ARCH Arc Capital

 

TIDMARCH 
 
RNS Number : 2873D 
ARC Capital Holdings Limited 
30 November 2009 
 

30 November 2009 
 
 
 
 
ARC Capital Holdings Limited 
 
 
Investing Policy 
 
 
ARC Capital Holdings Limited ("ARCH" or "the Company"), an AIM-quoted investment 
vehicle focused on China, is pleased to announce, in accordance with AIM Rule 8, 
its updated investing policy: 
 
 
1.Investment objective 
 
 
The Company's principal investment objective is to provide its shareholders with 
capital appreciation. The Company invests and holds equity, debt and other 
interests in listed and unlisted companies that are engaged in retailing, 
provide services that support the retail industry (such as consumer finance, 
distribution and logistics), manufacture or distribute consumer products or 
services, develop or manage property with a focus on retailing and other retail 
and consumer-related companies principally in China, Greater China and other 
countries in Asia. 
 
 
Investment Manager: 
ARCH is managed by ARC Capital Partners Limited, the Company's investment 
manager (the "Investment Manager"). More about the Investment Manager's 
management team is available here 
http://www.arch-fund.com/investor1_company.php. The Company's investment 
committee (the "Investment Committee") which is unanimously approved and 
appointed by the directors of the Investment Manager and approved by the board 
of directors of the Company (the "Board"), is responsible for considering and 
approving investment opportunities selected in accordance with the investment 
guidelines that the Investment Manager identifies as suitable for investment by 
the Company.  Details of the members of the Investment Committee are available 
here http://www.arch-fund.com/about4.php. 
 
 
2.    Investment strategy 
 
 
The Investment Manager has identified the following trends which it believes 
support the investment opportunities in the region: 
 
 
  *  Consolidation opportunities through acquisitions and trade sales in the 
  hypermarket and supermarket sectors, where a smaller chain is unable to grow due 
  to inadequate scale or poor management, but has an attractive footprint due to 
  the locations of the store network. 
 
 
 
  *  Due to historic regional variations and policy restrictions, there are very few 
  leading national brands in the PRC. However, as communications, travel and 
  inter-regional trade grow in modern China, an opportunity to back the growth and 
  expansion of leading regional brands or fledgling national brands to dominate 
  specific product or service categories. 
 
 
 
  *  With the rise of the shopping mall format, traditionally consisting of one or 
  more anchor tenants and a range of specialty retail chains, an opportunity to 
  back the entry or expansion of specialty retail chains with proven business 
  models catering to growing demand in product areas such as lifestyle products, 
  children's and baby products and services. 
 
 
 
  *  Opportunities to invest in and hold property assets which are deployed in the 
  retail and services sectors or spun off from existing retailing companies as PRC 
  companies learn to focus on investment returns rather than asset scale. 
 
 
 
  *  Service sectors that facilitate retail and distribution, such as consumer 
  finance, logistics and marketing and communications, present opportunities for 
  investment paralleling growth in the retail and consumer markets. 
 
 
 
3.Investing policy 
 
 
The Company adheres to the following investment policies and restrictions: 
 
 
Geographical Focus. At least 70 per cent. of the Company's gross assets will be 
invested in China. Up to a maximum of 30 per cent. of the Company's gross assets 
may also be invested in Greater China and other countries in Asia, should the 
Board consider that such investments offer potentially attractive returns. Any 
investment made in countries outside of Greater China must be approved by the 
Board. 
Company Focus. The Company targets (i) late stage companies with growth, back up 
or performance enhancement potential; and (ii) expansion stage companies with 
proven management and significant growth potential. 
Sector Focus. The Company invests primarily in listed and unlisted companies 
engaged in retailing, provide services that support the retail industry (such as 
consumer finance, distribution and logistics), manufacture or distribute 
consumer products or services, develop or manage property with a focus on 
retailing, and other retail and consumer-related firms. 
Investment Vehicle. The Company makes its investments either directly or through 
investee companies which are special purpose vehicles established specifically 
for each investment ("Investee Companies") or by way of co-investment with other 
reputable investors. The Company may also invest in other funds which themselves 
invest in the same target regions and sectors as the Company. 
Control of Investments. The Company seeks to own a controlling interest in its 
investments, either by owning a direct controlling participating interest in the 
company or by controlling the Investee Company through which the Investment is 
made. In the event the Company holds a minority interest in an Investee Company, 
it seeks to secure structured exit alternative and adequate minority protection 
rights. 
Realisation of Investments. The Company aims to realise individual investments 
within 2 to 5 years of investment when the Board, with the advice of the 
Investment Manager and the Investment Committee, believes the realisation would 
be in the best interests of the Company and fulfil its investment objective. The 
Company intends to affect exits through disposals of its interests in Investee 
Companies through trade sales to institutional and private investors, 
recapitalizations and initial public offerings. 
Board Approval. The Investment Manager manages the Company's portfolio on a day 
to day basis without recourse to the Board. 
 
 
Investment Size. The Investment Manager aims to achieve a balance in the 
Company's exposure to different sectors. Furthermore, no single investment may 
at the time of investment exceed 20 per cent. of the Company's Net Asset Value. 
Collective Investment Schemes and Cross-Holdings. The Company may invest not 
more than 20 per cent. of the Gross Asset Value of the Company in units or 
shares in collective investment schemes, in other listed closed-end investment 
funds or in other managed investment companies, including ones managed, operated 
or advised by the Investment Manager or an associate. 
Leverage. The Investment Manager may use leverage to enhance returns on 
individual investments provided any leverage or guarantee at the Company's level 
is approved by the Board in advance and provided further that such leverage is 
on a non-recourse basis to the Company. 
Securities Underwritten by the Investment Manager or an Associate. The Company's 
portfolio may be invested in securities of which an issue or offer for sale was 
underwritten, managed or arranged by the Investment Manager or an associate 
during the preceding twelve months. 
Options, Futures, Warrants and Contracts for Differences. Without the prior 
written approval of the Board, the Company's portfolio may not be invested in 
options, futures, warrants and contracts for differences provided that the 
Company may enter into derivative transactions as the Board and the Investment 
Manager deems appropriate but may only do so as a measure to safeguard the value 
of the Company's underlying assets, hedge against currency rate fluctuations or 
to fix the cost of its liabilities. 
 
 
Uninvested Funds. Cash pending investment, reinvestment or distribution will be 
placed in bank deposits, bonds or government-issued treasury securities of the 
United States and its agencies or in local money market funds for the purpose of 
protecting the capital value of the Company's cash assets. In order to hedge 
against interest rate risk or currency risk, the Company may, where appropriate, 
also enter into forward interest rate agreements, forward currency agreements, 
interest rate and bond futures contracts and interest rate swaps and purchase 
and write (sell) put or call options on interest rates and put or call options 
on futures on interest rates. 
 
 
Distribution Policy. The Company's investment objective is focused primarily on 
capital appreciation by investing in a diversified portfolio of retailing, 
consumer products and services companies principally in China. The directors of 
the Company intend and reserve the right, but are not obliged, to provide 
returns to shareholders by either making dividend distributions, market 
purchases of ordinary shares of the Company and/or by establishing a buyback 
programme. 
 
4.   Life of Company 
The Company does not have a fixed life but the Board considers it desirable that 
shareholders should have the opportunity to review the future of the Company at 
appropriate intervals. Shortly before the seventh anniversary of the Company's 
admission to trading on AIM, the Board will convene a shareholders meeting at 
which a resolution will be proposed to continue the Company. If the resolution 
is passed, the Board intends that a similar resolution will be proposed at an 
extraordinary general meeting to be convened each fifth subsequent year 
thereafter. If the resolution is not passed, the Directors will be required to 
formulate proposals to be put to shareholders to reorganise, unitise or 
reconstruct the Company or for shareholders to exercise their power to wind up 
the Company, which can be done at any time. 
For more information, please contact: 
+-------------------------------------+-------------------------------------+ 
| MANAGER:                            | LEGAL COUNSEL:                      | 
| Allan Liu, Managing Partner         | Jon Lewis, General Counsel          | 
| ARC Capital Partners Limited        | Pacific Alliance Group              | 
| 13/F, St. John's Building           | 16/F, St. John's Building           | 
| 33 Garden Road                      | 33 Garden Road                      | 
| Central, Hong Kong                  | Central, Hong Kong                  | 
| Tel: (852) 3115 0243                | Tel: (852) 2918 0088                | 
| Fax: (852) 3115 0244                | Fax: (852) 2918 0881                | 
| aliu@pacific-alliance.com           | jlewis@pacific-alliance.com         | 
|                                     |                                     | 
+-------------------------------------+-------------------------------------+ 
| BROKER:                             | NOMINATED ADVISER:                  | 
| Hiroshi Funaki                      | Philip Secrett                      | 
| LCF Edmond de Rothschild Securities | Grant Thornton Corporate Finance    | 
| Tel: (44) 20 7845 5960              | Tel: (44) 20 7383 5100              | 
| Fax: (44) 20 7845 5961              | Philip.J.Secrett@gtuk.com           | 
| funds@lcfr.co.uk                    |                                     | 
|                                     |                                     | 
+-------------------------------------+-------------------------------------+ 
| MEDIA RELATIONS:                    | MEDIA RELATIONS:                    | 
| Sophie Hoggarth                     | Andrew Walton/David Cranmer         | 
| Pacific Alliance Group              | Financial Dynamics, London          | 
| Tel: (86) 21 6288 3788              | Tel: (44) 20 7269 7217              | 
| shoggarth@pacific-alliance.com      |                                     | 
|                                     | Alastair Hetherington/Christine     | 
|                                     | Wood                                | 
|                                     | Financial Dynamics, Asia            | 
|                                     | Tel: (852) 3716 9800                | 
|                                     |                                     | 
+-------------------------------------+-------------------------------------+ 
 
 
 
 
Notes to editors: 
 
 
ARC Capital Holdings Limited ("ARCH") (AIM: ARCH) is a closed-end investment 
company with net assets of US$560 million as at 31 October 2009. ARCH was 
admitted to trading on the AIM Market of the London Stock Exchange in June 2006. 
ARCH makes and holds investments in the retail, consumer goods and consumer 
services sectors, principally in China but also in neighboring Asian countries. 
Target investments include regional hypermarkets and supermarkets, dominant 
consumer brands, specialty retail chains, retail property assets and retail and 
consumer service providers. 
 
 
For more information about ARCH, please visit: www.arch-fund.com 
 
 
ARC Capital Holdings Limited is a member of Pacific Alliance, the Asian 
alternative investment fund management group. 
 
 
For more information about Pacific Alliance, please visit: 
www.pacific-alliance.com 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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