Notice to the unitholders of SEB SICAV 2 - SEB Eastern Europe Small and Mid Cap Fund
We wish to inform you that 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 sub-fund, SEB SICAV 2 – SEB Eastern Europe Small and Mid Cap Fund, will retain its liquid assets, and the 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.
Through the split, unitholders will retain the units of the existing sub-fund (SEB Eastern Europe Small and Mid Cap Fund) and will receive new sub-fund (SEB Eastern Europe Small and Mid Cap 2) units. The total value of the sub-fund shares in the two sub-funds corresponds to the value of your existing holding. 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 (ie submit sales order to the bank) of their fund units until 8th February 2023 14.00. Unitholders who do not redeem their units in sub fund before cut-off time 14:00 on 8 February 2023, will automatically participate in the split.
The split will take effect after the cut-off time on 10 February 2023.
Background
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.
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. The sub-fund has continued to be closed for subscriptions.
A fundamental principle for UCITS funds is that they must be open for subscriptions and redemption and contain liquid assets - criteria that SEB Eastern Europe Small and Mid Cap 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.
New sub-fund will be put into liquidation with the purpose of dissolving the sub-fund as soon as possible.
Change of name and benchmark of the existing Sub-Fund
In connection with the split, the sub-fund SEB Eastern Europe Small and Mid Cap Fund ’s rules in the remaining sub-fund 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.
SEB SICAV 2 - SEB Eastern Europe Small and Mid Cap Fund 2 will represent unitholders 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 fees related to the ownership of units of the new sub-fund (SEB Eastern Europe Small and Mid Cap Fund 2) are borne by SEB Investment Management AB
Important dates
- 8 February 2023 before 14.00: 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.
- 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.
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.
