25 August 2021

Dear Investor

Ballot – FGAM amalgamation

This LETTER is important and requires your attention

The purpose of this letter is to obtain your approval on the proposed amalgamation of the FGAM (Pty) Ltd co-named portfolios established under the IP Collective Investment Scheme with co-named portfolios on the Sanlam Collective Investments (SCI) Scheme. This amalgamation ballot is conducted by the CIS Manager namely IP Management Company (RF)(Pty) Ltd at the request of FGAM (Pty) Ltd (FSP 20987), the investment manager of the FGAM portfolios.

Source portfolio established under IP’s CIS scheme Target portfolio established under SCI’s CIS scheme
FG IP International Flexible Fund of Funds FG Sanlam Collective Investments International Flexible Fund of Funds
FG IP Jupiter Income Fund of Funds FG Sanlam Collective Investments Jupiter Income Fund of Funds
FG IP Mercury Equity Fund of Funds FG Sanlam Collective Investments Mercury Equity Fund of Funds
FG IP Neptune Growth Fund of Funds FG Sanlam Collective Investments Neptune Growth Fund of Funds
FG IP Saturn Flexible Funds of Funds FG Sanlam Collective Investments Saturn Moderate Funds of Funds
FG IP Venus Cautious Fund of Funds FG Sanlam Collective Investments Venus Cautious Fund of Funds

A vote in favour of the amalgamation will terminate the services offered by the IP Collective Investment Scheme and replace those with services to be offered by the Sanlam Collective Investment Scheme.

This affords you, as an investor, an opportunity to vote in favour of, or against, the proposed amalgamation.

The similarities and differences between the portfolios are illustrated in Annexure A – please take note of the differences especially.

Actions required.

Kindly study this document, complete the attached form and return it to our auditors by no later than 06 October 2021.

  1. Please complete and sign the enclosed ballot form and return it in the enclosed self-addressed envelope or via email to ct@bdo.co.za.
  2. If you have disposed of your participatory interests, no action is required.

Please do not include any other instructions regarding your holdings with your ballot form, for example requests for purchases, switching instructions, etc. Your ballot form will go directly to our auditors and, should such instructions NOT be sent to the auditors, it will not be processed.

How does the proposed amalgamation impact your investment?

In terms of the section 99 of the Collective Investment Schemes Control Act, 45 of 2002, (“the act”) the ballot will be valid if the majority of investors, including the Manager, vote in favour of the amalgamation.  Please note, an absence of a response will be regarded as a vote in favour of the amalgamation.

Section 99 (3) (a) of the Act stipulates that on the effective date, every investor “shall hold in the new scheme or portfolio, such participatory interests with an aggregate money value that is not less than the lower of the net asset value or market value, as may be fair and reasonable in the circumstances of the participatory interests which such investor, immediately before the date on which the proposed transaction becomes effective, held in an original scheme or portfolio.”  In other words, when the portfolios are amalgamated, investors will be issued with replacement participatory interests in the new portfolio. The replacement participatory interests will be equal in market/monetary value to the participatory interests held pre-amalgamation.

The amalgamations will be a Capital Gains Tax (CGT) roll-over event, so no CGT will be payable upon amalgamation.

 

Your rights as an investor

The rights of investors are firmly entrenched in the Act and the Deed:

  1. All investors in the portfolios are given an opportunity to vote in favour of, or against, the proposals above.
  2. An independent auditor will verify the outcome of the ballot.
  3. Should you not be comfortable with the proposal in so far as they relate to the portfolio in which you hold participatory interests, you may switch your investments to any of the IP Collective Investment Scheme portfolios, at no switching cost, provided we receive your switching instructions before 05 November 2021. Should you not be comfortable with the proposal and do not wish to switch your investments to any of the IP Collective Investment Scheme portfolios, you may elect to redeem your participatory interests at any time and withdraw your money at the NAV price, as defined in the Deed, subject to that it is a discretionary investment. By electing to redeem or switch your participatory interests, it will constitute a CGT event for which you will be liable to pay CGT at your next income tax assessment.
  4. If you choose not to switch or withdraw your investments prior to 05 November 2021, the proposals as set out in this letter (to the extent that they are approved by investors) will automatically apply to your investment.

 

Effective date

The effective date of the proposed amalgamation shall be 05 November 2021 close of business, provided that the necessary consent is obtained from investors and the Financial Services Conduct Authority.

A special income distribution will be processed for both portfolios on this date.

 

Covid19 contingency

Due to the impact of the current Covid19 crisis we have implemented a contingency plan whereby in the event that you are unable to provide us with a copy of your signed ballot letter, then you may contact us via email or call us at the number below and we will make alternative arrangements to assist you in getting your vote to the auditors before the due date.

 

For more information

If you are in any doubt as to what action to take, please consult your financial advisor or call IP Management Company on 021 673 1340 or SCI at 021 916 5232