BH GLOBAL LIMITED - Peregrine Communications · Directors’ recommendation The Circular sets out...

ADV05430 CONFIDENTIAL DO NOT COPY OR DISTRIBUTEYOUR ATTENTION IS DRAWN TO THE SECTION ENTITLED “IMPORTANT INFORMATION” SET OUT AT THE BEGINNING OF THIS PRESENTATION AND TO “FURTHER IMPORTANT INFORMATION” AT THE END OF THIS PRESENTATION.© BREVAN HOWARD CAPITAL MANAGEMENT LP (2014). ALL RIGHTS RESERVED.

BH GLOBAL LIMITED

CLASS CLOSURE VOTE – 2014

2YOUR ATTENTION IS DRAWN TO THE SECTION ENTITLED “IMPORTANT INFORMATION” SET OUT AT THE BEGINNING OF THIS PRESENTATION AND TO “FURTHER IMPORTANT INFORMATION” AT THE END OF THIS PRESENTATION. INFORMATION AND OPINIONS UNLESS OTHERWISE INDICATED ARE EXPRESSED AS AT 5 FEBRUARY 2014. © BREVAN HOWARD CAPITAL MANAGEMENT LP (2014). ALL RIGHTS RESERVED. ADV05430

IMPORTANT INFORMATION

This document and the information contained in it relates to BH Global Limited (the“Company” or “BHG”) and the Brevan Howard managed fund/s in which it invests (“theUnderlying Funds”) (together the “Funds”). This document is being communicated by BrevanHoward Asset Management LLP (“BHAM”). BHAM is authorised and regulated by theFinancial Conduct Authority (“FCA”) of the United Kingdom. BHAM, Brevan Howard CapitalManagement LP (“BHCM”) and their affiliates together will be referred to as “Brevan Howard”in this presentation.

This document does not constitute or form part of any offer to issue or sell, or anysolicitation of any offer to subscribe or purchase, any inve stment, nor shall it or thefact of its distribution or communication form the basis of, or be relied on inconnection with any contract. Any person acquiring shares in the Company must be ableto bear the risks involved and must meet the suitability requirements relating to suchinvestments. An investment in shares may not be suitable for certain investors. Thisdocument constitutes a financial promotion for the purposes of the Financial Services andMarkets Act 2000 (the “Act”) and the handbook of rules and guidance issued from time-to-time by the FCA (“FCA Rules”). BHAM is acting exclusively for the Company and no-oneelse in connection with the matters described in this document, will not be responsible toanyone other than the Company for providing the protections afforded to its clients or forproviding any advice in connection with the matters described in this document and will notregard any other person as its client in connection with the matters described in thisdocument.

Interests in the Funds have not been and will not be registered under any securities laws ofthe United States of America or any of its territories or possessions or areas subject to itsjurisdiction, and, accordingly, may not be offered, pledged or sold within the United States orto, or for the account or benefit of, US Persons unless in certain transactions pursuant to anexemption from the registration requirements of U.S. Securities Act of 1933, as amended,(the “Securities Act”) and any applicable state laws.

The value of investments and the income from them can go down as well as up. Investorsmay not get back the amount originally invested and may lose all of their investment. Pastperformance is not a reliable indicator of future results.

This material is not intended to constitute, and should not be construed as, investmentadvice. Investors in the Company should seek their own independent financial advice.BHAM neither provides investment advice to, nor receives and transmits orders from,investors in the Company to which this material relates nor does it carry on any otheractivities with or for such investors that constitute "MiFID or equivalent third countrybusiness" for the purposes of the FCA rules.


AGENDA

04 > Introduction to Class Closure Resolutions

05 > Letter from the Manager

06 > Performance Information

10 > Expected Timetable

11 > Action to be Taken


INTRODUCTIONIntroduction to Class Closure Resolutions

Discount Management Trigger

BH Global Limited’s articles of incorporation (“Articles”) include various discountmanagement provisions, including class closure provisions. In particular, the Articlesinclude an obligation that if, in any calendar year the average daily closing market priceof a class of the Company’s shares is 10% or more below the average NAV per share ofthat class taken over the 12 month-end NAV calculation dates during that year, theCompany is required to convene an extraordinary meeting of the holders of that class ofshares (a “Class Closure Meeting”).

Class Closure Meeting

At the Class Closure Meeting, the Articles require that a special resolution be proposed(a “Class Closure Resolution”). If passed by the shareholders of the relevant class, theClass Closure Resolution requires the Company to make the following options availableto those shareholders in respect of their holdings of shares of that class:

(a) to offer all or some of their shares for redemption by the Company;

(b) to convert all or some of their shares into shares of another class of the Company; or

(c) to remain in the class, subject as described further below.

Alternatively, if holders of all three classes of the Company’s shares approve a ClassClosure Resolution, the Company is required to put in place measures for the winding-up of the Company.

Trigger of Class Closure Resolutions

As announced on 27 January 2014, the requirement to hold a Class Closure Meeting and topropose a Class Closure Resolution has been triggered in respect of the year ended 31December 2013 for each class of the Company’s shares.

The Company published a circular on 5 February 2014 (the “Circular”) containing noticesconvening Class Closure Meetings.

Directors’ recommendation

The Circular sets out an explanation of the business to be considered at the Class ClosureMeetings and why the Company’s Board considers that shareholders should vote AGAINSTthe Class Closure Resolutions.

Shareholder Circular

This presentation summarises but is not a substitute for the information contained in theCircular. You should refer to the Circular for a more detailed explanation of the business tobe considered at the Class Closure Meetings.

The Circular has been dispatched to the registered address of each shareholder and is alsoavailable on the Company’s website – www.bhglobal.com


LETTER FROM THE MANAGER

Dear Shareholders,

BH Global Limited (the “Company”) continues to offer investors unique access to alisted, diversified multi-strategy hedge fund that invests in a broad range of BrevanHoward-managed funds, a number of which are otherwise closed to new investment.These underlying funds provide the Company’s shareholders with exposure to a rangeof strategies including, among others, fixed income, foreign exchange, equity, credit,commodities and emerging markets.

Since its launch in 2008, the Company has produced consistent risk-adjusted net assetvalue (“NAV”) returns that are uncorrelated to equities, credit or duration. The Companyprovides shareholders with access to Brevan Howard’s leading operational, risk andtrading platform. We are continuously striving to improve this platform and during 2013expanded our operations in Jersey, New York and Hong Kong. These additionalresources further strengthen Brevan Howard’s operational, risk and trading resourcesglobally and provide exciting new opportunities for trading profits and diversification in2014.

We recognise the ongoing challenges that the Company and all closed-ended listedcompanies face in managing their discounts. The Company’s class closure provisionsare an important feature of its wider discount management programme and areintended to narrow the discount by providing an annual opportunity for shareholders tovote to redeem their shares should they trade at a discount to NAV of 10 per cent. orgreater. These provisions are supported by the use of market buybacks and, whereappropriate, the discretionary annual partial capital return. We welcome the Board’sannouncement (in the shareholder circular published on 5 February 2014) that it intendsto make more active use of its buyback powers in 2014.

Following recent consultation with shareholders, we are working to ensurecommunication with shareholders is kept informative and accessible. Going forward wepropose to produce enhanced reporting on a quarterly basis to supplement existingmonthly newsletters. We are also working to consolidate and simplify the informationavailable on the Company’s website relating to the Company’s structure and theunderlying funds to make it more easily accessible. These enhancements and oursupport of the Company’s more active use of market buy-backs reflect Brevan Howard’songoing commitment to the long-term success of the Company.

Despite these measures, we recognise that NAV returns are the key determinant of theprice at which the Company’s shares trade. Our primary goal will therefore continue to bedelivering consistent long-term NAV appreciation, with low volatility, to the Company’sshareholders.

Yours faithfully,

Brevan Howard Capital Management Limited as general partner of Brevan HowardCapital Management LP

5 February 2014


PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULT S

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BH Globa l NAV (USD)

BH Globa l Share Price (USD)

HFRI Composite

FTSE250

BH GLOBAL LIMITEDPerformance - NAV and share price performance since launch

Historic returns Historic cumulative performance graph of BHG 3

(rebased to 100 on 29 May 2008)

Source: BHG’s NAV and NAV per share data is provided by the administrator, Northern Trust International Fund Administration Services (Guernsey) Limited. BHG’s NAV per share percentage monthly changecalculations are made by BHCM. The NAV data is unaudited and net of all fees and expenses payable by BHG.1. Data as at 31 December 2013. Shares in BHG do not necessarily trade at a price equal to the prevailing NAV per share.2. IPO price of 10 (USD).3. Source for HFRI Composite and FTSE 250: Bloomberg. HFRI Fund of Funds Composite Index is denominated in USD. FTSE 250 is denominated in GBP.4. Volatility and Sharpe Ratio calculated on the based USD share class. Sharpe Ratio is annualised excess return over Fed Funds divided by annualised standard deviation of excess return (weekly returns). Data

is estimated as at 31 December 2013.

Consistent NAV Performance and Low Volatility

� Since its launch, BHG has achieved consistent NAV growth of on an annualised basis of 5.29%1 in the GBP Share class (USD +4.98%1 , EUR +5.08%1 )

� From launch to 31 December 2013 total NAV returns are +33.4%1 (GBP class) +31.2%1 (USD class) , +31.9%1 (EUR class)

� These NAV returns have been generated with an annualised volatility of 3.7%4 and a Sharpe Ratio of 1.224



BH GLOBAL LIMITEDDiversifier from equity and bond risk

Performance of BHG 1 compared to Global Equities and Government Bonds

BHG USD = BH Global Limited USD Shares NAV Performance; SPX = S&P 500; SXXP = EuroStoxx 600; MXWD = MSCI World; BNDGLB = Barclays Capital Bond Composite - Global Index. HFRXGL = HFRXGlobal Hedge Fund Index; SBWGC = Citigroup World Government Bond Index (Hedged) All Maturities USD.Source: Indices calculations are based on weekly data from Bloomberg; BHG calculations made by BHCM are based on weekly data from Northern Trust International Fund Administration Services (Guernsey)Limited and otherwise on BHCM’s internal estimates. Where no BHCM estimate of the BHG NAV is available for a given day, the BHG NAV for that day is assumed to be the same as the previous day. Dataestimated as at 31 December 2013.1.The performance characteristics on this page relate to the NAV performance of the USD Shares of BHG. BHG NAV data is unaudited and net of all investment management fees and all other fees and expensespayable by BHG.2. The BNDGLB index was discontinued on 28/08/2008 and re-launched on 05/11/2008, accordingly data for the intervening period was not included in the calculations.



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CS HF Index (monthly)BHG (monthly)HFRI FoF Composite Index (monthly)

BH GLOBAL LIMITEDMost hedge funds appear to be long equity market be ta, with little timing ability

12-month rolling correlation of hedge fund indices and BHG’s NAV with the MSCI World Global Equities I ndex

Sources: BHG data calculated by BHCM; data estimated as at 29 November 2013. Indices data from Bloomberg; data as at 29 November 2013. HFRI FoF Composite Index: HFRI Fund of Funds Composite Index. CS HF Index: Credit Suisse Hedge Fund Index.1. The performance characteristics on this page relate to the NAV performance of the USD Shares of BHG. BHG NAV data is unaudited and net of all investment management fees and all other fees and expenses payable by BHG.

1



BH GLOBAL LIMITEDDiversifier from equities and risk assets

Sources: BHG data calculated by BHCM; data estimated as at 31 December 2013. Indices data from Bloomberg; data as at 31 December 2013. CS HF Index: Credit Suisse Hedge Fund Index. S&P500: Standard and Poor's United States 500 Total return 1988. MSCI World: MSCI Daily TR Gross World USD. CS Tremont Eq L-S: Credit Suisse Long/Short Equity Hedge Fund Index. HFRI FoF Composite Index: HFRI Fund of Funds Composite Index. CS Tremont Global Macro: Credit Suisse Global Macro Hedge Fund Index.1. The performance characteristics on this page relate to the NAV performance of the USD Shares of BHG. BHG NAV data is unaudited and net of all investment management fees and all other fees and expenses payable by BHG.

Returns during the worst ten months for the S&P 500 since launch of BHG 1

In the worst performing ten months for equities since the launch of the Company, BHG produced positive NAV performance in six of those months

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BHG


EXPECTED TIMETABLE

Latest time and date for receipt of Forms of Proxy for the Euro Class Closure Meeting 11.00 a.m. on 25 February 2014

Latest time and date for receipt of Forms of Proxy for the US Dollar Class Closure Meeting 11.15 a.m. on 25 February 2014

Latest time and date for receipt of Forms of Proxy for the Sterling Class Closure Meeting 11.30 a.m. on 25 February 2014

Euro Class Closure Meeting 11.00 a.m. on 27 February 2014

US Dollar Class Closure Meeting 11.15 a.m. on 27 February 2014

Sterling Class Closure Meeting 11.30 a.m. on 27 February 2014

All references are to Guernsey time

In the event that one or more Class Closure Resolutions are passed, the Company will send holders of the relevant class(es) of shares a

further communication regarding the options available to those shareholders, expected to be sent on 7th March 2014.


ACTION TO BE TAKEN

To vote on the Class Closure Resolutions

Accompanying the Circular are the Forms of Proxy for each class of shares of the Company that you hold:

• Form of Proxy with the white band for the Class Closure Meeting of theEuro Shares

• Form of Proxy with the blue band for the Class Closure Meeting of the USDollar Shares

• Form of Proxy with the purple band for the Class Closure Meeting of theSterling Shares

To summarise the Directors’ recommendation:

• Vote AGAINST the Class Closure Resolution – and hence be supportiveof the class continuing

If you wish to follow the directors’ recommendation, further details on how to complete the proxy forms are contained on the next page


ACTION TO BE TAKEN

x

To vote on the Class ClosureResolution, you need to completeand return the Form of Proxy for theclass meetings for the relevantclass(es) of shares that you hold.

To adopt the Directors’ recommendations, vote AGAINST the Class Closure Resolution.

Class Closure Meeting Proxy Form (complete the Form of Proxy for each class in which you are invested)

Please sign and date


FURTHER IMPORTANT INFORMATION

Data, projections and analyses

Any projections or analyses provided to assist the recipient of this document in evaluating the mattersdescribed herein may be based on subjective assessments and assumptions and may use one amongalternative methodologies that produce different results. Accordingly, any projections or analysesshould not be viewed as factual and should not be relied upon as an accurate prediction of futureresults. Hypothetical or simulated performance results have certain inherent limitations. Unlike anactual performance record, simulated results do not represent actual trading and similar investmentopportunities may not be available. Also, since the investments represented do not represent actualinvestments, the results may have under- or over-compensated for the impact, if any, of certain marketfactors, such as lack of liquidity or market disruptions. Simulated investments in general are alsosubject to the fact that they are designed with the benefit of hindsight.

No representation is being made that any investment will or is likely to achieve profits or losses similarto those shown herein. The inclusion of any investment examples or strategies herein should not betaken to imply that performance similar to the investment examples or strategies may be obtained orlosses avoided. Past performance is no guarantee of future results. Performance is shown net ofmanagement fees and performance fees. An investment in the Funds involves a significant degree ofrisk. Potential investors must familiarize themselves with the relevant Prospectus and related materials.The Prospectus and related materials will be made available to those persons eligible for participationin the Funds who demonstrate the capacity to evaluate the risks and merits of such investment.

Any indices referred to herein are unmanaged; the figures for any such index do not reflect thededuction of any fees or expenses, which would reduce returns, potentially substantially. Investors maynot be able to invest directly in an index.

The portfolio characteristics and risk controls set forth are not static and may change over time. BrevanHoward does not represent that the statistics, investment guidelines, capital allocation and limitsdisclosed herein will remain constant over time. The portfolio risk management process includes aneffort to monitor and manage risk, but should not be confused with and does not imply low risk.

Additional information

References to future returns are not promises or even estimates of actual returns that an investor mayachieve. Any forecasts and other material contained in this document are for illustrative purposes onlyand are not to be relied upon as advice or interpreted as a recommendation. BHAM and its affiliatesgive no representations, warranties or undertakings that any indicative performance or return will beachieved in the future or that the investment objectives and policies from time to time of the Funds willbe met. Past performance is no guarantee and is not indicative of future results.

The information herein reflects prevailing conditions and Brevan Howard’s judgments as of this date, allof which are subject to change.

Brevan Howard understands the importance of maintaining market integrity and confidence in financialmarkets and has outlined its commitment and approach to the prevention of market abuse in theBrevan Howard Compliance Manual.

Brevan Howard has established a risk management framework which is intended to identify, measure,monitor, report, and where appropriate, mitigate key risks identified by a Fund’s investment manager/s.Amongst other things, the risk management framework addresses portfolio risks (such as market, credit,liquidity, counterparty and funding risks), operational risks and outsourcing risks. Portfolio risks whichare monitored by the risk management team include, as at the date hereof, analysis of sensitivitymeasures, gross and net exposures, value at risk, leverage, stress tests and scenario analyses, with aview to identifying and mitigating the potential impact of extreme market movements. These analysesmay be changed from time to time. Brevan Howard believes its risk management framework to beappropriate but gives no warranty as to the adequacy or sufficiency of this framework, or that it isexhaustive or able to address the entire universe of possible risks to which an investment manager or aFund may be subject. Further, while Brevan Howard’s portfolio risk management process includes aneffort to monitor and manage risk, it should not be confused with, and does not imply, low risk.

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