Berkshire Launch Units – Series 44 – Berkshire Hathaway Inc. Class B Shares

Berkshire Launch Units – Series 44 – Berkshire Hathaway Inc. Class B Shares

Berkshire Launch Series 44 provides Investors with exposure to Berkshire Hathaway Inc Class B Shares with a 13% Volatility Target mechanism

Key Features:

  • Two potential Performance Coupons of up to 10.8%* each, at the end of Year 1 & Year 2, plus the potential for an uncapped Final Coupon at Maturity, subject to averaging and changes in the AUD/USD exchange rate
  • 100% Limited Recourse loan with interest rates of 5.95% p.a.
  • Risk management fee of 0.7% p.a.
  • A variable participation rate mechanism designed to manage market risk associated with the performance of the Reference Asset – refer to the Termsheet PDS for more information;
  • Averaging
  • No margin calls
  • SMSF’s are eligible

Downloads

To find out more, and to download a copy of the Term sheet PDS and Master PDS, please click on the links below

Initial Strategy Value

Date

31 August 2018

28 September 2018

31 October 2018

Initial Strategy Value (average)

Initial Strategy Value

100.00%

102.02%

98.65%

100.22%

Final Strategy Value

Date

30 June 2021

30 July 2021

31 August 2021

Final Strategy Value

Final Strategy Value

TBA

TBA

TBA

TBA

Performance Coupons

Coupon Determination Date

First Coupon: 30 August 2019

Second Coupon: 31 August 2020

Third Coupon: 31 August 2021

Performance Coupon(%)

TBA

TBA

TBA

Launch Series 44 (BRK) Performance

DateReference Asset LevelBRK/B Share PriceIndicative Unit Value* Gross Performance
31-Oct-201898.65%n/a$1.0000-1.57%
30-Nov-2018102.870n/a$1.02642.64%

* Unit Value: Investors please note this is a theoretical investment maturity value. This investment is designed to be held to maturity. Any investors seeking to redeem prior to maturity may recieve an amount significantly different to the Indicative Unit Value stated

Berkshire Launch Series 44- Key Risks

Key risks include:

  • Your return (including any Coupons) is affected by the performance of the Reference Asset (Berkshire Hathaway Inc Class B Shares). There is no guarantee that the Reference Asset will perform well.
  • The Units have varying levels of exposure to the Reference Asset depending on volatility due to the variable Participation Rate. It operates by varying the exposure that the Units will have to the Reference Asset depending on the Realised Volatility of the Berkshire Hathaway Inc Class B Shares and the Target Volatility. There is the risk that the Participation Rate could drop to significantly below 100% during the Investment Term in which case Investors will not gain the full benefits of an increase of the value of the Reference Asset.
  • Investors should note that there is a lag in measuring the Realised Volatility of the Reference Asset. This means that where there has been a period of high Realised Volatility, the Investor’s exposure to the Reference Asset will be low, regardless of whether the Reference Asset is performing positively or negatively.
  • There will be no Performance Coupons payable if the performance of the Strategy Value is negative at a Coupon Determination Date.
    • The two potential Performance Coupons and the Final Coupon are determined by reference to the Initial Strategy Value, the Strategy Value on the relevant Coupon Determination Dates and the Final Strategy Value as well as changes in the AUD exchange rate. An increase in the AUD/USD exchange rate between the relevant dates will reduce the Performance Coupons and Final Coupon whilst a decrease in the AUD/USD rate between the relevant dates will lead to an increase in the Performance Coupons and Final Coupon;
  • The Initial Strategy Value and Final Strategy Value are subject to averaging. Averaging may decrease the impact of an increase in the Reference Asset during the Investment Term.
  • There is no guarantee that the Units will generate returns in excess of the Prepaid Interest and Fees, during the Investment Term. Additionally, in the event of an Investor requested Issuer Buy-Back or an Early Maturity Event you will not receive a refund of your Prepaid Interest or Fees.
  • Gains (and losses) may be magnified by the use of a 100% Loan. However, note that the Loan is a limited recourse Loan, so you will never be required to pay more than the Prepaid Interest Amount and Fees at Commencement.
    • Investors are subject to counterparty credit risk with respect to the Issuer and the Hedge Counterparty;
    • Gains and losses may be magnified by the use of a 100% limited recourse Loan; and
    • the Units may mature early following an Early Maturity Event, including an Adjustment Event, Market Disruption Event or if the Issuer accepts your request for an Issuer Buy-Back.

Please refer to Section 2 “Risks” of the Master PDS for more information.

Please refer to Section 4 “Key Risks” of the Term Sheet PDS and Section 2 “Risks” of the Master PDS for more information.

For more information, please contact Sequoia at:
invest@sequoia.com.au and 02 8114 2222.

Units in Berkshire Launch Units – Series 44 are issued by Sequoia Specialist Investments Pty Ltd (ACN 145 459 936 ) (the “Issuer”) and arranged by Sequoia Asset Management Pty Ltd (ACN 135 907 550, AFSL 341506) (the “Arranger”). Investments in the Berkshire Launch Units – Series 44 can only be made by completing an Application Form attached to the Term Sheet Product Disclosure Statement (“TSPDS”), after reading the Term Sheet PDS dated 8 August 2018 and the Master PDS dated 14 August 2017 and submitting it to Sequoia. A copy of the PDS can be obtained by contacting Sequoia Asset Management on or contacting your financial adviser. You should consider the Term Sheet & Master PDS’ before deciding whether to invest in Units in Berkshire Launch Units – Series 44. Capitalised terms on the webpage have the meaning given to them in Section 10 “Definitions” of the Master PDS