CAPTURING 

VALUE
INFORMATION MEMORANDUM

DEEP VALUE MICROCAP FUND TRUSTEE & MANAGER

MICROEQUITIES ASSET MANAGEMENT PTY LTD
LEVEL 7, 109 PITT STREET
ISSUED 1 JULY 2010 SYDNEY NSW 2000, AUSTRALIA
PH: (61 2) 9231 6169
[email protected]
PRI CODE: MICX100AU
CONTENTS

IMPORTANT INFORMATION 2
THE DEEP VALUE MICROCAP FUND 3
INVESTOR PROFILE 4
KEY BENEFITS OF THE FUND 5
INVESTMENT PRINCIPLES 6
INVESTMENT PHILOSOPHY 6
INVESTMENT RISKS 8
GENERAL RISKS 9
FUND SPECIFIC RISKS 9
FEES AND CHARGES 10
CONTRIBUTION (ENTRY) FEES 10
ADVISOR COMMISSIONS 10
INVESTMENT MANAGEMENT FEES 10
ADMINISTRATION EXPENSES 10
EXIT FEES 11
PERFORMANCE HURDLE 11
PERFORMANCE FEES 11
HIGH WATER MARK 11
UNITS IN THE FUND 12
VALUATION OF FUND ASSETS 12
UNIT PRICING 12
ISSUE AND REDEMPTION PRICE 12
INCOME DISTRIBUTION AND REINVESTMENT 12
TAXATION 13
KEEPING INVESTORS INFORMED 14
SUMMARY OF TRUST DEED 14
INVESTING IN THE FUND 15
MINIMUM INVESTMENT 15
WHO CAN INVEST IN THE FUND? 15
OTHER QUALIFYING INVESTORS 16
HOW TO INVEST? 17
APPLICATIONS FOR UNITS 17
REDEMPTION OF UNITS 17
ANTI-MONEY LAUNDERING AND COUNTER-TERRORISM 17
PRIVACY 17
GLOSSARY OF TERMS IN THIS IM 18

DEEP VALUE MICROCAP FUND | INFORMATION MEMORANDUM

FUND SUMMARY

ABOUT THE FUND INVESTMENT STYLE

Deep value, highly selective

The Fund invests

approach
Specialised Microcap asset class,
in-house research
in profitable, growing,
undervalued Microcap MINIMUM INVESTMENT
Minimum investment

companies listed
$50,000
on the ASX Applications and Redemptions

SUMMARY OF PERFORMANCE (As at 30th June 2010)

Since Inception (6th March 2009)
Monthly
84.66%
Recommended Investment Term
+
12 Months 3-5 Years
+58.59%
DISTRIBUTIONS
Yearly
ASSET MANAGER

FEES
Management fee is 1.8% pa.
Performance fee is 20% of the
outperformance subject to
a ‘high watermark’ and ‘hurdle’.
CUSTODIAN

DEEP VALUE MICROCAP FUND | INFORMATION MEMORANDUM | PG 1

IMPORTANT INFORMATION

Microequities Asset Management Pty Ltd ABN 96 134 The information in this IM is general advice and does not
984 768 (also referred to in this Information Memorandum constitute personal advice. In preparing this IM, Microequities
as “Microequities Asset Management”, “the Trustee”, “the Asset Management has not taken into account the investment
Manager”, “us”, “we” and “our”) is the trustee and investment objectives, financial situation or particular needs of individual
manager of the Microequities Deep Value Microcap Fund investors. Microequities Asset Management strongly
(“the Fund”) ABN 20 869 753 103. Microequities Asset recommends that potential investors read this IM in its entirety
Management is the issuer of this Information Memorandum and seek independent professional advice as to the financial,
and of units in the Fund. This Information Memorandum should taxation and other implications of investing in the Fund and the
be read in its entirety before making a decision to invest in material contained in this IM.
the Fund.
Investors should consider whether an investment in the Fund
This Information Memorandum (“IM”) is dated 1st of July 2010. is appropriate for their investment objectives, financial situation
It replaces the IM dated 16th of February 2009 and will expire and needs. None of Microequities Asset Management,
on the date determined by Microequities Asset Management Microequities Pty Ltd, or their members, directors, employees,
at its sole and unfettered discretion. An investment in the Fund consultants, appointed investment managers (if any), advisers
is subject to the terms of the Fund’s Trust Deed (“Trust Deed”) or agents guarantee the repayment of capital invested in
dated 16th of February 2009. The IM is not a comprehensive the Fund, the payment of income from the Fund or the
statement of the Trust Deed or of all of the terms applicable performance of the Fund or an investment in the Fund
to an investment in the Fund. A copy of the Fund’s Trust generally. As with any investment there are inherent risks in
Deed can be obtained by contacting Microequities Asset investing in the Fund, including the risk that the investment
Management. An investment in the Fund is an application in the Fund is speculative, that the investment may result in a
for units in the Fund based on this Information Memorandum. reduction in the capital value of the investment, loss of income
No units in the Fund will be issued on the basis of this and returns that are less than expected or delays in repayment
Information Memorandum after the date that the Information of capital. Please refer to section on Risks of Investing pg 8.
Memorandum expires.
All amounts in this IM are given in Australian dollars. Fees
Information in this IM is subject to change from time to time. and costs in this IM are disclosed inclusive of the net effect of
If it is not materially adverse information this may be updated Goods and Services Tax (GST) if applicable and any Reduced
by us. We intend to issue a supplementary or replacement Input Tax Credits (RITC).
IM when any changes are made.
Applications for investment in the Fund may only be made
Unless otherwise determined by Microequities Asset on the application form attached to or accompanied by this
Management at its sole and unfettered discretion, an Information Memorandum.
application for units in the Fund is limited to investors that
are wholesale clients and sophisticated investors (“Wholesale
Clients”) within the meaning of Section 761G(7) and Section
761GA(7) of the Corporations Act 2001 (“Corporations Act”)
and other qualifying investors (See section Who can invest in
the Fund? Pg 15).
This Information Memorandum is not a Product Disclosure
Statement for the purposes of Part 7.9 of the Corporations
Act. The level of disclosure in this IM is less than that of a
Product Disclosure Statement, prospectus or similar disclosure
document. A copy of this IM does not need to be and has not
been lodged with the Australian Securities and Investments
Commission (“ASIC”).

DEEP VALUE MICROCAP FUND | INFORMATION MEMORANDUM | PG 2

THE DEEP VALUE MICROCAP FUND

The Microequities Deep Value Microcap Fund launched

in March 2009 is an open-ended unregistered Managed
DEEP VALUE MICROCAP FUND
VALUE OF $100,000 INVESTED AT INCEPTION
Investment Scheme designed for the Australian wholesale
As at June 30th 2010
market. Microequities have established this Fund to
provide investors with an investment vehicle that will $250k
seek to invest in identified undervalued Microcap companies.
The objective of this Fund is to identify undervalued $250k
Microcap companies, invest in them and through a medium $200k
to long term commitment attempt to deliver superior
investment returns. $200k
$150k
The Fund invests primarily in ASX listed Microcap securities,
which are at the time of initial investment generally below $150k
$100k
a market capitalisation of A$250 million. The Fund may at
times invest in companies with a higher market capitalisation
$100k
but these will be limited to no more than 20% of the assets $50k
of the Fund.
At times the Fund may invest in pre-IPO securities that $50k
0
are due to be listed on the ASX within 3-6 months and that
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company has lodged a prospectus with ASIC, these will also
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be limited to no more than 10% of the assets of the Fund.

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The Fund will be limited to investing no more than 20% of

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the Fund’s assets in any one security or company. The Fund

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will make investments with a medium to long term time

DEEP VALUE MICROCAP FUND
horizon of between 12 months to 3-5 years in VS. ALL ORDS ACCUMULATION INDEX
Deep Value Microcap Fund
the companies it selects to invest in. As at June 30th 2010 All Ords Index
$250k Deep Value Microcap Fund
The Fund will not speculate in derivatives. It will be permitted
All Ords Index
to hold other securities that are directly associated with a $225k
particular investment such as options granted with a specific $250k
company issue etc. The Fund will not engage in short selling $200k
$225k
or stock lending.
$175k
$200k
$150k
$175k
HISTORICAL PERFORMANCE OF THE FUND $125k
$150k
$100k
$125k
Summary of Performance* (As at 30/06/2010)
$75k
$100k
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$75k
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Since Inception (6th March 2009) +84.66%

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12 months +58.59%

Performance figures above include a distribution payable *Disclaimer & Warning: The performance figures presented
to investors in the Fund at 30th June, 2010. in this document are for the past performance of The Deep
Value Microcap Fund. Past performance is not a reliable
indicator of future performance. Microequities do not
guarantee the performance of the fund, the return of an
investor’s capital nor any specific rate of return.

DEEP VALUE MICROCAP FUND | INFORMATION MEMORANDUM | PG 3

THE DEEP VALUE MICROCAP FUND

WHY MICROCAPS?
Due to their relatively small market capitalisation, investment
banks and stock brokers do not allocate the necessary
The Microequities Deep resources to analyse or provide research coverage on
Microcap companies. This lack of professional investor
Value Microcap Fund has been coverage can provide investment opportunities in highly
undervalued securities that may have been overlooked.
operating since March 6th 2009. Many Microcaps face higher growth rates than larger
companies. Often, the reason for a superior growth rate will be
A complete month by month due to a company specific happening such us a new product
or service, expansion into new markets, increased market
performance table is available at size or other company specific events that are unrelated to
the economic cycle. These company specific events can
the website microequities.com.au provide some Microcap companies with growth in challenging
economic conditions. The Microcap investment universe may
offer many incoherent valuations because a lack of institutional
and professional investor following. Capturing these anomalies
in valuation is an integral part of the Microequities Deep
Value Microcap Fund.

INVESTOR PROFILE MICROCAPS ARE NOT START-UPS

The Fund offers the unique opportunity for wholesale and Microcaps are small companies, in most cases these
high net-worth investors to diversify their equity portfolios, companies are not start up companies but rather companies
to include exposure to the Microcap asset class. In a well with a track record. Many Microcap companies can in fact
diversified investment portfolio investors may consider eventually become small, mid and large cap companies.
exposure to Microcap companies, complementing a Microcap companies in a number of cases have highly
longer term growth, and yield portfolio. Your own personal recognisable brand names and products and can be market
circumstances will affect your decision and individual strategy leaders in their field.
details will differ depending on these circumstances.
There are many reasons why companies are Microcaps or
We encourage investors to talk to a financial adviser before
small and they can include:
making an investment decision.
• the relatively small domestic market for their product
In our view an investor in the Fund has already made
and have not entered the exporting arena;
an asset allocation decision and does not require further
exposure to cash. In line with this view, the cash holding • they might be largely family dominated companies;
of the Fund is expected to be between 1-20% of the assets
of the Fund. Microequities Asset Management may however, • they might have previously been part of a larger company;
at its discretion, decide to hold up to 80% of the Fund portfolio • their pace of growth might be managed (rapid growth can
in cash. be harder to manage)
in many cases, they might have been even smaller in size a
WHAT IS A MICROCAP? few years ago and have grown rapidly but still remain under
A Microcap is generally defined as a company whose market the A$250 million arbitrary market cap guide for Microcaps
capitalisation (market value) is relatively small (generally (i.e. they were A$20 million market cap 3 years ago and now
defined as below A$250 million). Whilst an individual Microcap they are A$60 million)
company’s market value is relatively small, they make up a
large component of total Australian Securities Exchange (ASX)
participants.

DEEP VALUE MICROCAP FUND | INFORMATION MEMORANDUM | PG 4

THE DEEP VALUE MICROCAP FUND

ABOUT THE FUND MANAGER

Microequities Asset Management Pty Ltd is a subsidiary of
Microequities Pty Ltd (“Microequities”) holder of Australian
Financial Services Licence (AFSL) number 287526. Microequities was established
Microequities was established in 2005 to research
Microcap companies and is possibly the only investment
in 2005 to research Microcap
research house in Australia solely focused on researching
Microcap companies. During this time Microequities has
companies and is possibly the
become a provider of in depth investment analysis on
Australian Microcaps.
only investment research house
Microequities experience, method, process and knowledge in Australia solely focused on
of Australian Microcaps place it in a unique position to invest
in these companies. Other fund managers might manage a researching Microcap companies.
Microcap fund as part of a wide array of managed investment
products, for us, it’s our core product. Our space is Microcaps,
our competency is in this asset class, our experience and skill
set lie within the Microcap space.
Microequities Asset Management will be utilising predominately We have developed an intricate and process driven
in-house research from our investment research team. methodology to identify value and assess the investment
Microequities is unique in that we have established investment potential of Microcap companies. Microcaps are the sole
research and valuation capabilities in-house. Unlike many investment universe and we are dedicated to this asset
investment managers with limited resources dedicated to class. Microequities’ research team is broken up into
the research of Microcaps, they have to either outsource this sector specialisations including Telecommunications Media
function or purchase reports on a needs basis. Technology, Industrial, Retail, Services etc.
The research capabilities and expertise have been
developed specifically for analysing the Microcap asset
class. They include various valuation models that are applied
depending on the type of business and in many cases can be
a combination of several models.

KEY BENEFITS OF THE FUND

3 Exposure to a specialised asset class
3 Opportunity to invest in under-researched Microcap stocks
3 Access to capital market opportunities via participation in private placements and capital raisings
3 Higher long term growth profile than large cap funds
3 Manager with extensive experience in the Microcap sector
3 Value investing philosophy
3 In-house research expertise and capability
3 Bottom-up investment research based experience
3 Early access to potential high growth companies
3 Performance based incentive for the Manager
3 Distributions may carry imputation tax credits
3 Stocks generally held for longer than 12 months thus delivering CGT benefits to Unitholder

DEEP VALUE MICROCAP FUND | INFORMATION MEMORANDUM | PG 5

INVESTMENT PRINCIPLES

INVESTMENT IN PROFITABLE COMPANIES

We do not speculate on loss making businesses. In order
to value a business (company) the business needs to be
“To us, at the heart of the generating positive earnings. Microequities don’t research
loss making businesses, and the Fund does not invest in
investment decision lies the companies that do not have a historically positive EBITDA
(Earnings Before Net Interest, Depreciation and Amortisation).
value question. Investments in
undervalued companies generally LONG TERM INVESTMENT HORIZON
Good things take time. In the Microcap space our experience
have a better possibility of long has been that it takes time for the market to recognise value.
The time horizon of investment is therefore a medium to long
term outperformance.” term one. The Fund seeks equity investments as a de facto
business partnership. The Fund does not trade in and out
of positions; it looks for long term superior gains by way of
long term investments. The experience is that this philosophy
provides superior long term returns. Microequities suggest
that investors adopt a minimum of 3-5 year time horizon for
their investment in this Fund. The Fund aims to provide capital
INVESTMENT PHILOSOPHY growth and some income.
VALUE
INVESTMENT APPROACH
Value is at the heart of our investment philosophy.
We investigate and research the Microcap space because PROFILE OF COMPANIES THE FUND WILL INVEST IN
generally Microcap companies present the most compelling
value propositions. Value investing is the buying of securities There exists information asymmetry in the market for Microcap
at significantly less than their intrinsic value. Our investment securities. Information asymmetry arises when one party has
approach aims to identify those securities that are trading more or better quality information than the other. Stock broking
below their intrinsic value while offering exposure to growth firms and investment banks generally produce research
opportunities. Securities may trade below or above their material for their clients in order to generate commissions from
intrinsic value for many reasons due to a multitude of factors trading volume. They tend to cover mainly the largest 200-
including but not limited to; economic outlook; general market 400 stocks listed on the exchange as these tend to have the
sentiment; company size; lack of analysis; outside of major largest daily volume of trading activity. There are approximately
bench mark indices; etc. Investments should generally be 2200 companies listed on the ASX and most of these would
made with a medium to long term time horizon of between not have been considered for research by brokers or other
18 months to 3-4 years in companies selected for investment research firms, hence there may exist opportunities to profit
as prices are likely to revert to their intrinsic value through the from intrinsically undervalued companies in the remaining
course of an investment cycle. 1800-2000 or so un-researched companies.
Additionally, many index fund managers tend to structure their
GROWTH portfolios to track or follow specific indices. These indices
As important as value is, growth is a vital driver of capital would cover the top few hundred stocks or a particular sector.
returns. Without growth, value is undermined. Therefore not This can suggest that the index fund managers are investing
only are undervalued companies sought, but companies that in both well performing companies and poor performing
are likely to grow and grow at faster rates than the rest of companies simply to imitate the particular index.
the market. The Microcap universe presents a wide array of
growth companies some of which, because of their relatively Microequities are a fundamental deep value investor focused
smaller size, posses a more attractive growth profile. on growing companies with a performance track record and
an undervalued share price. We use a bottom-up approach to
investing. Fundamental analysis of companies is undertaken
using various models and key indictors to value companies
before consideration of inclusion for investment by the Fund.

DEEP VALUE MICROCAP FUND | INFORMATION MEMORANDUM | PG 6

INVESTMENT PRINCIPLES

We conduct research that includes information gathering

from customers, suppliers and competitors. As part of the
investment process we conduct face to face meetings with
company’s senior management to gain valuable insights into
the operations of the company’s business units, strategy and
plans. We will only invest the Fund in businesses that we
understand and that have a historical track record of earnings.
The list below is a sample and is in no way exhaustive of
some of the factors that may be looked at and taken into
consideration when considering an investment by the Fund;
As each company is unique not all factors below will be
suitable for taking into consideration for the purposes of
a valuation model of the company.

3 Companies with a well established business model SOCIAL AND ETHICAL CONSIDERATIONS
3C ompanies generally should be at least 2 years Microequities regard the subject of ethical investing as highly
or longer EBITDA profitable complex and understand there are often contradictions
and conflicting beliefs that are a constant element of the
3C
 ompanies with low manageable debt or no debt capitalist system. Microequities are unable to assess the
are preferred individual beliefs and values of each investor in the Fund.
Our investment decisions are primarily based on economic
3 High cash flow generating businesses factors. We do not take labour standards or environmental,
3C ompanies with high earnings visibility and social or ethical considerations into account when making
disclosure investment decisions. However, such issues may financially
affect an investment and any financial effect would influence
3C
 ompanies with a predictable future Microequities’ investment decisions.
earnings stream
3 Companies in a growing sector
3C ompanies that have a growth catalyst division,
product or service
3C
 ompanies with a highly competitive advantage
or brand name
Microequities approach aims to
3C
 ompanies with a stable management and track identify those securities that are
record for delivering value to shareholders
trading below their intrinsic value
3C
 ompanies where management has a
significant stake while offering exposure to growth
3C
 ompanies with a reputable board of directors
opportunities.
The approach to investment necessitates a medium to long
term perspective and only under such an investment time
horizon do investors capture superior capital generation.
The investment performance of companies invested in
is regularly reviewed. We are in close contact with senior
executives and management of those companies and their
investment case is re-examined. Companies that have not
yet met our investment criteria are also monitored. The world
is a dynamic place and investment cases do change.

DEEP VALUE MICROCAP FUND | INFORMATION MEMORANDUM | PG 7

INVESTMENT RISKS

Risk Profile
High
Medium-High
Medium A Microcap fund such as this one is
Medium-Low considered as having a high risk profile
Low

RISKS OF INVESTING The performance of the Fund or the return of capital is not
No investment is without some degree of risk. Risk can be guaranteed. The value of an investment in the Fund will go
explained as the probability that an investment’s actual return up and down with the value of the Fund’s assets. Equity
will be different than expected. This includes the possibility of markets are inherently volatile. Investors are cautioned that
losing some or all of the original investment. You will need to such volatility may produce significant variations in application
determine how much risk you are able, or willing to tolerate. and redemption prices within relatively short periods of time,
A Microcap fund such as this one is considered as having a notwithstanding the performance of the Fund over the longer
high risk profile. term. An investor may receive a capital return less than the
amount invested in the Fund and there is no guarantee that
The purpose of this section is to inform investors of the types income distributions will be made from any income derived
of risks that may apply to an investment in the Fund. Prior to from the investment of the assets of the Fund. The value
making a decision to invest in the Fund, an investor should of your investment is reflected in the value of your Units.
consider the risk factors which may apply to the investor’s Unit prices will rise and fall depending upon the value of
investment in the Fund. the underlying assets.

INVESTMENT RISK VS RETURN RELATIONSHIP

It is commonly accepted that there is a relationship between Below is an illustration of some of the types of investment
the level of return generated by an investment, and its level classes and their relationship between risk and return,
of risk. Put simply, the greater the expected return from an for you to consider.
investment, the greater the expected risk. This is known as
the ‘risk return trade-off’.

Cash Fixed Interest Property Large Cap Equities Small & Micro Cap Equities

LOWER RISK HIGHER RISK

correlated with correlated with
lower returns higher returns
over the long run over the long run

DEEP VALUE MICROCAP FUND | INFORMATION MEMORANDUM | PG 8

 The following is not intended to be an exhaustive list of the
risk factors to which the Fund is exposed. Before deciding to
invest in the Fund, prospective investors should read this entire
INVESTMENT RISKS IM and seek professional advice from their professional adviser.

GENERAL RISKS FUND SPECIFIC RISKS

Market Risk: Market risk is the risk that prices of all listed Fund Risk: Risks particular to the Fund include that the Fund
securities fall. Markets are subject to a host of factors, could terminate, Microequities Asset Management could be
including economic conditions, government regulations, replaced as Manager and Microequities Asset Management’s
market sentiment, local and international political events and Investment professionals could change. There is also a
environmental and technological issues. Market risk may have risk that investing via the Fund may give different results as
different impacts on each investment. opposed to investing directly due to income or capital gains
accrued in the Fund and the consequences of contributions
Inflation Risk: Inflation risk is the risk that the prices of goods
and redemptions by other investors.
and services will rise faster than the value of the investments.
Liquidity Risk: If the Fund has a low cash balance, or had
Sector Risk: Sector risk is the risk a particular sector that
problems selling its listed investments, access to cash could
may be subject to sector wide problems of demand/supply
be delayed. Similarly, if there is an interruption of regular
imbalances due to certain events or shocks.
trading on the ASX or for a particular asset of the Fund,
Company Specific Risk: An investment in a company there may be delays in processing redemption requests.
may be affected by unexpected changes in that company’s
Low Cash Position: If the Fund has a low cash balance
operations (Such as changes in management, loss of a
this could hamper or delay the the ability of the Fund to pay
significant customer or contract) and business environment.
distributions to investors.
Microcap Company Risk: Shares in Microcap companies
Volatility Risk: Volatility in the prices of the underlying assets
may trade less frequently and in smaller volumes and may
of the Fund can result in fluctuations in the unit price and/or
experience greater price volatility than larger companies.
amounts distributed to Unit Holders.
In times of heightened market volatility Microcap companies
could face an illiquid securities market, thereby limiting the Investment Selection Risk: Some investments chosen will
ability of the Fund Manager to disinvest out of positions. not perform as well as other investments in terms of capital
Microcap companies may also have more limited operating return or income.
histories, markets, product lines or financial resources
Political & Legal Risks: Value of the Fund’s assets may
than larger companies. They may also depend heavily
be affected by uncertainties including political and economic
on key personnel.
developments and changes in laws and regulations in Australia
Unlisted Company Risk: Unlisted investments are not as or overseas relating to managed funds.
liquid as investments in a listed company. Investments in
Currency Risk: The Fund will be denominated in Australian
unlisted companies carry a heightened risk due to lack of
dollars which may appreciate or depreciate against an
transparency in management, directors and operations.
investor’s base currency of investment.
In addition, unforeseen factors may prevent an unlisted
company from listing on an exchange. Taxation Change Risk: Any change in taxation policy may
impact the distributions to unit holders, as well as, the taxation
Interest Rate Risk: Changes in interest rates can have a
treatment of those distributions.
direct or indirect impact on the investment value and/or returns
of all types of assets. Interest rates may directly or indirectly Significant Redemptions Risk: A risk exists that a
affect a company’s cost of borrowings. significant number of requests for redemption of Units in the
Fund will be received. In such an event, it may not be possible
Currency Risk: Some companies may have significant
to liquidate some of the Fund’s investments at the time that
operations in other countries, and if currencies change in
such redemptions are requested, or it may be possible to
value relative to the Australian dollar, the value of the
do so only at prices which do not reflect the true value of
investment may change.
such investments, resulting in an adverse effect on the
Liquidity Risk: This is the risk that an investment in a return to Investors.
company may not be easily converted into cash with little or
Force majeure events: Events, including acts of God, fire,
no loss of capital and minimum delay. The market for Microcap
flood, earthquakes, war, acts of terrorism, and labour strikes
companies generally has less liquidity than higher larger
may adversely affect the normal operations of financial markets
capitalised companies. Securities of Microcap companies
and the Fund.
in particular may from time to time become illiquid.

DEEP VALUE MICROCAP FUND | INFORMATION MEMORANDUM | PG 9

FEES AND CHARGES

CONTRIBUTION (ENTRY) FEES

Subject to prevailing Australian legislation, most fund
managers charge an entry fee as a percentage of the amount
invested. This fee is deducted from the value of the initial No entry fee to Investors who
investment so that the investor would ordinarily receive
fewer units in the fund. It is common for the entry fees to be apply for units in the Fund directly
disbursed as a commission to licensed advisers who introduce
investors to the fund. The licensed advisor may rebate part though Microequities Asset
or this entire entry fee to the investor in the form of additional
units at the licensed advisor’s discretion. In line with market Management
practice, Microequities Asset Management has set the entry
fee at a maximum of 2%. Additional investments in the Fund
will also be subject to the 2% entry fee.
An investor who applies directly to the Fund will also be
charged a 2% entry fee; however Microequities Asset
Management reserves the right (subject to prevailing Australian
legislation) to rebate up to 100% of the fee in the form of ADMINISTRATION EXPENSES
additional units at our discretion.
The Fund’s Trust Deed entitles Microequities Asset
Management to be reimbursed out of the Fund’s assets for
ADVISOR COMMISSIONS expenses properly incurred in operating the Fund (together
In addition to the contribution fee described previously with any GST on such expenses). Such expenses include,
(which may be fully rebated to the investor at the discretion registry fees, legal expenses, and stationery, postage,
of the advisor) we may pay (subject to prevailing Australian and insurance and compliance costs. Microequities Asset
legislation) licensed advisors a trailing commission of up to Management has set a maximum that these fees should not
a maximum 0.25% per annum. The trailing commission is exceed 0.20% per annum of net asset value of the Fund.
paid out of Microequities Asset Managements’ management
fee. You may agree to pay your adviser a fee for any financial Transaction costs (such as custodian fees, brokerage,
advice that they provide to you. However, these are separate government taxes, duties and levies, bank charges,
to any fees we may charge in respect of your investment accounting, Tax consulting, auditing and account transaction
in the Fund. charges) are paid out of the Fund’s assets monthly.
Occasionally, abnormal costs may be paid out of the Fund.
Any commissions (both contribution and trailing) paid to Such costs may include the costs of holding unit holders’
licensed financial advisors would be subject to compliance meetings or effecting changes to the Trust Deed of the Fund
with prevailing Australian legislation. or terminating the Fund.
Microequities Asset Management will not be reimbursed from
INVESTMENT MANAGEMENT FEES the Fund for any expenses that it incurs which are directly
The investment management fee payable to Microequities attributable to Microequities’ own business, such as overheads
Asset Management for managing the Fund is 1.8% per or internal salary expenses.
annum of the net asset value of the Fund calculated monthly
and payable by the Fund within 14 days of the end of each
month. If there is a change in the investment management fee,
Microequities will give at least 30 days notice in writing
to investors.
Microequities Asset Management reserves the right to charge
a lesser amount to certain clients. In particular, we may charge
or rebate management fees individually negotiated
with investors.

DEEP VALUE MICROCAP FUND | INFORMATION MEMORANDUM | PG 10

FEES AND CHARGES

RELATED PARTY TRANSACTIONS

In the execution of transactions, Microequities Asset
Management deals with professional organisations that
may include Microequities Pty Ltd or its associated A High Water Mark is in place
companies. All transactions are conducted on arm’s length
terms. These organisations may receive commissions or fees ensuring that previous negative
at prevailing market rates for the execution of transactions.
Any conflict of interest or potential conflict of interest is performance must be recouped
managed in accordance with Microequities’ Conflict of
Interest Policy. before a performance fee can be
EXIT FEES received by Microequities Asset
Microcaps are a specialised class of investment that requires
a specific type of entry and exit timeline. Microequities Asset
Management.
Management considers that investors in the Fund should
be prepared to commit to being an investor in the Fund for
a period of at least 3-5 years. In line with market practice,
Microequities Asset Management has set an exit fee of 2%
to be levied, on amounts invested for less than 12 months, HIGH WATER MARK
deducted from redemption monies and paid to the trustee.
This is to discourage short term investing, as investments Additionally a High Water Mark is in place ensuring that
such as this Fund are recommended for medium and long previous negative performance must be recouped before
term only. After a 12 month period there is no exit fee. a performance fee can be received by Microequities Asset
Management. The High Water Mark is the highest prior net
asset value NAV of the Fund on a per unit basis at which
PERFORMANCE HURDLE a performance fee was levied at the end of a performance
Microequities Asset Management are an absolute return fee period. For example, if the investors units in the Fund
manager and as such have set the performance hurdle for underperformed by 2% in month 1 and outperformed by
the Microequities Deep Value Microcap Fund at a fixed 5% 5% in month 2, performance fees in month 1 would be zero.
per annum (calculated monthly) increase in the value of the In month 2, the performance fee would be calculated as 20%
Fund’s assets after management fees on a per unit basis. of approximately 3% out performance (5% outperformance
in month 2 less 2% underperformance in month 1). Where
PERFORMANCE FEES the performance of the investor’s units in the Fund does not
Microequities Asset Management will be entitled to receive exceed the hurdle, performance fees are not charged against
a 20% performance fee of the aggregate outperformance the investor’s units. The High Water Mark is in respect of each
of each investor’s units (net of management fees and individual Unit in the Fund. It should be noted that the Trustee
administration costs, and before performance fees are at its sole discretion may reset The High Water Mark.
deducted) of the performance hurdle. The performance
fee is calculated, accrued and paid monthly.

DEEP VALUE MICROCAP FUND | INFORMATION MEMORANDUM | PG 11

UNITS IN THE FUND

VALUATION OF FUND ASSETS

The net asset value (NAV) of the Fund is calculated by
deducting the liabilities of the Fund from the value of its assets.
In line with market practice, Microequities Asset Management The valuation of the Fund is
may determine valuation methods and policies for each
category of asset and may change these methods and policies calculated monthly on the
from time to time. Unless determined otherwise, the value
of an asset will be its last closing sale price. The values of last closing price on or before
liabilities include all significant accrued income and expenses
that are due and payable to or from the Fund. The valuation of the last business day of the
the Fund is calculated monthly on the last closing price on or
before the last business day of the relevant month. relevant month.
UNIT PRICING
The unit price of a unit in the Fund is calculated by dividing
the net asset value (NAV) of the Fund by the number of units
on issue at the time. Unit prices in the Fund are calculated INCOME DISTRIBUTION AND
monthly on the day of the valuation of the Fund assets.
REINVESTMENT
ISSUE AND REDEMPTION PRICE Microequities Deep Value Microcap Fund is not a tax paying
The issue and redemption prices for units in the Fund are entity under the present law as the Trustee must distribute
calculated by adding or subtracting a transaction cost all of the income of the Fund in each financial year. Income
allowance from the unit price. The issue and redemption and any net realised capital gains are generally distributed
price for units is based on the unit price for the Fund. annually and are usually paid after June 30. Microequities
Asset Management has a policy of automatically reinvesting
The Issue price will be the unit price on the day the units distributions as additional units in the Fund, although it
are issued, plus the transaction cost allowance. may choose at times to pay these distributions in cash at
The Redemption price will be the unit price on the day the its discretion.
units are redeemed, less the transaction cost allowance.

TRANSACTION COST ALLOWANCE

The Fund may incur transaction costs associated with
buying and selling the underlying investments of the Fund.
These include expenses such as brokerage paid on share
transactions. Transaction costs are deducted from the
issue and redemption prices of units in the Fund to seek to
fairly allocate transaction costs to all investors in the Fund.
The difference between the issue and redemption price is
sometimes referred to as a “Buy/Sell Spread”.
The indicative Buy/Sell Spread for the Fund is set out below.
This may be amended at any time by Microequities Asset
Management at its absolute discretion.

Buy +0.40%

Sell -0.40%

DEEP VALUE MICROCAP FUND | INFORMATION MEMORANDUM | PG 12

TAXATION

TAXATION
The tax information provided in this IM is intended to be a
brief guide only and should not be relied upon as a complete
statement of all relevant laws. We strongly recommend Under existing Australian tax
that potential investors read this IM in its entirety and seek
independent professional advice as to the financial, taxation legislation, no tax is payable by
and other implications of investing in the Fund.
Under existing Australian tax legislation, no tax is payable by
the Fund, as all taxable income
the Fund, as all taxable income including net capital gains of
the Fund is distributed to investors each year. Taxable income
including net capital gains of the
distributed, including reinvested distributions, forms part of the
assessable income of investors in the year of entitlement.
Fund is distributed to investors
The tax an investor in the Fund may pay depends on, among each year.
other things, the type of distributions made to the investor.
Distributions can be made up of income (such as dividends
and interest), net capital gains, tax credits (such as franking
credits attached to dividend income and credits for tax
paid on foreign income). Some distributions may not need
to be included in the investor’s tax return but will generally TAX REPORTING
reduce the cost base of the investments for capital gains tax After the end of the financial year, Microequities Asset
purposes. Management will send tax statements to investors. The
investor is not obliged to provide a Tax File Number (TFN) or
GOODS AND SERVICES TAX (GST) Australian Business Number (ABN) notification, but if neither
GST will not be imposed on the application for, or withdrawal is provided, and a valid exemption is not claimed, we are
of, units in the Fund. However, it will be charged on the required to deduct tax from investor’s distributions at the
price of most purchases made by the Fund in carrying out highest marginal tax rate, plus the Medicare levy, to meet
its investment activities as well as any management fees Australian Taxation Office requirements. Australian companies
payable by the Fund, and reimbursable expenses. The Fund and other entities that invest in the course of their registered
may be entitled to claim a refund for any Reduced Input Tax business can supply their ABN instead of their TFN to
Credits (RITC) for part of the GST included in the price of most Microequities Asset Management.
purchases.

TAX ON WITHDRAWLS KEEPING INVESTORS INFORMED

Partial or full withdrawals from the Fund will be treated as
Microequities Asset Management will provide
disposal of investments for tax purposes and the investor
investors in the Fund with the following information
may be subject to Capital Gains Tax (CGT). If the investor
is an individual, and the investor holds the investments for • Confirmation of transactions
more than 12 months, the investor may be entitled to a CGT
concession that can reduce the investor’s CGT liability by • Transaction statements at least annually
50%. Other taxpayers (for example, complying superannuation • Monthly reports on the performance of the Fund, an
funds) may be entitled to a 33.33% CGT concession provided economic and market overview, and Fund highlights
the investments are held for more than 12 months. We strongly
recommend that potential investors read this IM in its entirety • A tax report to help with tax return at financial
and seek independent professional advice as to the financial, year-end
taxation and other implications of investing in the Fund.

DEEP VALUE MICROCAP FUND | INFORMATION MEMORANDUM | PG 13

SUMMARY OF THE TRUST DEED

SUMMARY OF TRUST DEED

The Microequities Deep Value Microcap Fund (“Fund”) is
established by a deed (“Trust Deed”), which provides the
framework for its operation, as well as setting out certain Microequities Asset Management
rights, duties and obligations of Microequities Asset
Management as the trustee (“Trustee”). The principal provisions has not attempted to summarise
of the Trust Deed include those dealing with:
• the duration of the Fund;
all of the provisions of the Trust
• the classes of units; Deed. Unit holders should refer
• the duties and obligations of, and their delegation by,
Microequities Asset Management;
to the Trust Deed for more
• investment, borrowing and valuation powers and detailed information about the
procedure;
operation of the Fund.
• fees and recoverable expenses;
• the limiting of Microequities Asset Management liability
and its right of indemnification;
• the rights of investors;
Microequities Asset Management has endeavoured to
• the calling and conducting of unit holder meetings;
explain the operation of the Fund in general terms in this
• the calculation, entitlement to and distribution of income Information Memorandum. Accordingly, it has summarised
and proceeds of the Fund on termination; and paraphrased important provisions of the Trust Deed.
Microequities Asset Management has not attempted to
• unit issue and redemption mechanisms;
summarise all of the provisions of the Trust Deed. Unit holders
• and modification of the Trust Deed should refer to the Trust Deed for more detailed information
about the operation of the Fund. Copies of the Trust Deed are
The Trust Deed of the Fund binds all unit holders in the
available from Microequities Asset Management on request.
Fund. With the exception of where the Trust Deed provides
Microequities Asset Management with a discretion to modify
its effect (for example, that Microequities Asset Management
may charge lower fees than the Trust Deed allows), the
provisions of the Trust Deed will prevail over statements in this
Information Memorandum, should there be any inconsistency.
Microequities Asset Management, as Trustee, may alter or
modify the Trust Deed in accordance with the provisions of the
Trust Deed and any relevant provisions of the Corporations
Act. Amendments to the law governing managed investment
schemes and any relevant ASIC relief may also affect
provisions of the Trust Deed.

DEEP VALUE MICROCAP FUND | INFORMATION MEMORANDUM | PG 14

INVESTING IN THE FUND

MINIMUM INVESTMENT
In line with market practice, Microequities Asset Management have imposed a minimum initial investment requirement of
A$50,000 for all investors who are wholesale or other qualifying investors and a minimum initial investment of A$500,000 for all
investors who would otherwise be required to invest A$500,000 in order to fall within the definition of a wholesale client under the
Corporations Act (as described below).
Additional investments by an existing wholesale investor must be at a minimum of A$20,000. Similarly redemptions in the Fund
must be at a minimum of A$20,000. An investor must maintain the minimum investment amount during the period of investment
in the Fund. If the value of an investor’s units in the Fund falls below the minimum investment amount, Microequities Asset
Management may redeem the investor’s remaining units in the Fund and pay the redemption proceeds to the investor.

WHO CAN INVEST IN THE FUND?

The Microequities Deep Value Microcap Fund is a wholesale fund. Unless otherwise determined by Microequities Asset
Management in its sole and unfettered discretion, only wholesale clients within the meaning of section 761G(7) and 761GA (7)
of the Corporations Act may invest in the Fund.
Accordingly, Microequities Asset Management will only accept investments in the Fund from an investor who falls within the
definition of a Wholesale Client as outlined below:
An investor is a wholesale client if:
A. the person invests an initial amount of $500,000 or more; or
B. the person acquires units in the Fund for use other than in connection with a business that is not a small business; or
C. the person has net assets of at least $2.5 million. The investor must provide Microequities Asset Management with a copy
of a qualified accountant’s certificate dated within the preceding six (6) months that certifies that they own the required net
assets; or
D. the person earned at least $250,000 (gross income) a year for each of the last two (2) financial years. The investor must
provide Microequities Asset Management with a copy of a qualified accountant’s certificate dated within the preceding six (6)
months that certifies the required level of income; or
E. the person qualifies as a “professional investor” within the meaning of the Corporations Act, including:
a. a person who is a financial services licensee and is acting as principal; or
b. a person who is a trustee of;
i. a superannuation fund; or
ii. an approved deposit fund; or
iii. a pooled superannuation trust; or
iv. a public sector superannuation scheme,
v. within the meaning of the Superannuation Industry (Supervision) Act 1993 and the fund, trust or scheme has net assets
of at least $10 million; or
c. or a person that is a body regulated by the Australian Prudential Regulation Authority, other than the trustee referred to
above; or
d. a person that controls at least $10 million (including any amount held by an associate or under a trust that the person
manages); or
e. a person that is a body registered under the Financial Corporations Act 1974; or

DEEP VALUE MICROCAP FUND | INFORMATION MEMORANDUM | PG 15

INVESTING IN THE FUND

f. a person that is a listed entity, or a related body corporate of a listed entity; or

g. a person that is an exempt public authority within the meaning of the Corporations Act; or
h. a person that is a body corporate, or an unincorporated body, that:
i. carries on a business of investment in financial products, interest in land or other investments;
ii. and; for those purposes, invests funds received (directly or indirectly) following an offer or invitation to the public, the
terms of which provided for the funds subscribed to be invested for those purposes; or
iii. a person that is a foreign entity that, if established or incorporated in Australia, would be covered by one of the above; or
F. the person qualifies as a “sophisticated investor” within the meaning of the Corporations Act, where:
a. Microequities Asset Management is satisfied on reasonable grounds that the other person has previous experience
in using financial services and investing in financial products that allows the client to assess:
i. the merits of the product or service; and
ii. the value of the product or service; and
iii. the risks associated with holding the product; and
iv. the person’s own information needs; and
v. the adequacy of the information given by Microequities Asset Management the product issuer; and
b. Microequities Asset Management gives the person before, or at the time when, the product is provided a written statement
of the Microequities Asset Management’s reasons for being satisfied as to those matters; and
c. the person signs a written acknowledgment before, or at the time when, the product is provided that:
i. Microequities Asset Management has not given the person a Product Disclosure Statement; and
ii. Microequities Asset Management has not given the person any other document that would be required to be given to
the person under this Chapter if the product or service were provided to the person as a retail client; and
iii. Microequities Asset Management does not have any other obligation to the person under this Chapter that Microequities
Asset Management would have if the product or service were provided to the client as a retail client.
References to the word “person” above include references to corporations and institutional investors.

OTHER QUALIFYING INVESTORS

Microequities Asset Management may also issue units in the Fund to other investors in circumstances where disclosure
is not required under Division 2 of Part 7.9 of the Corporations Act. These include the making of personal offers to:
a. not more than twenty (20) investors in any twelve (12) month period; and
b. such personal offers do not result in more than $2,000,000 being raised in any twelve (12) month period.
References to the word “person” above include references to corporations and institutional investors.
The above is only a summary of the relevant provisions of the Corporations Act. An investor may contact their professional
advisors or Microequities Asset Management if the investor would like any assistance in determining whether the investor
is a wholesale client or other qualifying investor under the Corporations Act.

DEEP VALUE MICROCAP FUND | INFORMATION MEMORANDUM | PG 16

HOW TO INVEST

APPLICATIONS FOR UNITS

Initial investments in units of the Fund must be accompanied
by a completed application form which is attached to this
IM. Units will only be issued (subject to acceptance by Initial investments in units of the
Microequities Asset Management) on the first Application Day
after receipt of the completed application form together with Fund must be accompanied by a
cleared funds at least 14 days prior.
“Application Days” are the first business day following the
completed application form which
valuation of the Fund’s assets and the striking of a unit price in
the relevant month. The relevant value against which the issue
is attached to this IM.
prices of units will be calculated will be the Net Asset Value of
the Fund on the day prior to the relevant Application Day.

REDEMPTION OF UNITS
Units in the Fund will only be permitted to be redeemed PRIVACY
monthly, on the Redemption Day. A unit holder wishing to The privacy of your personal information is important to us.
redeem units must give Microequities Asset Management at Federal Privacy legislation regulates the use of your personal
least 15 days prior written notice. Any redemption request information. Microequities Asset Management will hold your
received less than 15 days before the next Redemption personal information in a secure manner and will not disclose
Day will be treated as being applicable to the next following it to third parties without your permission. Only information
Redemption Day. Redemptions will generally be paid within that is necessary in connection with this offer is being
30 days following the applicable Redemption Day. requested. In order to fulfill obligations under the Privacy Act,
“Redemption Days” are the first business day following the the necessary security measures have been put in place to
valuation of the Fund’s assets and the striking of a unit price minimize the risk of unauthorized access to or loss of personal
in the relevant month. The relevant value against which the information. We collect personal information so that we may
redemption prices of units will be calculated will be the Net provide you with the products and services you request as well
Asset Value of the Fund on the day prior to the relevant as information on other products and services offered by us.
Redemption Day. We may disclose personal information to other parties
(confidentiality arrangements apply) for certain purposes
ANTI-MONEY LAUNDERING AND that we outsource, including administration and audit.
COUNTER-TERRORISM Your personal information may be disclosed to these third
parties in such circumstances or otherwise to enable
In order to meet our obligations under anti-money laundering,
Microequities Asset Management to efficiently operate
counter-terrorism legislation or taxation legislation, we may
the Fund.
require further information from you as to identity, the source
of your funds and similar matters. Microequities are required to If you used a financial adviser, who recommended your
verify that information by sighting appropriate documentation. investment in the Fund (as indicated on your application form),
Records of the information obtained will be kept and may be details of your investment will be provided to him/her.
required by law to be disclosed. Otherwise the information
We aim to ensure that the personal information we retain about
will be kept confidential. By applying for Units through this IM,
you is accurate, complete and up-to-date. If you provide us
you also agree that Microequities may in its absolute discretion
with incomplete or inaccurate information, we may not be able
determine not to issue Units to you, may cancel Units which
to provide you with the products or services you are seeking.
have been issued to you or may redeem any Units issued
If you have concerns about the completeness or accuracy of
to you if Microequities believe such action to be necessary
the information we have about you or would like to request
or desirable in light of its obligations under the Anti-Money
access or amendment to your information, simply contact
Laundering and Counter-Terrorism Financing Act 2006
Microequities Asset Management on (02) 9231 6169.
(Commonwealth) or related legislation.
You will be taken to agree to the collection, use and disclosure
of your personal information as set out above when you make
an investment in the Fund.

DEEP VALUE MICROCAP FUND | INFORMATION MEMORANDUM | PG 17

GLOSSARY OF TERMS IN THIS INFORMATION MEMORANDUM

‘A$’ means Australian Dollars ‘Microcap’ means a company with a market capitalisation
of approximately $250 million or under
‘AFSL’ means Australian Financial Services License
‘Manager’ means Microequities Asset Management Pty Ltd
‘Application Days’ means business days on which
applications are processed ‘Minimum Holding’ means the minimum value of an
investment in the Fund permitted by one Unit Holder
‘Application Form’ means application form attached to the
Information Memorandum ‘Minimum Reinvestment’ means the minimum value of
additional investments in the Fund
‘Application Price’ The price payable for units in the Fund
‘NAV’ means net asset value
‘ASIC’ means Australian Securities and Investments
Commission. ‘Portfolio’ means the investments made by the Fund in listed
and unlisted companies’ shares
‘ASX’ means Australian Securities Exchange
‘Redemption’ means the buy back of a unit or units in the
‘Bank Account’ means an account with an Australian
Fund
Authorised Approved Deposit Taking Institution (which includes
a building society and credit union) ‘Redemption Price’ means the price at which units are
redeemed by the Fund
‘Business Day’ means any day other than a Saturday or
Sunday on which majority of trading banks are open for ‘The Act’ means the Corporations Act 2001
general banking business in NSW
‘Trust Deed’ means the Deed establishing the Microequities
‘Current value of the Fund’ means the market value of the Deep Value Microcap Fund and executed on February 16th
Fund’s assets less certain liabilities 2009
‘Custodian’ means Equitas Nominees Pty Ltd (a 100% ‘Trustee’, ‘manager’, ‘we’, ‘our’, or ‘us’ means
owned subsidiary of Macquarie Group), responsible for Microequities Asset Management Pty Ltd
safeguarding the Funds financial assets
‘Unit’ means an individual interest in the Fund as prescribed
‘Qualifying Investor’ means wholesale investor as defined in the Trust Deed
in section 761G & 761GA of the Corporations Act 2001
‘Unit Pricing Day’ means the last business day of the month
‘Fund’ means the Microequities Deep Value Microcap Fund
‘Unitholder’ means a person who completes and submits to
‘GST’ means Goods & Services Tax the Trustee an application form and subscription monies for
the Microequities Deep Value Microcap Fund in accordance
‘IM’ means information memorandum
with the terms of this Information Memorandum whose
‘Issue Price’ means the price at which units are issued in application has been accepted and who is registered as a
the Fund holder of units under the Trust Deed
‘Listed Securities’ means securities that are quoted on ‘Units’ means units issued in the Microequities Deep Value
the ASX Microcap Fund

DEEP VALUE MICROCAP FUND | INFORMATION MEMORANDUM | PG 18

 TRUSTEE & MANAGER
Microequities Asset Management Pty Ltd
Level 7, 109 Pitt Street, Sydney NSW 2000, Australia
P: (61 2) 9231 6169
APPLICATION FORM F: (61 2) 9475 1156
E: [email protected]
www.microequities.com.au

MICROEQUITIES APPLICATION TYPE

APIR® CODE: MIC0001AU ISIN: AU60MIC00019
Please complete this form clearly. Initial any
corrections. If you have obtained this Information Initial Investment Additional Investment
Memorandum electronically, you should print all the
pages and this application form.

1. INVESTOR DETAILS Please complete either the Individual/Joint Applicant (Please use BLOCK letters)

INVESTOR 1 INVESTOR 2

First Name First Name

Last Name Last Name

Tax File Number/Exemption Tax File Number/Exemption

Date of Birth Date of Birth

For joint holdings, please indicate whether:

Both applicants to sign Either applicant to sign (If no selection is made “Both applicants to sign” will be assumed)

Company/Trust/Superannuation Fund
Name

Contact person Tax File Number

Title ACN/ARBN

v105

DEEP VALUE MICROCAP FUND | INFORMATION MEMORANDUM | PG 19

APPLICATION FORM

2. INVESTOR CONTACT DETAILS

PO Box/Street Address (line 1) Home Number

PO Box/Street Address (line 2) Business Number

City Mobile

State Postcode Fax

Email

3. INVESTMENT DETAILS

The minimum initial investment is A$ 50,000.00

I wish to invest:

In the following manner:

(please tick
Cheque Electronic transfer method of payment

PAYING BY CHEQUE ELECTRONIC TRANSFER

Please Make Cheques payable in Australian dollars to: For Electronic Transfer instructions please call (02) 9231 6169
or email [email protected]
“Microequities Asset Management Pty Ltd ATF Microequities
Deep Value Microcap Fund” Please note: If you choose to make payment by electronic
transfer or bank deposit, please identify yourself by inserting
Cross the cheque “not negotiable”, mail to Suite 702,
the investor(s) name in the narrative when you make
109 Pitt St, Sydney NSW 2000.
the transfer.

v105

DEEP VALUE MICROCAP FUND | INFORMATION MEMORANDUM | PG 20

APPLICATION FORM

Have you just paid us by electronic transfer?

If so, please record your receipt and transfer details below so we can promptly track the funds and credit it to your account.

From which financial institution?

Your receipt number?

Date of transfer

4. DISTRIBUTION AND WITHDRAWAL ACCOUNT DETAILS

Please supply here the account details for where you would like your distributions and withdrawals paid.
The account must be in the Investor’s name.

Financial Institution

Branch

BSB Account Number

Account Name

v105

DEEP VALUE MICROCAP FUND | INFORMATION MEMORANDUM | PG 21

APPLICATION FORM

5. IDENTIFICATION

□□ I have provided certified copies of three (3) forms of identification including one (1) photo ID (Drivers Licence, Passport,
Medicare card) for each individual investor/Trustee/Director or beneficiary in a Trust

6. TO BE AN ELIGIBLE INVESTOR,YOU MUST SATISFY ONE OF THESE CRITERIA. I AM ELIGIBLE

TO INVEST IN THE FUND BECAUSE AT LEAST ONE OF THE FOLLOWING CRITERIA HAS BEEN
MET. (PLEASE TICK ONE):

□□ Investing at least A$500,000 at one time; □□ Carry on a business of investment in financial products,
interests in land or other investments and invests funds
□□ Be a business that is not a small business (that is, received (directly or indirectly) following an offer or
companies that employ more than 20 people or
invitation to the public, the terms of which provided for
100 people if they are a manufacturer);
the Funds subscribed to be invested for those purposes;
□□ Hold an Australian Financial Services Licence; □□ Be a foreign entity that, if established or incorporated
□□ Control at least A$10 million (including any amount in Australia, would be covered by one of the preceding
held by an associate or under a trust that the paragraphs; or
Applicant(s) manages);
□□ Provide the Trustee with an accountant certificate (in form
□□ Be regulated by the Australian Prudential Regulatory annexed) which is less than 6 months old indicating that
Authority other than a trustee of an Australian the Applicant has either net assets of at least $2.5 million
superannuation fund, approved deposit fund, pooled or a gross income for each of the last 2 financial years of
superannuation trust or public sector superannuation at least $250,000 a year.
scheme;
□□ Microequities Asset Management is satisfied on
□□ Be the trustee of an Australian superannuation fund, reasonable grounds that Investor qualifies as a
approved deposit fund, pooled superannuation trust or “sophisticated investor” and has given the Investor a
public sector superannuation scheme with assets at least written statement to that effect and the Investor has
A$10 million; signed an acknowledgment.
□□ Be a body registered under the Financial Corporations □□ Microequities Asset Management has made a personal
Act 1974 of the Commonwealth of Australia; offer where disclosure is not required under Division 2
of Part 7.9 of the Corporations Act. These include the
□□ Be an exempt public authority; making of personal offers to: (a) not more than twenty (20)
□□ Be listed or a Related Body Corporate of a investors in any twelve (12) month period; and (b) such
listed entity; personal offers do not result in more than $2,000,000
being raised in any twelve (12) month period as defined
□□ A professional investor or a wholly-owned subsidiary in Section 1012E of the Corporations Act.
of a professional investor that is a body corporate;

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DEEP VALUE MICROCAP FUND | INFORMATION MEMORANDUM | PG 22

APPLICATION FORM

7. DECLARATION I/We have noted the withdrawal (redemption) provisions

in the Information Memorandum.
I/We declare that: I/We further acknowledge that Microequities Asset
All details provided by me/us in this application are true Management Pty Limited or their members, directors,
and correct. employees, consultants, appointed investment managers
(if any), advisers or agents do not guarantee the repayment of
I/We have received and read a copy of the Information capital invested in the Fund, the payment of income from the
Memorandum (dated July 1st, 2010) and agree to the offer Fund or the performance of the Fund or an investment in the
contained in it and to be bound by its Trust Deed and any Fund generally.
other additional obligations or restrictions contained in the
Information Memorandum. Joint Applicants must both sign.

I/We acknowledge that investments in the Microequities Applications under a Power of Attorney must be accompanied
Deep Value Microcap Fund are subject to investment risk, by a certified copy of the Power.
including possible delays in repayments and loss of income
or principal invested.

SIGNATURE SIGNATURE

Print Name Print Name

Director Secretary Director Secretary

Date Date

IMPORTANT
Microequities Asset Management Pty Ltd may in its absolute discretion refuse any applications for units in whole or part and
need not give reasons. The collection of your TFN is authorised by Australian Law. You do not have to quote your TFN however
if you choose not to you may be charged tax at the highest marginal rate.

v105

DEEP VALUE MICROCAP FUND | INFORMATION MEMORANDUM | PG 23

APPLICATION FORM

CERTIFICATE BY A QUALIFIED ACCOUNTANT

For purposes of Chapter 7 of the Corporations act 2001.
Please arrange for your accountant to complete if you are applying as a wholesale client.
To the Trustee of the Microequities Deep Value Microcap Fund
By email: [email protected] By fax: + 61 2 9475 1156
By mail: Suite 702, 109 Pitt Street, Sydney NSW 2000, Australia

<Insert investor’s name>

<Insert investor’s address>

I certify that the person or entity whose details are set out above:
□□ has net assets of at least $2.5 million; or
□□ has gross income for each of the last 2 financial years of at least $250,000.
I belong to: (insert name of professional body) My membership designation from this professional body is

I comply with this body’s continuing professional education requirements.

I hereby certify that I am a Qualified Accountant as defined in the section 88B of the Corporations Act 2001.

(Print name)

SIGNATURE

Date

ACCOUNTANT CONTACT DETAILS

Organisation Address

Telephone

Fax

Email address State Post code

DEEP VALUE MICROCAP FUND | INFORMATION MEMORANDUM | PG 24

DIRECTORY

TRUSTEE & MANAGER

MICROEQUITIES ASSET MANAGEMENT PTY LTD
Level 7, 109 Pitt Street
Sydney NSW 2000, Australia
PH: (61 2) 9231 6169
FAX: (61 2) 94751156
[email protected]
www.microequities.com.au

CUSTODIAN
MACQUARIE GROUP
1 Shelley Street
Sydney NSW 2000, Australia
www.macquarie.com

AUDITOR
PKF CHARTERED ACCOUNTANTS
Level 10, 1 Margaret Street
Sydney NSW 2000, Australia
www.pkf.com.au

LEGAL SERVICES
CLAYTON UTZ
1 O’Connell Street
Sydney NSW 2000, Australia
www.claytonutz.com

APIR CODE: MIC0001AU

ISIN CODE: AU60MIC00019
DEEP VALUE MICROCAP FUND