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Fortress Caribbean Pension FundProspectus & Information CircularSeptember 30th 2003This document is a prospectus and informationany shares nor should he in any event purchase orc i rcular for the issue of an unlimited number ofsubscribe for any shares unless in the relevant terri-redeemablemutual fund shares designated astory such an invitation could lawfully be made to himRedeemable Aggressive Accumulator Shares (here-or her without off e ror compliance with any re g i s t r a-inafter sometimes re f e r red to as "AA share s " ,tion or other legal re q u i rements. Any person wishingRedeemable Conservative Consolidator Shares (here-to subscribe for shares should satisfy himself that, ininafter sometimes re f e r red to as "CC shares" anddoing so, he or she complies with the laws of anyRedeemable Capital Secure Shares (hereinafter some-relevant territory, and that he or she obtains anytimes referred to as "CS shares") respectively, at arequisite governmental or other consents andprice equal to the net asset value per share of theobserves any other applicable formalities.assets underlying each class of share.Theredeemable mutual fund shares of all classes shallWARNINGcollectively and exclusively constitute the FundS h a re s .IMPORTANTA copy of this document has been re g i s t e red with theIf you are in any doubt about the contents ofRegistrar of Companies in Barbados in accord a n c ethis offering document, you should consult yourwith the provisions of the Companies Act Cap 308 ofbank manager, an attorney, accountant or otherthe laws of Barbados and has also been filed with thefinancial adviser.Securities Commission. The Fund is an authorisedmutual fund licensed under the Mutual Funds Act,The price of shares and the income distributed2002-22. The Registrar of Companies and Thef rom them (where income is distributed) isSecurities Commission of Barbados take no re s p o n s i-subject to fluctuation.bility as to the validity or the veracity of the contentsof this prospectus and have neither approved nord i s a p p roved the issue of any of the securities here i nmentioned.It is not the intention of the off e ror to file a copy ofthis document or to register any of the securitiesh e rein mentioned with any regulatory authority oragency in any territory outside of Barbados.No person receiving a copy of this document in anyterritory may treat this document as constituting aninvitation to him or her to purchase or subscribe for3
TA B L E O F C O N T E N T SSTATUTORY REQUIREMENTS8-9SECTION ONE:ABOUT THE REGION11 -12SECTION TWO:ABOUT BARBADOS13SECTION THREE:ABOUT THE FUND14Managers, Shareholders & Fund Directors15Viewing of Prospectus, Material Contracts& Consents16Investment policies, strategies & objectives17-23Risks & Expenses24-25Investing in other funds25Accounts & statements25SECTION FOUR:ABOUT YOUR ACCOUNT26Shares & net asset values26-28Tax considerations28-30Exchange controls30SECTION FIVE:INVESTING WITH FORTRESS31Opening a new account31Purchase of shares31Restrictions on purchase of shares31Switching32Redemption or transfer of shares32SECTION SIX:Terms and conditions33General Information344
DEFINITIONSIn this document, where the context permits, the expressions set out below bear the following meanings:"THE COMPANY"Fortress Caribbean Pension Fund Limited."THE FUND"Fortress Caribbean Pension Fund."FUND SHARES"The three classes of redeemable mutual fund shares to be issued by theCompany designated as Redeemable Aggressive Accumulator Shares(hereinafter sometimes referred to as "AA shares"), RedeemableConservative Consolidator Shares (hereinafter sometimes referred to as"CC shares") and Redeemable Capital Secure Shares (hereinafter sometimesreferred to as "CS shares") respectively."FUND SHAREHOLDERS"Holders for the time being of Fund Shares."THE DIRECTORS"The Directors of the Company."THE MANAGER"Fortress Fund Managers Limited."SUB-FUND"The portfolio of money and assets comprising the fund established inrespect of each class of Fund shares."BSE"Barbados Stock Exchange Inc."SC"The Securities Commission."TRINIDAD"Trinidad and Tobago."TTSE"Trinidad and Tobago Stock Exchange."JSE"Jamaica Stock Exchange."BDS "The currency of Barbados."TT "The currency of Trinidad and Tobago."JAM "The currency of Jamaica."US "The currency of the United States of America."NAV"Net Asset Value being the net asset value of the assets comprising a Sub Fund.5
DIRECTORSMr. Geoffrey Cave, B.C.H. - ChairmanATTORNEY-AT-LAWMr. David BynoeMr Rene DelmasSir Henry Forde Q.C.Mr. Ken EmeryJuris ChambersSir Fred GollopAttorneys-at-lawMr. Desmond KinchFidelity HouseMr. Roger Cave – Investment ManagerWildey Business ParkSt. MichaelSECRETARYBarbadosCorporate Services LimitedCUSTODIANThe Financial Services CentreBishop’s Court HillFirstCaribbean International Bank,St. MichaelTrustee BranchBarbadosBroad StreetBridgetownREGISTERED OFFICEBarbados1st Floor, Carlisle HouseFUND MANAGERS & ADMINISTRATORHincks StreetBridgetownFortress Fund Managers LimitedSt. Michael1st Floor, Carlisle HouseBarbadosHincks Street, BridgetownSt. Michael, BarbadosINDEPENDENT AUDITORSTel no:246-431-2198Fax no:246-431-0514PricewaterhouseCoopersInternet: www.fortressfund.comThe Financial Services CentreE-mail: invest@fortressfund.comBishop’s Court HillSt. MichaelBarbados6
BOARD OF DIRECTORSNAME AND RESIDENCEPOSITION WITH THE FUNDPRINCIPAL OCCUPATIONMr. Geoffrey Cave, B.C.H."Windermere"Britton’s HillSt. MichaelBarbadosChairman & DirectorBusiness ExecutiveMr. David BynoeLocust HallSt. GeorgeBarbadosDirectorBusiness ExecutiveMr. Rene Delmas,#8 Kent Avenue,Fort George Heights,St. Michael.BarbadosDirectorBusiness ExecutiveMr. Ken EmeryThe GladeHutton MountBrentwood, EssexCM13 2JLUnited KingdomDirectorConsultantSir Fred GollopWarner’s TerraceChrist ChurchBarbadosDirectorAttorney-at-LawMr. Desmond Kinch"Saltwhistle Bluff"SpottsGrand CaymanDirectorInvestment ManagerMr. Roger CaveRowan’s ParkSt. GeorgeBarbadosDirectorInvestment Manager7
S TAT U T O R Y R E Q U I R E M E N T S1. Name, registered office, principal place of business in Barbados,Fortress Caribbean Pension Fundplace and date of creation of the fund, with an indication of its1st Floor, Carlisle House, Hincksduration if limited.Street,Bridgetown, St. MichaelBarbadosThe fund was created in Barbadoson October 9th 2002.Investment objectives and restrictions:2. Details of investment objectives and policy, including summaryPlease see pages 15-21.of the investment and borrowing restrictions.3. If the nature of the investment policy so dictates, a warning thatPlease see page 22.investment in the fund is subject to risks and a description of therisks involved.Operators and principals:4. The names and addresses of the following partiesa) The directors or partners of the fundPlease see page 4.b) The administratorPlease see page 4.c) The trustee or custodianPlease see page 4.d) The investment adviserFortress Fund Managers Limited.e) The representativeFortress Fund Managers Limited.f) The auditorsPlease see page 4.8
Characteristics of Shares5. Minimum initial subscription, minimum subsequent subscriptionPlease see page 30.and minimum holding.6. Methods of calculating net assets and net asset value of shares.Please see page 25.7. Frequency of valuation and dealing, including dealing days.Please see pages 24-25.Application and Redemption Procedures:8. Pro c e d u re for subscribing and redeeming share s .Please see pages 28.9. The maximum interval between the request for redemption andPlease see page 28.the dispatch of the redemption pro c e e d s .10. The circumstances in which redemption of shares may bePlease see page 28.suspended or changed.11. Authorised intermediariesPlease see page 30.Distribution Policy:12. The distribution policy and the approximate dates on whichNot applicable.dividends (if any) will be paid (if applicable).Limitation on Voting Powers:13. The voting powers of the holders of shares and any limitationsthereon.9Please see page 24.
Fees and Charges:14. The level of all fees and charges payable by an investor, including allPlease see page 22-23.charges levied on subscription and redemption and switching (in the caseof umbrella funds).15. The level of all fees and charges payable by the fund, includingPlease see page 22-23.management, custodian fees and start-up expenses.16. Disclosure of entitlement to brokerage or other transaction benefitsPlease see page 23.to any connected persons to the fund.Reports and Accounts:17. The date of the fund’s financial year-end.Please see page 23.18. WarningsPlease see page 1.19. A list of constitutive documents and an address in Barbados wherePlease see page 14.they can be inspected free of charge or purchased.20. The date of the publication of the offering document.October 2002.21. A statement that the directors, partners or managers of the fund orPlease see page 29.the administrator accept responsibility for the information contained inthe offering document as being accurate as at the start of publication.22. If mention is made of any unauthorised funds in the off e r i n gdocument, a statement that such fund is not authorised to off e rshares in or from Barbados.10Not applicable.
SECTION ONE - ABOUT THE REGIONCaribbean Economies & Capital Marketexchanges.With the exception of Jamaica, theactivity on the exchanges has been very limited,and is typical of immature stock markets in devel-Developmentoping countries. Both the supply and demand haveThe Caribbean consists of a number of small islandeconomies which are in the early stages of development in terms of their capital markets and portfolioof foreign investments but are well advanced inbeen inhibited by factors such as fear of loss offamily control, lack of tradition and understandingof equity investment and over reliance on bankoverdraft financing. Private sector debt markets andc o m m e rcial paper have begunterms of business, banking, legalto develop in Jamaica andand political structures. Most ofTrinidad and the remainder isthe Caribbean economies over thecharacterised by the issuanceyears have been characterised byof government paper andclosed, government dominated,commoditybasedbonds by island governmentseconomies,primarily to state pensionwhich have relied in part on finan-schemescial aid and support for exportmarket activity.countries. Over the last decadeCaribbean countries have begun totheirThis low level of marketeconomiest h rough diversification away from the basiccommodities of sugar and bananas to tourism, lightmanufacturing, off - s h o re financial services andinformatics.Over the past few years, Caribbean govern m e n t shave committed themselves to a process of changetowards more open and market driven economies.The most significant changes have taken place inJamaica, Guyana, Trinidad and more recently in theOECS where exchange controls have been relaxed,c u r rencies floated and governments have beendownsized through major privatisation of government controlled organisations. In addition tradeliberalisation policies have been enacted withreduced duties and quotas in the region. A numberof changes have taken place in Barbados as well inan effort to open up the economy there.The Caribbean can be considered as a classical"Emerging Capital Market" with six small stockinstitutionalinvestors with little secondaryprices from the major developedtransformandactivity results in relativelyi n e fficient markets which are characterised bycomparatively low P/E ratios and buy and holdstrategies by many investors who trade on a yieldbasis. It is these characteristics, which provide theinvestment opportunity now as these marketsbegin to develop and become more efficient. Theability to invest across the region offers attractiveopportunities for equity risk management throughportfolio diversification of investments in thevarious countries.The countries to which Fortress Caribbean PensionFund will initially have the majority of its investment exposure are Barbados, Jamaica and Trinidadwhere established stock markets currently exist.The Fund either directly or through its underlyinginvestments is also actively seeking investmentopportunities across the region and will continue toincrease the diversification of the portfolio as otherCaribbean capital markets develop.11
During 1995, the Inter-American Development Bank(IADB) commenced funding for a project to harmonisethe Caribbean Stock Exchanges. It was implementedby consultants from NASDAQ and the objective is tolink the main stock exchanges in the Caribbean withelectronic trading and a central depository system forsettlement. The countries involved are Jamaica,Trinidad, Barbados, Bahamas and the DominicanRepublic. So far Jamaica and Barbados havecommenced electronic trading, with settlementstaking place through a Central Securities Depositoryproviding for settlement on a delivery versus paymentbasis. Trinidad has commenced settlement through acentral securities depository and is expected to implement electronic trading later this year.The Caribbean countries are likely to soon followrecent trends of merging their Stock Exchanges nowhappening around the world, thereby creating moreactive, dynamic and efficient stock exchanges.The Directors believe that the expansion of the regionaleconomies, the need for fresh capital investment particularly in the services and tourism sectors and the severalincentives that are being provided by Governments, willincrease the listings in the local markets.The creation of a final withholding tax of 12.5% fordividend income for Barbadians and the taxation ofdividends at zero percent for CARICOM territories thathave signed the CARICOM Treaty is likely to further thedemand for equities. The reduction of the corporationtax rate in Trinidad to 35% and the planned inclusionof the Trinidad and Jamaican Stock Exchanges in theIFC Emerging Markets index should all combine toincrease the demand for Caribbean equities.12
SECTION TWO
Attorney-at-Law Investment Manager Investment Manager NAME AND RESIDENCE Mr. Geoffrey Cave, B.C.H. "Windermere" Britton’s Hill St. Michael Barbados Mr. David Bynoe Locust Hall St. George Barbados Mr. Rene Delmas, #8 Kent Avenue, Fort George Heights, St. Michael. Barbados Mr. Ken Emery The Glade Hutton Mount Brentwood, Essex CM13 2JL United Kingdom Sir Fred Gollop
