Frequently Asked Questions

First State Investments (“First State”) distributes its UK domiciled UCITS OEIC Fund range (the “UK OEIC Fund range” or “UK Company”) across Europe, to both UK and non-UK, EU-based investors. We anticipate that Brexit may change the status of the UK OEIC Fund range and limit the ability of non-UK, EU-based investors to continue to hold or make further investments into our UK Fund range. Please see question 9.

It is our assessment that, before the UK’s proposed departure from the EU, it is in the best interests of all shareholders to ensure that our non-UK, European investors have continued access to the current range of our investment strategies, regardless of the final outcome of the Brexit negotiations. 

  1. We are planning an orderly transfer of non-UK European shareholders from our UK OEIC Fund range to our Irish domiciled UCITS VCC Fund range (the “Irish VCC Fund range”). This is subject to Regulator and Shareholder approval 
  2. We are seeking necessary approvals to set up management company operations in Dublin in 2019 to ensure we are well placed to service and grow our client base across EU member states, regardless of the Brexit outcome.
  3. We expect that our Irish VCC Fund (UCITS) range will continue to be available to UK investors as is the status currently.

We intend to ensure that European investors have continued access to our current range of investment strategies.

We plan to do this by facilitating an exchange of Euro class shares in the UK OEIC Fund range for equivalent shares in the Irish VCC Fund range. The exchange will be done by way of a “scheme of arrangement”. The scheme of arrangement will enable investors to have their assets transferred to funds in the Irish VCC Fund range which are run by the same fund managers as their UK OEIC Fund range equivalents.

We believe a scheme of arrangement reduces the operational impact for our clients.

Only Euro class shares will transfer to the Irish VCC Fund range. Holders of other currency classes in the UK OEIC Fund range who want to transfer will need to switch into Euro class shares. Conversely, holders of Euro class shares who do not wish to transfer will need to switch out of the Euro class shares.

A scheme of arrangement is the process of exchanging shares in one fund for shares in another fund.

The scheme of arrangement is subject to regulatory and shareholder approvals.

In this instance, the scheme will involve First State Investments exchanging Euro Class shares in the UK OEIC Fund range for Euro Class shares in the Irish VCC Fund range.

Unlike a manual redemption and subscription, under a scheme of arrangement the exchange of shares is facilitated by the asset manager.

Only Euro class shares in the UK OEIC Fund range will transfer to the Irish VCC Fund range. Holders of other currency classes in the UK OEIC Fund range who want to transfer will need to switch into Euro class shares. Conversely, holders of Euro class shares who do not wish to transfer will need to switch out of the Euro class shares. Details on how to do this are in our shareholder mailing dated 5 October 2018 and can be found on www.firststateinvestments.com/brexit.

Euro class shareholders will receive a more detailed communication from us in November. This will include information on the shareholder voting process required to approve the scheme of arrangement.

There will be different impacts depending on the currency class you hold in the UK OEIC Fund range – only Euro class shares will transfer to the Irish VCC Fund range under the scheme of arrangement.

The impact will, generally speaking, be the same for all domiciles.

The regulations require us to send communications to the name and address on the register so if you hold via a platform, custodian or nominee you will need to make sure that they pass on relevant communications to you.

If you are a holder of Euro class shares in the UK OEIC Fund range, you are also encouraged to instruct the platform, custodian or nominee to exercise votes on your behalf.

  1. October 2018: We sent a mailing to all shareholders in the UK OEIC. If you haven’t received this, please be in contact your platform, nominee or custodian
  2. November 2018: We will provide formal notification of the proposal to Euro class shareholders and issue proxy cards for voting
  3. December 2018: Extraordinary General Meetings (EGMs) for Euro class shareholders will take place, at which they will vote on the proposal. We will notify shareholders of the result shortly afterwards.
  4. January and February 2019 – First State will transition EU share class assets to the Irish VCC Fund range. Shareholders who transfer to the Irish VCC Fund range will receive a welcome pack with account details.

We anticipate that when the UK leaves the EU, UK-domiciled UCITS funds will cease to qualify as UCITS and lose their EU passporting rights. There may, however, be a transitional period when they continue to qualify.

Importantly, post Brexit, all of the funds within the UK OEIC Fund range will continue to be managed in the same way, with the same investment objectives and by the same investment teams.

We are working to ensure that the registration status of the Irish VCC Fund range matches the registration of the UK OEIC Fund range as at the date of the scheme of arrangement. 

Transferring to the Irish VCC Fund range under the scheme of arrangement, and any switching of shares, may have tax consequences for you depending on your own tax residency and circumstances.

If you are in any doubt as to the action you should take, you should seek advice from an independent professional adviser and you should seek your own independent tax advice.

This will depend on the final terms of the UK’s departure however we anticipate that Brexit may limit the ability of non-UK, European based investors to continue to hold or make further investments into the UK OEIC Fund range.

It is likely that the UK OEIC Fund range will lose its UCITS status and European passporting rights.

Our Irish VCC Fund range will continue to offer UCITS-compliant funds throughout the EU. 

You can contact your relationship manager or submit your details in the ‘More Information’ section if you have any further questions. 

Switching Form
Switching Form for use in connection with share class merger

First State Investments to transfer EU investor assets to Irish-domiciled fund range

First State Investments (UK) Limited (‘First State’) announces its intention to transfer EU investor assets to its Irish-domiciled fund range.

Under First State’s proposal, Euro class shares of 18 funds within its UK-domiciled OEIC range are to be exchanged for equivalent Euro class shares in UCITS-compliant funds run by the same portfolio management teams within its Irish-domiciled fund range. The exchange of shares will allow First State’s European investors continued access to its current range of investment strategies.

Chris Turpin, Managing Director, EMEA at First State says “Our proposals are intended to protect the interests of all investors, and in particular to ensure that our EU-based clients can continue to invest in our strategies irrespective of the outcome of the Brexit negotiations. First State has operated Dublin-based pooled funds for almost 20 years and we have an established presence in Ireland.”

Investors in the First State UK OEIC range will receive the detail of the plans in October this year. Following this, formal notification of the exchange of fund share classes will then be sent to investors in November, subject to Financial Conduct Authority (FCA) approval. If the proposals are approved by shareholders, the planned transfer of assets would take place during Q1 of 2019. As part of its wider Brexit preparations, First State is also seeking the necessary approvals to set up management company operations in Dublin in 2019 to ensure it is well placed to service and grow its client base across the EU member states, regardless of the Brexit outcome.

The funds included in the proposed exchange of Euro class shares are below:

Fund name (OEIC/UK fund range)

First State Asia Focus Fund

First State Asian Property Securities Fund

First State Emerging Markets Bond Fund

First State Global Listed Infrastructure Fund

First State Global Property Securities Fund

First State Greater China Growth Fund

First State Japan Focus Fund

Stewart Investors Asia Pacific Fund

Stewart Investors Asia Pacific Leaders Fund

Stewart Investors Asia Pacific Sustainability Fund

Stewart Investors Global Emerging Markets Fund

Stewart Investors Global Emerging Markets Leaders Fund

Stewart Investors Global Emerging Markets Sustainability Fund

Stewart Investors Indian Subcontinent Fund *

Stewart Investors Latin America Fund

Stewart Investors Worldwide Equity Fund

Stewart Investors Worldwide Leaders Fund*

Stewart Investors Worldwide Sustainability Fund

to

Fund name (Irish fund range equivalent)

First State Asia Pacific Select Fund*

First State Asian Property Securities Fund

First State Emerging Markets Bond Fund

First State Global Listed Infrastructure Fund

First State Global Property Securities Fund

First State Greater China Growth Fund

First State Japan Equity Fund (similar strategy)

Stewart Investors Asia Pacific Fund

Stewart Investors Asia Pacific Leaders Fund

Stewart Investors Asia Pacific Sustainability Fund

Stewart Investors Global Emerging Markets Leaders Fund (similar strategy)

Stewart Investors Global Emerging Markets Leaders Fund

Stewart Investors Global Emerging Markets Sustainability Fund

Stewart Investors Indian Subcontinent Sustainability Fund

Stewart Investors Latin America Fund

Stewart Investors Worldwide Equity Fund

Stewart Investors Worldwide Select Fund

Stewart Investors Worldwide Sustainability Fund

* The name of this fund will change to ensure consistency across both ranges. The name change will take place before the exchange of fund share classes in 2019. 

 

About First State Investments:

First State Investments is a global asset management business with experience across a range of asset classes and specialist investment sectors. First State Investments is owned by the Commonwealth Bank of Australia and as at 30 June 2018 managed £122 billion of assets on behalf of clients worldwide. In Australia First State operates as Colonial First State Global Asset Management. First State Investments offers a range of investment solutions to institutional and retail investors globally, including equities, debt, multi-asset and unlisted infrastructure.

Our approach to investment is driven by a commitment to providing the best possible outcomes over the long term for our investors. To achieve this, we ensure our interests are aligned with our investors and uphold a culture of always acting in our clients’ best interests.

Important Information

This document has been prepared for informational purposes only and is only intended to provide a summary of the subject matter covered and does not purport to be comprehensive. The views expressed are the views of the writer at the time of issue and may change over time. It does not constitute investment advice and/or a recommendation and should not be used as the basis of any investment decision. This document is not an offer document and does not constitute an offer or invitation or investment recommendation to distribute or purchase securities, shares, units or other interests or to enter into an investment agreement. No person should rely on the content and/or act on the basis of any material contained in this document.

The information contained within this document has been obtained from sources that we believe to be reliable and accurate at the time of issue but no representation or warranty, express or implied, is made as to the fairness, accuracy, or completeness of the information. We do not accept any liability whatsoever for any loss arising directly or indirectly from any use of this information.

References to “we” or “us” are references to First State Investments.

In the UK, issued by First State Investments (UK) Limited which is authorised and regulated by the Financial Conduct Authority (registration number 143359). Registered office Finsbury Circus House, 15 Finsbury Circus, London, EC2M 7EB number 2294743. Outside the UK within the EEA, this document is issued by First State Investments International Limited which is authorised and regulated in the UK by the Financial Conduct Authority (registered number 122512). Registered office: 23 St. Andrew Square, Edinburgh, EH2 1BB number SCO79063.

First State Investments (UK) Limited and First State Investments International Limited are part of Colonial First State Asset Management (“CFSGAM”) which is the consolidated asset management division of the Commonwealth Bank of Australia ABN 48 123 123 124. CFSGAM includes a number of entities in different jurisdictions, operating in Australia as CFSGAM and as First State Investments elsewhere. The Commonwealth Bank of Australia (“Bank”) and its subsidiaries do not guarantee the performance of any investment or entity referred to in this document or the repayment of capital. Any investments referred to are not deposits or other liabilities of the Bank or its subsidiaries, and are subject to investment risk including loss of income and capital invested.

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