MAVERICK FUND, LTD. - Conversion of Fund to ‘Qualified Purchaser Fund’

Date1-Feb-2000
Conversion of Fund to ‘Qualified Purchaser Fund’ under U.S. Legislation

 

On April 3, 1997, significant federal securities regulations relating to“qualified purchaser funds” were adopted by the Securities and Exchange Commission (the ‘SEC’) in the U.S.. The rules implemented an exception from the registration requirements of the U.S.’s Investment Company Act of 1940, as amended (the “Investment Company Act”), for any investment fund that restricts ownership of its securities by U.S. persons to "Qualified Purchasers," regardless of the number of investors in the fund (a "Qualified Purchaser Fund").

 

Since its inception Maverick Fund, Ltd. (the “Fund”) was limited to 100 U.S.beneficial owners. Throughout 1999 the Fund was approaching the limit and as a result, Maverick Capital, Ltd., the Fund’s investment advisor (“Maverick Capital”), recommended to the Fund’s Board of Directors (the “Board”) that the Fund convert to a Qualified Purchaser Fund in order to permit the Fund to have added flexibility in attracting strategic investors that are U.S. persons. Based on such recommendation, the Board determined that it was in the Fund’s best interest to convert to Qualified Purchaser Fund status.

 

The effective date of the Fund’s conversion will be January 1, 2000 (the ‘Conversion Date’). Effective as of the Conversion Date, future U.S. investors in the Fund will be limited to Qualified Purchasers and U.S. ownership in the Fund will no longer be limited to 100 U.S. persons.

 

The Qualified Purchaser Fund rules include a “grandfather” provision which permits existing investment funds that are currently limited to 100 beneficial owners (such as Maverick Fund, Ltd.) to convert into a Qualified Purchaser Fund without requiring investors that are not Qualified Purchasers to dispose of their interest in the fund, as long as such non-Qualified Purchasers became investors in the fund on or before September 1, 1996. In order to take advantage of the grandfather provision, the fund is required to give notice of its intention to convert into a Qualified Purchaser Fund, as well as a special redemption privilege, to each U.S. investor in the fund. Shareholders were informed of the decision to convert to a Qualified Purchase Fund and of the grandfather provisions and redemption procedures by a letter to Shareholders on October 15, 1999. In that letter the Fund offered each U.S. shareholder the opportunity to redeem all or any portion of its shares in the Fund at the net asset value per share as of December 31, 1999 (less any applicable redemption charges and accrued management and performance fees). The Fund gave effect to all redemption elections received by the close of business on December 1, 1999. All redemption payments were made in cash in accordance with the terms of the Fund’s Memorandum and Articles of Association.

 

Any U.S. shareholder who first invested in the Fund after September 1, 1996 (“Post September 1st Investors”) is required to satisfy the Qualified Purchaser rules in order to remain in the Fund. A Qualified Purchaser Questionnaire was forwarded to each Post September 1st Investor on October 15, 1999. Any Post September 1st Investor who is not a Qualified Purchaser or who failed to return the enclosed Qualified Purchaser Questionnaire was required to redeem all of its shares in the Fund as of December 31, 1999. The letter of October 15, 1999 served as notice of such mandatory redemption pursuant to the Fund’s Articles of Association.

 

Enquiries:

 

NCB Stockbrokers Limited

 

Mr Odhran O’Reilly

Phone: (+353 1) 611 5907

The Irish Trust Company (Cayman) Ltd

Ms Michelle Boucher Phone: (+1 345) 949 0658