been established in Luxembourg. Luxembourg is internationally considered reliable as a fund domiciliation country” added Oja.
LHV Persian Gulf Fund invests into companies listed on the stock exchanges of the GCC countries. GCC markets make up 2% of the world equity markets. The fund manager visited the region to meet the companies of all six GCC countries in which the assets of the fund are invested. Visiting the listed companies and meeting with their governing bodies is an important part of the investment process of the fund.
Investors who prefer not to keep investing into the GCC region through the Luxembourg domiciled fund, have the opportunity to exit the fund free of charge from 26.02.15 to 01.04.15.
The volume of LHV Persian Gulf Fund is 25 million euros. LHV Persian Gulf Fund has been elected by Zawya Thomson Reuters as the best GCC equity fund both in 2012 and 2013 and by International Financial Magazine as the most rapidly growing GCC fund in 2014. The fund manager Joel Kukemelk has received a high Citywire A rating.
Merger Information Document
KIID of SEF-LHV Persian Gulf Fund
Comparison of Investment Policies