UFG Russia Debt

Fund Type

UFG Russia Debt Fund Ltd. was launched on 11 January 2005 and is a Cayman Islands-exempted company. The fund is denominated in US dollars.

Fund Objective

The investment objective of the Fund (fixed income) is to achieve fixed income returns, primarily through investments in debt instruments issued by corporations domiciled in the Russian Federation, which are denominated in roubles, US dollars or euros.

Investment Strategy

• — Around 70% of the portfolio is invested in Russian Rouble corporate bonds with an average duration of less than 2 years, yielding 11% in Rouble terms
• — The rest of the portfolio is invested in Russian corporate Eurobonds with an average duration of less than 4 years and a 7—8% yield
• — The short duration of the portfolio minimizes price risks, while improving credit ratings leads to further spread compression
• — The short tenors of Rouble-denominated debt result in low sensitivity to US interest rate changes while significant Rouble exposure should provide an effective hedge against a weakening US dollar

Legal Structure

• — The Manager: UFG Advisors Limited, a company incorporated under the laws of Bermuda, specializing in investment in Russia
• — Independent Auditors: PricewaterhouseCoopers, Cayman Islands, British West Indies
• — Cayman Counsel to the Fund: Ogier, Grand Cayman, Cayman Islands, British West Indies
• — U.S. Counsel to the Fund: Akin, Gump, Strauss, Hauer & Field, LLP New York, New York
• — Administrator: Delphi Management Limited, Hamilton, Bermuda
• — Custody: Credit Suisse (London)

Fees and procedures

Management Fee — 1% p.a.

Performance Fee — 10% over hurdle rate 5% + loss carry forward

Minimum Investment — US$100,000

Subscriptions: bi-weekly, on the first business day of the first and third weeks of each calendar month

Redemptions: monthly with at least 15 business days written notice prior to the proposed redemption date