Notice of unit holder meeting in SKAGEN m2
Unitholders in SKAGEN m2 are hereby invited to a unitholder meeting on Monday 24 April 2017.
SKAGEN AS (SKAGEN) manages the equity fund SKAGEN m2. The fund has a global mandate and mainly invests in shares issued by companies worldwide which engage in activities associated with real estate.
Unitholders in SKAGEN m2 are hereby invited to the unitholder meeting in order to consider a proposal to change the fund's reference index as stated in §7 of the Articles of Association.
The suggested change to the Articles of Association was considered and unanimously approved by SKAGEN's Board of Directors on 3 February 2017.
The unitholder meeting will be held at SKAGEN's offices at Skagen 3, Torgterrassen, 5th floor, Stavanger, Norway on Monday 24 April at 17.00.
Advance voting can be carried out by submitting voting ballots either by email or by post. Ballots must be received by SKAGEN no later than 21 April 2017.
1. Background and reasons for changing the reference index for SKAGEN m2
SKAGEN m2 has invested parts of its portfolio in so-called Real Estate Investment Trusts (REITs). REITs are a company type for real estate with special tax rules common in a number of countries. A mutual fund in Norway is a separate entity for tax purposes and according to Norwegian tax law many of the investments in REITs are treated as taxable investments in the fund. Subsequently, unitholders in SKAGEN m2 are subject to double taxation linked to these types of investments. It is therefore SKAGEN's recommendation that SKAGEN m2 should generally not be invested in REITs.
It is not necessary to make changes to SKAGEN m2's investment strategy or mandate itself, if REITs are no longer a priority investment target of the fund. However, as the current reference index for SKAGEN m2 includes a significant number of REITs, a change to a reference index without REITs will be required. SKAGEN m2's reference index is currently the MSCI ACWI Real Estate IMI. The proposed new index is the MSCI ACWI Real Estate IMI ex REITS. Both indices are provided by the internationally recognised Morgan Stanley Capital International (MSCI).
The suggested index has a greater focus on property management and development and will be representative of SKAGEN's recommended investment universe. SKAGEN believes that the scope for investment opportunities will remain sizable and that a change to the current benchmark will not have any negative impact on the fund.
SKAGEN considers the proposed change to the Articles of Association to be in the best interests of unit holders. The change will allow for less complexity and more efficiency in managing the fund and remove tax- related uncertainties and inconveniences for many unitholders. We do not anticipate that the proposed change to the Articles of Association will result in a higher risk for the fund as there will still be sufficient potential to diversify the risk in the global market for real estate management and development. However, it is expected that the change to the fund's Articles of Association will result in a reduction of tax-related costs. All things being equal, the change should have a positive effect on the fund's performance.
2. Suggested change to the Articles of Association for SKAGEN m2
The change of reference index entails the need to change §7 of the Articles of Associations (Unit Classes). The following change to the Articles of Association is proposed:
Wherever §7 of the Articles of Association mentions the reference index MSCI ACWI Real Estate IMI, this should be replaced by the reference index MSCI ACWI Real Estate IMI ex REITs.
Please contact customer services if you would like a copy of the revised Articles of Association to be sent to you free of charge.
The implementation of the proposed amendment requires that a minimum of 75 percent of the units represented at the unitholder meeting, in person or in advance, have voted for the amendment. Assuming that the proposals receive the endorsement of the unitholders at the unitholder meeting, the FSA will subsequently ensure that the legal requirements for content and procedures for amending the Articles of Association are met.
In the period between the announcement of the change and the change coming into force, it is a legal requirement that units may be redeemed free of charge. None of SKAGEN's funds have redemption fees, so the requirement for charge-free redemptions is fulfilled.
3. Unitholder meeting and voting
Decisions regarding the change to the Articles of Association will be taken by the fund's unitholders during the unitholder meeting which will be held at SKAGEN's offices at Skagen 3, Torgterrassen, 5th floor, Stavanger, Norway on Monday 24 April at 17.00.
The agenda for the unit holder meeting will be:
1) Election of chairman and two unit holders from the Fund to countersign the minutes
2) Presentation by Ørnulf Staalesen, Head of Business Support and Compliance, of the rationale behind the amendment to the Articles of Association
3) Review of submitted questions from unitholders
At the unitholder meeting each unit will carry one vote. The holdings as per Friday 21 April 2017 will form the basis for the number of votes.
Votes at the unitholder meeting may be cast in person or by proxy. Proxy forms may be obtained below or by contacting customer services. Please remember to bring your ID and, if applicable, your company certificate.
Votes may be cast in advance by sending the ballot by email to email@example.com or by post to SKAGEN AS, Post Box 160, 4001 Stavanger. Ballots may be obtained from SKAGEN's web site www.skagenfunds.com
Advance voting ballots must be received by SKAGEN no later than 21 April 2017.
You may register to attend the unitholder meeting by email firstname.lastname@example.org or by post to SKAGEN AS, Post Box 160, 4001 Stavanger. Registrations must be received by SKAGEN no later than 21 April 2017.
Do you have any questions?
For questions related to the suggested amendments to the Articles of Association or regarding the unitholder meeting, please contact SKAGEN at email@example.com or call +47 51 80 37 09.
Unitholders are entitled to discuss issues related to the changes to the Articles of Association during the unitholder meeting. Questions need to be directed to SKAGEN's Board of Directors in written format within a week of the meeting being held. Please use the following email address: firstname.lastname@example.org
The unitholder meeting may not make any decisions that bind the fund or the management company, apart from the change to the Articles of Association.
Board of Directors SKAGEN AS
Chairman of the Board