Professional Documents
Culture Documents
Impact Investors in Asia
Impact Investors in Asia
Impact Investors in Asia
*OHYHJ[LYPZ[PJZHUK7YLMLYLUJLZ
MVY0U]LZ[PUNPU:VJPHS,U[LYWYPZLZ
PU(ZPHHUK[OL7HJPJ
$VLDQ'HYHORSPHQW%DQN
$OOULJKWVUHVHUYHG3XEOLVKHGLQ
3ULQWHGLQ6LQJDSRUH
,6%1
3XEOLFDWLRQ6WRFN1R537
&DWDORJLQJ,Q3XEOLFDWLRQ'DWD
$VLDQ'HYHORSPHQW%DQN
,PSDFWLQYHVWRUVLQ$VLD&KDUDFWHULVWLFVDQGSUHIHUHQFHVIRULQYHVWLQJLQVRFLDOHQWHUSULVHVLQ$VLDDQGWKH3DFLF
0DQGDOX\RQJ&LW\3KLOLSSLQHV$VLDQ'HYHORSPHQW%DQN
,QYHVWPHQW6RFLDOHQWHUSULVHV$VLDDQGWKH3DFLF$VLDQ'HYHORSPHQW%DQN
7KHYLHZVH[SUHVVHGLQWKLVSXEOLFDWLRQDUHWKRVHRIWKHDXWKRUVDQGGRQRWQHFHVVDULO\UHHFWWKHYLHZVDQGSROLFLHVRIWKH
$VLDQ'HYHORSPHQW%DQN$'%RULWV%RDUGRI*RYHUQRUVRUWKHJRYHUQPHQWVWKH\UHSUHVHQW
$'%GRHVQRWJXDUDQWHHWKHDFFXUDF\RIWKHGDWDLQFOXGHGLQWKLVSXEOLFDWLRQDQGDFFHSWVQRUHVSRQVLELOLW\IRUDQ\
FRQVHTXHQFHRIWKHLUXVH
%\PDNLQJDQ\GHVLJQDWLRQRIRUUHIHUHQFHWRDSDUWLFXODUWHUULWRU\RUJHRJUDSKLFDUHDRUE\XVLQJWKHWHUPFRXQWU\LQWKLV
GRFXPHQW$'%GRHVQRWLQWHQGWRPDNHDQ\MXGJPHQWVDVWRWKHOHJDORURWKHUVWDWXVRIDQ\WHUULWRU\RUDUHD
$'%HQFRXUDJHVSULQWLQJRUFRS\LQJLQIRUPDWLRQH[FOXVLYHO\IRUSHUVRQDODQGQRQFRPPHUFLDOXVHZLWKSURSHU
DFNQRZOHGJPHQWRI$'%8VHUVDUHUHVWULFWHGIURPUHVHOOLQJUHGLVWULEXWLQJRUFUHDWLQJGHULYDWLYHZRUNVIRUFRPPHUFLDO
SXUSRVHVZLWKRXWWKHH[SUHVVZULWWHQFRQVHQWRI$'%
1RWH
,QWKLVSXEOLFDWLRQUHIHUVWR86GROODUV
$'%$YHQXH
0DQGDOX\RQJ&LW\
0HWUR0DQLOD
3KLOLSSLQHV
7HO
)D[
ZZZDGERUJ
)RURUGHUVSOHDVHFRQWDFW
'HSDUWPHQWRI([WHUQDO5HODWLRQV
)D[
DGESXE#DGERUJ
-VYL^VYK
7KLVLVWKHUHSRUWRIWKH,PSDFW,QYHVWRU$VVHVVPHQWFRQGXFWHGDVSDUWRIWKH$VLDQ'HYHORSPHQW%DQN
$'%5HJLRQDO5HVHDUFKDQG'HYHORSPHQW7HFKQLFDO$VVLVWDQFH7$SURMHFW'HYHORSLQJD5HJLRQDO
6RFLDO,QYHVWPHQW([FKDQJH,QLWLDWLYH7KHSURMHFWLVQDQFHGE\WKH,QYHVWPHQW&OLPDWH)DFLOLWDWLRQ
)XQGXQGHUWKH5HJLRQDO&RRSHUDWLRQDQG,QWHJUDWLRQ)LQDQFLQJ3DUWQHUVKLS)DFLOLW\
7KHUHVHDUFKZDVFRQGXFWHGE\DQGWKLVUHSRUWZDVSUHSDUHGE\,PSDFW,QYHVWPHQW6KXMRJ/LPLWHG
6KXMRJDVFRQVXOWDQWWRWKH$'%
6KXMRJZRXOGOLNHWRDFNQRZOHGJHVLJQLFDQWFRQWULEXWLRQVWRWKHUHVHDUFKPDGHE\,PSDFW,QYHVWPHQW
([FKDQJH$VLD,,;7KHUHVHDUFKZDVEXLOWRQDQGZDVFRQWH[WXDOL]HGE\SULRUUHVHDUFKFRQGXFWHGE\
,,;ZLWKJHQHURXVQDQFLDOVXSSRUWIURPWKH5RFNHIHOOHU)RXQGDWLRQ
6SHFLDOWKDQNVDUHDOVRGXHWRWKHPDQ\VXUYH\UHVSRQGHQWVDQGLQWHUYLHZHHVZKRWRRNWLPHRXWRIWKHLU
EXV\VFKHGXOHVWRSURYLGHWKHLQSXWZKLFKZDVHVVHQWLDOWRWKHVXFFHVVRIWKHUHVHDUFK/DVWO\WKDQN\RX
WR6KXMRJVPDQ\YROXQWHHUVZLWKRXWZKRPWKLVUHSRUWZRXOGQRWKDYHEHHQSRVVLEOH
7KLVFRQVXOWDQWVUHSRUWGRHVQRWQHFHVVDULO\UHHFWWKHYLHZVRI$'%RUWKH*RYHUQPHQWFRQFHUQHG
DQG$'%DQGWKH*RYHUQPHQWFDQQRWEHKHOGOLDEOHIRULWVFRQWHQWV
3OHDVHQRWHWKDWIRUWKHSXUSRVHVRIWKLVUHSRUWUHIHUVWR86GROODUV
6WWVY[\UP[`MVY0TWHJ[;4
;HISLVM*VU[LU[Z
(IV\[;OL7YVQLJ[
,?,*<;0=,:<44(9@
)HJRNYV\UK
:\Y]L`4L[OVKVSVN`
2L`-PUKPUNZ
7961,*;*65;,?;
6]LY]PL^6M0TWHJ[0U]LZ[PUN
+PZJVUULJ[)L[^LLU*HWP[HS:\WWS`(UK+LTHUK
)LUL[Z6M(9LNPVUHS:[VJR,_JOHUNL
;OL9VSL6M00?(UK:O\QVN0U*YLH[PUN(:\JJLZZM\S:VJPHS:[VJR,_JOHUNL
,UNHNLTLU[-YHTL^VYR
(WWYVHJO
:\Y]L`-VYTH[
;HYNL[0U]LZ[VYZ
(5(3@:0:6--05+05.:
6]LY]PL^
7YVSL6M:\Y]L`9LZWVUKLU[Z
7HY[PJPWH[PVU0U0TWHJ[0U]LZ[PUN
7YLYLX\PZP[LZ;V9LHSPaL;OL7V[LU[PHS6M0TWHJ[0U]LZ[PUN
7YVZWLJ[P]L0TWHJ[0U]LZ[TLU[4L[OVKZ
([[YHJ[P]LULZZ6M(:VJPHS:[VJR,_JOHUNL
9LHZVUZ-VY-H]VYPUN;OL+L]LSVWTLU[6M(:VJPHS:[VJR,_JOHUNL
7YLMLYLUJLZ-VY:VJPHS0TWHJ[0UKPJH[VYZ(UK(ZZLZZTLU[4L[OVKVSVNPLZ
6WLYH[PVUHS9LX\PYLTLU[Z-VY(:VJPHS:[VJR,_JOHUNL
*VUJS\KPUN9LTHYRZ
9,*644,5+(;065:
6]LY]PL^
9LJVTTLUKH[PVUZ-VY*YLH[PUN(9LNPVUHS:VJPHS:[VJR,_JOHUNL
9LHSPaPUN(:\JJLZZM\S:[VJR,_JOHUNL!;OL9VSL6M0P_
(77,5+0?
+LUPUN0TWHJ[0U]LZ[PUN
+LUPUN:VJPHS,U[LYWYPZL
:VJPHS,U[LYWYPZLZ0U(ZPH
+LUPUN:VJPHS:[VJR,_JOHUNL
0TWHJ[9LWVY[PUN(UK0U]LZ[PUN:[HUKHYKZ
:O\QVN:\Z[HPUHIPSP[`-YHTL^VYR
0TWHJ[0U]LZ[VY:\Y]L`
()6<;;/,7961,*;
7KHDLPRIWKHUHVHDUFKLVWRXQGHUVWDQGWKHEX\VLGHRIWKHPDUNHWIRULPSDFWLQYHVWLQJLQ$VLDDQG
WKH 3DFLF 6SHFLFDOO\ WKLV SURMHFW SODFHV HPSKDVLV RQ XQGHUVWDQGLQJ WKH VFDOH DQG VFRSH RI FDSLWDO
SRROVDYDLODEOHIRULPSDFWLQYHVWPHQWLQVXVWDLQDEOHVRFLDOHQWHUSULVHV6(VLQ$VLDDQGWKH3DFLFLQ
WKHFRPLQJ\HDUVWKHLQWHUHVWRILQYHVWRUVLQXWLOL]LQJDVRFLDOVWRFNH[FKDQJHDVSDUWRIWKHLULPSDFW
LQYHVWPHQWVWUDWHJ\LQWKHUHJLRQDQGWKHGHVLJQIHDWXUHVWKDWVXFKDVRFLDOVWRFNH[FKDQJHPXVWLQFRUSRUDWH
LQRUGHUWRDWWUDFWWKHVHLPSDFWLQYHVWRUV
7KHUHVHDUFKVHHNVWRXQGHUVWDQG:KDWHQJDJHVLQYHVWRUVLQLPSDFWLQYHVWPHQW":KDWLVWKHFXUUHQW
DQGSURMHFWHGOHYHORILQWHUHVW":KDWLVWKHQHHGIRUDQGDSSHDORIDVRFLDOVWRFNH[FKDQJH"DQG:KDW
DUHWKHRSHUDWLRQDOUHTXLUHPHQWVIRUHDFKLQYHVWRUFDWHJRU\WRSDUWLFLSDWHRQDVRFLDOVWRFNH[FKDQJH"DOO
LQWKHFRQWH[WRI$VLDDQGWKH3DFLFUHJLRQ
7KLVUHSRUWSURYLGHVLQVLJKWVWRLQYHVWRUVNHHQWRLQYHVWLQWKHUHJLRQQDQFLDOLQWHUPHGLDULHVWKDWDGYLVH
6(V RQ FDSLWDO UDLVLQJ DQG GHYHORSHUV RI SODWIRUPV VHHNLQJ WR FRQQHFW 6(V LQ WKH UHJLRQ ZLWK LPSDFW
LQYHVWRUV,PSDFW,QYHVWPHQW([FKDQJH$VLD,,;DQ6(EDVHGLQ6LQJDSRUHLVDSSO\LQJWKHQDORXWSXWV
RIWKLVUHVHDUFKDVLWQDOL]HVWKHRSHUDWLQJIHDWXUHVRI$VLDVUVWVRFLDOVWRFNH[FKDQJHZKLFKLWLVFUHDWLQJ
7KHRXWSXWVRIWKHUHVHDUFKZLOODOVRDLGSROLF\PDNHUVDQGLQVWLWXWLRQDODFWRUVWREHWWHUXQGHUVWDQGDQG
IRVWHUDQHQYLURQPHQWIRUVXVWDLQDEOHGHYHORSPHQWWKURXJKLPSDFWLQYHVWLQJ
6RFLDOHQWHUSULVHVDUHGHQHGDVEXVLQHVVRULHQWHGQRWIRUSURWVRUPLVVLRQRULHQWHGIRUSURWV6(VKDYHDVRFLDODQGRU
HQYLURQPHQWDOPLVVLRQDWWKHFRUHRIWKHLUZRUNEXWVHHNWRRSHUDWHLQDQDQFLDOO\VXVWDLQDEOHPDQQHU
,PSDFWLQYHVWRUVDUHGHQHGDVLQYHVWRUVVHHNLQJWRPDNHLQYHVWPHQWVWKDWFUHDWHSRVLWLYHVRFLDODQGHQYLURQPHQWDOLPSDFW
EH\RQGQDQFLDOUHWXUQ-30RUJDQ,PSDFW,QYHVWPHQWV$QHPHUJLQJDVVHWFODVV
0TWHJ[0U]LZ[VYZPU(ZPH
,?,*<;0=,:<44(9@
,?,*<;0=,:<44(9@
)HJRNYV\UK
,PSDFW LQYHVWLQJ KDV HPHUJHG DV DQ DOWHUQDWLYH DVVHW FODVV WKDW FKDQQHOV ODUJHVFDOH SULYDWH FDSLWDO LQWR
DGGUHVVLQJWKHZRUOGVPRVWSUHVVLQJVRFLDODQGHQYLURQPHQWDOFKDOOHQJHV-30RUJDQHVWLPDWHVWKDWWKH
LPSDFWLQYHVWPHQWPDUNHWKDVWKHSRWHQWLDOWRDEVRUEEHWZHHQ86ELOOLRQDQG86WULOOLRQRYHUWKH
QH[WGHFDGHHYHQZKHQRQO\LQFOXGLQJYHVHFWRUVKRXVLQJUXUDOZDWHUGHOLYHU\PDWHUQDOKHDOWKSULPDU\
HGXFDWLRQDQGQDQFLDOVHUYLFHVLQWKHDQDO\VLV:KLOHIRXQGDWLRQVGHYHORSPHQWQDQFHLQVWLWXWLRQVDQG
XOWUDKLJK QHW ZRUWK LQGLYLGXDOV KDYH EHHQ WKH WUDGLWLRQDO SLRQHHUV LQ LPSDFW LQYHVWLQJ WKHUH LV D ODUJH
VXSSO\ RI XQWDSSHG LPSDFW LQYHVWPHQW FDSLWDO DPRQJ LQGLYLGXDOV DQG LQVWLWXWLRQV WKDW FDQ KHOS WR PHHW
WKLVLQYHVWPHQWGHPDQGRYHUWKHFRPLQJ\HDUV2XUK\SRWKHVLVLVWKDWWKHGHYHORSPHQWRIDVRFLDOVWRFN
H[FKDQJHVHUYLQJ6(VLQ$VLDDQGWKH3DFLFFDQKHOSWRXQORFNWKLVVXSSO\RILPSDFWLQYHVWPHQWFDSLWDO
7KHFDSLWDOPDUNHWVFDQSOD\DFULWLFDOUROHLQVXVWDLQDEOHHFRQRPLFGHYHORSPHQWLQ$VLDPLOOLRQ
SHRSOHLQ$VLDDQGWKH3DFLFUHJLRQOLYHRQOHVVWKDQ86SHUGD\DQGDSSUR[LPDWHO\RIWKH
ZRUOGV SRRU SRSXODWLRQ GHQHG DV OLYLQJ RQ OHVV WKDQ 86 SHU GD\ OLYH LQ $VLD 3RVVHVVLQJ KXJH
JURZWKSRWHQWLDOLQ$VLDVXVWDLQDEOH6(VDUHXQLTXHO\SRVLWLRQHGWRDGGUHVVDZLGHUDQJHRIHFRQRPLF
HQYLURQPHQWDOKHDOWKDQGVRFLDOFKDOOHQJHV
7KRXJK D ODUJH QXPEHU RI LQQRYDWLYH 6(V DGGUHVV D P\ULDG RI VRFLDO DQG HQYLURQPHQWDO FKDOOHQJHV
WKURXJKRXW $VLD D GLVFRQQHFW SUHYDLOV EHWZHHQ WKH VXSSO\ RI LPSDFW LQYHVWPHQW FDSLWDO IURP LPSDFW
LQYHVWRUVDQGWKHGHPDQGIRUJURZWKFDSLWDOE\6(V7KLVGLVFRQQHFWLVSUHVHQWO\FXUELQJ6(JURZWKDQG
LQKLELWLQJWKHLQKHUHQWSRWHQWLDORIOHYHUDJLQJPDUNHWEDVHGFDSLWDOIRUVRFLDOLPSDFW7KHGLVFRQQHFWDULVHV
IURPWKHODFNRILQIRUPDWLRQDERXWWKHDYDLODELOLW\RILPSDFWLQYHVWPHQWRSSRUWXQLWLHVLQWKHUHJLRQDVZHOO
DVWKHGLIFXOW\DQGKLJKGXHGLOLJHQFHFRVWVLQFXUUHGLQDFFHVVLQJVXFKRSSRUWXQLWLHVWKHKLJKSHUFHLYHG
ULVNDVVRFLDWHGZLWKLPSDFWLQYHVWPHQWVHVSHFLDOO\LQHPHUJLQJPDUNHWVDQGWKHSRWHQWLDOLOOLTXLGLW\RI
LQYHVWPHQWVLQ6(VDQGOLPLWHGUDQJHRIH[LWRSWLRQVIRULQYHVWRUV7KLVGLVFRQQHFWDOVRDULVHVIURPWKHODFN
RIVWDQGDUGL]HGLPSDFWPHDVXUHPHQWDQGUHSRUWLQJDVZHOODVIURPDPLVPDWFKLQPDQ\LQVWDQFHVEHWZHHQ
LQYHVWRUVDQG6(VH[SHFWDWLRQVIRUQDQFLDOUHWXUQVRQLPSDFWLQYHVWPHQWV
$UHJLRQDOVRFLDOVWRFNH[FKDQJHPD\EHDEOHWRUHGXFHWKLVGLVFRQQHFWRIVXSSO\DQGGHPDQGE\DGGUHVVLQJ
WKHVH LVVXHV ,Q SDUWLFXODU D UHJLRQDO VRFLDO VWRFN H[FKDQJH FRXOG LPSURYH DFFHVV WR DQG UHGXFH GXH
GLOLJHQFHFRVWVIRULQYHVWPHQWRSSRUWXQLWLHVLQ6(VRIIHUDYDULHW\RILQYHVWPHQWSURGXFWVWKDWPD\PLWLJDWH
ULVNV LPSURYH OLTXLGLW\ LQ LPSDFW LQYHVWPHQWV LPSURYH WUDQVSDUHQF\ E\ HVWDEOLVKLQJ VWDQGDUGL]HG
UHSRUWLQJ IRU VRFLDO DQG HQYLURQPHQWDO LPSDFW DQG HQJDJLQJ PDUNHW LQWHUPHGLDULHV DQG HQFRXUDJLQJ
VWDNHKROGHUSDUWLFLSDWLRQ
,,; DQG LWV QRWIRUSURW DIOLDWH ,PSDFW ,QYHVWPHQW 6KXMRJ 6KXMRJ DUH SOD\LQJ D FULWLFDO UROH LQ WKH
GHYHORSPHQWRI$VLDVUVWVRFLDOVWRFNH[FKDQJH5HFRJQL]LQJWKDWWKHUHLVDQHHGWREXLOGXSWKHFDSDFLW\
RI 6(V LQ$VLD VR WKDW WKH\ FDQ HIIHFWLYHO\ DEVRUE JURZWK FDSLWDO 6KXMRJ IRFXVHV RQ FDSDFLW\EXLOGLQJ
DGYRFDF\ UHVHDUFK DQG HGXFDWLRQ UHODWHG WR WKH 6( VHFWRU LQ$VLD DQG WKH 3DFLF ,Q RUGHU WR IDFLOLWDWH
SULYDWHFDSLWDOUDLVLQJE\6(VLQ$VLDDQGWKH3DFLF,,;ODXQFKHG,PSDFW3DUWQHUVLQ0DUFKVHUYLQJ
DV$VLDVUVWSULYDWHSODFHPHQWSODWIRUPFRQQHFWLQJ6(VDQGLPSDFWLQYHVWRUV
-30RUJDQ,PSDFW,QYHVWPHQWV$QHPHUJLQJDVVHWFODVV
$VLDQ'HYHORSPHQW%DQN3RYHUW\LQ$VLDDQGWKH3DFLF$Q8SGDWH
:\Y]L`4L[OVKVSVN`
7KHSURMHFWHQWDLOHGVXUYH\LQJVDPSOLQJDQGLQWHUYLHZLQJLQYHVWRUVDFURVVWKHJOREHLQRUGHUWRXQGHUVWDQG
WKHLU LQYHVWLQJ DFWLYLWLHV LQ $VLD DQG WKH 3DFLF UHJLRQ 7KH VXUYH\ FRQWDLQHG TXHVWLRQV DQG ZDV
GLVWULEXWHGWRDZLGHUDQJHRILQYHVWRUVZKLFKLQFOXGHGLQGLYLGXDOVDQGLQVWLWXWLRQVLQ$VLDDQGWKH3DFLF
DQGDURXQGWKHJOREH,QGLYLGXDOLQYHVWRUVWDUJHWHGLQFOXGHGLQGLYLGXDOVZLWKDZLGHUDQJHRILQFRPHVDQG
DVVHWV UDQJLQJ IURP UHWDLO LQYHVWRUV WR XOWUDKLJK QHW ZRUWK LQGLYLGXDOV ,QVWLWXWLRQDO LQYHVWRUV WDUJHWHG
LQFOXGHGERWKWUDGLWLRQDOLQYHVWRUVDVZHOODVLQVWLWXWLRQDOLQYHVWRUVIRFXVLQJRQLPSDFWLQYHVWPHQWV7KH
VXUYH\UHFHLYHGUHVSRQVHV
2L`-PUKPUNZ
7KH UHVXOWV VKRZ WKDW LQYHVWRUV DFURVV DOO RI WKH JURXSV VXUYH\HG DUH ZLOOLQJ WR LQFUHDVH WKHLU
LQYROYHPHQW LQ LPSDFW LQYHVWLQJ RYHU WKH QH[W IHZ \HDUV VXEMHFW WR WKH GHYHORSPHQW RI DSSURSULDWH
PDUNHWLQIUDVWUXFWXUH7KLVLVWUXHIRUWKRVHDOUHDG\HQJDJHGLQLPSDFWLQYHVWLQJDQGWKRVHZKRDUHQRW
\HW7KHH[SHFWHGLQFUHDVHLQLQYHVWPHQWVKRXOGOLIWDOOUHJLRQVRI$VLDDQGQHDUO\DOOVHFWRUV
,Q RUGHU IRU WKLV SRWHQWLDO LQFUHDVH LQ LPSDFW LQYHVWPHQW WR EH UHDOL]HG WKHUH DUH D QXPEHU RI SUH
UHTXLVLWHV WKDW PXVW EH PHW 7KH PRVW IUHTXHQWO\ FLWHG SUHUHTXLVLWHV WR LQFUHDVHG LPSDFW LQYHVWLQJ
ZHUHLQFUHDVHGLQIRUPDWLRQDERXWWKHDYDLODELOLW\RILPSDFWLQYHVWLQJRSSRUWXQLWLHVDQGHDVLHUDFFHVV
WR LPSDFW LQYHVWPHQW RSSRUWXQLWLHV ,Q DGGLWLRQ LQYHVWRUV H[SHFW WR GLYHUVLI\ WKH PHWKRGV DQG W\SHV
RILQVWUXPHQWVWKH\XVHWRPDNHLPSDFWLQYHVWPHQWV,QYHVWRUVDOVRH[SHFWWRLQFUHDVHWKHDPRXQWRI
LQYHVWPHQWLQSXEOLFHTXLWLHVDQGOLTXLGGHEWDVZHOODVWKHLULQYHVWPHQWWKURXJKIXQGVDQGLQGLUHFWO\
WKURXJKDGYLVRUV2YHUDOOWKHLPSDFWLQYHVWPHQWPDUNHWFDQEHH[SHFWHGWRHYROYHIURPRQHGRPLQDWHG
E\GLUHFWLQYHVWPHQWVLQSULYDWHVHFXULWLHVWRRQHLQZKLFKLQGLUHFWLQYHVWPHQWVDQGOLTXLGVHFXULWLHVSOD\
DODUJHUUROH
$ODUJHPDMRULW\RIUHVSRQGHQWVDUHLQIDYRURIWKHGHYHORSPHQWRIDVRFLDOVWRFNH[FKDQJHDQGDODUJH
PDMRULW\RIUHVSRQGHQWVVD\WKH\ZRXOGDFWXDOO\WUDQVDFWRQLW7KHPRVWFLWHGUHDVRQIRUWUDQVDFWLQJRQD
VRFLDOVWRFNH[FKDQJHLVWKHDELOLW\WRUHDOL]HERWKVRFLDODQGQDQFLDOUHWXUQV&HUWDLQW\SHVRILQYHVWRUV
DOVRFLWHLWDVDXVHIXOPHFKDQLVPIRUH[LWLQJWKHLUFXUUHQWLQYHVWPHQWV6RPHRIWKHPRVWLPSRUWDQW
SHUFHLYHGEHQHWVRIDUHJLRQDOVRFLDOVWRFNH[FKDQJHLQFOXGHLQFUHDVHGOLTXLGLW\DVZHOODVLQFUHDVHG
WUDQVSDUHQF\RIERWKVRFLDODQGQDQFLDOLQIRUPDWLRQ
2QHRIWKHNH\DWWUDFWLRQVRIDVRFLDOVWRFNH[FKDQJHWRLQYHVWRUVLVWKHGHVLUHWRDFKLHYHVRFLDOUHWXUQV
:LWKWKLVLQPLQGLWLVQRWVXUSULVLQJWKDWWKHYDVWPDMRULW\RIUHVSRQGHQWVEHOLHYHLWLVLPSRUWDQWIRUD
VRFLDOVWRFNH[FKDQJHWRUHTXLUHOLVWHGFRPSDQLHVWRUHSRUWRQWKHLUVRFLDODQGHQYLURQPHQWDOLPSDFW
7KHUHVXOWVRIWKHUHVHDUFKDOVRSURYLGHYDOXDEOHLQSXWLQWRRWKHURSHUDWLRQDOUHTXLUHPHQWVWKDWDVRFLDO
VWRFN H[FKDQJH PXVW PHHW LQ RUGHU WR EH XVHIXO WR LPSDFW LQYHVWRUV DQG WKH SUHIHUHQFHV RI LPSDFW
LQYHVWRUVIRUVXFKDQH[FKDQJH7KHUHVXOWVLQGLFDWHGWKDWQRWRQO\GRPRVWLQYHVWRUVKDYHDQLQWHUHVW
LQWUDGLQJHTXLWLHVRQDVRFLDOVWRFNH[FKDQJHEXWPDQ\LQYHVWRUVDUHDOVRLQWHUHVWHGLQWUDGLQJERQGV
DQGIXQGV+DUGFXUUHQFLHVDUHODUJHO\SUHIHUUHGIRUWUDQVDFWLRQVWKRXJKORFDOFXUUHQFLHVDUHDFFHSWDEOH
WR PDQ\ 7KH PLQLPXP LQYHVWPHQW DQG PDUNHW FDSLWDOL]DWLRQ VL]HV YDULHG DPRQJVW WKH UHVSRQGHQWV
HVSHFLDOO\ZKHQFRPSDULQJLQGLYLGXDOLQYHVWRUVZLWKLQVWLWXWLRQDOLQYHVWRUV7KRXJKWKHUHZDVVLJQLFDQW
YDULDWLRQLQUHVSRQVHVPDQ\LQYHVWRUVZRXOGH[SHFWIUHTXHQWSULFHTXRWDWLRQVIURPDQ\VRFLDOVWRFN
H[FKDQJH7KH\DOVRZRXOGH[SHFWUHJXODUUHSRUWLQJRIQDQFLDOVRFLDODQGHQYLURQPHQWDOSHUIRUPDQFH
UHVXOWV6XFKLQVLJKWVZLOOSURYHYDOXDEOHLQGHYHORSLQJDVRFLDOVWRFNH[FKDQJHWKDWPHHWVWKHQHHGVRI
LPSDFWLQYHVWRUV
6RFLDOUHWXUQUHIHUVWRDEHQHFLDOVRFLDORUHQYLURQPHQWDORXWFRPHWKDWPD\EHDWWULEXWHGWRDQLQYHVWPHQWLQDVRFLDOHQWHUSULVH
0TWHJ[0U]LZ[VYZPU(ZPH
7961,*;*65;,?;
7961,*;*65;,?;
6]LY]PL^VMPTWHJ[PU]LZ[PUN
,PSDFW LQYHVWLQJ KDV IXQGDPHQWDOO\ FKDQJHG WKH ZD\ LQYHVWRUV DQG HQWHUSULVHV HQJDJH LQ VXVWDLQDEOH
GHYHORSPHQW7KH WUDGLWLRQDO GLYLGH EHWZHHQ IRUSURW HQWHUSULVHV VHHNLQJ RQO\ QDQFLDO JDLQ DQG QRQ
SURWRUJDQL]DWLRQVVHHNLQJVRFLDOJRRGLVEOXUULQJDVK\EULGRUJDQL]DWLRQVEULQJWRJHWKHUSURWJHQHUDWLQJ
RSHUDWLRQVDQGVRFLDOPLVVLRQV,QSDUDOOHOWRWKHHPHUJHQFHRIVXVWDLQDEOH6(VQHZFDWHJRULHVRILQYHVWRUV
KDYH HPHUJHG$FWLYHO\ VHHNLQJ LQYHVWPHQWV \LHOGLQJ ERWK D QDQFLDO DQG D VRFLDO UHWXUQ WKHVH LPSDFW
LQYHVWRUV DUH WDNLQJ QRWLRQV RI VRFLDOO\ UHVSRQVLEOH LQYHVWPHQW RQH VWHS IXUWKHU DQG SURDFWLYHO\ VHHNLQJ
LQYHVWPHQWVZLWKGHPRQVWUDEOHSRVLWLYHVRFLDODQGRUHQYLURQPHQWDOLPSDFW
,PSDFWLQYHVWLQJKDVHPHUJHGDVDQDOWHUQDWLYHDVVHWFODVVFKDQQHOOLQJODUJHVFDOHSULYDWHFDSLWDOWRDGGUHVV
WKHZRUOGVPRVWSUHVVLQJVRFLDODQGHQYLURQPHQWDOFKDOOHQJHV-30RUJDQHVWLPDWHVDSURWRSSRUWXQLW\
IRU LPSDFW LQYHVWRUV EHWZHHQ DQG ELOOLRQ RYHU WKH QH[W GHFDGH LQ YH VHFWRUV VHUYLQJ JOREDO
SRSXODWLRQV HDUQLQJ OHVV WKDQ DQQXDOO\$V DQRWKHU LQGLFDWRU$YDQWDJH 9HQWXUHV HVWLPDWHV WKDW
DFKLHYLQJXQLYHUVDODFFHVVWRFOHDQZDWHUDQGVDQLWDWLRQLQ$VLDDORQHFRXOGFUHDWHDPDUNHWSRWHQWLDORI
WRELOOLRQIRU6(VE\
7KHUHKDVEHHQDWUHPHQGRXVJURZWKLQWKHDPRXQWRIFDSLWDOFRPPLWWHGWRLPSDFWLQYHVWPHQWRYHUWKH
SDVW\HDUV7KHWUDGLWLRQDOSLRQHHUVLQLPSDFWLQYHVWPHQWKDYHEHHQIRXQGDWLRQVGHYHORSPHQWQDQFH
LQVWLWXWLRQVDQGXOWUDKLJKQHWZRUWKLQGLYLGXDOV7KHDWWUDFWLRQRILPSDFWLQYHVWLQJKRZHYHULVQRWFRQQHG
WRWKHVHJURXSVDQGWKHUHLVDODUJHVXSSO\RIXQWDSSHGLPSDFWLQYHVWPHQWFDSLWDODPRQJLQGLYLGXDOVDQG
LQVWLWXWLRQVWKDWFRXOGEHPRELOL]HGZLWKWKHGHYHORSPHQWRIDSSURSULDWHLQYHVWPHQWFKDQQHOV$VDQH[DPSOH
DUHFHQWVWXG\IRXQGWKDWQHDUO\RI86LQYHVWRUVZHUHLQWHUHVWHGLQPDNLQJLPSDFWLQYHVWPHQWV7KDW
VDPHVWXG\VL]HGWKHFXUUHQWO\DYDLODEOHVXSSO\RIFDSLWDOIURP86UHWDLOLQYHVWRUVDWELOOLRQ$VWXG\
E\WKH0RQLWRU,QVWLWXWHLQSURMHFWHGWKDWWKHLPSDFWLQYHVWLQJPDUNHWZLOOJURZWRELOOLRQRYHU
WKHQH[WYHWRWHQ\HDUV7U\LQJWRVL]HWKHGHPDQGIRULQYHVWPHQWFDSLWDOIURP6(V-30RUJDQHVWLPDWHG
DQLQYHVWPHQWRSSRUWXQLW\RIEHWZHHQELOOLRQDQGWULOOLRQRYHUWKHQH[WGHFDGH
&DSLWDOPDUNHWVFDQSOD\DFULWLFDOUROHLQSURPRWLQJVXVWDLQDEOHHFRQRPLFGHYHORSPHQWLQ$VLD&HUWDLQO\
FDSLWDOPDUNHWVKDYHWKHSRWHQWLDOWRSOD\DQLPSRUWDQWUROHLQLQFUHDVLQJWKHRZRILQYHVWPHQWFDSLWDO
WRQDQFLDOO\VXVWDLQDEOH6(VLQ$VLD WR DOORZWKHPWR LQFUHDVHWKHVFDOHRI WKHLULPSDFW%\ DOORFDWLQJ
UHODWLYHO\VFDUFHSRROVRIFDSLWDODPRQJXVHUVLQDFRPSHWLWLYHPDUNHWSODFHFDSLWDOPDUNHWVKHOSWRHQVXUH
FDSLWDORZVDUHHPSOR\HGHIFLHQWO\:KLOHWUDGLWLRQDOFDSLWDOPDUNHWVRQEDODQFHGLUHFWFDSLWDOWRZDUGV
WKRVHXVHVWKDWSURPLVHWKHKLJKHVWULVNDGMXVWHGQDQFLDOUHWXUQVVRFLDOFDSLWDOPDUNHWVKDYHWKHSRWHQWLDO
WKURXJKLPSDFWLQYHVWLQJWRGLUHFWFDSLWDOWRWKRVHXVHVWKDWGHPRQVWUDWHWKHEHVWFRPELQDWLRQRISRVLWLYH
VRFLDODQGHQYLURQPHQWDOLPSDFWDQGQDQFLDOUHWXUQ
,QWKHFRQWH[WRI$VLDWKHODVWGHFDGHKDVVHHQVXEVWDQWLDOJURZWKLQWKHQXPEHUDQGVFDOHRIQDQFLDOO\
VXVWDLQDEOH6(V5HSUHVHQWLQJKXJHJURZWKSRWHQWLDOVXVWDLQDEOH6(VLQ$VLDDUHXQLTXHO\SRVLWLRQHGWR
SRVLWLYHO\LPSDFWWKHOLYHVRIWKHRIWKHZRUOGVSRSXODWLRQZKROLYHLQ$VLDE\DGGUHVVLQJDZLGH
UDQJHRIHFRQRPLFHQYLURQPHQWDOKHDOWKDQGVRFLDOFKDOOHQJHVPLOOLRQSHRSOHLQ$VLDDORQHOLYHRQ
OHVVWKDQ86SHUGD\$QDGGLWLRQDOPLOOLRQSHRSOHLQ$VLDOLYHRQOHVVWKDQ86SHUGD\LQ
PRGHUDWHSRYHUW\EULQJLQJWKH$VLDQUHJLRQVWRWDOSRRUSRSXODWLRQWRELOOLRQSHRSOHRURIWKH
-30RUJDQ,PSDFW,QYHVWPHQWV$QHPHUJLQJDVVHWFODVV
$YDQWDJH9HQWXUHV$VLD3DFLF,PSDFW,QYHVWPHQW5HSRUW,PSDFW,QYHVWLQJLQ$VLD7KH2SSRUWXQLWLHV7KH&KDOOHQJHVDQG
:KHUH,W,V+HDGHG
+RSH&RQVXOWLQJ0RQH\IRU*RRG7KH860DUNHWIRU,PSDFW,QYHVWPHQWVDQG&KDULWDEOH*LIWVIURP,QGLYLGXDO'RQRUVDQG
,QYHVWRUV
,ELGS
-30RUJDQ,PSDFW,QYHVWPHQWV$QHPHUJLQJDVVHWFODVV
$VLDQ'HYHORSPHQW%DQN3RYHUW\LQ$VLDDQGWKH3DFLF$Q8SGDWH
UHJLRQVWRWDOSRSXODWLRQ6(VOODFULWLFDOJDSLQWKHPDUNHWDGGUHVVLQJWKHVHERWWRPRIWKHS\UDPLG
SRSXODWLRQVZLWKDYDULHW\RILQQRYDWLRQVLQDEURDGUDQJHRIVHFWRUVVXFKDVSRYHUW\DOOHYLDWLRQKHDOWKDQG
VDQLWDWLRQGLVDVWHUUHOLHIDQGHGXFDWLRQ$VLDQ6(VPXVWEHDEOHWRVXVWDLQWKHLULQQRYDWLRQVQDQFLDOO\
RUJDQL]DWLRQDOO\DQGZLWKLPSDFWVRWKH\FDQDGGUHVVWKHPRVWFULWLFDOFKDOOHQJHVIDFLQJWKHUHJLRQIRU
WKHORQJWHUPIXWXUH
+PZJVUULJ[IL[^LLUJHWP[HSZ\WWS`HUKKLTHUK
1RWZLWKVWDQGLQJ WKH ODUJH QXPEHU RI LQQRYDWLYH 6(V LQ$VLD DQG WKH 3DFLF DQG WKH P\ULDG VRFLDO DQG
HQYLURQPHQWDO FKDOOHQJHV WKH\ DGGUHVV WKHUH LV D SUHYDLOLQJ GLVFRQQHFW EHWZHHQ WKH VXSSO\ RI LPSDFW
LQYHVWPHQW FDSLWDO DQG WKH GHPDQG IRU FDSLWDO
WR IXQG 6( JURZWK 7KLV GLVFRQQHFW LV SUHVHQWO\
FXUELQJ 6( JURZWK DQG LQKLELWLQJ WKH LQKHUHQW
SRWHQWLDO RI OHYHUDJLQJ PDUNHWEDVHG FDSLWDO IRU
VRFLDOLPSDFW7KHGLVFRQQHFWDULVHVIURPWKHODFN
RI LQIRUPDWLRQ DERXW WKH DYDLODELOLW\ RI LPSDFW
LQYHVWPHQW RSSRUWXQLWLHV LQ WKH UHJLRQ DV ZHOO DV
WKHGLIFXOW\DQGKLJKGXHGLOLJHQFHFRVWVLQFXUUHG
LQDFFHVVLQJVXFKRSSRUWXQLWLHVWKHKLJKSHUFHLYHG
ULVNDVVRFLDWHGZLWKLPSDFWLQYHVWPHQWVHVSHFLDOO\
LQHPHUJLQJPDUNHWVDQGWKHSRWHQWLDOLOOLTXLGLW\RILQYHVWPHQWVLQ6(VDQGOLPLWHGUDQJHRIH[LWRSWLRQV
IRULQYHVWRUVLQ6(V7KLVGLVFRQQHFWDOVRDULVHVIURPWKHODFNRIVWDQGDUGL]HGLPSDFWPHDVXUHPHQWDQG
UHSRUWLQJDVZHOODVIURPDPLVPDWFKLQPDQ\LQVWDQFHVEHWZHHQLQYHVWRUVDQG6(VH[SHFWDWLRQVIRU
QDQFLDOUHWXUQVRQLPSDFWLQYHVWPHQWV
7KHGLVFRQQHFWEHWZHHQFDSLWDO
VXSSO\DQGGHPDQGLVFXUELQJ6(
JURZWKDQGLQKLELWLQJWKHLQKHUHQW
SRWHQWLDORIOHYHUDJLQJPDUNHW
EDVHGFDSLWDOIRUVRFLDOLPSDFW
)LUVWDFFHVVWRLQYHVWPHQWRSSRUWXQLWLHVDQGLQIRUPDWLRQUHPDLQVDODUJHEDUULHUWRHQWU\,PSDFWLQYHVWRUV
LQWHUHVWHGLQ$VLDQ6(VDUHIDFHGZLWKDYDVWDQGYDULHGHOGWKDWPDNHVDFWLYHSDUWLFLSDWLRQFRVWO\DQG
QGLQJVXLWDEOHLQYHVWHHVGLIFXOW(DFKLQYHVWRUPXVWFDUU\RXWKLVRUKHURZQGXHGLOLJHQFHVWXGLHVRQ
HDFKSRWHQWLDOLQYHVWHHDOHQJWK\ODERULQWHQVLYHDQGLQHIFLHQWSURFHVV,PSURYHGDFFHVVWRLQIRUPDWLRQ
DERXWLPSDFWLQYHVWPHQWRSSRUWXQLWLHVDQGJUHDWHUWUDQVSDUHQF\ZRXOGORZHUVHDUFKDQGLQYHVWLJDWLRQFRVWV
IRUSURVSHFWLYHLPSDFWLQYHVWRUV
6HFRQGLQFUHDVHGOLTXLGLW\RILQYHVWPHQWVLVDSUHUHTXLVLWHIRUDWWUDFWLQJDEURDGHUUDQJHRILQYHVWRUVWR
WKLV VHFWRU 7KHUH GRHV QRW \HW H[LVW D WUDQVSDUHQW DFFRXQWDEOH DQG HIFLHQW WUDQVDFWLRQDO SODWIRUP WKDW
UHOLDEO\IDFLOLWDWHVLQYHVWPHQWVWKDWJHQHUDWHUHDOQDQFLDODQGVRFLDOUHWXUQV/LTXLGLW\UHPDLQVDFULWLFDO
EDUULHUIRUPDQ\SRWHQWLDOLPSDFWLQYHVWRUV6RFLDOYHQWXUHFDSLWDOIXQGVDQGRWKHUHTXLW\LQYHVWRUVLQ6(V
KDYHEHHQDEOHWRUHDOL]HH[LWVLIDWDOOSULPDULO\IURPVKDUHEX\EDFNVE\6(VDQGVDOHVRIHQWLUHEXVLQHVVHV
WRVWUDWHJLFEX\HUV7KHPRVWW\SLFDOURXWHIRUOLTXLGLW\IRUDYHQWXUHEDFNHGFRPSDQ\LQWKHWUDGLWLRQDO
QDQFLDOPDUNHWVDQLQLWLDOSXEOLFRIIHULQJ,32KDVEHHQRIIOLPLWVWRPRVW6(V$WWUDFWLQJDEURDGHU
UDQJHRILQVWLWXWLRQDOFDSLWDODVZHOODVLQGLYLGXDOLQYHVWRUVWRWKHLPSDFWLQYHVWLQJVHFWRUZRXOGUHTXLUHD
IDUPRUHOLTXLGDQGGHHSPDUNHWSODFH
7KLUGZKLOHWKHPRYHPHQWWRZDUGVDVWDQGDUGL]HGLPSDFWPHDVXUHPHQWDQGUHSRUWLQJV\VWHPKDVUHFHLYHG
FRQVLGHUDEOHDWWHQWLRQFRQVHQVXVKDVQRW\HWEHHQUHDFKHG,QRUGHUWRDWWUDFWLQYHVWRUVZKRDUHQRWDEOHWR
SHUIRUPUVWKDQGDQDO\VLVRIWKHVRFLDODQGHQYLURQPHQWDOLPSDFWRIWKHLULQYHVWPHQWVWKHUHLVDQHHGIRU
VWDQGDUGL]HGLPSDFWUHSRUWLQJPHWULFVWRIDFLOLWDWHHDV\FRPSDULVRQRILQYHVWPHQWVRQWKHEDVLVRISRWHQWLDO
VRFLDOUHWXUQ
)RXUWKORZHULQJWKHSHUFHLYHGULVNVRILPSDFWLQYHVWPHQWLVUHTXLUHGWRDWWUDFWEURDGHUVRXUFHVRIFDSLWDO
LQFOXGLQJLQVWLWXWLRQDOFDSLWDO
)LQDOO\UHWXUQH[SHFWDWLRQVUHPDLQSRRUO\FRPPXQLFDWHGDQGSRRUO\SDLUHGLQWHUPVRIVHWWLQJH[SHFWDWLRQV
EHWZHHQLPSDFWLQYHVWRUVDQG6(VVHHNLQJWRDWWUDFWLQYHVWPHQWFDSLWDO
,ELG
(IFLHQW PDWFKLQJ RI VXSSO\ DQG GHPDQG RI LPSDFW LQYHVWPHQWV GHPDQGV D JUHDWHU XQGHUVWDQGLQJ RI
WKHVXSSOLHUVRIFDSLWDO8QGHUVWDQGLQJWKHIDFWRUVWKDWLQXHQFHWKHVFDOHRILQYHVWRUDFWLYLW\ZLOODOORZ
GHPDQGVLGHDFWRUVWRVWUXFWXUHWKHLURSHUDWLRQVDQGPDUNHWWKHPVHOYHVLQDPDQQHUFRQGXFLYHWRDWWUDFWLQJ
JURZWKFDSLWDO7KHKRSHLVWKDWWKLVUHVHDUFKLQWRWKHLQWHUHVWVRILPSDFWLQYHVWRUVWKHGULYHUVDQGLPSHWXVHV
RI PLVVLRQGULYHQ LQYHVWPHQW DQG LQYHVWRU LQWHUHVW LQ D VRFLDO VWRFN H[FKDQJH DQG UHTXLUHG GHVLJQ DQG
RSHUDWLRQDODVSHFWVRIDVRFLDOVWRFNH[FKDQJHZLOOXOWLPDWHO\IRVWHUJURZWKLQLPSDFWLQYHVWPHQWVXSSRUWLQJ
6(VLQ$VLDDQGWKH3DFLF
)LUL[ZVMHYLNPVUHSZ[VJRL_JOHUNL
$UHJLRQDOVRFLDOVWRFNH[FKDQJHFRXOGUHGXFHWKLVGLVFRQQHFWEHWZHHQVXSSO\DQGGHPDQGE\LPSURYLQJ
DFFHVVWRLQYHVWPHQWRSSRUWXQLWLHVLQ6(VLPSURYLQJWUDQVSDUHQF\DQGUHGXFLQJGXHGLOLJHQFHFRVWVIRU
LQYHVWPHQWVLQ6(VVHUYLQJDVDUHJXODWHGWUDGLQJPHFKDQLVPRIIHULQJVXEVWDQWLDOO\JUHDWHUOLTXLGLW\WKDQ
LVQRZDYDLODEOHIRULQYHVWPHQWVLQ6(VLPSURYLQJWUDQVSDUHQF\E\HVWDEOLVKLQJVWDQGDUGVRIGLVFORVXUH
LQFOXGLQJ VWDQGDUGL]HG UHSRUWLQJ RI VRFLDO DQG HQYLURQPHQWDO LPSDFW RIIHULQJ D YDULHW\ RI LQYHVWPHQW
LQVWUXPHQWVDQGSURGXFWVWRPLWLJDWHULVNDQGHQJDJLQJPDUNHWLQWHUPHGLDULHVDQGVWDNHKROGHUSDUWLFLSDWLRQ
$UHJLRQDOVRFLDOVWRFNH[FKDQJHIRU$VLDDQGWKH3DFLFZRXOGVHUYHDVDSODWIRUPRQZKLFK6(VLQ$VLD
DQG WKH 3DFLF FDQ UDLVH FDSLWDO WKURXJK RIIHULQJV RI VKDUHV ERQGV RU RWKHU QDQFLDO LQVWUXPHQWV 6XFK
DVRFLDOVWRFNH[FKDQJHZLOOXQORFNWKHFDSLWDORILPSDFWLQYHVWRUVVHHNLQJWRPDNHLQYHVWPHQWVLQ6(V
WKDWJHQHUDWHQDQFLDOUHWXUQVZKLOHDOVRSURPRWLQJSRVLWLYHVRFLDODQGHQYLURQPHQWDORXWFRPHVWKURXJKD
SODWIRUPWKDWSURYLGHVOLTXLGLW\DQGWUDQVSDUHQF\
;OLYVSLVM00?HUK:O\QVNPUJYLH[PUNHZ\JJLZZM\S
ZVJPHSZ[VJRL_JOHUNL
5HFRJQL]LQJWKHLQYHVWPHQWFRQVWUDLQWVIDFHGE\VRPHRI$VLDVPRVWSURPLVLQJ6(V,,;VPLVVLRQLVWR
SURYLGH6(VLQ$VLDDQGWKH3DFLFZLWKJUHDWHUDFFHVVWRLQYHVWPHQWFDSLWDODOORZLQJWKHPWRVFDOHWKHLU
DFWLYLWLHVDQGH[SDQGWKHLULPSDFW7KURXJK LWV WZR LQYHVWPHQW SODWIRUPV ,PSDFW 3DUWQHUV DQG ,PSDFW
([FKDQJH,,;FRQQHFWV6(VZLWKLPSDFWLQYHVWRUVWKDWYDOXHWKHVRFLDODQGHQYLURQPHQWDOLPSDFWWKHVH
6(VFUHDWH,QRUGHUWRIDFLOLWDWHSULYDWHFDSLWDOUDLVLQJE\6(VLQ$VLDDQGWKH3DFLF,,;ODXQFKHG,PSDFW
3DUWQHUV LQ 0DUFK VHUYLQJ DV $VLDV UVW SULYDWH SODFHPHQW SODWIRUP FRQQHFWLQJ 6(V DQG LPSDFW
LQYHVWRUV7KH,PSDFW3DUWQHUVSODWIRUPVKRZFDVHV6(VIURPDFURVV$VLDDQGWKH3DFLFWKDWDUHVHHNLQJ
LQYHVWPHQWFDSLWDO
,,;LVZRUNLQJWRZDUGWKHFUHDWLRQRIDUHJLRQDOVRFLDOVWRFNH[FKDQJHVHUYLQJ6(VLQ$VLDDQGWKH3DFLF
,,;VDLPLVWRFUHDWHDWUDQVSDUHQWPDUNHWSODFHZKHUH6(VFDQUDLVHFDSLWDOIURPPLVVLRQDOLJQHGLQYHVWRUV
DQGLPSDFWLQYHVWRUVFDQEHQHWIURPDVRXUFHRIOLTXLGLW\DFFHVVWRLQYHVWPHQWUHDG\6(VDQGWUDQVSDUHQW
UHSRUWLQJRIQDQFLDOVRFLDODQGHQYLURQPHQWDOUHVXOWV
,,;UHFRJQL]HVWKDWWKHUHLVDQHHGWREXLOGXSWKHFDSDFLW\RI6(VLQ$VLDVRWKDWWKH\FDQHIIHFWLYHO\DEVRUE
JURZWKFDSLWDO,QUHVSRQVHWRWKLVQHHG,PSDFW,QYHVWPHQW6KXMRJ6KXMRJZDVFUHDWHGLQ0DUFKDV
DQRWIRUSURWDIOLDWHRI,,;6KXMRJUHJLVWHUHGDVDFKDULW\LQ6LQJDSRUHIRFXVHVRQFDSDFLW\EXLOGLQJ
DGYRFDF\UHVHDUFKDQGHGXFDWLRQUHODWHGWRWKH6(VHFWRULQ$VLDDQGWKH3DFLF6KXMRJFRQGXFWVDYDULHW\
RIDGYRFDF\DQGUHVHDUFKDFWLYLWLHVWRUDLVHDZDUHQHVVDQGEXLOGNQRZOHGJHRIWKHVRFLDOHQWHUSULVHDQG
LPSDFWLQYHVWLQJVHFWRUVLQWKHUHJLRQ
6KXMRJDOVRSHUIRUPVLPSDFWDVVHVVPHQWVIRUVRFLDOHQWHUSULVHVKHOSLQJWKHPWRVKRZFDVHDQGKLJKOLJKW
WKHLU VRFLDO LPSDFW WR LQYHVWRUV HIIHFWLYHO\ 6KXMRJ SHUIRUPV FRQWH[WXDOL]HG LPSDFW PHDVXUHPHQW DQG
UHSRUWLQJWRFRPSOHPHQWHPHUJLQJVWDQGDUGL]HGPHWULFVVXFKDV*,,56DQG652,6HH$SSHQGL[
&UHDWLQJWUDQVSDUHQWPDUNHWVIRULPSDFWLQYHVWPHQWFDQQRWEHDFFRPSOLVKHGLQDYDFXXP%XLOGLQJSODWIRUPV
WRFRQQHFW6(VDQGLPSDFWLQYHVWRUVLVRQO\SDUWRIWKHVROXWLRQ,QRUGHUIRUVRFLDOFDSLWDOPDUNHWVWRJURZ
DQG IRU FDSLWDO WR RZ HIFLHQWO\ WR 6(V LW LV QHFHVVDU\ WR KDYH WKH VXSSRUW RI D EURDG HFRV\VWHP RI
LQWHUPHGLDULHVDFURVVWKHUHJLRQ7KLVHFRV\VWHPQHHGVWRPLUURUZKDWH[LVWVLQWUDGLWLRQDOFDSLWDOPDUNHWV
DQGPXVWLQFOXGHWUDQVDFWLRQDGYLVRUVVXFKDVQDQFLDODGYLVRUVOHJDODGYLVRUVDQGDFFRXQWLQJDGYLVRUV
UDWLQJDJHQFLHVJRYHUQPHQWUHJXODWRU\ERGLHVUHVHDUFKUPVDFDGHPLFLQVWLWXWLRQVDQGRUJDQL]DWLRQVWKDW
EXLOGFDSDFLW\LQDQGSURYLGHWHFKQLFDODVVLVWDQFHWR6(V
6LQJDSRUHV QDQFLDO LQIUDVWUXFWXUH DQG LWV SRVLWLRQ DV D UHJLRQDO KXE FDQ SOD\ DQ LPSRUWDQW UROH LQ WKH
VFDOLQJRILPSDFWLQYHVWLQJDQGVRFLDOHQWHUSULVHLQ$VLD6LQJDSRUHLVZHOOSRVLWLRQHGWRFKDQQHOFDSLWDO
WR$VLDQ6(VWKURXJKLWVPDWXUHSULYDWHEDQNLQJVHFWRULWVZHOOGHYHORSHGLQYHVWPHQWEDQNLQJLQGXVWU\
DQGLWVUHSXWDWLRQDVDWUXVWHGJOREDOQDQFLDOFHQWHU/RFDOUHJXODWLRQLVFRQGXFLYHWRFURVVERUGHUFDSLWDO
UDLVLQJDQGH[LVWLQJLQYHVWRUVDUHIDPLOLDUZLWKWKHUHJXODWRU\HQYLURQPHQW7KHSUHVHQFHRIDUHVSHFWHG
UHJXODWRUVXFKDVWKH0RQHWDU\$XWKRULW\RI6LQJDSRUH0$6ZLOOFRPIRUWLQYHVWRUVDQGTXLFNHQJURZWK
RIWKH6(VSDFHLQ$VLD7KHVHDUHDOOFRQWULEXWLQJIDFWRUVWRUHGXFLQJSHUFHLYHGLQYHVWPHQWULVN
7KH DLP RI WKH UHVHDUFK LV WR XQGHUVWDQG WKH QHHGV DQG SUHIHUHQFHV RI LPSDFW LQYHVWRUV ZLWK UHJDUG WR
LQYHVWPHQWLQVRFLDOHQWHUSULVHVLQ$VLDDQGWKH3DFLFZLWKDYLHZWR
GHWHUPLQH ZKHWKHU VXFK LQYHVWRUV IDYRU WKH GHYHORSPHQW RI D UHJLRQDO VRFLDO VWRFN H[FKDQJH DV D
SODWIRUPWRFKDQQHOVXFKLQYHVWPHQWDQG
XQGHUVWDQGWKHUHTXLUHPHQWVWKDWVXFKDUHJLRQDOVRFLDOVWRFNH[FKDQJHPXVWPHHWLQRUGHUWREHXVHIXO
WRLQYHVWRUV
4,;/6+636.@
,UNHNLTLU[-YHTL^VYR
7KH SURMHFW HQWDLOHG VXUYH\LQJ VDPSOLQJ DQG LQWHUYLHZLQJ VWDNHKROGHUV DFURVV WKH JOREH LQ RUGHU WR
XQGHUVWDQGWKHLULPSDFWLQYHVWLQJDFWLYLWLHVLQ$VLDDQGWKH3DFLFUHJLRQ
7KHVXUYH\DQGFRQVHTXHQWDQDO\VLVKDVUHYHDOHGLPSRUWDQWLQIRUPDWLRQFRQFHUQLQJWKHFXUUHQWVWDWHDQG
SURVSHFWLYHJURZWKRIWKHLPSDFWLQYHVWLQJPDUNHW7KLVZRUNZDVIXUWKHUFRQWH[WXDOL]HGE\SULRUUHVHDUFK
FRQGXFWHGE\,,;ZLWKWKHVXSSRUWRIWKH5RFNHIHOOHU)RXQGDWLRQDQGWKH3URJUDPPHRQ6RFLDO,QQRYDWLRQ
DQG&KDQJH36,&$YDLODEOHPDUNHWVWXGLHVDQGDFDGHPLFOLWHUDWXUHE\OHDGLQJUHVHDUFKHUVLQWKHHOG
ZHUHDOVRXWLOL]HG
(WWYVHJO
$SLORWVXUYH\ZDVUVWFUHDWHGLQ-XQHDQGVHQWWRYHLQYHVWRURUJDQL]DWLRQVIURP(XURSH$VLDDQG
1RUWK$PHULFDWKDWZHUHLQ,,;DQG6KXMRJVLPPHGLDWHQHWZRUNV7KHVHYHLQYHVWRURUJDQL]DWLRQVSURYLGHG
IHHGEDFNRQWKHVXUYH\ZKLFKZDVXVHGWRUHQHWKHVXUYH\7KHQDOL]HGVXUYH\ZDVWKHQGLVWULEXWHGWR
DZLGHUDQJHRILQYHVWRUVZKLFKLQFOXGHGLQGLYLGXDOVDQGLQVWLWXWLRQVLQ$VLDDQGWKH3DFLFDQGDURXQG
WKHJOREHIURPWKHEHJLQQLQJRI0D\WRWKHHQGRI-XQH7KHVXUYH\ZDVVXSSOHPHQWHGZLWK
IDFHWRIDFHPHHWLQJVDQGWHOHSKRQHGLVFXVVLRQVZLWKLQYHVWRUVZLWKDQLQWHUHVWLQLQYHVWLQJLQ6(VLQ$VLD
DQGWKH3DFLF
:\Y]L`-VYTH[
7KHVXUYH\ZDVSUHVHQWHGLQDQHOHFWURQLFIRUPDQGFRQVLVWHGRITXHVWLRQV
7KHVXUYH\TXHVWLRQVZHUHGHVLJQHGWRFUHDWHDGHPRJUDSKLFDQGQDQFLDOSUROHRIFXUUHQWDQGSRWHQWLDO
LPSDFWLQYHVWRUVDQGWRGHWHUPLQHWKHLUSUHIHUHQFHVIRULPSDFWLQYHVWLQJLQ$VLDDQGWKH3DFLF7KHVXUYH\
TXHVWLRQVDOVRDLPHGWRXQGHUVWDQGWKHOHYHORILQYHVWRULQWHUHVWLQXWLOL]LQJDVRFLDOVWRFNH[FKDQJHDQG
'XUUHHQ6KDKQD])RXQGHURI6KXMRJZDVWKHKHDGRI36,&DWWKH/HH.XDQ<HZ6FKRRORI3XEOLF3ROLF\1DWLRQDO
8QLYHUVLW\RI6LQJDSRUHIURPWR36,&FRQGXFWHGVLJQLFDQWUHVHDUFKRQ$VLDQ6(VDQGWKHLUUHDGLQHVVWR
DEVRUELQYHVWPHQWFDSLWDO
WRGHWHUPLQHWKHUHTXLUHPHQWVWKDWVXFKDQH[FKDQJHPXVWPHHWLQRUGHUWRDSSHDOWRLPSDFWLQYHVWRUV,Q
SDUWLFXODUWKHVXUYH\VRXJKWWRXQGHUVWDQGLQYHVWRUSUHIHUHQFHVZLWKUHJDUGWRWKHVRFLDOLPSDFWPHWULFV
DVVHVVPHQWPHWKRGRORJLHVWKDWVXFKDQH[FKDQJHVKRXOGDGRSW
6SHFLFDOO\WKHVXUYH\TXHVWLRQVFRYHUHGWKHIROORZLQJDUHDV
&KDUDFWHULVWLFVRIWKHUHVSRQGHQW
&XUUHQW LQYROYHPHQW LQ LPSDFW LQYHVWPHQW LQFOXGLQJ WKH GHJUHH RI LQYROYHPHQW DQG JHRJUDSKLF
DUHDVDQGVHFWRUVWDUJHWHG
([SHFWHGIXWXUHLQYROYHPHQWLQLPSDFWLQYHVWLQJ
,PSDFWLQYHVWPHQWFULWHULD
6XSSRUWIRUWKHGHYHORSPHQWRIDUHJLRQDOVRFLDOVWRFNH[FKDQJH
2SHUDWLRQDOUHTXLUHPHQWVDQGSUHIHUHQFHVIRUVXFKDVRFLDOVWRFNH[FKDQJH
3UHIHUHQFHVIRUVRFLDOLPSDFWLQGLFDWRUVDQGDVVHVVPHQWPHWKRGRORJLHV
6KXMRJUHFHLYHGIRUW\VL[FRPSOHWHGDQGWZHQW\IRXUSDUWLDOO\FRPSOHWHGUHVSRQVHV
)RUWKHIXOOVXUYH\SOHDVHVHHWKH$SSHQGL[
;HYNL[0U]LZ[VYZ
,QFRQGXFWLQJLWVUHVHDUFK6KXMRJWDUJHWHGERWKLQGLYLGXDOLQYHVWRUVDQGLQVWLWXWLRQDOLQYHVWRUV7KHWDUJHW
XQLYHUVHLQFOXGHGLQYHVWRUVZKRZHUHFXUUHQWO\LQYROYHGLQLPSDFWLQYHVWLQJDVZHOODVLQYHVWRUVZKRZHUH
QRWFXUUHQWO\LQYROYHGLQLPSDFWLQYHVWLQJDQGWKHDQDO\VLVGUDZVGLVWLQFWLRQVEHWZHHQWKHVHJURXSVZKHUH
UHOHYDQW
,QGLYLGXDOLQYHVWRUVWDUJHWHGLQFOXGHGLQGLYLGXDOVZLWKDZLGHUDQJHRILQFRPHVDQGDVVHWVUDQJLQJIURP
UHWDLOLQYHVWRUVWRXOWUDKLJKQHWZRUWKLQGLYLGXDOV
,QVWLWXWLRQDOLQYHVWRUVWDUJHWHGLQFOXGHGDZLGHUDQJHDVZHOO7KHVHLQFOXGHGWUDGLWLRQDOLQYHVWRUVDVZHOO
DVLQVWLWXWLRQDOLQYHVWRUVIRFXVLQJRQLPSDFWLQYHVWPHQWVLQFOXGLQJVRFLDOYHQWXUHFDSLWDOIXQGV69&VDQG
PLFURQDQFHLQYHVWPHQWYHKLFOHV0,9V
6XUYH\VZHUHGLVWULEXWHGWRLQGLYLGXDOVDQGLQVWLWXWLRQVLQ,,;VDQG6KXMRJVEURDGQHWZRUNVDVZHOODV
RWKHULQYHVWRUVFKRVHQWRHQVXUHDEURDGUDQJHRIW\SHVRILQYHVWRUV
,_OPIP[!0UZ[P[\[PVUHS0U]LZ[VYZ;HYNL[LK
,QVWLWXWLRQDO,QYHVWRUV
6RFLDOYHQWXUHFDSLWDOIXQGV69&V
0LFURQDQFHLQYHVWPHQWYHKLFOHV0,9V
3HQVLRQIXQGV
0XWXDOIXQGPDQDJHUVSRVVLEO\ZLWK65,IXQGV
,QVWLWXWLRQDOIXQGPDQDJHUVSRVVLEO\ZLWK65,IXQGV
2WKHUIXQGPDQDJHUV
6RYHUHLJQZHDOWKIXQGV
(QGRZPHQWV)DPLO\IRXQGDWLRQV
6RFLDOYHQWXUHFDSLWDOIXQGVLQYHVWLQVRFLDOHQWHUSULVHVDWWKHHDUO\VWDJHVRIWKHLUGHYHORSPHQW0LFURQDQFHLQYHVWPHQW
YHKLFOHVIXQFWLRQDV69&VWKDWIRFXVVROHO\RQPLFURQDQFHLQYHVWPHQWV
0TWHJ[0U]LZ[VYZPU(ZPH
(5(3@:0:6--05+05.:
(5(3@:0:6--05+05.:
6]LY]PL^
6KXMRJVUHVHDUFKUHYHDOHGDQXPEHURILQVLJKWVLQWRWKHEHKDYLRURIYDULRXVJURXSVRILQYHVWRUVDQGLQWRWKH
JHQHUDOGLUHFWLRQRIWKHLPSDFWLQYHVWLQJVHFWRU$PRQJWKHVHWUHQGVYHNH\QGLQJVVWDQGRXW
LQYHVWRUVIURPDFURVVDOOVXUYH\HGJURXSVLQFOXGLQJWKRVHWKDWDUHDOUHDG\HQJDJHGLQLPSDFWLQYHVWPHQW
DQGRWKHUVWKDWDUHQRWDUHZLOOLQJWRLQFUHDVHWKHLULQYROYHPHQWLQLPSDFWLQYHVWLQJRYHUWKHQH[WIHZ
\HDUVVXEMHFWWRWKHGHYHORSPHQWRIDSSURSULDWHPDUNHWLQIUDVWUXFWXUH
IRUWKLVSRWHQWLDOWREHUHDOL]HGWKHUHDUHDQXPEHURISUHUHTXLVLWHVWKDWPXVWEHPHW
LQYHVWRUVLQWHQGWRGLYHUVLI\WKHPHWKRGVDQGW\SHVRILQVWUXPHQWVWKH\XVHWRPDNHLPSDFWLQYHVWPHQWV
ZLWKDIRFXVRQSURGXFWVWKDWRIIHULQFUHDVHGOLTXLGLW\
DODUJHPDMRULW\RIDOOUHVSRQGHQWVDUHLQIDYRURIWKHGHYHORSPHQWRIDVRFLDOVWRFNH[FKDQJHDQGDODUJH
PDMRULW\ZRXOGFRQVLGHUWUDQVDFWLQJRQLWDQG
RQHRIWKHNH\DWWUDFWLRQVRIDVRFLDOVWRFNH[FKDQJHLVLWVDELOLW\WRKHOSDFKLHYHVRFLDOUHWXUQVDQGD
ODUJHPDMRULW\RILQYHVWRUVWKRXJKWLWZDVLPSRUWDQWIRUDVRFLDOVWRFNH[FKDQJHWRLQFOXGHVRFLDOLPSDFW
LQIRUPDWLRQ
7YVSLVM:\Y]L`9LZWVUKLU[Z
6KXMRJVXUYH\HGDQLQYHVWRUXQLYHUVHWKDWLQFOXGHGDZLGHYDULHW\RILQGLYLGXDODQGLQVWLWXWLRQDOLQYHVWRUV
5HVSRQVHVZHUHUHFHLYHGIURPLQGLYLGXDOLQYHVWRUVDQGLQVWLWXWLRQDOLQYHVWRUV
,QWHUPVRIWKHLQGLYLGXDOLQYHVWRUVWKHLUDQQXDOKRXVHKROGLQFRPHVUDQJHGIURPOHVVWKDQ86WR
RYHUPLOOLRQDQGWKHLUDSSUR[LPDWHDPRXQWRIQHWLQYHVWDEOHDVVHWVUDQJHGIURPOHVVWKDQWR
RYHUPLOOLRQ)RUWKHSXUSRVHVRIRXUDQDO\VLVZHFKDUDFWHUL]HGWKHLQGLYLGXDOLQYHVWRUUHVSRQGHQWVDV
HLWKHUUHWDLOLQYHVWRUVPLOOLRQLQLQYHVWDEOHDVVHWVRUKLJKQHWZRUWKLQGLYLGXDOV+1:,!PLOOLRQ
LQLQYHVWDEOHDVVHWV:KHUHUHOHYDQWZHKLJKOLJKWDQGGLVFXVVVLJQLFDQWGLVWLQFWLRQVEHWZHHQWKHVHWZR
JURXSVWKURXJKRXWWKLVUHSRUW2IWKHVXUYH\HGLQGLYLGXDOLQYHVWRUVZHUHDOUHDG\HQJDJHGLQLPSDFW
LQYHVWLQJZHUHQRW\HWHQJDJHGDQGZHUHXQFHUWDLQ,QGLYLGXDOUHVSRQGHQWVFDPHIURPDFURVV
WKHJOREHZLWKDVLJQLFDQWSRUWLRQIURP$VLD
-PN\YL!(UU\HSOV\ZLOVSKPUJVTL
PU<:PUKP]PK\HSPU]LZ[VYZ
-PN\YL!(WWYV_PTH[LHTV\U[VMUL[PU]LZ[HISL
HZZL[ZPU<:PUKP]PK\HSPU]LZ[VYZ
)LYHDGGLWLRQDOUHVSRQGHQWVGLGQRWLGHQWLI\ZKHWKHUWKH\ZHUHLQGLYLGXDORULQVWLWXWLRQDOLQYHVWRUV7KHVHUHVSRQGHQWVRQO\
DQVZHUHGVHOHFWTXHVWLRQVIURPWKHVXUYH\EXWKDYHEHHQLQFOXGHGLQWKHRYHUDOOGDWD
7KHKLJKGHJUHHRISDUWLFLSDWLRQLQLPSDFWLQYHVWLQJDPRQJUHVSRQGHQWVLVQRWEHOLHYHGWREHUHSUHVHQWDWLYHRIWKHRYHUDOO
LQYHVWRUXQLYHUVHEXWPRVWOLNHO\UHHFWVELDVLQWKHVXUYH\XQLYHUVH
7KHLQVWLWXWLRQDOLQYHVWRUUHVSRQGHQWVDOVRUHSUHVHQWHGDGLYHUVHUDQJHRILQVWLWXWLRQVLQWHUPVRIWKHW\SH
RILQVWLWXWLRQWKHLUVL]HPHDVXUHGE\DVVHWVXQGHUPDQDJHPHQWDQGWKHGHJUHHRIWKHLULQYROYHPHQWLQ
LPSDFWLQYHVWLQJ7KHLQVWLWXWLRQDOLQYHVWRUUHVSRQGHQWVLQFOXGHGIRXQGDWLRQVDQGHQGRZPHQWVWUDGLWLRQDO
IXQG PDQDJHUV SHQVLRQ IXQGV DQG PDQDJHUV RI VRFLDO YHQWXUH FDSLWDO IXQGV 69&V DQG PLFURQDQFH
LQYHVWPHQWYHKLFOHV0,9V7KHDVVHWVXQGHUPDQDJHPHQWRIWKHUHVSRQGHQWVYDULHGZLGHO\IURPOHVVWKDQ
PLOOLRQZKLFKJURXSLQFOXGHGDQXPEHURIWKH69&VDQG0,9VWRRYHUELOOLRQ7KHXOWLPDWH
VRXUFHRIWKHLULQYHVWRUFDSLWDOFDPHIURPDURXQGWKHJOREHLQFOXGLQJ(XURSH$VLDDQG1RUWK$PHULFD
DQGIURPDYDULHW\RIW\SHVRILQYHVWRUVLQFOXGLQJUHWDLOLQGLYLGXDOLQYHVWRUV+1:,VDQGLQVWLWXWLRQDODVVHW
RZQHUV)RUWKHSXUSRVHVRIRXUDQDO\VLVZHFKDUDFWHUL]HGWKHLQVWLWXWLRQDOLQYHVWRUVEDVHGRQZKHWKHURU
QRWWKH\ZHUHFXUUHQWO\HQJDJHGLQLPSDFWLQYHVWLQJ$PRQJWKHLQVWLWXWLRQVFXUUHQWO\HQJDJHGLQLPSDFW
LQYHVWLQJZHDOVRRQRFFDVLRQVLQJOHGRXW69&VDQG0,9VIRUVHSDUDWHDQDO\VLVEHFDXVHRIWKHLUXQLTXH
IRFXVEHLQJVROHO\GHGLFDWHGWRLPSDFWLQYHVWLQJDQGIRFXVHGSULPDULO\RQPDNLQJSULYDWHLQYHVWPHQWV
:KHUHUHOHYDQWWKLVUHSRUWKLJKOLJKWVVLJQLFDQWGLVWLQFWLRQVEHWZHHQLQGLYLGXDOLQYHVWRUVDQGLQVWLWXWLRQDO
LQYHVWRUVDQGDPRQJWKHGLIIHUHQWW\SHVRILQVWLWXWLRQDOLQYHVWRUV
-PN\YL!6YPNPUVMPU]LZ[VYJHWP[HS
PUZ[P[\[PVUHSPU]LZ[VYZ
-PN\YL!:V\YJLVMPU]LZ[TLU[M\UKZ
PUZ[P[\[PVUHSPU]LZ[VYZ
7HY[PJPWH[PVUPU0TWHJ[0U]LZ[PUN
2QHRIWKHPRVWSURQRXQFHGQGLQJVRIWKHVXUYH\LVWKDWLQYHVWRUVDUHZLOOLQJWRLQFUHDVHWKHDPRXQWRI
WKHLUSRUWIROLRVDOORFDWHGWRLPSDFWLQYHVWLQJVXEMHFWWRWKHFRQWLQXHGPDWXUDWLRQRIWKHLPSDFWLQYHVWLQJ
PDUNHWDQGWKHGHYHORSPHQWRIDSSURSULDWHPDUNHWLQIUDVWUXFWXUH7KLVQGLQJDSSOLHVDFURVVDOOJURXSV
RI UHVSRQGHQWV LQFOXGLQJ UHWDLO LQYHVWRUV +1:,V DQG
LQVWLWXWLRQDO LQYHVWRUV 7KRVH DOUHDG\ HQJDJHG LQ LPSDFW
LQYHVWLQJH[SHFWWRLQFUHDVHWKHSHUFHQWDJHRIWKHLUSRUWIROLRV
GHGLFDWHG WR LPSDFW LQYHVWLQJ RYHU WKH QH[W WKUHH \HDUV$
ODUJHSHUFHQWDJHRIWKRVHZKRDUHQRWFXUUHQWO\HQJDJHGLQ
LPSDFW LQYHVWLQJ H[SHFW WR EHJLQ PDNLQJ VXFK LQYHVWPHQWV
ZLWKLQWKUHH\HDUV
,QYHVWRUVDUHZLOOLQJWRLQFUHDVH
WKHLULPSDFWLQYHVWLQJDFWLYLW\
VXEMHFWWRWKHFRQWLQXHG
PDWXUDWLRQDQGGHYHORSPHQW
RIWKHPDUNHWSODFH
-PN\YL!7LYJLU[HNLVM[V[HSM\UKZPU]LZ[LKPUPTWHJ[PU]LZ[TLU[Z
J\YYLU[S`PTWHJ[PU]LZ[PUNUV[PUJS\KPUN:=*ZHUK40=Z
,QDGGLWLRQDUHODWLYHO\KLJKOHYHORIUHVSRQGHQWVZKRDUHQRWFXUUHQWO\HQJDJHGLQLPSDFWLQYHVWLQJLQGLFDWHG
WKDWWKH\ZRXOGH[SHFWWREHVRHQJDJHGZLWKLQWKUHH\HDUVVXEMHFWWRWKHIXUWKHUGHYHORSPHQWRIWKHLPSDFW
LQYHVWPHQW PDUNHW$PRQJ LQGLYLGXDO LQYHVWRUV ZKR DUH QRW FXUUHQWO\ HQJDJHG LQ LPSDFW LQYHVWLQJ DQ
RYHUZKHOPLQJSHUFHQWDJHRIUHVSRQGHQWVLQGLFDWHGWKDWWKH\H[SHFWHGWREHFRPHLPSDFWLQYHVWRUVRQFHWKH
PDUNHWGHYHORSHGIXUWKHUPRUHVDLGWKH\H[SHFWHGWRLQYHVWRYHURIWKHLUWRWDOIXQGVLQLPSDFW
LQYHVWPHQWV7KRVHLQVWLWXWLRQDOLQYHVWRUVZKRDUHQRWFXUUHQWO\LQYROYHGLQLPSDFWLQYHVWLQJZHUHPRUH
FLUFXPVSHFW7KHYDVWPDMRULW\UHVSRQGHGWKDWWKH\FRXOGQRWSUHGLFWWKHLUIXWXUHOHYHORILQYROYHPHQWLQ
LPSDFWLQYHVWLQJDVLWZDVGHSHQGHQWRQWKHLUFOLHQWRULQYHVWRUSUHIHUHQFHV
-PN\YL!7YVQLJ[LKWLYJLU[HNLVM[V[HSM\UKZPU]LZ[LKPUPTWHJ[
PU]LZ[TLU[ZPU[OYLL`LHYZ
PUKP]PK\HSPU]LZ[VYZJ\YYLU[S`UV[PTWHJ[PU]LZ[PUN
7KHQGLQJWKDWLPSDFWLQYHVWLQJLVH[SHFWHGWRLQFUHDVHRYHUWKHFRPLQJ\HDUVKHOGWUXHDFURVVDZLGHUDQJH
RIVHFWRUVZKLFKDWWUDFWLPSDFWLQYHVWPHQWDVZHOODVDFURVVDZLGHUDQJHRIJHRJUDSKLFDUHDV5HVSRQGHQWV
ZHUHDVNHGWRLGHQWLI\WKHVHFWRUVLQZKLFKWKH\KDGPDGHRUZHUHFXUUHQWO\PDNLQJLPSDFWLQYHVWPHQWV
DQGDOVRWRLQGLFDWHWKHVHFWRUVLQZKLFKWKH\ZRXOGOLNHWRPDNHLPSDFWLQYHVWPHQWVLQWKHIXWXUH$OPRVW
DOOVHFWRUVVKRZHGLQFUHDVHVLQWKHQXPEHURILQYHVWRUVLQWHUHVWHGLQLQYHVWLQJLQWKHIXWXUHUHODWLYHWRWKH
QXPEHUFXUUHQWO\LQYHVWLQJ(GXFDWLRQVXVWDLQDEOHDJULFXOWXUHDQGKHDOWKDUHDPRQJWKHVHFWRUVVKRZLQJ
WKHJUHDWHVWLQFUHDVHVZLWKDQGUHVSHFWLYHO\RIDOOUHVSRQGHQWVVD\LQJWKH\ZRXOGOLNHWR
PDNHLPSDFWLQYHVWPHQWVLQWKHVHVHFWRUVLQWKHIXWXUH
6LPLODUO\DOOJHRJUDSKLFUHJLRQVZLWKLQ$VLDUHJLVWHUHGLQFUHDVHVLQWKHQXPEHURILQYHVWRUVLQWHUHVWHGLQ
LQYHVWLQJLQWKHIXWXUHUHODWLYHWRWKHQXPEHUFXUUHQWO\LQYHVWLQJ6($VLDDQG6RXWK$VLDOHDGWKHZD\ERWK
LQWHUPVRIFXUUHQWLQYHVWPHQWVDVZHOODVIXWXUHSODQVZLWKDQGUHVSHFWLYHO\RIUHVSRQGHQWV
H[SUHVVLQJDGHVLUHWRPDNHLPSDFWLQYHVWPHQWVLQWKHVHUHJLRQVLQWKHIXWXUH
-PN\YL!:LJ[VYZMVYPTWHJ[PU]LZ[TLU[ZV]LYHSS
-PN\YL!.LVNYHWOPJHYLHZMVYPTWHJ[PU]LZ[TLU[ZV]LYHSS
7YLYLX\PZP[LZ[V9LHSPaL[OL7V[LU[PHSVM0TWHJ[0U]LZ[PUN
6XUYH\ UHVSRQGHQWV ZHUH DVNHG ZKDW UHTXLUHPHQWV ZRXOG QHHG WR EH PHW LQ RUGHU IRU WKHP WR EHJLQ
PDNLQJ LPSDFW LQYHVWPHQWV RU LI WKH\ ZHUH DOUHDG\ LPSDFW LQYHVWRUV WR LQFUHDVH WKHLU OHYHO RI LPSDFW
LQYHVWPHQW6HYHUDOVHFWLRQVRIWKHVXUYH\LQFOXGLQJWKLVRQHIRFXVHGODUJHO\RQWKHQDQFLDOUHWXUQVDQG
OLTXLGLW\UHTXLUHPHQWVIRULPSDFWLQYHVWLQJVHYHUDORWKHUVHFWLRQVIRFXVHGRQWKHVRFLDODQGHQYLURQPHQWDO
UHTXLUHPHQWVIRULPSDFWLQYHVWLQJZKLFKZLOOEHGLVFXVVHGODWHULQWKHUHSRUW$ZLGHYDULHW\RIUHTXLUHPHQWV
ZHUH FLWHG :KLOH D PDMRULW\ RI UHVSRQGHQWV ZKR DUH
DOUHDG\ HQJDJHG LQ LPSDFW LQYHVWPHQW UHVSRQGHG WKDW
WKHUHZHUHQRLPSHGLPHQWVWRLQYHVWLQJIXUWKHUPDQ\RI
WKHFXUUHQWLPSDFWLQYHVWRUVDQGWKHYDVWPDMRULW\RIWKRVH
QRWDOUHDG\HQJDJHGLQLPSDFWLQYHVWLQJLGHQWLHGRQHRU
LQVRPHFDVHVVHYHUDOUHTXLUHPHQWVWKDWZRXOGKDYHWREH
PHWWREHJLQRULQFUHDVHLPSDFWLQYHVWLQJ
,QFUHDVHGLQIRUPDWLRQDERXWWKH
DYDLODELOLW\RILPSDFWLQYHVWLQJ
RSSRUWXQLWLHVDQGHDVLHUDFFHVVWR
LPSDFWLQYHVWPHQWRSSRUWXQLWLHV
ZHUHWKHPRVWFLWHSUHUHTXLVLWHVWR
LQFUHDVHGLPSDFWLQYHVWLQJ
-PN\YL !7YLYLX\PZP[LZMVYPTWHJ[PU]LZ[PUNV]LYHSS
,QWHUHVWLQJO\WKRVHDOUHDG\HQJDJHGLQLPSDFWLQYHVWLQJFLWHGPRVWIUHTXHQWO\WKHQHHGIRUJUHDWHUOLTXLGLW\
IRU JUHDWHU WUDQVSDUHQF\ DQG IRU HDVLHU DFFHVV WR LPSDFW LQYHVWPHQW RSSRUWXQLWLHV ZKLOH WKRVH QRW \HW
HQJDJHGLQLPSDFWLQYHVWLQJFLWHGPRVWIUHTXHQWO\WKHQHHGIRUPRUHLQIRUPDWLRQDERXWLPSDFWLQYHVWPHQW
RSSRUWXQLWLHVDGHPRQVWUDWHGWUDFNUHFRUGRIQDQFLDOUHWXUQVDQGHDVLHUDFFHVV7KRVHZKRKDYHDOUHDG\
EHJXQPDNLQJLPSDFWLQYHVWPHQWVDSSHDUWRKDYHLGHQWLHGDQHHGIRUJUHDWHUOLTXLGLW\DQGWUDQVSDUHQF\
7KRVH ZKR KDYH \HW WR FRPPLW WR WKH PDUNHW DUH ZDLWLQJ IRU PRUH LQIRUPDWLRQ ERWK LQ JHQHUDO DQG
VSHFLFDOO\UHODWHGWRWKHQDQFLDOUHWXUQWKH\FDQH[SHFW%RWKJURXSVDUHFOHDUWKDWHDVLHUDFFHVVLVFULWLFDO
WRH[SDQGLQJWKHPDUNHW
-PN\YL!7YLYLX\PZP[LZMVYPTWHJ[PU]LZ[PUN
J\YYLU[S`PTWHJ[PU]LZ[PUN]ZJ\YYLU[S`UV[PTWHJ[PU]LZ[PUN
7YVZWLJ[P]LPTWHJ[PU]LZ[TLU[TL[OVKZ
,PSDFWLQYHVWRUVLQWHQGWRGLYHUVLI\WKHPHWKRGVDQGW\SHVRILQVWUXPHQWVWKH\XVHWRPDNHWKHLULPSDFW
LQYHVWPHQWV ,Q SDUWLFXODU LPSDFW LQYHVWRUV H[SHFW WR UHGXFH WKHLU UHOLDQFH RQ GLUHFW LQYHVWPHQW DQG WR
LQFUHDVHWKHLUXVHRIWKLUGSDUW\DGYLVHUVDQGWKHLULQYHVWPHQWWKURXJKIXQGVDQGIXQGVRIIXQGV/LNHZLVH
LQYHVWRUVH[SHFWWRPRYHDZD\IURPWKHFXUUHQWHQYLURQPHQWZKHUHWKHPDMRULW\RILPSDFWLQYHVWPHQWV
DUHSULYDWHORDQVRUSULYDWHHTXLW\LQYHVWPHQWVWRDPDUNHWZKHUHOLTXLGGHEWVHFXULWLHVDQGSXEOLFO\WUDGHG
HTXLW\VHFXULWLHVDFFRXQWIRUDODUJHUVKDUHRIWKHPDUNHW
2I WKRVH UHVSRQGHQWV ZKR DUH FXUUHQWO\ LPSDFW LQYHVWRUV WKH RYHUZKHOPLQJ PDMRULW\ FXUUHQWO\ PDNHV
LPSDFWLQYHVWPHQWVGLUHFWO\ZLWKDERXWRQHTXDUWHUDOVRXWLOL]LQJIXQGVDQGDVPDOOSHUFHQWDJHXWLOL]LQJ
WKLUGSDUW\PDQDJHUV:KHQDVNHGKRZWKH\ZRXOGOLNHWRPDNHLPSDFWLQYHVWPHQWVLQWKHIXWXUHDUHGXFHG
SHUFHQWDJH RI WKLV VDPH JURXS LQGLFDWHG D GHVLUH WR FRQWLQXH LQYHVWLQJ GLUHFWO\ DQG D PDUNHGO\ KLJKHU
SHUFHQWDJHLQGLFDWHGWKHGHVLUHWRLQYHVWWKURXJKIXQGVWKLUGSDUW\PDQDJHUVDQGIXQGVRIIXQGV0RUHRYHU
WKRVHZKRDUHQRWFXUUHQWO\LPSDFWLQYHVWRUVEXWZKRH[SHFWWREHJLQPDNLQJLPSDFWLQYHVWPHQWVLQWKH
FRPLQJ\HDUVVKRZDQHYHQJUHDWHUSURSHQVLW\WRLQYHVWWKURXJKLQGLUHFWURXWHV$SSDUHQWO\WKHGHPDQGIRU
WKHGHYHORSPHQWRIWKHVHLQYHVWPHQWSURGXFWVDQGVHUYLFHVLVVWURQJ
-PN\YL!4L[OVKZVMTHRPUNPTWHJ[PU]LZ[TLU[Z
J\YYLU[S`PTWHJ[PU]LZ[PUN]ZJ\YYLU[S`UV[PTWHJ[PU]LZ[PUN
$PRQJFXUUHQWLPSDFWLQYHVWRUVZKRUHVSRQGHGWRWKHVXUYH\WKHPRVWZLGHO\XVHGIRUPVWKDWWKHLULPSDFW
LQYHVWPHQWVFXUUHQWO\WDNHDUHSULYDWHHTXLW\ORDQVDQGTXDVLHTXLW\PH]]DQLQHQDQFH1RWVXUSULVLQJO\
OLTXLGGHEWVHFXULWLHVDQGSXEOLFHTXLWLHVSOD\DOPRVWQRUROHLQFXUUHQWSRUWIROLRV:KHQDVNHGZKDWIRUPV
WKH\ZRXOGOLNHWKHLULPSDFWLQYHVWPHQWVWRWDNHLQWKHIXWXUHSULYDWHHTXLW\ORDQVDQGPH]]DQLQHQDQFH
UHPDLQHGWKHPRVWSRSXODUEXWOLTXLGGHEWVHFXULWLHVDQGSXEOLFHTXLW\VHFXULWLHVZHUHDOVRFLWHGE\DODUJH
SHUFHQWDJHRIUHVSRQGHQWV(YHQPRUHVWULNLQJO\DPRQJWKRVH\HWWRHQJDJHLQLPSDFWLQYHVWLQJSXEOLF
HTXLW\VHFXULWLHVZHUHWKHPRVWSUHIHUUHGIRUPRILQYHVWPHQW
-PN\YL!;`WLZVMPTWHJ[PU]LZ[TLU[Z
J\YYLU[S`PTWHJ[PU]LZ[PUN]ZJ\YYLU[S`UV[PTWHJ[PU]LZ[PUN
0H]]DQLQHQDQFLQJLVDIRUPRIQDQFLQJSRVLWLRQHGLQEHWZHHQGHEWDQGHTXLW\0H]]DQLQHQDQFLQJLVSRSXODUIRUDWWUDFWLYH
EHFDXVHRILWVDELOLW\WRUHWDLQRIIHUWKHXSVLGHRIHTXLW\EXWSUHVHUYHZKLOHPDLQWDLQLQJWKHORZHUULVNRIGHEW
0UKP]PK\HS0U]LZ[VYZ
,QGLYLGXDOLQYHVWRUVLQSDUWLFXODUGHPRQVWUDWHDSURQRXQFHGLQWHUHVWLQXWLOL]LQJIXQGVDQGDVWURQJGHVLUHIRU
OLTXLGLQYHVWPHQWRSSRUWXQLWLHV7KRXJKRQO\RILQGLYLGXDOLQYHVWRUVFXUUHQWO\LQYHVWWKURXJKIXQGV
KRSHWRGRVRLQWKHIXWXUH:KLOHRQO\DYHU\VPDOOQXPEHURILQGLYLGXDOVPDNHLPSDFWLQYHVWPHQWV
WKURXJKSXEOLFHTXLW\VHFXULWLHVFXUUHQWO\KRSHWRGRVRLQWKHIXWXUH7KHGLIIHUHQFHVDUHSURQRXQFHG
EHWZHHQ UHWDLO LQYHVWRUV DQG +1:,V ZLWK UHWDLO LQYHVWRUV VKRZLQJ D JUHDWHU GHVLUH WR XWLOL]H IXQGV DQG
WKLUGSDUW\PDQDJHUVDQGDJUHDWHUGHVLUHIRUOLTXLGLQYHVWPHQWRSSRUWXQLWLHV%\FRQWUDVW+1:,VZKRDUH
FXUUHQWO\LQYROYHGLQLPSDFWLQYHVWLQJWKURXJKGLUHFWLQYHVWPHQWLQSULYDWHFRPSDQLHVVHHPWREHUHODWLYHO\
FRQWHQWZLWKWKHVWDWXVTXR,QWHUHVWLQJO\UHWDLOLQYHVWRUVVHHPPRUHNHHQRQWUDGLQJOLTXLGGHEWVHFXULWLHV
WKDQ+1:,VRIUHWDLOLQYHVWRUVZRXOGOLNHWRWUDGHOLTXLGGHEWVHFXULWLHVLQWKHIXWXUHZKHUHDVRQO\
RI+1:,VVDLGVR
:KHQWU\LQJWRH[SODLQZK\UHWDLOLQYHVWRUVDUHFXUUHQWO\OHVVOLNHO\WRPDNHGLUHFWLQYHVWPHQWVOLTXLGLW\
DSSHDUV WR EH D NH\ IDFWRU &RQVLGHU WKDW D PXFK KLJKHU SHUFHQWDJH RI UHWDLO LQYHVWRUV YV
RI +1:,V HPSKDVL]HG D UHTXLUHPHQW IRU LQFUHDVHG OLTXLGLW\ LQ LPSDFW LQYHVWPHQWV EHIRUH WKH\ FRXOG
LQFUHDVHWKHLULPSDFWLQYHVWLQJDFWLYLW\)XUWKHUPRUHPRUHUHWDLOLQYHVWRUVUHTXLUHGHDVLHUDFFHVVWRLPSDFW
LQYHVWPHQWVYVRI+1:,V&RQVLGHULQJWKDWDVRFLDOVWRFNH[FKDQJHZRXOGIXOOOERWKRIWKHVH
UHTXLUHPHQWV UHWDLO LQYHVWRUV LQ SDUWLFXODU VWDQG WR JDLQ VLJQLFDQW EHQHWV IURP WKH HVWDEOLVKPHQW RI D
VRFLDOVWRFNH[FKDQJH
-PN\YL!;`WLZVMPTWHJ[PU]LZ[TLU[ZPUKP]PK\HSPU]LZ[VYZ
-PN\YL!4L[OVKZVMTHRPUNPTWHJ[PU]LZ[TLU[Z
PUKP]PK\HSPU]LZ[VYZ
0UZ[P[\[PVUHS0U]LZ[VYZ
,QVWLWXWLRQDOLQYHVWRUVDUHQRWDVLQWHUHVWHGLQLQYHVWLQJLQIXQGVFXUUHQWO\GRDQGRQO\SODQWRGR
VRLQWKHIXWXUHDVDUHLQGLYLGXDOLQYHVWRUV$QGWKRXJKLQVWLWXWLRQDOLQYHVWRUUHVSRQGHQWVYDOXHOLTXLGLW\
WKH\ GR QRW SODFH DV PXFK YDOXH RQ LW DV GR WKH LQGLYLGXDO LQYHVWRU UHVSRQGHQWV RI LQVWLWXWLRQDO
LQYHVWRUV PHQWLRQHG OLTXLGLW\ DV DQ DGGHG EHQHW RI D VRFLDO VWRFN H[FKDQJH /LNH LQGLYLGXDO LQYHVWRU
UHVSRQGHQWVLQVWLWXWLRQDOUHVSRQGHQWVFLWHGSULYDWHHTXLW\DVWKHPRVWFRPPRQIRUPRILPSDFWLQYHVWPHQW
WRGD\ :KLOH WKHVH UHVSRQGHQWV H[SHFW SULYDWH HTXLW\ WR UHPDLQ WKH PRVW FRPPRQ IRUP RI LQYHVWPHQW
SXEOLFHTXLW\DQGOLTXLGGHEWVHFXULWLHVDUHH[SHFWHGWRSOD\DODUJHUROHLQWKHIXWXUHDVZHOO
-PN\YL!;`WLZVMPTWHJ[PU]LZ[TLU[ZPUZ[P[\[PVUHSPU]LZ[VYZ
-PN\YL!4L[OVKZVMTHRPUNPTWHJ[PU]LZ[TLU[ZPUZ[P[\[PVUHSPU]LZ[VYZ
([[YHJ[P]LULZZVMH:VJPHS:[VJR,_JOHUNL
7KHUHVXOWVRIWKHVXUYH\SRLQWWRDKLJKLQFOLQDWLRQDPRQJLQYHVWRUVWRQRWRQO\VXSSRUWWKHGHYHORSPHQWRI
DVRFLDOVWRFNH[FKDQJHEXWDOVRWRWUDQVDFWDQGRUHQFRXUDJHWKHLUFOLHQWVWRWUDQVDFWRQVXFKDSODWIRUP
9HU\LPSRUWDQWO\HYHQWKRVHUHVSRQGHQWVZKRDUHQRWFXUUHQWO\HQJDJHGLQLPSDFWLQYHVWLQJH[SUHVVHGVWURQJ
LQWHUHVWLQWKHGHYHORSPHQWRIDVRFLDOVWRFNH[FKDQJHDQG
LQWUDQVDFWLQJRQVXFKDQH[FKDQJH
RILQYHVWRUVZKRDUHQRW
FXUUHQWO\LPSDFWLQYHVWLQJZRXOG
FRQVLGHUWUDQVDFWLQJRQDVRFLDO
VWRFNH[FKDQJH
-PN\YL!0UMH]VYVM[OLKL]LSVWTLU[VMH
ZVJPHSZ[VJRL_JOHUNLJ\YYLU[S`PTWHJ[PU]LZ[PUN
-PN\YL!>V\SKJVUZPKLY[YHUZHJ[PUNVUH
ZVJPHSZ[VJRL_JOHUNLJ\YYLU[S`PTWHJ[PU]LZ[PUN
-PN\YL !0UMH]VYVM[OLKL]LSVWTLU[VMH
ZVJPHSZ[VJRL_JOHUNLJ\YYLU[S`UV[PTWHJ[PU]LZ[PUN
-PN\YL!>V\SKJVUZPKLY[YHUZHJ[PUNVUH
ZVJPHSZ[VJRL_JOHUNLJ\YYLU[S`UV[PTWHJ[PU]LZ[PUN
9LHZVUZMVY-H]VYPUN[OL+L]LSVWTLU[VMH:VJPHS:[VJR,_JOHUNL
)RUERWKLQGLYLGXDOLQYHVWRUVDQGLQVWLWXWLRQDOLQYHVWRUVWKHRSSRUWXQLW\WRDFKLHYHERWKQDQFLDOUHWXUQ
DQGVRFLDOLPSDFWZDVWKHPRVWIUHTXHQWO\FLWHGUHDVRQWRWUDQVDFWRQDVRFLDOVWRFNH[FKDQJHZLWK
RIUHVSRQGHQWVVD\LQJVR$VLJQLFDQWSHUFHQWDJHRILQVWLWXWLRQDOLQYHVWRUUHVSRQGHQWVSDUWLFXODUO\DPRQJ
69&VDQG0,9VDOVRFLWHGWKHRSSRUWXQLW\WRXWLOL]HDVRFLDOVWRFNH[FKDQJHDVDQH[LWPHFKDQLVPIRU
H[LVWLQJLQYHVWPHQWVDVDUHDVRQWRVXSSRUWWKHGHYHORSPHQWRIVXFKDQH[FKDQJH
:KHQDVNHGWRFLWHWKHEHQHWVRIXWLOL]LQJDVRFLDOVWRFNH[FKDQJHYHUVXVPDNLQJSULYDWHLPSDFWLQYHVWPHQWV
ERWKLQGLYLGXDODQGLQVWLWXWLRQDOLQYHVWRUVVDLGWKDWWUDQVSDUHQWUHSRUWLQJRIVRFLDOHQYLURQPHQWDOLPSDFW
LQIRUPDWLRQZDVWKHODUJHVWDSSHDOZLWKVD\LQJVR1HDUO\WKHVDPHSHUFHQWDJHDOVRFLWHGWKHLQFUHDVHG
OLTXLGLW\RIDVRFLDOVWRFNH[FKDQJHDVDQLPSRUWDQWUHDVRQIRULWVDSSHDO$QGDPDMRULW\FLWHGWKHLQFUHDVHG
WUDQVSDUHQF\RIQDQFLDOLQIRUPDWLRQWKDWDVRFLDOVWRFNH[FKDQJHZRXOGEULQJWRLPSDFWLQYHVWLQJ
0UKP]PK\HS0U]LZ[VYZ
%H\RQG DFKLHYLQJ QDQFLDO UHWXUQV DQG VRFLDO LPSDFW D ODUJH SHUFHQWDJH RI LQGLYLGXDO LQYHVWRUV
FLWHGWKHSRWHQWLDOVRFLDOLPSDFWRIDVRFLDOVWRFNH[FKDQJHDVDNH\UHDVRQWRWUDQVDFWRQVXFKDQH[FKDQJH
5HODWLYHO\IHZLQGLYLGXDOVFLWHGWKHSRWHQWLDOIRUQDQFLDOUHWXUQVRUWKHDELOLW\WRXVHWKHH[FKDQJHDVDQ
H[LWVWUDWHJ\IRUH[LVWLQJLQYHVWPHQWVDVLPSRUWDQWEHQHWVRIVXFKDQH[FKDQJH
:KHQDVNHGZKDWQDQFLDOUHWXUQVWKH\DLPIRUZKHQPDNLQJLPSDFWLQYHVWPHQWVRQO\RILQGLYLGXDO
UHVSRQGHQWVDQVZHUHGWKDWWKH\DLPIRUDIXOOULVNDGMXVWHGPDUNHWUDWHRIUHWXUQ7KHRWKHURILQGLYLGXDO
UHVSRQGHQWVZRXOGEHVDWLVHGZLWKEHORZPDUNHWUHWXUQVRIZKLFKZRXOGEHVDWLVHGVLPSO\ZLWK
WKHSUHVHUYDWLRQRIWKHLUSULQFLSDO
-PN\YL!4HPUYLHZVU[V[YHUZHJ[VUHZVJPHSZ[VJRL_JOHUNL
PUKP]PK\HSPU]LZ[VYZ
-PN\YL!(WWLHSVMHZVJPHSZ[VJRL_JOHUNLJVTWHYLK
[VWYP]H[LPU]LZ[TLU[ZPUKP]PK\HSPU]LZ[VYZ
-PN\YL!-PUHUJPHSJYP[LYPHMVYPTWHJ[PU]LZ[PUNPUKP]PK\HSPU]LZ[VYZ
0UZ[P[\[PVUHS0U]LZ[VYZ
%\ FRQWUDVW WR LQGLYLGXDO UHVSRQGHQWV D VLJQLFDQW QXPEHU RI LQVWLWXWLRQDO UHVSRQGHQWV FLWHG WKH
DELOLW\RIDVRFLDOVWRFNH[FKDQJHWRSURYLGHDQH[LWPHFKDQLVPIRUH[LVWLQJLQYHVWPHQWVDVWKHPDLQUHDVRQ
WRWUDQVDFWRQVXFKDQH[FKDQJH1RWVXUSULVLQJO\69&VDQG0,9VZHUHSDUWLFXODUO\LQFOLQHGWRYDOXHWKLV
DVSHFWRIDVRFLDOVWRFNH[FKDQJHZLWKRI69&VDQG0,9VODEHOLQJLWDVDQLPSRUWDQWFULWHULRQ
7KHQDQFLDOUHWXUQUHTXLUHPHQWVIRULQVWLWXWLRQDOLQYHVWRUVDOVRVKRZHGDPDMRUGLVWLQFWLRQEHWZHHQW\SHV
RILQVWLWXWLRQDOLQYHVWRUV69&VDQG0,9VZHUHLQVRPHFDVHZLOOLQJWRWUDGHRIIQDQFLDOUHWXUQIRUVRFLDO
UHWXUQZLWKOHVVWKDQLQGLFDWLQJWKDWWKH\DOZD\VUHTXLUHDIXOOULVNDGMXVWHGPDUNHWUDWHRIUHWXUQ%\
FRQWUDVWSHQVLRQIXQGVDQGWUDGLWLRQDOIXQGPDQDJHUVZHUHXQDQLPRXVLQVHHNLQJIXOOULVNDGMXVWHGPDUNHW
UDWHVRIUHWXUQRQWKHLULPSDFWLQYHVWPHQWV
-PN\YL!-PUHUJPHSJYP[LYPHMVYPTWHJ[PU]LZ[PUNPUZ[P[\[PVUHSPU]LZ[VYZ
-PN\YL!(WWLHSVMHZVJPHSZ[VJRL_JOHUNLJVTWHYLK
[VWYP]H[LPU]LZ[TLU[ZPUZ[P[\[PVUHSPU]LZ[VYZ
7YLMLYLUJLZMVYZVJPHSPTWHJ[PUKPJH[VYZHUK
HZZLZZTLU[TL[OVKVSVNPLZ
)RULPSDFWLQYHVWRUVWKHVRFLDODQGHQYLURQPHQWDOLPSDFWRI6(VLVDFULWLFDOLQYHVWPHQWFULWHULRQ6(VDUH
GLIIHUHQWLDWHGE\WKHLUPDUNHWRULHQWHGDSSURDFKHVWRDGGUHVVVRPHRIWKHELJJHVWVRFLDODQGHQYLURQPHQWDO
FKDOOHQJHVLQWKHZRUOG:KLOHWKHLUQDQFLDOSHUIRUPDQFHLVFUXFLDOWRWKHVXVWDLQDELOLW\RIWKHRUJDQL]DWLRQ
6(V PLVVLRQGULYHQ QDWXUH LV WKH PDLQ DWWUDFWLRQ IRU LPSDFW LQYHVWRUV 2QH RI WKH NH\ DWWUDFWLRQV RI D
VRFLDOVWRFNH[FKDQJHWRLQYHVWRUVLVWKHDELOLW\LWRIIHUVWKHPWRDFKLHYHVRFLDOUHWXUQV7KHLPSRUWDQFHRI
VRFLDODQGHQYLURQPHQWDOLPSDFWIRUDQLPSDFWLQYHVWRULVKLJKOLJKWHGE\WKHZLOOLQJQHVVRIPDQ\RIRXU
UHVSRQGHQWVWRDFFHSWORZHUQDQFLDOUHWXUQVLQUHWXUQIRUKLJKVRFLDOLPSDFWVIURP6(V7RMXVWLI\WKLVWUDGH
RIIKRZHYHUJUHDWLPSRUWDQFHLVSODFHGRQWKHDELOLW\WRGHPRQVWUDWHWKHVRFLDOLPSDFWFUHDWHGE\LPSDFW
LQYHVWPHQWV
&RQVHTXHQWO\RYHURIUHVSRQGHQWVLQGLFDWHGWKDWWKH\UHTXLUHWKHDELOLW\WRPHDVXUHWKHVRFLDODQG
HQYLURQPHQWDOUHWXUQRIWKHLULPSDFWLQYHVWPHQWV$QGQRWVXUSULVLQJO\WKHYDVWPDMRULW\RIUHVSRQGHQWV
RYHUEHOLHYHLWLVLPSRUWDQWIRUDVRFLDOVWRFNH[FKDQJHWRUHTXLUHOLVWHGFRPSDQLHVWRUHSRUWRQWKHLU
VRFLDODQGHQYLURQPHQWDOLPSDFW
7KHUHZHUHDYDULHW\RIRSLQLRQVDVWRZKLFKIRUPVXFKUHSRUWLQJVKRXOGWDNH:KLOHRSLQLRQVZHUHGLYLGHG
WKHPDMRULW\RILQYHVWRUVH[SUHVVHGDGHVLUHIRUVRFLDOLPSDFWLQIRUPDWLRQWREHUHSRUWHGXVLQJVWDQGDUGL]HG
WHUPLQRORJ\VXFKDV,5,6DQGWREHDXGLWHGE\LQGHSHQGHQWSDUWLHV$VLJQLFDQWSURSRUWLRQRIUHVSRQGHQWV
IDYRUHGWKHXVHRIWKLUGSDUW\VRFLDOLPSDFWUDWLQJVWRROV
0UKP]PK\HS0U]LZ[VYZ
,QGLYLGXDOLQYHVWRUVKLJKO\YDOXHDGHTXDWHGLVFORVXUHRIVRFLDOHQYLURQPHQWDOLQGLFDWRUVIRUWKHLULPSDFW
LQYHVWPHQWVDVZHOODVWKHDELOLW\WRPHDVXUHWKHVRFLDOHQYLURQPHQWDOUHWXUQRIWKHLULPSDFWLQYHVWPHQWV
+RZHYHURQO\RILQGLYLGXDOLQYHVWRUVDUHFXUUHQWO\XVLQJDV\VWHPWRPHDVXUHWKHVRFLDOLPSDFWRI
WKHLULQYHVWPHQWV,QGLYLGXDOLQYHVWRUVPD\RIWHQWLPHVODFNWKHUHVRXUFHVDQGLQIUDVWUXFWXUHRILQVWLWXWLRQDO
LQYHVWRUVWRPHDVXUHWKHVRFLDOLPSDFWRIWKHLULQYHVWPHQWVEXWWKH\QRQHWKHOHVVQGVXFKPHDVXUHPHQWV
WREHDFUXFLDOUHTXLUHPHQWIRUDQ\RIWKHLULPSDFWLQYHVWPHQWV$VDUHVXOWLQGLYLGXDOUHVSRQGHQWVZHUH
WKHPRVWOLNHO\WRVD\WKDWWKH\UHOLHGRQWKHXVHRIVRFLDOHQYLURQPHQWDOFHUWLFDWLRQVIURPLQGHSHQGHQW
WKLUGSDUWLHV+RZHYHULWLVZRUWKQRWLQJWKDWQRUHOLDEOHFHUWLFDWLRQVFXUUHQWO\H[LVWLQ$VLDVRWKLVPXVW
EHDGGUHVVHGLQWKHQHDUIXWXUH
-PN\YL!9LX\PYLTLU[ZMVYZVJPHSLU]PYVUTLU[HSPTWHJ[VMPTWHJ[
PU]LZ[TLU[ZPUKP]PK\HSPU]LZ[VYZ
0UZ[P[\[PVUHSPU]LZ[VYZ
7KRXJKDOOJURXSVRILQVWLWXWLRQDOLQYHVWRUVDVZHOODVLQGLYLGXDOLQYHVWRUVDJUHHGWKDWPHDVXUHVRIVRFLDO
LPSDFW DUH LPSRUWDQW 69&V DQG 0,9V ZHUH PRVW OLNHO\ WR GHPDQG WKH DELOLW\ WR PHDVXUH WKH VRFLDO
HQYLURQPHQWDOUHWXUQVRIWKHLULPSDFWLQYHVWPHQWV7KLVUHHFWVWKHVROHO\LPSDFWLQYHVWPHQWRULHQWHGQDWXUH
RI69&VDQG0,9V)XUWKHUPRUHZKLOH69&VDQG0,9VFDUHPRUHDERXWKDYLQJLQIRUPDWLRQWRFRQGXFW
WKHLURZQDQDO\VHVRWKHULQVWLWXWLRQVDUHNHHQHURQWKHLGHDRIKDYLQJLQGHSHQGHQWVRFLDOFHUWLFDWLRQV
-PN\YL!9LX\PYLTLU[ZMVYZVJPHSLU]PYVUTLU[HSPTWHJ[VMPTWHJ[
PU]LZ[TLU[ZPUZ[P[\[PVUHSPU]LZ[VYZ
6WLYH[PVUHSYLX\PYLTLU[ZMVYHZVJPHSZ[VJRL_JOHUNL
7KHVXUYH\FRQWDLQHGDQXPEHURITXHVWLRQVUHODWLQJWRWKHUHTXLUHPHQWVDQGSUHIHUHQFHVRILQYHVWRUVIRU
WKHRSHUDWLRQRIDVRFLDOVWRFNH[FKDQJH7KHVHTXHVWLRQVZHUHGHVLJQHGWRHOLFLWUHVSRQVHVWKDWZRXOGDVVLVW
LQJXLGLQJWKHGHYHORSPHQWRIDVRFLDOVWRFNH[FKDQJHIRUWKH$VLDDQGWKH3DFLFUHJLRQ7KHUHVXOWVRI
WKHUHVHDUFKKDYHSURYLGHGYDOXDEOHLQVLJKWDVWRWKHRSHUDWLRQDOUHTXLUHPHQWVWKDWDVRFLDOVWRFNH[FKDQJH
PXVWPHHWLQRUGHUWREHXVHIXOWRLPSDFWLQYHVWRUVDQGWKHSUHIHUHQFHVRILPSDFWLQYHVWRUVIRUVXFKDQ
H[FKDQJH$VXPPDU\RIWKHVHLVSURYLGHGEHORZ
,QYHVWRUVZHUHDVNHGZKLFKLQVWUXPHQWVWKH\ZRXOG EH LQWHUHVWHGLQ LQYHVWLQJLQ WKURXJK D VRFLDOVWRFN
H[FKDQJH 2YHU RI WKRVH ZKR UHVSRQGHG LQGLFDWHG DQ LQWHUHVW LQ LQYHVWLQJ LQ HTXLWLHV ZKLFK LV
QRW VXUSULVLQJ JLYHQ WKDW HTXLWLHV WUDGLQJ GRPLQDWHV WKH WUDGLQJ RQ WUDGLWLRQDO H[FKDQJHV +RZHYHU D
VXUSULVLQJO\ KLJK SHUFHQWDJH DOVR LQGLFDWHG DQ LQWHUHVW LQ
LQYHVWLQJ LQ ERQGV DQG IXQGV WUDGHG RQ D
VRFLDOVWRFNH[FKDQJH
2YHURIUHVSRQGHQWV
LQGLFDWHGDQLQWHUHVWLQLQYHVWLQJ
LQHTXLWLHV
-PN\YL!0UZ[Y\TLU[ZPU[LYLZ[LKPU[YHKPUN
VUZVJPHSZ[VJRL_JOHUNLV]LYHSS
*VUJS\KPUNYLTHYRZ
,QWHUHVWLQWKHLPSDFWLQYHVWLQJVSDFHLVJURZLQJDFURVVWKHERDUG,QVWLWXWLRQDOLQYHVWRUVIDPLO\RIFHV
LQVWLWXWLRQDOZHDOWKPDQDJHUVDQGKLJKQHWZRUWKLQGLYLGXDOVDOOVKRZDJURZLQJZLOOLQJQHVVWRLQYHVWLQ
RUJDQL]DWLRQVWKDWRIIHUVRFLDOO\UHVSRQVLEOHLQYHVWPHQWRSSRUWXQLWLHVDQGWKDWQXUWXUHVXVWDLQDEOHSURMHFWV
LQGHYHORSLQJFRXQWULHVDQGKROGVFRSHIRUQDQFLDOUHWXUQV+RZHYHUIRUDPDMRULW\RIWKHVHLQYHVWRUV
D SULPDU\ FRQFHUQ LV WKDW LW LV RIWHQ GLIFXOW WR HVWDEOLVK DQG HYDOXDWH WKH WUXH LPSDFW WKHLU LQYHVWPHQWV
ZLOOPDNH$VQRWHGDERYHRXUQGLQJVSRLQWWRDGHVLUHDPRQJH[LVWLQJDQGSRWHQWLDOLPSDFWLQYHVWRUV
IRULQFUHDVHGWUDQVSDUHQF\UHJDUGLQJKRZ6(VGHQHWUDFNDQGUHSRUWRQWKHLUVRFLDODQGHQYLURQPHQWDO
SHUIRUPDQFH +HLJKWHQHG WUDQVSDUHQF\ LQ LPSDFW UHSRUWLQJ ZRXOG QRW RQO\ HQFRXUDJH H[LVWLQJ LPSDFW
LQYHVWRUVWRLQFUHDVHWKHLULQYHVWPHQWSRUWIROLREXWZRXOGDOVRLQVSLUHPRUHLQYHVWRUVWRHQWHUWKHLPSDFW
LQYHVWLQJVSDFH
)RUWKHQDQFLDODQDO\VLVRIOLVWHGHQWHUSULVHVWUDGLWLRQDOVWRFNH[FKDQJHVUHTXLUHDOOFRPSDQLHVWRUHSRUW
XVLQJVWDQGDUGL]HGQDQFLDOUHSRUWLQJODQJXDJH,QDVLPLODUIDVKLRQWKHUHLVDVWURQJSUHIHUHQFHDPRQJ
LQYHVWRUVIRUUHDGLO\DYDLODEOHVWDQGDUGL]HGGDWDRQLQGLFDWRUVRIVRFLDODQGHQYLURQPHQWDOLPSDFWRIDOO6(V
ORRNLQJWRUDLVHFDSLWDOYLDDVRFLDOVWRFNH[FKDQJH
7KHXVHRIVWDQGDUGL]HGPHWKRGVWRPHDVXUHDQGUHSRUWWKHVRFLDODQGHQYLURQPHQWDOLPSDFWRI6(VZRXOG
UHGXFHWKHWUDQVDFWLRQFRVWIRULPSDFWLQYHVWRUVDQGSURYLGHDPHDQVWRFRPSDUHWKHVRFLDOUHWXUQVRI6(V
6WDQGDUGL]HGUHSRUWLQJLVLPSRUWDQWQRWRQO\EHFDXVHLWDOORZVLQYHVWRUVWRFRPSDUHWKHSHUIRUPDQFHRI
HQWHUSULVHVZLWKLQDJLYHQDUHDEXWDOVRWRGHYHORSPRUHKROLVWLFPHDVXUHPHQWPHWKRGRORJLHVWKDWDOORZ
FRPSDULVRQDFURVVVSHFWUXPUDQJHRIVRFLDODQGHQYLURQPHQWDOLPSDFW
9DULRXV UHSRUWLQJ VWDQGDUGV DUH DYDLODEOH WR LQYHVWRUV IRU WUDQVSDUHQW DQG DFFRXQWDEOH DVVHVVPHQW RI
HQWHUSULVHV7KRVHIUDPHZRUNVWKDWDUHPRVWDSSOLFDEOHWR$VLDDQGWKXVWKHOHDGLQJFRQWHQGHUVIRUXVHRQ
DUHJLRQDOVRFLDOVWRFNH[FKDQJHDUHGLVFXVVHGLQWKHDSSHQGL[
0TWHJ[0U]LZ[VYZPU(ZPH
9,*644,5+(;065:
9,*644,5+(;065:
6]LY]PL^
7KHUHVXOWVRIWKLVUHVHDUFKKDYHLQGLFDWHGVLJQLFDQWLQWHUHVWDPRQJJOREDOLQYHVWRUVLQPDNLQJLPSDFW
LQYHVWPHQWVLQ6(VLQ$VLDDQGWKH3DFLF6SHFLFDOO\UHVSRQVHVKDYHVKRZQVLJQLFDQWLQWHUHVWLQDQG
VXSSRUWIRUWKHGHYHORSPHQWRIDUHJLRQDOVRFLDOVWRFNH[FKDQJHLQ$VLDDQGDKLJKOHYHORIZLOOLQJQHVVWR
WUDQVDFWRQDUHJLRQDOVRFLDOVWRFNH[FKDQJHIRUDFFHVVWRLPSDFWLQYHVWPHQWRSSRUWXQLWLHV
7KHUHVHDUFKKDVDOVRKLJKOLJKWHGYDULRXVSUHIHUHQFHVRILPSDFWLQYHVWRUVUHJDUGLQJKRZVXFKDQH[FKDQJH
VKRXOGEHVWUXFWXUHG$VLWZRUNVWRZDUGVWKHODXQFKRI$VLDVUVWVRFLDOVWRFNH[FKDQJH,,;VKRXOGIRFXV
RQPHHWLQJWKHVHRSHUDWLRQDOUHTXLUHPHQWVFUHDWLQJVRFLDODQGHQYLURQPHQWDOOLVWLQJFULWHULDWKDWZLOOEH
DFFHSWHGE\LPSDFWLQYHVWRUVDQGHQJDJLQJWKHQHFHVVDU\HFRV\VWHPSOD\HUVWKDWZLOOIDFLOLWDWHWKHOLVWLQJ
RI6(V'HSHQGLQJRQWKHW\SHRILQYHVWRUEDVHWKDWWKHH[FKDQJHZLOOVHHNWRWDUJHWLHLQGLYLGXDOYV
LQVWLWXWLRQDOWKHVHUHTXLUHPHQWVPD\YDU\DVWKHUHVHDUFKLQGLFDWHGVRPHYDULDWLRQLQSUHIHUHQFHVEHWZHHQ
GLIIHUHQWW\SHVRILQYHVWRUV
9LJVTTLUKH[PVUZMVY*YLH[PUNH9LNPVUHS:VJPHS:[VJR,_JOHUNL
2QHRIWKHVWURQJHVWUHVXOWVRIWKHUHVHDUFKZDVWKHLPSRUWDQFHWKDWDYDVWPDMRULW\RIUHVSRQGHQWVSODFHG
RQ UREXVW VRFLDO DQG HQYLURQPHQWDO LPSDFW UHSRUWLQJ E\ 6(V OLVWHG RQ D VRFLDO VWRFN H[FKDQJH ,QGHHG
IRU PDQ\ D SULPDU\ DWWUDFWLRQ RI D VRFLDO VWRFN H[FKDQJH LV WKDW LW ZRXOG UHTXLUH VXFK UHSRUWLQJ 7KLV
KLJKOLJKWVWKHLPSRUWDQFHRIVHOHFWLQJDSSURSULDWHVRFLDODQGHQYLURQPHQWDOOLVWLQJFULWHULDDVZHOODVVRFLDO
DQGHQYLURQPHQWDOGLVFORVXUHUHTXLUHPHQWV
7KHUHVXOWVRIWKHUHVHDUFKDOVRSURYLGHVRPHJXLGDQFHRQWKHJHQHUDOIRUPWKDWVXFKGLVFORVXUHUHTXLUHPHQWV
VKRXOG WDNH 6XUYH\ TXHVWLRQV KDG UHOHYDQFH IRU D QXPEHU RI LVVXHV WKH GHJUHH RI VWDQGDUGL]DWLRQ WKDW
VKRXOGEHUHTXLUHGLQLPSDFWUHSRUWLQJZKHWKHUUHSRUWLQJUHTXLUHPHQWVVKRXOGLQFOXGHWKHUHTXLUHPHQWIRU
WKH6(WRUHFHLYHDVRFLDOUDWLQJRUFHUWLFDWLRQDQGZKHWKHUWKHUHVKRXOGEHDUHTXLUHPHQWIRUVRFLDOLPSDFW
GLVFORVXUHVWREHDXGLWHGE\WKLUGSDUWLHV
2QWKHUVWRIWKHVHWKHUHZDVEURDGVXSSRUWDPRQJUHVSRQGHQWVIRUWKHLGHDRIUHTXLULQJXVHRIDVWDQGDUGL]HG
UHSRUW WHUPLQRORJ\ VXFK DV ,5,6 :KHWKHU WKH LQGLFDWRUV WR EH UHSRUWHG VKRXOG EH PDQGDWHG E\ WKH
H[FKDQJHRUVHOIVHOHFWHGE\WKH6(ZDVVXEMHFWWRGLVDJUHHPHQWZLWKLQGLYLGXDOUHVSRQGHQWVVKRZLQJD
VOLJKWSUHIHUHQFHIRUWKHIRUPHUDQGLQVWLWXWLRQDOUHVSRQGHQWVVKRZLQJDVOLJKWSUHIHUHQFHIRUWKHODWWHU
,QGLYLGXDOUHVSRQGHQWVZHUHPRUHVXSSRUWLYHRIDUHTXLUHPHQWWKDW6(VXQGHUJRDVRFLDOLPSDFWUDWLQJWKDQ
ZHUHLQVWLWXWLRQDOUHVSRQGHQWV+RZHYHUWKHUHZDVDERXWHTXDOVXSSRUWIRUPDQGDWLQJDUDWLQJDVIRUVLPSO\
PDQGDWLQJVWDQGDUGL]HGUHSRUWLQJRILQGLFDWRUVFKRVHQE\WKHH[FKDQJH
:LWKUHJDUGWRWKHQHFHVVLW\RIDQDXGLWQDWXUDOO\PRVWUHVSRQGHQWVZRXOGIHHOPRUHFRPIRUWDEOHZHUH
VRFLDOLPSDFWJXUHVWREHDXGLWHGLQDOOLQVWDQFHVZLWKLQGLYLGXDOUHVSRQGHQWVSODFLQJPRUHZHLJKWRQWKLV
1HYHUWKHOHVVDPDMRULW\RIUHVSRQGHQWVZRXOGEHFRPIRUWDEOHZLWKVRPHOHYHORIUHYLHZVKRUWRIDQDXGLW
RIDOO6(VUHSRUWV7KHRSHUDWRURIWKHH[FKDQJHZLOOQHHGWREDODQFHWKHFRVWRIUHTXLULQJ6(VWRDXGLWWKHVH
UHVXOWVDJDLQVWWKHEHQHWVDQGPRUHDQDO\VLVPD\EHUHTXLUHGRQWKLVSRLQW
$QRWKHU LVVXH RQ ZKLFK LW ZLOO EH LPSRUWDQW WR EDODQFH FRVWV DQG EHQHWV LV WKH OHYHO RI VFUXWLQ\ WR EH
UHTXLUHGRIWKHOLVWLQJGRFXPHQWV:KLOHWKHODUJHVWQXPEHURIUHVSRQGHQWVLQGLFDWHGDGHVLUHIRULVVXHUVWR
OHDIXOOSURVSHFWXVVLPLODUWRWKDWUHTXLUHGIRUDSXEOLFRIIHULQJLQKLJKO\UHJXODWHGPDUNHWVDVLJQLFDQW
QXPEHUZHUHZLOOLQJWRDFFHSWDQDGPLVVLRQVGRFXPHQWVLPLODUWRWKDWUHTXLUHGE\WKH$,0LQ/RQGRQ
DQGDVOLJKWO\VPDOOHUQXPEHUZHUHZLOOLQJWRDFFHSWDQRIIHULQJGRFXPHQWVLPLODUWRWKRVHFRPPRQLQ
9LHSPaPUNH:\JJLZZM\S:[VJR,_JOHUNL!;OLYVSLVM00?
7KHUHVXOWVRIRXUUHVHDUFKDUHH[SHFWHGWRLQIRUPWKHHIIRUWVRI,,;LQGHYHORSLQJWKHUVWUHJLRQDOVRFLDO
VWRFNH[FKDQJHVHUYLQJ6(VLQ$VLDDQGWKH3DFLF
,QDGGLWLRQWRLQFRUSRUDWLQJWKHVHUHVXOWV,,;VKRXOGFRQWLQXHZRUNLQJFORVHO\ZLWKLWVVLVWHURUJDQL]DWLRQ
6KXMRJZKLFKHQJDJHVZLWK6(VDQGWKHLUVWDNHKROGHUVWRPDSVRFLDOHQWHUSULVHVDFURVV$VLDDQGLGHQWLI\
WKHPRVWSURPLVLQJ6(VDQGFRQGXFWVLPSDFWDVVHVVPHQWVRQ6(VWRKHOSSUHSDUH6(VWRUDLVHFDSLWDO7KHVH
DFWLYLWLHVZLOOHYHQWXDOO\KHOS,,;VRXUFHDQGIDFLOLWDWHGHDOVRQWKHVRFLDOVWRFNH[FKDQJH
$ VRFLDO VWRFN H[FKDQJH PXVW DOVR HQJDJH D EURDG VHW RI VWDNHKROGHUV FDSDEOH RI FRQGXFWLQJ WKH GXH
GLOLJHQFHZRUNQHFHVVDU\IRUULVNPLWLJDWLRQ7KHHFRV\VWHPRIPDUNHWLQWHUPHGLDULHVLQFOXGLQJQDQFLDO
DGYLVRUVLQYHVWPHQWEDQNVODZ\HUVDFFRXQWDQWVFUHGLWUDWLQJDJHQFLHVFRQVXOWDQWVDQGLQFXEDWRUVDOVR
SOD\VDFUXFLDOUROHLQFDSDFLW\EXLOGLQJIRU6(V,WLVWKHUHIRUHLPSRUWDQWWRDVVXUHWKHLUEX\LQIURPDQ
HDUO\VWDJHLQWKHGHYHORSPHQWRIDVRFLDOVWRFNH[FKDQJH
7KHUROHDQGLPSRUWDQFHRIPDUNHWLQWHUPHGLDULHVLVGLVFXVVHGIXUWKHULQ0DUNHW,QWHUPHGLDU\$VVHVVPHQW,PSDFW,QYHVWPHQW
0TWHJ[0U]LZ[VYZPU(ZPH
(77,5+0?
(77,5+0?
+LUPUN0TWHJ[0U]LZ[PUN
,PSDFW LQYHVWLQJ FDQ EH GHQHG DV PDNLQJ LQYHVWPHQWV LQWHQGHG WR FUHDWH SRVLWLYH LPSDFW EH\RQG
QDQFLDOUHWXUQ
2YHUWKHSDVWGHFDGHDQHPHUJLQJEDVHRILQYHVWRUVZLWKDJOREDOIRFXVKDVVRXJKWWRPDNHLQYHVWPHQWV
WKDWJHQHUDWHDGRXEOHRUWULSOHERWWRPOLQH7KHVHLQYHVWRUVDUHQRZEURDGO\GHVLJQDWHGDVLPSDFWLQYHVWRUV
WKDW LV DFWRUV PDNLQJ PDUNHWEDVHG LQYHVWPHQWV WKDW JHQHUDWH VRFLDO DQGRU HQYLURQPHQWDO YDOXH
DORQJVLGHQDQFLDOUHWXUQ(PHUJLQJIURPWUDGLWLRQDOSKLODQWKURS\SULYDWHLQYHVWPHQWDQGYHQWXUHFDSLWDO
EDFNJURXQGVLPSDFWLQYHVWRUVDUHGULYLQJDQLQQRYDWLYHPRYHPHQWZLWKFURVVVHFWRUDQGFURVVUHJLRQDO
LQYHVWPHQWSRUWIROLRVWKDWIRFXVRQFUHDWLQJDQGVFDOLQJVRFLDOLPSDFW
7KHFRQYHUJHQFHRISKLODQWKURSLFVRFLDOPRWLYDWLRQVDQGLQWLPDWHNQRZOHGJHRIQDQFLDOPDUNHWVLVIDVW
FUHDWLQJDQHZDVVHWFODVVDQGZLWKLWDQHZJOREDOLQGXVWU\
2QHRIWKHHDUOLHVWSXEOLFDWLRQVGHGLFDWHGWRWKLVPRYHPHQWLVWKH0RQLWRU,QVWLWXWHVUHSRUW,QYHVWLQJ
IRU6RFLDO (QYLURQPHQWDO,PSDFW$'HVLJQIRU&DWDO\]LQJDQ(PHUJLQJ,QGXVWU\:LWKVSRQVRUVKLS
IURPWKH5RFNHIHOOHU)RXQGDWLRQWKHUHSRUWFRLQHGWKHWHUPLPSDFWLQYHVWLQJDQGUHFRJQL]HGWKHMRLQLQJ
RILQYHVWLQJIRUVRFLDOLPSDFWDVRSSRVHGWRJLYLQJDQGWKHLPSDFWWKDWLQQRYDWLYHDSSURDFKHVKDYHRQ
WUDGLWLRQDOLQYHVWLQJ
,PSDFW LQYHVWRUV GLVWLQJXLVK WKHPVHOYHV IURP WUDGLWLRQDO LQYHVWRUV QRW ZLWK WKH LQYHVWPHQW YHKLFOHV
RU SURGXFWV WKH\ HPSOR\ QRU WKH PDUNHWV RU VHFWRUV LQ ZKLFK WKH\ FRQFHQWUDWH EXW UDWKHU WKURXJK WKH
PRWLYDWLRQVEHKLQGWKHLULQYHVWPHQWEHKDYLRUDQGWKHIDFWRUVWKH\FRQVLGHUZKHQPDNLQJWKHLULQYHVWPHQW
GHFLVLRQV,PSDFWLQYHVWRUVDUHH[LEOHLQWKHLUSURYLVLRQRIFDSLWDOLQRUGHUWRVXLWWKHQHHGVRIWKHLQYHVWHH
LQTXHVWLRQ$VLQJOHLPSDFWLQYHVWRUPD\LQVRPHFDVHVLQYHVWHTXLW\FDSLWDOLQRQHHQWLW\ZKLOHSURYLGLQJ
FUHGLWRUJXDUDQWHHVWRDQRWKHU,PSDFWLQYHVWRUVDUHDOVRZLOOLQJWRSURYLGHVRIWIXQGLQJWRHQWLWLHVWKDWODFN
DVVHWVL]HVRUUHYHQXHVWUHDPVFRQVLGHUHGDGHTXDWHIRUWUDGLWLRQDOLQYHVWRUV
6RIWIXQGLQJLVVRPHWLPHVSDLUHGZLWKVLJQLFDQWGLUHFWRUVXEVLGL]HGWHFKQLFDOVXSSRUWIURPWKHLQYHVWRU
WRWKHLQYHVWHH
,PSDFWLQYHVWRUVFRPPRQO\UHO\RQSDWLHQWFDSLWDOXVLQJDUDQJHRILQVWUXPHQWVWKDWDUHFRPPLWWHGDVORQJ
WHUPLQYHVWPHQWV,QYHVWRUVW\SLFDOO\SXUVXHLQYHVWPHQWRSSRUWXQLWLHVWKDWUHTXLUHDORQJHUWLPHIUDPHWR
JHQHUDWHUHWXUQRIFDSLWDOWKDQWUDGLWLRQDOLQYHVWPHQWV
+LUPUN:VJPHS,U[LYWYPZL
:KLOHWKHUHDUHPDQ\GHQLWLRQVRIVRFLDOHQWHUSULVHWKLVUHSRUWXVHVWKHWHUPWRUHIHUWRDQHQWLW\WKDW
PHHWVWKHIROORZLQJNH\FULWHULD
([LVWVSULPDULO\WRFUHDWHVSHFLFSRVLWLYHVRFLDORUHQYLURQPHQWDOLPSDFWYVDQDQFLOODU\RUVHFRQGDU\
GHYHORSPHQWVXFKDVDFRPSDQ\V&RUSRUDWH6RFLDO5HVSRQVLELOLW\SURJUDP
$GRSWVDPDUNHWRULHQWDWLRQ
)RFXVHVRQQDQFLDOVXVWDLQDELOLW\
$Q6(PHHWLQJWKHVHFULWHULDPD\EHVWUXFWXUHGDVDIRUSURWRUDQRWIRUSURW
*LYHQWKHSUHVHQWVXUJHRIJOREDOLQWHUHVWLQ6(VRQHPD\WKLQNWKDW6(DQGVRFLDOHQWUHSUHQHXUVKLSDUH
HPHUJLQJSKHQRPHQD+RZHYHU6(VSULPDULO\LQPLFURQDQFHKDYHH[LVWHGIRURYHUWKUHHGHFDGHV6RPH
6(VKDYHRYHUFRPHEDUULHUVWRVFDOHDQGVXFFHVVIXOO\PHUJHGDQH[SOLFLWDQGLQWULQVLFVRFLDOPLVVLRQZLWK
FRPPHUFLDOYLDELOLW\)DFHGZLWKFKDOOHQJHVVXFKDVVXQNFRVWVLQHVWDEOLVKLQJWKHLURUJDQL]DWLRQVUD]RU
-30RUJDQ,PSDFW,QYHVWPHQW$Q(PHUJLQJ$VVHW&ODVV
VKDUSPDUJLQVLQVHUYLQJPDUJLQDOL]HGFRPPXQLWLHVDQGFKDOOHQJLQJWKHKHJHPRQ\RIPXOWLQDWLRQDODQG
PHJDFRUSRUDWLRQVDQGRSHUDWLQJZLWKDSHUPDQHQWODFNRIDYDLODEOHFDSLWDODQGFUHGLW6(VVXFKDV%5$&
DQG*UDPHHQ%DQNLQ%DQJODGHVKKDYHVXFFHVVIXOO\VFDOHGWREHFRPHPXOWLPLOOLRQGROODUHQWHUSULVHV
6(V PD\ HPSOR\ PDUNHWEDVHG VROXWLRQV WR WDFNOH D JLYHQ VRFLDO RU HQYLURQPHQWDO FKDOOHQJH EXW 6(V
RIWHQRSHUDWHLQWKHLQWHUVHFWLRQRISULYDWHSXEOLFDQGFKDULWDEOHVHFWRUVUHO\LQJWRDJUHDWHUH[WHQWRQ
WKHFRQFHUWHGHIIRUWVRISDUWLHVLQDOOVHFWRUV6XFK6(VPD\WDNHJURZWKFDSLWDOIURPFRPPHUFLDOLQYHVWRUV
DVZHOODVLPSDFWLQYHVWRUVZKLOHDOVRDWWUDFWLQJGRQDWLRQVIURPWUDGLWLRQDOSKLODQWKURSLFRUJDQL]DWLRQV
UHFHLYLQJVXSSRUWIURPJRYHUQPHQWVDQGFRUSRUDWHVRFLDOUHVSRQVLELOLW\LQLWLDWLYHV
:VJPHS,U[LYWYPZLZPU(ZPH
:KHQ PDUNHWRULHQWHG DSSURDFKHV WR VRFLDO SUREOHPV ZHUH UVW UDLVHG WKHUH ZDV QR FDSLWDO DYDLODEOH
IRU6(V(QWUHSUHQHXUVVRFLDORURWKHUZLVHHLWKHUXVHGWKHLURZQIXQGVRUDSSOLHGIRUEDQNORDQV%DQN
OHQGLQJKRZHYHUUHOLHVKHDYLO\RQFROODWHUDOIRUGLVEXUVDOZKLFKFXUEHGWKHDYDLODELOLW\RIIXQGLQJDQG
UHVWULFWHGWKHDELOLW\WRVWDUWDQ6(WRDOOEXWWKHXSSHUHFKHORQVRIVRFLHW\7KHRQO\RWKHURSWLRQDQGRQH
WKDWFRQWLQXHVWRSOD\DODUJHUROHZDVWRUHFHLYHJUDQWV*UDQWVFDPHIURPWZRPDLQVRXUFHVIRXQGDWLRQV
DQGUHOLJLRXVRUJDQL]DWLRQV
7KHUROHRIIRXQGDWLRQVLQGHYHORSLQJ6(VLVKLVWRULFDOO\JURXQGHGDQGLPPHQVH(YHQWRGD\PRVW6(VLQ
$VLDDUHHVWDEOLVKHGDVQRWIRUSURWQRQJRYHUQPHQWRUJDQL]DWLRQV1*2VOHJDOO\UHJLVWHUHGDVVRFLHWLHV
RUWUXVWVLQRUGHUWRFRPPXQLFDWHWKHLUVRFLDOJRDOVDQGWDSDYDLODEOHIXQGV$V1RUWKHUQFRXQWULHVEHFDPH
PRUHHFRQRPLFDOO\DQGVRFLDOO\VWDEOHPRUHIXQGVIRXQGWKHLUZD\WRWKHWKLUGZRUOGSDUWLFXODUO\IRU
GHYHORSPHQWSXUSRVHV7KHWD[V\VWHPVRI1RUWKHUQFRXQWULHVDOORZHGIRUIXQGVWRRZLQWRWKH1*2
VHFWRULQ$VLD&RQVHTXHQWO\$VLDLVQRZUHSOHWHZLWK1*2VRIYDULRXVVL]HVDQGVKDSHVWKDWRIWHQFRPSHWH
ZLWKHDFKRWKHUWRDWWUDFWQDQFLDOVXSSRUWLQWKHIRUPRIJUDQWVDQGGRQDWLRQV7KLVFRQWLQXHVWREHDQ
H[WUHPHO\SRSXODUIRUPRIQDQFLQJVRFLDOPLVVLRQV,Q%DQJODGHVKDORQHWKHUHDUHRYHU1*2VDQG
FRXQWULHVOLNH,QGLDRU,QGRQHVLDKDYHVHYHUDOWLPHVWKLVQXPEHU
$QRWKHU VRXUFH RI IXQGLQJ IRU VRFLDO YHQWXUHV LV UHOLJLRXV RUJDQL]DWLRQV$VLDQ FRXQWULHV VXFK DV ,QGLD
,QGRQHVLD3DNLVWDQ%DQJODGHVK0DOD\VLD6LQJDSRUHDQG7KDLODQGKDYHVXEVWDQWLDO0XVOLPSRSXODWLRQV
DQGJLYLQJ]DNDWUHTXLUHG\HDUO\GRQDWLRQRIRQHVHYHQWKRIRQHVZHDOWKLVDQLPSRUWDQWSDUWRIWKH,VODPLF
WUDGLWLRQ7KRXJKPXFKRIWKHJLYLQJLVWRWKHUHOLJLRXVLQVWLWXWLRQVIXQGVKDYHEHHQXVHGWRVXSSRUWDUDQJH
RIVRFLDOPLVVLRQVLQFOXGLQJWKHHVWDEOLVKPHQWRIPDGUDVDKVWRSURYLGHEDVLFHGXFDWLRQIRUWKHPDVVHV
7KHVDPHLVWUXHIRURWKHUUHOLJLRXVIROORZHUVLQWKHUHJLRQLQFOXGLQJ+LQGXV-DLQV3DUVLV&KULVWLDQV6LNKV
DQG%XGGKLVWV
$IHZ\HDUVDJRDQHZVRXUFHRIFDSLWDOZDVDGGHGWRWKHVHWUDGLWLRQDOIXQGLQJVRXUFHVWKHPDUNHW0DUNHW
VRXUFHVZHUHDQGWRVRPHH[WHQWVWLOODUHLQLWLDOO\OLPLWHGWREXVLQHVVDFWLYLWLHVLQLWLDWHGE\1*2VVXFKDV
RUJDQL]LQJIXQGUDLVLQJHYHQWVPDUDWKRQVFRQFHUWVVDOHVDQGLGHQWLI\LQJSURGXFWVDQGVHUYLFHVWKDWFRXOG
EHVROGWRUHGXFHGHSHQGHQF\RQGRQDWLRQVDQGJUDQWV6RPHRIWKHEHVWH[DPSOHVRIWKHVHDFWLYLWLHVDUHIURP
&KLOG5HOLHIDQG<RX&5<ZKLFKSURGXFHGJUHHWLQJFDUGVDQGVWDWLRQHU\WRVXSSRUWFKLOGULJKWVDGYRFDF\
ZRUNDQG$DURQJWKHUHWDLODUPRI%5$&ZKLFKZRUNVZLWKRYHUZRPHQDFURVV%DQJODGHVKDQG
JHQHUDWHVDQDQQXDOWXUQRYHURIRYHUPLOOLRQ
5HOLDQFHRQSKLODQWKURS\DQGIRUHLJQDLGKDVLWVOLPLWDWLRQV$VVHHQDFURVVWKHJOREHJUDQWVDQGGRQDWLRQV
WHQGWREHLQIUHTXHQWDQGXQSUHGLFWDEOHWKH\FUHDWHHQRUPRXVGHSHQGHQF\RQGRQRUVDQGDUHRIWHQWRR
VPDOOWRVXSSRUWVFDOLQJXSHIIRUWV)XUWKHUPRUHPDQ\DUHKLJKO\UHVWULFWLYH,QLWLDOHIIRUWVE\1*2VWR
EOHQGVRFLDODFWLYLWLHVZLWKEXVLQHVVSODQVZHUHUHJDUGHGZLWKVNHSWLFLVPDIWHUDOO1*2VZHUHVXSSRVHG
WREHDERXWJLYLQJQRWUHFHLYLQJ,QVRPHFDVHVPDUNHWRULHQWHGHIIRUWVRI1*2VKDYHUXQFRXQWHUWR
WKHLU WD[ WUHDWPHQW UHHFWLQJ WKH LGHD WKDW HQJDJHPHQW RQ FRPPHUFLDO WHUPV ZDV VRPHKRZ DQWLWKHWLFDO
,WLVKRZHYHUZRUWKQRWLQJWKDWIRUVRPHRIWKHVHHQWLWLHVLWWRRNDWUHPHQGRXVVFDOHDQGGHFDGHVRIGRQRUIXQGLQJWREUHDN
HYHQDQGEHFRPHQDQFLDOO\VXVWDLQDEOHVRFLDOHQWHUSULVHV
KWWSZZZDVLDSDFLFSKLODQWKURS\RUJ
WRWKHLUPLVVLRQRUDOWUXLVWLFJRDOV)RUH[DPSOHDFURVV$VLDWD[ODZVUHTXLUH1*2VWRNHHSDVVHWVLQ
VDYLQJV DFFRXQWV LQVWHDG RI LQYHVWLQJ IXQGV PRUH SURGXFWLYHO\ 6RPH FRXQWULHV KDYH EHJXQ WD[LQJ WKH
UHYHQXHPDNLQJ DFWLYLWLHV RI 1*2V ,Q %DQJODGHVK VXFK DFWLYLWLHV DUH VXEMHFW WR WD[HV WKRXJK PLFUR
QDQFHDFWLYLWLHVDUHH[HPSWIURPWD[HV
7KHDLGDQGGRQDWLRQGHSHQGHQF\RI1*2VLQ$VLDLVVORZO\EXWVXUHO\FKDQJLQJ'HPDQGIURPERWWRP
RIWKHS\UDPLGPDUNHWH[WHUQDOPDUNHWIRUFHVPDFURHFRQRPLFFKDOOHQJHVDQGGRQRUIDWLJXHDUHIRUFLQJ
D ORW RI WKH$VLDQ 1*2V WR EHFRPH PRUH PDUNHWRULHQWHG DQG QDQFLDOO\ VXVWDLQDEOH JUDGXDWLQJ IURP
GRQRUGHSHQGHQF\WRQDQFLDOLQGHSHQGHQFH7KHUHLVDOVRDUHFHQWWUHQGLQ6RXWK$VLDZKHUHDQXPEHURI
QDQFLDOO\VXFFHVVIXO1*2VDUHFKDQJLQJWKHLUOHJDOVWDWXVDQGEHFRPLQJIRUSURW6(V
$V1*2VZKRFRQWLQXHWRUHO\RQWUDGLWLRQDOFKDULW\VWUXJJOHWRUHFRQFLOHGXDOSKLODQWKURSLFDQGFRPPHUFLDO
SHUVSHFWLYHVWKH6(VHFWRULVEULQJLQJWKHVHWZRLGHDVWRJHWKHU([LVWLQJ6(VLQWKHUHJLRQDGGUHVVLVVXHVRI
IRRGVHFXULW\KRXVLQJVKRUWDJHVHQYLURQPHQWDOGHJUDGDWLRQIDLOLQJKHDOWKFDUHHGXFDWLRQDOV\VWHPVDQG
SRRUVDQLWDWLRQERWKZLWKLQDQGEH\RQGQDWLRQDOERXQGDULHV7KXVLQDQLQFUHDVLQJQXPEHURILQVWDQFHV
DQHZEUHHGRIVXVWDLQDEOH6(VLQERWKWKHIRUSURWDQGQRWIRUSURWVHFWRUVLVDFKLHYLQJWKHUHJLRQV
VRFLRHFRQRPLFJRDOV
7KLVQHZEUHHGRIVXVWDLQDEOH6(VLVKHOSLQJWDFNOHSUREOHPVWKDWKDYHHOXGHGDOOWUDGLWLRQDOGHYHORSPHQW
DLGHIIRUWV,QWKHFRQWH[WRI$VLDPLFURQDQFHLQVWLWXWLRQV0),VDUHOHDGLQJWKHSDFNLQWHUPVRIVHFWRU
VL]HSXEOLFUHFRJQLWLRQDQGPDWXULW\7KHVXFFHVVRIPLFURQDQFHKDVQRZDFFHOHUDWHGWKHOHDUQLQJFXUYH
RI 6(V DFURVV WKH VSHFWUXP WKDW ZLWK SURSHU H[SRVXUH WR WKH PDUNHW FDQ DOVR SOD\ D UROH LQ DUHDV OLNH
SRYHUW\DOOHYLDWLRQDQGHFRQRPLFGHYHORSPHQWLQDFRPPHUFLDOO\DQGVRFLDOO\VXVWDLQDEOHPDQQHU
:VJPHS,U[LYWYPZLZPU)HUNSHKLZO
7RXQGHUVWDQGWKH6(VFHQHLQ%DQJODGHVKRQHPXVWORRNDWWKHKLVWRULFDOHYROXWLRQRI6(VLQ%DQJODGHVK7KH
VWURQJSUHVHQFHRI1*2VLQ%DQJODGHVKGDWHVEDFNWRZKHQ%DQJODGHVKWKHQ(DVW3DNLVWDQJDLQHG
LQGHSHQGHQFHIURP:HVW3DNLVWDQLQDGUDPDWLF%HQJDOLXSULVLQJDJDLQVWWKH3DNLVWDQ0LOLWDU\-XQWD7KH
FLYLOZDUUHVXOWHGLQWKHFRPELQHGGHDWKRUHPLJUDWLRQRIPRUHWKDQWHQPLOOLRQ%HQJDOLVDVZHOODVVHYHUH
GHSOHWLRQ RI WKH FRXQWU\V UHVRXUFHV7KH QHZO\ LQGHSHQGHQW QDWLRQ EHFDPH GHSHQGHQW RQ LQWHUQDWLRQDO
DLGDQGWKHVHDUFKIRUDOWHUQDWLYHGLVWULEXWLRQFKDQQHOVIRUGHYHORSPHQWDVVLVWDQFHVSXUUHGWKHHPHUJHQFH
RI1*2V7KHFRXQWU\VGHYHORSPHQWQHHGVWRGD\FRQWLQXHWRDWWUDFWWKHDWWHQWLRQRILQWHUQDWLRQDOGRQRUV
DQGWKHQXPEHURIRIFLDOO\UHJLVWHUHG1*2VDFWLYHLQ%DQJODGHVKKDVPXOWLSOLHGVHYHUDOWLPHVVLQFHWKH
VFXUUHQWO\WRWDOLQJDERXW,QFOXGLQJQRQUHJLVWHUHGHQWLWLHV%DQJODGHVKKDVDQHVWLPDWHG
1*2VSHUVTXDUHPLOHWKHKLJKHVWFRQFHQWUDWLRQLQWKHZRUOGDQGDSSUR[LPDWHO\RIWKHVH1*2V
GHYRWHWKHLUHIIRUWVWRVRFLDOGHYHORSPHQW
7KH%DQJODGHVKLHFRQRP\KDVJURZQLQH[FHVVRISHU\HDUVLQFHDFKLHYLQJVROLGJURZWKHYHQLQ
WKHPLGVWRIWKHJOREDOHFRQRPLFFULVLVRYHUWKHSDVWIHZ\HDUV:LWKVROLGJURZWKLQ6(VDQGFRQYHQWLRQDO
EXVLQHVVHVDOLNHWKHNH\SROLF\FKDOOHQJHLVWRUHPRYHUHPDLQLQJEDUULHUVWRHQWUHSUHQHXUVKLSJXDUDQWHH
EHQHWVRIJURZWKDUHGHOLYHUHGWRPDUJLQDOL]HGSHRSOHDQGHQVXUHWKDWJURZWKLVHFRQRPLFDOO\VRFLDOO\
DQGHQYLURQPHQWDOO\VXVWDLQDEOH(QWUHSUHQHXUVDUHLQFUHDVLQJO\HQWHULQJRWKHUVRFLDODFWLYLW\DUHDVVXFK
DVLQVXUDQFHVDYLQJVLQIRUPDWLRQGLVVHPLQDWLRQVRFLDOQHWZRUNVDQGWHFKQRORJLFDOH[SHUWLVHEXWPDQ\
H[LVWLQJ6(VDUHWU\LQJWRVROYHWKHSUREOHPRIHQWUHSUHQHXULDOVWDUWXSQDQFLQJ)LQGLQJJURZWKFDSLWDO
IRU6(VWRPRYHIURPEHLQJDPLFURHQWHUSULVHWREHLQJDVHOIVXVWDLQHG60(LVDSHUVLVWHQWFKDOOHQJHDV
DUHDFTXLULQJEXVLQHVVVNLOOVWUDLQLQJDQGPHQWRULQJDQGIRVWHULQJOLQNVZLWKELJEXVLQHVV
/LNH7KDLODQGDQG,QGLDWKHUHLVSUHVHQWO\QRQRWLRQRIDOLPLWHGSURWFRPSDQ\LQ%DQJODGHVK%DQJODGHVK
KDV RQO\ WZR UHJXODWRU\ RSWLRQV IRU PLVVLRQGULYHQ RUJDQL]DWLRQV QRQSURW FRPSDQLHV ZKHUH QR
SURW FDQ EH WDNHQ RXW RI WKH FRPSDQ\ RU QRQSURW FKDULWLHV ZKHUH WKHUH LV QR URRP IRU IRUSURW
$VLI6DOHK)LHOG5HVHDUFKHUV1RWHV
&,$:RUOG)DFWERRN
%DQJODGHVK6RFLDO(QWHUSULVH3URMHFW3ROLF\%ULHI
DFWLYLWLHV%DQJODGHVKWKXVODFNVUHJXODWRU\FRYHUIRULQQRYDWLYHHQWHUSULVHVZLWKDVRFLDOPLVVLRQZLVKLQJ
WRVFDOHXSWKHLUDFWLYLWLHVZLWKFRPPHUFLDOFDSLWDOIXQGLQJ&RQVHTXHQWO\QRQSURW1*2VVWLOOGRPLQDWH
SULYDWHVHFWRU GHOLYHU\ RI VRFLDO VHUYLFHV LQ %DQJODGHVK +RZHYHU RUJDQL]DWLRQDO PRGHOV HQJDJHG LQ
SURYLGLQJ VHUYLFHV WR PDUJLQDOL]HG SHRSOH DUH VORZO\ FKDQJLQJ DQG ORRNLQJ DW H[LVWLQJ HQWLWLHV WKH 6(
VSHFWUXPLVFHUWDLQO\HYROYLQJLQ%DQJODGHVK
)LUVW%DQJODGHVKLVKRPHWRDYLEUDQWWUDGLWLRQDOQRQSURWVHFWRU0XFKRIWKHDLGJLYHQWR%DQJODGHVKLV
WUDQVIHUUHGWKURXJKVHUYLFHGHOLYHU\PRGHOVZKHUHLQLQGLYLGXDO1*2VSURYLGHVHUYLFHVEDVHGRQWKHODUJHU
IUDPHZRUNRIGLIIHUHQWGRQRUJURXSV3UHVHQWO\WKHH[LVWHQFHRIWKHVH1*2VGHSHQGVVROHO\RQGRQRUJUDQWV
7KLVVFHQHKRZHYHULVVORZO\FKDQJLQJDVGRQRUVVWDUWVWUHVVLQJLQFUHDVHGVHOIVXIFLHQF\RQWKHSDUWRI
1*2V DQG HPSKDVL]H WKH LPSRUWDQFH RI ORQJWHUP VXVWDLQDEOH VHUYLFH GHOLYHU\7KH FKDOOHQJH UHPDLQV
HVWLPDWLQJKRZPDQ\VXFKRUJDQL]DWLRQVDUHDFWLYHDWDJLYHQWLPHWUDGLWLRQDOO\PRVWRUJDQL]DWLRQVZHUH
HVWDEOLVKHGE\DSSHDOLQJWRWKHJRRGZLOORIWKHSHRSOHLQRUGHUWRDFKLHYHDVSHFLFVRFLDOJRRG
6HFRQGWKHUHH[LVWQRQSURWVWKDWKDYHGHYHORSHGLQFRPHJHQHUDWLRQDFWLYLWLHVQRQSURWFRPSDQLHV
,QFUHDVLQJO\ 1*2V DUH HYROYLQJ LQWR WKLV W\SH RI 1*2 ZKHUH LQFRPHJHQHUDWLQJ DFWLYLWLHV DUH SDLUHG
ZLWKWUDGLWLRQDOGRQRUIXQGHGDFWLYLWLHV$VSUHIHUHQFHKDVVKLIWHGIURPGRQRUGULYHQDFWLYLWLHVWRQDQFLDO
VXVWDLQDELOLW\VRPH1*2VDUHDVVXPLQJWKHVWUXFWXUHRIWUDGLWLRQDOEXVLQHVVHV7KHVH1*2VPD\RUPD\
QRWKDYHDVRFLDOPLVVLRQEXWDOOSURWVJHQHUDWHGIURPLWVDFWLYLWLHVDUHUHLQYHVWHGLQWRWKHRUJDQL]DWLRQ
LWVHOI%5$&HQWHUSULVHDQGLWVYDULRXVHQWLWLHVVXFKDV$DURQJ%5$&'DLU\ERXWLTXHVKRS3URERUWRQD
ULJKWVEDVHG SKRWRJUDSK\ RUJDQL]DWLRQ 'ULN KHDOWKFDUH VHUYLFH SURYLGHU )ULHQGVKLS )ORDWLQJ +RVSLWDO
DQG PLFURQDQFH LQVWLWXWLRQV VXFK DV$6$ DUH UHJLVWHUHG DV 1*2V DQG JHQHUDWH UHYHQXH WKURXJK WKHLU
DFWLYLWLHV+RZHYHUWKHUHODWLYHLQFRPHRIWKHVHRUJDQL]DWLRQVLVW\SLFDOO\VPDOOFRPSDUHGWRWKHLURYHUDOO
EXGJHWDQGPRVWRIWKHLUH[SHQVHVDUHVWLOOVXEVLGL]HGE\GRQRUJUDQWV
7KLUGDQHZEUHHGRI6(VKDVVWDUWHGRSHUDWLQJLQ%DQJODGHVK$OWKRXJKWKHUHLVVRPHFRQIXVLRQUHJDUGLQJ
SUHFLVHGHQLWLRQVRIDQ6(PRVWGHQHLWDVDQLQFRPHJHQHUDWLQJRUJDQL]DWLRQZLWKDVRFLDOREMHFWLYH
6XFK6(VLQFOXGHODUJHRUJDQL]DWLRQVVXFKDV*UDPHHQ6KDNWLJUHHQHQHUJ\*UDPHHQ'DQQRQ\RJKXUW
IRUWKHSRRU+DWKD\%XQDQRWUDLQLQJDQGMREFUHDWLRQLQUXUDODUHDVDQG:DVWH&RQFHUQ7KHVHDUHMXVW
DIHZH[DPSOHVRIHQWHUSULVHVWKDWEHJDQWRDGGUHVVVRFLDOQHHGVDQGDUHQRZZRUNLQJWRZDUGQDQFLDO
LQGHSHQGHQFH7KLVW\SHRI6(VWDUWHGZLWK$DURQJLQDQHQWLW\RI%5$&ZLWKDIRUSURWEXVLQHVV
PRGHODQGDPLVVLRQWRKHOSUXUDODUWLVDQV$GYRFDF\IRUZLGHVSUHDGDGRSWLRQRIVXFKEXVLQHVVPRGHOVODWHU
SLFNHGXSZKHQ'U<XQXVRI*UDPHHQFKDPSLRQHGWKHVHPRGHOVDVWKHZD\WRHIFLHQWO\HUDGLFDWHSRYHUW\
:VJPHS,U[LYWYPZLZPU0UKPH
7KHWHUPVRFLDOHQWUHSUHQHXUVKLSKDVJDLQHGSURPLQHQFHLQ,QGLDEHFDXVHLWGHHVWUDGLWLRQDOH[SHFWDWLRQV
RIWKHJRYHUQPHQWDVWKHVROHVDYLRURIWKRVHQHJOHFWHGRUYLFWLPL]HGE\PDUNHWIDLOXUH7KH*RYHUQPHQW
RI,QGLDKDVHPEUDFHGWKHGHYHORSPHQWRI6(VDVDVHFRQGDU\SURYLGHURISXEOLFJRRGVDQGVDIHW\QHWVDQG
LVHDJHUWRSURPRWHIXUWKHUJURZWKLQWKHVHFWRU$VWKHODUJHVWGHPRFUDF\LQWKHZRUOGZLWKDIHGHUDODQG
KLJKO\ IUDJPHQWHG SXEOLF PDQDJHPHQW VWUXFWXUH UHIRUPV LQ WKH VHFWRU KDYH LQHYLWDEO\ EHHQ UHJLRQDO LQ
VFRSH:LWKLQWKHGHFHQWUDOL]HGJRYHUQPHQWVWUXFWXUHVRI,QGLD6(VKDYHEHHQHPEUDFHGDVDZD\WRHQVXUH
HQJDJHPHQWDQGLQFOXVLRQRIWKHQDWLRQVFLWL]HQVLQGHYHORSLQJSURMHFWV7KHJRYHUQPHQWKDVUHDOL]HGWKH
PDJQLWXGHRIWKLVDFKLHYHPHQWDQGLVFXUUHQWO\SURPRWLQJSROLFLHVDQGVFKHPHVWRIXUWKHUJURZWKLQWKH
VRFLDOHQWUHSUHQHXUVKLSVHFWRU
%\YLUWXHRILWVVL]HDQGGLYHUVLW\,QGLDRIIHUVLQQXPHUDEOHRSSRUWXQLWLHVWRVRFLDOHQWUHSUHQHXUV6XFFHVVIXO
LQLWLDWLYHVVXFKDV&DUP'DNVK0LOOHHH6HOFRDQGIRUXPVOLNH6DQNDOSEHDUWHVWLPRQ\WRWKHIDFWWKDWWKHUH
LVJUHDWSRWHQWLDOIRUVXFFHVV,WDOVRGHPRQVWUDWHVWKDW6(VDUHEHLQJFRQVLGHUHGDV
GLVWLQFWIURPWUDGLWLRQDOSKLODQWKURS\DQG
DYHQXHVIRULPSDFWLQJSHRSOHVOLYHVSRVLWLYHO\WKURXJKNQRZOHGJHDQGHPSRZHUPHQW
6RFLDOHQWUHSUHQHXUVKLSFRXUVHVDUHEHLQJRIIHUHGE\VRPHRIWKHPRVWSUHVWLJLRXVEXVLQHVVVFKRROVLQWKH
FRXQWU\DQGVRFLDOHQWUHSUHQHXUVDUHEHLQJDZDUGHGDQGUHFRJQL]HGIRUWKHLUHIIRUWV7KHVHGHYHORSPHQWV
FOHDUO\ GHPRQVWUDWH WKH JURZLQJ H[SHFWDWLRQ WKDW 6(V DUH D NH\ VROXWLRQ WR WKH PDQ\ GHYHORSPHQWDO
SUREOHPVSUHYDLOLQJLQ,QGLD
,QGLDFXUUHQWO\KDVDYDVWQXPEHURIPLVVLRQGULYHQRUJDQL]DWLRQVWKDWFRXOGSRWHQWLDOO\TXDOLI\DV6(V8QWLO
UHFHQWO\WKHVHRUJDQL]DWLRQVKDYHKDGWREHVWUXFWXUHGDVWUXVWVVRFLHWLHVRUVHFWLRQFRPSDQLHVZKHUH
SURWV FDQQRW EH GLVWULEXWHG WR WKH VKDUHKROGHUV )XQGLQJ KDV FRPH HLWKHU WKURXJK JUDQWV RU SURJUDPV
LPSOHPHQWHGE\WKHRUJDQL]DWLRQVWKHPVHOYHV8QGHUWKHUHJXODWRU\V\VWHPV\VWHPVKDYHEHHQHVWDEOLVKHG
IRU QRQSURW HQWHUSULVHV DQG FKDULWDEOH RUJDQL]DWLRQV LQFOXGLQJ ODZV OLNH WKH )RUHLJQ &RQWULEXWLRQ
5HJXODWLRQ$FWLQWKH7UXVWV$FWRIWKH6RFLHWLHV5HJLVWUDWLRQ$FWRIVHFWLRQV$
DQG*RIWKH,QFRPH7D[$FWDQGVHFWLRQRIWKH&RPSDQLHV$FW+RZHYHUWKHVHHQDFWPHQWVWHQG
WRVHSDUDWHRUJDQL]DWLRQVZLWKVRFLDOPLVVLRQVIURPFRPPHUFLDORUJDQL]DWLRQVUHTXLULQJWKHIRUPHUWRPHHW
FHUWDLQVWUXFWXUDORUDFWLYLW\EDVHGFRQGLWLRQVWRTXDOLI\IRUSROLF\EHQHWVXQGHUWKHVHUHJXODWLRQV
)URPRQZDUG,QGLDKDVUHRULHQWHGLWVSROLFLHVDQGUHJXODWLRQVXQGHUWKH1HZ(FRQRPLF3ROLF\,QGLD
KDVLQFUHPHQWDOO\OLEHUDOL]HGIRUHLJQLQYHVWPHQWDQGIRUHLJQOHQGLQJWRHQWHUSULVHVDQGUHYDPSHGSROLFLHV
IRU WHFKQLFDO FROODERUDWLRQ DQG MRLQW YHQWXUHV ,Q DGGLWLRQ WR EXVLQHVV LQYHVWRUV LQVWLWXWLRQDO LQYHVWRUV
DQGYHQWXUHIXQGVKDYHDOVREHHQIRUPDOL]HGDVFODVVHVRILQYHVWRUVZLWKVSHFLFUHJXODWLRQVJRYHUQLQJ
WKHLULQYHVWPHQWVLQ,QGLD)RUH[DPSOHUHJXODWLRQVKDYHEHHQLQGLYLGXDOL]HGIRUIRUHLJQYHQWXUHFDSLWDO
LQYHVWRUVIRUHLJQH[FKDQJHERUURZLQJKDVEHHQSHUPLWWHGIRUPLFURQDQFHDFWLYLWLHVVLQFHDQG
UHJXODWLRQV ZHUH LQWURGXFHG IRU VPDOO DQG PHGLXP HQWHUSULVHV LQYLWLQJ SXEOLF LQYHVWPHQWV DQG OLVWLQJ
LQ$SULO
$OWKRXJKWKHJRYHUQPHQWLVPDNLQJHIIRUWVWRDGGUHVVVKRUWFRPLQJVLQWKHUHJXODWRU\HQYLURQPHQWWKHUHDUH
VWLOOVHYHUDOKXUGOHVWRRYHUFRPH)RUHLJQLQYHVWPHQWVLQDSDUWQHUVKLSRUSURSULHWDU\VWUXFWXUHDVRSSRVHG
WRFRQWULEXWLRQVUHTXLUHSULRUJRYHUQPHQWDSSURYDODQGIRUHLJQH[FKDQJHERUURZLQJFDQQRWEHXVHGIRU
ZRUNLQJFDSLWDO,QWHUPVRIVRFLDOLQQRYDWLRQWKHG\QDPLVPDQGFUHDWLYLW\RI6(VRQWKHJURXQGDUHQRW
PDWFKHGE\FKDQJHVLQWKHUHJXODWRU\HQYLURQPHQW5HJXODWLRQVGHDOLQJZLWKWKHIXQFWLRQVDQHQWHUSULVH
FDQSHUIRUPWKHSURFHVVRIUHJLVWUDWLRQDQGRSHUDWLRQDQGWKHDUHDVLQZKLFKLWFDQRSHUDWHFRQVWUDLQQHZ
LQLWLDWLYHVDQGQHHGWREHUHYDPSHGWRDGDSWWRWKHFKDQJLQJHQYLURQPHQW
6LQFH-XO\VHYHUDOPLQLVWULHVOLNHWKH0LQLVWU\RI+HDOWKDQG6RFLDO:HOIDUHWKH0LQLVWU\RI6RFLDO
-XVWLFHDQG(PSRZHUPHQWWKH0LQLVWU\RI:RPHQDQGWKH&KLOG'HYHORSPHQW&RXQFLOIRU$GYDQFHPHQW
RI 3HRSOHV $FWLRQ DQG 5XUDO 7HFKQRORJ\ &$3$57 KDYH FROOHFWLYHO\ LQLWLDWHG WKH 1*2 SDUWQHUVKLS
V\VWHP1*2368QGHUWKLVVFKHPH1*2VYROXQWDU\RUJDQL]DWLRQVDQG6(VFDQUHJLVWHUDVFRPPHUFLDO
FRPSDQLHVWKDWDOVREHQHWIURPJUDQWVVHUYLFHVDQGEHQHWVRIIHUHGE\WKHJRYHUQPHQW7KLVLQLWLDWLYHLV
DJUHDWSODWIRUPIRUQHWZRUNLQJDPRQJDOOVWDNHKROGHUVLQYROYHG6LPXOWDQHRXVZLWKWKHVHGHYHORSPHQWV
PDQ\ ,QGLDQ 6(V KDYH DGRSWHG UHYHQXHJHQHUDWLQJ PRGHOV DV FRPPHUFLDO HQWHUSULVHV DFFHVVHG IRUHLJQ
HTXLW\DQGORDQLQYHVWPHQWVE\LQFOXGLQJWKHHOHPHQWRIQDQFLDOUHWXUQRQLQYHVWPHQWVDQGDOORZHGIRU
JUHDWHUH[LELOLW\LQWKHLUEXVLQHVVPRGHOVDQGPLVVLRQV
:VJPHS,U[LYWYPZLZPU;OHPSHUK
:KLOHWKHWHUP6(LVQHZWR7KDLODQGLWVSUDFWLFHLVQRW7KLUGVHFWRURUJDQL]DWLRQV762VDWHUPZLGHO\
XVHGWRGHQH6(VLQWKH8.LQ7KDLODQGKDYHEHHQXVLQJEXVLQHVVSUDFWLFHVVLPLODUWRWKRVHDWWULEXWHGWR
$VSHUVHFWLRQDDQGERIWKH,QGLDQ&RPSDQLHV$FW
)XOOWH[WDYDLODEOHDWKWWSZZZPFDJRYLQ0LQLVWU\DFWVBELOOVKWPO
)XOOWH[WDYDLODEOHDWKWWSZZZPKDQLFLQXQLTXHSDJHDVS",GB3N
)XOOWH[WDYDLODEOHDWKWWSYDNLOQRFRPEDUHDFWVLQGLDQWUXVWVDFWLQGLDQWUXVWVDFWKWPO
)XOOWH[WDYDLODEOHDWKWWSYDNLOQRFRPEDUHDFWVVRFLHW\UHJDFWVRFLHW\UHJDFWKWP
)XOOWH[WDYDLODEOHDWKWWSZZZLQFRPHWD[LQGLDJRYLQ
)XOOWH[WDYDLODEOHDWKWWSZZZPFDJRYLQ0LQLVWU\DFWVBELOOVKWPO
6HFXULWLHVDQG([FKDQJH%RDUGRI,QGLD)RUHLJQ9HQWXUH&DSLWDO,QYHVWRUV5HJXODWLRQVKWWSZZZVHELJRYLQDFWV
)RUHLJQ9HQWXUH&DSLWDOKWPO
5HVHUYH%DQNRI,QGLD)RUHLJQ([FKDQJH0DQDJHPHQW%RUURZLQJRU/HQGLQJLQ)RUHLJQ([FKDQJH6HFRQG$PHQGPHQW
5HJXODWLRQV$YDLODEOHDWKWWSUELRUJLQVFULSWV%6B)HPD1RWLFDWLRQVDVS[",G
&KDSWHU;$RIWKH6(%,,VVXHRI&DSLWDODQG'LVFORVXUH5HTXLUHPHQWV5HJXODWLRQV
KWWSQJRLQGLDJRYLQGHIDXOWSKS"
VXFFHVVIXO6(VLQRWKHUFRXQWULHVIRUGHFDGHV$VDJURXSRI6(V762VJHQHUDOO\LQFOXGHRUJDQL]DWLRQV
WKDWDUHODUJHZHOOHVWDEOLVKHGZHOONQRZQDQGZLWKJRRGFRQQHFWLRQVWRJRYHUQPHQW*RRGH[DPSOHV
LQFOXGH 'RL7XQJ ZKLFK GRHV HYHU\WKLQJ IURP KLJKHQG WRXULVP WR RUJDQLF IRRGV GLVWULEXWLRQ DQG WKH
3RSXODWLRQDQG&RPPXQLW\'HYHORSPHQW$VVRFLDWLRQ3'$ZKLFKRIIHUVDYDVWDUUD\RIVHUYLFHVIURP
HQYLURQPHQWDODQGKHDOWKFDUHSURJUDPVWRPLFURFUHGLWDQG60(GHYHORSPHQWDVVLVWDQFH+RZHYHUDUHFHQW
VWXG\E\WKH6RFLDO(QWUHSUHQHXUVKLS,QVWLWXWHVKRZHGWKDWPDQ\VRFLDORUJDQL]DWLRQVDUHQRWDZDUHRIWKH
GHYHORSPHQW RI 6(V DV DQ HQWUHSUHQHXULDO DSSURDFK WR OHYHUDJLQJ WUDGLWLRQDO EXVLQHVV PRGHOV IRU VRFLDO
DQGHQYLURQPHQWDOJRRG7KH6(VHFWRULVWKXVVWLOOUHODWLYHO\VPDOOLQVL]HDQGVFRSHUHTXLULQJV\VWHPDWLF
VXSSRUWDQGDGYRFDF\LQRUGHUWRH[SDQGDQGRXULVKLQ7KDLODQG
7KH JHQHUDO LGHD RI HQWUHSUHQHXUVKLS LV GHHSO\ URRWHG LQ 7KDLODQG ,Q 7KDLODQG ZDV VDLG WR KDYH
WKHKLJKHVWSUHYDOHQFHRIHQWUHSUHQHXUVKLSLQWKHZRUOG7KLVLQGLFDWHVDQHQYLURQPHQWEULPPLQJZLWK
RSSRUWXQLW\IRUVRFLDOHQWUHSUHQHXUVKLSIDFLOLWDWHGE\PDUNHWRSHQQHVVHQWUHSUHQHXUPHGLDSUROHVDQGD
SRVLWLYHDWWLWXGHWRZDUGHQWUHSUHQHXUV7KHJRYHUQPHQWEHOLHYHVWKDWJURZWKLQWKH6(VHFWRUZLOOFRQWULEXWH
JUHDWO\ WRZDUG WKH VXVWDLQDEOH GHYHORSPHQW RI 7KDLODQGV HFRQRP\ ZKLOH UHFRJQL]LQJ WKH H[LVWHQFH RI
VWXPEOLQJEORFNVVXFKDVODFNRIHGXFDWLRQDQGWUDLQLQJUHVHDUFKDQGGHYHORSPHQWFDSDFLW\LQWHOOHFWXDO
SURSHUW\ULJKWVDQGDFFHVVWRQDQFLDOVXSSRUW
7RDGGUHVVWKHVHLVVXHVWKH7KDLJRYHUQPHQWFUHDWHGWKH1DWLRQDO6RFLDO(QWHUSULVH&RPPLWWHHLQHDUO\
WR IRFXV RQ VHYHUDO NH\ DUHDV RI 6(V LQFOXGLQJ HQKDQFLQJ SHUFHSWLRQ DQG NQRZOHGJH RI 6( LQ
7KDLODQGGHYHORSLQJWKHSRWHQWLDORI6(VDQGLQFUHDVLQJFKDQQHOVWKURXJKZKLFK6(VFDQDSSURDFKFDSLWDO
DQGUHVRXUFHV7KH%ULWLVK&RXQFLOLVDQLPSRUWDQWSDUWQHURIWKHJRYHUQPHQWRI7KDLODQGDQGLVUXQQLQJD
SURMHFWFDOOHG6NLOOVIRU6RFLDO(QWUHSUHQHXUV7KH6NLOOVIRU6RFLDO(QWUHSUHQHXUVIRUXPKHOSHGWRHVWDEOLVK
WKH%ULWLVK&RXQFLODVRQHRIWKH7KDLJRYHUQPHQWVPDLQSDUWQHUVLQWKHGHYHORSPHQWRI6(V7KH3ULPH
0LQLVWHUPHQWLRQHGWKH%ULWLVK&RXQFLOVLQSXWLQ7KDLODQGVDJHQGDIRU6(GHYHORSPHQWKLPVHOIGXULQJ
WKHUVWPHHWLQJRIWKH6RFLDO(QWHUSULVH&RPPLWWHH$QDFWLRQSODQLVQRZLQSODFHIRUDFRPSUHKHQVLYH
IHDVLELOLW\VWXG\RQWKHHVWDEOLVKPHQWRIDVRFLDOYHQWXUHIXQGZKLFKZLOOLQYROYHFORVHHQJDJHPHQWZLWK
WKH%ULWLVK&RXQFLODVWKHJRYHUQPHQWVLQWHUQDWLRQDOSDUWQHURIFKRLFHLQWKLVHOG
6(VLQ7KDLODQGFXUUHQWO\KDYHWZROHJDOVWDWXVRSWLRQV
WRUHJLVWHUDVDIRXQGDWLRQ762
WRUHJLVWHUDVDFRPPHUFLDOIRUSURWHQWLW\
$V LQ PRVW FRXQWULHV IRXQGDWLRQV IDFH PRUH UHTXLUHPHQWV WKDQ FRPSDQLHV 7R DFTXLUH OHJDO VWDWXV DV
D IRXQGDWLRQ DQ RUJDQL]DWLRQ LV H[SHFWHG WR IRUPDOO\ UHJLVWHU ZLWK WKH JRYHUQPHQW +RZHYHU PDQ\
SUDFWLWLRQHUV LQ WKH VRFLDO VHFWRU VHH WKH UHJLVWUDWLRQ SURFHVV DV LQHIFLHQW 7KH LQLWLDO HQGRZPHQW
UHTXLUHPHQW RI %DKW DURXQG 86 IRU HVWDEOLVKLQJ D QHZ RUJDQL]DWLRQ KLQGHUV QHZ
RUJDQL]DWLRQVIURPFRPSOHWLQJWKHVWDUWXSSURFHVV7KHHQGRZPHQWLVDGHIDFWRVXQNFRVWWKDWFRXOG
RWKHUZLVHEHXVHGWRQDQFHWKHRWKHULQLWLDOH[SHQVHV7KLVUHTXLUHPHQWWKXVH[FOXGHVPDQ\FRPPXQLW\
RUJDQL]DWLRQVIURPUHJLVWHULQJOHJDOO\OHDYLQJWKHPLQWKHVKDGRZHFRQRP\DVLWLVVLPSO\QRWIHDVLEOH
IRUWKHPWRUDLVHDQGPDLQWDLQD%DKWFDSLWDOIXQGLQJ
$VLQPDQ\FRXQWULHV762VZLWKDVRFLDOSXUSRVHDUHQRWUHTXLUHGWRSD\DQ\LQFRPHWD[RQGRQDWLRQV
UHFHLYHG,QDGGLWLRQZKHQWD[H[HPSWRUJDQL]DWLRQVPDNHGRQDWLRQVWRJRYHUQPHQWKRVSLWDOVRUDFDGHPLF
LQVWLWXWLRQVWKH\DUHHOLJLEOHIRUWD[GHGXFWLRQVHTXDOWRWKHDPRXQWRIWKHLUGRQDWLRQVEXWQRWPRUHWKDQ
SHUFHQWRIWKHUHYHQXHUHGXFHGE\RWKHUW\SHVRIWD[GHGXFWLRQEHQHWV,QGLYLGXDOGRQRUVWRWD[H[HPSW
762VFDQFODLPDWD[GHGXFWLRQIRUWKHIXOODPRXQWRIDQ\GRQDWLRQVWR6(VUHJLVWHUHGDVIRXQGDWLRQVIRU
0RVWGDWDDYDLODEOHLQ7KDLODQGDUHIRU762VZKLOHOLWWOHGDWDLVDYDLODEOHVSHFLFDOO\IRU6(VLQFOXGLQJSURSHUOHJDOGHQLWLRQ
7KHUHIRUH6(VLQ7KDLODQGDUHGLVFXVVHGLQWKLVVHFWLRQDVDVXEVHWRI762V
6RFLDO(QWUHSUHQHXUVKLS,QVWLWXWH6(,3XEOLF3ROLF\WRSURPRWH6RFLDO(QWHUSULVHVLQ7KDLODQG
%RVPDHWDO*OREDO(QWUHSUHQHXUVKLS0RQLWRUS/RQGRQ%XVLQHVV6FKRRO
)XOOWH[WDYDLODEOHDWKWWSZZZJHPFRQVRUWLXPRUJGRZQORDGDVS"G
KWWSVRFLDOHQWHUSULVHEULWLVKFRXQFLORUMSHQDERXWVRFLDOHQWHUSULVHWKDLODQG
7KDL&LYLODQG&RPPHUFLDO&RGH3DUW,,,)XOOWH[WDYDLODEOHDWKWWSWKDLODZVFRP
DPRXQWVXSWRSHUFHQWRIWKHLUGLVSRVDEOHLQFRPH6LPLODUO\FRUSRUDWLRQVUHFHLYHWD[FUHGLWVIRUWKHLU
GRQDWLRQVWRIRXQGDWLRQVIRUDPRXQWVXSWRWZRSHUFHQWRIWKHLUQHWSURW
7KLVORZHUWD[UDWHIRUEXVLQHVVHVZDVIRXQGWRGLVFRXUDJHFRUSRUDWLRQVIURPVXSSRUWLQJPDUNHWRULHQWHG
6(VDQGLQVWHDGHQFRXUDJHWKHPWRPDNHGRQDWLRQVWRIRXQGDWLRQV+RZHYHUWKLVWD[H[HPSWLRQSULYLOHJH
GRHVQRWDSSO\WRDOOIRXQGDWLRQVWUXFWXUHG6(VEXWRQO\WRTXDOLHGWD[H[HPSWRUJDQL]DWLRQVWKDWKDYH
EHHQDSSURYHGE\WKH0LQLVWU\RI)LQDQFH02)DQGDUHOLVWHGLQWKH02)V5HJLVWU\$VRI1RYHPEHU
RQO\RIWKHWRWDOQXPEHURI762VLQ7KDLODQGMXVWRYHURUJDQL]DWLRQVLVHOLJLEOHIRUWKLV
WD[H[HPSWLRQVWDWXVZKLFKLVEDVHGRQVHYHUDOFULWHULDEH\RQGIRUPDOUHJLVWUDWLRQDVDIRXQGDWLRQ6RPH
RI WKHVH FULWHULD LQFOXGH H[SHQGLQJ SHUFHQW RI WKH RUJDQL]DWLRQV WRWDO RXWSXW IRU WKH WKUHH SUHFHGLQJ
\HDUV WRZDUGV VRFLDO EHQHW DFWLYLWLHV DQG QRW OHVV WKDQ HDFK \HDU 7KLV LV D SDUWLFXODUO\ GLIFXOW
UHTXLUHPHQWWRPHHWSDUWLFXODUO\IRU\RXQJHU6(V7KHVHQRQOLVWHGRUJDQL]DWLRQVKDYHWRSD\WD[RQDQ\
LQFRPHUHFHLYHGIURPWKHVDOHRIJRRGVDQGVHUYLFHVIHHVEDQNLQWHUHVWUHQWHWF)RUH[DPSOHQRQOLVWHG
RUJDQL]DWLRQVPXVWSD\WD[DWDUDWHRIRQDQ\EDQNVDYLQJVLQWHUHVWZKHUHDVOLVWHGRUJDQL]DWLRQVFDQ
FODLP DQ H[HPSWLRQ7KLV FRQGLWLRQ FUHDWHV D EDUULHU IRU VPDOO QHZ HQWHUSULVHV WR DFFHVV GRQDWLRQV IRU
LQLWLDOVHHGIXQGLQJEHFDXVHLQGLYLGXDOVDQGEXVLQHVVHVDUHUHOXFWDQWWRGRQDWHWRRUJDQL]DWLRQVWKDWFDQQRW
RIIHUWKHPWD[GHGXFWLRQSULYLOHJHV
+RZHYHUWKHPRVWFULWLFDOFRQVWUDLQWZLWKUHJDUGWRWKHWD[FRGHDQGKRZLWLVLPSOHPHQWHGLQWKHWKLUGVHFWRU
LVWKDWWD[UDWHVDUHFDOFXODWHGEDVHGRQLQFRPHDQGQRWSURWRUVXUSOXV)RU6(VUHJLVWHUHGDVIRXQGDWLRQV
RU762VDLQFRPHWD[LVDSSOLHGWRDQ\LQFRPHJHQHUDWHGLQOLQHZLWKLWVREMHFWLYHVWKDWLVGHFODUHGDW
UHJLVWUDWLRQ)RULQFRPHJHQHUDWHGDFWLYLWLHVQRWLQOLQHZLWKLWVREMHFWLYHDLQFRPHWD[UDWHDSSOLHV,Q
FRQWUDVWFRPSDQLHVSD\WD[HVFDOFXODWHGRQWKHEDVLVRISURWV7KHUHIRUHWKHPRUHLQFRPHD6(JHQHUDWHV
WKHPRUHLWKDVWRSD\LQWD[HVUHJDUGOHVVRILWVRSHUDWLQJH[SHQVHV,QRWKHUZRUGV762VPXVWFRPSHWHZLWK
RWKHUEXVLQHVVHVSURGXFLQJWKHVDPHOLQHRISURGXFWVRUVHUYLFHVEXWPXVWDWWDLQDKLJKHUPDUJLQIRUWKHLU
LQYHVWPHQWVWRVKRXOGHUDJUHDWHUWD[EXUGHQDVFRPSDQLHVFDQGHGXFWH[SHQVHVDQGDUHWD[HGDWDDW
FRUSRUDWHUDWHRQWKHLUSURWRQO\7KLVWD[V\VWHPIXUWKHUGLVFRXUDJHVQRQH[HPSW762VLQ7KDLODQGIURP
WUDGLQJWKHLUJRRGVDQGVHUYLFHVDQGPRYLQJWRZDUGDQDQFLDOO\VXVWDLQDEOHRSHUDWLQJPRGHO
8QGHUWKLVV\VWHPLWLVGLIFXOWIRU6(VUHJLVWHUHGDVIRXQGDWLRQVLQ7KDLODQGZLWKRXWWD[H[HPSWVWDWXVWR
PRYHWRZDUGDJUHDWHUVHOIQDQFLQJPRGHRIRSHUDWLRQ5HJXODWLRQVSUHVHQWO\OLPLWPRVW6(VWRXVLQJD
JUDQWDQGGRQDWLRQGHSHQGHQWVWUXFWXUH7D[LQFHQWLYHVXQGHUWKH7KDLWD[FRGHDUHLQQHHGRIVLJQLFDQW
LPSURYHPHQW LI WKH FRXQWU\ LV WR HQFRXUDJH7KDL LQGLYLGXDOV DQG FRUSRUDWLRQV WR VXSSRUW WKH QRQSURW
VHFWRURUWRIRVWHUWKHHPHUJHQFHDQGJURZWKRIIRUSURWVRFLDOHQWUHSUHQHXUVKLS
$FFHVVWRDQ\IRUPRIQDQFHLVDFULWLFDOIDFWRUGHWHUPLQLQJWKHVWDUWXSVXFFHVVDQGHQVXULQJWKHVXUYLYDO
RIDQ6(6(VDUHOLPLWHGLQWKHLUDFFHVVWRPDLQVWUHDPQDQFLDOUHVRXUFHVIURPWKH7KDLEDQNLQJV\VWHP
EHFDXVHWKH\XVXDOO\GRQRWKDYHWKHFROODWHUDOWKDWEDQNVUHTXLUH7KDLUHJXODWLRQVGRQRWHQFRXUDJH762V
WRERUURZPRQH\IURPQDQFLDOLQVWLWXWLRQVEHFDXVH762VDUHQRWFRQVLGHUHGEXVLQHVVHVDQGDUHWKHUHIRUH
QRWH[SHFWHGWRJHQHUDWHLQFRPHWRVHUYLFHORDQVDQGUHSD\GHEWVWREDQNVRURWKHUQDQFLDOLQVWLWXWLRQV
762VZLWK[HGDVVHWVVXFKDVODQGRUEXLOGLQJVDUHDOORZHGWRUHQWRXWWKHLUDVVHWVEXWWKLVVRXUFHRI
UHYHQXHLVYHU\H[FHSWLRQDOIRU762VDQGRIWHQSRVVLEOHRQO\IRUORQJVWDQGLQJRUJDQL]DWLRQV
$OWHUQDWLYHQDQFHUHVRXUFHVIURPWKHJRYHUQPHQWDUHDOVROLPLWHGIRUPRVW6(V$QRUJDQL]DWLRQVHHNLQJ
VXSSRUWIURPWKH&RPPXQLW\2UJDQL]DWLRQV'HYHORSPHQW,QVWLWXWHLVUHTXLUHGWRVXEPLWDSURMHFWSURSRVDO
WKDWWDUJHWVDWOHDVWRQHJURXSIURPDSUHGHQHGOLVW+RZHYHUWKHOLVWGRHVQRWFRYHUDOOWKHGLVDGYDQWDJHG
SRSXODWLRQVLQ7KDLODQGDQGGRHVQRWDFFRPPRGDWHLQQRYDWLYHVRFLDOHQWUHSUHQHXUVKLS$OVRWRTXDOLI\IRU
JRYHUQPHQW IXQGLQJ RUJDQL]DWLRQV PXVW EH UHJLVWHUHG ZLWK WKH JRYHUQPHQW DQG PXVW KDYH D PLQLPXP
RIRQH\HDULQRSHUDWLRQ7KLVFRQGLWLRQLVOLNHO\DVHULRXVFRQVWUDLQWIRUQHZVWDUWXSVLQVHULRXVQHHGRI
IXQGLQJIRUHDUO\VWDJHRSHUDWLRQV
%DVHGRQWKH762VXUYH\DYDLODEOHDWKWWSZZZUGJRWKSXEOLVKKWPO
'LVDGYDQWDJHGJURXSVLQFOXGHVFKLOGUHQHOGHUO\GLVDEOHG+,9$,'6LQIHFWHGKRPHOHVVDQGZRPHQ&IKWWSZZZFRGLRUWK
+LUPUN:VJPHS:[VJR,_JOHUNL
6RFLDO VWRFN H[FKDQJHV DUH SODWIRUPV ZKLFK VHHN WR EULQJ WRJHWKHU 6(V ZKLFK ZLVK WR JDLQ LQFUHDVHG
DFFHVVWRLQYHVWPHQWFDSLWDOWRJURZWKHLUEXVLQHVVHVDQGUHDFKWKHLUIXOOVRFLDODQGQDQFLDOSRWHQWLDODQG
LPSDFWLQYHVWRUVZKRDUHLQVHDUFKRI6(VZLWKVFDODEOHVRFLDOLPSDFWDQGQDQFLDOUHWXUQ6RFLDOVWRFN
H[FKDQJHVDUHEHLQJGHYHORSHGLQYDULRXVORFDWLRQVDURXQGWKHZRUOGDQGRSHUDWHVLPLODUO\WRWUDGLWLRQDO
VWRFN H[FKDQJHV7KH\ DOORZ LQYHVWRUV WR SXUFKDVH DQG WUDGH VHFXULWLHV LVVXHG E\ 6(V LQ WKH VDPH ZD\
WUDGLWLRQDOVWRFNH[FKDQJHVHQDEOHWUDGLQJRIVHFXULWLHVLVVXHGE\WUDGLWLRQDOFRPSDQLHV
6KXMRJV DIOLDWH ,PSDFW,QYHVWPHQW([FKDQJH$VLD ,,; LV LWVHOI DQ 6( GHYHORSLQJ$VLDV UVW VRFLDO
VWRFN H[FKDQJH ,Q GRLQJ VR LW LV FUHDWLQJ D QHZ SRLQW RI LQWHUVHFWLRQ IRU VXVWDLQDEOH GHYHORSPHQW DQG
FDSLWDOPDUNHWV7KURXJKWKHH[FKDQJH,,;DLPVWRSURYLGH$VLDVLQQRYDWLYH6(VZKLFKSLRQHHUPDUNHW
RULHQWHGDSSURDFKHVWRDGGUHVVVRPHRIWKHZRUOGVPRVWSUHVVLQJVRFLDODQGHQYLURQPHQWDOFKDOOHQJHVDQ
HDVLHUZD\WRDFFHVVPXFKQHHGHGLQYHVWPHQWFDSLWDO
6(VOLVWHGRQWKHH[FKDQJHZLOOUDLVHFDSLWDOE\VHOOLQJVKDUHVRUERQGVWRLQYHVWRUVWKURXJKWKHSODWIRUP
7KHH[FKDQJHSURYLGHV6(VDFFHVVWRDODUJHUSRRORILQYHVWRUVDQGLQYHVWPHQWFDSLWDOPXFKODUJHUWKDQ
ZRXOGEHDYDLODEOHWRWKHPZKHQUDLVLQJFDSLWDOWKURXJKDSULYDWHWUDQVDFWLRQ$GGLWLRQDOO\E\FRPSDULVRQ
WRUDLVLQJFDSLWDORQDWUDGLWLRQDOVWRFNH[FKDQJHUDLVLQJFDSLWDORQDVRFLDOVWRFNH[FKDQJHHQDEOHVWKH6(V
WRDFFHVVDJURXSRILPSDFWLQYHVWRUVZKRVHLQYHVWPHQWREMHFWLYHVDUHDOLJQHGZLWKLWVVRFLDOPLVVLRQDQG
ZKLFKDUHIDPLOLDUZLWKDQGVXSSRUWLYHRILWVEXVLQHVVPRGHO
7KH VRFLDO VWRFN H[FKDQJH ZKLFK ,,; LV FUHDWLQJ DLPV WR EH D WUDQVSDUHQW PDUNHWSODFH ZKHUH 6(V FDQ
UDLVHFDSLWDOIURPPLVVLRQDOLJQHGLQYHVWRUV7KHH[FKDQJHZLOOEHQHWLPSDFWLQYHVWRUVE\SURYLGLQJWKHP
D VRXUFH RI OLTXLGLW\ DFFHVV WR LQYHVWPHQWUHDG\ 6(V DQG WUDQVSDUHQW UHSRUWLQJ RI QDQFLDO VRFLDO DQG
HQYLURQPHQWDOUHVXOWV
0TWHJ[9LWVY[PUNHUK0U]LZ[PUN:[HUKHYKZ
7KH,PSDFW5HSRUWLQJDQG,QYHVWPHQW6WDQGDUGV,5,6GHYHORSHGE\WKH*OREDO,PSDFW,QYHVWLQJ1HWZRUN
*,,1LQFROODERUDWLRQZLWKLQGXVWU\H[SHUWVSURYLGHVDFRPPRQODQJXDJHIRUUHSRUWLQJWKHVRFLDODQG
HQYLURQPHQWDOSHUIRUPDQFHRIDQHQWHUSULVH,WIDFLOLWDWHVFRQVLVWHQWPHDVXUHPHQWRILQSXWVRXWSXWVDQG
LPSDFW RI HQWHUSULVHV E\ VWDQGDUGL]LQJ DQG GHQLQJ SHUWLQHQW PHWULFV IRU GHVFULELQJ DQ RUJDQL]DWLRQV
JRYHUQDQFHOHJDOVWUXFWXUHVL]HPLVVLRQRSHUDWLRQDODFWLYLWLHVDQGSURGXFWLPSDFW7KHFRPPRQVRFLDO
DQGHQYLURQPHQWDOYRFDEXODU\SURYLGHGLQWKH,5,6WD[RQRP\HQDEOHVVWDQGDUGL]HGUHSRUWLQJDQGUHDG\
FRPSDULVRQRILPSDFWGDWDDFURVVVHFWRUVDQGHQWHUSULVHV%\SURYLGLQJDFRPPRQODQJXDJHFRQVLVWHQW
FRPPXQLFDWLRQEHWZHHQGLIIHUHQWDFWRUVLVSRVVLEOH,QWXUQLWHDVLHUIRULPSDFWLQYHVWRUVWRXQGHUVWDQG
HYDOXDWHDQGFRPSDUHWKHVRFLDODQGHQYLURQPHQWDOLPSDFWVRIGLIIHUHQWPLVVLRQGULYHQRUJDQL]DWLRQV
.009:
*OREDO ,PSDFW ,QYHVWLQJ 5DWLQJV 6WDQGDUG *,,56 DVVHVVHV 6(V DJDLQVW D QXPEHU RI FULWHULD DQG EHVW
SUDFWLFHV IRU WKH 6( PRGHO JRYHUQDQFH ZRUNHU SUDFWLFHV FRPPXQLW\ HQJDJHPHQW DQG HQYLURQPHQWDO
LPSDFW*,,56PHDVXUHVWKHVRFLDODQGHQYLURQPHQWDOLPSDFWRIFRPSDQLHVDQGIXQGVXVLQJDQDSSURDFK
DQDORJRXVWR0RUQLQJVWDULQYHVWPHQWUDWLQJVRU6 3FUHGLWULVNUDWLQJV*,,56GULYHVWKHXVDJHRI,5,6
WD[RQRP\DQGLWKHOSVLQYHVWRUVUHGXFHGXHGLOLJHQFHFRVWE\SURYLGLQJWKHPZLWKDVWDQGDUGL]HGWRROIRU
VRFLDOLPSDFWPHDVXUHPHQW7KH*,,56DVVHVVPHQWLVEDVHGRQVHOIUHSRUWHGGDWDWKDWLVWKHQYHULHGE\D
WKLUGSDUW\DFWRUEHIRUHTXDOLI\LQJIRUDQRIFLDO*,,56UDWLQJ
:960
6RFLDO5HWXUQRQ,QYHVWPHQW652,ZDVRULJLQDOO\GHYHORSHGE\5(')IRUPHUO\WKH5REHUWV(QWHUSULVH
'HYHORSPHQW)XQGD6DQ)UDQFLVFREDVHGSKLODQWKURSLFIXQGWRPHDVXUHWKHLPSDFWRILWVRZQLQYHVWPHQWV
7KH652,PHWKRGLVDTXDQWLWDWLYHDSSURDFKWRXQGHUVWDQGLQJDQGPDQDJLQJWKHVRFLDOHQYLURQPHQWDODQG
,,;%XVLQHVV3ODQ
1HZ)URQWLHUVRI3KLODQWKURS\IRUWKFRPLQJ&KDSWHU6RFLDODQG(QYLURQPHQWDO([FKDQJHV
,,;%XVLQHVV3ODQ
HFRQRPLFYDOXHWKDWDSURMHFWEXVLQHVVRUJDQL]DWLRQIXQGRUSROLF\LVFUHDWLQJ(DFK652,DVVHVVPHQWLV
XQLTXHDQGEDVHGRQWKHRUJDQL]DWLRQVLQGLYLGXDOVHWRIDFWLYLWLHVFRQWH[WVDQGVWDNHKROGHUV'HYHORSHG
IURPWUDGLWLRQDOFRVWEHQHWDQDO\VLVDQGVRFLDODFFRXQWLQJ652,PHDVXUHVWKHVRFLDODQGHQYLURQPHQWDO
YDOXH RI DQ HQWHUSULVH UHODWLYH WR WKH UHVRXUFHV LQYHVWHG LQ WKH RUJDQL]DWLRQ IRU WKH DFKLHYHPHQW RI WKH
PLVVLRQ,WIRFXVHVRQLGHQWLI\LQJDQGFDSWXULQJRXWFRPHVWKDWDUHLPSRUWDQWWRVWDNHKROGHUVEXWJHQHUDOO\
H[FOXGHGIURPWKHPDUNHWVDVZHOODVSODFLQJDQDQFLDOYDOXHRQWKHVHRXWFRPHVZLWKWKHVDPHWHUPVXVHG
LQWKHPDUNHWV2YHUDOOWKH652,DQDO\VLVLQWHQGVWRSURYLGHDFOHDURYHUYLHZRIWKHW\SHVRILPSDFWFUHDWHG
E\WKHHQWHUSULVH
:O\QVN:\Z[HPUHIPSP[`-YHTL^VYR
7KH6KXMRJ6XVWDLQDELOLW\)UDPHZRUNDGGUHVVHVWKHLVVXHVVXUURXQGLQJFXVWRPL]DWLRQDQGFRQWH[WXDOL]DWLRQ
RI6KXMRJVLPSDFWDVVHVVPHQWVDQGLWVXSFRPLQJLPSDFWHQWHUSULVHFHUWLFDWLRQV6KXMRJVLPSDFWHQWHUSULVH
FHUWLFDWLRQSURJUDPZLOOFHUWLI\VRFLDOHQWHUSULVHVRQWKHEDVLVRIWKHLUVRFLDOHQYLURQPHQWDODQGQDQFLDO
SHUIRUPDQFHDQGLQIUDVWUXFWXUH7KHFHUWLFDWLRQVZLOOSURYLGHLPSDFWLQYHVWRUVZLWKDTXLFNJDXJHRIWKH
TXDOLW\ RI 6(V EHLQJ H[DPLQHG IRU SRWHQWLDO LQYHVWPHQW 6KXMRJV LPSDFW DVVHVVPHQWV SURYLGH PRUH LQ
GHSWKDQDO\VHVRI6(V7KH\DGGYDOXHWR6(VE\DFWLQJDVDVWDQGDUGL]HGDQGFUHGLEOHPHDVXUHRIVRFLDO
DQG HQYLURQPHQWDO LPSDFW IRU VWDNHKROGHUV SDUWQHUV DQG SURVSHFWLYH LQYHVWRUV SRVLWLRQLQJ WKH 6( DV D
OHDGHULQLWVVHFWRUIRUKDYLQJDWUDQVSDUHQWWKLUGSDUW\HYDOXDWLRQRILWVVRFLDODQGHQYLURQPHQWDOLPSDFW
DQGHQDEOLQJWKH6(WRUDLVHFDSLWDOIURPLPSDFWLQYHVWRUVZKRYDOXHVXFKLPSDFWDVVHVVPHQWV6KXMRJV
LPSDFWDVVHVVPHQWVIUDPHWKHLPSDFWRIWKH6(LQWKHFRQWH[WRIFRXQWU\DQGVHFWRUVSHFLFFKDOOHQJHVDQG
RSSRUWXQLWLHV,QRUGHUWRGRWKLV6KXMRJXWLOL]HVLWVRZQ6KXMRJ6XVWDLQDELOLW\)UDPHZRUNDVDPDMRUWRRO
ZKLFKFDQEHYLVXDOL]HGDVWKH6KXMRJ6XVWDLQDELOLW\3\UDPLGEHORZ)LJXUH7KH)UDPHZRUNHPSOR\V
DEURDGVHWRIVHFWRUFRXQWU\DQG6(VSHFLFLQGLFDWRUVWRDVVHVVWKHVXVWDLQDELOLW\DQGLPSDFWRIWKH6(
DQGWKHUHVXOWDQWHPSRZHUPHQWRILWVVWDNHKROGHUV,QDQDO\]LQJDQ6(VLPSDFWYDOXHFKDLQ6KXMRJUVW
DVVHVVHVWKH6(VPLVVLRQZKLFKPXVWEHWKHFHQWUDOIRFXVRIZKDWWKH6(LQWHQGVWRDFKLHYH7KHQDIWHU
FRQUPLQJWKH6(VQDQFLDOYLDELOLW\ZKLFKLVUHODWHGWRWKH6(VHIFLHQF\6KXMRJHYDOXDWHVWKH6(V
HIIHFWLYHQHVVLQUHDOL]LQJLWVPLVVLRQE\PHDVXULQJKRZWKH6(LPSDFWVWKHOLYHVRILWVEHQHFLDULHVDQGWKH
HQYLURQPHQWDVZHOODVWKHVRFLHW\DVDZKROH)RUH[DPSOHIRUDQ6(LQUXUDO%DQJODGHVKVRFLDOPLVVLRQ
QDQFLDOVWDELOLW\DQGVRFLDODQGHQYLURQPHQWDOLPSDFWRIWKHEXVLQHVVXOWLPDWHO\OHDGWRWKHHPSRZHUPHQW
RIWKHSRSXODWLRQWKDWLVEHQHWLQJIURPWKH6(VRSHUDWLRQV7KLVLPSURYHGDFFHVVWREDVLFQHHGVVXFK
DV KHDOWK DQG HGXFDWLRQ HYHQWXDOO\ OHDGV WR RSSRUWXQLW\ FUHDWLRQ QDQFLDO LQGHSHQGHQFH DQG SROLWLFDO
LQGHSHQGHQFHIRUWKH6(VEHQHFLDULHV
-PN\YL !:O\QVN:\Z[HPUHIPSP[`7`YHTPK
0TWHJ[0U]LZ[VY:\Y]L`
0U[YVK\J[PVU[V[OL:\Y]L`
7KHSXUSRVHRIWKLVVXUYH\LVWRDVVHVVLQYHVWRULQWHUHVWLQDVRFLDOVWRFNH[FKDQJHWKDWZRXOGRSHUDWHLQ
$VLDDQGWKH3DFLFDQGWRXQGHUVWDQGWKHUHTXLUHPHQWVWKDWLQYHVWRUVKDYHIRUVXFKDQH[FKDQJH
,PSDFW,QYHVWPHQW6KXMRJLVFRQGXFWLQJUHVHDUFKDVSDUWRIDSURJUDPVSRQVRUHGE\WKH$VLDQ'HYHORSPHQW
%DQNWRVXSSRUWWKHGHYHORSPHQWRIDUHJLRQDOVRFLDOVWRFNH[FKDQJHLQ$VLDDQGWKH3DFLF6XFKDVRFLDO
VWRFNH[FKDQJHZRXOGEHVLPLODUWRDWUDGLWLRQDOVWRFNH[FKDQJHDQGZRXOGVHUYHDVDSODWIRUPIRU6RFLDO
(QWHUSULVHVLQ$VLDDQGWKH3DFLFWRUDLVHFDSLWDOWKURXJKRIIHULQJVRIVKDUHVERQGVRURWKHUQDQFLDO
LQVWUXPHQWV7KHH[FKDQJHZRXOGWDUJHWLQYHVWRUVVHHNLQJWRPDNHLQYHVWPHQWVLQ6RFLDO(QWHUSULVHV
WKDWJHQHUDWHQDQFLDOUHWXUQVZKLOHDOVRSURPRWLQJSRVLWLYHVRFLDODQGHQYLURQPHQWDORXWFRPHVWKURXJK
DSODWIRUPWKDWSURYLGHVIRUOLTXLGLW\DQGWUDQVSDUHQF\,PSDFW,QYHVWPHQW([FKDQJH$VLDLVFXUUHQWO\
GHYHORSLQJVXFKDUHJLRQDOVRFLDOVWRFNH[FKDQJH
6RFLDOHQWHUSULVHVDUHVRFLDOPLVVLRQGULYHQRUJDQL]DWLRQVZKLFKDSSO\PDUNHWEDVHGVWUDWHJLHVWRDFKLHYH
DVRFLDODQGRUHQYLURQPHQWDOSXUSRVH7KH\SXUVXHWKHLUVRFLDOJRDOVZKLOHEHLQJQDQFLDOO\VXVWDLQDEOH
7KH\PD\EHHLWKHUQRWIRUSURWRUIRUSURWHQWHUSULVHV
)RUWKHSXUSRVHRIWKLVVXUYH\LPSDFWLQYHVWLQJLVGHQHGDVLQYHVWLQJFDSLWDOLQEXVLQHVVHVIXQGVRU
RWKHUQDQFLDOYHKLFOHVWKDWDFWLYHO\VHHNWRJHQHUDWHVRFLDODQGRUHQYLURQPHQWDOEHQHWVZLWKWKHLQWHQW
RIJHQHUDWLQJERWKVRFLDOHQYLURQPHQWDOEHQHWVDQGQDQFLDOUHWXUQV
,PSDFWLQYHVWLQJVRPHWLPHVDOVRUHIHUUHGWRDVVRFLDOLQYHVWLQJLVDGLVWLQFWVXEVHWRIVRFLDOO\
UHVSRQVLEOHLQYHVWLQJ
:HGHQHVRFLDOO\UHVSRQVLEOHLQYHVWLQJDVLQYHVWLQJZKLOHWDNLQJLQWRDFFRXQWHQYLURQPHQWDOVRFLDODQG
HWKLFDODVSHFWVRILQYHVWPHQWVLQDGGLWLRQWRWUDGLWLRQDOQDQFLDOFULWHULD6RFLDOO\UHVSRQVLEOHLQYHVWLQJ
VWUDWHJLHVPD\LQFOXGHQHJDWLYHVFUHHQLQJH[FOXGLQJLQYHVWPHQWVLQFRPSDQLHVLQFHUWDLQLQGXVWULHVRU
ZKLFKHQJDJHLQFHUWDLQSUDFWLFHVSRVLWLYHVFUHHQLQJDFWLYHO\VHHNLQJWRPDNHLQYHVWPHQWVLQFRPSDQLHV
LQFHUWDLQLQGXVWULHVRUZLWKFHUWDLQSUDFWLFHVRUDFWLYLVWLQYHVWPHQWVWUDWHJLHVDWWHPSWLQJWKURXJK
LQYHVWPHQWWRLQXHQFHFRPSDQLHVWRDGRSWSROLFLHVWKDWSURPRWHVRFLDODQGRUHQYLURQPHQWDOJRDOV
:\Y]L`
:KDWW\SHRILQYHVWRUDUH\RX"
,QVWLWXWLRQDO,QYHVWRU
,QGLYLGXDO,QYHVWRU
2WKHU
:KDWW\SHRIUPLV\RXURUJDQL]DWLRQ"
6RFLDO9HQWXUH&DSLWDO)XQG0DQDJHU
0LFURQDQFH,QYHVWPHQW9HKLFOH0DQDJHU
3HQVLRQ)XQG0DQDJHU
0XWXDO)XQG0DQDJHU
,QVWLWXWLRQDO)XQG0DQDJHU
2WKHU)XQG0DQDJHU
3ULYDWH%DQN
3ULYDWH&OLHQW,QYHVWPHQW0DQDJHU
6RYHUHLJQ:HDOWK)XQG
)RXQGDWLRQ(QGRZPHQW
2WKHU
:KDWDUH\RXUUPVWRWDODVVHWVXQGHUPDQDJHPHQW"
PLOOLRQ
PLOOLRQELOOLRQ
ELOOLRQ
ELOOLRQ
ELOOLRQ
2YHUELOOLRQ
:KHUHGRHV\RXULQYHVWRUFDSLWDORULJLQDWHIURP"&KHFNDOOWKDWDSSO\
1RUWK$PHULFD
(XURSH
$VLD
2WKHU
+RZZRXOG\RXFDWHJRUL]HWKHVRXUFHRI\RXULQYHVWPHQWIXQGV"&KHFNDOOWKDWDSSO\
5HWDLO,QYHVWRUV
+LJK1HW:RUWK,QGLYLGXDO,QYHVWRUV
,QVWLWXWLRQDO,QYHVWRUV
(QGRZPHQW
3HQVLRQ$VVHWV
*RYHUQPHQW0XOWLODWHUDO$JHQF\
2WKHU
1RWH$OOUHVSRQGHQWVFRQWLQXHWRDQVZHUWKHVDPHTXHVWLRQVDIWHUWKLVSRLQW
3$577:2&855(1762&,$/,19(670(17(1*$*(0(17/(9(/
6RFLDOO\UHVSRQVLEOHLQYHVWLQJLVGHQHGDVLQYHVWLQJZKLOHWDNLQJLQWRDFFRXQWHQYLURQPHQWDOVRFLDODQG
HWKLFDODVSHFWVRILQYHVWPHQWVLQDGGLWLRQWRWUDGLWLRQDOQDQFLDOFULWHULD6RFLDOO\UHVSRQVLEOHLQYHVWLQJ
VWUDWHJLHVPD\LQFOXGHQHJDWLYHVFUHHQLQJH[FOXGLQJLQYHVWPHQWVLQFRPSDQLHVLQFHUWDLQLQGXVWULHVRU
ZKLFKHQJDJHLQFHUWDLQSUDFWLFHVSRVLWLYHVFUHHQLQJDFWLYHO\VHHNLQJWRPDNHLQYHVWPHQWVLQFRPSDQLHV
LQFHUWDLQLQGXVWULHVRUZLWKFHUWDLQSUDFWLFHVRUDFWLYLVWLQYHVWPHQWVWUDWHJLHVDWWHPSWLQJWKURXJK
LQYHVWPHQWWRLQXHQFHFRPSDQLHVWRDGRSWSROLFLHVWKDWSURPRWHVRFLDODQGRUHQYLURQPHQWDOJRDOV
D
$FFRUGLQJWR\RXURZQRUWKHDERYHGHQLWLRQDUH\RXFXUUHQWO\HQJDJHGLQVRFLDOO\
UHVSRQVLEOHLQYHVWLQJ"
<HV
1R
'RQWNQRZ
1RWH7KRVHZKRDQVZHU1RRU'RQWNQRZVNLSDXWRPDWLFDOO\WRTXHVWLRQ
E
:KDWSHUFHQWDJHRI\RXUWRWDOIXQGVDYDLODEOHIRUPDQDJHPHQWLVFXUUHQWO\LQYHVWHGXVLQJVRFLDOO\
UHVSRQVLEOHLQYHVWPHQWVWUDWHJLHV"
/HVVWKDQ
2YHU
$FFRUGLQJWR\RXURZQRUWKHDERYHGHQLWLRQDUH\RXFXUUHQWO\HQJDJHGLQLPSDFWLQYHVWLQJ"
<HV
1R
'RQWNQRZ
1RWH7KRVHZKRDQVZHU1RRU'RQWNQRZZLOODXWRPDWLFDOO\VNLSWRTXHVWLRQ
,I\RXUGHQLWLRQRILPSDFWLQYHVWLQJGLIIHUVIURPRXUVKRZVR"
D :KDWSHUFHQWDJHRI\RXUWRWDOIXQGVDYDLODEOHIRULQYHVWPHQWLVFXUUHQWO\LQYHVWHGLQ
LPSDFWLQYHVWPHQWV"
/HVVWKDQ
2YHU
E :KDWSHUFHQWDJHRI\RXUWRWDOIXQGVDYDLODEOHIRULQYHVWPHQWLVFXUUHQWO\WDUJHWHGIRU
LPSDFWLQYHVWPHQW"
/HVVWKDQ
2YHU
:KDWDUH\RXUQDQFLDOUHWXUQFULWHULDIRULPSDFWLQYHVWLQJ"&KHFNDOOWKDWDSSO\
)XOO5LVN$GMXVWHG0DUNHW5DWHRI5HWXUQ
%HORZ0DUNHW5HWXUQ
3UHVHUYDWLRQRI3ULQFLSDO
9DULHVSOHDVHHODERUDWH
2WKHU
:KDWUHTXLUHPHQWVZRXOGKDYHWREHPHWIRU\RXWREHJLQLQYHVWLQJLQFUHDVH\RXULQYHVWPHQWVL]HRU
UHFRPPHQG\RXUFOLHQWVWRLQYHVWLQLPSDFWLQYHVWPHQWV"&KHFNDOOWKDWDSSO\
1RUHTXLUHPHQWV5HDG\WRLQYHVW$OUHDG\LQYHVWLQJ
,QFUHDVHGOLTXLGLW\RILPSDFWLQYHVWPHQWRSSRUWXQLWLHV
,QFUHDVHGWUDQVSDUHQF\RILPSDFWLQYHVWPHQWRSSRUWXQLWLHV
0RUHLQIRUPDWLRQDERXWWKHDYDLODELOLW\RILPSDFWLQYHVWLQJRSSRUWXQLWLHV
(DVLHUDFFHVVWRLPSDFWLQYHVWPHQWRSSRUWXQLWLHV
'HPRQVWUDWHGWUDFNUHFRUGRISRVLWLYHQDQFLDOUHWXUQVRILPSDFWLQYHVWPHQWV
)RU)XQG0DQDJHUVRU$GYLVRUVGHPRQVWUDWHGLQYHVWRUFOLHQWGHPDQG
2WKHU
/RRNLQJIRUZDUGWKUHH\HDUVDQGDVVXPLQJWKDWWKHFULWHULDVSHFLHGDERYHKDYHEHHQPHW
ZKDWSHUFHQWDJHRI\RXUWRWDOIXQGVDYDLODEOHIRULQYHVWPHQWZRXOG\RXH[SHFWWRGHYRWHWR
LPSDFWLQYHVWPHQWV"
1RQH
/HVVWKDQ
2YHU
&DQWSUHGLFW'HSHQGVRQP\FOLHQWVLQYHVWRUVSUHIHUHQFHV
,I\RXDUHDIXQGPDQDJHUZKLFKRIWKHIROORZLQJZRXOG\RXFRQVLGHUXVLQJDVDQLQYHVWPHQWYHKLFOH
IURPZKLFKWRPDNHLPSDFWLQYHVWPHQWV"&KHFNDOOWKDWDSSO\
3UHH[LVWLQJIXQGPDQDJHGE\\RXUUP
1HZO\FUHDWHGIXQGVSHFLFDOO\WDUJHWLQJLPSDFWLQYHVWPHQWV
1$
2WKHU
D ,QGLFDWHWKHVRFLDORUHQYLURQPHQWDOVHFWRUVLQZKLFK\RXKDYHPDGHRUDUHFXUUHQWO\PDNLQJLPSDFW
LQYHVWPHQWV&KHFNDOOWKDWDSSO\
0LFURQDQFH
+RXVLQJ
(GXFDWLRQ
+HDOWK
8UEDQ5HQHZDO
-RE&UHDWLRQ
:RPHQ &KLOGUHQV,VVXHV
)DLU7UDGH
6XVWDLQDEOH$JULFXOWXUH
&RPPXQLW\'HYHORSPHQW
3RYHUW\$OOHYLDWLRQ
(QHUJ\$OWHUQDWLYH(QHUJ\
0DULQH2FHDQ
)RUHVWU\
:DWHU
1DWXUDO5HVRXUFHV
:DVWH0DQDJHPHQW
1RQH
2WKHU
E,QGLFDWHWKHVRFLDORUHQYLURQPHQWDOVHFWRUVLQZKLFK\RXZRXOGOLNHWRPDNHLPSDFWLQYHVWPHQWVLQ
WKHIXWXUH&KHFNDOOWKDWDSSO\
0LFURQDQFH
+RXVLQJ
(GXFDWLRQ
+HDOWK
8UEDQ5HQHZDO
-RE&UHDWLRQ
:RPHQ &KLOGUHQV,VVXHV
)DLU7UDGH
6XVWDLQDEOH$JULFXOWXUH
&RPPXQLW\'HYHORSPHQW
3RYHUW\$OOHYLDWLRQ
(QHUJ\$OWHUQDWLYH(QHUJ\
0DULQH2FHDQ
)RUHVWU\
:DWHU
1DWXUDO5HVRXUFHV
:DVWH0DQDJHPHQW
1RQH
2WKHU
D ,QGLFDWHWKHZD\VLQZKLFK\RXFXUUHQWO\PDNHLPSDFWLQYHVWPHQWV&KHFNDOOWKDWDSSO\
'LUHFWO\
7KURXJKIXQGV
7KURXJKWKLUGSDUW\0DQDJHUV$GYLVRUV
7KURXJKIXQGVRIIXQGV
1$
2WKHU
E,QGLFDWHWKHZD\VLQZKLFK\RXZRXOGOLNHWRPDNHLPSDFWLQYHVWPHQWVLQWKHIXWXUH
&KHFNDOOWKDWDSSO\
'LUHFWO\
7KURXJKIXQGV
7KURXJKWKLUGSDUW\0DQDJHUV$GYLVRUV
7KURXJKIXQGVRIIXQGV
1$
2WKHU
D ,QGLFDWHWKHW\SHVRILPSDFWLQYHVWPHQWV\RXFXUUHQWO\PDNH&KHFNDOOWKDWDSSO\
'HSRVLWV&'V2WKHU6KRUW7HUP,QYHVWPHQWV
/RDQV
/LTXLG'HEW6HFXULWLHV
*XDUDQWHHV
4XDVL(TXLW\0H]]DQLQH)LQDQFH
3ULYDWH(TXLW\
3XEOLFHTXLW\
5HDO(VWDWH
+DUG$VVHWV)RUH[DPSOHIRUHVWU\
1$
2WKHU
E,QGLFDWHWKHW\SHVRILPSDFWLQYHVWPHQWV\RXZRXOGOLNHWRPDNHLQWKHIXWXUH&KHFNDOOWKDWDSSO\
'HSRVLWV&'V2WKHU6KRUW7HUP,QYHVWPHQWV
/RDQV
/LTXLG'HEW6HFXULWLHV
*XDUDQWHHV
4XDVL(TXLW\0H]]DQLQH)LQDQFH
3ULYDWH(TXLW\
3XEOLFHTXLW\
5HDO(VWDWH
+DUG$VVHWV)RUH[DPSOHIRUHVWU\
1$
2WKHU
3$577+5((62&,$/672&.(;&+$1*(&21&(376
,PSDFW,QYHVWPHQW([FKDQJH$VLDLVFXUUHQWO\GHYHORSLQJDUHJLRQDOVRFLDOVWRFNH[FKDQJHWRVHUYHDVD
SODWIRUPIRUVRFLDOHQWHUSULVHVLQ$VLDDQGWKH3DFLFWRUDLVHFDSLWDOWKURXJKRIIHULQJVRIVKDUHVERQGV
RURWKHUQDQFLDOLQVWUXPHQWV7KLVVRFLDOVWRFNH[FKDQJHZLOOWDUJHWLPSDFWLQYHVWRUVVHHNLQJWRPDNH
LQYHVWPHQWVLQVRFLDOHQWHUSULVHVWKDWJHQHUDWHQDQFLDOUHWXUQVZKLOHDOVRSURPRWLQJSRVLWLYHVRFLDODQG
HQYLURQPHQWDORXWFRPHVWKURXJKDSODWIRUPWKDWSURYLGHVIRUOLTXLGLW\DQGWUDQVSDUHQF\
7KHVRFLDOVWRFNH[FKDQJHZLOOEHVLPLODUWRDWUDGLWLRQDOVHFXULWLHVH[FKDQJHLQPDQ\ZD\VEXWZLOO
GLIIHULQDQXPEHURINH\DVSHFWV0RVWIXQGDPHQWDOO\WKHH[FKDQJHZLOORQO\OLVWVHFXULWLHVLVVXHGE\
VRFLDOHQWHUSULVHVZKLFKDUHDEOHWRPHHWVWULQJHQWVRFLDODQGHQYLURQPHQWDOOLVWLQJFULWHULD2QFHOLVWHGLW
ZLOOEHPDQGDWRU\IRUHDFKOLVWHGFRPSDQ\WRSURYLGHGHWDLOHGSHULRGLFVRFLDODQGHQYLURQPHQWDOLPSDFW
UHSRUWVLQDGGLWLRQWRQDQFLDOUHSRUWV,WLVH[SHFWHGWKDWWKHYDOXHRIWKHWUDGHGVHFXULWLHVZLOOUHHFWERWK
WKHQDQFLDODQGWKHVRFLDOSHUIRUPDQFHRIWKHLVVXHU7KHH[FKDQJHZLOOEHRSHQWRERWKIRUSURWVRFLDO
HQWHUSULVHVZKLFKPD\OLVWVKDUHVRUERQGVRQWKHH[FKDQJHDVZHOODVQRWIRUSURWVRFLDOHQWHUSULVHV
ZKLFKPD\OLVWERQGVRQWKHH[FKDQJH
$UH\RXLQIDYRURIWKHGHYHORSPHQWRIVRFLDOVWRFNH[FKDQJHV"
<HV
1R
'RQW.QRZ
:RXOG\RXFRQVLGHUWUDQVDFWLQJRUUHFRPPHQGLQJ\RXUFOLHQWVWRWUDQVDFWRQDVRFLDOVWRFNH[FKDQJH"
<HV
1R
'RQW.QRZ
:KDWZRXOGEHWKHPDLQUHDVRQIRU\RXWRWUDQVDFWRUUHFRPPHQG\RXUFOLHQWVWRWUDQVDFWRQDVRFLDO
VWRFNH[FKDQJH"&KHFNDOOWKDWDSSO\
3RWHQWLDOQDQFLDOUHWXUQV
3RWHQWLDOVRFLDOLPSDFW
2SSRUWXQLW\WRDFKLHYHERWKQDQFLDOUHWXUQVDQGVRFLDOLPSDFW
5LVNGLYHUVLFDWLRQ
([LWVWUDWHJ\IRUH[LVWLQJLQYHVWPHQWV
2WKHU
&RPSDUHGWRPDNLQJSULYDWHLPSDFWLQYHVWPHQWVWKURXJKSULYDWHO\QHJRWLDWHGWUDQVDFWLRQVRUSULYDWH
IXQGVZKDWLVWKHDSSHDORIDVRFLDOVWRFNH[FKDQJH"&KHFNDOOWKDWDSSO\
/LTXLGLW\
7UDQVSDUHQWUHSRUWLQJRIQDQFLDOLQIRUPDWLRQ
7UDQVSDUHQWUHSRUWLQJRIVRFLDOHQYLURQPHQWDOLPSDFWLQIRUPDWLRQ
2WKHU
:KDWLQVWUXPHQWVZRXOG\RXEHLQWHUHVWHGLQLQYHVWLQJLQWUDGLQJRQDVRFLDOVWRFNH[FKDQJH"
&KHFNDOOWKHDSSO\
(TXLWLHV6KDUHV
%RQGV
)XQGV
2WKHU
,QZKLFKFXUUHQFLHVZRXOG\RXEHZLOOLQJWRFRQGXFWWUDQVDFWLRQV"&KHFNDOOWKDWDSSO\
86
(XUR
6LQJDSRUH
/RFDOFXUUHQF\WKHFXUUHQF\RIWKHLVVXHUFRXQWU\
3$57)28562&,$/,19(670(17$1',03$&7&5,7(5,$
6RFLDO(QWHUSULVHVOLVWLQJVHFXULWLHVRQDVRFLDOVWRFNH[FKDQJHZLOOEHUHTXLUHGWRUHSRUWRQWKHLUVRFLDO
HQYLURQPHQWDOLPSDFWSHUIRUPDQFHDVZHOODVRQWKHLUQDQFLDOSHUIRUPDQFH
'R\RXFXUUHQWO\XVHDV\VWHPWRPHDVXUHWKHVRFLDOLPSDFWRIWKHFRPSDQLHVLQZKLFK\RXLQYHVW"
<HV
1R
1RWH7KRVHZKRDQVZHU1RDXWRPDWLFDOO\VNLSWRTXHVWLRQ
,I\HVZKLFKV\VWHPGR\RXXVH"
7KLQNLQJDERXWWKHVRFLDOHQYLURQPHQWDOLPSDFWRI\RXULPSDFWLQYHVWPHQWVZKLFKRIWKHIROORZLQJ
GR\RXUHTXLUH"&KHFNDOOWKDWDSSO\
7KHDELOLW\WRPHDVXUHWKHVRFLDOHQYLURQPHQWDOUHWXUQRIP\LQYHVWPHQW
$GHTXDWHGLVFORVXUHRIVRFLDOHQYLURQPHQWDOLQGLFDWRUV
5HOLDEOHVRFLDOHQYLURQPHQWDOUDWLQJVRUFHUWLFDWLRQVIURPLQGHSHQGHQWDJHQFLHV
&RQIRUPLW\ZLWKWKH,QWHUQDO5HYHQXH6HUYLFHV3URJUDP5HODWHG,QYHVWPHQWUXOHVRUVLPLODUUXOHV
DSSOLFDEOHRXWVLGHRIWKH86
1$
2WKHU
+RZDFFHSWDEOHDUHHDFKRIWKHIROORZLQJW\SHVRIVRFLDOHQYLURQPHQWDOLPSDFWUHSRUWLQJIRUOLVWHG
FRPSDQLHVRQDVFDOHRI HQWLUHO\DFFHSWDEOH"
1RWH,PSDFW5HSRUWLQJDQG,QYHVWPHQW6WDQGDUGV,5,6LVDFRPPRQIUDPHZRUNIRUPHDVXULQJVRFLDODQG
HQYLURQPHQWDOLPSDFWRILQYHVWPHQWV*OREDO,PSDFW,QYHVWLQJ5DWLQJ6\VWHP*,,56DVVHVVHVWKHVRFLDO
DQGHQYLURQPHQWDOLPSDFWRIFRPSDQLHVDQGIXQGVXVLQJDUDWLQJVDSSURDFKDQDORJRXVWR0RUQLQJVWDU
LQYHVWPHQWUDQNLQJVRU6 3FUHGLWULVNUDWLQJV
BBBB 5HSRUWLQJRIVRFLDO.3,VFKRVHQE\WKHFRPSDQ\XVLQJVWDQGDUGL]HGUHSRUWLQJWHUPLQRORJ\
VXFKDV,5,6
BBBB 5HSRUWLQJRIVRFLDO.3,VDVVSHFLHGE\WKHVRFLDOVWRFNH[FKDQJHXVLQJVWDQGDUGL]HGUHSRUWLQJ
WHUPLQRORJ\VXFKDV,5,6
BBBB 5HSRUWLQJRIVRFLDO.3,VVXIFLHQWWRJHQHUDWHDVRFLDOLPSDFWUDWLQJXVLQJDVWDQGDUGL]HG
V\VWHPVXFKDV*,,56
+RZDFFHSWDEOHDUHHDFKRIWKHIROORZLQJIRUPVRIYHULFDWLRQRIVRFLDOHQYLURQPHQWDOLPSDFWGDWD
UHSRUWHGE\FRPSDQLHVOLVWHGRQDVRFLDOVWRFNH[FKDQJHRQDVFDOHRI HQWLUHO\DFFHSWDEOH"
BBBB 6HOIUHSRUWLQJE\OLVWHGFRPSDQLHVZLWKRXWLQGHSHQGHQWYHULFDWLRQ
BBBB 6HOIUHSRUWLQJE\OLVWHGFRPSDQLHVZLWKGXHGLOLJHQFHUHYLHZSHUIRUPHGE\FRPSDQ\VSRQVRU
XQGHUZULWHUQDQFLDODGYLVRU
BBBB 6HOIUHSRUWLQJE\OLVWHGFRPSDQLHVVXEMHFWWRUDQGRPSHULRGLFDXGLWE\LQGHSHQGHQWDXGLWUP
BBBB 6HOIUHSRUWLQJE\OLVWHGFRPSDQLHVVXEMHFWWRDXGLWLQHDFKLQVWDQFHE\DQLQGHSHQGHQW
DXGLWUP
3$57),9(23(5$7,21$/5(48,5(0(176)25$62&,$/672&.(;&+$1*(
7KLVVHFWLRQLVPHDQWWRJDXJH\RXURSHUDWLRQDOUHTXLUHPHQWVIRUWUDQVDFWLQJRQDVRFLDOVWRFNH[FKDQJH
,I\RXZHUHHYHUWRWUDQVDFWRQDVRFLDOVWRFNH[FKDQJH
/,48,',7<
:KDWLV\RXULQYHVWPHQWKRUL]RQWLPHIUDPHLHKRZORQJZRXOG\RXH[SHFWWRKROGDQLQYHVWPHQW
PDGHRQDVRFLDOVWRFNH[FKDQJH"
/HVVWKDQ\HDU
\HDUV
\HDUV
0RUHWKDQ\HDUV
&DQWSUHGLFW
+RZRIWHQDWDPLQLPXPZRXOG\RXQHHGDSULFHTXRWDWLRQ"
5HDOWLPHSULFHV
'DLO\
:HHNO\
0RQWKO\
4XDUWHUO\
1RWLPSRUWDQW
0$5.(7$&&(66
3OHDVHUDQNWKHIROORZLQJDVSRWHQWLDOORFDWLRQVIRUDVRFLDOVWRFNH[FKDQJHVHUYLQJ$VLDQLVVXHUVDQG
JOREDOLQYHVWRUVLQRUGHURISUHIHUHQFH PRVWSUHIHUUHG
6LQJDSRUH
.XDOD/XPSXU
%DQJNRN
+RQJ.RQJ
0XPEDL
'R\RXDQWLFLSDWHDFFHVVLQJWKHPDUNHWYLDDEURNHU"
<HV
1R
'RQW.QRZ
1RWH7KRVHZKRDQVZHU1RRU'RQWNQRZDXWRPDWLFDOO\VNLSWRTXHVWLRQ
,I\HVGR\RXKDYHVSHFLFUHTXLUHPHQWVIRUEURNHUV"
),1$1&,$/5(3257,1*
+RZIUHTXHQWO\DWDPLQLPXPZRXOG\RXUHTXLUHOLVWHGFRPSDQLHVWRSURYLGHQDQFLDO
VWDWHPHQWUHSRUWLQJ"
4XDUWHUO\
6HPLDQQXDOO\
$QQXDOO\
2))(5,1*'2&80(176
:KDWPLQLPXPOHYHORIRIIHULQJGRFXPHQWVZRXOG\RXUHTXLUHFRPSDQLHVXQGHUWDNLQJDQRIIHULQJRI
VHFXULWLHVWRSURYLGHEHIRUHPDNLQJDQLQYHVWPHQWGHFLVLRQ"
)XOOSURVSHFWXVVLPLODUWRZKDWLVUHTXLUHGWREHOHGIRUDSXEOLFRIIHULQJRIVHFXULWLHVLQWKH86
WKH8.RU6LQJDSRUH
$GPLVVLRQGRFXPHQWVLPLODUWRZKDWLVUHTXLUHGIRUDGPLVVLRQWROLVWLQJRQWKH$OWHUQDWLYH
,QYHVWPHQW0DUNHW$,0LQWKH8.
2IIHULQJPHPRUDQGXPVLPLODUWRZKDWLVUHTXLUHGIRUDERQGRIIHULQJWRLQVWLWXWLRQDOLQYHVWRUV
LQ6LQJDSRUH
'RQW.QRZ
2WKHU