Notice to the unitholders of SEB SICAV 2 – SEB Eastern Europe Small and Mid Cap Fund
SEB SICAV 2 – SEB Eastern Europe Small and Mid Cap Fund will be split into two sub-funds. The split means that the holdings in the initial sub-fund, SEB SICAV 2 – SEB Eastern Europe Small and Mid Cap Fund, will retain its liquid assets. However, illiquid assets, the Russian holdings currently unable to be sold, will be transferred to a new sub-fund SEB SICAV 2 – SEB Eastern Europe Small and Mid Cap Fund 2.
Unitholders of SEB Eastern Europe Small and Mid Cap Fund who do not wish to be included in the split are entitled to request the redemption of their fund units by submitting a sales order free of charge to the bank until 8 February 2023 14.00. Unitholders who do not redeem their units in sub fund before the mentioned cut-off time, will automatically participate in the split.
The split will take effect on 10 February 2023.
Through the split, unitholders will receive sub-fund shares in the two sub-funds, and the total value of the sub fund shares in the two sub funds corresponds to the value of the existing holding.
Why is the fund being split?
The reason for the sub-fund's split is that the part of the sub-fund's holdings listed on the Moscow Stock Exchange are currently unable to be sold. This has been the case since the outbreak of war in Ukraine and the subsequent closure of the Moscow Stock Exchange on 25 February 2022.
As previously announced, the sub-fund closed for trading on 28 February 2022, as it was not possible to make a reliable valuation of the Russian holdings. On 28 March 2022, however, the sub-fund was opened for redemption, to give shareholders the opportunity to sell shares.
A fundamental principle for UCITS funds is that they must be open for subscriptions and redemption and contain liquid assets – criteria that the sub-fund currently does not meet.
SEB SICAV 2 – SEB Eastern Europe Small and Mid Cap Fund, with the liquid holdings, will continue to be managed by SEB Investment Management AB. That sub-fund will continue to be managed in accordance with the original investment strategy and will again be open for both the subscription and redemption of sub-fund shares.
Change of name and benchmark of the existing Sub-Fund
In connection with the split, the remaining sub-fund’s rules will be changed, so that Russia and Belarus are not included in the list of countries in which the sub-fund may invest. Consequently, the sub-fund will also change its name to SEB SICAV 2 – SEB Eastern Europe Small and Mid Cap ex. Russia Fund and change its benchmark from MSCI Emerging Markets Europe 10/40 Index to MSCI Emerging Markets Europe 10/40 Index ex Russia.
Shareholders of SEB SICAV 2 – SEB Eastern Europe Small and Mid Cap ex. Russia Fund will retain the shares in that original sub-fund, while obtaining new shares in the newly created sub-fund to represent the ownership of the illiquid Russian assets. By dividing these assets, the original sub-fund will be able to open for subscriptions and operate as a normal UCITS fund without the risk of shareholders suffering from any potential further loss.
All the fees related to the new sub-fund being put into liquidation will be borne by SEB Investment Management AB, and the shareholders will not bear any fees in relation to the ownership of the shares in the new sub-fund.
- 8 February 2023: The last opportunity to sell shares in the sub-fund, before the split is carried out, is before the cut-off time on this date. Redemptions by this date are free of charge.
- 10 February 2023: The split is implemented.
- 13 February 2023: SEB SICAV 2 – SEB Eastern Europe Small and Mid Cap ex. Russia Fund opens for both subscriptions and redemptions.
Fund manager has prepared for more information Questions and Answers document which can be found here.
Detailed information about the split is available on the SEB Group webpage and upon request at the registered office of the Management Company. Product documentation for the sub-funds is available on www.sebgroup.lu.