BH Macro Limited - Launch of Initial Issue and Issuance Programme

BH Macro Limited - Launch of Initial Issue and Issuance Programme

PR Newswire

London, January 23

THIS ANNOUNCEMENT IS NOT FOR DISTRIBUTION IN OR INTO THE UNITED STATES OR TO ANY US PERSON, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA, ANY EUROPEAN ECONOMIC AREA STATE OR ANY OTHER JURISDICTION IN WHICH ITS DISTRIBUTION MAY BE UNLAWFUL.

This announcement is an advertisement and not a prospectus for the purposes of the Prospectus Regulation Rules of the Financial Conduct Authority ("FCA") or otherwise. Investors should not subscribe for or purchase any securities referred to in this announcement except solely on the basis of the information contained in the prospectus proposed to be published by BH Macro Limited (comprising a summary, registration document and securities note, together with any supplementary prospectus, if relevant) including the risk factors set out therein. Once published, a copy of the prospectus will be available for inspection at BH Macro Limited's registered office and website at www.bhmacro.com (subject to certain access restrictions) and at the National Storage Mechanism via https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

THIS ANNOUNCEMENT INCLUDES INSIDE INFORMATION

BH MACRO LIMITED (the "Company")

(an authorised closed-ended collective investment scheme established as a non-cellular company limited by shares under the laws of Guernsey with registration number 46235)

LEI: 549300ZOFF0Z2CM87C29

Initial Placing, Intermediaries Offer and Offer for Subscription and Issuance Programme

Proposed Share Sub-division

Publication of Circular and Notice of Extraordinary General Meeting

The board of directors (the "Directors" and, collectively, the "Board") of BH Macro Limited (the "Company") is pleased to announce the launch of an initial placing (the "Placing"), intermediaries offer (the "Intermediaries Offer") and offer for subscription (the "Offer for Subscription" and, together with the Placing and the Intermediaries Offer, the "Initial Issue") of new ordinary shares of no par value each in the capital of the Company ("Shares") which may be denominated as Sterling shares (the "Sterling Shares") or US dollar shares (the "US Dollar Shares") at a price per Share of the relevant class equal to the latest estimated net asset value per Share of the relevant class as at the closing date of the Initial Issue (currently expected to be 10 February 2023) (the "Initial Closing Date") plus a premium of two per cent. (the "Initial Issue Price").

The Company also announces a proposed publication of a prospectus (the "Prospectus") and circular to Shareholders in connection with the Initial Issue and an Issuance Programme (with a maximum total issuance under the Initial Issue and the Issuance Programme of 220 million new Shares, assuming that that the Share Sub-Division described below becomes effective).

The Company will invest the proceeds of the Initial Issue (net of working capital requirements) in Brevan Howard Master Fund Limited (the "Master Fund") in accordance with the Company's investment policy.

While the capacity of the Master Fund to accept new investment may vary from time to time, the Manager has agreed with the Company to procure that the Master Fund will accept new investment by the Company of the aggregate net proceeds and each subsequent issue under the Issuance Programme, subject to any limitations on the Master Fund's capacity as may be generally applied from time to time.

The Company is also announcing the proposed sub-division of its Shares, so that each existing Share is replaced by ten Shares of the same currency class, in order to assist in liquidity of the Shares (the "Share Sub-Division") and certain amendments to the terms of the management agreement between the Company and the Manager (the "Management Agreement") and the terms of the Company's investment in the Master Fund. in order to reflect the increased investment of the Company in the Master Fund as a result of the Initial Issue and the Issuance Programme.

Initial Issue Highlights

· The premium to estimated net asset value represented by the Initial Issue Price is less than the average premium to net asset value at which the Shares have been trading at recently. For comparison, as at 20 January 2023, the Sterling Shares have traded at an average premium to net asset value of 11.1 per cent. / 12.3 per cent. / 10.7 per cent. over the last twelve, six and three months respectively. The US Dollar Shares have traded at an average premium to net asset value of 11.5 per cent. / 12.5 per cent. / 10.6 per cent. over the same time periods.

· The Directors believe that the launch of the Initial Issue and the Issuance Programme are very significant and important developments for the Company, which should lead to a significant increase in the Company's market capitalisation and the liquidity in the Shares, as well as spreading the Company's fixed costs over a wider share capital base.

· J.P. Morgan Securities plc (which conducts its UK investment banking activities as J.P. Morgan Cazenove) ("JPMC") is acting as Sole Bookrunner and Sole Sponsor in connection with the Initial Issue and the Issuance Programme. Kepler Partners LLP is acting as Intermediaries Offer Adviser and Placing Agent in connection with the Initial Issue.

· Applications will be made for Shares issued pursuant to the Initial Issue to be admitted to listing on the Premium listing segment of the Official List of the FCA and to trading on London Stock Exchange plc's main market for listed securities.

· The Initial Issue, which is not underwritten, is subject to the terms and conditions described in the Prospectus including, amongst other things, upon the approval of the Prospectus by the FCA (expected later today) and Shareholders passing the Issuance Resolutions at the Extraordinary General Meeting (as further described below).

Issuance programme

Assuming the requisite authorities are approved by Shareholders at the Extraordinary General Meeting, the Company will have the ability of raising additional capital by issuing further Shares, up to the maximum number of Shares available, by way of further issues (or sales from treasury) until 23 January 2024 (the "Issuance Programme"). It is proposed that, in aggregate, up to 220 million new Shares (assuming that the Share Sub-Division described is approved at the Extraordinary General Meeting and becomes effective) may be issued as Sterling Shares or US Dollar Shares pursuant to the Initial Issue and the Issuance Programme.

If the Share Sub-Division is not approved by Shareholders, up to 22 million new Shares, in aggregate, will be available to be issued pursuant to the Initial Issue and the Issuance Programme (to be denominated as either Sterling Shares or US Dollar Shares).

Prospectus

Further details will be set out in the Prospectus, which, once approved by the FCA, and together with a Circular, is expected to be available shortly (subject to certain access restrictions), on the Company's website at www.bhmacro.com.

The Company will release a further announcement upon the publication of the Prospectus.

Once published, a copy of the Prospectus will be submitted to the National Storage Mechanism and will be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

Application for admission

Application will be made to the FCA and London Stock Exchange plc for the Shares to be issued pursuant to the Initial Issue to be admitted to the premium segment of the Official List of the FCA and to trading on London Stock Exchange plc's Main Market for listed securities ("Initial Admission"). It is expected that Initial Admission will become effective, and dealings commence in respect of the Shares issued in the Initial Issue, at 8.00 a.m. on or around 15 February 2023.

Share Sub-division

The Share Sub-Division is subject to Shareholder approval at the Extraordinary General Meeting by way of special resolution (the "Sub-Division Resolution") and is conditional upon the sub-divided Shares issued pursuant to the Share Sub-Division being admitted to the premium listing segment of the Official List of the FCA and to trading on London Stock Exchange plc's Main Market for listed securities (the "Sub-Division Admission").

If approved by Shareholders, the Share Sub-Division would result in Shareholders holding ten new Shares for each existing Share they hold immediately prior to the Share Sub-Division. The new Shares of each class will carry the same rights in all respects as the existing Shares of the same class, including voting rights. The Share Sub-Division should have no impact on the Company's net assets as no change in the total aggregate value of the Company's shares will occur.

Assuming that the Share Sub-Division is effective, the ticker symbols for the Sterling Shares and the US Dollar Shares will remain as BHMG and BHMU respectively, but the ISIN and SEDOL for the sub-divided Shares will change as follows:

ISIN for the sub-divided Sterling Shares: GG00BQBFY362

ISIN for the sub-divided US Dollar Shares: GG00BQBFY479

SEDOL for the sub-divided Sterling Shares: BQBFY36

SEDOL for the sub-divided US Dollar Shares: BQBFY47

Assuming that the Share Sub-Division resolution is passed, the Share Sub-Division will become effective at Sub-Division Admission, which is expected to take place at 8.00 a.m. on 7 February 2023. Application will be made for admission of the sub-divided Shares to the premium listing segment of the Official List of the FCA and to trading on London Stock Exchange plc's Main Market for listed securities. It is anticipated that the last day of dealings in existing Shares will be 6 February 2023 with the record date for the Share Sub-Division being 6.00 p.m. on that date. The effective date for dealings to commence in the sub-divided Shares will be 7 February 2023.

Extraordinary General Meeting and Circular to Shareholders

The Shares issued under the Initial Issue and the Issuance Programme will be offered on a non-pre-emptive basis and the Sub-Division is subject to Shareholder approval. Accordingly, the Company has today published and posted to Shareholders an explanatory circular (the "Circular") containing a notice convening an extraordinary general meeting to be held at the offices of Northern Trust International Fund Administration Services (Guernsey) Limited, Trafalgar Court, Les Banques, St Peter Port, Guernsey at 8.30 a.m. on 6 February 2023 (the "Extraordinary General Meeting").

Shareholder approval will be sought at the Extraordinary General meeting for the allotment and issue of the Shares to be issued under the Initial Issue and the Issuance Programme by way of an ordinary resolution and the disapplication of the pre-emption rights contained in the Company's articles of incorporation in respect of such Shares by way of a special resolution (the "Issuance Resolutions"). Approval of the Sub-Division by way of special resolution will also be proposed at the Extraordinary General Meeting.

The Initial Issue and each subsequent issue under the Issuance Programme is conditional upon approval of the Issuance Resolutions at the Extraordinary General Meeting but is not conditional upon the Sub-Division Resolution being approved.

A copy of the Circular will be submitted to the National Storage Mechanism and will be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

Amendments to the Management Agreement and the terms of the Company's investment in the Master Fund

In order to reflect the increased investment of the Company in the Master Fund as a result of the Initial Issue and the Issuance Programme and the fact that the Company will become an even more significant feeder fund into the Master Fund, the Company and the Manager have agreed to a number of amendments to the Management Agreement and the terms on which the Company's investment in the Master Fund can be redeemed in order to provide the Manager with more operational certainty regarding the Company's investment in the Master Fund. These changes, which do not require Shareholder approval, are described in further detail in the Circular.

The main changes and their effect are as follows:

· The Company will ordinarily be required to provide 12 months' notice of the redemption of all or some of its investment in the Master Fund, except as may be required to fund the Company's specific working capital requirements and, up to a maximum amount equal to five per cent. of each class of the Company's holding of Master Fund shares every month, to finance on-market share buy backs. Any redemption of all or part of the Company's investment in the Master Fund on a winding up of the Company or to finance a tender offer or a class closure resolution will be required to be on 12 months' notice. In those cases, the Company would only receive the proceeds of redemption from the Master Fund (and, therefore, Shareholders would only receive payment from the Company) after the redemption date at the end of the 12 month notice period and the Company (and, therefore, Shareholders) would remain exposed to the investment performance of the Master Fund in the intervening period to that redemption date.

· The circumstances in which the Company can terminate the Management Agreement and redeem its investment in the Master Fund on less than 12 months' notice will be limited to certain "cause" events affecting the Manager, in which case the Company would be entitled to terminate the Management Agreement and redeem its investment in the Master Fund on three months' notice.

· In addition, the annual buy back allowance arrangements introduced in 2021 will continue to apply in respect of repurchases and redemptions of shares of each class in excess of five per cent. of the relevant class in any calendar year, as described further in the Circular.

The Directors believe that these changes are in the interests in the Company, given that they will help facilitate the Initial Issue and the Issuance Programme, and that the Initial Issue and the Issuance Programme should benefit the Company through a significant increase in its market capitalisation and potential increase in the liquidity of the Shares.

Background on the Company

BH Macro Limited is an authorised closed-ended collective investment scheme established as a non-cellular company limited by shares under the laws of Guernsey on 17 January 2007. The Company's ordinary shares were first admitted to listing on London Stock Exchange on 14 March 2007.

The Company's Sterling Shares and US Dollar Shares are listed on the premium segment of London Stock Exchange plc's Main Market for listed securities. Until 2017, the Company also had a class of Euro-denominated shares listed on the premium segment of the Main Market.

The Company is a feeder fund that invests all of its assets (net of short-term working capital requirements) directly in the Master Fund, a hedge fund in the form of a Cayman Islands open-ended investment company.

The investment objective of the Master Fund is to generate consistent long-term appreciation through active leveraged trading and investment on a global basis.

The Master Fund has flexibility to invest in a wide range of instruments including, but not limited to, debt securities and obligations (which may be below investment grade), bank loans, listed and unlisted equities, other collective investment schemes, currencies, commodities, futures, options, warrants, swaps and other derivative instruments and digital assets. The underlying philosophy is to construct strategies, often contingent in nature, with superior risk/return profiles, whose outcome will often be crystallised by an expected event occurring within a pre- determined period of time.

The Master Fund employs a combination of investment strategies that focus primarily on economic change and monetary policy and market inefficiencies.

The Company is one of five feeder funds into the Master Fund and is the only feeder fund that is publicly traded.

Both the Company and the Master Fund are managed by the Manager, acting through its sole general partner, Brevan Howard Capital Management Limited.

Expected Timetable

Announcement of the Initial Issue	23 January 2023
Publication of the Prospectus and despatch of the EGM Circular to existing Shareholders	23 January 2023
Initial Placing, Intermediaries Offer and Offer for Subscription open	23 January 2023
Latest time and date for receipt of forms of proxy in respect of the EGM	8.30 a.m. on 2 February 2023
Extraordinary General Meeting	8.30 a.m. on 6 February 2023
Record date for the sub-division and disablement in CREST of the existing Shares	6.00 p.m. on 6 February 2023
Admission of new Shares issued pursuant to the Sub-division Resolution becoming effective*	8.00 a.m. on 7 February 2023
Latest time and date for receipt of completed Offer for Subscription Application Forms and payment in full under the Offer for Subscription and settlement of relevant CREST instructions (as appropriate)	11.00 a.m. on 9 February 2023
Latest time and date for receipt of completed applications from Intermediaries in respect of the Intermediaries Offer	11.00 a.m. on 9 February 2023
Latest time and date for receipt of commitments under the Initial Placing	3.00 p.m. on 10 February 2023
Initial Closing Date	3.00 p.m. on 10 February 2023
Announcement of the results of the Initial Issue	13 February 2023
Initial Admission and dealings in the Shares issued pursuant to the Initial Issue commence	8.00 a.m. on 15 February 2023
Crediting of CREST stock accounts in respect of the Shares issued pursuant to the Initial Issue and payment in full under the Intermediaries Offer	as soon as practicable on 15 February 2023
Where applicable, definitive share certificates despatched in respect of the Shares**	Week commencing 20 February 2023 (or as soon as possible thereafter)

* Assuming that the Sub-division Resolution is passed at the Extraordinary General Meeting and becomes effective.

** Underlying applications who apply to Intermediaries for Shares under the Intermediaries Offer will not receive share certificates.

Enquiries

BH Macro
Richard Horlick
Chairman

J.P. Morgan Cazenove (Sole Bookrunner)
William Simmonds / Rupert Budge (Corporate Finance) Tel: [phone]
James Bouverat / Liam MacDonald-Raggett (Sales)

Kepler Partners LLP (Placing Agent & Intermediaries Offer Adviser)
Hugh van Cutsem Tel: [phone]
Hugo Rynsard-Perry Tel: [phone]

Important Notice

The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed by any person for any purpose on the information contained in this announcement or its accuracy, fairness or completeness.

Investors should not base any financial decision on this announcement. Acquiring investments to which this announcement relates may expose an investor to a significant risk of losing all of the amount invested. Persons considering making investments should consult an authorised person specialising in advising on such investments. This announcement does not constitute a recommendation concerning the Shares. The value of shares can decrease as well as increase. Potential investors should consult a professional advisor as to the suitability of the Shares Option for the person concerned.

Nothing contained herein constitutes or should be construed as (i) investment, tax, financial, accounting or legal advice (ii) a representation that any investment or strategy is suitable or appropriate to individual circumstances or (iii) a personal recommendation.

J.P. Morgan Securities plc, which conducts its UK investment banking activities as J.P. Morgan Cazenove ("JPMC"), which is authorised by the Prudential Regulation Authority and regulated by the Prudential Regulation Authority and the FCA in the United Kingdom, is acting exclusively for the Company and no-one else in connection with the Initial Issue and the Issuance Programme and the Issue and will not be responsible to anyone other than the Company for providing the protections afforded to customers of JPMC or for providing advice in relation to the Initial Issue and the Issuance Programme, or any other matter referred to herein

This announcement does not constitute an offer or solicitation to acquire or sell any securities in the Company. This announcement is not for distribution in or into the United States or to any US Person, Australia, Canada, Japan, New Zealand, the Republic of South Africa, any European Economic Area state or any other jurisdiction in which its distribution may be unlawful. A "US Person" is any person who is not a "Non-United States Person" as defined in US Commodity Futures Trading Commission Rule 4.7. This announcement is not an offer of securities for sale in the United States or elsewhere. The securities of the Company have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold in the United States unless registered under the Securities Act or pursuant to an exemption from such registration. The Company has not been and will not be registered under the US Investment Company Act of 1940, as amended, and investors are not entitled to the benefits of that Act. There has not been and there will be no public offering of the Company's securities in the United States.

None of the Company, the Manager or JPMC or any of their respective affiliates accepts any responsibility or liability whatsoever for/or makes any representation or warranty, express or implied, as to this announcement, including the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith. The Company, the Manager, JPMC and their respective affiliates accordingly disclaim all and any liability whether arising in tort, contract or otherwise which they might otherwise have in respect of this announcement or its contents or otherwise arising in connection therewith.

This announcement includes statements that are, or may be deemed to be, 'forward-looking statements'. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "forecasts", "projects", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. All forward-looking statements address matters that involve risks and uncertainties and are not guarantees of future performance. Accordingly, there are or will be important factors that could cause the Company's actual results of operations, performance or achievement or industry results to differ materially from those indicated in these statements. Any forward-looking statements in this announcement reflect the Company's current views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to the Company's operations, results of operations, growth strategy and liquidity. Given these uncertainties, prospective investors are cautioned not to place any undue reliance on such forward-looking statements. These forward-looking statements apply only as of the date of this announcement.

Information to distributors

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("Directive 2014/65/EU"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing Directive 2014/65/EU; (c) local implementing measures; and/or (d) (where applicable to UK investors or UK firms) the relevant provisions of the UK MiFID Laws (together the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the Shares have been subject to a product approval process, which has determined that the Shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in Directive 2014/65/EU or the UK MiFID Laws (as applicable) and (ii) eligible for distribution through all distribution channels as are permitted by Directive 2014/65/EU or the UK MiFID Laws, as applicable (the "Target Market Assessment").

Notwithstanding the Target Market Assessment, distributors should note that: the price of the Shares may decline and investors could lose all or part of their investment; the Shares offer no guaranteed income and no capital protection; and an investment in the Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risk of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Initial Issue. Furthermore, it is noted that, notwithstanding any Target Market Assessment, JPMC will, pursuant to the Initial Placing, only procure placees who meet the criteria of professional clients and eligible counterparties.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of Directive 2014/65/EU or the UK MiFID Laws (as applicable); or (b) a recommendation to any investors or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Shares.

Each distributor is responsible for undertaking its own Target Market Assessment in respect of the Shares and determining appropriate distribution channels.

PRIIPs Regulation

In accordance with the UK version of the Regulation (EU) No 1286/2014 of the European Parliament and of the Council of 26 November 2014 on key information documents for packaged retail and insurance-based investment products (PRIIPs) and related legislation (the "UK PRIIPs Laws"), key information documents in respect of an investment in the Sterling Shares and the US Dollar Shares have been prepared by the Manager and are available to investors at www.bhmacro.com.

If you are distributing the Shares, it is your responsibility to ensure that the key information document relating to the relevant class of Shares is provided to any clients that are "retail clients". The Company is the only manufacturer of the Shares for the purposes of the UK PRIIPs Laws or the PRIIPs Regulation and JPMC is not a manufacturer for these purposes. JPMC does not make any representation, express or implied, or accept any responsibility whatsoever for the contents of any key information documents prepared by the Manager nor accept any responsibility to update the contents of any key information documents in accordance with the UK PRIIPs Laws or the PRIIPs Regulation, to undertake any review processes in relation thereto or to provide such key information documents to future distributors of Shares. JPMC and its affiliates accordingly disclaim all and any liability whether arising in tort or contract or otherwise which it or they might have in respect of any key information documents prepared by the Manager.