Apollo Investment Management Limited - Managed Funds: Tiger Fund, Californian Fund, balanced growth Fund

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Apollo Californian Fund Ltd.

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Apollo Californian Fund Ltd.

(A Company incorporated with limited liability in Guernsey on 10th June 1997 under the provision of the Companies (Guernsey) Laws 1994 and 1996 with registration number 32590)

LAUNCH DETAILS

Offer Price:	Net Asset Value per share (plus a preliminary charge of up to 5.5%)
Dealing Day:	Thursday (Weekly)
Minimum Investment:	£5,000/US$10,000
Minimum Subsequent Investment:	£2,500/US$5,000
Types of Shares:	Participating Redeemable Preference Shares of par value £0.01

MANAGEMENT AND ADMINISTRATION

Manager and Secretary	Apollo Investment Management Limited, First Floor, Tudor House, Le Bordage, St. Peter Port, Guernsey, GY1 1DB, Channel Islands
Registered Office of the Company	Apollo Californian Fund Limited, Dorey Court, Admiral Park, St. Peter Port, Guernsey, Channel Islands.
Custodian and Banker	Royal Bank of Canada (Channel Islands) Ltd., PO Box 48, Canada Court, Upland Road, St. Peter Port, Guernsey, Channel Islands, GY1 3BQ.
Administrator and Registrar	Kleinwort Benson (Guernsey) Fund Services Limited, Dorey Court, Admiral Park, St. Peter Port, Guernsey, Channel Islands.
Investment Adviser	Davis Skaggs Investment Management 1 Sansome Street, 36th Floor, San Francisco, California, CA94104 - 4437, USA.
Auditors	Moore Stephens, Chartered Accountants Town Mills South, La Rue du Pre, St. Peter Port, Guernsey, GY1 3HZ, Channel Islands.
Advocates	Ozannes 1 Le Marchant Street, St. Peter Port, Guernsey, GY1 4HP, Channel Islands.
Sponsoring Broker	NCB Stockbrokers Limited 3 George's Dock, International Financial Services Centre Dublin 1, Ireland.

THE COMPANY

The Company is an open-ended investment company which was incorporated with limited liability in Guernsey on 10th June 1997 under the provisions of the Companies (Guernsey) Laws, 1994 and 1996 with an authorised share capital of £20,100. The Company has issued 100 Management Shares of £1 each and can issue up to 2,000,000 Unclassified Shares of 1p each. The Unclassified Shares may be issued as Participating Shares or Nominal Shares.

The Articles of the Company enable the Directors to create separate classes of Participating Shares and the capital structure is such that the Company operates in a similar way to a unit trust in that it issues and redeems its Participating Shares at prices based on the underlying net asset value.

It is the intention of the Directors to distribute in excess of 85% of the net income of the Company in order to qualify under the Income and Corporation Taxes Act 1988 of the United Kingdom for the Company to be certified as a Distributing Fund.

The Company’s Participating Redeemable Preference Shares are quoted on the Irish Stock Exchange.

INVESTMENT POLICY

The Company is designed for investors seeking to achieve long-term capital growth through investments in a professionally managed portfolio of listed equity investments in corporations either domiciled in California or having a substantial part of their business in California (e.g. in excess of 20 per cent of turnover attributable to their operations in California). Subject to this geographical focus the Company will seek to diversify its investments in a range of industries.

Notwithstanding the recession experienced in the early 1990’s, the Californian economy still ranks among the world’s ten largest economies when measured in gross product and represents one eighth of the economy of the United States of America. In the opinion of the Investment Adviser California has one of the most diversified economies of the United States of America with employment in over 120 separate industries.

A flexible investment approach will be maintained so that investments may include common and preferred stocks, convertible securities, warrants and options.

In the event economic or financial conditions are considered adverse for equity investments, or pending investments in such equities the Company may invest in fixed interest securities, cash and money market equivalents of not less than double ‘A’ investment grade.

Investments will normally be denominated in United States Dollars, but the Company may purchase investments denominated in other major currencies. The Company will not hedge its United States Dollar exposure.

The principal investment objectives and policies of the Company, as set out above will, in the absence of unforeseen circumstances, be adhered to for at least three years following admission of the Participating Shares to the Official List of The Irish Stock Exchange. Any material changes in the objectives and policies of the Company will only be made with the approval of the holders of Participating Shares (the “Shareholders”).

INVESTMENT RESTRICTIONS

Whilst the Company’s Memorandum and Articles of Association impose no restrictions as to the type of investments it may make and the investment methods it may adopt the Directors have resolved to adopt the following investment restrictions. The restrictions are that the Company will not:

(1) invest more than 10 per cent of its net asset value (calculated at the time of investment) in securities of any one issuer except for collective investment schemes having similar investment restrictions in whole or in their constituent parts (sub funds) where a limit of 5 per cent in the aggregate shall apply.

(2) invest in more than 10 per cent of the securities of any class of any one issuer (calculated by reference to the nominal amount of that security at the time of investment), or more than 5 per cent of the units in any single collective investment scheme.

(3) invest more than 10 per cent of its total net asset value (calculated at the time of investment) in securities that are not listed on a recognised securities exchange or quoted on a recognised over the counter market, or which are restricted securities, the realisable price of which may be affected by contractual or legal restrictions on sale, or in warrants or options.

(4) exercise legal or management control of any company in which the Company may be invested nor will it purchase securities of an issuer which would result in the Company exercising control or management of that issuer.

(5) purchase any securities on margin except that the Company may obtain such short-term credit as may be necessary for the clearance of purchases and sales of securities held for the account of the Company or make short sales of securities or maintain a short position (deposits made in connection with option or forward contracts are not considered to be margin for this purpose).

(6) invest in any collective investment scheme unless such scheme has similar investment policy and has equivalent investment restrictions.

(7) expose more than 20 per cent of its gross assets to the solvency of any single counterparty.

Investment restrictions (1), (4) and (7) above will be adhered to for so long as the Participating Shares are listed on The Irish Stock Exchange except that in the case of (1) above the limit per issuer may be increased to 20 per cent in the case of investment in securities issued or guaranteed by a Government, Government Agency or instrumentally of any member state of the European Union (“EU”) or Organisation for Economic and Commercial Development (“OECD”) or by any supranational authority of which one or more EU or OECD member states are members and any other state approved for such purposes by the Irish Stock Exchange. Any amendment to the Investment Restrictions will require the approval of the holders of the Participating Shares in General Meeting.

INVESTMENT RISKS

The Company’s assets will be invested primarily in securities denominated in US Dollars and any income received by the Company from these investments will be received in US Dollars. The Company will compute its net asset value and make any distributions in Sterling; there is therefore a currency exchange risk that may affect the value of the Shares.

Investment in shares in the Company will represent a high concentration of exposure to the economy of California and to corporations operating there. The Californian economy relies to a great extent upon its export trade particularly with Japan and other Pacific Rim countries which is vulnerable to the strength of the US Dollar against other currencies. The Californian economy would also be vulnerable to general economic recession within the United States of America.

It is not anticipated that options will be purchased which are not covered by an underlying security. However if such an option were to be purchased there is a potential risk that the Company may have to purchase an underlying security to settle the contract.

REPORTS AND ACCOUNTS

Copies of the reports and audited financial statements of the Company made up to the 31st March each year (commencing March 1999) will normally be sent to Shareholders at their registered addresses and to the Irish Stock Exchange in July of each year or at the latest within six months of the period to which they relate.

Half-yearly reports and unaudited financial statements relating to the Company will be made up to 30th September each year (commencing September 1999) and will be sent to Shareholders and to the Irish Stock Exchange within four months of the period to which they relate.

PUBLICATION OF PRICES

The bid prices and offer prices will be quoted daily in ‘The Financial Times’. The published offer price is inclusive of the maximum 5.5% initial charge.

INVESTMENT ADVISER

Davis Skaggs Investment Management (“Davis Skaggs”) is the San Francisco branch office and unit of Smith Barney Investment Advisers a division of Smith Barney Inc. a member of Travelers Group. The Investment Adviser was first established in San Francisco in 1927.

Davis Skaggs provides investment management services directly to individual and institutional clients. As at 31st March 1997 Davis Skaggs had approximately US$4.2 billion of funds under discretionary management. The appointment of the Investment Adviser may be terminated by the Investment Adviser or the Manager upon giving one months notice in writing to the other. Due to the time differential between Guernsey and San Francisco the Manager has authorised the Investment Adviser to effect investment transactions on its behalf on a discretionary basis subject to the Investment Policy and Restrictions previously stated.

FUND MANAGER

Name - Peter Hable
Location - San Francisco.
Further details currently being updated.

SUBSCRIPTION OF SHARES

Participating Shares are issued in response to applications from investors (satisfying the minimum subscription levels set out below) at the current subscription (offer) price on the Dealing Day next following receipt of an application. A Dealing Day is the Thursday of each week as long as this is treated as a business day by the banks in the Island of Guernsey. The issue of Participating Shares is conditional upon payment of cleared funds for such shares having been received, by the Manager by 4.30 p.m. (Guernsey time) on the business day immediately preceding the relevant Dealing Day. If cleared funds are received after 4.30 p.m. (Guernsey time) the issue of Participating Shares pursuant thereto will normally take place on the next but one Dealing Day. However, the Manager may at its discretion, accept applications from authorised intermediaries without the payment of cleared funds. In these cases, payment of the cleared funds must be received within 5 working days subsequent to the Dealing Day on which the application was processed failing which the allotment of Participating Shares will be cancelled.

Application must be made on the application form and should be sent to Kleinwort Benson (Guernsey) Fund Services Ltd.,Dorey Court, Admiral Park, St. Peter Port, Guernsey, Channel Islands. Tel: +44 (0) 1481 700219.

All applications must be for at least the minimum initial subscription set out in the application form. Subsequent subscriptions from existing investors must be for at least £2,500 or US$5,000. Fractions of a Participating Share will be issued where any subscription monies are not an exact multiple of the offer price.

Each application should be accompanied by a cheque, bankers draft or money order drawn in Sterling or U.S. Dollars made payable to Apollo Investment Management Limited for the amount proposed to be invested. Alternatively, funds may be remitted by telegraphic transfer to Kleinwort Benson (Guernsey) Limited as follows (quoting your name):

Sterling
Royal Bank of Canada (Channel Islands) Ltd.,
PO Box 48, Canada Court, Upland Road, St. Peter Port,
Guernsey, Channel Islands, GY1 3BQ.
(Telex No. 4191617) for the account of Kleinwort Benson (Guernsey) Limited (No.1 Account)
Number 8120577.
Sort Code 40-22-25
Quoting Ref. Apollo Californian Fund

US Dollars
Royal Bank of Canada (Channel Islands) Ltd.,
PO Box 48, Canada Court, Upland Road, St. Peter Port,
Guernsey, Channel Islands, GY1 3BQ.
SWIFT Code CHASUS33 for the account of Kleinwort Benson (Guernsey) Limited (SWIFT KBENGGSP) Account No. 001-1-926649
Quoting Ref: Apollo Californian Fund

If payment is made in US Dollars, the applicable exchange rate for investment in the Company will be determined by the Custodian. The cost of conversion (if any) is deducted from the converted amount. Contract notes confirming the allotment of shares and allocating a shareholders reference number (which should be quoted in all subsequent communications) will be posted to applicants or their nominated agents at the applicant’s risk before the close of business on the second business day following the day on which allotment is made.

Share Certificates will normally be sent out to investors within 21 days of receipt of completed registration documentation.

The Company reserves the right to reject any application in whole or in part.

REDEMPTION OF SHARES

Shareholders may arrange to redeem all or part of their Participating Shares on any Dealing Day at the prevailing redemption (bid) price unless the valuation of the Company’s assets has been suspended (see page 14). Instructions should be given by completing the redemption request on the reverse of the certificate or in writing or by fax (confirmed in due course by signing the reverse of the certificate(s)) to be received by the Manager not later than 4.30 p.m. (Guernsey time) on the Business Day immediately preceding the intended Dealing Day. If a redemption request is received after 4:30pm (Guernsey time) the redemption of the Participating Shares will take place on the next but one Dealing Day. At the election of the Manager, Participating Shares offered for redemption may be purchased by the Manager or redeemed by the Company but no selling shareholder may receive less than the bid price specified under the Articles of Association. Partial redemptions of a holding will not be permitted unless after such redemption the Shareholder holds Participating Shares equivalent in value at the time of redemption to not less than £2,500 or $5,000.

The Company has the right to restrict the number of Participating Shares to be redeemed on any Dealing Day to a maximum of 10 per cent of the number of Participating Shares in issue. If the number of Participating Shares to be redeemed on any Dealing Day is in excess of this figure, all applicants for redemption will have their redemption requests scaled down rateably. Any redemption request not satisfied will be held over for redemption on the next Dealing Day.

Redemption proceeds will be despatched by the Manager by the fourth Business Day following the relevant Dealing Day, or on the Business Day following the subsequent receipt by the Manager of the above certificate with the redemption form on the reverse duly completed by the Shareholder. Payment will only be made in the name of the registered shareholder or, in the case of joint holders, to the first named holder. Payment instructions for the redemption proceeds may be amended by written instruction signed by the registered holder(s). Redemption proceeds will be paid by cheque denominated in Sterling or in US Dollars. Alternatively, if the Redemption proceeds are in excess of £10,000 or the currency equivalent, the proceeds may be paid by telegraphic transfer at the shareholder’s request, risk and expense.

APPLICATION FORM

The Share Application Form is available to download here as an Adobe™ Acrobat PDF document. You will need to print the application form out and send it to us by mail or courier.

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