Risks

Investment Risks

Investment in the Fund carries certain risks, which are described below. These risks are not purported to be exhaustive and potential investors should review the Fund’s Prospectus and Key Information Document (KID) and consult with their professional advisors, before making any final investment decision. There can be no assurance that the Fund will achieve its objectives.

Market Risk

The equity investments of the Fund are subject to normal market fluctuations and the risks inherent in investment in international securities markets and there can be no assurances that appreciation will occur. Stock markets can be volatile and stock prices can change substantially. Debt securities, as far as the Fund is invested in them, are interest rate sensitive and may be subject to price volatility due to various factors including, but not limited to, changes in interest rates, market perception of the creditworthiness of the issuer and general market liquidity.

Currency Risk

The Net Asset Value per Share will be computed in the base currency of the Fund, the EUR, whereas the investments held for the account of the Fund may be acquired in other currencies. The base currency value of the investments of the Fund designated in another currency may rise and fall due to exchange rate fluctuations in respect of the relevant currencies. Adverse movements in currency exchange rates can result in a decrease in return and a loss of capital. The Fund currently has no intention to enter into currency hedging transactions.

Political and/or Regulatory Risks

The value of the assets of the Fund may be affected by uncertainties such as international political developments, changes in government policies, taxation, restrictions on foreign investment and currency repatriation, currency fluctuations and other developments in applicable laws and regulations.

Regulatory Reforms

The Fund’s Prospectus has been drafted in line with currently applicable laws and regulations. It cannot be excluded that the Fund and its investment objectives and policies may be affected by any future changes in the legal and regulatory environment. New or modified laws, rules and regulations may not allow, or may significantly limit the ability of the Fund to invest in certain instruments or to engage in certain transactions. They may also prevent the Fund from entering into transactions or service contracts with certain entities. This may impair the ability of the Fund to carry out its respective investment objectives and policies. Compliance with such new or modified laws, rules and regulations may also increase all or some of the Fund’s expenses and may require the restructuring of the Fund with a view to complying with the new rules.

Liquidity Risk

Liquidity risk may take two forms: asset liquidity risk and funding liquidity risk. Asset liquidity risk refers to the inability of the Fund to purchase or sell a security or position at its quoted price or market value. The Fund invests according to a deep value strategy, suitable for investors with an investment horizon of at least three to five years. In line with the Investment Strategy as set out in the Prospectus, the Fund may invest in the shares of small and medium-sized companies, which may be less liquid and more volatile. In cases where markets in a certain security offer limited trading volume, this liquidity risk could lead to the Fund incurring higher transaction costs, paying a higher average price, or receiving a lower average price relative to cases where high trading volumes exist. Reduced liquidity may have an adverse impact on the Net Asset Value. Funding liquidity risk refers to the inability of the Fund to meet a redemption request. To manage liquidity risk, and in line with regulatory requirements, the Management Company deploys a risk management system based on a Liquidity Policy, which outlines, amongst others, (i) the liquidity management processes and tools; and (ii) liquidity stress testing procedures.

Reliance on external service providers

The bankruptcy, liquidation, or other adverse developments of any of the Fund’s external service providers, such as, but not limited to, the Management Company, the Depository, or the Investment Advisor may have a negative impact on the Fund’s investment management, process and outcome.

Indemnification Obligations

The Fund has agreed to indemnify the Directors, the Management Company, the Register and Transfer Agent, the Administrative Agent, the Domiciliary Agent, and the Depositary as provided for in the relevant agreements.

No Investment Guarantee equivalent to Deposit Protection

An investment in the Fund is not similar in nature to a bank deposit and consequently is not protected by any government, government agency or other guarantee scheme which may be available to protect the holder of a bank deposit account.

Settlement Risks

The equity markets in different countries will have different clearance and settlement procedures and in certain markets there have been times when settlements have been unable to keep pace with the volume of transactions, thereby making it difficult to conduct such transactions. Delays in settlement could result in temporary periods when assets of the Fund are uninvested, and no return is earned thereon. The inability of the Fund to make intended purchases due to settlement problems could cause it to miss attractive investment opportunities. Inability to dispose of portfolio securities due to settlement problems could result either in losses to the Fund due to subsequent declines in value of the portfolio security or, if it has entered into a contract to sell the security it could result in a possible liability of it to the purchaser.

Cyber Security Risk

The Fund and its service providers are susceptible to operational and information security and related risks of cyber security incidents. In general, cyber incidents can result from deliberate attacks or unintentional events. Cyber security attacks include, but are not limited to, gaining unauthorized access to digital systems (e.g., through “hacking” or malicious software coding) for purposes of misappropriating assets or sensitive information, corrupting data or causing operational disruption. Cyber-attacks also may be carried out in a manner that does not require gaining unauthorized access, such as causing denial-of-service attacks on websites (i.e., efforts to make services unavailable to intended users). Cyber security incidents affecting the Fund, the Directors, the Investment Manager, the Investment Advisor, Administrative Agent, Depositary or other service providers such as financial intermediaries have the ability to cause disruptions and impact business operations, potentially resulting in financial losses, including by interference with a company’s ability to calculate its NAV; impediments to trading; the inability of Shareholders to transact business with the Fund; violations of applicable privacy, data security or other laws; regulatory fines and penalties; reputational damage; reimbursement or other compensation or remediation costs; legal fees; or additional compliance costs. Similar adverse consequences could result from cyber security incidents affecting the value of issuers of securities in which the Fund invests, counterparties with which the Fund engages in transactions, governmental and other regulatory authorities, exchange and other financial market operators, banks, brokers, dealers, insurance companies and other financial institutions and other parties. While information risk management systems and business continuity plans have been developed which are designed to reduce the risks associated with cyber security, there are inherent limitations in any cyber security risk management systems or business continuity plans, including the possibility that certain risks have not been identified.

Large Shareholder Risk

Shares may be purchased or redeemed by investors holding a large portion of the issued and outstanding shares of the Fund (“large shareholders”). If a large shareholder redeems all or a portion of its investment in the Fund, the Fund may have to incur transaction costs in the process of making the redemption. Conversely, if a large shareholder makes a significant purchase in the Fund, the Fund may have to hold a relatively large position in cash for a period of time while the Investment Manager finds suitable investments. This may negatively impact the performance of the Fund.

Sustainability Risk

The Fund takes Environmental, Social and Governance (“ESG”) characteristics into consideration when screening for investment opportunities that meet the Fund’s investment criteria. On the one hand, the Fund uses screening filters that are primarily based on externally validated sources such as the Sustainalytics Rank, the RobecoSAM Total Sustainability Rank, and the ISS Quality Score. On the other hand, the Fund includes ESG factors in its proprietary research. Security selection may involve additional elements of subjectivity when applying ESG filters. Due to limitations in the standardisation of ESG criteria, data, and standards within the geographical scope of the Fund (OECD countries), ESG factors incorporated in the investment processes may vary substantially. It highly depends on, amongst others, investment sectors and geographies and subjective use of different ESG criteria governing the portfolio construction. Since the assessment of ESG risks is still evolving, it is therefore difficult to measure them. The Fund’s risk management is therefore based on indirect measures of risk, such as the (relative) scores of companies on ESG factors derived from external sources.

The Fund has performed an assessment of the likely impact of sustainability risks on the expected returns of the Fund. The outcome of the assessment was that, given the investment philosophy of the Fund, which is focused on a deep value approach, factors other than ESG factors tend to have a dominant impact on the expected returns of the Fund. The Fund’s underlying investments do not actively take into account the EU criteria for environmentally sustainable economic activities, as provided by Regulation (EU) 2020/852 of 18 June 2020 on the establishment of a framework to facilitate sustainable investment. The Fund qualifies as a financial product under Article 6 of the Sustainable Finance Disclosure Regulation (“SFDR”). The Fund’ s ESG Policy can be viewed here.