Envysion Commodity Strategy Fund

Envysion Global Investments VCC

Sub-Fund 1
Commodities

MAY 2020
 About Us

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 A Winning Team
Veron Shim
Veteran banker and trusted advisor for UHNW families and entrepreneurs for almost two decades.
▪ Head of SEA at EFG Bank. Founding team at Julius Baer Asia
▪ Qualified CFP. Licensed Trust and Estate Practitioner
▪ Masters in Applied Finance from the University of Adelaide and BSc. (1st Hons) from the University of
London
CEO & Founder
Jacob Doo
26 years of structured finance and multi-asset class investment experience navigating market cycles to
dynamically manage investment portfolios.
• Head of Structured Products, Asia at Julius Baer
• Independent reviewer on Institute of Banking & Finance (IBF) Standards courses
• Global Product Manager for Fixed Income, acting Global Head of FX, Rates, and Commodities in
Standard Chartered Bank
CIO • Double Masters in Applied Finance and Financial Engineering

Kay Siong Tan

Over 25 years of regulatory, compliance experience in the banking industry including setting up and
growing compliance teams.
• Former regulator
• Certified AML specialist, ACAMS
• Affiliate member, ACCA
• MBA (Finance), University of Hull
COO & CCO

Elvin Chan
Over 20 years of IT experience in Global Technology firms. Expertise in data centre design, network
storage, disaster recovery and messaging administration.
Director at Julius Baer
Certifications: IT Business Continuity Management – Associate, ITIL v3, and Data Centre Management
BSc. Computer Science, De La Salle University
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Envysion Commodity Strategy Fund
• Sub-fund of Envysion Global Investments VCC
(Variable Capital Company)
What is a Variable Capital Company?
• The Variable Capital Company (VCC) is a new corporate structure for investment funds constituted under the Variable
Capital Companies Act which took effect on 14 Jan 2020. The VCC will complement the existing suite of investment
fund structures available in Singapore.
• The VCC Act and subsidiary legislation is administered by ACRA. All VCCs must be managed by a MAS Licensed Fund
Manager . The anti-money laundering and countering the financing of terrorism obligations of VCCs will come under the
purview of the Monetary Authority of Singapore (MAS).

Some key features of a VCC

• A VCC has a variable capital structure that provides flexibility in the issuance and redemption of its shares. It can also pay
dividends out of capital, which gives fund managers flexibility to meet dividend payment obligations.
• A VCC can be set up as a single standalone fund or an umbrella fund with two or more sub-funds, each holding a
portfolio of segregated assets and liabilities. For fund managers that structure their funds as umbrella VCCs, there may
be cost efficiencies from using common service providers across the umbrella and its sub-funds.
• A VCC can be used for both open-ended and closed-end fund strategies.
• Fund managers may incorporate new VCCs or re-domicile their existing overseas investment funds with comparable
structures by transferring their registration to Singapore as VCCs.
• VCCs must maintain a register of shareholders, which need not be made public. However, this register must be disclosed
to public authorities upon request for regulatory, supervisory and law enforcement purposes.

Source : https://www.acra.gov.sg/business-entities/variable-capital-companies
More details pertaining to the VCC framework can be found at www.mas.gov.sg
 Fund Structure and Management Team

VCC Fund Manager

Envysion Wealth Management Pte Ltd.
(a holder of a capital markets services license for fund management under section 86 of the
Securities and Futures Act (Cap. 289))

Envysion Global Investments VCC

VCC Sub-Fund 1:
Envysion Commodity Strategy Fund

Auditor: Legal Advisor: Company Secretary: Fund Administrator:

Baker Tilly Eversheds Harry Elias LLP Fastcorp Pte Ltd Crowe Horwath First
Trust Fund Services
 Fund Strategy

Strategy Specification
• The main strategy involves the purchase of receivables arising from the sale of physical
commodities, specifically Nickel.

• Receivables are associated with forward contracts for the sale of the Nickel.

• Upon every purchase on a monthly basis, the seller will then enter into a forward contract
to secure the forward selling price with a buyer operating in LME market.

• Seller of the Receivables benefit from the arbitrage profits arise from the difference
between price for Nickel and the selling price of the forward contracts.

Envysion Commodity Strategy Fund will buy a portion of the undivided share of
such Receivables of the seller at a negotiated price, which will be on a non-
recourse basis to the Seller.
 Historical Performance of Strategy
On 3 month rolling (2017 – 2019)

Realised Gain/Loss for FY 2017

Month of Tranche Launch Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17
Realised Returns 24.41% 26.30% 22.39% 23.47% 27.42% 24.45% 22.44% 24.69% 25.08% 16.10% 15.98% 16.62%

30.00%

20.00%

10.00%

0.00%
Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17

Realised Gain/Loss for FY 2018

Month of Tranche Launch Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18
Realised Returns 16.05% 15.69% 15.74% 16.21% 15.65% 16.02% 15.45% 15.16% 15.29% 15.20% 15.56% 15.24%
18.00%

16.00%

14.00%

12.00%
Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18

Realised Gain/Loss for FY 2019

Month of Tranche Launch Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19
Realised Returns 15.38% 15.73% 15.02% 15.43% 15.79% 15.64% 18.34% 18.00% 18.14% 15.44% 15.09% 15.05%
23.00%

18.00%

13.00%

8.00%
Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19

(Based on similar strategy adopted by another company unrelated to Envysion Global Investments VCC - Note that historical performance may not be reflective of future performance)
 Physical Nickel Arbitrage

STRATEGY DESCRIPTION

• Sale of commodities (nickel) utilizing a

spread between the purchase and
forward sale price to generate
arbitrage profit, less associated costs Buy from Source of Net return to the Fund
such as brokerage fees, hedging costs, commodity at a
insurance and shipping costs discounted offtake
price

Physical Less
• Receivables from the Forward Buyer Discount Fees
will be made available by the seller for Spread
the Envysion Commodity Strategy
Fund. Including
- Brokerage fee
Sell through an
- Shipping fee
approved broker on
- Insurance fee
• The profits generated from the LME with a forward - Hedging fee
receivables will then be distributed to contract - Commissions
the fund upon the delivery of the
physical stock at the maturity of the
forward contract.
 Illustrative Flow of the Physical
Commodity

End buyer Cargo can be sold wholesale/partially to established

institutions (eg. BNP Paribas, Glencore etc)
Established end buyers have a lower chance of
reneging on the contract.

Destination to LME warehouses/areas where

Contract demand for nickel is strong
Cargo destination
Essentials
Warehouse companies must meet strict criteria
before they are approved for the handling of metals.

Contract specs Procured Nickel is according to LME specifications

(or other required specifications)
Every metal traded on the LME must conform to
strict specifications regarding quality, lot size and
shape. Each LME tradeable contract is likewise
governed by rules covering (but not limited to)
prompt dates, settlement terms, traded and cleared
currencies and minimum tick size.
 Investment Process
Subscription

SUBCRIPTION AND INVESTMENT CYCLE

The tenure of each series

Subscription to each Entry window for the is 12 months with
series of the Envysion series is open for 20 distribution of yield at the
commodity strategy fund calendar days or until the end of every 3
starts on the 1st of every series is fully filled; months/quarterly from
month whichever occurs first* the start of each series

KEY DETAILS

Tenor of Strategy 12 months

Investment Currency SGD or USD
Minimum Subscription SGD100K / USD100K
Subscription Frequency Monthly
Maturity End of 12-month period
Early redemption is allowed at the end of each quarter. Redemption
notice must be submitted one month before the quarterly yield
Redemption Frequency
distribution. Early redemption is subjected to a fee of 1% of the
redemption amount
Management Fees 0.5% per quarter
Service Charge 0.0625% per quarter
Initial Charge 3.0%
 Investment Process
Distributions & Redemption

Across the strategy tenor of 12 months (an example) Note that the subscription frequency of the strategy will be
monthly

Investor subscribes to the

January series and deposits January 2020
money into the Fund within
3 business days

After quarterly yield

distributions are paid out
April 2020 by the Fund at the end of
the quarterly tenor, the
Distribution of yield full principle will be rolled
over to the next quarter.

The investor may reinvest

July 2020 the quarterly yield into the
strategy, but on a
Distribution of yield subsequent subscription
month series.

Note that quarterly

October 2020 distributions are subject to
being declared
Distribution of yield
Full redemption of Principle
plus quarterly yield with net
proceeds paid no later than January 2021
20 Business days after the
expiration of one year from
issuance of the series Jan series maturity
Principle + Yield payout
 Risks and Considerations

Investment in the strategy is subject to the credit risk of the seller and other counterparties. The
Credit Risk investment is unsecured. An investor will need to perform his or her own due diligence.

Investment risk This is a Principal - at - risk product. There is no assurance that investors will recover the Principal,
in full or in part, and there is no certainty that any illustrative yield can be achieved.

Liquidity risk There is no liquidity nor secondary market during the tenor. However, the investor may liquidate
at the end of every quarter, subject to an early redemption penalty.

As with all shipments, there is a risk of loss of goods due to unforeseeable circumstances such as
Shipping and weather, accidents or exceptional events as pirates. This risk is significantly mitigated by insurance
logistics risk coverage which covers part the cargo value lost in such situations.**

The seller of the Receivables employs derivatives as part of their hedging strategies. The
derivatives can be traded via Over-The-Counter (OTC) with counterparties (primarily investment
Counterparty risk banks). Therefore, seller of the Receivables is exposed to counterparty risk if their counterparty
fails to fulfil its obligations.

**subject to the terms and conditions of the shipping insurance coverage.

 Uses of Nickel

Primary nickel consumption in

Using nickel improves the steel’s corrosion resistance and robustness in a
2018 by industry
Stainless steel wide range of temperature conditions, boosts its ductility and durability, and
enhances non-magnetic properties.

5%
6%

7% Used to produce heat and corrosion-resistant alloys with high nickel content,
Alloys and primarily driven by demand from aerospace industry (aircraft engines) and
special steels the oil and gas industry (tubing, valves, pumps, etc).
8%
2,300,000
Metric tons

A process that uses an electrical current to coat metal with a thin layer of
nickel. Provides superior ductility, corrosion resistance, hardness, and
Electroplating
improves a product’s brightness and external appearance (cars, motorcycles,
bicycles, lighting fixtures, appliances, etc).
74%

Used for two of the most common types of lithium ion electric car batteries:
Electric car Nickel Cobalt Aluminium (NCA) and Nickel Manganese Cobalt (NMC),
batteries comprising of 80% and 33% nickel respectively.
Stainless Steel Alloys
Special Steels Electroplating
Batteries

Source: Nickel Institute, Norilsk Nickel company presentations

 Key Risks and Disclaimer

This document is provided to you by Envysion Global Investments VCC (“EGI” ) for your information and private use only and may not be
reproduced, transmitted or communicated to any other person without the prior written consent of EGI. This document is presented only as
an abbreviated summary of the Information Memorandum (“IM”) issued in respect of the Envysion Commodity Strategy Fund, a sub-fund
under EGI, and is not intended to substitute, and has to be read with, the IM.

The contents of this document are only for your information, is not an offer or a solicitation for you to purchase or invest in any investments,
and should not be relied on in any decision by you to undertake any investments described herein or to establish any relationship with EGI or
and its manager, Envysion Wealth Management Pte Ltd (“EWM”). In the event of any inconsistency between this document and the IM, the IM
shall prevail.

This document does not have regard to the specific investment objectives, financial situation or particular needs of any specific person. This
document shall not constitute investment advice or a solicitation or recommendation to invest in this investment or any products mentioned
herein. This document does not constitute, or form part of any, and shall not be construed as a prospectus/offering memorandum or other
similar offer or issue documentation of any investment. It is not intended to be a representation of the terms and conditions of any investment,
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EGI nor EWM is obliged to inform you of such changes. Any statements as to any procedures or process (including without limitation, any
evaluation process) reflected in this document are only of an indicative nature and subject to change.

This document may contain subjective information which does not necessarily reflect the position of EGI and EWM. The contents of this
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 Key Risks and Disclaimer

The value of any investment and any income accruing to such investment may rise as well as fall. The risk of loss from investments can
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take no responsibility for their accuracy. You should carefully consider, the merits and the risk inherent in this investment and based on
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