26 June 2024
Macau Property Opportunities
Fund Limited
(the
"Company")
Changes to Investment
Management Agreement
As announced on 21 December 2023,
following approval of the continuation of the Company at the AGM,
the Board has been in discussions with Sniper Capital Limited, the
Company's Investment Manager ("Sniper" or the "Manager"), to reach agreement on the
investment management fee arrangements going forwards.
During the course of 2023 as Macau
transitioned away from the strict COVID-19 restrictions imposed by
the Chinese government, the economy gained momentum, driven by
strong gaming revenues and increased visitor numbers. Despite this
broadly positive backdrop, the property market - especially the
higher-end luxury segment - was slower to respond as favourably as
other areas of the economy, as a degree of caution remained.
Accordingly, while progress with disposals was made during the
year, the Board deemed it necessary to extend the management
arrangements with Sniper whilst repositioning the fees payable to
incentivise the Manager to achieve substantial sales during 2024.
The Board's view remains unchanged that the Manager's knowledge of
the Company's portfolio of assets and the Macau market is key to
the successful delivery of the divestment strategy.
The Board has agreed to amend the
terms of the Investment Management Agreement (the "Agreement") with the Manager, with
effect (retrospectively) from 1 January 2024 as follows:
· From 1
January 2024 and continuing during the remainder of calendar year
2024, a management fee of US$100,000 per month will continue to be
payable to the Manager, with the realisation fee continuing on the
same terms as in 2023 and using the 30 September 2019 valuation
basis for determining the realisation fee hurdle.
· Fees
continue to be subject to an overall cap per annum set at 4.99% of
the lower of market capitalisation and net asset value (the
"Cap"). This is based on
the market capitalisation on the day immediately prior to signing
the amendment agreement in respect of calendar year 2024 and will
be reset for each of the following years based on the market
capitalisation or net asset value (as applicable) at close of
business on the last business day of the previous calendar year.
The Cap for 2024 is accordingly set at US$1,439,816.
· At the
option of the Board, the monthly management fee may be reduced to
US$80,000 per month in respect of any monthly period beginning on
or after 1 January 2025, with one month's advance notice given to
the Manager.
· For
calendar year 2025 and thereafter, the realisation fee hurdle will
be rebased by reference to the carrying value of the Company's
portfolio of assets as at 31 December 2024 (if available), but
subject to divestment hurdles being reached in 2024, in line with
an agreed divestment plan.
· For
calendar year 2025 and thereafter, the realisation fee will be 2.5%
of the net realisation proceeds if the sale price achieved is
greater than 90% of the carrying value, with the removal of the 80%
- 90% performance hurdle band.
The Agreement (as amended) will
continue throughout the divestment period, but with effect from 1
January 2025, the notice period to terminate the Agreement by each
party will be reduced to 3 months.
The Board considers the arrangements
to be fair given the context of the continued challenging property
market seen during 2023. They are intended to ensure that the
Manager is able to continue to operate and remains incentivised to
deliver realisations on behalf of the Company and its shareholders.
The changes to the fee arrangements constitute a smaller related
party transaction under the Listing Rules, and the Company has
obtained written confirmation from its Sponsor that the terms are
fair and reasonable insofar as the Company's shareholders are
concerned.
The Board would like to thank
shareholders for their continued support and patience with regard
to the Company's realisation strategy, and recognition of the
inherent value in the Company's portfolio of assets.
For further
information:
Manager
Sniper Capital Limited
Group Communications
Tel: +853 2870 5151
Email:
info@snipercapital.com
Corporate Broker
Liberum Capital
Darren Vickers
Tel: +44 20 3100 2222
Company Secretary & Administrator
Ocorian Administration (Guernsey)
Limited
Kevin Smith
Tel: +44 14 8174 2742
--Ends--
About Macau Property Opportunities Fund
Premium listed on the London Stock
Exchange, Macau Property Opportunities Fund Limited is a closed-end
investment company registered in Guernsey and is the only quoted
property fund dedicated to investing in Macau, the world's largest
gaming market and the only city in China where gaming is
legalised.
Launched in 2006, the Company
targets strategic property investment and development opportunities
in Macau. Its current portfolio comprises prime residential
property assets.
The Company is managed by Sniper
Capital Limited, an Asia-based property investment manager with an
established track record in fund management and investment
advisory.
