REG - AVI Japan Opport.Tst - Publication of Prospectus and Circular

AVI Japan Opportunity TrustAnnouncement

14/10/2025 13:30

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RNS Number : 3367D  AVI Japan Opportunity Trust PLC  14 October 2025

THIS ANNOUNCEMENT IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR
DISTRIBUTION DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO, THE
UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR INTO
ANY OTHER JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OR BREACH
OF ANY APPLICABLE LAW.

14 October 2025

AVI Japan Opportunity Trust plc

("AJOT" or the "Company")

Publication of Prospectus and Circular in connection with the proposed
rollover from Fidelity Japan Trust plc

Introduction

The Board of AVI Japan Opportunity Trust plc (the "Company") announced on 12
August 2025 that it had entered into non-binding heads of terms with the Board
of Fidelity Japan Trust plc ("FJV") in respect of the proposed combination of
the assets of AJOT with the assets of FJV. The combination, if approved by
AJOT shareholders and FJV Shareholders, will be effected by way of a scheme of
reconstruction and members' voluntary winding up of FJV under section 110 of
the Insolvency Act (the "Scheme") and the associated transfer of part of the
undertaking, cash and other assets comprising the Rollover Pool to the Company
in exchange for the issue of new ordinary shares in the capital of the Company
(the "New Shares") to FJV Shareholders who are deemed to have elected for the
Rollover Option (the "Issue") (together, the "Proposals").

The Board announces that the Company has today published a prospectus (the
"Prospectus") in relation to the Issue, together with a circular to provide
Shareholders with further details of the Proposals and to convene a general
meeting of the Company (the "General Meeting") to seek approval from
Shareholders for the implementation of the Proposals (the "Circular").

 

Following implementation of the Proposals, the Company's portfolio will
continue to be managed by Asset Value Investors Limited ("AVI" or "Investment
Manager") in accordance with the Company's investment objective and investment
policy.

 

Benefits of the Proposals

The combination is expected to result in the following benefits for
Shareholders:

·                 Larger scale: A combination of AJOT and FJV
should result in both sets of shareholders benefiting from a more liquid,
larger fund, targeting attractive investment opportunities in Japanese
equities. The enlarged AJOT is also expected to have increased capability to
take influential positions in companies where AVI has identified a significant
opportunity to unlock value through AVI's active engagement, in line with
AJOT's existing investment strategy. Assuming full take up of the Cash Option,
the enlarged AJOT is expected to have net assets in excess of £360 million.

·                 Reduced management fee: subject to the
Scheme becoming effective, AVI has agreed to reduce its management fee from 1%
per annum (based on the lower of market capitalisation or NAV) to a tiered
structure on assets above £300 million as detailed below. Additionally, 25%
of the management fee will continue to be reinvested by AVI into AJOT shares.

·                 Lower ongoing charges: the new reduced
management fee structure and the economies of scale, which the combination
will bring, will result in an estimated annual ongoing charge of 1.25% on a
normalised basis.

Overview of the Scheme

The issue of the New Shares under the Scheme will be effected on a FAV to FAV
basis. FAVs for the purposes of the Scheme will be calculated in accordance
with AJOT's and FJV's normal accounting policies and will take into account
the adjustments outlined below. FAVs will be calculated based on the NAVs (cum
income with debt at fair value) of the respective companies, on the
Calculation Date.

Under the Scheme, FJV Shareholders (who are not Excluded FJV Shareholders)
will be entitled to elect to receive cash in respect of part or all of their
shareholding, subject to an aggregate limit of 50% of FJV's issued share
capital (excluding shares held in treasury) at the Calculation Date (the "Cash
Option").

Subject to the separate arrangements for Excluded FJV Shareholders detailed
below, New Shares will be issued as the default option under the Scheme in the
event that either no election, or a partial election, for the Cash Option is
made by an FJV Shareholder or because an election for the Cash Option is
scaled back in accordance with the Scheme (the "Rollover Option").

Pursuant to the Scheme, on the Calculation Date, once the NAV of each of FJV
and the Company has been determined, FJV's assets and undertaking will be
split into three pools:

(i) the Liquidation Pool, into which there will be appropriated such assets
and costs of FJV (including the Liquidators' Retention) which is estimated by
the Liquidators to be sufficient to meet the current and future, actual and
contingent liabilities of FJV (including any unpaid FJV's Scheme Costs),
together with any holdings of FJV which are determined by the Liquidators (in
consultation with FJV and the Company) not to be suitable for transfer to the
Company and will not have been realised prior to the Effective Date; and

(ii) the Residual Net Asset Value (being the balance after the appropriation
of cash and assets to the Liquidation Pool) shall then, on a Pro Rata
Allocation basis, be split into: (a) the interests of FJV Shareholders who
elect, or are deemed to elect, for the Rollover Option (the "Rollover Pool");
and (b) the interests of FJV Shareholders who elect, or are deemed to elect,
for the Cash Option (the "Cash Pool"). The NAV of the Rollover Pool and the
Cash Pool will then be adjusted as detailed further below.

In order to effect the Scheme and in accordance with valid elections
(including deemed elections) made, FJV will be required to reclassify its FJV
Share capital into shares with "A" rights (""A" Shares") and shares with "B"
rights (""B" Shares"). "A" Shares will entitle the holders thereof to be
issued with New Shares and "B" Shares will entitle the holders thereof to cash
under the Cash Option, in accordance with the terms of the Scheme.

Adjustments under the Scheme

Cash Pool

(a)              On the Calculation Date, the Cash Pool NAV will
be adjusted for the following:

(i)               the Cash Pool Costs Adjustment (if any, as
described below); and

(ii)              a reduction for the Cash Option Charge (as
described below),

(the Cash Pool NAV as adjusted by the above being the "FJV Adjusted Cash Pool
NAV").

Under the Scheme, a holder of "B" Shares will be entitled to an amount of cash
equal to the FJV Adjusted Cash NAV per Share multiplied by the number of "B"
Shares they hold. The FJV Adjusted Cash NAV per Share will be equal to the FJV
Adjusted Cash Pool NAV divided by the total number of "B" Shares (expressed in
pence and rounded down to six decimal places).

Rollover Pool

(b)              On the Calculation Date, the Rollover Pool NAV
will be adjusted for the following:

(i)               the Rollover Pool Costs Adjustment (if any, as
described below);

(ii)              an uplift arising from the Rollover Pool's
allocation of the Cash Option Charge (as described below); and

(iii)             an uplift from the AVI Costs Contribution (if
any, as described below),

(the Rollover Pool NAV as adjusted by the above being the "FJV Rollover FAV").

The "FJV Rollover FAV per Share" shall be equal to the FJV Rollover FAV
divided by the total number of "A" Shares (expressed in pence and rounded down
to six decimal places).

FJV Shareholders who are deemed to elect for the Rollover Option shall have
New Shares issued to them based on the ratio of the FJV Rollover FAV per Share
to the AJOT FAV per Share, multiplied by the total number of "A" Shares held
by the relevant FJV Shareholder.

AJOT

(c)              On the Calculation Date, the AJOT NAV will be
adjusted for:

(i)               a reduction for the AJOT Costs, to the extent
only such costs have not already been accrued in the AJOT NAV;

(ii)              a reduction for any Unpaid AJOT Dividends; and

(iii)             an uplift arising from AJOT's allocation of the
Cash Option Charge (as described below),

(the AJOT NAV as adjusted by the above being the "AJOT FAV").

Cash Option Charge

(d)              The Cash Option Charge (being an amount equal to
one per cent. of the Cash Pool NAV as adjusted for the Cash Pool Costs
Adjustment (if any)) shall be allocated between the Rollover Pool and AJOT,
based on the number of FJV Shares which have validly elected, or are deemed to
have elected, for the Rollover Option as follows:

(i)               first, the Rollover Pool shall be allocated a
percentage of the Cash Option Charge equal to the percentage of elections
made, or deemed to have been made, for the Rollover Option;

(ii)              second, AJOT shall be allocated an amount equal
to the lesser of: (i) the balance of the Cash Option Charge after the
allocation under paragraph (i) above; and (ii) the AJOT Costs; and

(iii)             lastly, the Rollover Pool shall be allocated the
balance (if any) of the Cash Option Charge after the allocations under
paragraphs (i) and (ii) above.

Termination Costs

(e)              On 13 October 2025 FJV served notice in respect
of the termination of the FJV Management Agreement on the FJV AIFM and the FJV
Investment Management Services Agreement on the FJV AIFM and the FJV
Investment Manager, to end on the day falling five Business Days after the
Effective Date.  The FJV Board entered into the Notice Agreement with the FJV
Investment Manager on 6 May 2025, which effectively reduced the normal notice
period, to minimise the costs associated with terminating those arrangements.

FJV's Scheme Costs

(f)               FJV's Scheme Costs (which for the avoidance of
doubt includes both the Transaction Costs and the Termination Costs, as
described above) are expected to be approximately £820,900 inclusive of VAT
(where applicable, which is assumed to be irrecoverable), in aggregate. The
expected FJV's Scheme Costs have already been included in FJV's published NAV
at the Latest Practicable Date. Each of the Rollover Pool and the Cash Pool
shall bear its respective Pro Rata Allocation of FJV's Scheme Costs, however,
the Rollover Pool's share of FJV's Scheme Costs are capped at £1,000,000
(with any balance over such cap being allocated to the Cash Pool) and to the
extent they are not fully offset by the Rollover Pool's allocation of the Cash
Option Charge, will be met through the AVI Costs Contribution, as described
below. For the avoidance of doubt, FJV's Scheme Costs exclude the Liquidators'
Retention (estimated at £100,000) to cover unknown or unascertained
liabilities of FJV. The Rollover Pool is not expected to suffer any reduction
for FJV's Scheme Costs (other than through the Liquidators' Retention, as
applicable). For the avoidance of doubt, FJV's Scheme Costs also exclude any
portfolio realisation costs.

AVI Costs Contribution

(g)              To the extent the Rollover Pool's allocation of
FJV's Scheme Costs after the Rollover Pool Costs Adjustment (which caps the
allocation of these costs to the Rollover Pool at £1,000,000 as described
above), are not fully defrayed by its allocation of the Cash Option Charge (as
above), AVI has undertaken to make a cash contribution to the costs of the
Rollover Pool equal to the balance of the Rollover Pool's allocation of FJV's
Scheme Costs, pursuant to the Cost Contribution Agreement. The value of the
AVI Costs Contribution will be determined by the Liquidators (in consultation
with the parties to the Cost Contribution Agreement and reviewed by the
Independent Accountant) (the "AVI Costs Contribution"). The availability of
the AVI Costs Contribution to the Rollover Pool is subject to the Scheme
becoming effective.

Elections under the Scheme

For illustrative purposes only, had the Calculation Date been close of
business on the Latest Practicable Date and assuming that no FJV Shareholders
had exercised their right to dissent from participation in the Scheme,
assuming that the maximum number of FJV Shares is elected for the Cash Option:

·      the FJV Rollover FAV per Share would have been 226.13 pence and
the AJOT FAV per Share would have been 173.05 pence which, for the Rollover
Option, would have produced a conversion ratio of 1.31 (i.e. for every FJV
Share, 1.31 AJOT Shares would be issued) and, in aggregate, 74,272,534 New
Shares would have been issued to FJV Shareholders who were deemed to have
elected for the Rollover Option under the Scheme; and

·      the FJV Adjusted Cash NAV per Share would have been 222.75 pence.

For the avoidance of doubt, the illustrative FJV Rollover FAV per Share does
not take into account all portfolio realisation costs as they are
unquantifiable as at close of business on the Latest Practicable Date.

Conditions of the Issue and the Scheme

The Issue and the Scheme are conditional upon the:

i.      passing of the Resolution and such Resolution becoming
unconditional in all respects;

ii.     passing of the FJV Resolutions to approve the Scheme and the
winding-up of FJV at the FJV General Meetings and the Scheme becoming
unconditional in all respects;

iii.    the FCA having acknowledged to the Company or its agents (and such
acknowledgement not having been withdrawn) that the application for the
admission of the New Shares to the Official List has been approved and (after
satisfaction of any conditions to which such approval is expressed to be
subject (for the purposes of this paragraph, the "listing conditions")) will
become effective as soon as notice of admission to the Official List has been
issued by the FCA and any listing conditions having been satisfied, and the
London Stock Exchange having acknowledged to the Investment Manager or its
agents (and such acknowledgement not having been withdrawn) that the New
Shares will be admitted to trading on the Main Market, subject only to
allotment; and

iv.    Directors and the FJV Directors resolving to proceed with the
Scheme.

Unless the conditions referred to above have been satisfied or, to the extent
permitted, waived by both the Company and FJV on or before 28 November 2025,
the Scheme will not become effective, and the New Shares will not be issued.

Costs and expenses of the Proposals

Subject to the AVI Costs Contribution, the Company and FJV have each agreed to
bear their own costs in relation to the Proposals, as specified above.

The Direct Transaction Costs to be borne by the Company are expected to be
approximately £808,600, inclusive of VAT, where applicable.

If the Scheme is implemented, there will also be Other Costs payable by AJOT
(expected to be approximately £645,000, inclusive of VAT, where applicable).
However, the Company will also benefit from an uplift to the AJOT NAV arising
from the allocation of the Cash Option Charge between the Company and the FJV
Rollover Pool, respectively, as detailed above.

In the event that implementation of the Scheme does not proceed each party
will bear its own costs. In this scenario, Direct Transaction Costs would
still be borne by the Company but the Other Costs that would have been payable
by AJOT, as enlarged, will not be payable.

Reduced management fee

The Investment Manager is currently entitled to annual management fees equal
to 1.00% of the lesser of NAV or the Company's market capitalisation.

With effect from the Effective Date, and conditional on the Scheme becoming
effective, the Company and the Investment Manager have agreed a new
competitive management fee structure pursuant to which the Investment Manager
shall be entitled to receive reduced annual management fees, calculated as
follows:

i.      1.0% on the first £300 million on the lesser of NAV or the
Company's market capitalisation;

ii.     0.95% (reduced from 1.0%) on the lesser of NAV or the Company's
market capitalisation over £300 million up to £350 million; and

iii.    0.90% (reduced from 1.0%) on the lesser of NAV or the Company's
market capitalisation over £350 million,

For the avoidance of doubt, 25% of the management fee will continue to be
reinvested by the Investment Manager into shares of the enlarged Company.

Non-material amendments to the Company's investment policy

To better reflect the fact that the Company's pre-existing investment policy
does not technically prohibit a very small holding of unlisted/unquoted
investments in its portfolio (and that this would remain the case going
forward), the Board recently adopted certain minor amendments to the Company's
investment policy. The investment policy also now expressly sets out the
Company's existing cash management policy. The Board consider that these
amendments are non-material in nature. The full wording of the Company's
current investment policy is set out in the appendix to this announcement,
with the amendments shown in bold font.

Allotment of New Shares

The resolution to be proposed at the General Meeting seeks Shareholder
approval for the allotment of New Shares pursuant to the Issue (the
"Resolution"). Pursuant to the Resolution, the maximum number of Shares that
the Directors will be authorised to allot in connection with the Issue is
160,000,000 Shares (representing approximately 118% of the issued share
capital of the Company, excluding Shares held in treasury, at the Latest
Practicable Date). The Scheme, amongst other things, is conditional on the
passing of the Resolution. The authority granted by the Resolution shall
(unless previously revoked) expire on 31 December 2025.

General Meeting

The implementation of the Proposals requires a general meeting of the Company
to be held. The notice convening the General Meeting (to be held at 3.00 p.m.
on 6 November 2025) is set in the Circular.

The Resolution to be proposed at the General Meeting, on which all
Shareholders may vote, is to approve the allotment of New Shares pursuant to
the Issue in connection with the Scheme. The Scheme is conditional on the
passing of the Resolution.

The Resolution will be proposed as an ordinary resolution. An ordinary
resolution requires a majority of the votes cast in respect of it, whether in
person or by proxy, to be voted in favour in order for it to be passed.

 

If the Resolution is not passed, the Scheme will not become effective and no
New Shares will be issued.

Recommendation

The Board considers the Proposals and the Resolution to be proposed at the
General Meeting to be in the best interests of Shareholders as a whole.

Accordingly, the Board unanimously recommends Shareholders to vote in favour
of the Resolution, as the Directors intend to do in respect of their own
beneficial holdings, which total 96,575 Shares as at the Latest Practicable
Date.

 

EXPECTED TIMETABLE

General Meeting

 Latest time and date for receipt of Forms of Proxy and electronic proxy  3.00 p.m. on 4 November 2025
 appointments for the General Meeting
 General Meeting                                                          3.00 p.m. on 6 November2025
 Announcement of results of the General Meeting                           6 November 2025

Scheme

 First FJV General Meeting                                                      8.30 a.m. on 7 November 2025
 Record Date                                                                    6.00 p.m. on 7 November 2025
 FJV Shares disabled in CREST (for settlement)                                  6.00 p.m. on 7 November 2025
 Trading in FJV Shares on the London Stock Exchange suspended                   10 November 2025
 Announcement of the results of elections                                       10 November 2025
 Calculation Date                                                               5.00 p.m. on 20 November 2025
 Reclassification of FJV Shares                                                  8.00 a.m. on 26 November 2025
 Suspension of listing of FJV Shares                                            7.30 a.m. on 7 November 2025
 Second FJV General Meeting                                                     9.00 a.m. on 27 November 2025
 Effective Date                                                                 27 November 2025
 Announcement of the FJV Rollover FAV per Share, the FJV Adjusted Cash NAV per  27 November 2025
 Share and the AJOT FAV per Share
 Admission                                                                      8.00 a.m. on 28 November 2025
 CREST accounts credited with, and dealings commence in, New Shares             28 November 2025
 Certificates despatched by post in respect of New Shares in certificated         within ten Business Days of the Effective Date
 form
 Cancellation of listing of Reclassified FJV Shares                              as soon as practicable after the Effective Date

Note: All references to time are to UK time. Each of the times and dates in
the above expected timetable (other than in relation to the general meetings)
may be extended or brought forward. If any of the above times and/or dates
change, the revised time(s) and/or date(s) will be notified to Shareholders
by an announcement through a Regulatory Information Service.

Singer Capital Markets is acting as sponsor to the Company in connection with
the Proposals.

Defined terms used in this announcement shall, unless the context requires
otherwise, have the meanings ascribed to them in the Circular.

The Prospectus and Circular have been submitted to the Financial Conduct
Authority and will shortly be available for inspection at the National Storage
Mechanism which is located
at https://data.fca.org.uk/a/nsm/nationalstoragemechanism and on the
Company's website at https://www.assetvalueinvestors.com/ajot/

 

AVI Japan Opportunity Trust plc

Norman Crighton

norman.crighton@ajot.co.uk (mailto:norman.crighton@ajot.co.uk)

MUFG Corporate Governance Limited (Company Secretary)

Nezia Morgan

0204 617 1038

LEI: 894500IJ5QQD7FPT3J73

Singer Capital Markets Limited (Sole Sponsor and Joint Financial Adviser to
AJOT)

James Maxwell

James Waterlow

Asha Chotai

Anthony Debson

0207 496 3000

Marex Group (Joint Financial Adviser to AJOT)

Mark Thompson

Priyan Rayatt

0203 017 2697

KL Communications (Financial PR Adviser to AJOT)

Charles Gorman

Henry Taylor

020 3882 6644

This announcement is not for publication or distribution in or into the United
States of America. This announcement is not an offer of securities for sale
into the United States. The securities referred to herein have not been and
will not be registered under the U.S. Securities Act of 1993, as amended, and
may not be offered or sold in the United States, except pursuant to an
applicable exemption from registration. No public offering of securities is
being made in the United States.

The information in this announcement is for background purposes only and does
not purport to be full or complete. No reliance may be placed for any purpose
on the information contained in this announcement or its accuracy or
completeness. The material contained in this announcement is given as at the
date of its publication (unless otherwise marked) and is subject to updating,
revision and amendment. In particular, any proposals referred to herein are
subject to revision and amendment.

The value of shares and the income from them is not guaranteed and can fall as
well as rise due to stock market and currency movements. When you sell your
investment you may get back less than you originally invested. Figures refer
to past performance and past performance should not be considered a reliable
indicator of future results. Returns may increase or decrease as a result of
currency fluctuations.

This announcement may include statements that are, or may be deemed to be,
"forward-looking statements". These forward-looking statements can be
identified by the use of forward-looking terminology, including the terms
"believes", "estimates", "anticipates", "expects", "intends", "may", "might",
"will" or "should" or, in each case, their negative or other variations or
similar expressions. All statements other than statements of historical facts
included in this announcement, including, without limitation, those regarding
AJOT's or FJV's respective financial positions, strategies, plans, proposed
acquisitions and objectives, are forward-looking statements.

Forward-looking statements are subject to risks and uncertainties and,
accordingly, AJOT's or FJV's actual future financial results and operational
performance may differ materially from the results and performance expressed
in, or implied by, the statements. These forward-looking statements speak only
as at the date of this announcement and cannot be relied upon as a guide to
future performance.

Subject to its legal and regulatory obligations, AJOT expressly disclaims any
obligations or undertaking to update or revise any forward-looking statements
contained herein to reflect any change in expectations with regard thereto or
any change in events, conditions or circumstances on which any such statement
is based unless required to do so by law or any appropriate regulatory
authority.

Singer Capital Markets ("Singer") which is authorised in the United Kingdom by
Financial Conduct Authority is acting as Sole Sponsor and Joint Financial
Adviser alongside Marex Group ("Marex") for AJOT and for no-one else in
connection with the Transaction, will not regard any other person as it client
in relation to the Transaction and will not be responsible to anyone other
than AJOT for providing the protections afforded to its clients or for
providing advice in relation to the Transaction, or any of the other matters
referred to in this announcement. This does not exclude any responsibilities
or liabilities of Singer or Marex under the Financial Services and Markets Act
2000, as amended, or the regulatory regime established thereunder.

None of AJOT, Singer or Marex, or any of their respective affiliates, accepts
any responsibility or liability whatsoever for, or makes any representation or
warranty, express or implied, as to this announcement, including the truth,
accuracy or completeness of the information in this announcement (or whether
any information has been omitted from the announcement) or any other
information relating to any of them, whether written, oral or in a visual or
electronic form, and howsoever transmitted or made by them, whether written,
oral or in a visual or electronic form, and howsoever transmitted or made
available or for any loss howsoever arising from any use of the announcement
or its contents or otherwise arising in connection therewith. Each of AJOT,
Singers and Marex, and their respective affiliates, accordingly disclaim all
and any liability whether arising in tort, contract or otherwise which they
might otherwise have in respect of this announcement or its contents or
otherwise arising in connection therewith.

 

 

 

 

 

 

 

APPENDIX

1.     Non-material amendments to the Company's investment policy

To better reflect the fact that the Company's pre-existing investment policy
does not technically prohibit a very small holding of unlisted/unquoted
investments in its portfolio (and that this would remain the case going
forward), the Board recently adopted certain minor amendments to the Company's
investment policy. The investment policy also now expressly sets out the
Company's existing cash management policy. The Board consider that these
amendments are non-material in nature. The full wording of the Company's
current investment policy is set out below, with the amendments shown in bold
font below:

Investment policy

The Company invests in a diversified portfolio of equities listed or quoted in
Japan which are considered by the Investment Manager to be undervalued and
where cash, listed securities and/or realisable assets make up a significant
proportion of the market capitalisation. AVI seeks to unlock this value
through proactive engagement with management and taking advantage of the
increased focus on corporate governance and returns to shareholders in Japan.
The Board has not set any limits on sector weightings or stock selection
within the portfolio. Whereas it is not expected that a single holding
(including any derivative instrument) will represent more than 10 per cent. of
the Company's gross assets at the time of investment, the Company has
discretion to invest up to 15 per cent. of its gross assets in a single
holding, if a suitable opportunity arises.

No restrictions are placed on the market capitalisation of investee companies,
but the portfolio is weighted towards small and mid-cap companies. The
portfolio normally consists of between 15 and 25 holdings although it may
contain a lesser or greater number of holdings at any time.

The Company may invest in exchange traded funds, listed anywhere in the world,
in order to gain exposure to equities listed or quoted in Japan.

On acquisition, no more than 15 per cent. of the Company's gross assets will
be invested in other UK listed closed-ended investment funds.

The Company's portfolio may include Japanese securities which are unlisted or
unquoted (the "Unlisted Japanese Securities"), although it is not expected
that the Company's direct holding of Unlisted Japanese Securities will
represent more than 5 per cent. of the Company's gross assets at the time of
investment.

The Company may also use derivatives for gearing and efficient portfolio
management purposes. The Company will not be constrained by any index
benchmark in its asset allocation.

Cash management

The Company may hold cash on deposit and may invest in cash equivalent
investments, which may include short-term investments in money market type
funds ("Cash and Cash Equivalents"). There is no restriction on the amount of
Cash and Cash Equivalents that the Company may hold and there may be times
when it is appropriate for the Company to have a significant Cash and Cash
Equivalents position. For the avoidance of doubt, the restrictions set out
above in relation to investing in collective investment vehicles do not apply
to money market type funds.

Borrowing policy

The Company may use borrowings for settlement of transactions, to meet ongoing
expenses and may be geared through borrowings and/or by entering into
long-only contracts for difference or equity swaps that have the effect of
gearing the Company's portfolio to seek to enhance performance.

The aggregate of borrowings and long-only contracts for difference and equity
swap exposure will not exceed 25 per cent. of NAV at the time of drawdown of
the relevant borrowings or entering into the relevant transaction, as
appropriate. It is expected that any borrowings entered into will principally
be denominated in JPY

Material change to the investment policy

No material change will be made to the investment policy without the prior
approval of the FCA and Shareholders by ordinary resolution.

Hedging policy

The Company does not hedge its currency exposure using financial instruments
such as derivatives, forward contracts, or options. Although there are no
current plans to hedge investments denominated in JPY, the Investment Manager
and the Board will periodically review this policy.

 

 

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