NOTICE TO SHAREHOLDERS
The Board has decided to appoint Carne Global Fund Managers (Luxembourg) S.A., a public limited company regulated in Luxembourg by the Commission de Surveillance du Secteur Financier as the Management Company.
MATTHEWS ASIA FUNDS
Société d'Investissement à Capital Variable
Registered office: 80, route d’Esch
Grand Duchy of Luxembourg
R.C.S. Luxembourg B 151.275
This document is important and requires your immediate attention. If in doubt, you should seek independent professional financial advice.
The Directors of the Fund accept full responsibility for the accuracy of the information contained in this document and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief there are no other facts the omission of which would make any statement misleading.
Capitalized terms not otherwise defined herein shall bear the same meaning as in the Fund’s prospectus (the “Prospectus”), the Supplement for Hong Kong Investors and the Product Key Facts Statements of the HK Sub-Funds (collectively referred to as the “Hong Kong Offering Document”).
NOTICE TO THE SHAREHOLDERS
MATTHEWS ASIA FUNDS
Luxembourg, 1 October 2019
We are writing to you as a holder of shares in one or more sub-funds of the Fund (each a “HK Sub-Fund” and collectively, the “HK Sub-Funds”).
The board of directors of the Fund (the “Board”) has decided to appoint CARNE GLOBAL FUND MANAGERS (LUXEMBOURG) S.A. as the management company of the Fund (the “Management Company”).
The Board has further decided to proceed with some other amendments to the Hong Kong Offering Document as summarised below.
- Appointment of a management company for the Fund
The Board has decided to appoint Carne Global Fund Managers (Luxembourg) S.A., a public limited company regulated in Luxembourg by the Commission de Surveillance du Secteur Financier and having its registered office at EBBC Centre, 6B, route de Trèves, L-2633 Senningerberg and registered with the Luxembourg Trade and Companies Register (Registre de Commerce et des Sociétés) under number B. 148258 as the Management Company (the “Appointment”). The Appointment will be effective as of 4 November 2019 (the “Effective Date”).
Reason for the Appointment
The decision to appoint the Management Company for the Fund is made to comply with the substance requirements laid down in the CSSF Circular 18/698 (the “Circular”). The Circular requires a self-managed investment company to have its registered office, as well as its decision-making and administrative center in Luxembourg. As the Fund does not have its decision-making and administrative center in Luxembourg, it is no longer an option to remain self-managed, and it should either create its own management company with such substance in Luxembourg, or appoint a third-party management company, hence the appointment of the Management Company. The Management Company is qualified to act as a UCITS management company in accordance with Chapter 15 of the Luxembourg law of 17 December 2010 on undertakings for collective investment.
Implications of the Appointment
Following the Appointment,
- the Management Company will delegate the administrative agency, registrar and transfer agency services of the Fund and all HK Sub-Funds to BROWN BROTHERS HARRIMAN (LUXEMBOURG) S.C.A., the Fund’s current administrative agent, domiciliary agent, registrar and transfer agent, and paying agent, under its overall supervision and control and under the ultimate responsibility of the Board, as detailed in the updated Hong Kong Offering Document; and
- the Management Company will at all times delegate the investment management functions with respect to all HK Sub-Funds to MATTHEWS INTERNATIONAL CAPITAL MANAGEMENT, LLC, the Fund’s current investment manager (the “Investment Manager”), under its overall supervision and control and under the ultimate responsibility of the Board, as detailed in the updated Hong Kong Offering Document.
Separate from the Appointment, the Board has also decided to terminate the advisory agreement with MATTHEWS GLOBAL INVESTORS S.À R.L., the Fund’s current investment advisor (the “Investment Advisor”) providing non-discretionary advisory services to the Investment Manager. Upon this termination, Matthews Global Investors S.à r.l. will no longer act as the Investment Advisor. The services that were provided by Matthews Global Investors S.à r.l. will be performed by the Investment Manager.
All costs and expenses resulting from the implementation of the Appointment, estimated to be approximately US$73,000, will be borne by the Fund as allocated to the HK Sub-Funds on a pro rata basis according to the relevant HK Sub-Fund’s net asset value. Where the costs and expenses attributable to a HK Sub-Fund exceed its total expense ratio as disclosed in the Hong Kong Offering Document, the Investment Manager will bear the excess.
As a result of the Appointment, the fees structure of the Fund will be as follows:
- The Fund will pay to the Management Company, out of the assets of each HK Sub-Fund, a management company fee of an amount up to 0.02% per annum of the net asset value of the relevant HK Sub-Fund. As such, the overall level of fees payable by each HK Sub-Fund will be increased but the relevant expense cap currently in place in respect of the HK Sub-Funds (i.e. the total expense ratio as disclosed in the Hong Kong Offering Document) will remain the same;
- The level of the aggregate fees payable to BROWN BROTHERS HARRIMAN (LUXEMBOURG) S.C.A., for acting as the administrative agent and depositary of the Fund as disclosed in the Hong Kong Offering Document, will remain unchanged; and
In addition, the current fee arrangement for the Investment Manager will be changed as a result of the termination of the appointment of the Investment Advisor. Each HK Sub-Fund currently pays a management fee and an administration fee to the Investment Advisor out of the relevant HK Sub-Fund’s assets at the respective annual rate disclosed in the Hong Kong Offering Document. The Investment Manager is then entitled to a fee payable by the Investment Advisor out of such management fee and administration fee. As a result of the termination of the appointment of the Investment Advisor, such management fee and administration fee will be paid directly by each HK Sub-Fund to the Investment Manager. The current level of the management fee and administration fee in respect of each HK Sub-Fund will remain unchanged.
The above changes will be reflected in an updated version of the Hong Kong Offering Document.
Please note that your rights and obligations as a shareholder in the HK Sub-Fund(s) will not be impacted by the changes mentioned above. The Board believes that there will not be material prejudice to existing investors’ rights or interests. Save as described in this Notice, there will be no other changes in the operation and/or manner in which the HK Sub-Funds are being managed. The above-mentioned delegations from the Management Company following the Appointment are not expected to impact the performance of the services continually provided by the relevant existing service providers to the Fund, or the management or composition of the underlying portfolio of the HK Sub-Funds. There will also be no impact on the features and risk profiles of the HK Sub-Funds.
- Other updates to the Hong Kong Offering Document
The Hong Kong Offering Document will also be updated to reflect other changes, as summarised below:
- Change of directors of the Fund;
- General enhancement of risk disclosures; and
- Other miscellaneous administrative, editorial and clarificatory updates.
In addition, the Fund’s website https://hk.matthewsasia.com/ is now available. You may obtain copies of the latest Hong Kong Offering Document, annual report and interim report of the Fund, and other information about the HK Sub-Funds such as prices of shares on the Fund’s website. The Hong Kong Offering Document has been updated to reflect the availability of the Fund’s website. This website has not been reviewed or authorised by the SFC.
Shareholders who do not agree with the above changes may redeem their Shares, free of charge, up until the last Hong Kong Business Day before the Effective Date in accordance with the dealing procedures and by the Hong Kong Dealing Deadline as set out in the Hong Kong Offering Document (i.e. 6:00 p.m. Hong Kong time for both Class A and Class I Shares).
A copy of the updated Hong Kong Offering Document, taking into account all the changes mentioned in this Notice, will be available in due course at the office of the Hong Kong Representative, Brown Brothers Harriman (Hong Kong) Limited free of charge or on the Fund’s website https://hk.matthewsasia.com/. This website has not been reviewed or authorised by the SFC.
Should you have any questions in connection to these matters, you should either contact us at the above address or alternatively you should contact your financial advisor, your distributor or the Hong Kong Representative, Brown Brothers Harriman (Hong Kong) Limited, whose office is at 13/F Man Yee Building, 68 Des Voeux Road Central, Hong Kong (Tel: +852 3971 7133).
On behalf of the Fund
Matthews Asia Funds