- Terms and Conditions
The content of this promotion has not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000. Reliance on this promotion for the purposes of engaging in any investment activity may expose an investor to a significant risk of losing all of the property or other assets invested.
Important Notice
This memorandum is issued by Caledonian Investments (Gulf) Limited (the ‘Company'). It is made on a confidential basis to a limited
number of persons for the sole purpose of providing information about an investment in the Company. This memorandum should
not be distributed, published or reproduced, in whole or in any part, nor should any of its contents be communicated or disclosed
by recipients to any other person.
The value of the shares in the Company can go down as well as up and investors may not get back the full amount invested. No guarantees as to investment performance, in respect of either income or capital gains, are given expressly or by implication. Past performance is not necessarily a guide to future performance and nothing in this memorandum should be taken as an express or an implied performance forecast. Prospective investors are advised to consult their own professional advisors and conduct their own due diligence concerning the acquisition, holding or disposal of interests in the Company. Prospective investors should also consider the Risk Factors set out at pages 17 and 18.
Prospective investors must rely on their own examination of the legal, taxation, financial and other consequences of investing in the Company, including risks involved. Prospective investors should not treat the contents of this memorandum as advice relating to legal, taxation or investment matters and are advised to consult their own professional advisors concerning the acquisition, holding or disposal of interests in the Company.
No representation is made or assurance given that any statement, view, projection or forecast is correct or that the objectives of the Company will be achieved. Prospective investors must determine for themselves what reliance (if any) they should place on such statements, views, projections or forecasts and the issuer accepts no responsibility in respect of them.
Any person who is in any doubt about the investment to which this memorandum relates should consult an authorised person specialising in advising on investments of the kind described in this memorandum.
Notice to UK Investors
The Company is not an ‘Authorised Person' under the Financial Services and Markets Act 2000 (‘FSMA').
The distribution of this memorandum is exempt from the general restriction in Section 21 of FSMA on the communication of invitations or inducements to engage in investment activity on the grounds that it is only being distributed to the following categories of persons:
- investment professionals as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the ‘FPO');
- certified high-net worth individuals as defined in Article 48 of the FPO;
- self-certified sophisticated investors as defined in Article 50A of the FPO; and
- high-net worth corporate bodies and unincorporated associations, and partnerships which meet the requirements of Article 49 of the FPO.
The transmission of this memorandum to any other person in the United Kingdom is unauthorised and may contravene the FSMA.
To qualify:
- as a self-certified sophisticated investor a person must have signed, within the last twelve months, a statement in the terms set out in Part II of Schedule 5 of the FPO; and
- as a certified high-net worth individual, a person must have signed, within the last twelve months, a statement in the terms set out in Part I of Schedule 5 of the FPO.
Notice for Overseas Investors
This memorandum does not constitute, and may not be used for the purposes of, an offer of interests or an invitation to acquire
interests in the Company by any person in any jurisdiction in which such offer or invitation is not authorised or in which the person
endeavouring to make such an offer or invitation is not qualified to do so or to any person to whom it is unlawful to make such an offer
or invitation. No action has been or will be taken in any jurisdiction by the Company that would permit a public offering of interests in
the Company or possession or distribution of this memorandum in any jurisdiction where action for that purpose is required. It is the
responsibility of prospective investors to satisfy themselves as to the full compliance with the relevant laws and regulations of any
territory in connection with any application to participate in the Company, including obtaining any requisite governmental or other
consent and adhering to any other formality prescribed in such territory.
Residents of the United Arab Emirates
This memorandum does not, and is not intended to, constitute an invitation or a offer of securities in the United Arab Emirates
(including the Dubai International Financial Centre) and accordingly should not be construed as such. This memorandum is being
issued to a limited number of institutional/sophisticated investors (a) upon their request and confirmation that they understand that
the Fund and the Interests have not been approved or licensed by or registered with the United Arab Emirates Central Bank or any
other relevant licensing authorities or governmental agencies in the United Arab Emirates; and (b) on the condition that it will not
be provided to any person other than the original recipient, is not for general circulation in the United Arab Emirates and may not be
reproduced or used for any other purpose. This memorandum has not been approved by or filed with the Dubai International Financial
Services Authority.
Investors should be aware of the following risk factors:
This memorandum does not purport to identify, and does not necessarily identify, all of the risk factors associated with the proposed investment. Accordingly, each prospective investor, prior to making any investment decision, must conduct and rely upon their own investigation of risk factors associated with the proposed investment, including, among others (a) risks the Company faces by virtue of the market in which it operates, (b) risks that are specific to the Company, and (c) risks that are specifically associated with the nature of the proposed investment.
Prospective investors should consider the important notice on the inside front cover of this memorandum and the risks that relate to an investment of the kind including but not limited to:
Investment Risks
No representation is or can be made as to the future performance
of the Company and there is no assurance that the Company will
realise its investment objective. The Company could lose some
or all of its investment in a project which could have a significant
adverse effect on the overall returns.
The investment is for a fixed term and it will not be possible for
investors to receive their investment back before the intended
exit or liquidation of the Company's assets.
Property Risks
In any market property is usually an illiquid asset. There are normal
cycles of market behaviour, and property values can go down as
well as up. Global economic trends and local market conditions
can both have an effect on the market for real-estate.
In emerging markets such as the Gulf States these cycles may be more marked than in developed markets. Also there is less market history from which to extrapolate future trends and returns.
The Company may invest in a project which, for whatever reason, experiences delays, and thus negatively impacts on the realisation of the investment at the expected profit level. The issuing of planning approvals and government licenses and other indirect contingencies may also have adverse consequences for the Company.
The Company may be dependent on the performance of third parties for completing, marketing and successful realising its investment. The valuation of property assets may depend on subjective factors outwith the control of the Company, and no assurance can be given that the price which any investment will realise accurately reflects its valuation. It also may not be possible to achieve the expected values of assets within the time frame of the Company. Realisation of the Company's assets may take longer than is intended, as a result of market conditions, and the Directors may determine under exceptional circumstances to lengthen the time span of the Company if they consider conditions warrant this.
Market supply and demand may result in properties being unoccupied at certain periods during the lifetime of the fund, which may adversely affect investment returns.
Financial Risks
It may be the case that investments will be financed in part by
borrowings, and security over that investment granted to lenders.
Interest rate fluctuations may result in increased borrowing costs,
and income from realised investments may not be sufficient to
cover these additional costs.
This leveraging may affect the Company's ability to attain the anticipated returns and additionally in the event of default may lead to the loss of ownership of the property or investment.
Political Risks
Overseas investment inevitably carries a risk of changes in the
political environment in the overseas country.
Whilst the Gulf region has been politically stable, many countries in the Middle East have been subject to political instability, and are undergoing economic, political and social change. The performance of the Company may be affected by actual and perceived risks arising from social, religious and political influences, as well as changes in government policies, hostilities in the region, and action by extremist groups.
Regulatory Environment and Legal Risks
Investing in the Gulf regions' real-estate market involves risks
not encountered in more mature property markets, namely
possible restrictions of foreign ownership, changing legal
framework regarding freehold title, difficulties in registration of
title, recognition of rights in areas where there may be a dispute,
potential liability of pollution and environmental clear up costs,
and lack of availability of real-estate insurance. The Company
may not be able to entirely mitigate against these and other
unforeseen risks.
The legal framework of the countries in which the Company will invest is rapidly evolving and the effect of new laws hard to predict. The interpretation and application of property laws could have an effect on the Company's investment strategy and performance. It is possible that in the future, investment by foreign investors in one or any of the intended territories may be subject to government sanction or prohibition, with negative consequences for the Company.
As real-estate laws in the Gulf region are new, they may not have been applied before, and when applied they may not be applied consistently. New laws and regulations may be introduced, including those with retrospective effect, with little or no prior consultation.
Accounting data and other property-specific information on which judgments concerning investments and investee companies are made may be less accurate or not readily available in the Gulf and UAE states.
The corporate infrastructure for conducting business eg. handling and settling transactions is not as well developed in the Gulf and the UAE as it is in more developed nations. Consequently corporate action and legal enforcement of contracts is subject to more risk.
Taxation Risks
It is possible that at some point in the future local taxation laws
may change and that assets such as property could be subject
to either corporate or capital gains tax. (Please refer to the
section on Taxation which describes the status of the Company
for investors subject to UK tax.)
Currency Risks
Currency fluctuations will occur during the investment period,
and at the end of the investment period the disbursement
of funds to investors will be concluded at the prevailing AED
to £ Sterling rate.
The currency of Dubai and the UAE, the AED currently tracks the USD, and therefore movements of the USD relative to the UK pound could affect the forecasted returns to investors. This may be as a result of events completely unrelated to the economies of the Gulf region and the UAE. Also, international interest rates can affect the borrowing costs of the Company.
Company Risks
The Company is a specially formed vehicle for the investment
purposes as described in this memorandum, and does not have
a demonstrable track record of property investment, other
than that of its Directors and Managers. The Company will
rely on the experience of its Directors and the Managers
to successfully expedite its business activities and achieve
its investments objectives.
Conflicts of Interest Risks
The services that the Managers provide to the Company are not
exclusive and they may either collectively or individually provide
similar services to other companies or funds.
The Directors and Managers will however at all times have due regard for their responsibilities towards the Company and Investors. Any conflict of interest that arises will be resolved in a fair and equitable manner by the Directors and the Managers, which should not unfairly prejudice or compromise the interests of the Investors.
Summary
The foregoing does not purport to be a complete summary
of the risks involved in investment in the Company. If you are
in any doubt as to whether to proceed to make an investment
in terms of this communication, then you should seek the
advice of an authorised person, suitably qualified to advise
on investments of this nature.
The contents of this memorandum are subject to change. Where appropriate investors will be informed of any major changes concerning the circumstances or procedures outlined within this memorandum.