Investment Manager: Terms Amendment
24 November 2009
Africa Opportunity Fund Limited
Investment Manager: Terms Amendment
The Board of Directors of the Africa Opportunity Fund Limited
announces that it has approved an amendment to its Investment
Management Agreement with its investment manager, Africa Opportunity
Partners Limited.
Background
In February 2009, the Africa Opportunity Fund Limited ("the Fund" or
"AOF") conducted a tender offer resulting in investors representing
63% of AOF's outstanding shares exiting the Fund. Since the end of
February, AOF's Net Asset Value has returned 67%, and the share price
62%, assuming reinvestment of dividends.
Africa Opportunity Partners Limited ("the Investment Manager" or
"AOP") recently approached the Board of Directors ("the Board") of
AOF requesting the flexibility to manage other investment vehicles,
including open-ended funds with investment strategies that may be
substantially similar to those of the Fund. AOF's Investment
Management Agreement (the "Management Agreement") with the Investment
Manager originally prohibited AOP from acting as manager to other
vehicles with investment strategies substantially similar to those of
AOF.
The Board considered this request in light of the potential
beneficial economies of scale in investment opportunity flow and
expense maintenance that would result, and in light of the strong
performance and the reduced size of AOF. The Board determined that,
subject to conditions on time and attention and the implementation of
conflicts and co-investment policies (described in more detail
below), the granting of this request may be beneficial to the Fund.
As a result, the Board approved the amendment to the Management
Agreement. The Board also approved the Investment Manager's conflict
and co-investment policies ("the Policies") to mitigate any potential
conflicts of interests arising from the management of multiple
vehicles.
Amendment to Investment Management Agreement
AOF's amendment of the Management Agreement allows AOP to act as the
investment manager to other vehicles including other vehicles that
have a substantially similar investment focus to that of the Fund so
long as:
(i) the Investment Manager devotes such time and
attention as is required to properly manage the affairs of the Fund
and its related entities; and
(ii) the Investment Manager adopts a set of policies
governing conflicts and co-investments that is acceptable to the
Board.
Co-investment Policies
The Policies generally require the Investment Manager to make
applicable co-investments and divestments on behalf of its managed
accounts and investment vehicles on a pro rata basis. In addition,
the Policies contain certain exceptions to those general principles,
including a requirement of the Investment Manager to seek, when
appropriate, a waiver from the Board.
For further information please contact:
Africa Opportunity Fund Limited
Francis Daniels
Tel: +2711 684 1528
Grant Thornton Corporate Finance (Nominated Adviser)
Philip Secrett/Adam Suggett Tel: +44
207 383 5100
LCF Edmond de Rothschild Securities Limited (Nominated Broker)
Claire Heathfield/Hiroshi Funaki Tel: +44 20
7845 5960
For more information about the Fund, see
www.africaopportunityfund.com
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