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J99 Brandeaux Student Accommodation Fund
Your questions answered
06 March 2015
Friends Provident International Limited (“Friends Provident International” or “FPIL”) provides access to the
Brandeaux - Student Accommodation Fund through our internal fund, J99. The Brandeaux - Student
Accommodation Fund is managed by Brandeaux. We have been advised by the fund managers of the
Brandeaux - Student Accommodation Fund that the Directors have agreed a sale of the underlying Brandeaux –
Student Accommodation Fund assets and that it is their intention that the fund will be wound up. As a result,
Friends Provident International’s J99 Fund remains suspended and will be closed once all the assets in the
underlying fund have been sold and proceeds received by FPIL.
The following list of questions and answers is intended to provide you with the latest update from Friends
Provident International following this announcement.
Q1. Are my funds still being managed during this period?
A1. Yes, you can be assured that Brandeaux continues to actively manage the assets of the underlying fund,
which invest in student accommodation rents. Brandeaux believes these assets will continue to perform.
Q2. When will the J99 Fund re-open?
A2. As Brandeaux has confirmed that it intends to wind-up the underlying fund, the J99 Fund will remain
suspended until the closure process has completed. As and when proceeds are received from Brandeaux,
Friends Provident International will process a proportional switch into our L37 Schroder Global Multi-Asset Income
(GBP HDG) fund and a switch confirmation will be sent to you or your financial adviser. At this stage, we are
unable to confirm any precise date for the completion of the closure, or for any proportional switches. Please be
assured that we are monitoring the Brandeaux – Student Accommodation fund closely and we will process
payments received from Brandeaux as quickly as possible, once they have been received and cleared. Further
details will be posted on the Brandeaux News section of our web site www.fpinternational.com at the appropriate
time.
Q3. What is a Proportional Switch?
A3. To treat all investors in the fairest possible manner, we will distribute proceeds received from Brandeaux to
each investor by switching out a percentage of their holding in the J99 Fund ((“proportional switch”). The effect of
this process is that each investor in the J99 Fund will be given access to a proportion of the proceeds received
from the Brandeaux – Student Accommodation Fund based on their current unit holdings in the J99 Fund. The
appropriate number of units will be switched, without further instruction from you, into Friends Provident
International’s L37 Schroder Global Multi-Asset Income (GBP HDG) fund.
Once you receive confirmation from us that this proportional switch has been completed and the proceeds have
been transferred into the L37 Schroder Global Multi-Asset Income (GBP HDG) fund, you may select an
alternative fund if you would prefer and no Friends Provident International charges will arise from such
transaction. Please note that if your policy already holds 10 funds, the available proceeds from the J99 Fund will
be split evenly across the other unrestricted funds held within your policy.
This process will be repeated each time we receive sufficient proceeds from Brandeaux to enable us to switch a
portion of the units out of the J99 Fund.
Q4. Why is the redemption queuing system no longer in place?
A4. The current position is that all redemption requests have been cancelled by Brandeaux. Friends Provident
International will therefore take the same action for the J99 Fund in order to treat all customers equally, whether
they are invested in the underlying fund or in the mirror fund.
Q5. What happens if I request a switch in or out of the J99 Fund?
A5. During the suspension period, no redemptions, new business or switches in/out of the Brandeaux Student
Accommodation Fund are possible. If you send in a new instruction to switch into or out of the suspended fund,
we will contact you to advise that the instruction cannot be processed. You may switch out of the L37 Schroder
Global Multi-Asset Income (GBP HDG) fund once you receive the switch confirmation, by sending us a signed
Fund Transfer Request form, which is available on request.
Q6. What will happen to my Switch Instruction that was in the redemption queue?
A6. Following today’s announcement from Brandeaux, any switch instructions previously received and logged in
the redemption queue have been cancelled. If you wish to switch out of L37, you will need to submit a new
instruction in place of the one you sent previously. Please refer to A4 and A5 above.
Q7. What happens if I want to withdraw money from the J99 Fund?
A7. Should you wish to request a payment (or if we already hold your instruction to surrender), it can only be
processed once the units have been switched into L37 following receipt of funds from Brandeaux. For full or part
surrenders, maturities and death claims, any other funds held within your policy which are not restricted will be
sold and the proceeds forwarded in accordance with the instructions we have received. Please note that we will
advise you of timescales for payments as soon as we are able.
Q8. What happens to regular withdrawals?
A8. Once the proportional switch has taken place, regular withdrawals can recommence from the portion of
holdings in the L37 Schroder Global Multi-Asset Income (GBP HDG) fund, if there are sufficient funds to do so. If
your holding in L37 Schroder Global Multi-Asset Income (GBP HDG) is then exhausted or you withdraw the
balance in that fund and your policy is only invested in the J99 Fund (or J99 plus other restricted funds), regular
withdrawals will be re-suspended.
Q9. What happens to existing regular withdrawal scheme payments if the only holdings in my policy are
suspended and I have exhausted my holding in L37?
A9. It will not be possible for any further regular withdrawals to be paid from your policy until there are sufficient
funds in the L37 Schroder Global Multi-Asset Income (GBP HDG) fund, following completion of the next
proportional switch (please also refer to A8). In addition, this applies to any Optional Management Agreement
that you may have agreed with your Independent Financial Adviser.
Q10. Will my existing regular savings linked to the J99 Brandeaux Student Accommodation Fund continue?
A10. No, as the fund is fully suspended all premiums due to invest in this fund since the last pricing date (31 May
2013) have already been automatically re-directed at the time the fund was suspended. You are free to redirect
regular premiums into another unrestricted FPIL fund, if you wish. Please note that you can only hold a maximum
of 10 funds in your policy at any one time.
Q11. Why have you changed the default fund from your previous letter?
A11. At the time that the J99 Fund was suspended, the L37 Schroder Global Multi-Asset Income (GBP HDG)
fund (“L37”) had not been launched. This fund was launched as it’s aims were more suitable for us to use as a
default for investors in the J44 Brandeaux Ground Rent Income fund, which closed last year, If you do not wish to
remain invested in L37, you may switch out by submitted a signed switch instruction, once you have received the
switch confirmation from the J99 Fund to L37.
Q12. Will FPIL continue to publish updated fund prices for J99 on their website and literature?
A12. No. Whilst the mirror fund is suspended, we are unable to provide a unit price for the fund. However, as
covered in Q1, the funds continue to be actively managed by Brandeaux. We will however publish the price on
our web site that is used for each proportional switch that takes place.
Q13. How will my investment benefit from the waiving of the 1.2% Annual Management Change by FPIL since
September 2014?
A13. Rather than our Pricing team reducing the amount of the proceeds received from Brandeaux by the
outstanding proportion of the 1.2% AMC since the fund was suspended, this will be reduced by 0.1% for each
month since 01 September 2014 (for an initial period of 12 months), thereby increasing the price that will be used
for each proportional switch, and in turn increasing the value available to you within you policy.
Q14. Am I eligible for interest on my delayed proceeds?
A14. No, the J99 Fund is not a bank account and will not be eligible for any interest payments for the period of
suspension
Q15. Why has Brandeaux taken so long to make this latest announcement?
A15. Following the decision not to proceed with the IPO in the summer of 2014, Brandeaux have moved as
quickly as possible to find a buyer at an acceptable price for all concerned.
Q16. Are the Brandeaux funds covered by any compensation scheme?
A16. No – the investment funds you choose, (be it via an FPIL fund like J99 or directly via our Reserve Bond) are
entirely your choice and responsibility. There is a scheme in place to protect policyholders in the event of a life
assurance company not being able to meet the liabilities of its policyholders – the Life Assurance (Compensation
of Policyholders) Regulations 1991 of the Isle of Man. However this scheme does not offer any protection against
the investment performance or failure of the underlying assets to which the policy is linked.
Q17. What can I do if I am not happy with this announcement?
A17.
Please speak to your IFA.
Alternatively, complaints can be sent in writing to
[email protected] or Royal Court, Castletown, Isle of Man, IM9 1RA. Your complaint will be
acknowledged within 24 hours of receipt and a response will be sent as soon as possible once we have
completed our investigations into your specific complaint.
Definition of an Internal Fund
Friends Provident International has set up its own internal insured fund that invests exclusively in the underlying
funds of the same or similar name. These funds can only be accessed through FPIL’s range of savings &
investment plans.
The unit price of the FPIL fund will be different from the underlying fund. This is due to the fact that the internal
FPIL fund is launched on a different date from the underlying fund and often at a starting price of GBP 1.00
(USD, EUR etc). There is a small cash holding in each mirror fund to help with fund flows and the possible
differences in fund charges. This means that the price of the FPIL fund will be different from the corresponding
fund but will move mainly in line with it.
It is important to remember that, as with most investments, the value of your investment is not guaranteed and
can go down as well as up. Therefore we suggest that you only invest money that can be committed in the
medium to long term. Your should also bear in mind that securities held within a fund may not be denominated in
the currency of that fund, so unit prices may fall purely on account of exchange rate fluctuations.
Past performance should not be viewed as an indication of future performance. Fund prices may go up and down
depending upon investment performance and are not guaranteed. You may get back less than you paid in. Fund
prices and performance figures are net of annual charges.
The unit-linked products through which you may invest in this fund are not designed for early surrender and a
discontinuance charge may be applied. These funds are intended for medium to long-term investment.
Copyright © 2015 Friends Provident International Limited. All rights reserved.
Friends Provident International Limited: Registered and Head Office: Royal Court, Castletown, Isle of Man, British Isles, IM9 1RA.
Telephone: +44(0) 1624 821 212 | Fax: +44(0) 1624 824 405 | Website: www.fpinternational.com. Incorporated company limited
by shares. Registered in the Isle of Man, number 11494. Authorised by the Isle of Man Insurance and Pensions Authority.
Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation
Authority. As Friends Provident International Limited is a non-UK based insurer, the regulatory system that applies, in some
respects, is different from that of the United Kingdom Provider of life assurance and investment products. Friends Provident
International is a registered trade mark of the Friends Life group.