Sequoia Launch Units – Series 28A

Sequoia Launch Units – Series 28A

The objective of the Units in Sequoia Launch Series 28A is to deliver positive returns to investors, regardless of market conditions over a period of 2 years and 338 days (being the remaining time to maturity on the existing Series 28 Units). The Units aim to achieve this by offering leveraged exposure to a diversified basket of global investment funds and an index with various investment styles and exposure including:

  • Global Equity Absolute Return;
  • UK Equity Absolute Return;
  • Global Currencies and Bonds (Long / Short)
  • Diversified Multi-Asset Long/Short

A summary of the key features are as follows:

Features
  • Reference Basket
  • Currency of Reference Basket
  • Strategy
  • Unit Currency Exposure
  • 3 Potential Uncapped Performance Coupons
  • Performance Fees
  • Limited recourse Loan
  • Term
  • Annual Interest Rate on Loan
  • Application Fee
  • Volatility Mechanism
  • Target Volatility
  • Maximum Participation Rate
  • Margin Calls
  • SMSF Eligibility
Launch Series 28A
  • Weighted exposure to the following 3 Global Funds and 1 Index:


    20%: Old Mutual Global Equity Absolute Return Fund;


    20%: Janus Henderson - United Kingdom Absolute Return


    40%: H2O Adagio (Global Currencies and Bonds)


    20%: BNP Paribas Multi-Asset Diversified vol 4 EUR Index


  • AUD Hedged
  • Reference Basket with 2.0% Target Volatility
  • AUD
  • Three (3) potential Uncapped Performance Coupons, payable annually, based on the performance of the Strategy Value.
  • None
  • Yes. Investors borrow 100% of the Investment Amount.
  • 2 years and 338 days
  • 1.99% p.a.
  • 0.0%
  • Yes
  • 2.0%
  • 100%
  • No
  • Yes

Unwind of Series 28 and Application for Series 28A Units

Investors who elect to acquire Series 28A Units will not be required to pay any Application Fee or Adviser Fee (or any other fees). The Issuer will buy back the Investor’s Series 28 Units at a price of $1 per Series 28 Unit and refund the balance of the Investor’s non-amortised Prepaid Interest. The balance of these proceeds will then be applied in full repayment of the Loan attributable to the Series 28 Units and full payment of the Prepaid Interest of the Series 28A Units, meaning that there is no additional payment required from Investor’s who elect to acquire the Series 28A Units. An Investor making this election will be required to have made the election in respect of all of their Series 28 Units.

You should ensure you have understood and read in full the Series 28A Units’ PDS before making a decision to acquire the Series 28A Units.

This Election Form constitutes both an Application Form for Sequoia Launch Units – Series 28A (“Series 28A Units”), and an Issuer Buy-Back Form for Sequoia Launch Units – Series 28 ( issued under a Term Sheet PDS dated 1 May 2017 and Master PDS dated 15 June 2015) (“Series 28 Units”), both issued by Sequoia Specialist Investments Pty Ltd (ACN 145 459 936) and arranged by Sequoia Asset Management Pty Ltd (ACN 135 907 550, AFSL 341506). This Election Form accompanies the Term Sheet PDS for the Series 28A Units dated 11 July 2018 2018, Master PDS dated 14 August 2017 and any supplementary PDS issued for the Units (“PDS”). It is important that you read the Term Sheet PDS and PDS in full and the acknowledgements contained in this Election Form before applying for the Issuer Buy-Back of the Series 28 Units and an investment in the Series 28A Units.

A person who gives another person access to this Election Form must at the same time and by the same means give the other person access to the PDS including any supplemental PDS. The Issuer will provide you with a paper copy of the PDS including the Master PDS, any supplemental PDS and this Election Form, on request without charge.

This form is to be used if you are an investor in the Series 28 Units and wish to request an Issuer Buy-Back of your Series 28 Units and to use the proceeds of the Issuer Buy-Back to acquire Series 28A Units. Please see the instructions on how to complete this Form in the PDS. This Election Form must be received by the Registrar by 5:00 pm on 26 July 2018 in order to be accepted by the Issuer. Election Forms received after this time will not be accepted by the Issuer. Election Forms received by persons who are not a registered holder of Series 28 Units will also not be accepted by the Issuer.

Series 28A Units are only issued on receipt of:

  1. an executed copy of this Election Form,
  2. approval of the Application by the Issuer and Lender, and
  3. verification of the applicant’s identity (verification of the applicant’s identity will be performed on the basis of past information provided by the applicant to the Issuer).

Terms of the Issuer Buy-Back

  1. Buy-Back Price of $1 per Series 31 Unit;
  2. Investor must elect for the Issuer to Buy-Back all of the Series 28 Units registered in the name of the Investor and make an investment application for the same number of Series 28A Units in the name of the Investor;
  3. Issuer will apply the total amount of the Buy-Back Price in full satisfaction of the Investor’s Series 28 Units Loan;
  4. Issuer will refund to the Investor in full all non-amortised Prepaid Interest in respect of the Investor’s Series 28 Units Loan if the Investor elects to take part in the Issuer Buy-Back;
  5. Investor must direct the Issuer to apply 100% of the Prepaid Interest refund to an investment in Series 28A Units in the name of the Investor.

Potential investors should obtain independent financial and taxation advice as to the suitability of this investment to them having regard to their investment objectives, financial situation and particular needs. Nothing in this PDS is a recommendation by the Issuer, the Security Trustee, the Custodian or their related bodies corporate concerning investment in the Units or any specific taxation consequences arising from an investment in the Units.

Initial Strategy Value

Date

27 July 2018

Strategy Value

99.82

The Strategy Value for Sequoia Launch Series 28A on 27 July 2018 = 99.82%.

This is the date of the Issuer Buy-Back for investors who unwound their investment in Sequoia Launch Series 28 and invested into Sequoia Launch Series 28A.

27 July 2018 is the Commencement Date for Sequoia Launch Series 28A

Performance Coupons

Date

First Coupon: 28 June 2019

Second Coupon: 30 June 2020

Third Coupon: 30 June 2021

Performance Coupon (%)

TBA

TBA

TBA

Strategy Value Strike on the Commencement Date

Date

27 July 2018

Strategy Value Strike

100

Launch Series 28A (Global Funds) Performance

DateStrategy ValueReference BasketIndicative Unit Value*Gross Performance
31-Jul-201899.730n/a$1.00-0.27%
31-Aug-201899.055n/a$1.0000-0.95%
28-Sep-201899.690n/a$1.0000-0.31%
31-Oct-201898.565 n/a $1.0000 -1.44%
30-Nov-201897.958 n/a $1.0000 -2.04%

* Gross performance is measured by the reference to the strategy value strike of 100, since this is what is used as a reference for calculating future potential performance coupons.

Launch series 28A (Global Funds) Performance Key risks

Key risks include:

  • Your return (including any Coupons) is affected by the performance of the Underlyings comprising the Reference Basket. There is no guarantee that the Reference Basket will perform well.
  • In the Event that an appropriate hedge cannot be achieved in relation to all or some of the Underlying’s comprising the Reference Basket, the Issuer may choose to remove the Underlying or replace the Underlying with a similar fund in its absolute discretion. Any changes will be notified on the Issuers website and in correspondence to Investors.
  • The Units have varying levels of exposure to the Reference Basket depending on volatility due to the variable Participation Rate. It operates by varying the exposure that the Units will have to the Reference Basket depending on the Realised Volatility of the Reference Basket and the Target Volatility. There is the risk that the Participation Rate could drop 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 Basket.
  • Investors should note that there is a lag in measuring the Realised Volatility of the Reference Basket.  This means that where there has been a period of high Realised Volatility, the Investor’s exposure to the Reference Basket will be low, regardless of whether the Reference Basket is performing positively or negatively.
  • There will be no Performance Coupons payable if the performance of the Strategy Value does not exceed the Strategy Value Strike on a Coupon Determination Date.
  • The potential Performance Coupons are determined by reference to the Strategy Value Strike and Strategy Value on the relevant Coupon Determination Date and any past Performance Coupons paid.
  • 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, 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 can  never lose more than your Prepaid Interest Amount and Fees paid at Commencement.
  • Investors are subject to counterparty credit risk with respect to the Issuer and the Hedge Counterparty; 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 Sequoia Launch Units – Series 28A are issued by Sequoia Specialist Investments Pty Ltd (ACN 145 459 936) (the “Issuer”) and arranged by Sequoia Asset Management Pty Ltd (ABN 70 135 907 550, AFSL 341506) (the “Arranger”). Investments in the Sequoia Launch Units – Series 28A can only be made by completing an Election Form above (also attached to the Sequoia Launch Series 28A Term Sheet Product Disclosure Statement (“TSPDS”) dated 11 July 2018), after reading the Master PDS dated 14 August 2017 and submitting it to Sequoia.