Explaining the dilution levy
It is a fee paid by subscribing investors into a fund (that is a single priced fund with dilution levy), as set out in its Prospectus, as is the case of the Fund. A dilution levy is applied to mitigate the effect of “dilution”.
The dilution levy was introduced on all subscriptions into the Fund from 13 October 2014 and this has been maintained at every Dealing Day since that date. The dilution levy was maintained at 5% of the value of subscriptions at every Dealing Day until the 12 April 2016, when it was reduced to 2.5% before moving back to 5% on 12 January 2017. On 13 August 2018, the dilution levy was reduced to 1%, then on 13 June 2019 (inclusive) the levy was raised again to 5%. It also applies to top-ups made to existing holdings. The dilution levy will be retained by the fund for the benefit of investors and will help offset the acquisition costs associated with the fund making new acquisitions.
The dilution levy will be applied to all subscriptions over £1,000. The minimum investment amount for TIME:Freehold is £5,000 and the minimum top-up is £1,000.
To what level and when are you proposing to adjust the dilution levy?
Based on the objective assessment of dilution to existing Shareholders, noting the current balance sheet of TIME:Freehold and the profile of the pipeline acquisition targets, it is proposed to vary the dilution levy up to 5%. This revised level shall be effective from 13 June 2019.
Why are you adjusting the dilution levy?
It is a requirement for the Authorised Corporate Director (ACD) of TIME:Freehold to review the level of the dilution levy applied on every Dealing Day and this has been the case. The ACD has reviewed the current balance sheet of TIME:Freehold and the profile of the pipeline acquisition targets and determined a upward adjustment of the level of the dilution levy is appropriate. The ACD continues to actively monitor the appropriate level.
What does this mean for your clients?
Existing investments in TIME:Freehold will not be affected by the dilution levy. Prospective new investors should be made aware of the dilution levy as it may affect their decision to invest. It is important to emphasise that the dilution levy does not affect withdrawals, which will continue to be available on normal terms at every dealing day.
We shall continue to monitor the ongoing requirement for the dilution levy at each dealing day. However, it is expected to remain in place for the foreseeable future.
If you have any questions about this please speak to a member of our team on 0207 391 4747 or email us at firstname.lastname@example.org.