UEM is a UK closed-end investment trust

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ICM Investment Management Limited is the Alternative Investment Fund Manager of UEM and joint portfolio manager alongside ICM Limited. ICMIM is also the secretary. Accounting and administration services are provided to UEM by JP Morgan Chase Bank, N.A., London Branch and ICMIM has appointed Waverton Investment Management Limited to provide support services (including middle office, market dealing and information technology support services) to ICMIM in relation to the provision of its services to UEM.

UEM’s investment objective is to provide long-term total return through a flexible investment policy that permits it to make investments predominantly in infrastructure, utility and related sectors, mainly in emerging markets.

UEM’s investment policy is flexible and its investments include (but are not limited to) water, sewerage, waste, electricity, gas, telecommunications, ports, airports, service companies, rail, roads, any business with essential service or monopolistic characteristics and any new infrastructure or utilities which may arise mainly in emerging markets. UEM may also invest in businesses which supply services to, or otherwise support, the infrastructure, utility and related sectors.

UEM focuses on the under-developed and developing markets of Asia, Latin America, Emerging Europe and Africa but has the flexibility to invest in markets worldwide. UEM generally seeks to invest in emerging market countries where the Directors believe that there are attributes such as political stability, economic development, an acceptable legal framework and an encouraging attitude to foreign investment.

UEM has the flexibility to invest in shares, bonds, convertibles and other types of securities, including non-investment grade bonds and to invest in unlisted securities.

UEM may also use derivative instruments such as American Depository Receipts, promissory notes, foreign currency hedges, interest rate hedges, contracts for difference, financial futures, call and put options, warrants and similar instruments for investment purposes and efficient portfolio management, including protecting the Company’s portfolio and balance sheet from major corrections and reducing, transferring or eliminating investment risks in its investments. These investments will be long term in nature.

The Board has prescribed the following limits on the investment policy, all of which are at the time of investment unless otherwise stated:

  • Investments in unquoted and untraded investments in aggregate must not exceed 10.0% of gross assets at the time of investment. This restriction does not apply to the UEM’s holding of shares linked to a segregated account of Global Equity Risk Protection Limited (“GERP”), an unquoted Bermuda segregated accounts company;
  • No single investment (including any investment by UEM in GERP) may exceed 20.0% of gross assets at the time of investment;
  • Investments other than in infrastructure, utility and related companies (including UEM’s investment in GERP) must not exceed 20% of gross assets at the time of investment;
  • Investments in a single country must not exceed 50.0% of gross assets at the time of investment (and for these purposes investments will be considered to have been made in
  • the countries where the relevant investee company reports that it carries out its business operations, as determined on a look-through basis);
  • Not more than 10.0% in aggregate of the value of the total assets of UEM at the time the investment is made will be invested in other closed-ended investment funds which are listed on the Official List (except to the extent that those investment funds have stated investment policies to invest no more than 15.0% of their total assets in other investment companies which are listed on the Official List);
  • Regardless of the investment policy of other closed-ended investment funds listed on the Official List and which are invested in by UEM, the Company shall not invest in such funds more than 15.0% in aggregate of the value of the total assets of the Company at the time the investment is made; and
  • Equity markets derivative transactions are carried out by GERP on behalf of UEM to enable it  to make investments more efficiently and for the purposes of efficient portfolio management. GERP spreads its investment risks by having the ability to establish an overall net short position in index options, contracts for difference, swaps and equity options. GERP may not hold more than 50.0% of the value of UEM’s segregated portfolio in index options and GERP may not hold more than 100.0% of the relevant debt or of the relevant market value in foreign currency by way of foreign exchange options or forwards.

UEM may use bank borrowings for short-term liquidity purposes. In addition, the Board may gear the Company by borrowing on a longer-term basis for investment purposes.

The Board has set a current limit on gearing (being total borrowings measured against gross assets and excluding any portfolio gearing provided through UEM’s investment in GERP) not exceeding 25% at the time of drawdown. Borrowings may be drawn down in Sterling, US Dollars or any currency for which there are corresponding assets within the portfolio (at the time of drawdown the value drawn must not exceed the value of the relevant assets in the portfolio).

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