empire club investment fund pds5353

Product Disclosure Statement

Empire Club Investment Fund (ARSN 609 631 914)

Dated 29 February 2016


‒ Empire Club Investment Fund

© Empire Equity Group Pty Ltd Page i

29 February 2016

Table of Contents

Important Information .................................................................................................................. iii

1 Introduction to Empire Club Investment Fund .............................................................. 1 1.1 The Fund ............................................................................................................. 1 1.2 The Fund – at a glance ........................................................................................ 2

2 Summary of Important Topics ........................................................................................ 3

3 Fund Structure............................................................................................................... 10 3.1 Fund .................................................................................................................. 10 3.2 Key Entities ........................................................................................................ 10 3.3 Responsible Entity ............................................................................................. 11 3.4 Investment Manager .......................................................................................... 11 3.5 Custodian .......................................................................................................... 12 3.6 Administrator ..................................................................................................... 12 3.7 Financial Auditor ................................................................................................ 13 3.8 Compliance Plan Auditor ................................................................................... 13

4 Features and Benefits ................................................................................................... 13 4.1 Professional management ................................................................................. 13 4.2 Ability to benefit from both market rises and falls ............................................... 14 4.3 No lengthy lock-in periods .................................................................................. 14 4.4 Access to information ........................................................................................ 14

5 Hypothetical Past Performance .................................................................................... 15

6 Risks .............................................................................................................................. 16

7 How the Fund Invests ................................................................................................... 19 7.1 Investment objective and strategy ...................................................................... 19 7.2 Valuation, location and custody of assets .......................................................... 21 7.3 Liquidity ............................................................................................................. 21 7.4 Leverage ........................................................................................................... 22 7.5 Derivatives ......................................................................................................... 22 7.6 Short selling ....................................................................................................... 23 7.7 Suggested minimum investment timeframe ....................................................... 23 7.8 Labour standards and environmental, social and ethical considerations ............ 23

8 Fees and Other Costs ................................................................................................... 24 8.1 Consumer Advisory Warning ............................................................................. 24 8.2 In brief ............................................................................................................... 24 8.3 Example of annual fees and costs for Fund ....................................................... 27 8.4 Additional explanation of fees and costs ............................................................ 29

9 Taxation ......................................................................................................................... 31 9.1 Tax considerations ............................................................................................. 31 9.2 Gains or losses made on CFDs ......................................................................... 32 9.3 Interest and dividend adjustments ..................................................................... 32 9.4 Treatment of other expenses ............................................................................. 32 9.5 Disposing of interest in the Fund ........................................................................ 32 9.6 Taxation of financial arrangements (TOFA) ....................................................... 32 9.7 Goods and services tax (GST) ........................................................................... 32 9.8 Quoting a Tax File Number (“TFN”) ................................................................... 33

10 Other Important Information ......................................................................................... 33



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10.1 Information about the Club ................................................................................. 33 10.2 Club Membership Fee ....................................................................................... 35 10.3 Withdrawals ....................................................................................................... 35 10.4 Distributions ....................................................................................................... 36 10.5 Transfers ........................................................................................................... 36 10.6 Reporting ........................................................................................................... 37 10.7 Continuous disclosure ....................................................................................... 37 10.8 Cooling off ......................................................................................................... 37 10.9 Constitution ........................................................................................................ 37 10.10 Compliance Plan................................................................................................ 37 10.11 Anti-money laundering and counter terrorism financing (“AML/CTF”)................. 38 10.12 Complaints and dispute resolution ..................................................................... 38

11 How to Apply ................................................................................................................. 38 11.1 Acceptance of application or additional investment ............................................ 39

12 Glossary ......................................................................................................................... 39

13 The Club - Frequently Asked Questions ...................................................................... 42

14 Directory ........................................................................................................................ 67 14.1 Responsible Entity ............................................................................................. 67 14.2 Investment Manager .......................................................................................... 67 14.3 Licensee ............................................................................................................ 67 14.4 Custodian .......................................................................................................... 67 14.5 Administrator ..................................................................................................... 67 14.6 Lawyer ............................................................................................................... 68 14.7 Financial Auditor ................................................................................................ 68 14.8 Compliance Plan Auditor ................................................................................... 68



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Important Information

This Product Disclosure Statement (“PDS”) provides information a potential investor would reasonably require for the purpose of making a decision about whether to invest in the Empire Club Investment Fund (ARSN 609 631 914) (the “Fund”). The Fund is a managed investment scheme (“MIS”) structured as a trust. If you make an investment into the Fund you will become a member of the MIS (an “Investor”, “you”, “your”).

Vasco Investment Managers Limited (ABN 71 138 715 009, AFSL 344486) is the issuer and the responsible entity of the Fund (the “Responsible Entity”, “we”). The Responsible Entity has appointed Empire Equity Group Pty Ltd (ABN 40 168 738 805) (“Empire Equity Group” or “Investment Manager”), a Corporate Authorised Representative (“CAR”) (authorised representative number 1238253) of Specialised Investment and Lending Corporation Pty Ltd (trading as ‘The SILC Group’) (ABN 87 149 520 918, AFSL 407100) (the “Licensee”), to manage the investment assets and activities of the Fund.

None of the Responsible Entity, the Investment Manager, nor the Licensee guarantees the performance of the Fund or the return of capital or income. Your investment in the Fund is subject to investment risk.

The Fund invests in highly leveraged and risky derivatives. The prices of underlying assets can be influenced by a variety of global factors which can be unpredictable. Small movements in an underlying asset price can result in significant gains or losses. Consequently, the Fund’s investment returns can be volatile. You may lose your entire investment as a consequence of significant movements in the market against the Fund’s investments.

Prior to investing, you should carefully consider whether investing in the Fund is suitable to you. To minimise investment risk the Fund’s Investment Manager adopts an investment strategy which includes a number of risk management measures. See sections 6 and 7 for more detail.

The information in this PDS is general information only and does not take into account your individual objectives, personal financial situation or needs. You should obtain financial advice from a licensed adviser that is tailored to suit your personal circumstances.

The investment offered in this PDS is available only to persons receiving this PDS (electronically or in hard copy) within Australia.

All monetary amounts referred to in this PDS are given in Australian dollars unless otherwise stated.

The information in this PDS may change over time. The Responsible Entity may update this information where this does not involve a change that is materially adverse from the point of view of an investor, and make it available to you, where permitted by law, at www.vascofm.com. You can also obtain updated information by contacting the Responsible Entity on +61 (0)3 8352 7120. A paper copy of any updated information is available for free on request. If a change is considered materially adverse, the Responsible Entity will issue a supplementary PDS.

Only a person that is a member of the Empire Club is eligible to invest in the Fund, however this PDS only relates to an interest in the Fund and not membership of the Empire Club. The activities of the Empire Club are not part of the Fund. For your information, brief details of the Club are outlined in section 10.1.

http://www.vascofm.com/



© Empire Equity Group Pty Ltd Page 1

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1 Introduction to Empire Club Investment Fund

The Empire Club Investment Fund (the “Fund”) is a managed investment scheme that is only open to members of Empire Club (the “Club”). The Club is a membership organisation that aims to provide lifestyle privileges and investment opportunities catering for 18 to 40 year olds. Membership of the Club is by invitation only.

1.1 The Fund

Vasco Investment Managers Limited is the Responsible Entity of the Fund.

Empire Equity Group is the Investment Manager and has been appointed to manage the Fund’s investments and make investment decisions within an approved investment mandate.

The minimum and maximum investment in the Fund is dependent on your membership tier in the Club. However, the Responsible Entity may, at its discretion, allow”Platinum” Club members to invest more than $150,000.

Table 1 – Minimum and maximum investment

Trial Full Platinum Out of Towner

Minimum $500 $5,000 $25,000 $500

Maximum $5,000 $25,000 $150,000 $25,000

If your account balance exceeds the maximum investment level according to your Club membership tier at the end of the month, the Responsible Entity may, at its discretion, pay you the excess.




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1.2 The Fund – at a glance

Professionally managed

•By a professional investment team with years of experience. You don’t have to worry about making decisions on a daily basis.

Audited

•The Fund's financial reports and compliance plan are both independently audited by an ASIC Registered Auditor.

Flexible

•Deposit / withdraw funds each month. You’re not locked in for ages like you are with some investment products.

Accessible

•The Fund is open to ‘retail’ clients. This means that the fund is available to everyday investors, not just those with a high net wealth or lots of investment experience.

Licensed

•We must comply with the myriad of financial services laws which aim to protect consumers. The RE is a holder of an Australian financial services licence and the Fund has been registered with ASIC. The Investment Manager is authorised under an Australian financial services licence.

Reporting

•We provide performance results which are updated monthly – they show how the Fund and your account is going and the fees being charged.

Performance Based Fees

•The Fund charges performance based fees which are only charged if the investments doing well. If you don’t do well, we don’t either.

Past Performance

•Whilst we’ve got some solid past performance, its really important you know that past performance never reflects future performance and that with high returns, comes high risk. Most investments carry risk, ours is no different.




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2 Summary of Important Topics

This section sets out benchmarks and disclosure principles applicable to the Fund as required by Australian Securities and Investments Commission (“ASIC”) Regulatory Guide 240 – Hedge funds: Improving disclosure (RG 240).

2.1 Benchmarks

Table 2 – Benchmarks

Benchmark Does the Fund meet the Benchmark?

Benchmark 1 – Valuation of Assets

The Responsible Entity has and implements a policy that requires valuations of the Fund’s assets that are not exchange traded to be provided by an independent administrator or an independent valuation service provider.

(a) The Fund meets this benchmark.

Fund assets valuation is administrated by Apex Fund Services (Australia) Pty Ltd (ABN 86 149 408 702) (the “Administrator”). Fund asset values for assets that are not exchange traded are sourced from an independent valuation services provider.

The Fund primarily trades in over-the-counter derivatives. These assets are valued using the liquidation value quoted by derivatives platform providers. Both the Administrator and the derivative platform providers are not related entities of the Responsible Manager or the Investment Manager.

Benchmark 2 – Periodic Reporting

The Responsible Entity has and implements a policy to provide periodic reports on certain key information (as set out in the ASIC Regulatory Guide 240 (Hedge funds: Improving disclosure)) on an annual and monthly basis.

(b) The Fund meets this benchmark.

Every month, we will report on the following information which will be available on our website:

Net return on the Fund’s assets after fees, costs and taxes

Current total net asset value of the Fund

Any material changes in investment strategy and risk profile

Any changes in individuals that have a key role in making investment decisions for the Fund

Changes in key services providers

Every year, we will report on the following information which will be available on our website:

Fund’s actual asset allocation

Liquidity profile of the Fund’s portfolio

Maturity profile of the Fund’s liabilities

Leverage ratio

Derivative counterparties

Monthly or annual investment returns over a 5-year period (or since inception if in existence less than 5 years)




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Benchmark Does the Fund meet the Benchmark?

Changes in key service providers

2.2 Summary of disclosure principles

Table 3 contains information relevant to disclosure principles set out by ASIC in RG 240.

Table 3 – Disclosure Principles

Topic Summary Section

Investment strategy

The Fund aims to produce investment returns through the identification and exploitation of market movement indicators (“Indicators”) primarily in the foreign exchange and commodities markets. The Fund identifies Indicators through an active technical analysis of market data in relation to historical and current asset prices and trading volume. Trading is in accordance with the Fund’s proprietary trading methodology which indicates when trades should be entered and exited.

The Fund invests in:

Over-the-counter or exchange traded derivatives with underlying assets in foreign exchange rates and commodities – for example, currency contracts, bullion contracts, commodity contracts, and derivatives over listed shares or market indexes

Cash and fixed interest investments – for example, bank savings accounts and term deposit products

The assets of the Fund are normally located in Australia and valued in Australian dollars. The use of leverage and derivatives by the Fund is outlined in more detail in section 7.4 and 7.5.

The Fund will also produce investment returns by investing in bank deposit products. However, this does not form part of the Fund’s primary investment strategy.

The Fund’s investment strategy relies upon the following dependencies and assumptions:

Market volatility is needed to make a profit (or loss) – the Fund invests in derivatives that derive their value from movements in the price of the underlying asset. Derivatives only result in a profit or loss if the value of the underlying asset varies. The degree of the profit or loss is also dictated by the degree of the movement in the underlying asset.

Indicators are correctly identified through the Investment Manager’s technical analysis – the Fund is dependent

7.1




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upon the correct analysis of market data in accordance with the Fund’s investment strategy. It also assumes that the Fund’s proprietary trading methodology correctly identifies market movements which will not always be the case.

History – the Fund’s analysis assumes that, in the long-term, the market will reflect historical movements. It assumes that the market will have similar patterns and trends and that these can be predicted and identified. It assumes that future trends can be identified using historical market data.

There are no fundamental shifts in the market – market events can result in fundamental shifts in the market. For example, a currency unpegging or a central bank’s interest rate change will result in a fundamental shift in the market that is not reflected in historical data. The Fund’s technical analysis assumes that there will be no fundamental shifts in the market and trades using a strategy that avoids periods of market uncertainty.

Trades are correctly traded upon and executed in a timely fashion – the Fund’s investment strategy assumes that the Investment Manager has the ability to trade correctly in accordance with the investment strategy. Given the dynamic nature of financial markets, it also assumes that trades can be executed in a timely fashion to exploit identified Indicators.

The Fund has imposed diversification guidelines and limits. The Fund must only allocate:

0-50% of Fund assets to over-the-counter and exchange traded derivatives

0-100% of Fund assets to cash or fixed income investments

The Fund has adopted an organisational risk management strategy procedure to identify and assess risks which are applicable to the Fund and to manage and implement procedures to control those risks.

Table 4 in section 6 provides a detailed list of specific risks and associated controls related to the investment strategy. These risks include:

Investment risk

Counterparty risk

Derivatives risk

Fund risk

Interest rate risk




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Legal and regulatory risk

Leverage risk

Market risk

Outsourcing risk

Short selling risk

Trading strategy risk

Liquidity risk

The investment strategy for the Fund may change from time to time. The Responsible Entity will notify you of any change to the Fund’s investment strategy via your online accounts or otherwise as required by law.

Investment Manager

Empire Equity Group has been appointed as the investment manager of the Fund.

The Investment Manager is a registered corporate authorised representative (authorised representative number 1238253) of Specialised Investment and Lending Corporation Pty Ltd (the “Licensee”).

Mr Nicholas Lawson is the principle person responsible for the investment decisions made by the Investment Manager. Mr Lawson’s relevant qualifications include:

RG 146 - Generic Knowledge - Level 1

RG 146 - Accredited Derivatives Advisor - Level 1

Mr Lawson’s relevant experience includes trading full time for 15 years. He has predominantly traded his own wealth during this time.

Mr Kane Jackson is the Chief Executive Officer of the Investment Manager and also plays a key role in investment decisions of the Fund. Mr Jackson’s relevant qualifications include:



Mr Jackson’s relevant experience includes serving as a Director of investment manager BKF Investments Pty Ltd and most recently as Managing Director of Capstone Investment Group Pty Ltd.

Mr Jackson and Mr Lawson are committed to the success of the Fund and they intend to devote as much time as is required for the Fund to achieve its investment objectives. It is anticipated this will occupy approximately 50% and 100% of their full time working hours, respectively.

3.4




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There have been no adverse regulatory findings against Mr Lawson, Mr Jackson, the Investment Manager or the Responsible Entity. The Investment Management Agreement between the Responsible Entity and the Investment Manager provides that the Responsible Entity may terminate the Investment Manager’s appointment with 90 days prior written notice or with 20 days written notice if the Investment Manager has materially breached the Investment Management Agreement and this breach is not rectified.

Fund structure The Fund is a registered Australian MIS and is structured as an account based trust.

Vasco Investment Managers Limited is the responsible entity of the Fund and issuer of this PDS and interests in the Fund (“Interests”).

Empire Equity Group is the investment manager of the Fund, operating under the Australian financial services licence (“AFSL”) of the Licensee.

Australian Executor Trustees Ltd (ABN 84 007 869 794, AFSL 240023) (the “Custodian”) is the custodian of the Fund’s assets.

Apex Fund Services (Australia) Pty Ltd (the “Administrator”), is the Fund’s administrator.

3

Valuation, location and custody of assets

The Administrator will complete monthly valuations of the Fund’s assets and each Investor’s account balance. Valuations will take into consideration:

both realised and unrealised returns and losses made by the Fund’s investments

amounts contributed to or and withdrawn by Investors

fees charged by the Fund

expenses and transaction costs incurred by the Fund

any other amount of gains or losses which are attributable to an Investor by the Fund’s Constitution (the “Constitution”)

The Fund will only invest in cash, fixed interest and over-the-counter or exchange traded derivatives and these assets will be valued using external valuations of the assets’ market price. All derivatives will be entered into with a counterparty or exchange which is located within Australia and held by the external Custodian. All cash and fixed interest investments will be entered into with a depository institution (e.g. a bank) and held by the external Custodian.

7.2

Liquidity The Responsible Entity reasonably expects that it will be able to realise 100% of the Fund’s assets within 30 Business Days,

7.3




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except:

in the case of derivative investments where a counterparty has imposed a trading suspension or restriction (e.g. due to periods of extreme market volatility or suspension of trading in the underlying asset);

in the case of a fixed interest investment where the investment is subject to a withdrawal notice period – e.g. a term deposit may have a 31-day notice period; or

in the case of a cash or fixed interest investment in the unlikely event that the depository institution has suspended or restricted withdrawals – e.g. where a bank is in financial distress.

The imposition of the suspensions or restrictions noted above are rare.

The Fund will be able to realise the value of any cash or fixed-income investments at all times subject to any break fees (e.g. term-deposit administration fee for early withdrawal).

As the value of commodities and foreign exchange rates are constantly changing, a valuation of a derivative is only valid at the point in time in which the derivative is valued.

To minimise the risk that the Fund will lack required liquidity, the Fund has imposed the following controls:

The Fund will not enter into new derivatives once the level of withdrawal requests reach 90% of the Fund’s available cash assets

The Fund will limit the amount of margin available to a single trade to be 20% of funds under management

Leverage (c) The Fund invests in highly leveraged derivative investments which means that gains and losses of the Fund are magnified and will generally be large in proportion to the money invested. The Fund will not otherwise use leverage.

The Fund’s maximum allowable level of leverage is 200 times the amount in which the Fund has allocated to over-the-counter and exchange traded derivatives. For example, if the Fund had $100 million in assets and $50 million was invested in derivative investments (which would be the maximum allowable derivatives exposure under the Fund’s investment strategy), the Fund could have $10,000 million exposure to the underlying assets in the derivative instruments. This means that for every $1 of the Fund’s net asset value, the Fund may be leveraged up to $100.

7.4




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Derivatives The Fund gains exposure to foreign exchange rates and commodities through investing in highly leveraged derivatives. Derivatives form a significant part of the Fund’s investments and are the primary component of the Fund’s investment strategy. The Fund will invest in over-the-counter and exchange traded derivatives. These derivatives will primarily be comprised of over-the-counter contracts-for-difference but may also include exchange traded derivatives.

The Fund will enter into derivatives with counterparties. This exposes the Fund to the risk that the counterparty will default on payment. Counterparty risk explored in further detail in Table 4 in section 6, below. To manage this risk, the Fund will only deal with a counterparty where it has completed appropriate due diligence.

When selecting a derivative counterparty the Fund will only engage a provider who do not use client or Fund money for proprietary trading. In addition, the Fund will only engage a provider who do not hedge with client funds, or, if it does, that it hedges 100% of client positions equally and does not hold proprietary positions by default as a direct result of unbalanced hedge positions.

When the Fund enters into a derivative it will be required to place an amount of collateral (or margin) with the counterparty. This collateral may be lost if the market moves against the derivative. Also, it is subject to counterparty risk if the counterparty becomes insolvent or under administration. In this event, the Fund will become an unsecured creditor and may not be able to recover some or all of the collateral.

As noted in “Periodic Reporting” in section 2.1, we will report on our counterparties annually on our website. As at the time of this PDS, we will use First Prudential Markets Pty Ltd (AFSL 286354) (FP Markets) as a counterparty.

7.5

Short selling Short selling is where a person sells a financial product that they do not own with a view to repurchase them later at a lower price. The Fund does not participate in short selling.

Although the Fund does not participate in short selling, the Fund does take short positions through the purchase of short derivatives if it is expected that the underlying asset will depreciate. When the Fund purchases a short derivative, there is a risk of loss in the event that the underlying asset moves against the derivative (appreciates). However, the risk of loss is present in all the derivatives in which the Fund invests.

7.6

Withdrawals You can make a withdrawal request at any time whilst the Fund is liquid. The Fund will be liquid if 80% of Fund assets can be realised within 30 Business Days. The Responsible Entity intends to accept and process withdrawals requests once a month. However, failing this the Responsible Entity has

10.1




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30 Business Days to accept or reject withdrawal requests.

The Fund must only reject a withdrawal request if the Fund:

does not contain sufficient liquid assets to fulfil the total amount of withdrawals requested to be made by Investors;

the Trust is exposed to significant unrealised gains or losses; or

the Responsible Entity reasonably believes that it is in the best interests of the Investors to do so.

If the Fund is not-liquid (less than 80% of Fund assets can be realised in 30 Business Days), withdrawals are only permitted in response to a withdrawal offer made by the Responsible Entity. The Responsible Entity intends to make a withdrawal offer to all Investors every month.

However, the Responsible Entity may decide not to make a withdrawal offer, or may cancel a withdrawal offer, if the Fund does not contain sufficient liquid assets to fulfil the total amount of withdrawals, if the Fund is exposed to significant unrealised gains or losses, or if the Responsible Entity reasonably believes it is in the best interests of Investors.

The Responsible Entity may also cancel a withdrawal offer in accordance with the Corporations Act.

3 Fund Structure

3.1 Fund

The Fund is a registered Australian MIS and is structured as an account based trust. If you make a contribution to the Fund which is accepted by the Responsible Entity, you will be issued an Interest in the Fund. Your money will be pooled with the money of other Investors. Holding an Interest does not give you the right to participate in the management or operation of the Fund. If you already hold an Interest and make an additional investment, this increases the value of your Interest. It does not mean that you hold more than one Interest.

3.2 Key Entities

The diagram below (Figure 1) shows the key entities in the Fund structure and the flow of investment money between them. Each of these entities is based in Australia. None are related parties and all material arrangements are on arm’s length terms. The Responsible Entity regularly monitors the performance of each service provider against agreed service standards set out in the relevant services agreement.

The Fund’s structure involves risk, including Fund risk, described in Section 6 (Risks).

The key entities are described in further detail in the following paragraphs of this Section 3 (Fund Structure).




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Figure 1 – Fund structure diagram

3.3 Responsible Entity

Vasco Investment Managers Limited is the Responsible Entity of the Fund.

The Responsible Entity’s team has significant experience in the Asia Pacific region in the management of investment funds, including equity funds, fixed income funds, real estate investment trusts, private equity real estate funds, real estate securities funds, and mortgage and real estate debt funds.

3.4 Investment Manager

Empire Equity Group is the Investment Manager and has been appointed by the Responsible Entity to manage the Fund’s investments and make investment decisions within an approved investment mandate, under an Investment Management Agreement.

The Investment Manager is a registered corporate authorised representative of Specialised Investment and Lending Corporation Pty Ltd (the Licensee), under a Corporate Authorised Representative Agreement.

Mr Nicholas Lawson is the principle person responsible for the investment decisions made by the Investment Manager. Mr Lawson’s relevant qualifications include:



Mr Lawson’s relevant experience includes trading full time for 15 years. He has predominantly traded his own wealth during this time. Mr Lawson acquired his trading knowledge during his time as understudy to his mentor, a successful career trader. Over the past 15 years he has refined his trading techniques and is known to be a disciplined trader utilising the techniques expounded by the Fund’s investment strategy.

Mr Kane Jackson is the Chief Executive Officer of the Investment Manager and also plays a key role in investment decisions of the Fund. Mr Jackson’s relevant qualifications include:






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Mr Jackson’s relevant experience includes serving as a Director of investment manager, BKF Investments Pty Ltd, and most recently as Managing Director of Capstone Investment Group Pty Ltd.

Mr Jackson and Mr Lawson are committed to the success of the Fund and they intend to devote as much time as is required for the Fund to achieve its investment objectives. It is anticipated this will occupy approximately 50% and 100% of their full time working hours, respectively.

There have been no adverse regulatory findings against Mr Lawson, Mr Jackson, the Investment Manager or the Responsible Entity. The Investment Management Agreement provides that the Responsible Entity may terminate the Investment Manager’s appointment with 90 days prior written notice or with 20 days written notice if the Investment Manager has materially breached the agreement and this breach is not rectified.

In addition, the Investment Management Agreement provides that the Investment Manager can give notice to the Responsible Entity to retire from the role of responsible entity of the Fund. The Responsible Entity must call a meeting of members within 28 days (if required by law) and nominate a new responsible entity chosen by the Investment Manager.

Empire Equity Group operates the Club. The Club is a membership organisation that provides benefits to its members. Those benefits begin with eligibility to invest in the Fund and extend to lifestyle privileges such as events and experiences. This structure has been designed from a viewpoint that fees paid to membership organisations should not just be an expense; that they should also be an investment in your future from a financial, lifestyle, networking and life experience perspective.

3.5 Custodian

Australian Executor Trustees Ltd (AET) has been appointed by the Responsible Entity as the Fund’s custodian under a Custody Agreement. The Custodian’s role is to hold the assets of the Fund. When you invest in the Fund, your money goes directly to the Custodian. Australian Executor Trustee Limited’s role as Custodian is limited to holding the assets of the Fund.

AET is one of Australia’s largest and oldest licensed trustee companies. AET has been providing custody and trustee services for over 130 years, having been established in 1880. AET is a member of the IOOF Holdings Limited (“IOOF”) Group, a leading provider of wealth management products and services in Australia. IOOF is an ASX200 listed company.

The Responsible Entity has appointed Australian Executor Trustees Limited under a Custodian Agreement. The Custodian’s role is to hold the assets in its name and act on the direction of the Responsible Entity to effect cash and investment transactions.

Australian Executor Trustees Limited has no supervisory role in relation to the operation of the Fund and has no liability or responsibility to a unit holder for any act done or omission made in accordance with the Custodian Agreement.

Australian Executor Trustee Limited’s role as Custodian is limited to holding the assets of the Fund.




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Australian Executor Trustees Limited (“AET”) collects your personal information for primarily the purpose of providing custodial services to the Responsible Entity and for ancillary purposes detailed in the Privacy Policy. AET may disclose your personal information, such as, your name and contact details, along with your account information to its related bodies corporate, the Responsible Entity, Investment Manager professional advisers, the land titles office and/or as otherwise instructed by the Responsible Entity. We are also permitted to collect and disclose your personal information when required or authorised to do so by law. AET is not likely to disclose your personal information to overseas recipients. Your personal information will be used in accordance with AET’s Privacy Policy. The Privacy Policy contains information about how you may access or correct your personal information held by AET and how you may complain about a breach of the Australian Privacy Principles. You may obtain a copy of the Privacy Policy at www.aetlimited.com.au/privacy

Australian Executor Trustees Limited has not withdrawn its consent to be named in this PDS as custodian of the Fund in the form and context in which it is named. Australian Executor Trustees Limited does not make, or purport to make, any statement that is included in this PDS and there is no statement in this PDS which is based on any statement by Australian Executor Trustees Limited.

To the maximum extent permitted by law, Australian Executor Trustees Limited expressly disclaims and takes no responsibility for any part of this PDS other than the references to its name. Australian Executor Trustees Limited does not guarantee the repayment of capital or any particular rate of capital or income return.

3.6 Administrator

Apex Fund Services (Australia) Pty Ltd has been appointed by the Responsible Entity as the Fund’s administrator under a Fund Administration Agreement and is responsible for the day to day administration of the Fund.

3.7 Financial Auditor

Pitcher Partners (ABN 27 975 255 196) (the “Financial Auditor”) has been appointed by the Responsible Entity as the approved auditor of the Fund’s financial accounts. The Financial Auditor has also been appointed as the auditor of the Investment Manager’s financial accounts.

3.8 Compliance Plan Auditor

Pitcher Partners (ABN 27 975 255 196) (the “Compliance Plan Auditor”) has been appointed as the approved auditor of the Fund’s compliance with its Compliance Plan (see Section 10.10 (Compliance Plan) below).

4 Features and Benefits

4.1 Professional management

The Responsible Entity’s team has significant experience in the management of investment funds in the Asia Pacific region, having been responsible for numerous investment funds, including equity funds, fixed income funds, real estate investment trusts, private equity real estate funds, real estate securities funds, and mortgage and real estate debt funds. The Investment Manager brings over a decade of valuable expertise in the trading of derivatives, which are key to the Fund’s investment strategy.

http://www.aetlimited.com.au/privacy




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4.2 Ability to benefit from both market rises and falls

Typical ‘buy-and-hold’ share investments rely on the value of the purchased shares increasing. Derivative investments, on the other hand, can be multi-directional, meaning that money can be made in a market that is rising or a market that is falling. This means an expected period of poor economic or stock market performance may not of itself be a reason to avoid investing.

For more information, see Section 7 (How the Fund Invests) below.

4.3 No lengthy lock-in periods

There are generally no lock-in periods for an investment in the Fund. Although the suggested minimum investment timeframe is 12 months, you can request to withdraw all or part of your investment at any time the Fund is liquid. The Responsible Entity has 30 Business Days to accept a withdrawal. However, the Responsible Entity anticipates accepting withdrawals once per month. Payment of your withdrawal must occur within 15 Business Days of acceptance, although the Responsible Entity anticipates payment soon after acceptance. Note, there are some circumstances in which the Responsible Entity may not accept withdrawals within 30 Business Days. This is outlined in more detail in section 10.1 (Withdrawals), below.

4.4 Access to information

Investors will receive monthly and annual reports detailing their investments and can also download the Empire smartphone and web-based electronic investment management application (for iOS and Android) (the “App”). The App allows you to track your investments, view the overall performance of your account, schedule withdrawals and deposits, set your payment preferences, and prepare performance reports. The main limitation of the App is that it provides you with only a notional and interim representation of your investment account and may not be perfectly accurate. The data available on the App is subject to change and is adjusted once a month when official data is prepared by the Administrator for the purposes of Investors’ monthly reports.

Investors will also have access to information as outlined in Benchmark 2 (Periodic Reporting) in Table 2, above.

The App also has other functions related to the Club, such as accessing privileges, inviting friends to the Club and managing Club preferences.




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5 Hypothetical Past Performance

As the Fund is a new fund, there is no actual past performance figures for the Fund. However, Empire Equity Group has been trading in its own funds using the same investment strategy as the Fund.

The below graph represents the hypothetical past performance of the Fund based on Empire Equity Group’s trading of its own funds during that period, less performance fees that would have applied. Accordingly, the past performance information in this section is hypothetical past performance information only. Past Performance is not a reliable indicator of future performance.




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The above graph is based on the results of Empire Equity Group between 1st June 2014 and 30th June 2015. It is based on a starting balance of $25,000. It does not take into account any deposits or withdrawals and assumes the permitted investment limits for a Platinum Member. It is adjusted to take out the fees that you would have paid on such performance. It assumes that any distributions are reinvested and does not take into account any taxes payable. As noted above, this is based upon Empire Equity Group’s trading of its own funds. The Fund is a new fund, so there is no actual past performance figures for the Fund.

6 Risks

All investments carry risk. Different investment strategies may carry different levels of risk depending on the assets that make up the strategy. Assets with potentially higher long-term returns may also have a higher risk of losing money in the short term. Potential Investors should consult a licenced financial adviser to determine an appropriate level of risk for them (known as their ‘risk profile’).

The following is a description of some of the significant risks involved with the Fund and how they are managed.

Table 4 – Risks

Risk Explanation

Investment risk

The Fund invests in highly leveraged and risky derivatives. The prices of underlying assets can be influenced by a variety of global factors which may be unpredictable. Small movements in an underlying asset price can result in significant gains or losses. Consequently, Fund investment returns can be volatile. It is possible for you to lose your full investment due to significant movements in the market against the Fund’s investments. Prior to investing, you should carefully consider whether investing in the Fund is suitable to you.

To minimise investment risk the Fund’s Investment Manager adopts an investment strategy which includes a number of risk management measures specified in this table below, including:

employing an investment strategy which applies a technical analysis of the market by an experienced trader

50% limit on the amount of funds which can be used for trading as margin;

imposing maximum limits on a single trade

not trading during periods of significant market uncertainty

investment committee monitoring.

Counterparty risk

There is a risk that a party to a transaction fails to meet its obligations under a contract, causing loss to the Fund.

The Investment Manager will manage this risk by carefully choosing counterparties that the Investment Manager believes are less likely to default on their obligations and carefully monitoring them.

The Fund will only deal with a counterparty where the Investment Manager has completed appropriate due diligence.




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Risk Explanation

When selecting a derivative counterparty the Fund will only engage a provider who does not use client or Fund money for the purpose of proprietary trading. In addition, the Fund will engage only a provider who does not hedge with client funds, or, if it does, that it hedges 100% of client positions equally and does not hold proprietary positions by default as a direct result of unbalanced hedge positions.

The Fund will review its exposure to counterparties on an ongoing basis and use multiple counterparties where appropriate.

Derivatives risk

The Fund invests in derivatives (including over-the-counter and exchange traded instruments) which are sophisticated financial products. Derivatives will generally involve leverage and hence have the potential to cause losses that are large in proportion to the money invested in them. Refer to ‘Leverage risk’ and Sections 7.4 (Leverage) and 7.5 (Derivatives) below for more details about how derivatives are used. The use of derivatives may also give rise to counterparty risk as set out above.

The Investment Manager will manage this risk by implementing:

diversification guidelines and limits

a maximum limit on the amount of funds which can be used as margin for any one derivative trade which is 20% of the value of Fund assets

a policy to minimise potential losses for all derivative trades to use stop losses which aim to limit losses to an acceptable level

An extreme market event may cause a slippage in the market of the underlying asset. In this event, a stop loss may not be effective and it can result in a loss which is significantly greater than the Fund’s account balance. The Fund has accepted the risk of this occurring.

Fund risk As with all managed funds, there is a risk that the Fund could terminate, the Fund’s fees and costs could change, the Responsible Entity or Investment Manager could change, or the investment professionals involved with the Fund could change. There is also a risk that investing in the Fund may give different results to investing directly, because of income or capital gains accrued in the Fund and the consequences of investment and withdrawals by other Investors.

The Responsible Entity and Investment Manager will manage fund risk by monitoring the Fund regularly and acting in Investors’ best interests. The Fund will notify Investors of any changes in fees, responsible manager, Investment Manager or key investment professionals through electronic message (or otherwise as required by law) and provide Investors with the opportunity to withdrawal from the Fund.

Members are also entitled by law to vote on removing the responsible entity of the Fund by calling a members meeting and voting on an extraordinary resolution.

Interest rate risk

Changes in interest rates can negatively influence the value and returns of investments.




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Risk Explanation

The Investment Manager will manage this risk by ensuring careful analysis is conducted on relevant research material.

Legal and regulatory risk

There is a risk that laws or regulations (including tax laws) change in a way that adversely affects investments in the Fund.

The Responsible Entity (in addition to the Investment Manager) will manage this risk by regularly reviewing regulatory and government policy and law reform proposals, in order to anticipate changes in the legal, regulatory and taxation environment.

Leverage risk The Fund invests in highly leveraged derivative investments which means that gains and losses are magnified and will generally be large in proportion to the money invested. The Fund will not otherwise use leverage.

Losses may exceed the Fund’s trading account balance if the Fund has entered into a derivative where the underlying asset is subject to an extreme market event.

As noted in Derivatives Risk (above), the Investment Manager) aims to manage this risk by implementing:

diversification guidelines and limits

a maximum limit on the amount of funds which can be used as margin for any one derivative trade which is 20% of the value of Fund assets

a policy to minimise potential losses for all derivative trades to use stop losses which aim to limit losses to an acceptable level.

An extreme market event may cause a slippage in the market of the underlying asset. In this event, a stop loss may not be effective and it can result in a loss which is significantly greater than the Fund’s account balance. The Fund has accepted the risk of this occurring.

Market risk Changes in legal and economic policy, political events, technology failure, interest rates, economic cycles, investor sentiment and social climate can all directly or indirectly influence (negatively or positively) the value of investments in the Fund. Consequently, this may result in a fundamental shift in the market which is not reflected in the Fund’s technical analysis.

The Investment Manager aims to manage this risk by not trading in periods, deemed by the Investment Manager, of significant market uncertainty, for example:

significant economic, political or geological events

key government and economic data announcements

central bank announcements.

In addition, the investment committee will meet quarterly to monitor market conditions and the Fund’s record in periods of market uncertainty.

Outsourcing risk

The Responsible Entity outsources key operational functions, including investment management, custody, administration and valuations to third




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Risk Explanation

party service providers. There is a risk that these service providers may intentionally or unintentionally breach their obligations to the Fund or provide services below their expected standards, causing loss to the Fund.

The Responsible Entity will manage this risk by conducting sufficient due diligence on service providers before their appointment, engaging service providers that the Responsible Entity believes have a lower likelihood of defaulting, and negotiating contractual terms which protect Investors’ interests.

Trading strategy risk

The investment strategy requires the Investment Manager to correctly identify market movement indicators through an active technical analysis of the market. There is a risk that Indicators are not identified correctly or are not traded upon correctly and in a timely fashion.

To manage this risk, the Investment Committee monitors the Investment Manager’s performance during periodic Investment Committee meetings. Day-to-day trading is supervised by The Managing Director of Empire Equity Group Pty Ltd.

Liquidity risk Derivatives traded by the Fund are traded either on an exchange or through a counterparty. Trading in both of these types of derivatives are subject to suspensions or restrictions imposed by the exchange or the counterparty (as applicable).

For over-the-counter derivatives, the Fund will manage this risk in the same way in which it manages its counterparty risk as described above. For exchange traded derivatives, the Fund will manage this risk by only engaging with exchanges following the completion of due diligence and limiting its exposure to one single exchange in the same manner in which it limits its exposure to a single counterparty.

7 How the Fund Invests

7.1 Investment objective and strategy

The Fund aims to produce investment returns through the identification and exploitation of market movement indicators (“Indicators”) primarily in the foreign exchange and commodities markets. The Fund identifies Indicators through an active technical analysis of market data in relation to historical and current asset prices and trading volume. Trading is in accordance with the Fund’s proprietary trading methodology which indicates when trades should be entered and exited.

The Fund invests in:

Over-the-counter or exchange traded derivatives with underlying assets in foreign exchange rates and commodities – for example, currency contracts, bullion contracts, commodity contracts or derivatives over listed shares or market indexes

Cash and fixed interest investments – for example, bank savings accounts and term deposit products




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The assets of the Fund are normally located in Australia and valued in Australian dollars. The use of leverage, derivatives and short selling by each Fund is outlined in more detail in section 7.5.

The Fund will also produce investment returns by investing in bank deposit products. However, this does not form part of the Fund’s primary investment strategy.

The Fund’s investment strategy relies upon the following dependencies and assumptions:

Market volatility is needed to make a profit (or loss) – the Fund invests in derivatives that derive their value from movements in the price of the underlying asset. Derivatives only result in a profit or loss if the value of the underlying asset moves. The degree of the profit or loss is also dictated by the degree of the movement in the underlying asset.

Indicators are correctly identified through the Fund’s technical analysis – the Fund is dependent upon the correct analysis of market data in accordance with the Fund’s investment strategy. It is also assumes that the Fund’s proprietary trading methodology correctly identifies market movements which will not always be the case.

History repeats – the Fund’s analysis assumes that, in the long-term, the market will reflect historical movements. It assumes that the market will have similar patterns and trends and that these can be predicted and identified. It assumes that future trends can be identified using historical market data.

There are no fundamental shifts in the market – market events can result in fundamental shifts in the market. For example, a currency unpegging or a central bank’s interest rate change will result in a fundamental shift in the market that is not reflected in historical data. The Fund’s technical analysis assumes that there will be no fundamental shifts in the market and trades using a strategy that avoids periods of market uncertainty.

Trades are correctly traded upon and executed in a timely fashion – the Fund’s investment strategy assumes that the Investment Manager has the ability to trade correctly in accordance with the investment strategy. Given the dynamic nature of financial markets, it also assumes that trades can be executed in a timely fashion to exploit identified Indicators.

The Fund has imposed diversification guidelines and limits. The Fund must only allocate:

0-50% of Fund assets to over-the-counter and exchange traded derivatives

0-100% of Fund assets to cash or fixed income investments

The Fund has adopted an organisational risk management strategy procedure to identify and assess risks which are applicable to the Fund and to manage and implement procedures to control those risks. Refer to Table 4 in section 6 for a complete list of investment strategy specific risks and associated controls.

The investment strategy for the Fund may change from time to time. The Responsible Entity will notify Investors of any change to the Fund’s investment strategy via their online accounts or as required by law.




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7.2 Valuation, location and custody of assets

The Administrator will complete monthly valuations of the Fund’s assets and each Investor’s account balance. Valuations will take into consideration:

both realised and unrealised returns and losses made by the Fund’s investments

amounts contributed to or and withdrawn by Investors

fees charged by the Fund

expenses and transaction costs incurred by the Fund

any other amount of gains or losses which are attributable to an Investor by the Constitution

The Fund will only invest in cash, fixed interest and over-the-counter or exchange traded derivatives and these assets will be valued using external valuations of the assets market price. All derivatives will be entered into with a counterparty or exchange which is located within Australia and held by the external Custodian. These counterparties will provide the Administrator with valuations of the derivative. All cash and fixed interest investments will be entered into with a depository institution (e.g. a bank) and held by the external Custodian. These depository institutions will provide the Administrator with valuations of the cash and fixed interest investments.

Table 5 – Asset Classes

Asset Class Proportion of Net Asset Value of Fund

Cash and fixed interest investments 0 – 100%

Over-the-counter and exchange-traded derivatives

0 – 50%

7.3 Liquidity

The Responsible Entity reasonably expects that it will be able to realise 100% of the Fund’s assets, except:

in the case of derivative investments where a counterparty has imposed a trading suspension or restriction (e.g. due to periods of extreme market volatility or suspension of trading in the underlying asset);

in the case of a fixed interest investment where the investment is subject to a withdrawal notice period – e.g. a term deposit may have a 31-day notice period; or

in the case of a cash or fixed interest investment in the unlikely event that the depository institution has suspended or restricted withdrawals – e.g. where a bank is in financial distress.

The imposition of the suspensions or restrictions noted above are rare.

The Fund will be able to realise the value of any cash or fixed-income investments at all times subject to any break fees (e.g. term-deposit administration fee for early withdrawal).




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As the value of commodities and foreign exchange rates are constantly changing, a valuation of a derivative is only valid at the point in time in which the derivative is valued.

To minimise the risk that the Fund will lack required liquidity, the Fund has imposed the following controls:

The Fund will not enter into new derivatives once the level of withdrawal requests reach 90% of the Fund’s available cash assets.

The Fund will use multiple derivative counterparties.

The Fund will limit the amount of margin available to a single trade to be 20% of funds under management.

7.4 Leverage

The Fund invests in highly leveraged derivative investments which means that gains and losses are magnified and will generally be large in proportion to the money invested. The Fund will not otherwise use leverage.

A derivative is a product that derives its value from an underlying asset. That underlying asset may be gold or oil, for example. The Investor has exposure to the price movement of the asset without having to own the asset. The use of leverage in derivative investments means that gains and losses are magnified. For example, a $100 derivative investment might have an exposure of $10,000 to the underlying asset. If the asset increases by 10% to $11,000 the Investor has made $1,000 on its initial investment of $100. If the asset falls by 1%, the Investor would lose its entire $100. (Note this is a simplified example for the purpose of demonstrating the effect of leverage and does not take into account any commissions, fees, costs or interest which would also affect the return on the investment.)

The risk of loss is managed by limiting the value of derivative investments. It is intended that no more than 25% of the assets of the Fund will be invested in derivatives at any one time (although a maximum of 50% is permissible).

The Fund’s maximum allowable level of leverage is 200 times the amount in which the Fund has allocated to over-the-counter and exchange traded derivatives. For example, if the Fund had $100 million in assets and $50 million was invested in derivative investments (which would be the maximum allowable derivatives exposure under the Fund’s investment strategy), the Fund could have $10,000 million exposure to the underlying assets in the derivative instruments. This means that for every $1 of the Fund’s net asset value, the Fund may be leveraged up to $100.

7.5 Derivatives

The Fund gains exposure to foreign exchange rates and commodities through investing in highly leveraged derivatives. Derivatives form a significant part of the Fund’s investments and are the primary component of the Fund’s investment strategy. The Fund will invest in over-the-counter and exchange traded derivatives. These derivatives will primarily be comprised of over-the-counter contracts-for-difference but may also include exchange traded derivatives.

When selecting derivative counterparties the Fund will engage only those providers who do not use client or Fund money for the purpose of proprietary trading. In addition, the Fund will engage only providers who do not hedge with client funds, or,




29 February 2016

if they do, that they hedge 100% of client positions equally and do not hold proprietary positions by default as a direct result of unbalanced hedge positions.

When the Fund enters into a derivative it will be required to place an amount of collateral (or margin) with the counterparty. This collateral may be lost if the market moves against the derivative. Also, it is subject to counterparty risk of the counterparty becomes insolvent or under administration. In this event, the Fund will become an unsecured creditor and may not be able to recover some or all of the collateral.

As at the time of this PDS, we will use First Prudential Markets Pty Ltd (AFSL 286354) (FP Markets) as a counterparty.

7.6 Short selling

Short selling is where a person sells a financial product that they do not own with a view to repurchase them later at a lower price. The Fund does not participate in short selling.

However, the Fund does take short positions through the purchase of short derivatives if it is expected that the underlying asset will depreciate. When the Fund purchases a short derivative, there is a risk of loss in the event that the underlying asset increases in value. However, the risk of loss is present in all the derivatives in which the Fund invests.

7.7 Suggested minimum investment timeframe

The suggested minimum timeframe for an investment in the Fund is 12 months.

7.8 Labour standards and environmental, social and ethical considerations

The Fund does not take into account labour standards and environmental, social and ethical considerations in the selection, retention and realisation of investments.




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8 Fees and Other Costs

8.1 Consumer Advisory Warning

DID YOU KNOW?

Small differences in both investment performance and fees and costs can have a substantial impact on your long-term returns.

For example, total annual fees and costs of 2% of your account balance rather than 1% could reduce your final return by up to 20% over a 30 year period (for example, reduce it from $100,000 to $80,000).

You should consider whether features such as superior investment performance or the provision of better member services justify higher fees and costs.

You may be able to negotiate to pay lower contribution fees and management costs where applicable. Ask the fund or your financial adviser.

TO FIND OUT MORE

If you would like to find out more, or see the impact of the fees based on your own circumstances, the Australian Securities and Investments Commission (ASIC) website (www.moneysmart.gov.au) has a managed funds fee calculator to help you check out different fee options.

This section shows the fees and other costs that you may be charged. These fees and costs may be deducted from your money, from the returns on their investments or from the assets of the MIS as a whole.

Taxes considerations are set out in section 9 of this document.

You should read all the information about fees and costs because it is important to understand their impact on your investment.

8.2 In brief

We aim to charge you fees only when you are getting a healthy return – so we charge performance fees. It wouldn’t be fair to take a performance fee if we hadn’t performed. And so for that reason, we don’t.

We have 2 types of performance fees: the Consistent Performance Fee and the Exceptional Performance Fee.

As the name suggests, we charge the Consistent Performance Fee for consistently good performance. We average out monthly performance over a 12-month period, and if we are on track to perform more than 10% per annum then we earn 25% of your profit. If average performance is less than 10% per annum, you will be charged a total of zero for this fee.

As you may have guessed, we charge the Exceptional Performance Fee for exceptional performance. If we earn more than 5% in any given month (which would be 60% per year), we take 33% of the profit over that 5% as a reward for doing so well.

However… the Investment Manager is paying operational fees for the Fund. In the event that the Investment Manager does not pay these fees, you will be charged instead (we hope this never happens). For more information on circumstances whereby the Investment Manager might not pay these fees, see section 8.4(h). There are two operational fees – the RE Fee and the Admin Fee. You will also

http://www.moneysmart.gov.au/




29 February 2016

indirectly incur incidental costs which are primarily costs of investing, e.g. brokerage fees. These costs are spread out across all Investors.

All of these fees and costs are described in detail below. You should read all of this information to understand how these fees work.

Table 6 – Fees and Costs

Empire Club Investment Fund

Type of fee or cost Amount How and when paid

Fees when an investor’s money moves in or out of the managed investment product

Establishment fee 1

The fee to open the investment.

Nil.1 Not applicable.

Contribution fee

The fee on each amount contributed to the investment.

Nil. Not applicable.

Withdrawal fee

The fee on each amount an investor take out of its investment.


Exit fee

The fee to close an investment.


Management costs

The fees and costs for managing an investor’s investment. 2

“RE Fee” – 0 to 0.3% p.a.

(subject to an annual minimum amount described in note 3 below)3

You will only pay this fee if the Investment Manager fails to pay this fee.

To the extent that the Investment Manager does not pay for all or some of the RE Fee, it will be deducted from the Fund’s assets and paid by Investors monthly within 5 Business Days of the last Business Day of the month.

(d) PLUS

“Admin Fee” – 0 to 0.11% p.a.

(subject to an monthly minimum amount and an annual 3% increase described in note 4 below)4

You will only pay this fee if the Investment Manager fails to pay this fee.

To the extent that the Investment Manager does not pay for all or some of the Admin Fee, it will be deducted from the Fund’s assets and paid by Investors monthly on the last Business Day of the




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Empire Club Investment Fund

Type of fee or cost Amount How and when paid

month.

PLUS

“Consistent Performance Fee” 25% of the Rolling 12-month Average Return pro-rated for the month5 multiplied by the Investor’s account balance.

This fee is payable by you to the Investment Manager if the “Rolling 12-month Average Return” 5 for that month exceeds 10% per annum (“Consistent Performance Target”).

If payable, the Consistent Performance Fee will be deducted from the Investor’s account monthly in arrears, within 5 Business Days of the last Business Day of the month. 6

PLUS

“Exceptional Performance Fee” - 33% of the amount that the return on an Investor’s account exceeds 5% per month (“Exceptional Performance Target”).

If payable, the Exceptional Performance Fee will be deducted from the Fund’s assets monthly in arrears, within 5 Business Days of the last Business Day of the month.6

PLUS

“Incidental Costs”7 – 0 to 0.50% p.a.

Incidental Costs are deducted from the Fund’s assets as and when the costs are incurred. Primarily, these are the costs of investing (e.g. brokerage costs).

Service fees

Switching fee

The fee for changing from one investment to another.

Not applicable. Not applicable.

Transfer fee8

The fee for transferring or assigning an Interest.

$50 per transfer or assignment.

Deducted from your investment balance at the time of the transfer or assignment.

1 However, each Investor must be a member of the Empire Club. “Club Membership Fees” apply to the Empire Club membership. See Section 10.2 (Club Membership Fee) below for further information. The Club is separate from the Fund and Club Membership Fees are not fees of the Fund.

2 These fees include the RE Fee, the Admin Fee, the Consistent Performance Fee, Exceptional Performance Fee, and Incidental Costs. See Section 8.4(b) (Performance Fees) below for further information.




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3 The RE Fee is calculated as follows:

Fund Value RE Fee

< $150 million (e) 0.30% per annum of Fund Value, subject to a minimum annual amount of $50,000 for the whole Fund in the 1

st year from 15 December 2015, and

$60,000 in subsequent years.

$150 million or more but less than $400 million

0.20% per annum of Fund Value.

$400 million or more 0.10% per annum of Fund Value.

The RE Fee is payable to the Responsible Entity, based on the most recently calculated net asset value of the Fund (“Fund Value”). The RE Fee is calculated monthly in arrears by reference to the

Fund Value as at 5:00pm on the last Business Day of every month.

4 The Admin Fee is payable to the Administrator, based on the most recently calculated net asset value of the Fund (“Fund Value”). The Admin Fee equals $2,200 per month or 0.11% p.a. of Fund Value, whichever is greater. This fee will increase by 3% on 1 January 2017 and each year after.

5 The Rolling 12-month Average Return for a particular month will be calculated as the average of monthly returns earned by the Investor for the 12 months up to the most recent month end. See example in Table 7 for a detailed explanation, below.

6 The calculation and time for payment may be different if a Trigger Event occurs. See Section 8.4(c) (Trigger Events) below for further information.

7 Incidental Costs are costs associated with operating the Fund incurred by the Responsible Entity and/or the Investment Manager (as the case may be) and payable by the Fund. This amount is an estimate only.

8 See Section 8.4(d) (Transfer Fee) below for further information.

8.3 Example of annual fees and costs for Fund

The table below gives an example of how the fees and costs for the Fund can affect an Investor’s investment over a 1-year period. Potential Investors should use this table to compare this product with other managed investment products.

Table 7 – Examples of Fees and Costs

Example Percentage Balance Of $50,000 With a Contribution of $5,000 During Year

Contribution Fees

Nil. Nil. Nil.

Management Fees

PLUS RE Fee

Nil.1 Nil.2

PLUS Admin Fee

Nil.3 Nil.4

PLUS Consistent Performance Fee5

14.90% per annum7

And, for every $50,000 you invest, we estimate that you will be charged $34,238.91 each year.7




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Example Percentage Balance Of $50,000 With a Contribution of $5,000 During Year

PLUS Exceptional Performance Fee6

20.94% per annum7

And, for every $50,000 you invest, we estimate that you will be charged $48,125.18 each year. 7

EQUALS Cost of Fund

If you had an investment of $50,000 at the beginning of the 2014/2015 financial year, you would be charged fees of:

$82,364.09*7,8,9

(a) * These fees are based on hypothetical performance of the Fund such that your balance would still have risen from $50,000 to $147,470.

1 As at the date of this PDS, the Responsible Entity expects that the Investment Manager will pay the RE Fee. However, to the extent that the Investment Manager does not pay the RE Fee, the fee will be between 0.10 and 0.30% per annum, subject to minimum RE Fee thresholds specified in note 3 of Table 6.

2 As at the date of this PDS, the Responsible Entity expects that the Investment Manager will pay the RE Fee. However, assuming a total Fund Value of $20 million, to the extent that the Investment Manager does not pay the RE Fee, for every $50,000 you invest, the RE Fee which is chargeable is $150 per annum, subject to minimum RE Fee thresholds specified in note 3 of Table 6.

3 As at the date of this PDS, the Responsible Entity expects that the Investment Manager will pay the Admin Fee. However, to the extent that the Investment Manager does not pay the Admin Fee, the fee payable by the Fund will be the greater of 0.11% p.a. or $26,400, subject to an annual 3% fee increase specified in note 4 of Table 6.

4 As at the date of this PDS, the Responsible Entity expects that the Investment Manager will pay the Admin Fee. However, assuming a total Fund Value of $20 million, in the event that the Investment Manager does not pay the Admin Fee, for every $50,000 you invest, the Admin Fee which is attributable to your investment is $66 per annum.

5 Consistent Performance Fee equals 25% x (days in month/365) x Rolling 12-month Average Return for the Month. To provide an example of how monthly Consistent Performance Fees are calculated, if in June 2015 the Rolling 12-month Average Return was 212.96%, the Consistent Performance Fee will be 25% x (30/365) x 212.96% = 4.37589% for that month.

6 Exceptional Performance Fee equals (Performance for the month - 5%) x 33%. To provide an example of how monthly Exceptional Performance Fees are calculated, if in June 2015 the return for the month was 39.92%, the Exceptional Performance Fee will be 39.92% - 5% x 33% = 11.5236% for that month.

7 The performance fees (consistent and exceptional) are only hypothetical estimates based upon the Empire Equity Group’s trading of its own funds using the same




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investment strategy as the Fund. As the Fund is a new fund, there is no actual past performance figures to derive an estimate of performance fees.

The above estimate of performance fees is based on the Empire Equity Group’s trading returns during the 2014/2015 financial year when trading its own funds. Based upon Empire Equity Group’s trading returns during the 2014/2015 financial year, a $50,000 investment would have resulted in an account balance of $217,655.94 ($147,470 with applicable fees deducted).

8 This does not include Club Membership Fee which is based on the Investor’s Club membership level as explained in section 10.2.

9 The Responsible Entity has the ability to cap performance fees and will do so at its discretion.

8.4 Additional explanation of fees and costs

(a) RE Fee

The RE Fee relates to administration and other services provided to the Fund. As at the date of this PDS, it is intended that the Investment Manager will pay the RE Fee. This may change in the future. The Responsible Entity is entitled to deduct this fee from the Fund’s assets to the extent it is not paid by the Investment Manager.

(b) Performance Fees

Depending on how well the Fund performs, the Responsible Entity may be entitled to a Consistent Performance Fee, an Exceptional Performance Fee or both.

The Responsible Entity is only entitled to a Consistent Performance Fee in a particular month if the Rolling 12-month Average Return for that month exceeds 10% per annum. The fee is calculated in accordance with a formula in the Fund’s Constitution. In general terms, the Consistent Performance Fee is equal to 25% of the Rolling 12-month Average Return for the month.

The Responsible Entity is only entitled to an Exceptional Performance Fee in a particular month, if the Fund Value increases by more than 5% during that month. The fee is calculated in accordance with a formula in the Fund’s Constitution. In general terms, the Exceptional Performance Fee is equal to 33% of the increase in Fund Value during the month in excess of 5%.

All performance fees are payable by the Responsible Entity to the Investment Manager.

(c) Trigger events

The RE Fee, Consistent Performance Fee and Exceptional Performance Fee may also be payable when a Trigger Event occurs. The fee payable will be calculated in accordance with the Fund’s Constitution. The relevant fee will generally be calculated with reference to the Fund Value as at the




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time of the Trigger Event, rather than as at 5:00pm (Melbourne time) on the last Business Day of the month.

A Trigger Event means any of the following:

(i) a resolution is passed at a meeting of Investors removing or replacing the responsible entity of the Fund without the recommendation of the existing responsible entity;

(ii) the Fund terminates;

(iii) (if relevant) the Interests are the subject of a takeover bid which achieves the threshold for compulsory acquisition under Chapter 6A (Compulsory acquisitions and buy-outs) of the Corporations Act; or

(iv) the Investors approve a formal or informal scheme of arrangement under which the Fund is to merge with any other MIS or entity, or by which there is a change in the ownership or control of the Fund.

(d) Transfer Fee

A fee of up to $50 is charged for processing or registering each transfer or assignment of an Interest. This amount is deducted from the Interest at the time of the transfer or assignment.

(e) Incidental Costs

The Fund’s Constitution allows the Responsible Entity to deduct various other costs and expenses from the Fund which have been incurred in connection with the Fund. These include but are not limited to the Fund’s establishment costs, ASIC fees, taxes and costs associated with the engagement of custodians, administrators, investment managers and auditors.

(f) Taxes

Where the Fund is eligible for tax deductions, the benefit of these deductions is passed on to Investors in the form of reduced costs. For information on tax, see Section 9 (Taxation) below.

(g) Fee changes

Subject to a Fund’s Constitution and the law, the Responsible Entity will not increase the above fees without providing at least 30 days’ written notice to Investors, except in the case of government fees and charges, and transaction costs associated with the daily management of a Fund’s investments (refer to “Buy-sell spread” description above).

The Responsible Entity may waive its entitlement to fees (in whole or part).

(h) Payment of Fees by Investment Manager

As stated above, the Responsible Entity expects that the Investment Manager will pay all management costs specifically outlined in Table 6 above. If the Investment Manager does not pay these fees, they will be charged to the Fund. The circumstances in which the Investment Manager may not pay these fees is if the Investment Manager is placed into administration, or experiences financial difficulties that render them unable to make payment.




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9 Taxation

9.1 Tax considerations

The tax information in this PDS is provided for general information only. It contains a broad overview of some of the Australian tax consequences associated with investing in the Fund for a potential Australian resident investor.

It does not take into account the personal or specific taxation circumstances of each person who may invest in the Fund. Accordingly, it does not constitute tax advice and should not be relied on as such or as the basis on which potential investors make a decision to invest.

Taxation law is complex and the ultimate interpretation of the taxation laws rests with the courts. The law, and the way in which the Commissioner of Taxation (Commissioner) administers the law may change from time to time. The taxation information in this PDS has been prepared based on tax laws and administrative interpretations available as at the date of this PDS. These laws and interpretations may change.

This summary sets out the key Australian income tax consequences for an Australian resident investor who invests in the Fund having regard to Taxation Ruling TR 2005/15 (Ruling) which describes the income tax and capital gains tax consequences of trading in financial contracts for difference, such as a contract for difference (“CFD”). A copy of the Ruling is available at www.ato.gov.au.

Although the Ruling addresses the taxation consequences of direct investments in CFDs, we have taken the view that it applies to investors in the Fund based on the trust conduit principle that the character of any gain in the trustee’s hand is retained by a beneficiary on distribution of that gain.

Generally, the Responsible Entity as responsible entity of the Fund should not be subject to tax on the income of the Fund if the Australian resident investors in the Fund are presently entitled to all of the taxable gains of the Fund each year. The Responsible Entity intends to take all reasonable steps to ensure that the investors in the Fund should be presently entitled to all of the taxable gains of the Fund each year.

The taxable gains of the Fund, to which an investor becomes entitled during a financial year, form part of the investor’s assessable income for that year, even if payment of the entitlement does not occur until after the end of the financial year.

The investor will receive an entitlement to the distributable gains of the Fund for a financial year if the investor holds an interest in the Fund at the end of the distribution period. The tax impact of receiving an entitlement to the gains of the Fund will depend on the components of the distribution.

This summary assumes that the investors in the Fund have made their investments in the course of carrying on a business or otherwise with the intention of making a profit. The taxation consequences for other investors who entered into the Fund for other purposes are not addressed.

We strongly advise you seek independent professional advice on the tax consequences of investing in the Fund, based on your particular circumstances, before making an investment decision.

http://www.ato.gov.au/




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9.2 Gains or losses made on CFDs

Any gains derived or losses incurred from a CFD entered into by the Fund and distributed to an investor in the Fund should be assessable or deductible to investors. The gain or loss is determined by taking into account the difference between the opening contract value and closing contract value of the CFD.

The amount of tax payable by investors on their distributions from the Fund will depend on their total level of taxable income, and their income tax rate.

9.3 Interest and dividend adjustments

Any interest or dividend adjustments are notional amounts based on the underlying security that is the subject of the CFDs. As such, they are unlikely to be characterised as interest or dividends for tax purposes. Instead, these notional adjustments will be taken into account in determining the overall profit or loss on the CFD.

9.4 Treatment of other expenses

Where the gain or loss from a CFD is assessable or deductible to an investor, any fees or charges including commission, interest expenses etc. should be allowable as a deduction to the investor at the time they are incurred.

9.5 Disposing of interest in the Fund

Disposing of an interest in the Fund (e.g. by transferring or redeeming the interest) may trigger a tax liability for the investor on any gains realised. If the investor is assessed under capital gains tax (CGT) provisions of taxation law, the investor may make a capital gain or loss on the disposal of the interest in the year in which agreement to dispose of the interest is made. The investor may be eligible for the CGT discount provided the interest has been held for at least 12 months. Conversely, any capital loss arising may be offset against capital gains made in that year or subsequent years.

If the investor is not assessed under the CGT provisions, any profits made on the disposal of the interest should be assessable as ordinary income. In that case, the investors would be able to deduct any losses made on the disposal of the interests.

In either case, we recommend investors seek specialist tax advice.

9.6 Taxation of financial arrangements (TOFA)

The TOFA rules introduced by The Tax Laws Amendment (Taxation of Financial Arrangement) Act 2008 provide a principles-based framework for the taxation of gains and losses from financial arrangements based on their economic substance rather than legal form. Gains and losses from financial arrangements are generally included in assessable income or allowed as a deduction on revenue account.

Individuals and entities with a turnover of less than $100 million are excluded from the application of the TOFA rules. You should seek professional tax advice on whether the TOFA rules may apply to your circumstances.

9.7 Goods and services tax (GST)

The Fund has registered for GST. The issue and redemption of interests in the Fund and receipt of distributions will not be subject to GST. However, the Fund may incur GST on fees and expenses that it pays. The Fund may be entitled to claim input tax credits and/or reduced input tax credits (RITCs) on certain of these fees and expenses. The amount of any RITC entitlement may be affected by changes to the




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GST Regulations that are effective from 1 July 2012 in relation to RITC entitlements. Any reduction of RITCs may be an additional cost to the Fund, which may affect the net income of the Fund and the distributions (if any) made by the Fund to investors.

GST may also apply to certain fees and costs charged to you. You should obtain your own advice as to whether an input tax credit is available for any such GST, as it will depend on your personal circumstances.

9.8 Quoting a Tax File Number (“TFN”)

Investors can choose whether to quote their TFN. However, if an Investor doesn’t quote its TFN or provide sufficient information on an exemption it is entitled to claim, the Responsible Entity may be required to withhold tax at the highest marginal tax rate (plus Medicare and other applicable levies).

10 Other Important Information

10.1 Information about the Club

The Club is operated by Empire Equity Group and combines investing and lifestyle benefits such as events and experiences to bring members an alternative interpretation of out-dated membership organisations that people spend years waiting to join.

The Club offers an avenue for investing and lifestyle benefits in return for the fees you’d normally pay for a membership that gets you a seat at the football, entry to a racing track or the use of a cramped city dining room and out-dated gym.

The Club focuses on all kinds of opportunities, experiences & events - not just those of a specific nature that most organisations offer. Membership is, in a way, a membership that offers aspects of all other memberships: events at the races, the polo, private events on Grand Final Day & exclusive parties to celebrate the new year & other important dates, as well as events 'just ‘cos'. The Club organises experiences such as drive-days in luxury cars, winery adventures, relaxing escapes and invitations to exclusive product launches & venue openings. The Club gives you opportunities beyond the confines of a sports ground or a city club, but for a price that is similar. And, on top of all that, you will have access to the Fund which allows the Investment Manager’s professional team to manage your investments as well.

With no facilities to maintain, no property to purchase and no fixed costs an Empire Club Membership is the Airbnb of the club world. If you don't go to the football much, an MCC membership is a costly luxury. If you only go to the Melbourne Cup, why would a VRC membership make sense? If you want a membership that gives you a bit of everything, so that you get what you pay for, the Empire Club is for you - and if you can't make it to an event, we're still investing your money & aiming to return you a benefit, regardless. That's more than you can say about any other club.

Members of the separate Club receive membership privileges dependent on level of membership. Below is a brief description of each membership level and the associated privileges. However the Club is not part of your Interest as an Investor as it is not part of the Fund. Full details about the Club are at www.theempireclub.com.au

(a) Trial

A Trial Membership offers you a test drive of a brand new product that not many have driven before. You wouldn't buy an electric car because you've used an electric toothbrush. We help make the process stress free and




29 February 2016

attractive to commitment phoebes with low fees, low investment levels and a refund offer for those who don't love us (but how could you not?).

Trials last 6 months. Then you can choose to take the Club relationship to the next level with a full membership. During the trial, you'll see how the Club operates, learn who we are and what we're about and hopefully you’ll want to Invite a friend to join you on your experience by extending them an Invitation. Trial members get 1 invitation for a friend.

Trial Members are eligible to invest between $500 and $5000.

(b) Full

Full Membership provides members with privileges which vary depending on membership tier. Full members pay a flat monthly fee and are eligible to invest between $5000 and $25,000 in the Fund and invite up to 3 friends to join the Club. If profit from trading enables you to move into the next membership category, the Empire Equity Group will upgrade you automatically. Otherwise you can deposit more funds to reach the minimum for the next level. Full Membership accounts are limited to $25k including any accumulated profit. Any balance above $25k will be withdrawn monthly and deposited into your bank account. If you want to invest more, you'll need to become a Platinum Member.

Bronze Members are eligible to invest $5k to $10k. They will be invited to attend 1 Empire Event per year and can purchase additional passes to all other Full Member Events (subject to availability).

Silver Members are eligible to invest $10k to $15k. They will be invited to attend 2 Empire Events per year and 1 Empire Experience. You can purchase additional passes to all other Full Member Events and Experiences (subject to availability).

Gold Members are eligible to invest $15k to $25k. They are invited to attend 3 Empire Events per year, 1 Empire Experience and 1 Opportunity. You can purchase additional passes to all other Full Member Events, Experiences and Opportunities and Guest Passes to all Events you are invited to attend (subject to availability).

(c) Platinum

Platinum Membership is our premium membership option for those of you who demand more. You are eligible to invest more, attend all events, experiences and opportunities and be eligible to be selected for our pinnacle New Year’s Eve Event aboard a luxury yacht on Sydney Harbour - it's the kind of party that's a once in a life time experience. You'll be invited to exclusive Platinum Events and Experiences not available to other members. You'll also get guest passes to some of the Club’s events and you can purchase up to 3 additional guest passes to each event for friends who aren't eligible for premium privileges.

For a flat monthly fee you can invest $25k to $150k. One of the benefits to a Platinum Membership is that we don't limit the amount of profit you can invest. If you deposit $100k and it turns into $300k, we'll invest the full amount for the same fee. But the maximum you can deposit is $150k.

Platinum members receive an additional 5 invitations for their friends.




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(d) Out of Towner

Not everyone lives in Melbourne and can enjoy full membership privileges.

Because of that, there is an ‘Out Of Towner’ Membership category.

If you live further than 150km from the Melbourne CBD you are eligible for an Out Of Towner Membership. This gives you investment access plus the ability to purchase tickets to full member events (subject to availability). This way, you don't pay for what you can't use - it wouldn't be fair, otherwise.

You can invest between $5k and $25k as an Out Of Towner.

10.2 Club Membership Fee

A membership fee is payable for joining the Club (only members of the Club are eligible to invest in the Fund). The membership fees of the different membership options are set out below. This fee is paid directly to Empire Equity Group at the time of joining the Club. The fee is payable for access to the Club’s membership benefits, of which the ability to invest in the Fund is one.

Table 8 – Club Membership Levels and Fees

10.3 Withdrawals

An Investor can make a withdrawal request at any time whilst the Fund is liquid (80% of Fund assets are liquid assets). The Fund will be liquid if 80% of Fund assets can be realised within 30 Business Days. The Responsible Entity intends to accept and process withdrawals requests once a month. However, failing this the Responsible Entity has 30 Business Days to accept or reject withdrawal requests.

The Fund must only reject a withdrawal request if the Fund:

does not contain sufficient liquid assets to fulfil the total amount of withdrawals requested to be made by Investors;

the Trust is exposed to significant unrealised gains or losses; or

the Responsible Entity reasonably believes that it is in the best interests of the Members to do so.

If the Fund is not-liquid (less than 80% of Fund assets are liquid assets), withdrawals are only permitted in response to a withdrawal offer made by the Responsible Entity. The Responsible Entity intends to make a withdrawal offer to all Investors every month.

However, the Responsible Entity may decide not to make a withdrawal offer, or may cancel a withdrawal offer, if the Fund does not contain sufficient liquid assets to fulfil the total amount of withdrawals, if the Fund is exposed to significant unrealised gains or losses, or if the Responsible Entity reasonably believes it is in the best




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interests of Investors. The Responsible Entity may also cancel a withdrawal offer in accordance with the Corporations Act.

Investors will be notified of withdrawal offers by email, by post, via the App, or via notification on the Fund’s website. Subject to the Corporations Act and the Fund’s Constitution, the Responsible Entity may determine the terms of a withdrawal offer in the Responsible Entity’s absolute discretion (which may include a minimum withdrawal amount). Subject to the Constitution, withdrawal offers will close at 5:00pm (Melbourne time) on the last Business Day of the month.

Acceptance of a withdrawal offer must be in a form approved by the Responsible Entity. If an Investor accepts a withdrawal offer, the Investor can only retract its acceptance if the Responsible Entity agrees. The Responsible Entity will generally pay withdrawals within 21 days after the withdrawal offer closes. The Responsible Entity may deduct from the withdrawal any fees and costs payable. If an Investor attempts to withdraw an amount that is less than any minimum withdrawal amount set by the Responsible Entity, the Responsible Entity may vary the withdrawal amount in accordance with the Constitution. If an Investor attempts to withdraw an amount that may result in the Investor holding less than any minimum balance set by the Responsible Entity, the Responsible Entity may treat it as a withdrawal of the Investor’s entire Interest.

The RE may, at any time, process a withdrawal as though an Investor has made a withdrawal request if: the Investor ceases to be a member of the Club; or the value of the Investor’s investment falls below a minimum investment value specified in Table 1.

10.4 Distributions

The Responsible Entity will generally make a distribution to all Investors within 60 days of the end of each financial year. The Responsible Entity may also determine to make an interim distribution before the end of the financial year. Unless the Responsible Entity determines otherwise, and subject to the requirements of the Fund’s Constitution, distributions will consist of the net income (as determined under the relevant provisions of the Constitution) for the distribution period and any additional amount (whether income or capital) which the Responsible Entity considers appropriate (less any amounts previously distributed during that financial year). The Responsible Entity may deduct tax from distributions if it is required by law to do so.

Note that in accordance with the Fund’s Constitution, distributions may be calculated differently and paid at a different time if the Fund is to be taxed as if it were a company.

Note: All distributions will automatically be reinvested in the Fund on an Investor’s behalf unless the Investor instructs the Responsible Entity otherwise. Reinvestment of an Investor’s distributions will increase the Investor’s contribution to the Fund.

10.5 Transfers

An Interest may be transferred in writing using the form approved by the Responsible Entity (subject to the Constitution, the terms of issue of the Interest and any applicable legal requirements). If an Investor wishes to transfer its Interest, please contact the Administrator via the details at the rear of this PDS.




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10.6 Reporting

The Responsible Entity will provide Investors with monthly and annual reports on the Fund and its performance. These reports will either be sent to Investors or made available on the Fund’s website.

10.7 Continuous disclosure

The Fund is a disclosing entity and is subject to regular reporting and disclosure obligations. Copies of documents lodged with ASIC in relation to the Fund may be obtained from, or inspected at, an ASIC office. We can also provide you with a copy (free of charge) of:

the Funds’ annual financial report (including financial statements) most recently lodged with ASIC;

any half-yearly financial report lodged with ASIC in respect of the Fund; and

any continuous disclosure notices given for the Fund after the lodgement of the annual financial report.

Continuous disclosure notices (if any) and annual financial reports are also available from our website.

10.8 Cooling off

If a potential Investor is a ‘retail client’ (as defined in the Corporations Act) and it is investing directly in the Fund, the potential Investor has a 14 day cooling-off period. If the Investor exercises its cooling-off rights, the Responsible Entity will return the Investor’s money and no fees will apply. However, the amount the Investor receives will reflect any movement (either up or down) in the value of the Investor’s Interest (which may have tax implications). The 14 day cooling-off period commences on the earlier of the end of the 5th day after the Responsible Entity issues the Interest to the Investor, or from the date the Investor receives confirmation of its transaction.

A cooling-off period does not apply to ‘wholesale clients’ (as defined in the Corporations Act) or where an Investor makes an additional investment (including automatic reinvestments).

10.9 Constitution

The Fund is governed by a Constitution which sets out how the Fund must operate. The Constitution, together with this PDS, the Corporations Act and other laws, regulates the Responsible Entity’s legal relationship with Investors. If a potential Investor invests in the Fund, it agrees to be bound by the terms of this PDS and the Constitution. Potential Investors should read and consider these documents before investing. A copy of the Constitution will be provided upon request (free of charge).

The Responsible Entity may amend the Constitution from time to time in accordance with the provisions of the Constitution and the Corporations Act.

10.10 Compliance Plan

The Responsible Entity has lodged a plan for the Fund’s compliance with all relevant laws and regulations (the “Compliance Plan”) with ASIC. The Compliance Plan describes the procedures used by the Responsible Entity to comply with the Corporations Act and the Fund’s Constitution.




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10.11 Anti-money laundering and counter terrorism financing (“AML/CTF”)

Australia’s AML/CTF laws require the Responsible Entity to maintain an AML/CTF programme and know certain information about Investors in the Fund.

To meet these legal requirements the Responsible Entity needs to collect certain identification information and documentation (“KYC Documents”) from new Investors. Existing Investors may also be asked to provide KYC Documents in order to re-identify them. Processing of applications or withdrawals will be delayed or refused if Investors do not provide the KYC Documents when requested.

The Responsible Entity may also be required to submit reports to the Australian Transaction Reports and Analysis Centre (“AUSTRAC”) which may require the disclosure of an Investor’s personal information. The Responsible Entity may not be able to tell the Investor when this occurs and as a result AUSTRAC may require the Responsible Entity to deny the Investor (on a temporary or permanent basis) access to its investment. This could result in loss or capital invested or significant delays. Neither the Responsible Entity nor the Investment Manager will be liable for any loss an Investor may suffer due to compliance with AML/CTF laws.

The Administrator is responsible for performing these functions and maintaining the AML/CTF programme for the Fund under appointment by the Responsible Entity.

10.12 Complaints and dispute resolution

The Responsible Entity has in place a complaints handling procedure. All complaints should be made by contacting the Responsible Entity:

Complaints Resolution Officer Vasco Investment Managers Limited Level 5, 488 Bourke Street Melbourne Victoria 3000, Australia T +61 (0)3 8352 7120 F +61 (0)3 8352 7199 E: [email protected]

All complaints received will be acknowledged in writing. The Responsible Entity will investigate and attempt to resolve the complaint. If an Investor is not a wholesale client and its complaint has not been satisfactorily resolved within 45 days, the Investor may be entitled to refer its complaint to the Financial Ombudsman Service Ltd (ABN 67 131 124 448) (“FOS”). FOS will advise if they can assist the Investor with its complaint. The Responsible Entity’s FOS membership number is 14945. FOS is an independent body whose decisions are binding on the Responsible Entity. The contact details for FOS are:

Financial Ombudsman Service Ltd GPO Box 3, Melbourne Victoria 3001, Australia T: 1300 780 808 E: [email protected] W: www.fos.org.au

11 How to Apply

To invest in the Fund you must be a member of the Club and complete our online application form. All application forms will be in electronic format. Applications will not be accepted by any other way. Upon receiving an invitation to join the Club by an existing Club member, or Club management, we will send you an email which

mailto:[email protected]


http://www.fos.org.au/




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includes directions on how to electronically apply to be a member of the Club, apply to be an Investor of the Fund and provide you with this PDS.

Applications to become an Investor, or make an additional investment by an existing Investor, will only be accepted from individuals who are accepted to be (and remain) members of the Club.

You must also be an Australian resident and at least 18 years old to be an Investor.

The Fund is open only to individuals. However, the Responsible Entity may accept other types of investors (e.g. companies and SMSFs) at its discretion.

11.1 Acceptance of application or additional investment

The Responsible Entity may, without giving any reason, accept or reject an application, in part or in full. The Responsible Entity will decide to accept or reject an application before the end of one month from the receipt of application monies. If it is not reasonably practical to accept or reject the application before the end of that month, by such longer period as is reasonable in the circumstances. If an application is rejected, in whole or part, the Responsible Entity will return the portion of money which was not accepted. We will not establish your account, and you will not have an interest in the Fund, until we have received and accepted your first contribution of at least $500. We will send you an email confirmation once we have established your account.

12 Glossary

In this PDS unless the context otherwise requires:

“ABN” means Australian Business Number.

“Administrator” means Apex Fund Services (Australia) Pty Ltd (ABN 86 149 408 702) of Western House, Level 2, 83 William Street, Melbourne, Victoria 3000, Australia.

“AFSL” means Australian financial service licence.

“AML/CTF” means anti-money laundering and counter terrorism financing.

“App” means the Empire smartphone and web-based electronic investment management application (for iOS and Android).

“ASIC” means the Australian Securities and Investments Commission.

“AUSTRAC” means the Australian Transaction Reports and Analysis Centre.

“Business Day” means a day not being a Saturday, Sunday or public holiday on which banks are open for business in Melbourne, Victoria, Australia.

“CAR” means Corporate Authorised Representative.

“Club” means Empire Club, a membership organisation that aims to provide lifestyle privileges and investment opportunities catering for 18 to 40 year olds.

“Compliance Plan” means the plan for the Fund’s compliance with all




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relevant laws and regulations lodged with ASIC.

“Consistent Performance Fee”

means the fee payable by the Fund to the Investment Manager based on the Rolling 12-month Average Return for the Month.

“Consistent Performance Target”

means the performance target of 10% per annum which the Fund must exceed to be eligible for the Consistent Performance Fee.

“Constitution” means the constitution of the Fund from time to time.

“Corporations Act” means the Corporations Act 2001 (Cth) as amended from time to time.

“Custodian” means Australian Executor Trustees Ltd (ABN 84 007 869 794, AFSL 240023).

“dollars” or “$” mean the lawful currency of the Commonwealth of Australia.

“Exceptional Performance Fee”

means the fee payable by the Fund to the Investment Manager based on Fund Value.

“Exceptional Performance Target”

means the performance target of 5% per month which the Fund must exceed to be eligible for the Exceptional Performance Fee.

“FOS” means Financial Ombudsman Service Ltd (ABN 67 131 124 448) of GPO Box 3, Melbourne, Victoria 3001, Australia.

“Fund” means Empire Club Investment Fund (ARSN 609 631 914).

“Fund Value” means the most recently calculated net asset value of the Fund.

“Incidental Costs” means the costs associated with operating the Fund incurred by the Responsible Entity and/or the Investment Manager (as the case may be) and payable by the Fund.

“Indicators” means market movement indicators

“Interest” means an interest in the Fund.

“Investment Manager” means the investment manager of the Fund, Empire Equity Group Pty Ltd (ACN 168 738 805) of Suite 16, 210 Toorak Road, South Yarra, Victoria 3141, Australia.

“Investor” means an investor holding an investment in the Fund.

“KYC Documents” means certain identification information and documentation required from new Investors to meet AML/CTF requirements.

“Lawyers” means the Fund’s and the Investment Manager’s lawyers, being Mills Oakley Lawyers (ABN 51 493 069 734) of Level 6, 530 Collins Street, Melbourne, Victoria 3000, Australia.




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“Licensee” means the provider of AFSL CAR status to the Investment Manager, being Specialised Investment and Lending Corporation Pty Ltd (trading as ‘The SILC Group’) (ABN 87 149 520 918, AFSL 407100, ACL 426878) of Level 9, 179 Queen Street, Melbourne, Victoria 3000, Australia.

“MIS” means managed investment scheme.

“PDS” means this Product Disclosure Statement.

“RE Fee” means the fee payable by the Fund to the Responsible Entity based on Fund Value.

“Responsible Entity” means the responsible entity of the Fund, Vasco Investment Managers Limited (ABN 71 138 715 009, AFSL 344486) of Level 5, 488 Bourke Street, Melbourne Victoria 3000, Australia.

“Rolling 12-month Average Return for the Month”

means the return earned by the Fund as a whole for the 12 months up to the most recent month end.

“TFN” means Tax File Number.

“you” or “your” means you the reader.




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13 The Club - Frequently Asked Questions

The below frequently asked questions on the Club were prepared by the Investment Manager. They answer many questions with regard to the Club and the Fund.

References to “we”, “us” or “our” in the below frequently asked questions are references to the Investment Manager and not the Responsible Entity.

What is an Empire Club membership and what does it get me?

As with everything worth its weight in street cred, we figured it made sense to streamline finance, and the lifestyle that goes with it. To bring the means (aka. savvy investing) and the end (aka, the perks) together all under one happy, and if you don’t mind us saying, slick, umbrella.

In essence, a membership to The Empire Club means access to investment opportunities and privileges you might not otherwise come across in your day-to-day,non-empirical life. If we were an emoji we would be the one with sunnies, you know the one.

Empire Club hosts bespoke gatherings of varying size and lavishness at all the major social events of the year. Events like the Portsea Polo, Werribee Mansion Polo, Yarra Valley Polo, Melbourne Spring Racing Carnival, AFL Grand Final and various private events throughout the year. We offer bespoke drive days for our Members with our Partner South Yarra BMW to a select few wineries of preference in the Yarra Valley and also on the Mornington Peninsula.

From 2017 we are also planning an annual New Year’s Eve event on Sydney Harbour for select loyal members. The event will take place on a luxury super yacht and will be all inclusive for invited members. Including airfares and accommodation in Sydney. Empire Club members can also expect to be invited to take part in ‘Uniquely Empire Experiences’.

But we can’t tell you about those, only members can.

What kind of Membership is it?

Membership is a little old school, and operates on an invitation-only premise. Like everything worth having, we have limited supply as membership is capped. We could tell you by how many, but we feel numbers look better on a bank statement.

If that includes you, know that we have a monthly term approach and no lock in periods thinking of all you commitment phoebes out there. Cue: wink face emoji. Come and go as you please, be that one month or one decade, we will




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always welcome you back into the fold, recognising the level you obtained so you can pick up where you left off. The only thing you might need to think of before you leave, is our 6 month fee refund offer. See: ‘How does the 6 month fee refund guarantee work?’ for more info.

I don’t live in Melbourne. Can I be a member?

Sure, why not. But if perks are your thing keep in mind that the majority of our events and privileges take place in our original empire of Melbourne. On the horizon, however, we plan to extend full privileges to Sydney-siders, Brisbanites and beyond as we evolve.

In the meantime, we have an Out Of Towner Membership available for people who live further than 150km from the CBD’s that we operate in. This gives you access to just our investment opportunities. See the membership page for more information.

Where do you measure the 150km radius from Melbourne CBD?

From the old Melbourne General Post Office @ 350 Bourke Street Melbourne.

How do I become a member?

Like any empire, we rely on our countrymen. Like any company, we are a stickler for process. An invitation from an existing member is a prerequisite to membership. Sometimes in life you have to be a go-getter. If this is you do some stalking to see if any of your friends have liked our Facebook page, or Instagram Posts, or upload photos from our events (an indication of

http://www.theempireclub.com.au/WORDPRESS/wp-content/uploads/2015/11/Screen-Shot-2015-11-06-at-3.53.28-PM.png




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membership). If you’re in luck, brush up on your charm and hope they agree to extend one of their limited invitations to you.

Otherwise, if you fill out an application for pre-signup before we launch, you will get access to our beta testing phase without needing an invitation – but be quick, we’ll never do this again.

Why is it invitation only?

“To be with those I like is enough” – Walt Whitman.

It’s the company you keep that makes or breaks an experience, no matter how glossy or unique. It is in upholding a mentality of like-minds that ensure both the integrity of the network as an entity, and the enjoyment of those that form part of it. Whilst we are modern in many ways, we are infused with old school influence. When it comes to quality assurance nothing beats Word-of-Mouth, it is after all the original and most reliable form of PR.

What if no one I know is a member?

This might make things a little trickier. You will need to find someone. See “How do I become a Member?” for more help.

How many people can I invite as a member?

As a trial member you are given one invitation to extend to a friend. When you progress to a full member this is extended to 3 invitations.

If you progress to the platinum level of membership you are given 5 invitations to extend.

Each time you advance to the next membership level your invitations are reset to the full amount allocated.

Does The Empire Club need me to invite new members?

The Empire Club will only grow in the services we offer as our membership numbers grow. But beyond wanting to offer the best service possible, there is no expectation that you must use your invitations.

Can I buy an Invitation?

In life, some things can’t be bought. Empire Club membership is one of them. Any person found to be offering memberships in exchange for any kind of payment or benefit will be ejected from the Club.




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What is a Trial membership?

Everybody loves a taste-tester. We’re confident in the experience we provide. So much so, we offer an opportunity to see how everything works, at a lower than normal membership cost and investment commitment.

See “How does the 6 month fee refund guarantee work?” for information on our refund option for Trial members.

How long will I be a Trial member for?

6 months, unless you cancel sooner (you can do that). During this time you will see how The Empire Club operates and decide if you’d like to enhance your membership and get access to the lifestyle services. We also offer a 100% membership fee refund at the end of 6 months, if you decide we’re not for you.

How does the 6 month fee refund guarantee work?

To show our faith in our membership, we offer a fee refund. On conclusion of the 6th month of membership, Trial members are contacted with 2 options; roll their membership over into a Full, Platinum or Out Of Towner membership or cancel their membership and receive a complete refund on membership fees paid in that 6 month period.

If you do take a refund though, you’ll never be able to join again as a member unless you pay the amount that was refunded to you and undertake another trial membership. Sorry – but we don’t like being used; it makes us feel cheap and dirty.

Why do I have to wait 6 months to accept a membership fee refund?

We encourage you to stay for 6 months to see how we look over a longer period, and, if at that point you still want to leave, then so be it. We give you the freedom to leave but encourage you to stay, and we put our money where our mouth is via our refund offer. You can leave at any point prior to 6 months, but you won’t be eligible for a fee refund if you leave before you’ve been a member for 6 months.

What privileges do I get as a Trial member?

Sometimes you have to crawl before you can walk. Trial members only receive access to The Empire Club Investment Fund and are not privy to the full entertainment and lifestyle privileges afforded to full members. This




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enables us to offer you low membership fees and a 6-month fee refund offer (if you choose).

Why do you ask me a questionnaire when I join?

Because we are so focused on membership experience, it is important we understand a bit about you so that we can tailor our service offering. We also like to organise occasional surprises for our members and surprises aren’t the good kind if we don’t know enough about what makes you tick.

Can my membership application be rejected and why?

We do reserve the right to refuse your application if you do not meet the requirements of that application. You will not be discriminated against in any way, it’s just that the law requires we tick certain boxes when accepting a member. Remember, you also have to be invited by an eligible member before we can accept any application.

Can my membership be cancelled?

It can – our terms of membership can be found here: Go to Terms of Membership on our website. We can cancel your membership if you bring the club into disrepute, falsely represent the nature or facts of the club to any person or if you don’t pay your fees. We try to ask questions first and cancel memberships later. If you have any issues or trouble paying fees, please contact us and we’ll see if we can help you out [email protected]

Where can I find my membership number?

It would have been sent to you when your membership was approved. If you cannot locate it in the myriad of logins and passwords we need these days, we understand. Simply contact us [email protected]

What if I don’t want to be involved in the experience or event side of the membership?

That’s okay. You can use your membership in any way that makes you comfortable. If we notice you aren’t attending any of our events or experiences we might reach out to you and see if there’s anything we can organise for you that you’d enjoy. We’re thoughtful like that. Some membership organisations like members who pay fees and never use services, it keeps their costs down. That’s not really our style.

http://www.theempireclub.com.au/legal







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Why must I pay club membership fees to invest in the Empire Club Investment Fund?

We are a membership organisation that provides services to our members. One of those services is access to the Empire Club Investment Fund. Your club membership fees also provide access to events and experiences, much like any traditional facilities based membership. The difference is we don’t have to maintain an expensive facility portfolio and so we can return a greater proportion of membership fees to our members in the form of services. And, can we just say, these services are worth their weight.

How do I pay my membership fees?

We’re not exactly reinventing the wheel here, membership fees can be paid via Visa, MasterCard or American Express credit and debit cards.

Are there card fees for making payment via credit card?

Not for paying your membership fees. Our shout.

If you wish, however, to deposit investment funds via card, however, there will be fees. 1.75% for Visa and MasterCard. 2.9% for Amex.

How do I change my fee payment preferences?

You can change your payment preferences in The Empire Club App by selecting the profile menu in the right hand corner and by clicking ‘Payment Preferences’. You may select between Deposit, Withdrawal and Fee preferences to change the relevant details.

You can also change your preferences by logging in to the members’ area of our website. Pretty straightforward huh?

Can I suspend my membership?

Sorry no, you'll have to cancel it. But if you change your mind within 12 months of cancelling you may become a member again without needing an invitation.

When do I have to pay my membership fees?

Membership fees are debited from your credit or debit card, or bank account around the middle of the month, for the next 2 months in advance.

When you join, you’ll pay for 2 months up front. This is so that if you’re like us, and you cancel your lost credit card and forget that there are payments




29 February 2016

attached to it, you won’t miss out on next month’s investing because of a declined payment. We’re pretty thoughtful like that! If you ever cancel your membership, we’ll give back the extra month you’ve paid in advance – we aren’t trying to get one over you.

What are your fees?

We try to be transparent about fees. Please refer to the membership section of our website for more information about our club fees.

Please note that the fund performance fees are separate and can be found described elsewhere in the FAQ’s or in the Product Disclosure Statement available on our website.

The Empire Club Investment Fund is issued by Vasco Investment Managers Limited. You should consider the Product Disclosure Statement, which is available on our website, when deciding whether to acquire, or continue to hold, an investment in the Fund.

Where do my fees go?

It’s actually pretty simple, to keep things premium, membership fees are necessary to fund membership services. More specifically, they maintain the costs of operating all utilities, events, privileges and member opportunities.

Can membership fees be changed once I am already a member?

Unfortunately, like most things in the economy, our fees are subject to change – but you would always have the option to cancel your membership prior to any fee changes. We tend to favour nice surprises over the nasty kind, as such these will not be changed without plenty of notice (45 days) being given to you.

Are there any fees other than the membership fee?

Only for event guest passes and for fund deposits made using credit cards. For investments into the Empire Club Investment Fund, performance fees apply but are separate and built into the fund’s structure. They are only charged against profit and will not ever be ‘on charged’ to you for payment. Nothing suss.





29 February 2016

If I take a refund, can I ever join again?

If you take a refund after your trial membership ends, you’re done. Cya!

However, not all relationships end after the first break-up and we know that sometimes the departing party comes crawling back (we like white lilies and chocolates). If you do want to be welcomed back, you’ll have to pay the amount we refunded to you and begin a new trial membership.

Can I skip the Trial membership?

Starting small with a new product and company is a good way of learning how they operate and even though we know we’re pretty cool, we still like to encourage a responsible approach to all things new. It’s the kind of advice we’d like to be given by a company we knew nothing about.

What privileges do I get as a Bronze Member?

Empire’s Privileges will be rolled out 6 months post launch – please check back here soon for more information or contact us at [email protected]

What privileges do I get as a Silver Member?


What privileges do I get as a Gold Member?


What privileges do I get as a Platinum Member?


What events or experiences will I be included in?

Each event we run is assigned a classification; Bronze, Silver, Gold and/or Platinum. If your membership is lower than the classification you are not eligible to attend.

The Empire Club will sometimes arrange bespoke events for certain members and their networks. If you have a particular event in mind and




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would like us to organise it for you and your friends, why not reach out to us, we’ll do our best to oblige.

What does the Android and iOS app do?

Our Mobile Application is your daily interaction with The Empire Club, so you’re never out of the loop. You can track your investments, manage your invitations and when you have access to our privileges, manage all things related to them; your events and Uniquely Empire Experiences. In relation to the Empire Club Investment Fund, you can view the performance of your account, schedule withdrawals and deposits, set your payment preferences and prepare performance reports. It is important to know that our App is a notional reflection of funds and has no direct link to our investment and/or fund administration software. This is for security reasons.

http://www.theempireclub.com.au/WORDPRESS/faq/ - pafa-top

What do I do if I need help with understanding any information on your website?

We’d like to consider ourselves pretty useful individuals who would actually kinda like it if you reached out to us with any questions. If you can’t find what you’re looking for in the FAQ section, feel free to send us an email [email protected]

Why don’t you display reviews or testimonials?

For the same reason we don’t blow our own trumpet – they don’t mean much unless they come directly from someone you know and trust. “Tom from Richmond said…” doesn’t equate to credibility or legitimacy. If you want to learn about real experiences, talk about it with a real member.

Do I get anything for inviting a member?

No. The Empire Club does not reward or incentivise you a member for inviting others. This is merely a mechanism to enable the sanctity of the club.

How is my information treated and stored?

Our lips are sealed. Our fund has a privacy policy, which can be found “here” We also handle your personal information in accordance with the Privacy Act 1988 (Cth).

Isn’t Empire just a fund manager?

No – we’re so much more than that. We are a membership services provider that happens to provide access to an investment fund as just one of our offerings.

http://www.theempireclub.com.au/WORDPRESS/faq/#pafa-top






29 February 2016

Do you support any charitable causes?

We do. We believe in active engagement rather than simply throwing money at a cause. We have a relationship with Lord Somers Camp and Powerhouse, a community organisation that has partnered with other organisations to deliver weekend programs for various at-risk or vulnerable groups within our community. The purpose of these programs is to increase meaningful community engagement, serve others, facilitate the development of friendships and peer support networks, enhance self-confidence, increase independence and provide respite to people in need. Camps include Camp Diversity; a fun filled weekend for people between 16 and 30 living with intellectual and physical disabilities, Mirabel Family Camp; a weekend away for children orphaned by drug use and their carers, and, Very Special Kids Camp @ Somers; a weekend of fun and respite for family connected with Very Special Kids Foundation (Children living with life threatening illnesses and their families).

All of our staff participate in these programs. If you are interested in getting involved please reach out to us. Kane Jackson, our founder, would love to speak to you about his experiences and maybe you could come along to one of the weekends he attends. He’s never been able to work out if attending these camps is more beneficial to him, or the participants! https://www.lscph.org.au/programs/camp-diversity http://www.vsk.org.au/events/lord-somers-camp/ https://www.lscph.org.au/programs/mirabel

Empire Club Investment Fund You should consider the Product Disclosure Statement, which is available on our website, when deciding whether to acquire, or continue to hold, an investment in the Fund.

Can I participate in the managed fund if I am not an active Empire member?

Nope! That’s kind of important. You can’t watch the footy from the members section if you aren’t a member!

https://www.lscph.org.au/programs/camp-diversity

http://www.vsk.org.au/events/lord-somers-camp/

https://www.lscph.org.au/programs/mirabel




29 February 2016

How long do I need to invest for?

There is no such thing as a get rich quick investment. It’s a marathon, not a sprint. Investment is about making responsible, appropriate decisions that consider your circumstances and your future plans. We encourage our members to consider a minimum involvement with us of 12 months. However, we do not know whether this type of investment or investment timeframe is appropriate to you. You will need to consider your own personal circumstances before investing.

Markets fluctuate. Sometimes we have a poor month and don’t perform as planned, other months we perform quite well. If you only plan on joining for a few months, you may join at the beginning of a bad period and by not staying, you don’t see the investment return to profitability (but it is possible that we have a prolonged period of poor performance – we hope this never happens). Our 6 month fee refund offer reflects our commitment to longer term responsible investing by our members.


What is the minimum amount I can invest?

We believe in starting anywhere, so long as you start. So if you want to test the water before you dive in, this means your investment account can be as modest as $500 and invest more as you see fit once you’ve got the lay of the land.

Why do I have to supply 100 points of ID?

We live a world where, sometimes, bad things happen. Identity theft, money laundering and general deception do exist and we have to do our part to reduce the effect of that on our members.

The Empire Club Investment Fund operates in accordance with the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) which means we cannot open an account until we have verified your identity. Unfortunately we cannot accept any member without satisfactory proof of ID. Assuming you are not a fugitive, we don’t predict this will be a problem.




29 February 2016

Do you offer any kind of investment service to non-members, or the general public?

No – we are currently focused only on developing and enhancing the services we offer our members. If we reach membership capacity and demand exists for some kind of publicly offered service, we may consider it, you never know your luck in a big city.

My friend has higher returns than me, why?

Investing is never a straight line of increasing returns. Some months are better than others and there will be periods of good performance and periods of performance that aren’t so good. Kinda like the ebbs and flows of life.

If your friend joined in January and experienced 3 months of 10% returns each month, by the end of March, his investment account is 30% higher than when he/she started. If you join in April and the fund experiences a 5% loss in the next month, by the end of April your account would be worth 95% of its original value and your friend’s would be worth 125%.

If you join at the beginning of a less positive month, and you need to withdraw your funds to buy a house in 60 days, you might actually incur a loss, but if you could keep your membership for longer there is a chance that the loss would be recouped in the months ahead and the fund return to positive returns and end the year earning you a very healthy return. It is also possible for the investment fund to suffer a prolonged period of losses, but we hope this never happens.

Does The Empire Club invest my funds for themselves?

No way! Your funds are invested for you, and only you. They are never our funds and every year our fund is audited to verify compliance with the compliance procedures mandated by the law. Whilst we do not invest your funds for ourselves, we do charge fees if the investments sufficiently perform.

What are performance fees and how are they calculated?

We aim to charge you fees only when you are getting a healthy return – so we charge performance fees. It wouldn’t be fair to take a performance fee if we hadn’t performed. And so for that reason, we don’t.

We have 2 types of performance fees: the Consistent Performance Fee and an Exceptional Performance Fee.




29 February 2016

As the name suggests, we charge the Consistent Performance Fee for consistently good performance. We average out monthly performance over a 12-month period, and if we are on track to perform more than 10% per annum then we earn 25% of your profit. If average performance is less than 10% per annum, you will be charged a total of zero for this fee.

As you may have guessed, we charge the Exceptional Performance Fee for exceptional performance. If we earn more than 5% in any given month (which would be 60% per year), we take 25% of that profit as a reward for doing so well.

However… the Investment Manager is paying operational fees for the Fund. In the event that the Investment Manager does not pay these fees, you will be charged instead (we hope this never happens). There are two operational fees – the RE Fee and the Admin Fee. You will also indirectly incur incidental costs which are primarily the investment costs of the Fund, e.g. brokerage fees. These costs are spread out across all Investors.

All of these fees and costs are described in detail in the PDS which you should read – it is important to understand the effect of fees and costs on your investment.

Are there fees for withdrawals?

No. Nu-uh. Nada. Zero. Zilch.

How do I change my deposit preferences?

It’s all pretty intuitive. You can change your deposit preferences in The Empire Club App by selecting the profile menu in the right hand corner and by clicking ‘Payment Preferences’. You may then select Deposit. You can choose between Bank Account, Cheque or Credit Card.

How often can I change my investment amount?

You can increase or decrease your investment level each month. Or you can leave it at a set level. It’s up to you. You just have to request a withdrawal or schedule a deposit to change it. Pretty straightforward right? Check out the PDS for more details.

How do I close my account?

We’re not in to bad break ups, so we’ve made the process as clean as possible. Simply send us an email to [email protected] and we’ll organise it for you. Check out the PDS for details on withdrawals from the Fund.





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How is my account activity recorded?

Investment by investment; and transaction by transaction. Nothing happens to your account without it being recorded and disclosed. You feel me? Check out the PDS for more detail about what it means to have an ‘account’ in the Fund which is a collective investment vehicle.

What problem does The Empire Club solve?

The Empire Club seeks to bring professional and wholesale oriented investment products to the people. But it’s so much more than that. We’re all about aspiration, you see.

Let’s segway for a second.

Aspiration means “inhalation” or “breathing.” So how did it come to mean “ambition” or “the will to succeed”? The Latin gives us a clue: spirare (“to breathe”) and spiritus (“spirit”). It was once believed that our breath was our soul or spirit, which might explain why we talk about “breathing life into” something, or coming up with energy and ideas to invigorate it. How else to breathe life into something than with ambition and drive, in other words, “spirit”?

We take this ambition pretty seriously. So much so, we seek to literally ‘breathe life’ into the lacklustre world of finance. We want to bring together like minds and forge a network of people who want experiences that will take their breath away, and that have the spirit to pursue them. The Empire Club inherently grants members the contacts and network required to maximise opportunity and, inevitably, live a better life. We encourage long term responsible like wealth accumulation but delayed gratification is a thing of the past. With Empire Club, you can multi-task; take an interest in your financial future and have fun while you’re at it.

Does The Empire Club have other types of investment opportunities?

We spent 3 years establishing our current investment fund. We are working on other opportunities but they are a little further down the track. Things move slowly when it comes to building a framework to invest other people’s money. There are no short cuts (we don’t want to go to jail).

How does The Empire Club protect the value of my account?

In short, to the best of our abilities. The long answer?




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Trading derivatives can be quite aggressive and risky, we try and reduce that risk to an acceptable level that can be managed effectively, and consistently. The size of our investments are limited to an acceptable size so that each particular investment doesn’t, on its own, place an account balance at risk if it is unsuccessful. For further information, check out section 6 of the PDS entitled “How the Fund invests”.

Can I see detailed investment activity for my account?

Yes – through your Apex Fund Services unique login. Further information will be supplied upon joining.

Is the Empire Club Investment Fund audited by an Independent Auditor?

Of course. Pitcher Partners is a major accounting and auditing firm in Melbourne. They are approved auditors and audit our fund and compliance plan.

Can I replicate The Empire Club’s investment activity on my own?

No – we don’t give you enough information to do that. This is because our investment managers are chosen to manage your funds for a reason. They have years of proven experience and are likely to be better at doing what they do, than you will be. You are probably good at your job, because you’ve spent a long time learning about it. The same goes for our team. So leave it to the professionals why don’t you.

The investments include Derivatives. What is a derivative?

A derivative is an investment product that derives its value from an underlying asset. That underlying asset might be gold, or oil, or currency. They allow an investor exposure to the price movement of an asset without having to own the asset itself. It can be cheaper to pay for access to the price movement alone without having to own the asset and therefore the cost of the investment may be lower and, hopefully, the profit may be higher. It also allows an investor to potentially profit whether a market moves up or down.

I’ve never heard of the Derivative Market. Is it a big market?

According to June 2013 data from the Bank for International Settlements, it weighs in at $693 trillion in open contracts. In June 2015, the Australian




29 February 2016

Stock Market, all of it, according to the World Federation of Exchanges, was worth $1.62 trillion. So yeah, it’s pretty big!

Check out section 6 of the PDS for further information.

Why are there uninvested funds in my account?

The ratio of invested vs uninvested (available) funds is carefully defined by our investment management team. The nature of derivative investing means that investments are leveraged. This means that for a $100 investment, we might have exposure to an investment worth $1,000, for example. So in your $1,000 account, whilst you might see $100 invested the value of your total investment is higher. It is important that we manage this ratio carefully to ensure responsible and sustainable levels of investing. You will rarely see your total investment amount higher than 25% of your total account balance. It’s not that we aren’t doing our job, it’s that we’re making sure we keep investment acceptably conservative so that we can manage and absorb market fluctuations. If we invest 100% of account balance, and the market moves the wrong way, there is no way of absorbing that movement. Think of it as keeping a safety net in place to cushion any short-term blows.

How much should I invest with The Empire Club?

Everybody’s circumstances are different and we cannot give you advice. This is your call, and you are the best authority to make it. However, investments should always be appropriate to your circumstances and future plans and never put you under financial stress. There’s an old saying, that is “if you cannot afford to lose it, don’t invest it”. If you have doubts, we’d rather you take advice and choose something that better suits your tolerances. We like our members happy, not cash-strapped. If the decision to invest ever keeps you awake at night, you’ve made the wrong decision.

What would happen to my account if The Empire Club were to be acquired, go public, or cease doing business?

You’re really thinking big picture aren’t you. We like that. Ok so, your funds aren’t actually linked to us as a commercial entity. They are actually held in a trust by a completely separate custodian. That means that they aren’t our funds. We can’t do whatever we like with them, we can only direct the investment of the funds. The fund is operated in accordance with the rules of the Constitution which we have to abide by. Any changes to the Constitution that are adverse to your rights must be voted on by the participants (you). This is not an easy, or a small undertaking. Whilst we manage the investments of the fund, it is not “ours” – it cannot be acquired, or sold. If we can no longer operate, the fund, which is separate, would be wound up and money returned (after any applicable fees and expenses).




29 February 2016

How do you calculate the returns I see in the App for each investment?

We measure the return from the investment against the amount we invested from your account for that investment. For example, if we invested $500 and the profit was $50, that would be a 10% return. Wouldn’t that be nice.

How do you calculate the total returns at the end of a month?

Get ready, we’re getting technical. At the end of the month, we calculate the total returns from investing activity and measure that against your total account balance. But first we adjust the return to take into account any transaction fees or performance fees. For example, if gross return was $300 for the month, and after subtracting transaction and performance fees, the net return was $250, we’d measure that against your account balance and show it as a monthly performance. If you had $5,000 in your account your return would be 5% for the month.

Why do you adjust the balance I see on my app?

We reconcile each transaction from our Investment Fund Account with our reporting system once a month. Derivative trading incurs costs and receives earnings, depending on the positions opened. Differences in the interest rates between countries can result in an interest cost, or interest earning, when trading two currencies against each other. We also have to adjust your account to deduct our performance fees if we’ve had a good month.

Can an error be made adjusting my balance that could risk my money?

Our systems are separate. The fund administrator separately calculates your account balance which minimises the chance of loss. Even in the event of an error, your funds are held at arm’s length by a custodian.

How are profits from the fund taxed?

Good question. For information on the taxation of the fund, please refer to the Product Disclosure Statement.

When can I expect my money to be invested?

We revalue the fund every month, so in the first few business days of the month, if your funds have been deposited and your membership approved, we will begin investing.




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What is a monthly valuation?

We open and close the fund once a month. We accept deposits and withdrawals at this time. To do this we must value the fund so that everyone is treated equally. If there are active investments we take a snapshot of their value at the time of valuation so that they are included in total value. Makes sense doesn’t it?

What if there is still an investment open, can I close my account or withdraw funds?

You can withdraw the available funds, and opt out of future trades. Then, when the investments are finalised, we’ll accept your withdrawal request. Our investments are open for any period between approximately 3 days and 2 weeks. But some may be shorter, or longer in duration, depending on market conditions.

Why is the investment amount limited to $200,000?

For some, too much is never enough. We’re a little more moderated than that. In effect, we’re a membership organisation that aims to cater for the 18-40 year old retail investors. We provide a membership service that appeals to them and so our fund caters to their specific financial circumstances.

We don’t want a fund size that is too large and changes our ability to manage it so we limit the investment amount to enable us the ability to cater to more of our members.

Most managed funds need to be quite large to make money, and we’d make more if we had a higher balance per member, but we’re not most funds.

Saying this, we do have a Platinum membership with fewer limits. Get in touch to learn more.

Can I invest as a wholesale client and pay lower fees?

No – we cater to retail clients. The protections, reporting and disclosure requirements are higher for us in comparison to funds only open to wholesale client because ASIC considers retail clients the most vulnerable. We will happily accept a membership application from a wholesale client, but the service and opportunities are the same for every member.

Are you Hedge Fund?

If you wanna get technical, then yes, we are considered by ASIC to be a Hedge Fund.




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How do you pick investments?

Investments are chosen by our investment management team using technical analysis of charts and patterns. The exact process doesn’t quite fit a neat elevator pitch but it is derived and developed from many years of market experience. Please refer to the Product Disclosure Statement for further information.

Can I choose my investments?

No, no backseat drivers just yet – at this stage we are fully managed. We do plan on rolling out other investment opportunities in the years ahead and you will be able to ‘opt-in’ to those. We have our eyes on a different style of property development and a few other concepts we think will interest our members for investment. More information will be available as we develop these opportunities for our members.

How many investments do you make each month?

We normally make between 10 and 20 different investments each month. It depends on the market conditions, just like the Melbourne weather, we never know what we’re gonna get.

Do you ever stop investing?

You know what? We do sometimes. Our investment team won’t make an investment ‘just because’. That would be silly. It has to be supported by technical analysis. In periods of increased volatility, or during periods of reduced trading volumes, technical analysis can yield less helpful information.

Between the months of December and January our investment activity decreases. Over the Christmas period international trade volumes drop right off, in part, because investment managers are away. They traditionally close out of positions so that they don’t need to worry about them whilst on holiday. When they return they reposition themselves for the year ahead and often market trends are altered during this time. When trading volume is thinner it becomes easier for some traders to influence markets and moves can be unpredictable and significant. Volatile thin markets do not make for the best responsible investing and so we will only make investments during this time if there is significant technical support behind them.

This is not anything to be worried about and is consistent with our Investment Managers activities over the last decade.




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Should I be worried if there are any changes in investment activity?

In a word, no. We don’t trade out of habit, we trade by design. If the market doesn’t support effective trading, we will trade less frequently. This is part of investing and having the knowledge to know when to invest and when not to is all part of why investment managers are employed to manage funds. If you have any questions or you are worried about performance, you can certainly contact us and we can provide further information to help you understand more about why.

If my funds aren’t invested, where are they?

Your funds will only ever be in one of 3 places. Our investment account with our Broker, our Trust Bank Account that is held and administered by our Custodian, AET (A member of the IOOF Group) or in transit between those accounts, or yours if you’re withdrawing or depositing. You’ll never give funds to us directly. We’re the manager of the fund, not the keeper of them and we can’t use them for any purpose not permitted by the Constitution and Product Disclosure Statement and provided for your reference here.

Can I ever be locked into the fund?

Never say never. There are some instances where you might find yourself bound to the fund, but these are primarily protective measures implemented in your interest. To see when those instances may occur check out our PDS and Fund Constitution Document for more information.

Is your investment management team aligned with my interests?

Yes – in fact, they invest alongside the Empire Club Investment Fund and follow EVERY investment exactly as it is experienced by the Fund. That is our promise to you – we are as aligned with your funds and interests as we could be. No investment will ever be made for the fund without every employee and director of the club also being exposed to it. If that doesn’t make you feel all warm and fuzzy inside, we don’t know what will.

The Constitution and Product Disclosure Statement for the fund states that the responsible entity is Vasco Investment Managers. Who are they?

Vasco is the Investment Management Company we have appointed to be responsible for the supervision and compliance of our fund. They have an Australian financial services licence and operate the fund in accordance with their legal obligations. We are contracted to manage the investments of the fund in accordance with an extensive set of conditions Vasco impose on us





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that are designed to ensure compliant and ethical operation of the fund at all times. Kind of like Big Brother minus Gretel Killeen and questionable shenanigans in the hot tub.

Why are there other companies involved in the issuing and management of the fund?

It’s another layer of protection for investors so they can rest easy knowing that there is more than one company responsible for the lawful operation of the fund and that each company has reputation and compliance risk.

Will I be provided with formal reporting documents?

Yes – we pay Apex Fund Services an awful lot of money to provide boring but accurate monthly and annual reporting services to our members. Our fund is also independently audited by our auditors at Pitcher Partners. Meaning we can’t fudge the figures. This is good for you; and leads to the premature ageing of our in-house accountant who looked much younger when he first started.

Will withdrawing funds affect my tax situation?

Maybe – you’ll need to consult your tax advisor. Please refer to the Product Disclosure Statement for further information.

Where can I get my tax documents?

They come to you. You will be sent relevant documentation at the end of financial year in addition to your monthly statements. If you would like to request additional documentation please contact us.

What is your historical performance?

Please refer to the “Hypothetical Past Performance” section of our website.

What do you do with my money?

If you really wanna know, you’re going to have to pay attention. Things are about to get a little technical.

When you deposit money (and we’re done rolling round in it) the funds go directly to our custodian. Our custodian, Australian Executor Trustees, an IOOF company, holds all our funds on behalf of the entity responsible for the fund, Vasco Investment Managers. Sadly for us, we don’t get to roll round in cash because we never get to touch it. It goes directly to our custodian who hold it away from us (probably because they know about us rolling around in it). They hold it at an ‘arm’s length’ to protect you.




29 February 2016

We are appointed by the fund’s responsible entity (the responsible parent figure) to make investment decisions that are within our predefined and approved investment mandate and scope, they then request the transfer of funds from our custodian, to open the investment. The fund administrator, Apex, keeps track of how much of each investment belongs to each member. When that investment is closed the funds are apportioned to each member according to how much of that investment you are entitled to. At the end of the month, the entire fund is valued and we send out your monthly report to show you how we did and how much your account is worth.

Does the Empire Club have an Australian financial services license?

Yes. But no, but sort of. The Fund is technically run by Vasco Investment Managers who holds a licence. We are authorised to provide financial product advice to Vasco under a licence held by Specialised Investment and Lending Corporation but do not hold a licence ourselves.

Is the Empire Club Investment Fund registered with any government body?

The fund has been registered with the Australian Securities and Investment Commission. That’s a yes in case you hadn’t noticed.

Where is my money held?

Your money is held in trust by our Custodian, AET when it is not directly invested with our brokerage providers. Empire Equity Group Pty Ltd, trading as The Empire Club, does not have access to your investment funds at any point in time. The commercial operation of Empire Equity Group Pty Ltd is not linked in any way to your invested funds (meaning we don’t actually get to roll around in cash, which is disappointing, but much more professional).

Are there risks to investing with The Empire Club?

Yep. It’s investing. You’ll need to look at our comprehensive Product Disclosure Statement (PDS) for more information. It really is important that you have a read through and understand this document. ASIC requires that it is provided to you and it is for your protection, not because they want to put you to sleep. Never ignore this kind of thing. And if you need a translation of any part of it, please contact us directly or speak to a professional advisor. We cannot give you advice of any kind, so bear this in mind before showering us with 21 questions.






29 February 2016

Do I have access to the official accounting and reporting systems to generate accurate reports?

You sure do. Via Apex Fund Services, you can access the official records that relate to your investment account. You can log in and keep track of your account any time you like. Ahh. If only everything in life was that simple.

Will the systems ever be linked?

We never say never. We would need to be certain that integration of our systems is consistent with our functionality requirements and security provision. We are always exploring future developments. Watch this space.

Apex and The Empire Club App both tell me I have a different account balance. Why?

The Empire Club App is a notional representation of your investment account. It is not always perfectly accurate, a bird’s eye view if you like. The app provides a daily representation of ongoing performance, not so much the granular details. Apex is the official record of investment activity but is only updated monthly when the fund is valued. We know you want a better idea of how we’re going on a daily basis so we give you access to ongoing performance. This performance is subject to change and at the end of the month, your app balance will be equal to your Apex reported balance.

Why isn’t the Empire Club App linked directly to my investments?

For security and efficiency – by keeping a physical wall between our systems, we increase security, functionality and decrease cost to our members. Trust us, it’s better this way.

I am not an Australian Resident. Can I be a member?

It’s not you, it’s the law. Unfortunately, no. Each country has its own laws and regulations surrounding investments and we are only approved to operate in accordance with Australian Law (at the moment).

Will The Empire Club give me any kind of investment advice?

Our offering is not to be confused with investment advice. If this is what you’re after seek out an authorised financial advisor.




29 February 2016

Can I open an account for my Self Managed Superannuation Fund?

Not yet, but it’s on the cards. We are exploring our product offerings and aiming to have something on the horizon that would allow you to invest your superannuation.

Can I open multiple accounts?

Our in-house accountant says no – something about making his job too hard. Nobody likes admin. Furthermore, we are committed to keeping this thing as clean and simple as possible. One account may seem minimal but it’s more than enough to maximise our offering.

Do I have to use the app?

No you don’t, if you’re app’d out you’ll still get monthly reports sent to you via email. Too easy. And if you’re more of a hands-off member we’ll respect that and keep our contact frequency to a minimum.

How do I deposit funds?

You may deposit funds by Direct Debit, Cheque or Credit Card. You may also send us a payment via EFT.

To make a payment via EFT you MUST put your membership number as the reference for your transfer and send proof of payment (receipt) to us at [email protected]

How do I change my withdrawal bank account?

You can change your withdrawal preferences in The Empire Club App by selecting the profile menu in the right hand corner and by clicking ‘Payment Preferences’. You may then select Withdrawal. You can manage your bank account for withdrawals here.

When can I expect a withdrawal to reach my bank account?

Once a withdrawal is approved we endeavour to get it to you within 5 business days once the fund has been closed and valued each month. Ahh, modern banking. Don’t you love that.

How often can I withdraw funds?

Once a month. Simple as that. But, you can schedule a withdrawal at any time.





29 February 2016

Can I make a partial withdrawal from my account?

Sure can – but remember your membership level might be affected.

How much can I withdraw?

As much as is available in your account.

Is the Empire Club a financial advisor?

No. We are not and we cannot give you general or specific financial advice. We also strongly recommend you seek out advice before making any investment decision.

What do I do if I have a complaint?

Bill Gates once said, “your most unhappy customers are your greatest source of learning”. We don’t disagree, see our complaint policy found here.

What does “Performance Since Joining” represent in the app?

Performance Since Joining (%) represents the net performance of the Fund relative to your period of membership. Please note that this is not adjusted for deposits or withdrawals.


5320247_167.docx

14 Directory

14.1 Responsible Entity

Name Vasco Investment Managers Limited (ABN 71 138 715 009, AFSL 344486)

Address Level 5, 488 Bourke Street, Melbourne, Victoria 3000, Australia.

Telephone +61 (0)3 8352 7120

Facsimile +61 (0)3 8352 7199

Email [email protected]

Website www.vascofm.com

14.2 Investment Manager

Name Empire Equity Group Pty Ltd (ABN 40 168 738 805, Authorised Representative Number 1238253)

Address Suite 16, 210 Toorak Rd, South Yarra, Victoria 3141, Australia

Telephone +61 (0)3 9824 1302 or 1300 550 108


Website www.theempireclub.com.au

14.3 Licensee

Name Specialised Investment and Lending Corporation Pty Ltd (trading as ‘The SILC Group’) (ABN 87 149 520 918, AFSL 407100, ACL 426878)

Address Level 9, 179 Queen Street, Melbourne, Victoria 3000, Australia

Telephone +61 (0)3 9600 2828


Website www.silcgroup.com.au

14.4 Custodian

Name Australian Executor Trustees Ltd (ABN 84 007 869 794, AFSL 240023)

14.5 Administrator

Name Apex Fund Services (Australia) Pty Ltd (ABN 86 149 408 702)

Address Western House, Level 2, 83 William Street, Melbourne, Victoria


http://www.vascofm.com/


http://www.theempireclub.com.au/


http://www.silcgroup.com.au/

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3000, Australia

Telephone +61 (0)3 9020 3000


Website www.apexfundservices.com

14.6 Lawyer

Name Mills Oakley Lawyers (ABN 51 493 069 734)

14.7 Financial Auditor

Name Pitcher Partners (ABN 27 975 255 196)

14.8 Compliance Plan Auditor

Name Pitcher Partners (ABN 27 975 255 196)

http://www.apexfundservices.com/