Back In Business

  • May 2020
  • PDF

This document was uploaded by user and they confirmed that they have the permission to share it. If you are author or own the copyright of this book, please report to us by using this DMCA report form. Report DMCA


Overview

Download & View Back In Business as PDF for free.

More details

  • Words: 3,152
  • Pages: 96
      

%DFNLQ%XVLQHVV 

7KH/RZHU0DQKDWWDQ6PDOO%XVLQHVV DQG:RUNIRUFH5HWHQWLRQ3URMHFW 

5HVFXLQJWKH'RZQWRZQ%XVLQHVV&RPPXQLW\DIWHU6HSWHPEHUWK 3UHSDUHGIRU6HHGFR E\

7RP6HHVVHO



$XJXVW

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·V UHJXODUDFWLYLWLHVDVDQDWLRQDOFRPPXQLW\GHYHORSPHQWLQWHUPHGLDU\$QGZKLOHLQDQGRILWVHOIWKHFULVHVRI UHTXLUHGRXUUHVSRQVHDWWKHVDPHWLPHZHZHUHPLQGIXOWKDWWKURXJKWKLVHQGHDYRURXURYHUDOO FDSDFLW\WRHQKDQFHVHUYLFHGHOLYHU\VWUDWHJLHVPLJKWEHVXEVWDQWLDOO\LQFUHDVHG2QFHDJDLQ,EHOLHYH 7RP6HHVVHO·VQDUUDWLYHGHVFULELQJERWKZKDWZHGLGULJKWDQGWKHPLVWDNHVWKDWZHPDGHZLOOVHUYHXVLQ JRRGVWHDGDVZHHVWDEOLVKSDUWQHUVKLSVDQGEXLOGLQQRYDWLYHSURJUDPVLQRWKHUFRPPXQLWLHV0\RYHUDOO VHQVHLVWKDWZLWKQHFHVVLW\EHLQJWKHPRWKHURILQYHQWLRQZHFUHDWHGDPRGHOWKDWFRPELQHVILQDQFLQJ PHFKDQLVPVZDJHVXEVLGLHVDQGWHFKQLFDODVVLVWDQFHVHUYLFHVWKDWLVZHOOZRUWKH[SRUWLQJWROHVVIUHQ]LHGEXW HTXDOO\QHHG\VHWWLQJV 1RQHRIWKLVZRXOGKDYHEHHQSRVVLEOHZLWKRXWWKHVXSSRUWRI6HHGFR·V%RDUGZKRHQFRXUDJHGXVWR ULVHWRWKLVFKDOOHQJH,DOVRZDQWWRWDNHWKLVRSSRUWXQLW\WRSXEOLFO\DFNQRZOHGJHRXUVWDIIDQGFRQVXOWDQWV $QGUHD3KLOOLSV3HWHU2OLYHU%HFN\.RFK.ULVWHQ6FKH\GHU&DWKHULQH*LOO/HLJK*UDKDP%RE5HDP 5RELQ%HFNHU)DULGD5DPFKDQGDQL%HWW\5DXFKDQG0LPL*ULQNHUIURPRXUKHDGTXDUWHUV3DW3ULROHW 'HUHN+HQZRRG-DNH.LUE\,QJULG7LOWPDQQ$SDUQD*O\QQDQG%LOO'UHZHVZKRZRUNHGGRZQWRZQDQG %HWV\6PXO\DQ'LQD$QGUHQDQG5KLDQQD


SXUSRVHVXQVROLFLWHG7KH)RUG)RXQGDWLRQDVLVRIWHQWKHFDVHOHGWKHZD\%XWWKH1HZ
:LOOLDP-*ULQNHU 3UHVLGHQW $XJXVW



7DEOHRI&RQWHQWV ([HFXWLYH6XPPDU\  L ,QWURGXFWLRQ &UHDWLRQRIWKH:RUOG7UDGH&HQWHU  %XLOGHURIWKH:RUOG7UDGH&HQWHU7KH3RUW$XWKRULW\RI1HZ


)XWXUH'LUHFWLRQV   &RUH/06%:53DQG3HSVL&R)RXQGDWLRQ6PDOO*URFHU,QLWLDWLYH   7KH6PDOO*DUPHQW0DQXIDFWXULQJ%XVLQHVV,QLWLDWLYH   7KH6PDOO%XVLQHVV6HUYLFH)LUP,QLWLDWLYH  7KH5HWDLODQG0DQXIDFWXULQJ([SDQVLRQDQG5HORFDWLRQ,QLWLDWLYH  7KH2XWORRNIRU'RZQWRZQ  &RPPHUFLDO2IILFH6SDFH  5HVLGHQWLDO,QFHQWLYHV   7KH2XWORRNIRU'RZQWRZQ6PDOO%XVLQHVVHV  /DUJHU4XHVWLRQV  &RQFOXVLRQV   (QGQRWHV 



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·VWHQ PLOOLRQVTXDUHIHHWRIFRPPHUFLDORIILFHVSDFHZDVWKUHHWLPHVDVPXFKDVWKH3HQWDJRQWKHQWKHZRUOG·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


L

7HFKQLFDODVVLVWDQFHZDVDOVRDYDLODEOH7KHSURMHFWZDVQDPHGWKH/RZHU0DQKDWWDQ6PDOO%XVLQHVVDQG :RUNIRUFH5HWHQWLRQ3URMHFW /06%:53  6HHGFRFRPPLVVLRQHGWKLVUHSRUWDVDQHDUO\DFFRXQWRIWKHILUVWSKDVHRIWKHSURJUDPFRYHULQJLWV LQFHSWLRQWKURXJKDZDUGRIWKHILUVWPLOOLRQWREXVLQHVVHVDVRI$SULO7KLVUHSRUWLV OLPLWHGLQWKHFRQFOXVLRQVLWFDQGUDZ&XUUHQWO\WKHUHLVQRWKLQJPRUHWKDQDQSDJH´SUHOLPLQDU\ EOXHSULQWµ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·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·VZRUNHUVZDVDIIHFWHGE\VWUHHWFORVLQJVWKDWGLVUXSWHGWUXFNGHOLYHULHVRI VXSSOLHVQHHGHGWRFRPSOHWHRUGHUV6HHGFRDQG'7$LQFRQVXOWDWLRQZLWK+HQU\6WUHHW6HWWOHPHQW GHFLGHGWRLQYLWH$VLDQ$PHULFDQVIRU(TXDOLW\ $$)( DQGLWVDIILOLDWHFRPPXQLW\GHYHORSPHQWILQDQFLDO LQVWLWXWLRQ5HQDLVVDQFH(FRQRPLF'HYHORSPHQW&RUSRUDWLRQWRDFWDVWKHORFDORXWUHDFKDSSOLFDWLRQ SURFHVVLQJDQGFRPPXQLW\UHODWLRQVSDUWQHURUJDQL]DWLRQIRU&KLQDWRZQ



LL

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·VWDEOHRIRUJDQL]DWLRQ$QDGKRFVWDIIJURXSFRQVLVWLQJRI UHSUHVHQWDWLYHVRI6HHGFR'7$DQG$$)(ZRUNHGTXLFNO\WRGHYHORSJXLGHOLQHVFULWHULDDQG SURFHVVHVDQGWRPRYHDQLQLWLDOJURXSRIDSSOLFDWLRQVWRWKHSRLQWDWZKLFKIXQGVFRXOGEHUHOHDVHGWRWKH EXVLQHVVHV*ULQNHU·VFOHDUPHVVDJHWRKLVVWDIIZDVWRILQGDZD\WKDWKHFRXOGVD\´\HVµ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


LLL

&KLQDWRZQ7KH\FKDIHGDWKDYLQJWRVHQGORDQDQGJUDQWSDFNDJHVWR6HHGFRIRUDSSURYDO$$)(DUJXHG WKDWLWNQHZWKHDUHDZDVDEOHWRFRPPXQLFDWHLQ&KLQHVHDQGKDGDWUDFNUHFRUGRIVPDOOEXVLQHVV OHQGLQJ0RUHRYHUWKH\DVVHUWHGZKHQWKHUHZHUHSUREOHPVZLWKORDQVWKHERUURZHUVZRXOGFRPHWR 5HQDLVVDQFHIRUDVVLVWDQFHEXW6HHGFRZRXOGEHUHVSRQVLEOHIRUZRUNRXWVDQGORVVHV*ULQNHUGLGQRW DJUHHWR$$)(·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



LY

SDJHGRFXPHQWDQGPDQ\DWWDFKPHQWVLQ6HHGFR·VFXVWRPDU\FRPPXQLW\GHYHORSPHQWORDQ WUDQVDFWLRQV 6HHGFRKDVOHYHUDJHGLWVLQLWLDOIXQGLQJIURPWKH)RUG)RXQGDWLRQDQG1HZ


œ

/RDQV

  

œ

*UDQWVORDQV

  

œ

:DJH6XEVLGLHV

  

œ

%XVLQHVV6XSSRUW6HUYLFHV7HFK$VVLVW

  

Y

0DQDJHPHQWFRVWVZHUHUHSRUWHGE\6HHGFRWREHDERXWIRXUSHUFHQWRIWKH PLOOLRQWRWDO 7KHUHODWLYHO\ORZXWLOL]DWLRQUDWHRIZDJHVXEVLGLHVFRPSDUHGZLWKORDQVDQGJUDQWVUHIOHFWVWKH FRPSOH[LW\RIWKHWUDQVDFWLRQDQGWKHQHHGWRFRPSO\ZLWK,PPLJUDWLRQDQG1DWXUDOL]DWLRQ6HUYLFHDQG 'HSDUWPHQWRI/DERUUHJXODWLRQVUHJDUGLQJVXFKPDWWHUVDVFLWL]HQVKLSRUOHJDOLPPLJUDQWVWDWXVSD\PHQW RIVWDWXWRU\EHQHILWVVXFKDV),&$DQGZRUNPHQ·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


YL

7KH6%$RIIHUVIRXUSHUFHQWORDQVIRU\HDUVEXWUHTXLUHVFROODWHUDOVXFKDVWKHEXVLQHVV RZQHU·VKRPH%\HDUO\'HFHPEHUWKH6%$FDPHXQGHUFULWLFLVPIURPVPDOOEXVLQHVVRZQHUV SXEOLFHOHFWHGRIILFLDOVDQGWKHPHGLDIRUKDYLQJDSSURYHGRQO\DERXWRQHLQWKUHHDSSOLFDWLRQVIRUGLVDVWHU ORDQVZHOOEHORZWKHSHUFHQWUDWHVWKDWKDYHIROORZHGRWKHUUHFHQWPDMRUGLVDVWHUVVXFKDVIORRGLQJ RIWKH5HG5LYHURIWKH1RUWKLQ1RUWK'DNRWDLQDQG7URSLFDO6WRUP$OOLVRQLQ7H[DVDQG/RXLVLDQD LQ /RRNLQJDKHDGWKHIXWXUHKHDOWKRIVPDOOEXVLQHVVHVDQGWKHLUDELOLW\WRUHWDLQZRUNHUVGHSHQGVRQ ELJEXVLQHVV·DQGKLJKLQFRPHUHVLGHQWV·GHFLVLRQVDERXWUHWXUQLQJWRRUUHORFDWLQJLQ'RZQWRZQ0DQ\ ODUJHHPSOR\HUVVHHPWREHZDLWLQJWRVHHZKDWKDSSHQVZLWKWKHUHEXLOGLQJPDVWHUSODQDQGILQDQFLDO LQFHQWLYHV6RRQDIWHUWKHDWWDFNRQHVXUYH\VXJJHVWHGWKDWWHQDQWVRFFXS\LQJSHUFHQWRIWKH FRPPHUFLDOVSDFHZRXOGUHORFDWHRXWVLGHRI'RZQWRZQ,QODWH0DUFKWKHVDPHVXUYH\ RUJDQL]DWLRQUHSRUWHGWKDWWKLVILJXUHZDVSHUFHQW 6PDOOEXVLQHVVRZQHUVW\SLFDOO\GHVFULEHWKHPVHOYHVDV´VXUYLYRUVµDQGRQH·VLPSUHVVLRQEDVHG RQWZRPRQWKVRIILHOGUHVHDUFK'RZQWRZQLVWKDWWKHRYHUZKHOPLQJPDMRULW\DUHIROORZLQJDWOHDVWVR IDU%LOO*ULQNHU¶VH[KRUWDWLRQWR´+DQJLQWKHUH7KLQJVDUHJRLQJWRJHWEHWWHUµ$V&DUO&ROOHWWLRZQHU RI&1&REEOHURQHRIWKHUHFLSLHQWVRI/06%:53SXWLWLQDUHFHQWLQWHUYLHZIRUWKLVUHSRUW´,WZLOO FRPHEDFN7KLVLV1HZ


YLL

LQGXVWU\SULPDULO\LQ&KLQDWRZQVXSSRUWHGE\DQHZDOOLDQFHZLWKWKH8QLRQRI1HHGOH,QGXVWULDODQG 7H[WLOH(PSOR\HHV 81,7( DQGZLWKDQRQSURILWRUJDQL]DWLRQUHSUHVHQWLQJDFRQVRUWLXPRI81,7(DQG RYHUIRUW\RWKHU1HZ


YLLL

,QWURGXFWLRQ 6WHYH*UD\VRQZDVDWKLVGHVNRQWKHWKIORRURIDQRIILFHEXLOGLQJDW%URDGZD\DQGVW6WUHHWLQ 0DQKDWWDQRQWKHEULJKWDQGFOHDUPRUQLQJRI6HSWHPEHU-XVWDIWHUKHJODQFHGRXWRIKLV ZLQGRZZKLFKSURYLGHGDSRVWFDUGSHUIHFWYLHZRIWKH:RUOG7UDGH&HQWHU·VWZLQWRZHUVDERXWPLOHV DZD\DWWKHVRXWKHUQWLSRIWKHLVODQG+HVDZIODPHVDQGDSOXPHRIEODFNVPRNHFRPLQJRXWRIWKHQRUWK WRZHUDQGFDOOHGKLV6HHGFRFROOHDJXHVZKRZHUHEHJLQQLQJWRFRPHWRZRUN$VWKH\ZDWFKHGDWD VHFRQGKLMDFNHGDLUOLQHUFUDVKHGLQWRWKHVRXWKWRZHUDQGH[SORGHG$W3UHVLGHQW%XVKVDLGWKDWWKH FRXQWU\KDGVXIIHUHG´DQDSSDUHQWWHUURULVWDWWDFNµDQGDWDWKLUGDLUOLQHUFUDVKHGLQWRWKH3HQWDJRQ 7KH6HHGFRVWDIIE\QRZDVVHPEOHGQHDU*UD\VRQ·VRIILFHZDWFKHGZLWKKRUURUDQGGLVEHOLHIZKHQ DWWKHVRXWKWRZHURIWKH7UDGH&HQWHUFROODSVHGVHQGLQJXSDPDVVLYHFORXGRIGXVWDQGGHEULV 7KHLUFKLHIH[HFXWLYH:LOOLDP*ULQNHUZDVHQURXWHWR1HZ




&UHDWLRQRIWKH:RUOG7UDGH&HQWHU %XLOGHURIWKH:RUOG7UDGH&HQWHU7KH3RUW$XWKRULW\RI1HZ




,QWKH$XWKRULW\DQQRXQFHGDQHZSURMHFWFRQVWUXFWLQJDPXOWLVWUXFWXUH:RUOG7UDGH&HQWHU DORQJWKH(DVW5LYHULQORZHU0DQKDWWDQDWWKHHDVWHUQHQGRI:DOO6WUHHWMXVWVRXWKRIWKHVLWHZKHUHWKH 6RXWK6WUHHW6HDSRUWLVQRZORFDWHG

3ODQQLQJWKH:RUOG7UDGH&HQWHU 7KHRULJLQDOFRQFHSWRIDZRUOGWUDGHFHQWHUZDVLQWURGXFHGE\D:RUOG7UDGH&RUSRUDWLRQVHWXSE\ WKH1HZ




7KHSURSRVDOZDVWKRXJKWWRKDYHWKHVDPHSRWHQWLDOWRWULJJHUDUHYLWDOL]DWLRQRI'RZQWRZQDV 5RFNHIHOOHU&HQWHUKDGGRQHIRUDQHOHYHQDFUHVHFWLRQRI0LGWRZQEHWZHHQ)LIWKDQG6L[WK$YHQXHVDQG WKWRQG6WUHHWVLQWKHV7KLVVLWHZDVOHDVHGE\-RKQ'5RFNHIHOOHU-UIURP&ROXPELD8QLYHUVLW\ LQIRUDQHZKRPHIRUWKH0HWURSROLWDQ2SHUD+RXVHEXWWKHFRPSDQ\EDFNHGRXWRIWKHGHDODQGOHIW 5RFNHIHOOHUZLWKPLOOLRQ\HDULQOHDVHDQGSURSHUW\WD[SD\PHQWV7KHUHZHUHDOVRVRPH´VKDEE\ROG EURZQVWRQHV«>DQG@VSHDNHDVLHVSDZQVKRSVEDUVDQGRWKHUVXFKVOHD]\KDXQWVµRFFXS\LQJWKHSURSHUW\ 5RFNHIHOOHUZDVGHWHUPLQHGWREXLOGDQHZFRPPHUFLDOGLVWULFWDQGKLVDUFKLWHFWVFRQFHLYHGDEROGSODQ XOWLPDWHO\FRQVLVWLQJRIQLQHWHHQQHZFRPPHUFLDOEXLOGLQJVDQGEHFRPLQJZKDWZDVWKHQDQGQRZWKHODUJHVW SULYDWHEXLOGLQJHQWHUSULVHHYHUXQGHUWDNHQLQWKH8QLWHG6WDWHV7KHSURMHFWZRXOGFRQVXPHDERXWKDOIRI WKHIDPLO\·VIRUWXQHDOOWKHPRUHULVN\EHFDXVHWKHFRXQWU\ZDVLQWKHPLGVWRIWKH*UHDW'HSUHVVLRQ$IWHU 5RFNHIHOOHU&HQWHUZDVFRPSOHWHGLQRQHRI-RKQ'5RFNHIHOOHU·VVRQV\HDUROG1HOVRQ$ 5RFNHIHOOHUZKRZLWKKLVEURWKHU'DYLGZDVWRSOD\DFHQWUDOUROHLQFUHDWLQJWKH:RUOG7UDGH&HQWHU ´JRWDUHDOHVWDWHOLFHQVHDQGVRRQEHFDPHDIUHQHWLFVDOHVPDQIRUHPSW\RIILFHVSDFHDW5RFNHIHOOHU&HQWHUµ 8QGHUVWDQGLQJWKDWWKH3RUW$XWKRULW\ZDVXQLTXHO\HTXLSSHGZLWKERQGLQJFDSDFLW\DQGHPLQHQW GRPDLQWREULQJVXFKDQDPELWLRXVFRQFHSWWRIUXLWLRQWKH'RZQWRZQ/RZHU0DQKDWWDQ$VVRFLDWLRQDVNHG WKHDJHQF\WRVWXG\WKH620SODQIRUD:RUOG7UDGH&HQWHUDUHTXHVWWKDWZDVUHDGLO\DJUHHGWR:LWKLQ OHVVWKDQD\HDULQ0DUFKWKH3RUW$XWKRULW\DQQRXQFHGLWVSODQVLQDSXEOLFUHSRUWVXEPLWWHGWRWKH JRYHUQRUVRI1HZ




ZHUHRWKHUDGYDQWDJHVDVZHOOLQFOXGLQJEHWWHUVXEZD\FRQQHFWLRQVRQWKHZHVWVLGHWKDQRQWKHHDVWVLGH DQGRIV\PEROLFLPSRUWDQFHWKHZHVWVLGHZDVFORVHUWR1HZ-HUVH\2Q)HEUXDU\WKHUHTXLUHG OHJLVODWLRQIRUWKH:RUOG7UDGH&HQWHUSDVVHGLWVILQDOVWDWXWRU\KXUGOHZKHQLWZDVDSSURYHGE\ERWKKRXVHV RIWKH1HZ-HUVH\OHJLVODWXUH

7KH3ODQDQGWKH1HLJKERUKRRG 7KH:RUOG7UDGH&HQWHUZDVERUQLQFRQWURYHUV\7KHSURSRVHGDFUHVLWHFRQWDLQHGVRPH FRPPHUFLDOWHQDQWVLQGXVWULDOWHQDQWVPRUHWKDQDWKRXVDQGRIILFHVRIYDULRXVVL]HVDQGDERXW UHVLGHQWLDOWHQDQWVPRVWRIZKRPOLYHGLQIXUQLVKHGURRPV:KHWKHUWKLVFRQVWLWXWHGD´EOLJKWHGDUHDµ WKDWVKRXOGEHGHPROLVKHGRUDQXUEDQHFRV\VWHPWKDWVKRXOGEHQRXULVKHGEHFDXVHLWSURYLGHGDKRVSLWDEOH JURXQGIRUHFRQRPLFDQGVRFLDOLQWHUDFWLRQGHSHQGVRQRQH·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·VFRQFHQWUDWLRQRIVPDOOVKRSVWKDWVROG FRPSRQHQWVRIDXGLRV\VWHPVDORQJZLWKUDGLRV79VHWVDQGRWKHUKRXVHKROGDSSOLDQFHV,WZDVVDLGWKDW FXVWRPHUVFDPHIURPWKHWULVWDWHDUHDDQGWKDWLWZDVDQ´LQWHUFKDQJHµZKHUH´LI\RXQHHGHGDSDUWRU VRPHWKLQJ\RXFRXOGMXVWJRGRZQWKHVWUHHWWRDQRWKHUVWRUHDQGJHWLWµ 7KHRZQHURIRQHRIWKHVHVPDOOHOHFWURQLFVKRSVRQ*UHHQZLFK6WUHHW2VFDU1DGHOHPHUJHGDVWKH OHDGHURIWKHORFDORSSRVLWLRQWRWKH3RUW$XWKRULW\·VSODQWRFRQGHPQDQGSXUFKDVHWKHSURSHUWLHVZKHUH WKH\KDGWKHLUEXVLQHVVHVDQGFRQYHUWWKHVLWHLQWRD/H&RUEXVLHULQVSLUHGVXSHUEORFN(DFKGD\WKH QHZVSDSHUVFDUULHGVWRULHVDERXWWKHSOLJKWRIWKHVPDOOEXVLQHVVSHRSOHRZQLQJOLWWOHGHOLFDWHVVHQVFREEOHU VKRSVNH\VKRSVKDUGZDUHVWRUHVDQGEDUEHUVKRSVZKRDFFRUGLQJWR1DGHOZHUHYLFWLPVRI´ELJEXVLQHVV UXQQLQJRYHUXVµ7KHEXVLQHVVRZQHUVDFKLHYHGVXEVWDQWLDOSXEOLFUHODWLRQVYLFWRULHVE\GUDPDWL]LQJWKH ORVVHVWKDWZRXOGUHVXOWLQWHUPVRIWKHLURZQLQYHVWPHQWVDVZHOODVWKHMREVRIWKHORZZDJHZRUNHUVWKH\





HPSOR\HG$QXPEHURIPHUFKDQWVRUJDQL]HGD´FRIILQµSURWHVWDJDLQVW3RUW$XWKRULW\SODQVWRFRQGHPQ WKHLUSURSHUW\WRPDNHZD\IRUWKH:RUOG7UDGH&HQWHUDQGWKHERG\RI´0U6PDOO%XVLQHVVPDQµZDV ´SDUDGHGDURXQGWKH&KXUFK6WUHHWQHLJKERUKRRGLQDPRFNIXQHUDOSURFHVVLRQµ7KH3RUW$XWKRULW\IRXJKW EDFNDJDLQVWWKLVE\SRUWUD\LQJWKHDUHDDV´DQDQWLTXDWHGWKLUWHHQVTXDUHEORFNDUHDIXOORIILUHWUDSVµ 7KHEDWWOHZDVIRXJKWLQWKHFRXUWVDVZHOODVLQWKHVWUHHWV2SSRQHQWVLQFOXGLQJUHDOHVWDWH LQYHVWRUVZLWKSURSHUWLHVLQ0LGWRZQZKRGLGQRWZDQWWKHFRPSHWLWLRQFKDOOHQJHGWKH$XWKRULW\·VULJKWWR EXLOGWKH:RUOG7UDGH&HQWHU)LQDOO\WKH1HZ
7KH3URMHFW0DNLQJ1R6PDOO3ODQV $XVWLQ7RELQORQJWLPHH[HFXWLYHGLUHFWRURIWKH3RUW$XWKRULW\ZKRRYHUVDZGHYHORSPHQWRIWKH :RUOG7UDGH&HQWHUZDVIRQGRITXRWLQJ'DQLHO%XUQKDPWKHHDUO\WKFHQWXU\&KLFDJRDUFKLWHFWZKR EXLOW1HZ






7KH3RUW$XWKRULW\LQVHOHFWHGDVLWVDUFKLWHFWRYHUVXFKVXSHUVWDUVDV,03HLDQG3KLOLS -RKQVRQWKHUHODWLYHO\XQNQRZQ0LQRUX




HDUWKPHDVXULQJDERXWWKUHHWLPHVWKHDUHDRIWKHSUHYLRXVUHFRUGKROGHUWKH3HQWDJRQZKLFKFRXOGKROG WKH&DSLWRO%XLOGLQJLQDQ\RQHRILWVILYHZHGJHVKDSHGVHFWLRQV7KHWHQPLOOLRQVTXDUHIHHWRIFRPPHUFLDO RIILFHVSDFHLQWKHWZLQWRZHUVZDVDVPXFKDVQRZH[LVWVLQDOORI%XIIDOR'XULQJDSUHVVFRQIHUHQFHDWWKH :RUOG7UDGH&HQWHUGHGLFDWLRQLQ$SULOZKHQKHZDVDVNHGZK\KHGHFLGHGWRUHFRPPHQGWZR VWRU\WRZHUVZKHQWKHWHFKQRORJ\H[LVWHGWREXLOGRQHVWRU\EXLOGLQJ




XQGHUJURXQGFRQFRXUVHPDOOWKDWDWWKHWLPHRIWKHDWWDFNKRXVHGDERXWUHWDLOVKRSVLQFOXGLQJ*DS7KH /LPLWHG-&UHZDQG%DQDQD5HSXEOLF7KHVL]HRIWKHPDOOZDVKDOIDJDLQDVODUJHDVWKH+HUDOG&HQWHU 0DOODWWKDQG%URDGZD\LQ0LGWRZQDQGDERXWWKHVDPHVL]HDV$WODQWLF&HQWHULQ%URRNO\Q$FFRUGLQJ WRWKH,QWHUQDWLRQDO&RXQFLORI6KRSSLQJ&HQWHUVKDGWKHUHEHHQQR7KH0DOODWWKH:RUOG7UDGH &HQWHU·VSURMHFWHGVDOHVSHUVTXDUHIRRWDWWKHHQGRIZRXOGKDYHSXWLW´RQDSDUZLWKKLJKO\VXFFHVVIXO FHQWHUVOLNHWKHKLJKHQG%DO+DUERXU6KRSVLQWKH0LDPLDUHDRUWKH)RUXP6KRSVLQ&DHVDUV3DODFHLQ /DV9HJDVµ

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·VDQDO\VLVIRFXVHGRQ WUHQGVLQ0DQKDWWDQSHUVRQDOLQFRPHVDQGUHVLGHQWLDOUHQWOHYHOVIROORZLQJFRPSOHWLRQRIWKHSURMHFW)RU H[DPSOHLQPHGLDQUHVLGHQWLDOUHQWV´LQ0DQKDWWDQZHUHMXVWWHQSHUFHQWKLJKHUWKDQWKRVHLQWKH %URQ[«DQGOHDSWWRSHUFHQWLQµ,QWKHVDPHVWXG\6WHJPDQIRXQGWKDWLQWKH´*UHHQZLFK 9LOODJH)LQDQFLDO'LVWULFWVXEERURXJKDUHDWKHORFDWLRQRIWKH:RUOG7UDGH&HQWHUSHUFHQWRIWKH WRWDOXQLWVKDYHFRQWUDFWUHQWVJUHDWHUWKDQ«>@DVWULNLQJVWDWLVWLFIRUDQDUHDWKDWKDGEHHQ GHWHULRUDWLQJWKH\HDUVSULRUWRWKH:RUOG7UDGH&HQWHUµ,QWHUPVRIPHGLDQKRXVHKROGLQFRPHEHWZHHQ WKH\HDUVRIWKHUDWHRILQFRPHLQFUHDVHLQ0DQKDWWDQZDVSHUFHQWJUHDWHUWKDQLWZDVLQWKH UHVWRI1HZ
$OOLDQFHIRU'RZQWRZQ1HZ




DQGVHUYHVDVWKHILQDQFLDOFDSLWDORIWKHZRUOGIRUWKHWZHQW\ILUVWFHQWXU\µ7KH$OOLDQFHIRU'RZQWRZQ1HZ




H[FHHGLQJ7KH'RZQWRZQFRPPHUFLDOYDFDQF\UDWHLQWKHIRXUWKTXDUWHURIZDVUHSRUWHG E\&XVKPDQDQG:DNHILHOGWREHMXVWXQGHUIRXUSHUFHQW7KH5HSRUWFRQFOXGHVE\VD\LQJ´$GG 'RZQWRZQ·VSDUNVUHVWDXUDQWVDQGPXVHXPVDQGLWVZRUOGFODVVDUWDQGDUFKLWHFWXUHDQG\RXKDYHWKH PDNLQJRIRQHRI1HZ
,PPHGLDWH,PSDFWVRIWKH$WWDFN 'HVWUXFWLRQRIWKHWZLQWRZHUVDQGWKHRWKHUILYHVWUXFWXUHVRIWKH:RUOG7UDGH&HQWHUUHVXOWHGLQ GHDGRUPLVVLQJDFFRUGLQJWRDQRIILFLDOHVWLPDWHSXEOLVKHGLQWKH1HZ




EHVLJQLILFDQWO\JUHDWHUWKDQWKHRULJLQDOO\HVWLPDWHGEHFDXVHPRUHELJFRPSDQLHVDUHSODQQLQJWR PRYHVRPHHPSOR\HHVRXWRI0DQKDWWDQµ7KHILQDQFLDOVHUYLFHVLQGXVWU\ZKLFKJHQHUDWHVRQHTXDUWHURI WKHFLW\·VHFRQRPLFRXWSXWORVWELOOLRQEHWZHHQ6HSWHPEHUDQGWKHHQGRI2IWKHILQDQFLDO VHUYLFHVMREVWKDWOHIW/RZHU0DQKDWWDQDIWHU6HSWHPEHUDERXWUHORFDWHGZLWKLQWKHFLW\DQG OHIWWKHFLW\DWOHDVWWHPSRUDULO\

,PPHGLDWH3KLODQWKURSLFDQG*RYHUQPHQW5HVSRQVHVWRWKH$WWDFN ,QWKHDIWHUPDWKRI6HSWHPEHUWKHUHZDVDQRXWSRXULQJRISKLODQWKURSLFVXSSRUWLQWKHIRUPRI PRQH\DQGYROXQWHHUWLPHIRUYLFWLPVRIWKHWUDJHG\7KHKLJKHVWSULRULW\ZDVIDPLOLHVRIYLFWLPVLQFOXGLQJ ILUHILJKWHUVSROLFHRIILFHUVUHVFXHZRUNHUVDQGRWKHUVGLUHFWO\DIIHFWHGE\WKHDWWDFNVXFKDVGLVSODFHG UHVLGHQWVZRUNHUVDQGEXVLQHVVHV$IHGHUDOIXQGIRUYLFWLPVZDVHVWDEOLVKHGDQGRQ0DUFKLWZDV UHSRUWHGWKDWWKHDYHUDJHDZDUGZRXOGEHDERXWPLOOLRQ 7KH1HZ




7KHHDUOLHVWDQQRXQFHGRUJDQL]HGUHVSRQVHWRDVVLVWEXVLQHVVHVDQGWKHLUZRUNHUVZDVWKH)LQDQFLDO 5HFRYHU\)XQGRIWKH1HZDQGZLWKLQWZRZHHNVZDV UHSRUWHGE\*RYHUQRU3DWDNLDVKDYLQJKDG@PRUHWKDQSKRQHFDOOVDQGZDONLQYLVLWV«µ7KH (6'&DOVRFDSLWDOL]HGDIXQGIRUJUDQWVRIXSWRIRUVPDOOEXVLQHVVHVWRFRYHUXSWRWKUHHGD\VRIORVW UHYHQXHVDWWULEXWDEOHWRWKHGLVDVWHUWKLVSURJUDPDQGRWKHUUHODWHGFRPSRQHQWVZHUHH[SDQGHGLQHDUO\ ZLWKPLOOLRQLQIHGHUDOJUDQWV7KH&LW\·V(FRQRPLF'HYHORSPHQW&RUSRUDWLRQVHWXSDVLPLODU SURJUDPIRUVPDOOQRQUHWDLOEXVLQHVVHVZLWKRUIHZHUHPSOR\HHV$QG3UHVLGHQW%XVKSOHGJHGELOOLRQ LQIHGHUDODLGPRVWRIZKLFKZRXOGEHIRUUHEXLOGLQJHIIRUWV

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·VUROHLQSURGXFLQJWKHJXLGHWKH SULPDU\LQWHQGHGXVHUVRIWKHJXLGHZHUHSHUVRQQHORISXEOLFDQGSULYDWHDJHQFLHVLQYROYHGLQWKHUHOLHI HIIRUW´7RRXUVXUSULVHWKHUHZDVQRPHFKDQLVPDYDLODEOHWKURXJKZKLFKSHRSOHFRXOGJHWWRWKHKHOSWKH\ QHHGHGµ0V%DUQHVVDLGLQD)HEUXDU\LQWHUYLHZ7KHUHVSRQVHWRWKHJXLGHZDVVRJUHDWWKDW 6HHGFRVRRQSXEOLVKHGDQGGLVWULEXWHGDQRWKHUFRSLHVEHIRUH6DIH+RUL]RQDVVXPHGUHVSRQVLELOLW\IRU RQJRLQJXSGDWLQJDQGGLVWULEXWLRQ

,PSDFWRQ6PDOO%XVLQHVVHV 7KHUHDUHDQHVWLPDWHGVPDOOEXVLQHVVHVZLWKDERXWHPSOR\HHVLQ/RZHU 0DQKDWWDQ7KHUHLVQRRIILFLDOGHILQLWLRQRID´VPDOOEXVLQHVVµEXWWKH2IILFHRI$GYRFDF\RIWKH866PDOO %XVLQHVV$GPLQLVWUDWLRQ´RIWHQGHILQHV>LW@DVDILUPZLWKIHZHUWKDQHPSOR\HHVµ:LWKLQWKLVODUJHDQG GLYHUVHJURXSLQJUHWDLODQGVHUYLFHEXVLQHVVHVZKRVHSULPDU\PDUNHWVDUHFRUSRUDWHRIILFHVDQGIRRWWUDIILF ZHUHSDUWLFXODUO\KDUGKLWLQDZLGHUDGLXVH[WHQGLQJQRUWKDQGHDVWIURP*URXQG=HUR,QWKHLPPHGLDWH DUHDRIWKHDWWDFNWKH1HZDQGLQ@WKHFLW\·VPRUHWKDQ VPDOOEXVLQHVVHVHPSOR\HGQHDUO\PLOOLRQZRUNHUVURXJKO\ KDOIWKHWRWDOHPSOR\PHQWSRRODQGUDQJXSVDOHVRIRYHUELOOLRQµ 6PDOOEXVLQHVVHVDVIDUDZD\DVWZRPLOHVIURP*URXQG=HURWKDWH[SHULHQFHGQRSK\VLFDOGDPDJH QHYHUWKHOHVVIHOWWKHVHFRQGDU\LPSDFWVIURPGLVUXSWHGVXEZD\VHUYLFHXWLOLW\UHSDLUVFORVHGVWUHHWVDQGD GURSLQWRXULVP,QHDUO\'HFHPEHUIRUH[DPSOH.DZDO%KDWLDZKRVHIDPLO\RZQVDVKRHDQGOHDWKHUJRRGV





VWRUHDW:HVW(LJKWK6WUHHWLQ*UHHQZLFK9LOODJHVDLG´,·YHEHHQRQWKLVVWUHHWIRU\HDUVDQGLW·VQHYHU EHHQWKLVEDG,QSDVW\HDUVQRPDWWHUKRZEDGLWZDVWKHUHVWRIWKH\HDUDWOHDVW\RXNQHZ\RXZRXOG FRYHUDOO\RXUORVVHVZLWKWKHKROLGD\VKRSSHUV>EXWRQDUHFHQW)ULGD\@,GLGZRUWKRIEXVLQHVVµ 6PDOODQGPLFUREXVLQHVVHVDUHFKDUDFWHULVWLFDOO\YHU\WKLQO\FDSLWDOL]HGDQGUHO\RQZHHNO\FDVK IORZVWRNHHSJRLQJ$IWHUWKHGLVDVWHUWKH\EHJDQKHPRUUKDJLQJFDVKEHFDXVHRISUHFLSLWRXVEXVLQHVVIDOORIIV EXWWKHLUPDMRUH[SHQVHVFRQWUDFWUHQWVXQGHUOHDVHVHOHFWULFWHOHSKRQHDQGZDJHVLQH[RUDEO\ FRQWLQXHG7KHRQO\ZD\WRVWDXQFKWKHIORZZDVWRVWRSPDNLQJDVPDQ\DVSRVVLEOHRIWKHVHSD\PHQWV 'LIILFXOWFKRLFHVQHHGHGWREHPDGH,IWKHEXVLQHVVVWRSVSD\LQJUHQWLWIDFHVHYLFWLRQ/D\LQJRIIZRUNHUVLV DSDLQIXOVWHSEHFDXVHRIWKHSHUVRQDOWROODQGEHFDXVHLWUHGXFHVDEXVLQHVV·DELOLW\WRVHUYHFXVWRPHUVEXWLW EHFRPHVDQHFHVVDU\SDUWRIDVXUYLYDOVWUDWHJ\ )RFXVLQJRQHPSOR\PHQWLQVPDOOEXVLQHVVHV-DPHV3DUURWW3K'FKLHIHFRQRPLVWIRUWKH)LVFDO 3ROLF\,QVWLWXWHDUHVHDUFKDQGHGXFDWLRQRUJDQL]DWLRQLQ1HZDQGKDOIWKHUHVSRQGHQWV@LQGLFDWHGWKDWWKHLUVDOHVYROXPHGXULQJWKHIRXUWK TXDUWHUZDVEHWZHHQDQGSHUFHQWORZHUWKDQWKHLUYROXPHGXULQJWKHIRXUWKTXDUWHUµ7KH





$OOLDQFHDOVRUHSRUWHGWKDW´DOO'LVWULFWVKRSSLQJHVWDEOLVKPHQWVODLGRIIHPSOR\HHV>LQFOXGLQJSHUFHQWWKDW@ ODLGRIIHLJKWRUPRUHHPSOR\HHVVLQFH6HSWHPEHUµ7KHVXUYH\IRXQGWKDWDOPRVWIRXUIXOOPRQWKVDIWHU 6HSWHPEHUDQ´DYHUDJHRIRQO\ILYHSHUFHQWRIUHWDLOHUVKDYHUHFHLYHGIXOOSD\PHQWIRU>LQVXUDQFH@FODLPV ILOHGDJDLQVWWKHLUFDUULHUVµDQGRQO\SHUFHQWUHFHLYHGSDUWLDOSD\PHQWV $GGUHVVLQJWKHLQWHUUHODWHGFKDOOHQJHVRIFDVKIORZDQGUHWHQWLRQRIORZZDJHHPSOR\HHVDPRQJD VXEVHWRI/RZHU0DQKDWWDQVPDOOEXVLQHVVHVFRQVLVWLQJRIUHWDLODQGPDQXIDFWXULQJILUPVZLWKILIW\ HPSOR\HHVRUIHZHUEHFDPH6HHGFR·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·VLQKRXVHORDQVHUYLFLQJRSHUDWLRQV

3URMHFW2ULJLQV 7KH)RUG)RXQGDWLRQ 7RKHOSLWVKHDGTXDUWHUVFLW\UHEXLOGDQGUHFRYHUWKH)RUG)RXQGDWLRQPDGHDVSHFLDODOORFDWLRQRI PLOOLRQLQJUDQWIXQGVDQGDVNHGLWVSURJUDPGLUHFWRUVWRVXEPLWLGHDVIRUSURMHFWV´WKDWVHUYHLQGLYLGXDOV DQGJURXSVGLUHFWO\DIIHFWHGE\WKHDWWDFNVZLWKDIRFXVRQQHHGVQRWIXOO\FRYHUHGE\RWKHUIXQGVµ:LWK WKLVPDQGDWH)UDQN'H*LRYDQQLGLUHFWRURI)RUG·VHFRQRPLFGHYHORSPHQWXQLWGHFLGHGWRIXQGDSURMHFWWR KHOSSUHVHUYHWKHMREVRIORZZDJHZRUNHUVLQVPDOODQGPLFUREXVLQHVVHVLQWKHLPPHGLDWHDUHDRIWKHDWWDFN 6XFKDSURMHFWZRXOGEHFRQVLVWHQWZLWKKLVXQLW·VZRUNIRUFHGHYHORSPHQWPLVVLRQ´WRKHOSLPSURYHWKHZD\V ORZLQFRPHSHRSOHGHYHORSPDUNHWDEOHMREVNLOOVDQGDFTXLUHDQGUHWDLQUHOLDEOHHPSOR\PHQWWKDWSURYLGHV OLYDEOHZDJHVµ,QODWH6HSWHPEHU'H*LRYDQQLFDOOHG6HHGFRSUHVLGHQW*ULQNHUWRDVNLIKLVRUJDQL]DWLRQ ZRXOGEHZLOOLQJWRFRQGXFWVXFKDSURJUDP*ULQNHUTXLFNO\DJUHHGDQGVXEPLWWHGDSURSRVDOZLWKLQDIHZ GD\V 2Q2FWREHUWKH)RXQGDWLRQDQQRXQFHGDPLOOLRQJUDQWWR6HHGFR´IRUORDQVJUDQWVDQG WHFKQLFDODVVLVWDQFHWRVPDOODQGPLFUREXVLQHVVHVORFDWHGLQWKHYLFLQLW\RIWKH:RUOG7UDGH&HQWHUWKDW





VXIIHUHGVHULRXVORVVHVWKDWZLOOQRWEHFRYHUHGE\FLW\VWDWHRUIHGHUDOSURJUDPVµ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´6HHGFRZDVQRWWKH REYLRXVFKRLFHWRDGPLQLVWHUDVPDOOEXVLQHVVORDQIXQGEHFDXVHLWKDGOLWWOHH[SHULHQFHLQWKLVILHOG,WZDV SULPDULO\DOHQGHUIRUFRPPXQLW\GHYHORSPHQWSURMHFWVRXWVLGHRI1HZ




œ

7KHIXQGVDUHWREHXVHGEHORZ&DQDO6WUHHWWKHDUHDWKDWVXIIHUHGGLUHFWLPSDFWVIURPWKH DWWDFN

œ

7KHFKDULWDEOHSXUSRVHLVMREUHWHQWLRQQRWVXSSRUWIRULQGLYLGXDOHQWUHSUHQHXUV DOWKRXJK LWZDVXQGHUVWRRGWKDWDFFRPSOLVKPHQWRIWKHMREJRDOUHTXLUHGKHOSLQJWRVWDELOL]HEXVLQHVV DFWLYLW\WKURXJKFDVKLQWKHIRUPRIJUDQWVDQGORZLQWHUHVWORDQV 

œ

/RZLQFRPHSHRSOHDUHWKHIRFXV

œ

6HHGFRFRXOGPDNHORDQVRUJUDQWVRUDFRPELQDWLRQEXWVKRXOGDYRLGEXUGHQLQJ EHOHDJXHUHGEXVLQHVVRZQHUVZLWKLPSRVVLEOHGHEWORDGV

œ

7KHIXQGVVKRXOGQRWEHXVHGWREDLORXWEXVLQHVVHVWKDWZHUHIDLOLQJEHIRUH6HSWHPEHU

7KH1HZ




%HUUHVIRUGVXJJHVWHGWKDW5RVHQWKDOFDOO&DUO:HLVEURGSUHVLGHQWRIWKH$OOLDQFHIRU'RZQWRZQ1HZ




$IWHUWKHNH\DJUHHPHQWVZHUHUHDFKHGDERXWSURMHFWIRFXVJHRJUDSK\DQGFRYHUDJH5RVHQWKDO DVNHGIRUDSURSRVDOIURP6HHGFRZKLFKZDVWREHWKHJUDQWHHDQGLWZDVRQKLVGHVNWKHIROORZLQJ7XHVGD\ PRUQLQJDIWHUWKHORQJKROLGD\ZHHNHQG$FKHFNIRUWKHILUVWZDVVHQWWR6HHGFRWKHQH[WGD\ 5HIOHFWLQJODWHURQWKHVL]HRIWKHJUDQWDQGWKHGLVSDWFKZLWKZKLFKKHPDGHKLVGHFLVLRQ5RVHQWKDOVDLGWKDW KLVIRXQGDWLRQW\SLFDOO\PDNHVJUDQWVLQWKHUDQJH7KLVZDVYDVWO\ODUJHUEXW5RVHQWKDO NQHZWKDW´LIWKLVZDVJRLQJWRKHOSDQ\ERG\ZHQHHGHGWRGRLWQRZ'XHGLOLJHQFHLQDGLVDVWHULV DEVXUGµ

&KLQDWRZQ 7KHUHKDGEHHQQRGLUHFWSK\VLFDOGDPDJHWR&KLQDWRZQEXWLWZDVJUDGXDOO\EHFRPLQJNQRZQWKDW JDUPHQWPDQXIDFWXUHUVDQGUHWDLOEXVLQHVVHVKDGVXIIHUHGORVVHVDVDUHVXOWRILQWHUUHODWHGSUREOHPVRIVWUHHW





FORVLQJVUHGXFHGWRXULVPDQGLQWHUUXSWHGWHOHSKRQHDQGXWLOLW\VHUYLFH&DQ[LDQJKHRQ(DVW%URDGZD\IRU H[DPSOHLVDWLQ\VWRUHIURQWVHOOLQJVRXYHQLUVQHZVSDSHUVFDQG\DQGPRVWLPSRUWDQWRIDOO1HZ




$$)(ZDVERUQLQWKHVRXWRIDSURWHVWRYHUWKHODFNRI$VLDQFRQVWUXFWLRQZRUNHUVRQWKH &RQIXFLXV7RZHUVSURMHFWDPLGGOHLQFRPHKRXVLQJGHYHORSPHQWLQ&KLQDWRZQDQGKDVHYROYHGLQWRD PXOWLIDFHWHGFLYLODQGOHJDOULJKWVDQGFRPPXQLW\GHYHORSPHQWRUJDQL]DWLRQVHUYLQJ$VLDQLPPLJUDQWV FLW\ZLGH&KULV.XLH[HFXWLYHGLUHFWRURI$$)(VXJJHVWHGWR*ULQNHUWKDW6HHGFROHQGDEORFNRISURMHFW ORDQIXQGVDOORFDWHGIRU&KLQDWRZQWR5HQDLVVDQFHZKLFKZRXOGWKHQPDNHDQGVHUYLFHWKHORDQVDQGUHSD\ 6HHGFRIURPLWVERUURZHUV·UHSD\PHQWV$$)(·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´ORWVRIFUHGLWIRUPRELOL]LQJWKHSURJUDPVRTXLFNO\µ .XLDQGKLVDVVRFLDWHVKDYHJRQHRQWRUDLVHDGGLWLRQDOIXQGVGLUHFWO\IRU5HQDLVVDQFHLQFOXGLQJIXQGVIURP VRPHRIWKHVDPHVRXUFHVVXFKDVWKH6HSWHPEHUWK)XQGWKDWKDYHJLYHQWR6HHGFRIRUWKH/06%:53 

$QQRXQFHPHQWRIWKH/RZHU0DQKDWWDQ6PDOO%XVLQHVVDQG :RUNIRUFH5HWHQWLRQ3URMHFW 

%\2FWREHU6HHGFRKDGDVVHPEOHGD)XQGRIPLOOLRQIRUWKH3URMHFWDPLOOLRQJUDQW

IURPWKH1HZ




WKH:RUOG7UDGH&HQWHUDWWDFNµ7KHSUHVVUHOHDVHDQGVXEVHTXHQWSXEOLFLW\DOVROLVWHGDIRXUWKRUJDQL]DWLRQ WKH+HQU\6WUHHW6HWWOHPHQWDVDSDUWQHUDQG+HQU\6WUHHW·VORJRDSSHDUHGRQSURJUDPEURFKXUHVDQGRWKHU UHODWHGPDWHULDO7KH/RZHU0DQKDWWDQ6PDOO%XVLQHVVDQG:RUNIRUFH5HWHQWLRQ3URMHFW /06%:53 ZDV SUHVHQWHGDVDVKRUWWHUPHIIRUWRIOLPLWHGVFRSHDQGGXUDWLRQWRSURYLGHLPPHGLDWHFDVKIORZWRVKRUHXS VPDOOEXVLQHVVHVWKDWRWKHUZLVHPLJKWFORVHRUIDLOWRUHRSHQWKXVHOLPLQDWLQJMREVIRUDSUHGRPLQDQWO\ORZ ZDJHZRUNIRUFH 7KHDQQRXQFHPHQWZDVJUHHWHGHQWKXVLDVWLFDOO\E\&UDLQ·V1HZDQGWKHORDQV@ZLWKLQWHUHVWUDWHV EHWZHHQDQGDUHOHVVH[SHQVLYHWKDQWKHORDQVRIIHUHGE\WKH6%$µ ,QDFWXDOLW\WKHPDLQ SUREOHPZLWK6%$ORDQVIRU6HHGFR·VWDUJHWJURXSRIYHU\VPDOOEXVLQHVVHVZDVQRWWKHLQWHUHVWUDWHEXWWKH FROODWHUDOUHTXLUHPHQWZKLFKXVXDOO\PHDQWWKDWWKHEXVLQHVVRZQHUZDVUHTXLUHGWRPRUWJDJHKLVRUKHU KRPHXQGHUWKHWHUPVRIWKH6%$ORDQDJUHHPHQW  &1&REEOHUDVKRHUHSDLUVKRSDW7KDPHV6WUHHWDERXWWZREORFNVVRXWKRI*URXQG=HURXVHGWR KDYH´JUHDWIORZEHFDXVHWKHVWUHHWZDVDQDUWHU\IRUSHRSOHJRLQJWRDQGIURPWKH:RUOG7UDGH&HQWHUµ DFFRUGLQJWRRZQHU&DUO&ROOHWWLLQD0DUFKLQWHUYLHZLQKLVVWRUH´1RZWKHUHLVQRIORZµKH DGGHG7KHVWUHHWZDVFORVHGXQWLOWKHZHHNDIWHU7KDQNVJLYLQJDQGWKH5HG&URVVXVHGWKHVKRSDVDWULDJH FHQWHUIRUWKHZRXQGHGDQG´PDGHDPHVVRIWKHSODFHµ0U&ROOHWWLVDLG&ROOHWWLKDGDVKRHVKRSLQWKH :LQWHU*DUGHQDWWKH:RUOG)LQDQFLDO&HQWHUVLQFHDQGVD\VKHZDVRQHRIWKHILUVWUHWDLOWHQDQWV WKHUH7KDWVWUXFWXUHZDVGHVWUR\HGLQWKHDWWDFN&ROOHWWLRSHQHGWKHVKRSDW7KDPHV6WUHHWRQO\WZR \HDUVDJR´,XVHGWRKDYHILIWHHQSHRSOHZRUNLQJIRUPHEHWZHHQWKHWZRVKRSVµ0U&ROOHWWLVDLG´1RZ ,KDYHWKUHH7KDQN*RGQRQHRIP\HPSOR\HHVZHUHNLOOHG7ZRZHQWEDFNWR%UD]LODQGWKHRWKHUVDUHDW RWKHUVKRSVDURXQGWKHFLW\µ -XVWEHIRUH&KULVWPDV6HHGFR'7$VWDIIUHFRPPHQGHGDQG*ULQNHUDSSURYHGDJUDQWIRUUHQW XWLOLW\DQGUXLQHGLQYHQWRU\FRVWVWKDWZHUHQRWFRYHUHGXQGHU&1·VEXVLQHVVLQWHUUXSWLRQLQVXUDQFHSROLF\ IRUWKH7KDPHV6WUHHWORFDWLRQD6HHGFRORDQZDVQRWUHTXHVWHG6HHGFRDOVRDSSURYHGRQHZDJH VXEVLG\VORW&1&REEOHUVDOVRUHFHLYHGD6%$ORDQDWIRXUSHUFHQWIRU\HDUVFROODWHUDOL]HGE\ &ROOHWWL·VKRPHDQGDJUDQWIURP6DIH+RUL]RQ&ROOHWWLVDLGWKDW(PSLUH6WDWH'HYHORSPHQW &RUSRUDWLRQKDGSURYLGHGDJUDQWWRFRYHUWKUHHGD\VRIORVWEXVLQHVV+HKDVDSSOLHGIRUWKHVHFRQG URXQGRIWKLVDVVLVWDQFHFRYHULQJXSWRWHQGD\VDQGZDVWROGWKDWWKHILUVWWKUHHGD\V·ZRUWKDOUHDG\JLYHQ ZRXOGEHGHGXFWHGUHVXOWLQJLQDQHWQHZDZDUGFRYHULQJDQDGGLWLRQDOVHYHQGD\V &ROOHWWLKDVDOVRUHFHLYHG5HG&URVVJLIWVIRUWZRPRQWKV·RIKLVKRPHPRUWJDJHSD\PHQWVDQGKHOSWRZDUGV KLVGDXJKWHU·VFROOHJHWXLWLRQ7KH6DOYDWLRQ$UP\´SLFNHGXSP\FDUSD\PHQWVµKHVDLG&1&REEOHUVLV DWDERXWSHUFHQWRILWVIRUPHUOHYHO&ROOHWWLVDLGLQ0DUFK+HLVGHWHUPLQHGWR´KDQJLQWKHUHµ DQGLVQHJRWLDWLQJZLWKWKHODQGORUGIRUVSDFHWRUHRSHQKLVRWKHUVKRSQRWLQWKH:LQWHU*DUGHQEXWLQ 7ZR:RUOG)LQDQFLDO&HQWHU´,WZLOOFRPHEDFN7KLVLV1HZ




7\SHVRI$VVLVWDQFH 7KH3URMHFWFRPSULVHVWKUHHLQWHUUHODWHGFRPSRQHQWV

)LQDQFLDO$VVLVWDQFH /RZLQWHUHVWUDWHQRQFROODWHUDOL]HGORDQVXSWRIRUWHUPVXSWRWKUHH\HDUVDUHDYDLODEOH IRUZRUNLQJFDSLWDOWRKHOSPHHWQRUPDORSHUDWLQJH[SHQVHVRUWR´EULGJHWKHJDSEHIRUHUHFHLSWRIIXQGLQJ IURPRWKHUVRXUFHVµ7KHVHFRQGIRUPRIILQDQFLDODVVLVWDQFHLVJUDQWVRIXSWRWRFRPSHQVDWH EXVLQHVVHVIRUWKHDFWXDOYDOXHRI´RQHWLPHFRVWVDVVRFLDWHGZLWKVXVSHQGHGEXVLQHVVRSHUDWLRQVUHODWHGWR 6HSWHPEHUWKµ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

(PSOR\PHQW5HWHQWLRQ:DJH6XEVLGLHV 7KHVHDUHGHVLJQHG´WRHQDEOHVPDOOEXVLQHVVHVWRFRQWLQXHWRPHHWSD\UROODQGUHWDLQZRUNHUVZKR RWKHUZLVHZRXOGKDYHWREHODLGRIIµ%XVLQHVVHVWKDWDSSO\IRUORDQDQGJUDQWDVVLVWDQFHDQGPHHWSURJUDP HOLJLELOLW\UHTXLUHPHQWVPD\UHFHLYHVXEVLGLHVIRUDSHULRGRIXSWRWKUHHPRQWKVHTXDOWRRQHKDOIWKHZDJHV DQGVWDWXWRU\EHQHILWVVXFKDVGLVDELOLW\DQGZRUNPHQ·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





EXVLQHVVHVIRUH[DPSOHWKRVHWKDWHPSOR\XQGRFXPHQWHGZRUNHUVRUSD\´RIIWKHERRNVFDVKµDQGGRQRW ZLWKKROG),&$RULQFRPHWD[HV

%XVLQHVV6XSSRUW6HUYLFHV 7KLVFRPSRQHQWRIIHUV´IUHHWHFKQLFDODVVLVWDQFHVXSSRUWSURYLGHGE\6HHGFRDQGRWKHUSURERQR FRQVXOWDQWVµ6HHGFRDOVRSURYLGHGWRWKH'7$IRUFOHDQXSRIWKHDUHD VXFKDVSRZHUZDVKLQJ VWRUHIURQWV PDUNHWLQJDQGDGYHUWLVLQJFDPSDLJQVDQGWRKHOSRIIVHW'7$·VFRVWVRIRXWUHDFKDQGSURFHVVLQJ RIDSSOLFDWLRQVIRUDVVLVWDQFH$$)(UHFHLYHGIRUVLPLODUDFWLYLWLHVH[FHSWIRUFOHDQXS LQ &KLQDWRZQ6HHGFRXSGDWHGDQGH[SDQGHGWKHVHFWLRQRILWVHDUOLHU5HVRXUFH5HIHUUDO*XLGHSXEOLVKHGZLWK 6DIH+RUL]RQDVWKH:RUOG7UDGH&HQWHU6PDOO%XVLQHVV5HVRXUFH5HIHUUDO*XLGHDSDJHPDQXDOZLWK FRPSUHKHQVLYHLQIRUPDWLRQDERXWZKHUHWRJRDQGKRZWRDSSO\IRUIHGHUDOVWDWHDQGORFDOJRYHUQPHQWDQG SULYDWHVHUYLFHV7KH*XLGHLVDOVRRQ6HHGFR·V:HEVLWH

(OLJLELOLW\DQG2XWUHDFK 7KHILQDOHOLJLELOLW\UXOHVZHUHSUHFLVHO\GHOLQHDWHGWRIRFXVRQYHU\VPDOOEXVLQHVVHVZLWK FRQFHQWUDWLRQVRIORZZDJHZRUNHUV7KHSURFHVVRIGHYHORSLQJWKHJXLGHOLQHVUHYHDOHGRFFDVLRQDOO\ GLIIHULQJSHUVSHFWLYHVDERXWSXUSRVHVRIWKHSURJUDPKHOGE\6HHGFRDQGLWVSDUWQHUV'7$·VPHPEHUVKLS LQFOXGHVFRPSDQLHVVXFKDVSURIHVVLRQDOVHUYLFHILUPVWKDW6HHGFRGLGQRWZLVKWRLQFOXGHLQWKHSURJUDP EHFDXVHWKH\W\SLFDOO\GRQRWHPSOR\PDQ\ORZZDJHZRUNHUV'7$ZDQWHGWRLQFOXGHWRXURSHUDWRUV EHFDXVHWKH\EURXJKWYLVLWRUV'RZQWRZQEXW6HHGFRGHPXUUHGEHFDXVHWKHLURIILFHVFRXOGEHDQ\ZKHUH 0DQXIDFWXULQJZDVDWDUJHWLQGXVWU\EXWLQ'RZQWRZQWKHSUHGRPLQDQWJURXSLQWKLVFDWHJRU\ZDVMHZHOU\ IDEULFDWRUVPDQ\RIZKLFKRSHUDWHGIURPWKHLUDSDUWPHQWVDQGKDGQRHPSOR\HHV6HHGFRGHFLGHGWRLQFOXGH WKRVHZLWKDVWRUHIURQWORFDWLRQ'7$·VLQWHUHVWLQUHVWRULQJDQGSUHVHUYLQJVWUHHWOHYHOIDFDGHVZDVPHWE\ GHGLFDWLQJDSRUWLRQRIWKHSURMHFWIXQGVIRUWKLVSXUSRVHDVSDUWRI'7$·V&KLQDWRZQKDVD QXPEHURIVHFRQGDQGWKLUGVWRU\PDQXIDFWXULQJORIWVDQGVWRUHVWKDWLWZDQWHGWRLQFOXGHDQG6HHGFR DJUHHG 7KH/RZHU0DQKDWWDQSURMHFW·VSXEOLVKHGJXLGHOLQHVWKDWZHUHXOWLPDWHO\DJUHHGWRE\WKHWKUHH SDUWQHURUJDQL]DWLRQVZHUHDVIROORZV7RTXDOLI\IRUVXSSRUWXQGHUWKH/060:53DQDSSOLFDQWPXVW



œ

%HORFDWHGLQ/RZHU0DQKDWWDQRQRUEHORZ&DQDO6WUHHW

œ

,QWHQGWRUHPDLQLQ/RZHU0DQKDWWDQ



œ

%HDUHWDLOHULQFOXGLQJVKRSSLQJUHVWDXUDQWVDQGGHOLVRUDPDQXIDFWXUHU 7KLVH[FOXGHV PDLQO\SURIHVVLRQDOVHUYLFHVILUPVVXFKDVDFFRXQWDQWVODZ\HUVSK\VLFLDQVLQVXUDQFH DJHQFLHVDQGUHDOHVWDWHRIILFHVEHFDXVHWKHVHILUPVW\SLFDOO\GRQRWHPSOR\ORZZDJH ZRUNHUV 

œ

+DYHILIW\RUIHZHUHPSOR\HHV

œ

%HDEOHWRGHPRQVWUDWHDGYHUVHLPSDFWIURPWKHDWWDFN

œ

%HDEOHWRGHPRQVWUDWHILQDQFLDOYLDELOLW\SULRUWR

œ

%HDEOHWR´GHPRQVWUDWHWKHDELOLW\WRVXVWDLQUHQHZHGEXVLQHVVRSHUDWLRQVJRLQJIRUZDUGµ

2QO\WZRRIWKHHOLJLELOLW\FULWHULDORFDWLRQDQGQXPEHURIHPSOR\HHVZHUHYHULILDEOHE\REMHFWLYH HYLGHQFHVXFKDVDOHDVHRUSD\UROOUHFRUGV7KHRWKHUVUHTXLUHUHVHDUFKGLVFXVVLRQDQGMXGJPHQWDOORI ZKLFKFDQVORZGRZQWKHSURFHVV$PRQJWKHGLIILFXOWDSSOLFDWLRQVUHTXLULQJLQWHUSUHWDWLRQZHUHVRPHIURP 7ULEHFDDUWJDOOHULHV$UHDUWJDOOHULHV´UHWDLOµVWRUHV",WZDVILQDOO\UHVROYHGWKDWWKH\DUHLIWKH\DUHRSHQWR WKHSXEOLFRQDZDONLQEDVLVLQQRUPDOEXVLQHVVKRXUV$QRWKHUSUREOHPJURXSZDVEXVLQHVVHVWKDWGRKDQG FDOOLJUDSK\IRUZHGGLQJVDQGRWKHUIXQFWLRQV:HUHWKHVH´PDQXIDFWXULQJµ"7KHGHFLVLRQZDVWKH\DUHLIWKH\ KDYHHPSOR\HHVDQGDVWRUHIURQW 7KH)RUG)RXQGDWLRQVWDWHPHQWWKDWDLGZRXOGJRWRWKRVHEXVLQHVVHVZKRVHGDPDJH´ZLOOQRWEH FRYHUHGE\FLW\VWDWHRUIHGHUDOSURJUDPVµZDVQRWUHIOHFWHGLQWKHILQDOHOLJLELOLW\FULWHULD,QIDFWRZQHUV ZHUHGHVSHUDWHO\VHHNLQJZKDWHYHUDLGZDVDYDLODEOHDQGPDQ\ZKRUHFHLYHG6HHGFRJUDQWVDQGORDQVDOVR EHQHILWHGIURPFLW\VWDWHDQGIHGHUDOSURJUDPVDVZHOODVSULYDWHHIIRUWVVXFKDV5HG&URVVDQG)(0$ SD\PHQWVWRFRYHUSHUVRQDODQGEXVLQHVVORVVHV+RZHYHUPDQ\EXVLQHVVHVDVVLVWHGE\6HHGFRH[SHULHQFHG VLJQLILFDQWSUREOHPVDFFHVVLQJVRPHRIWKHVHVRXUFHVDQGLQPDQ\FDVHVWKHUHZHUHVHULRXVGHOD\VEHWZHHQWKH WLPHRI´DSSURYDOµDQGDFWXDOGLVEXUVHPHQWRIIXQGVVRPHWKLQJWKDWZDVDYRLGHGIRUPRVWRIWKHEXVLQHVVHV DVVLVWHGE\/06%:53 $YDLODELOLW\RIWKHIXQGVDQGVHUYLFHVZDVZLGHO\DQGYLJRURXVO\SXEOLFL]HG'RZQWRZQWKURXJK QHZVSDSHUVUDGLRDQG79RQ6HHGFR·VDQG'7$·V:HEVLWHVDQGEURFKXUHVGHOLYHUHGWKURXJKRXWWKH SURMHFWDUHDE\'7$·VEULJKWO\XQLIRUPHGVWUHHWSHUVRQQHO'7$·VWDUJHWDUHDLVERXQGHGE\&KDPEHUV 6WUHHWRQWKHQRUWKZKLOHWKHSURMHFWDUHDH[WHQGVDERXWWZRWKLUGVRIDPLOHEH\RQGWKDWWR&DQDO6WUHHW DQGLQFOXGHV7ULEHFD7KLVSURYLVLRQZKLFKPDGHQRQ'7$PHPEHUVHOLJLEOHIRUDVVLVWDQFHDQGWKH HOLJLELOLW\UHVWULFWLRQVWKDWUXOHGRXWVRPH'7$PHPEHUVFDXVHGWHQVLRQVLQ'7$·VFRQVWLWXHQF\EHFDXVHQRW





DOOPHPEHUVFRXOGEHWUHDWHGHTXDOO\1HYHUWKHOHVV'7$FRQGXFWHGDJJUHVVLYHDQGHIIHFWLYHRXWUHDFKWR HQJDJHWKHHOLJLEOHVPDOOEXVLQHVVHV,Q&KLQDWRZQ$$)(DQGLWVDIILOLDWH5HQDLVVDQFH(FRQRPLF 'HYHORSPHQW3URJUDPSXEOLFL]HGWKHSURJUDPWKURXJKWKHLUHVWDEOLVKHGOLQNVWRWKHFRPPXQLW\DQG WUDQVODWHGDOOSURJUDPPDWHULDOVLQWR&DQWRQHVHDQG0DQGDULQ 'DYH3DYH-HZHOHUVLVORFDWHGDW&KXUFK6WUHHWDWWKHFRUQHURI&KDPEHUVDEORFNZHVWRI %URDGZD\DQGDERXWILYHEORFNVQRUWKRI*URXQG=HUR7KHRZQHU'DYLG$HLQDHPLJUDWHGIURP,VUDHO DQGKDVEHHQLQEXVLQHVVDWWKLVORFDWLRQIRUVHYHQWHHQ\HDUV,Q$XJXVWKHWRRNRXWDVHFRQGPRUWJDJH RQKLVKRPHWRHQDEOHKLPWRGRXEOHWKHVSDFHLQKLVVWRUH+HUHFDOOVWKDWZKHQWKHVRXWKWRZHUFROODSVHG ´WKHRYHUKHDGOLJKWVFDPHGRZQDQGP\JODVVZLQGRZVZHUHVKDWWHUHG,UDQIRUP\OLIHµ 8QGHUKLVQHZOHDVHKHLVSD\LQJWZLFHWKHIRUPHUUHQWEXWDIWHUKLVEXVLQHVVLVDWKDOIRILWVSUHYLRXV OHYHODQGKHHVWLPDWHVKLVORVVHVDWDERXWWKURXJK-DQXDU\´7KHLQVXUDQFHZRQ·WFRYHUWKH WKHIWWKDWRFFXUUHGZKHQ,UDQIURPWKHVWRUHEHFDXVHRIDFODXVHVD\LQJWKDWLI,GLGQ·WOHDYHWKHLWHPV ORFNHGXSWKH\ZHUHQ·WUHVSRQVLEOHµ$HLQDVDLGGXULQJDUHFHQWYLVLWWRKLVVWRUH 'DYH3DYHZDVFORVHGIRUIRXUZHHNVE\&LW\RUGHUDQGDQRWKHUWZRZHHNVZHUHUHTXLUHGWRFOHDQXSDQG PDNHUHSDLUVEHIRUHUHVXPLQJEXVLQHVV$HLQDVDLGLQD0DUFKLQWHUYLHZWKDWEXVLQHVVLVEDFNWR DERXWILIW\SHUFHQWRILWVSUHOHYHOEXWKHLVVWLOOORVLQJDERXWSHUGD\UHSUHVHQWLQJWKHDGGLWLRQDO UHQWRXWOD\IURPODVW$XJXVW·VH[SDQVLRQ+HGHDOVZLWKWKLVVKRUWIDOOE\QRWSD\LQJWKHDGGLWLRQDOUHQW7R JHQHUDWHQHZEXVLQHVV'DYH3DYHKDVKDGDVSHFLDOVDOHZLWKLWHPVPDUNHGGRZQDERXWWKLUW\SHUFHQWDQGLV RSHQ6XQGD\V ,QODWH)HEUXDU\6HHGFR'7$VWDIIUHFRPPHQGHGDQG*ULQNHUDSSURYHGDJUDQW6HHGFR DOVRDZDUGHGDORDQ LQFUHDVHGE\*ULQNHUIURPWKHVWDIIUHFRPPHQGHG DQGDOORFDWLRQ RIWKUHHZDJHVXEVLG\VORWVSHQGLQJILOOLQJWKHSRVLWLRQVZKHQEXVLQHVVYROXPHMXVWLILHVWKHKLULQJ7KH6%$ DSSURYHGDORDQ7KH6HHGFRORDQZDVGLVEXUVHG)HEUXDU\$HLQDVDLGWKDW)(0$KDG JLYHQKLPDJUDQWWRFRYHUWZRPRQWKV·PRUWJDJHSD\PHQWVRQKLVKRPHDQGWKDW(6'&KDGDSSURYHGD JUDQWEXWQRIXQGVKDG\HWEHHQUHFHLYHG

3URMHFW6WUXFWXUH2UJDQL]DWLRQDQG6WDIILQJ *ULQNHU·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





7KLVZDVLPSRUWDQWEHFDXVHRI6HHGFR·VOLPLWHGH[SHULHQFHLQVPDOOEXVLQHVVOHQGLQJ,QLWV\HDU KLVWRU\6HHGFRKDGFORVHGRQRQO\VL[VPDOOEXVLQHVVORDQVZLWKDWRWDOSULQFLSDOYDOXHRI6HHGFR KDGQHYHUKDGDSURJUDPSUHVHQFHLQ/RZHU0DQKDWWDQRU&KLQDWRZQDOWKRXJKWKHUHZHUHVXEVWDQWLDO ZRUNIRUFHSURJUDPLQYROYHPHQWVZLWKFRPPXQLW\EDVHGRUJDQL]DWLRQVLQORZDVVHWQHLJKERUKRRGVLQ RWKHUSDUWVRIWKHFLW\0RUHRYHU6HHGFR·VFRPPXQLW\GHYHORSPHQWORDQXQGHUZULWLQJDQGGXHGLOLJHQFH ZHUHH[WUHPHO\IRUPDODQGWKRURXJKLQYROYLQJH[WHQVLYHVWDIIUHYLHZDQGDQDO\VLVEHIRUHEHLQJVXEPLWWHGWR DTXDUWHUO\%RDUGRI'LUHFWRUVPHHWLQJIRUDSSURYDO7KH%RDUGRIWHQGLJVGHHSO\LQWRWKHXQGHUZULWLQJ DVVXPSWLRQVDQGPHWKRGRORJ\DQGSURSRVDOVDUHRFFDVLRQDOO\UHWXUQHGWRWKHVWDIIIRUIXUWKHUGHWDLOHG DQDO\VLV &OHDUO\VXFKDWLPHFRQVXPLQJSURFHVVZRXOGQRWVHUYHWKHSXUSRVHVRIWKH/06%:537KHUHZDV DQXUJHQF\WRJHWWKHPRQH\RXWEHIRUHWKHEXVLQHVVHVIROGHGRUJDYHXSKRSHRIEHLQJDEOHWRUHRSHQVDOHV KDGGURSSHGWRQHJOLJLEOHOHYHOVIRUPRVWUHWDLOHUVLQWKH´IUR]HQ]RQHµQHDU*URXQG=HUR)RUQRQIRRG HVWDEOLVKPHQWVUHPDLQLQJRSHQDWOHDVWXQWLOWKH&KULVWPDVVHDVRQZDVYLWDOWRWKHLUFRQWLQXHGH[LVWHQFH 8QOHVVWKHPRQH\FRXOGEHJRWWHQLQWRWKHKDQGVRIWKHEXVLQHVVHVZLWKJUHDWKDVWHWKHHQWLUHSXUSRVHRIWKH HQWHUSULVHZRXOGEHGHIHDWHG%XWZKRZRXOGDFWXDOO\GRWKHH[SHGLWHGXQGHUZULWLQJ" ,QWKHFDVHRI&KLQDWRZQWKLVSUREOHPZDVVROYHGEHFDXVH$$)(KDVDVXEVLGLDU\QRQSURILW FRPPXQLW\GHYHORSPHQWILQDQFLDOLQVWLWXWLRQWKH5HQDLVVDQFH(FRQRPLF'HYHORSPHQW&RUSRUDWLRQ HVWDEOLVKHGLQDQGSRVVHVVLQJDFDSLWDOEDVHRIDERXWPLOOLRQ,WVPDLQDFWLYLW\ZDVPLFURDQGVPDOO EXVLQHVVORDQVUDQJLQJIURPWRDORQJZLWKWHFKQLFDODVVLVWDQFHPDLQO\IRU$VLDQLPPLJUDQW RZQHGVWDUWXSEXVLQHVVHVFLW\ZLGH,QWKHLPPHGLDWHDIWHUPDWKRI6HSWHPEHUVPDOOEXVLQHVVHVWKDWZHUH ORVLQJPRQH\EHFDXVHRIXWLOLW\GLVUXSWLRQVDQGVWUHHWFORVLQJVLQ&KLQDWRZQLQFOXGLQJVHYHUDOWKDWKDG UHFHLYHG5HQDLVVDQFHVWDUWXSORDQVDQGWHFKQLFDODVVLVWDQFHFDPHWR5HQDLVVDQFHIRUDLG5HQDLVVDQFH HVWDEOLVKHGDQHPHUJHQF\ORDQIXQGXWLOL]LQJD0HUFKDQWV%DQNOLQHRIFUHGLWEDFNHGE\ORVVUHVHUYHV HDUPDUNHGIURPJUDQWIXQGVDZDUGHGWR5HQDLVVDQFHE\WKHIHGHUDO&RPPXQLW\'HYHORSPHQW)LQDQFLDO ,QVWLWXWLRQV)XQGDQGODWHUE\DQ+6%&%DQNJUDQW 6HHGFRJDYH$$)(IRURXWUHDFKSXEOLFLW\DQGORDQXQGHUZULWLQJ/RDQDQGJUDQW UHFRPPHQGDWLRQVIRU&KLQDWRZQEXVLQHVVHVZRXOGEHIRUZDUGHGWR6HHGFRIRUILQDOGHFLVLRQ:LWKUHVSHFW WRZDJHVXEVLGLHV5HQDLVVDQFHZRXOGZRUNZLWK6HHGFR·VVXEVLGLDU\(DUQ)DLU//&WKHRUJDQL]DWLRQWKDW DGPLQLVWHUVDZRUNIRUFHGHYHORSPHQWSURJUDPLQFOXGLQJVXEVLGL]HGHPSOR\PHQWSDLGIRUZLWK1HZ




6HWWLQJXSDOHQGLQJRSHUDWLRQIRU'RZQWRZQZDVPRUHFRPSOLFDWHGWKRXJKQRWIRUWKHVDPH UHDVRQVDVLQ&KLQDWRZQ7KH'RZQWRZQ$OOLDQFHKDGQRFDSDELOLW\WRGROHQGLQJDQGWKHUHZDVQRRWKHU HVWDEOLVKHG&'),RUPLFURORDQIXQGDFWLYHLQWKHDUHDWKDWLQ*ULQNHU·VMXGJPHQWSRVVHVVHGWKHUHTXLVLWH FRPSHWHQF\DQGH[SHULHQFH2QHSRVVLELOLW\ZDV$&&,211HZ




7KHJURXSZRUNHGLQDODUJHURRPZLWKRQHFRQIHUHQFHWDEOHLQWKHPLGGOHXQGHUWKHGD\WRGD\ VXSHUYLVLRQRI6ODGHZKRFRRUGLQDWHGZLWKWKH6HHGFRVWDIIZKRFDPHDQGZHQWSHULRGLFDOO\,QLWLDOO\WKH NH\6HHGFROLDLVRQSHUVRQZDV%HFN\.RFKGHSXW\ORDQIXQGPDQDJHUODWHULWZDV3DW3ULROHWIRUPHU PDQDJHURIVRFLDOLQYHVWPHQWVDW3UXGHQWLDO,QVXUDQFH&RPSDQ\ZKRMRLQHG6HHGFRDVDFRQVXOWDQWLQWKH /06%:53LQPLG1RYHPEHUDQGEHFDPH*ULQNHU·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´,GRQ·WKDYHWRFDUU\WKHLQYHQWRU\FRVWVLQDVDORQµVKHVDLGLQD 0DUFKLQWHUYLHZLQWKHVDORQ7KH0DLWDVOLYHLQ%DWWHU\3DUN&LW\DQGFRXOGQ·WJHWEDFNLQWR WKHLUDSDUWPHQWXQWLO-DQXDU\ 7KHVDORQZDVFORVHGIRUDERXWWHQGD\VZKHQWKHVWUHHWZDVFORVHG´7KHVDORQZDVDPHVVDQGLW WRRNDQRWKHUWHQGD\VDIWHUWKDWWRFOHDQDQGUHSDLULWµVKHVDLG7KHUHZHUHIRUPHUO\WZHOYH IXOOWLPHHPSOR\HHVDQGQRZWKHUHDUHVL[SDUWWLPHSHRSOH´WRVSUHDGWKHZRUNDURXQGµ0DLWDVDLGWKDW KHUEXVLQHVVZDVGRZQWRDERXWSHUFHQWRILWVSUHOHYHOZLWKDJURVVRIDERXWSHUGD\ EUHDNHYHQLV6KHVDLGWKDWEXVLQHVVVKRXOGLPSURYH´ZKHQWKHZDUPHUZHDWKHUFRPHV:HVKRXOG EHDWSHUFHQWLQWKHVSULQJDQGEDFNWRDSHUFHQWD\HDUODWHUµ0V0DLWDREVHUYHG´SHRSOHGRQ·W FRPHWRWKHVDORQZKHQWKH\·UHQRWIHHOLQJKDSS\7KH\·UHQRWHQMR\LQJOLIH>DIWHU@µ 6WDIIUHFRPPHQGHGDQG*ULQNHUDSSURYHGDJUDQWIRU*HQWOH7RXFKHVLQHDUO\'HFHPEHUWR FRYHUUHQWXWLOLWLHVSD\UROODQGHTXLSPHQWGXULQJWKHFORVHGSHULRGDQGDZRUNLQJFDSLWDOORDQ *HQWOH7RXFKHVKDVDOVRUHFHLYHGDORDQIURP$&&,211HZ
:RUNVKRSVDQG$SSOLFDWLRQV 'RZQWRZQEXVLQHVVHVWKDWLQTXLUHGDERXWWKHSURJUDPDQGPHWEDVLFHOLJLELOLW\FULWHULDZHUHLQYLWHG LQWKHRUGHULQZKLFKWKH\LQTXLUHGWRDWWHQG6HHGFR'7$ZRUNVKRSVDWZKLFKWLPHWKHSURJUDPZDV





H[SODLQHGDQGDSSOLFDWLRQVGLVWULEXWHG6HHGFRVWDIIYROXQWHHUVDQG'7$·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·VVXEVLGLDU\IROORZLQJUHIHUUDOE\WKH ORDQDQGJUDQWVWDII 7KHILUVWURXQGRIVL[ZRUNVKRSVDW'7$ZHUHKHOGWKHZHHNRI2FWREHURQHPRQWKDIWHU *ULQNHU·VILUVWGLVFXVVLRQZLWK)RUG·V)UDQN'H*LRYDQQLDERXWWKHSRWHQWLDOSURMHFW$QDYHUDJHRI RZQHUVDWWHQGHGHDFKZRUNVKRSVRWKDWE\1RYHPEHUDERXWEXVLQHVVHVKDGEHHQLQWURGXFHGWR WKHSURJUDPDQGJLYHQDSSOLFDWLRQIRUPV6XEVHTXHQWZRUNVKRSVZHUHKHOGXQWLO'HFHPEHUDIWHUZKLFK WKH\ZHUHVXVSHQGHGEHFDXVHWKHYROXPHVHHPHGFHUWDLQWRH[KDXVWSURJUDPUHVRXUFHV

,QLWLDO$ZDUGV 7KHILUVWJUDQWVORDQVDQGZDJHVXEVLGLHVZHUHDQQRXQFHG1RYHPEHUOHVVWKDQWZRPRQWKV DIWHU*ULQNHU·VILUVWFRQYHUVDWLRQZLWKWKH)RUG)RXQGDWLRQDERXWDSRVVLEOHSURJUDPLQD/06%:53 SDUWQHUVKLSSUHVVUHOHDVH7KHUHOHDVHDQGSUHVVFRQIHUHQFHKHOG'RZQWRZQDQQRXQFHGWKDW´VPDOOUHWDLO DQGPDQXIDFWXULQJEXVLQHVVHVWRGD\UHFHLYHGORDQVDQGJUDQWVWRWDOLQJ>DQGLQZDJH VXEVLGLHVIRUHPSOR\HHV@WRVXSSRUWWKHPLQWKHZDNHRIWKH6HSWHPEHUWKDWWDFNVµ6WDWH$VVHPEO\ 6SHDNHU6KHOGRQ6LOYHUZKRVHGLVWULFWLQFOXGHVWKHDIIHFWHGDUHDVDLG´,DPSURXGWREHSDUWRIWKLVFRDOLWLRQ LQUHEXLOGLQJDVWURQJHU'RZQWRZQ0DQKDWWDQµ 7KHLQLWLDOOLVWRIDZDUGVLQFOXGHGVPDOO'RZQWRZQUHWDLOEXVLQHVVHVVXFKDV*HUDUGL·V5HVWDXUDQW DW3HDUO6WUHHWQHDUWKH6RXWK6WUHHW6HDSRUWZKLFKZDVDZDUGHGDJUDQWDQGWHQZDJHVXEVLG\ VORWV'RZQWRZQ)ORULVWDW&KXUFK6WUHHWDERXWWKUHHEORFNVQRUWKRI*URXQG=HURZKLFKUHFHLYHGD JUDQWDORDQDQGRQHZDJHVXEVLG\VORWDQG:DOO6WUHHW-HZHOHUVZKLFKUHFHLYHGDQ





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´UHFHLSWRIWKH FRPSOHWHGDSSOLFDWLRQZHKDYHPDGHDFRPPLWPHQWWRSURFHVVWKHDSSOLFDWLRQDQGJLYHWKHEXVLQHVVRZQHUD GHFLVLRQZLWKLQWHQEXVLQHVVGD\Vµ7KLVVHHPVWRKDYHEHHQRYHUO\DPELWLRXV7KHPRUHW\SLFDOFDVH DFFRUGLQJWRVWDIIZKRKDYHZRUNHGLQWKHSURJUDPIURPWKHEHJLQQLQJLVWKDWSURFHVVLQJRIWKHLQLWLDOEDWFK RIDSSOLFDWLRQVZDVDPDWWHURIZRUNLQJWKURXJKDODUJHEDFNORJZLWKJXLGHOLQHVDQGSURFHGXUHVWKDWZHUH EHLQJUHILQHGDQGLQWHUSUHWHGDVWKH\ZHQWDORQJ $SSOLFDWLRQVPRYHIDVWHUZKHQEXVLQHVVRZQHUVDUHFHUWDLQWKH\ZDQWWKHDVVLVWDQFHDQGSURPSWO\ JLYHFRPSOHWHUHVSRQVHVDQGVXEPLWWKRURXJKGRFXPHQWDWLRQ,QPRVWRIWKHLQLWLDODSSOLFDWLRQVWKHDQDO\VWV IRXQGYHU\VNHWFK\LQIRUPDWLRQDQGQHHGHGWRVSHQGZHHNVIROORZLQJXSWRJHWWKHRZQHUVWRSURYLGH DGGLWLRQDOLQIRUPDWLRQ7KHRZQHUVZHUHXSWRWKHLUQHFNVLQGD\WRGD\VXUYLYDODFWLYLWLHVDQGKDGOLWWOHWLPH WRGHYRWHWRWKLVNLQGRISDSHUZRUN6RPHZHUHVKRSSLQJDURXQGIRURWKHUDYDLODEOHILQDQFLDODVVLVWDQFH VXFKDV6%$DQGWKH(PSLUH6WDWH'HYHORSPHQW&RUSRUDWLRQDQGVRPHZHUHQRWKHDUGIURPDJDLQ$VRI $SULODFFRUGLQJWR6HHGFR·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





,Q-DQXDU\*ULQNHUVHQWDOHWWHUWRWKHDSSUR[LPDWHO\EXVLQHVVHVLQWKH'7$DUHDWKDWKDG LQTXLUHGDQGEHHQGHHPHGHOLJLEOHEXWFRXOGQRWEHDFFRPPRGDWHGLQWKHILUVWJURXSRIZRUNVKRSVVD\LQJ WKDWWKHSURJUDP´KDVEHHQSODFHGRQKROGXQWLODGGLWLRQDOPRQH\EHFRPHVDYDLODEOHµDQGVWDWLQJWKDWZDJH VXEVLGLHVDQGWHFKQLFDODVVLVWDQFHFRQWLQXHGWREHDYDLODEOHWRHOLJLEOHEXVLQHVVHV7KHOHWWHUDOVRSRLQWHGRXW WKDW´VHSDUDWHIXQGVDUHGXHWREHFRPHDYDLODEOHWKURXJKWKH(PSLUH6WDWH'HYHORSPHQW&RUSRUDWLRQµDQG FRQFOXGHGE\SURPLVLQJWREHLQIXUWKHUWRXFKZKHQ´ZHKDYHDQ\QHZVµ$$)(DQG5HQDLVVDQFHUXQQLQJRQ DQLQGHSHQGHQWWUDFNKDQGOHGFRPPXQLFDWLRQVVHSDUDWHO\ZLWKWKHLUFOLHQWHOHDERXWIXUWKHUUHTXHVWV

8QGHUZULWLQJDQG'XH'LOLJHQFH $$)(·VVXEVLGLDU\5HQDLVVDQFH(FRQRPLF'HYHORSPHQW&RUSRUDWLRQ·VH[SHULHQFHZLWKWKHVPDOO EXVLQHVVPDUNHWSUHSDUHGLWWRPRYHUHDGLO\DQGVPRRWKO\LQWRRSHUDWLRQ)RUWKH'RZQWRZQVHJPHQW 6HHGFRKDGQRRSHUDWLRQVPDQXDOVORDQXQGHUZULWLQJJXLGHOLQHVDSSOLFDWLRQIRUPVGXHGLOLJHQFHFKHFNOLVWV RUFORVLQJGRFXPHQWVWKDWZRXOGEHUHOHYDQWIRUVXFKDXQLTXHYHQWXUH6HHGFR·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





,QWKHLQWHUHVWRIVSHHGDQGWRGHDOZLWKWKHODUJHEDFNORJRIDSSOLFDWLRQVWKHORDQSURFHVVLQJJURXS DW'7$E\SDVVHGWKHWLPHFRQVXPLQJVWHSRIPDNLQJVLWHYLVLWVDQGJHWWLQJWRNQRZWKHRZQHUVDQGWKHLU EXVLQHVVHVGHFLGLQJLQVWHDGWRFRPSOHWHSURFHVVLQJRIWKHDSSOLFDWLRQVE\UHYLHZLQJWKHSDSHUZRUN7KLV HOLPLQDWHGWKHSRVVLELOLW\RIYHULI\LQJWKHRZQHU·VUHSUHVHQWDWLRQVDERXWVDOHVE\IRUH[DPSOHVSHQGLQJWLPH LQWKHYLFLQLW\RIWKHVWRUHDQGREVHUYLQJWKHWUDIILF ,QWHQWLRQWRUHPDLQLQ/RZHU0DQKDWWDQRQRUEHORZ &DQDO6WUHHWZDVDFFHSWHGDWWKHEXVLQHVVRZQHU·VZRUGDOWKRXJKDFRYHQDQWLQWKHORDQDJUHHPHQWREOLJHV WKHERUURZHUQRWWRPRYHRXWRIWKHWDUJHWDUHDEUHDFKRIWKHFRYHQDQWLVDQHYHQWRIGHIDXOW 6ODGHDQGWKH DQDO\VWVIHHOWKDWVLWHYLVLWVKDYHEHHQDFUXFLDORPLVVLRQWKDWZLOODGYHUVHO\DIIHFWWKHTXDOLW\RIWKHORDQVDQG WKHUHSD\PHQWUDWHV:KHQSURFHVVLQJLVUHVXPHGHVWDEOLVKLQJDUHODWLRQVKLSDQGPDNLQJVLWHYLVLWVZLOOEH SDUWRIWKHSURWRFRO

)LQDQFLDO$QDO\VLV 7KHPRVWGLIILFXOWFULWHULRQWRDVVHVVKDVEHHQ´IXWXUHILQDQFLDOYLDELOLW\µ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´UDWLRQDOSURMHFWLRQVµFDQ·WEHGRQHLQDQHQYLURQPHQWOLNHWKLVDQGWKDWPRVWFDVHV´FU\RXWIRU HTXLW\ILQDQFLQJµ7KHILQDQFLDOSURMHFWLRQV2OLYHUPDLQWDLQVDUH´VHDWRIWKHSDQWVµ6ODGHFRPPHQWHG WKDW´VSHHGRXWZHLJKHGDFFXUDF\µLQWKHLQLWLDOXQGHUZULWLQJDQGWKDW´LQGRLQJILQDQFLDOSURMHFWLRQVLQWRDQ XQNQRZQZRUOGZKDWLVJDLQHGE\GRLQJGHWDLOHGDQDO\VHV"µ 7KHPRVWGLIILFXOWXQGHUZULWLQJWDVNKDVEHHQGHYHORSLQJUHOLDEOHILQDQFLDOLQIRUPDWLRQIURPWKH DVVRUWPHQWRILQIRUPDWLRQWKDWZDVDYDLODEOH7\SLFDOVPDOOEXVLQHVVHVDSSO\LQJIRU/06%:53DVVLVWDQFHGR QRWKDYHDXGLWHGILQDQFLDOVWDWHPHQWVLQWKHIRUPWKDW6HHGFRUHTXLUHVIRULWVFRPPXQLW\GHYHORSPHQWORDQV 7KH6HHGFR'7$OHQGLQJWHDPQHHGHGWROHDUQRQWKHMREXQGHUSUHVVXUHKRZWRFRQVWUXFWDQ DSSUR[LPDWLRQRISURIRUPDILQDQFLDOHVWLPDWHV7KH\ZHUHDLGHGLQWKLVE\H[SHULHQFHGYROXQWHHUEDQNHUV RQHRIZKRPVKRZHG-DNH.LUE\WKHIRUPHUGRWFRPHQWUHSUHQHXU´ZKHUHWKHPRQH\ZDVµ$&&,21 1HZ




EHHQLQEXVLQHVVIRU\HDUVDQGKDYHQHYHUPDGHPRQH\µ$VDUHVXOWLWKDVEHHQQHFHVVDU\WR´EDFNLQWRµ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´RIIWKHWRSµ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·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

*UDQWV 8QGHUZULWLQJIRUWKHJUDQWVKDVEHHQGRQHVLPXOWDQHRXVO\ZLWKXQGHUZULWLQJWKHORDQVDQGLV VLPSOHUDQGPRUHVWUDLJKWIRUZDUG,QWKHFDVHRIJUDQWVDQDO\VWVGRQRWQHHGWRSURMHFWXQFHUWDLQIXWXUH UHVXOWVRIWKHEXVLQHVVEXWUDWKHUFRPSXWHWKHDPRXQWVRIDFWXDOORVVHVXSWRWKHPD[LPXPJUDQWDPRXQWRI





*UDQWVFDQFRYHUGLUHFWFRVWVVXFKDVUHSDLURUUHSODFHPHQWRIGDPDJHGSK\VLFDODVVHWVUHSDLURI GDPDJHGUHDOSURSHUW\UHSODFHPHQWRIVSRLOHGRUORVWLQYHQWRU\RFFXSDQF\SD\UROODQGXWLOLW\H[SHQVHV LQFXUUHGGXULQJWKHSHULRGRIVXVSHQGHGRSHUDWLRQVFOHDQXSH[SHQVHVSXUFKDVHRIUHSODFHPHQW FRPPXQLFDWLRQVHTXLSPHQWVXFKDVFHOOSKRQHVDQGUHORFDWLRQH[SHQVHVZLWKLQORZHU0DQKDWWDQ5HFHLSWV OHDVHVDQGRWKHUVLPLODUHYLGHQFHDUHUHTXLUHGWRVXEVWDQWLDWHFODLPVRQWKHJUDQWDSSOLFDWLRQIRUP$ZDUGV IURPRWKHUSURJUDPVVXFKDV(6'&·VJUDQWVWRFRYHUWKUHHGD\VRIORVWEXVLQHVVWKH5HG&URVVRUWKH1HZ
*HWWLQJWR´




WKHPDPPRWKFLW\+XPDQ5HVRXUFHV$GPLQLVWUDWLRQKHKDGSUHVLGHGRYHUFRPSOH[EXUHDXFUDFLHVDQG RUJDQL]DWLRQDOKLHUDUFKLHVGHDOLQJZLWKFRPSOLFDWHGSXEOLFSROLF\SUREOHPVVXFKDVZHOIDUHDQGKRPHOHVVQHVV 7KLVZDVDGLIIHUHQWZRUOGWRZKLFKKHUHDGLO\DGMXVWHG

3URVSHFWVIRU5HSD\PHQW %HFDXVHORDQUHSD\PHQWVGRQRWEHJLQXQWLO0D\QRWKLQJFDQEHVDLGDWWKLVSRLQWDERXWWKH TXDOLW\RIWKHORDQV6ODGHDQG$&&,211HZ




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´SXWWLQJ6HHGFRRQWKHKRRNIRUSHUFHQWµDVLJQLILFDQWGLIIHUHQFHIURPWKH FXUUHQWDUUDQJHPHQW 7UDGH&HQWHU/RFNDQG+DUGZDUHDW*UHHQZLFK6WUHHWDEORFNVRXWKRI*URXQG=HURKDV EHHQLQEXVLQHVVVLQFHDWWKLVORFDWLRQDQGIRUQLQHWHHQ\HDUVEHIRUHWKDWDW$OEDQ\6WUHHW 7KHVWRUHVXVWDLQHGGDPDJHWRWKHJDWHDQGDFFXPXODWLRQVRIGXVWDQGZDVFORVHGIRUWZRPRQWKV EHFDXVH*UHHQZLFK6WUHHWZDVFORVHG,QD0DUFKYLVLWWRWKHVWRUH-DPHV0LUVKDPVWKH RZQHUVDLG´DERXWVHYHQW\SHUFHQWRIP\EXVLQHVVZDVORFNVPLWKZRUNZLWKFRPPHUFLDOWHQDQWVLQWKH :RUOG7UDGH&HQWHU1RZWKDW·VJRQHµ 6LQFHUHRSHQLQJPRVWRI7UDGH&HQWHU/RFNDQG+DUGZDUH·VEXVLQHVVKDVEHHQZLWKFRQWUDFWRUVRQWKH FOHDQXSZRUNDQGDFFRUGLQJWR0LUVKDPVEXVLQHVVYROXPHRYHUDOOLVEDFNWRSHUFHQWRILWV IRUPHUOHYHO+HIHHOVWKDWWKHVWRUHZLOOEHEDFNWRDKXQGUHGSHUFHQWLQDERXWD\HDU´ZKHQWKH\ VWDUWUHEXLOGLQJµ0LUVKDPVDOVRVDLGWKDWKHLVSLFNLQJXSDOLWWOHQHZEXVLQHVVDVSHRSOHPRYHEDFN LQWR%DWWHU\3DUN&LW\ -XVWEHIRUH7KDQNVJLYLQJ7UDGH&HQWHU/RFNDQG+DUGZDUHZDVDSSURYHGIRUD6HHGFRJUDQW WRFRYHUUHQWXWLOLWLHVDQGUHSODFHPHQWRIGDPDJHGHTXLSPHQWDQGDORDQIRUZRUNLQJ FDSLWDOUHQWSD\UROODQGXWLOLWLHV´,ZDVQ·WVXUHZKDWZDVJRLQJRQZLWKWKHZDJHVXEVLGLHVµ 0LUVKDPVH[SODLQHG´EXWQRZ,ZDQWWRSXWWKUHHSHRSOHRQDQGWDONWR6HHGFRDERXWLWµ7KH6%$ GHFOLQHG7UDGH&HQWHU/RFNDQG+DUGZDUH·VORDQDSSOLFDWLRQEXW0LUVKDPVVDLGKHZRXOGUHDSSO\ $&&,211HZ




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·VRSWLRQEHREOLJHGWR´XVHWKH DPRXQWUHFHLYHGWRUHSD\DOORUDSDUWµ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´PRYHVLWVSULPDU\EXVLQHVVRSHUDWLRQVRXWRI/RZHU0DQKDWWDQEHORZ &DQDO6WUHHWµ 6HHGFRKDVGHYHORSHGDQDGGLWLRQDOILQDQFLDOSURGXFWWRUHVSRQGWRVSHFLDOVLWXDWLRQV$´=HUR 3HUFHQW3URPLVVRU\1RWHµRU´&RQYHUWLEOH/RDQµGHVLJQHGDVEULGJHILQDQFLQJXQWLOLQVXUDQFHSURFHHGVRU IHGHUDOLQFRPHWD[UHIXQGVIRUFDVXDOW\ORVVHVDUHUHFHLYHGDWZKLFKSRLQWWKRVHUHFHLSWVDUHWREHXVHGWR UHSD\6HHGFR·VFRQYHUWLEOHORDQ,IWKHDQWLFLSDWHGUHEDWHVIDOOVKRUWRIWKHFRQYHUWLEOHORDQDPRXQWWKH SRUWLRQRIWKH]HURSHUFHQWORDQHTXDOWRWKHXQUHFRYHUHGDPRXQWLVFRQYHUWHGWRDQRXWULJKWJUDQW)DLOXUH WRUHSD\DPRXQWVWKDWDUHQRWFRQYHUWHGZRXOGEHDQHYHQWRIGHIDXOWXSRQZKLFK6HHGFRFRXOGVXHIRU





UHFRYHU\XQGHULWVJUDQWDJUHHPHQWDOWKRXJKVXFKDVWHSVHHPVKLJKO\XQOLNHO\H[FHSWLQFDVHVRIIORXWLQJWKH LQWHQWRIWKH/06%:53

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·VH[LVWLQJORDQVWDII FDSDFLW\ $WILUVW%HFN\.RFKWKHQ6HHGFRGHSXW\ORDQIXQGPDQDJHUZHQWWR5HQDLVVDQFH(FRQRPLF 'HYHORSPHQW&RUSRUDWLRQ·VRIILFHVLQ&KLQDWRZQWRFRQGXFWORDQDQGJUDQWFORVLQJV+RZHYHUVKHVRRQ OHDUQHGWKDWKHUSUHVHQFHZDVVXSHUIOXRXVVLQFHHYHU\WKLQJZDVEHLQJGRQHLQ&DQWRQHVHRU0DQGDULQ 1RZ5HQDLVVDQFHKROGVLWVRZQFORVLQJVXVLQJ6HHGFRGRFXPHQWDWLRQDQGFRYHQDQWVDQGVHQGVWKH FRPSOHWHGSDFNDJHWR*LOOZKRWKHQVHQGVWKHFKHFNWR5HQDLVVDQFH &ORVLQJVIRUWKH'RZQWRZQORDQVDQGJUDQWVDUHKHOGHYHU\)ULGD\DWWKH'7$RIILFHVDW %URDGZD\*LOOVD\VWKDWKHUFORVLQJV´QRUPDOO\WDNHDERXWWHQPLQXWHVH[FHSWIRU]HURSHUFHQWORDQV UHSD\DEOHXSRQUHFHLSWRILQVXUDQFHSURFHHGVRUWD[UHIXQGVZKLFKDUHKDUGWRXQGHUVWDQGDQGPDNHPDQ\ SHRSOHQHUYRXV)RUWKHVH,KDYHWRZDONSHRSOHWKURXJKZKDWPD\DQGPD\QRWEHUHSD\DEOHµ7KH FORVLQJFKHFNOLVWRIGRFXPHQWVLVDPRGHORIVWULSSHGGRZQVLPSOLFLW\FRQVLVWLQJRIRQO\WHQLWHPVRIZKLFK 6HHGFRIXUQLVKHVDOOEXWWKUHH7KHERUURZHUQHHGVWRSURGXFHRQO\LWV&HUWLILFDWHRI,QFRUSRUDWLRQ &HUWLILFDWHRI$VVXPHG1DPH LIDQ\ DQGWKH)(0$UHJLVWUDWLRQQXPEHU6HHGFRGRHVQRWUHTXLUH FROODWHUDOZKLFKJUHDWO\VLPSOLILHVWKHFORVLQJSURFHVV6HHGFR·VFRPPXQLW\GHYHORSPHQWORDQFORVLQJ FKHFNOLVWLQFRQWUDVWFRQVLVWVRIGRFXPHQWVLQFOXGLQJVXFKLWHPVDVWKHERUURZHU·VDWWRUQH\·VRSLQLRQ OHWWHUDOLVWRIFROODWHUDOWKHERUURZHU·VGLVFORVXUHVWDWHPHQWDQHQYLURQPHQWDOUHYLHZDQGDFRQVWUXFWLRQ FRQWUDFWGUDZLQJVDQGVSHFLILFDWLRQVDSSURYHGE\WKHDSSURSULDWHPXQLFLSDODXWKRULWLHV





7KHUHDUHVHYHQ´QHJDWLYHFRYHQDQWVµLQDW\SLFDO/06%:53WUDQVDFWLRQLQZKLFKWKHERUURZHU DJUHHVQRWWRGRWKHIROORZLQJWKLQJVZLWKRXWILUVWREWDLQLQJWKHFRQVHQWRI6HHGFR œ

3D\GLYLGHQGVRUPDNHRWKHUGLVWULEXWLRQVWRDQ\EXVLQHVVRZQHURUPDQDJHUH[FHSWWKDW VDODULHVFDQEHSDLGLQOLQHZLWKSUHH[LVWLQJSUDFWLFHVWRVXFKLQGLYLGXDOV

œ

,QYHVWFDVKLQLQVWUXPHQWV´RWKHUWKDQPRQH\PDUNHWRULQVXUHGEDQNDFFRXQWVRUVHFXULWLHV LVVXHGE\RULQVXUHGE\WKHIXOOIDLWKDQGFUHGLWRIWKHIHGHUDOJRYHUQPHQWµDQGQR LQYHVWPHQWLVWRKDYHDWHUPRIPRUHWKDQRQH\HDU

œ

3OHGJHDQ\DVVHWVDVVHFXULW\IRUDQ\RWKHUGHEWXQOHVVWKH6HHGFRORDQ´LVVLPXOWDQHRXVO\ HTXDOO\DQGUDWDEO\VHFXUHGµ

œ

´0HUJHDFTXLUHDQRWKHUEXVLQHVVRUVHOOLWVDVVHWVLQDEXONVDOHWUDQVDFWLRQµ

œ

´(QJDJHLQDQ\WUDQVDFWLRQZLWKDQDIILOLDWHH[FHSWDWDUP·VOHQJWKDQGLQWKHRUGLQDU\FRXUVH RI«EXVLQHVVµ

œ

&KDQJHWKHQDWXUHRIWKHEXVLQHVV

œ

&KDQJHWKHSULPDU\ORFDWLRQIURPEHORZ&DQDO6WUHHW

$FFRUGLQJWR*LOO´QRWKLQJJHWVKHOGXSDWWKHVHFORVLQJVµDQGLIQHFHVVDU\6HHGFRZDLYHVRUDFFHSWV VXEVWLWXWHVIRUFHUWDLQLWHPV)RUH[DPSOH*LOOVDLGWKDWVKHZRXOGDFFHSWDQ\6WDWHRI1HZ




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´ZH·OOEH2.D\HDUIURPQRZRQFHWKH\VWDUWUHEXLOGLQJ7KLVLVWKHEHVWSODFHLQWKHZRUOG WREHµ ,Q-DQXDU\0XUUD\UHFHLYHGDQ6HHGFRJUDQWIRURFFXSDQF\FRVWVXWLOLWLHVUHSDLUVSD\UROO DQGWKHLQVXUDQFHGHGXFWLEOHDORDQZDVUHTXHVWHGDQGZDVDSSURYHGDQGVHYHQZDJH VXEVLG\VORWVZHUHDOORFDWHGSHQGLQJWKHHPSOR\HHV·EHLQJKLUHGRQFHEXVLQHVVSLFNVXS,QDGGLWLRQ $GORRQLVDLGKHKDGJRWWHQDORDQIURP$&&,211HZ
:DJH6XEVLGLHV 7KHFRPSRQHQWRIWKH6HHGFRSURJUDPWKDWGLUHFWO\DGGUHVVHVWKHLVVXHRIORZZDJHHPSOR\HHVRI VPDOOEXVLQHVVHVDIIHFWHGE\LVZDJHVXEVLGLHVDGPLQLVWHUHGE\WKH6HHGFRVXEVLGLDU\(DUQ)DLU//&$W WKHSRLQWZKHQDQDO\VWVDW'7$RUXQGHUZULWHUVDW5HQDLVVDQFH(FRQRPLF'HYHORSPHQW&RUSRUDWLRQIHHOWKDW DQDSSOLFDQW·VEXVLQHVVLVHOLJLEOHDQGOLNHO\WREHUHFRPPHQGHGIRUDORDQRUJUDQWWKH\FDOOLQ(DUQ)DLUWR LQLWLDWHDVHSDUDWHEXWSDUDOOHOSURFHVVLQJRIWKHZDJHVXEVLG\HOHPHQWZLWKWKHH[SHFWDWLRQWKDWDOOWKUHH SLHFHVRIDLGORDQJUDQWDQGZDJHVXEVLGLHVFDQEHDZDUGHGWRWKHEXVLQHVVDVRQHSDFNDJH6HHGFR HVWLPDWHVWKHDYHUDJHFDVKYDOXHRIWKHZDJHVXEVLG\WREHDERXWSHUHPSOR\HHIRUWKHZHHNSHULRG FRYHUHGRUDERXWZHHN7KHFRPSXWDWLRQLVEDVHGRQRQHKDOIRIDQDYHUDJHZDJHRIKRXUIRU KRXUVZHHNSOXVWKHSHUFHQWVWDWXWRU\EHQHILWV$WWKHHQGRIWKHZHHNSHULRGRI(DUQ)DLU HPSOR\PHQWWKHHPSOR\HHLVH[SHFWHGWREHKLUHGEDFNE\WKHEXVLQHVV

(DUQ)DLU//&DQGWKH1RQ3URILW$VVLVWDQFH&RUSRUDWLRQ (DUQ)DLU//&ZDVIRUPHGLQDVD´VRFLDOSXUSRVHHQWHUSULVHµWRHPSOR\DQGOHDVHWRFRPSDQLHV QHHGLQJZRUNHUVIRUPHUZHOIDUHUHFLSLHQWVDQGRWKHUORZLQFRPHKDUGWRHPSOR\LQGLYLGXDOVLQ1HZ




UHYHQXHREWDLQHGE\DQRWKHU6HHGFRDIILOLDWHWKH1RQ3URILW$VVLVWDQFH&RUSRUDWLRQ 13$& IURP FRQWUDFWVZLWKVWDWHDQGORFDOSXEOLFDJHQFLHVLQWKHZHOIDUHUHIRUPZRUNIRUFHGHYHORSPHQWILHOGVXFKDVWKH 6WDWH'HSDUWPHQWRI/DERUDQGWKH1HZ




ZKRZHUHVWLOOZLWKWKHEXVLQHVVEXWDWULVNRIOD\RIIRUUHGXFWLRQLQKRXUV(DUQ)DLU·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´JUDFHSHULRGµRIHPSOR\PHQWDW(DUQ)DLU GXULQJZKLFKWKHLUEHQHILWVDQGULJKWVZRXOGUHPDLQLQWDFW 7RUHVSRQGWREXVLQHVVRZQHUVZKRGRQRWZLVKIRURQHUHDVRQRUDQRWKHUWRWUDQVIHUWKHLU HPSOR\HHV(DUQ)DLURIIHUVDQDOWHUQDWLYHPHWKRGRORJ\RISURYLGLQJWKHVXEVLG\²WKH´GLUHFWVXEVLG\µ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´WKHXQGHUO\LQJ EDVLVRIZKLFKLQYROYHGZRUNSODFHVDIHW\DQGKHDOWKRUODERUVWDQGDUGVµ 'HVSLWHLWVREYLRXVFDVKIORZGLVDGYDQWDJHWRWKHEXVLQHVVDQLQFUHDVLQJQXPEHUDUHRSWLQJIRUWKLV DSSURDFKDFFRUGLQJWR(DUQ)DLUSUHVLGHQW%HWV\6PXO\DQ7KHFDVKIORZSUREOHPLVHYHQZRUVHWKDQLW DSSHDUVDWILUVWJODQFHEHFDXVH(DUQ)DLUUHWDLQVDWHQSHUFHQWKROGEDFNRQWKHVXEVLG\SD\PHQWSHQGLQJ





HPSOR\HUUHWHQWLRQRIWKHZRUNHURQDQRQVXEVLGL]HGEDVLVIRUWKUHHPRQWKVEH\RQGWKHWKUHHPRQWKVXEVLG\ SHULRG7KLVUHTXLUHPHQWVWHPVIURPWKHEDVLFSXUSRVHRIWKHIXQGLQJIURPWKH6WDWH'2/WRSURPRWH SHUPDQHQWQRQVXEVLGL]HGHPSOR\PHQWRIIRUPHUZHOIDUHUHFLSLHQWVDQGRWKHUVZLWKZHDNDWWDFKPHQWVWRWKH ODERUIRUFH7KHKROGEDFNDOVRDSSOLHVWR(DUQ)DLUZKHQLWLVWKHHPSOR\HUEXWLQWKDWFDVH(DUQ)DLUDQGQRW WKHEXVLQHVVRZQHUDEVRUEVWKHFDVKIORZGUDLQXQWLOWKHILQDOSD\PHQWLVPDGHE\'2/(DUQ)DLURIILFLDOV FDQQRWFRPSOHWHO\DFFRXQWIRUWKHLQFUHDVHGSRSXODULW\RIWKH´GLUHFWVXEVLG\µDSSURDFKEXWWKLQNWKDWWKH SV\FKRORJLFDOHIIHFWVRIEXVLQHVVHV·NHHSLQJWKHLURZQZRUNIRUFHPD\EHLPSRUWDQW,WFRXOGDOVREHDQ HQFRXUDJLQJVLJQRIEXVLQHVVXSWXUQLIWKHEXVLQHVVHVFDQPDQDJHWKHFDVKIORZRIWKHLUSD\UROOVDQGZDLWIRU (DUQ)DLU·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·VZRUNIRUFHGHYHORSPHQW DFWLYLWLHVLQFOXGLQJ(DUQ)DLUWKH´QH[WOHYHORIHQKDQFHPHQWRIWKHZDJHVXEVLG\SURJUDPQHHGVWREHVNLOOV WUDLQLQJIRUWKRVHHPSOR\HHVZKRWKHEXVLQHVVHVDUHSUREDEO\QRWJRLQJWRNHHSDIWHUWKHVXEVLG\SHULRGµ %LOO'UHZHVZKRSURYLGHGGLUHFWRQHRQRQHWHFKQLFDODVVLVWDQFHLQODWHHDUO\WRVRPH IRUW\VPDOOEXVLQHVVHVLQWKH/06%:53IRXQGWKDWWKHZDJHVXEVLGLHVZHUH´YHU\GLIILFXOWIRUWKHEXVLQHVVHV WRFRPSUHKHQGDQGUHFRJQL]HWKHLUYDOXH$W\SLFDOUHDFWLRQZDV¶WKLVLVWRRPXFKZRUNDQGWRRPXFK GLVFORVXUH·DERXWPDWWHUVWKHEXVLQHVVRZQHUZRXOGSUHIHUQRWWREHGLVFXVVHGOLNHWKHHPSOR\HHV· FLWL]HQVKLSVWDWXVRUZKHWKHU),&$ZDVEHLQJZLWKKHOG$QGLW·VWRRPXFKZRUNIRUMXVWWKUHHPRQWKVµ 6HHGFRKDVEHHQDEOHWRDGGUHVVWKHODVWSUREOHPDVDUHVXOWRILWVIXQGUDLVLQJVXFFHVV$VRIWKH 0DUFKH[SLUDWLRQGDWHRIWKHLQLWLDOZDJHVXEVLG\DJUHHPHQWV(DUQ)DLURIIHUHGWRH[WHQGWKHSHULRG RIHPSOR\PHQWIRUDQRWKHUWKUHHPRQWKVDWWKHUHGXFHGVXEVLG\UDWHRIWHQSHUFHQWRIWKHZDJHVDQG VWDWXWRU\EHQHILWVSOXVWKHIXOOFRVWRIKHDOWKLQVXUDQFHDQGSDLGOHDYHWKDWWDNHHIIHFWIRU(DUQ)DLUHPSOR\HHV DIWHUWKUHHPRQWKV8QGHUWKLVIRUPXODWKHWRWDOYDOXHRIWKH(DUQ)DLUVXEVLG\IRUDQKRXUMREILOOHGE\D ZRUNHUZKRKDVEHHQDW(DUQ)DLUIRUWKUHHPRQWKVLVFDOFXODWHGDVIROORZV





 :DJH



 ),&$8,'LVDELOLW\:&



 7RWDO:DJH&RVW OLQHOLQH 



 (DUQ)DLUVXEVLG\DWRIOLQH



 (DUQ)DLUFRVWRIKHDOWKLQVDQGSDLGOHDYH



 7RWDO(DUQ)DLUVXEVLG\ OLQHOLQH 



9LHZHGIURPWKHSHUVSHFWLYHRIDQHPSOR\HUXQGHUWKLVIRUPXODKLVRUKHUEXVLQHVVZRXOG UHLPEXUVH(DUQ)DLU OLQHPLQXVOLQH HYHU\WZRZHHNV,IDEXVLQHVVSD\VLWVZRUNHUVLQFDVK ´RIIWKHERRNVµ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

)LQDQFLDO$VVLVWDQFH$ZDUGHGWKURXJK$SULO $VRI$SULOOHVVWKDQKDOID\HDUDIWHUWKH6HHGFRSURJUDPZDVDQQRXQFHG6HHGFRKDG FRPPLWWHGVRPHPLOOLRQIRUDWRWDORIEXVLQHVVHVLQFOXGLQJ'RZQWRZQDQGLQ&KLQDWRZQ 7KHPLOOLRQFRPPLWWHGZDVLQWKHIROORZLQJFDWHJRULHV œ

/RDQV

  

œ

*UDQWVORDQV

  

œ

:DJH6XEVLGLHV

  

œ

%XVLQHVV6XSSRUW6HUYLFHV7$

  

0DQDJHPHQWDFWLYLWLHVZHUHUHSRUWHGE\6HHGFRWREHDERXWIRXUSHUFHQWRIWKHWRWDO FRPPLWWHGH[SHQGLWXUHV 2IWKHEXVLQHVVHVWKDWUHFHLYHGRQHRUPRUHIRUPVRIDVVLVWDQFHUHFHLYHGJUDQWVRU]HUR SHUFHQWORDQVUHFHLYHGORDQVDQGZHUHDSSURYHGIRUZDJHVXEVLGLHV7KHDYHUDJHJUDQW]HUR





SHUFHQWORDQVL]HZDVWKHUHZDVDODUJHGLVSDULW\EHWZHHQDYHUDJHJUDQWVL]HVLQ'RZQWRZQDQGLQ &KLQDWRZQ'RZQWRZQYV,QD0DUFKLQWHUYLHZ%HQMDPLQ:DUQNHPDQDJLQJ GLUHFWRURI5HQDLVVDQFH(FRQRPLF'HYHORSPHQW&RUSRUDWLRQVDLGWKDWWKHUHDVRQIRUWKLVZDVWR´KHOSDV PDQ\EXVLQHVVHVDVSRVVLEOHZLWKWKHOLPLWHGIXQGVDQGPDLQWDLQWKHSHUFHSWLRQRIHTXLWDEOHWUHDWPHQWµ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











 7KURXJK



7KURXJK

7KURXJK

7KHDYHUDJHORDQDPRXQWWKURXJK$SULOZDVDJDLQZLWKDGLVSDULW\EHWZHHQ

'RZQWRZQDQG&KLQDWRZQYV7HQSHUFHQWRIWKHWRWDOORDQIXQGVZHQWWR&KLQDWRZQ 7KHORZHUDYHUDJHORDQDPRXQWVZHUHFRQVLVWHQWZLWK5HQDLVVDQFH·VH[LVWLQJSRUWIROLRRIORDQVPDLQO\PLFUR ORDQVIRUVWDUWXSEXVLQHVVHV7KHRUJDQL]DWLRQLVFRQFHUQHGDERXWPDLQWDLQLQJFRQVLVWHQWSUDFWLFHVWR PDLQWDLQLWVFUHGLELOLW\DVDFRPPXQLW\EDVHGLQVWLWXWLRQDQGDGDSWHGWKH6HHGFRSURJUDPWRWKRVHHQGV





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´RQWKHERRNVµ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




$ERXWDZHHNODWHU6HHGFRDSSURYHGDJUDQWIRU1HZ
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·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·OLYHV&DPEULGJH+RUL]RQ$VVRFLDWHV·EXVLQHVVLVWRDVVLVWLQVXUHG SHUVRQVDQGRUJDQL]DWLRQVSUHSDUHDQGGRFXPHQWSURSHUW\ORVVFODLPV7KH\FRQGXFWHGVHVVLRQVRQWKLVWRSLF IRUWKH'RZQWRZQEXVLQHVVHVWKDWLQTXLUHGDERXWWKH6HHGFRSURJUDPRQ'HFHPEHUDQG$W WKHVHHYHQWV$UQROG0DVFDOLWKHLUYLFHSUHVLGHQWJDYHH[DPSOHVRIKRZWRILOORXWFODLPVDQGZLWKKLV DVVRFLDWHVSURYLGHGRQHRQRQHDVVLVWDQFHWRJRRYHUSROLFLHVFRUUHVSRQGHQFHDQGVLPLODUVXEMHFWV $FFRUGLQJWR.ULVWHQ6FKH\GHU6HHGFR·VPDQDJHURIFRPPXQLW\HFRQRPLFGHYHORSPHQWZKRZDVDVVLJQHG UHVSRQVLELOLW\WRFRRUGLQDWHWKHWHFKQLFDODVVLVWDQFHFRPSRQHQWWKHWZRLQVXUDQFHVHPLQDUVZHUHDWWHQGHGE\ DWRWDORISHRSOH0V6FKH\GHUVDLGWKDWDWWHQGDQFHZDVORZEHFDXVH´>WKHPRVWO\UHWDLO@EXVLQHVVRZQHUV IHOWWKDWWKH\FRXOGQ·WWDNHWKHWLPHWRDWWHQGDVHPLQDUGXULQJWKHEXV\KROLGD\VKRSSLQJVHDVRQµ7KH





:DOO6WUHHW-RXUQDOUHSRUWHGRQ)HEUXDU\WKDWRQO\SHUFHQWRIVPDOOEXVLQHVVFODLPVKDGEHHQSDLG LQIXOOSHUFHQWSDUWLDOO\SDLGDQGSHUFHQWZHUHVWLOOEHLQJSURFHVVHG7KHUHPDLQLQJSHUFHQW RIEXVLQHVVRZQHUV´VDLGWKH\KDYHUHFHLYHGQRSD\PHQWDWDOO«µ$FFRUGLQJWR$UQROG0DVFDOLWKHSURFHVVLV D´KXJHILQDQFHLVVXHIRUWKHLQVXUDQFHLQGXVWU\DQGWKHGLVDVWHUKDVEHHQOLNHDUXQRQWKHEDQN,QVXUHUVKDYH QRWKDGWKHFDVKWRPHHWWKHGHPDQGDQGKDYHQHHGHGWRWXUQWRWKHLUUHLQVXUHUVZKRWKHQLQLWLDWHDZKROH QHZOHYHORIUHYLHZDQGVFUXWLQ\EHIRUHSD\LQJµ ,QUHDOHVWDWH6HHGFRHQOLVWHGWKHSDUWLFLSDWLRQRIWKHQHZO\HVWDEOLVKHGQRQSURILW5HDO(VWDWH $GYLVRU\&RDOLWLRQ 5($& IRUPHGWRSURYLGHSURERQR´UHDOHVWDWHVROXWLRQVWRKHOSVPDOOEXVLQHVVHVDIIHFWHG E\WKHGHVWUXFWLRQRIWKH:RUOG7UDGH&HQWHUµ7KH&RDOLWLRQFRQVLVWVRIWKUHHOHDGLQJLQWHUQDWLRQDOUHDO HVWDWHSURIHVVLRQDORUJDQL]DWLRQV&RUH1HWDQ´RUJDQL]DWLRQIRUEXVLQHVVOHDGHUVHQJDJHGLQWKHVWUDWHJLF PDQDJHPHQWRIUHDOHVWDWHIRUPDMRUFRUSRUDWLRQVZRUOGZLGHµ5,&6 5R\DO,QVWLWXWHRI&KDUWHUHG 6XUYH\RUV DSURIHVVLRQDOERG\IRUODQGSURSHUW\FRQVWUXFWLRQDQGHQYLURQPHQWDODFWLYLWLHVDQGWKH $SSUDLVDO,QVWLWXWHD\HDUROGFRPPHUFLDODQGUHVLGHQWLDOUHDOHVWDWHDVVRFLDWLRQZLWKPRUHWKDQ PHPEHUVLQFKDSWHUVDFURVVWKHFRXQWU\ 'XQFDQ0DFDXOD\DSULQFLSDOZLWKWKH+LJKODQG*URXSDFRQVXOWLQJRUJDQL]DWLRQIRURZQHUV GHYHORSHUVIUDQFKLVHUVDQGOHQGHUVLQWKHKRWHOLQGXVWU\VHUYHVDV5($&·VFKLHIH[HFXWLYHRIILFHURQD YROXQWHHUEDVLV,QD0DUFKLQWHUYLHZ0DFDXOD\VDLGWKDWIROORZLQJWKH5HDO(VWDWH%RDUGRI 1HZ@





DIIHFWHGFRPSDQLHVJHWEDFNWREXVLQHVVDJDLQµ5HIHUUDOVWR5($&FDPHIURPWKRVHWZRSULQFLSDOVRXUFHV LQFOXGLQJWZRVHPLQDUVWKDWLWFRQGXFWHGIRUWKH/06%:53RQ'HFHPEHUDQG-DQXDU\ZKLFKZHUH DWWHQGHGE\DWRWDORISHRSOH%\0DUFK5($&KDGDWRWDOFDVHORDGRIVPDOOEXVLQHVVHVIURP DOOUHIHUUDOVRXUFHVLQFOXGLQJ6HHGFRRIZKLFKZHUHVXFFHVVIXOO\FRPSOHWHG 2QHRI5($&·VHDUOLHVWFOLHQWVZDV6WHDPHU·V/DQGLQJD\HDUROGUHVWDXUDQWLQ%DWWHU\3DUN&LW\ WKDWFORVHG6HSWHPEHUDQGGRHVQRWH[SHFWWRUHRSHQXQWLOVRPHWLPHLQ$SULO,WVZLQGRZVZHUHEURNHQ H[KDXVWV\VWHPUXLQHGWKHUHZDVWKUHHDQGDKDOIIHHWRIZDWHULQWKHEDVHPHQWDQGWHOHSKRQHVDQG HOHFWULFLW\ZHUHQRWZRUNLQJ)RRGURWWLQJLQWKHUHIULJHUDWRUH[SORGHG-DQ)ULHGFRRZQHUVDLG ´,FRXOGQ·WHYHQEHJLQFOHDQXSXQWLOPLG1RYHPEHUEHFDXVHWKHFKDRVRXWVLGHPDGHLWLPSRVVLEOHWRJHW SHUPLVVLRQ>IURPWKHODQGORUG@WRSDUNDWUDVKFRQWDLQHUµ6KHODLGRIIKHUZRUNIRUFHDQGVWRSSHGSD\LQJ UHQWHYHQWKRXJKWKHODQGORUGNHSWVHQGLQJPRQWKO\ELOOV5($&·VWUDFNLQJVKHHWFDVHQRWHVRQ6WHDPHU·V /DQGLQJUHDGDVIROORZV´:ULWWHQSURSRVDORQUHQWDQGWHUPVSXWWRJHWKHUDQGVXEPLWWHGWR ODQGORUGSHUWKHLUUHTXHVW,QVXUDQFHFODLPVSDUWLDOO\VHWWOHGµ,QD0DUFKLQWHUYLHZ0U0DFDXOD\VDLG LQVRPHIUXVWUDWLRQWKDWWKHRZQHU´ZDVVRDQ[LRXVWRUHRSHQWKDWWKH\LQYHVWHGLQUHSDLUVDQG PDMRUUHQRYDWLRQVZLWKRQO\WKUHHDQGDKDOI\HDUVOHIWRQWKHLUOHDVHEHIRUHUHQHJRWLDWLQJWKHWHUPZLWKWKH ODQGORUG1RZWKH\KDYHOHVVOHYHUDJHµ 6HHGFRDZDUGHGDJUDQWDORDQDQGWHQZDJHVXEVLG\VORWVWR6WHDPHU·V/DQGLQJ EXW5($&RIILFLDOVVDLGWKDWWKHORDQDQGJUDQWIXQGVZHUHGLVEXUVHGZLWKRXWFRQVXOWLQJZLWK5($&DERXWD VWUDWHJ\IRUGHDOLQJZLWKWKHODQGORUG ,QOHJDOVHUYLFHVWKH$VVRFLDWLRQRIWKH%DURIWKH&LW\RI1HZ




LQUHYLWDOL]LQJQHLJKERUKRRGVRI+DUOHP:DVKLQJWRQ+HLJKWVDQG,QZRRGLQQRUWKHUQ0DQKDWWDQIRUZKLFK LWZRQD$PHULFDQ%DU$VVRFLDWLRQ3XEOLF6HUYLFH$ZDUG7HG0D\QDUGWKHILUP·VOHDGSDUWQHUIRUWKLV HIIRUWZRUNHGFORVHO\ZLWKWKH$VVRFLDWLRQRIWKH%DURIWKH&LW\RI1HZ
2QHRQ2QH7HFKQLFDO$VVLVWDQFH )RURQHRQRQHWHFKQLFDODVVLVWDQFH6HHGFRUHWDLQHG:LOOLDP+'UHZHVDVHOIHPSOR\HGDWWRUQH\ ZKRDOVRKROGVDQDFFRXQWLQJGHJUHH'UHZHVKDVPRUHWKDQ\HDUVRIH[SHULHQFHLQVPDOOEXVLQHVV GHYHORSPHQWLQ1HZ




DERXWEXVLQHVVHVQHHGLQJLQWHQVLYHDVVLVWDQFHLQZKDWXVXDOO\WXUQHGRXWWREHDWDQJOHRILQWHUUHODWHG EXVLQHVVDQGSHUVRQDOLVVXHVDIIHFWLQJDOODVSHFWVRIWKHRZQHUV·OLYHV 2QHRI'UHZHV·FDVHVZDV3KLOOLSVRQ3UHVVORFDWHGDW:DUUHQ6WUHHWZHVWRI%URDGZD\DQG DERXWDKDOIPLOHQRUWKRI*URXQG=HUR'UHZHV·QRWHVRQWKLVEXVLQHVVLQKLV'HFHPEHUUHSRUWWR .ULVWHQ6FKH\GHURI6HHGFRUHDGDVIROORZV´0LJXHO0HMLD³1HHGVEL]GHY«FRXOGDOVRGRDQQRXQFHPHQWV WRJRYHUQPHQWDJHQFLHVDQGFRXUWVWKDWWKH\GRVSHFLDOSULQWLQJZRUNIRUWKHP3XWWRJHWKHUDPDUNHWLQJDQG SURPRWLRQVSURJUDP(VWLPDWHGWLPHGD\Vµ7KLVILUPZDVDSSURYHGIRUD6HHGFR]HURSHUFHQW FRQYHUWLEOHORDQSHQGLQJUHFHLSWRILQVXUDQFHSURFHHGVDQG(DUQ)DLUZDJHVXEVLGLHVIRU´GLUHFWµVORWVWKDWLV (DUQ)DLUZLOOUHLPEXUVH3KLOOLSVRQUDWKHUWKDQKLUHWKHHPSOR\HHVRQWKH(DUQ)DLUSD\UROO3KLOOLSVRQ3UHVV· UHTXHVWIRUDORDQZDVGHQLHGEHFDXVHWKHUHZDV´WRRPXFKH[LVWLQJGHEW HTXLSPHQWOHDVHV WR VXSSRUW6HHGFRORDQ'HQLHGE\6%$µ$FFRUGLQJWR'UHZHVWKHWHFKQLFDODVVLVWDQFHKHSURYLGHGWR 3KLOOLSVRQ3UHVVKDGQRUHODWLRQWRWKHORDQDQGJUDQWDSSOLFDWLRQWKDWZDVVLPXOWDQHRXVO\XQGHUUHYLHZ $QRWKHUH[DPSOHRI'UHZHV·WHFKQLFDODVVLVWDQFHDJDLQGUDZQIURPKLV'HFHPEHUUHSRUWWR .ULVWHQ6FKH\GHUZDVIRU6DEHQD·V5HVWDXUDQWDW1DVVDX6WUHHWHDVWRI%URDGZD\DQGDERXWDWKLUGRID PLOHIURP*URXQG=HUR'UHZHV·UHSRUWVDLG 7UDIILFRQ1DVVDX6WUHHWJUHDWO\UHGXFHG7KH\DUHDOVRKDYLQJWURXEOH PDNLQJGHOLYHULHVWRRIILFHEXLOGLQJVLQDUHDLQFOXGLQJWKH1<6(, LQWURGXFHGWKHPWRDODZILUP,NQRZZKLFKUHFHQWO\PRYHGWR0DLGHQ /DQH7KHODZILUPZLOOXVHWKHLUFDWHULQJVHUYLFHV,DOVRLQWURGXFHGWKHP WRWKH1DWLRQDO0LQRULW\%XVLQHVV&RXQFLOZKLFKVHQWWKHLUIO\HUDQGPHQX WRLWVEXVLQHVVPHPEHUVVXJJHVWLQJWKDWWKH\SDWURQL]H6DEHQD·V UHVWDXUDQWDQGFDWHULQJVHUYLFHV7KH\QHHGWRRUJDQL]HWKHLUFDWHULQJ VHUYLFH,IFXVWRPHUVFDQ·WFRPHWRWKHPWKH\QHHGWRJRWRWKHFXVWRPHUV +HDVNHGPHWRKHOSWKHPZLWKDEL]GHYSODQ« ,QHDUO\)HEUXDU\6HHGFRDSSURYHGDJUDQWWRFRYHUUHQWDQGXWLOLWLHVZKHQWKHUHVWDXUDQW ZDVFORVHGDQGWKHLQVXUDQFHGHGXFWLEOHDORDQZDVDSSOLHGIRUDQGWKHVWDIIUHFRPPHQGHG KRZHYHU*ULQNHUDSSURYHGDQGVL[GLUHFWZDJHVXEVLG\VORWV&RPPHQWVRQWKH6HHGFR 7UDFNLQJ6KHHWQRWHWKDWWKHRZQHUKDVD´SRRUFUHGLWKLVWRU\H[SDQGHGEXVLQHVVWRQGORFDWLRQWRR TXLFNO\ZFUHGLWFDUGGHEW+HFORVHGQGORFµ$VLQWKHRWKHUH[DPSOHFLWHGWKHUHDSSHDUVWRKDYHEHHQ QRFRQWDFWDPRQJ'UHZHVRWKHU6HHGFRHPSOR\HHVDQGSURERQRWHFKQLFDODVVLVWDQFHJURXSVWKDWFRQFHLYDEO\ FRXOGKDYHKHOSHGUHVROYHWKHVLJQLILFDQWSUREOHPVQRWHGE\WKH6HHGFR'7$XQGHUZULWLQJVWDII 6FKH\GHUVDLG´WKHEXVLQHVVHVWKDWZRUNHGZLWK%LOOKDGJORZLQJFRPPHQWVDERXWKRZKHOSIXOKH ZDVµ+RZHYHUVKRUWO\DIWHU'UHZHVVXEPLWWHGKLV'HFHPEHUUHSRUWKLVVHUYLFHVZHUHVXVSHQGHG





DORQJZLWKWKHVXVSHQVLRQRI'7$LQWDNHZRUNVKRSVEHFDXVHWKHDYDLODEOHIXQGVKDGEHHQH[KDXVWHG'UHZHV VDLGWKDWKHXQGHUVWRRGIURP6HHGFRWKDWKLVZRUNZDVVWRSSHGEHFDXVH6HHGFRKDGRULJLQDOO\DVNHGKLPWRGR DQ´DVVHVVPHQWµRIWHFKQLFDODVVLVWDQFHQHHGVEXW´,FRXOGQ·WMXVWVWRSWKHUH,IVRPHERG\QHHGVKHOSZLWKWKH ODQGORUG,ZHQWDQGWDONHGWRWKHODQGORUG7KLVZRUNLVLPSRUWDQWWRPHSV\FKRORJLFDOO\µ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œ

/HJDOSURYLGHGE\WKH$VVRFLDWLRQRIWKH%DURIWKH&LW\RI1HZ
œ

5HDOHVWDWHSURYLGHGE\WKH5HDO(VWDWH$GYLVRU\&RDOLWLRQ

œ

$FFRXQWLQJDQGWD[SURYLGHGE\WKH1HZ
œ



0DUNHWLQJ ´SUDFWLFDOORZFRVWLGHDVµ SURYLGHGE\WKH$OOLDQFHIRU'RZQWRZQ1HZ


œ

%XVLQHVV3ODQQLQJ6&25( 6HUYLFH&RUSVRI5HWLUHG([HFXWLYHV DQG:LOOLDP'UHZHV

œ

,QVXUDQFH+HDOWKLQVXUDQFHDGYLFHZLOOEHSURYLGHGE\0HGLFDO/LQN3URYLGHUVRIEXVLQHVV FDVXDOW\DQGSURSHUW\LQVXUDQFHKDGQRWEHHQLGHQWLILHGDVRI$SULO

œ

0HQWDOKHDOWKFRXQVHOLQJ$PHULFDQ*URXS3V\FKRWKHUDS\$VVRFLDWLRQ

œ

%XVLQHVVPHQWRULQJ
)XQGUDLVLQJ 7KHWZRSKLODQWKURSLHVZKRVHJUDQWVODXQFKHGWKH/06%:53VRXJKWRXW6HHGFRWRXQGHUWDNHWKH SURMHFWWKH)RUG)RXQGDWLRQ PLOOLRQ DQGWKH1HZ




DUHDKDYHEHHQHOLJLEOHIRUWKH/06%:53VLQFHWKHEHJLQQLQJDQG6HHGFRHVWLPDWHVWKDWWKH\FRQVWLWXWH DERXWSHUFHQWRIWKHEXVLQHVVHVLQLWVGDWDEDVH7KLVSURMHFWLVGHVFULEHGLQPRUHGHWDLOLQDODWHUVHFWLRQ $QRWKHUFKDULWDEOHRUJDQL]DWLRQWKDWGLVFRYHUHGWKH6HHGFRSURJUDPZDVWKH&KLFDJREDVHG 0F&RUPLFN7ULEXQH)RXQGDWLRQ'LVDVWHU5HOLHI)XQGZKLFKKDGDZDUGHGJUDQWVWRWDOLQJPLOOLRQ PRVWO\LQ1HZ




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


  $PHULFDQ([SUHVV)RXQGDWLRQ $QRQ\PRXV %DQN2QH %HUWHOVPDQQ9LFWLPV5HOLHI)XQG 7KH&HUHV)RXQGDWLRQ &OHDU\*RWWOLHE6WHHQ +DPLOWRQ 7KH*ROGPDQ6DFKV*URXS,QF :LOOLDP5DQGROSK+HDUVW)RXQGDWLRQ 0F&RUPLFN7ULEXQH)RXQGDWLRQ'LVDVWHU5HOLHI)XQG 3DXO:HLVV5LINLQG:KDUWRQ *DUULVRQ 7KH3UXGHQWLDO)RXQGDWLRQ 1HZ




  (PSLUH6WDWH'HYHORSPHQW&RUSRUDWLRQ 7KH6WDIIDQG$WWRUQH\VRI/DWKDP :DWNLQV 7KH6WURRFN6SLULWRI1HZ




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

&RUH/06%:53DQG3HSVL&R)RXQGDWLRQ6PDOO*URFHU,QLWLDWLYH )RUWKH&RUHSURJUDP6HHGFRHVWLPDWHVDWRWDOQHHGIRULQH[LVWLQJDQGQHZUHVRXUFHV WRSURYLGHJUDQWVIRUEXVLQHVVHVORDQVIRUEXVLQHVVHVZDJHVXEVLGLHVIRUQHZZRUNHUVDQGZDJH VXEVLG\H[WHQVLRQVIRU7KHVHQXPEHUVUHSUHVHQWMXVWXQGHURQHKDOIWKHQXPEHURIJUDQWVDQGDERXWD WKLUGRIWKHQXPEHURIORDQVDQGZDJHVXEVLG\VORWVDVZHUHFRPPLWWHGWKURXJK$SULO$YHUDJHORDQ DQGZDJHVXEVLG\DZDUGVDUHH[SHFWHGWREHDERXWWKHVDPHDVLQWKHILUVWURXQGEXWDYHUDJHJUDQWVL]HZLOO GURSIURPWRDERXW7KH$OOLDQFHIRU'RZQWRZQ1HZ




7KH6PDOO*DUPHQW0DQXIDFWXULQJ%XVLQHVV,QLWLDWLYH $FFRUGLQJWRWKH&HQWHUIRUDQ8UEDQ)XWXUHD1HZDQG@RQO\SHUFHQWRI1HZE\WKH86'HSDUWPHQWRI/DERU ODVW2FWREHU@ZHUHLQFRPSOLDQFHZLWKIHGHUDOPLQLPXPZDJHDQGRYHUWLPHODZVµ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
7KH6PDOO%XVLQHVV6HUYLFH)LUP,QLWLDWLYH 6HUYLFHILUPVVXFKDVPHGLFDORIILFHVODZILUPVDFFRXQWLQJILUPVDUFKLWHFWXUHDQGGHVLJQILUPV QRQUHWDLOWUDYHODJHQWVEXVLQHVVVXSSRUWVHUYLFHVDQGVWDIILQJDJHQFLHVKDYHQRWEHHQHOLJLEOHIRUWKH /06%:53XSWRWKLVSRLQW6HHGFRUHSRUWVDERXWVXFKEXVLQHVVHVLQWKLVFDWHJRU\KDYHLQTXLUHGDERXW DVVLVWDQFHEXWFRXOGQRWEHKHOSHGXQGHUWKHRULJLQDOJXLGHOLQHVWDUJHWLQJUHWDLODQGPDQXIDFWXULQJEXVLQHVVHV (OLJLELOLW\IRUWKLVQHZLQLWLDWLYHZLOOEHUHVWULFWHGWRILUPVVRXWKRI&KDPEHUV6WUHHWWKH'7$·VQRUWKHUQ ERXQGDU\DQGWKHDUHDFORVHVWWR*URXQG=HUR2WKHUHOLJLELOLW\FULWHULDLQFOXGHOHVVWKDQWHQHPSOR\HHV WKRVHZLWKODUJHUSD\UROOVFDQDFFHVV(6'&·VDQGRWKHUSURJUDPV DQGEXVLQHVVHVWKDWDUHRSHUDWHGRXWVLGH





RIWKHKRPHDQGRFFXS\FRPPHUFLDOVSDFH,WLVH[SHFWHGWKDWJUDQWVDYHUDJLQJORDQV DYHUDJLQJDQGZDJHVXEVLG\VORWVDYHUDJLQJZLOOEHDZDUGHGLQWKLVSURMHFW

7KH5HWDLODQG0DQXIDFWXULQJ([SDQVLRQDQG5HORFDWLRQ,QLWLDWLYH %HOLHYLQJWKDWWKHRULJLQDOSURMHFWJRDOVWRNHHSVPDOOUHWDLOHUVDQGPDQXIDFWXUHUVRSHQDQGWR SURWHFWWKHMREVRIORZZDJHZRUNHUVDUHEHLQJDFKLHYHGWKURXJKWKHRWKHUFRPSRQHQWVDQGWKDWWKH DFFRPSOLVKPHQWVUHSUHVHQW´DIDUEHWWHUUHFRUGWKDQZHDQWLFLSDWHGZKHQZHEHJDQWKLVHIIRUWVL[PRQWKV DJRµ6HHGFRDQG'7$SODQWRPRYHWRWKHQH[WVWDJHRIUHGHYHORSPHQW$QHZLQLWLDWLYHZLOOVXSSRUWWKH H[SDQVLRQRUUHORFDWLRQEHORZ&DQDO6WUHHWRI'RZQWRZQEXVLQHVVHVWKDWFDQGHPRQVWUDWHSUHILQDQFLDO YLDELOLW\7KHEXVLQHVVVL]HFULWHULRQRUIHZHUHPSOR\HHVKDVEHHQPRGLILHGWRDVVLVWILUPVWKDWZKHQ RSHUDWLQJKDGPRUHHPSOR\HHVEXWDUHFXUUHQWO\RXWRIEXVLQHVV%XVLQHVVHVWKDWZHUHGHVWUR\HGLQWKHDWWDFN DUHHVSHFLDOO\HQFRXUDJHGWRVHHNDVVLVWDQFHLQUHRSHQLQJ)LQDQFLDOVXSSRUWZLOOEHSURYLGHGWRUHVXPHD GHVWUR\HGEXVLQHVVRSHQDQHZVWRUHSXUFKDVHHTXLSPHQWH[SDQGH[LVWLQJRSHUDWLRQVRUWRUHORFDWHIURP QRUWKRI&DQDO6WUHHW)LQDQFLDODZDUGVPD\LQFOXGHJUDQWVXSWRWZLFHWKHH[LVWLQJFDSORDQVRIXS WRWKHFXUUHQWPD[LPXPDQGZDJHVXEVLGLHVXSWRWKHIRUPXODOLPLWRISHUZRUNHU,WLV H[SHFWHGWKDWEXVLQHVVHVZLOOUHFHLYHJUDQWVDYHUDJLQJDQGWKDWEXVLQHVVHVZLOOERUURZORDQV DYHUDJLQJ ,IDOOWKHVHFRPSRQHQWVDUHIXOO\IXQGHGWKHVL]HRIWKH/06%:53ZLOOUHDFKDOHYHORIDERXW PLOOLRQPRUHWKDQVHYHQWLPHVLWVRULJLQDOVL]HZKHQLQLWLDOIXQGLQJZDVUHFHLYHGVL[PRQWKVHDUOLHUIURP WKH)RUG)RXQGDWLRQDQGWKH1HZ




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´WRSURFHHGSURPSWO\µ+RZHYHU0D\RU0LFKDHO%ORRPEHUJVDLGWKDWDQ\VXFK HIIRUWVKRXOGSURFHHGVORZO\DQGWKDW´SHRSOHDIIHFWHGE\WKHDWWDFN«DQGE\WKHUHGHYHORSPHQWRIWKHDUHD VRXWKRI&KDPEHUV6WUHHWVKRXOGILUVWKDYHDGHTXDWHRSSRUWXQLWLHVWRH[SUHVVWKHLUYLHZVDERXWDPHPRULDO WUDQVSRUWDWLRQEXLOGLQJVDQGRWKHUFKDQJHV'RZQWRZQµ 7KHVWDWHDQGFLW\PHDQZKLOHDUHPRYLQJIRUZDUGZLWKSODQVWRGLVWULEXWHIHGHUDOIXQGVDV LQFHQWLYHVWREXVLQHVVDQGUHVLGHQWLDOWHQDQWVWRPRYHEDFNWR'RZQWRZQ7KHILUVWJURXSRIRIIHUVRIIXQGV WRWDOLQJDERXWPLOOLRQIRUEXVLQHVVHVZHQWWRXQLGHQWLILHGILUPVWKHZHHNRI0DUFKDFFRUGLQJ WRWKHFLW\·VGHSXW\PD\RUIRUHFRQRPLFGHYHORSPHQWDQGUHEXLOGLQJ'DQLHO/'RFWRURII,QLWLDOWDUJHWV IRUWKHDLGDUHWKRXJKWWRLQFOXGHILQDQFLDOJLDQWVVXFKDV0HUULOO/\QFK$PHULFDQ([SUHVV*ROGPDQ6DFKV 'HXWVFKH%DQNDQGWKH%DQNRI1HZ




PRGLILHVWKHH[LVWLQJ:RUN2SSRUWXQLW\7D[&UHGLWWRJLYHVPDOOEXVLQHVVHVZLWKXQGHUHPSOR\HHVDWD[ EUHDNIRUHYHU\LQGLYLGXDOWKH\UHWDLQRUKLUHµ

&RPPHUFLDO2IILFH6SDFH ,QWHUPVRIFRPPHUFLDOWHQDQWVWKHSLFWXUHLVPL[HGDQGXQFHUWDLQ7HQDQWZLVHFRPDQRQOLQH RIILFHVSDFHEURNHUWKDWKDVFORVHO\WUDFNHGWKHSODQVRIODUJHWHQDQWVVLQFHQRWHVLQDUHFHQWUHSRUWWKDW ´'RZQWRZQKDVKLVWRULFDOO\EHHQDZHDNRIILFHPDUNHWVLQFHDWOHDVW2YHUWKHODVW\HDUVWKH DYHUDJHDYDLODELOLW\UDWHZDV«7KHUHIRUHWRGD\·VDYDLODELOLW\UDWHLVQRWDW\SLFDO«µ7KHUHKDYH EHHQVRPHUHFHQWHQFRXUDJLQJVLJQVVXFKDVWKHDQQRXQFHPHQWVE\0HUULOO/\QFKDQG$PHULFDQ([SUHVVWKDW WKH\SODQWRPRYHSRUWLRQVRIWKHLURSHUDWLRQVEDFNWRWKH:RUOG)LQDQFLDO&HQWHU$QRWKHUSRVLWLYHVLJQLV DQLQFUHDVHLQEXLOGLQJVDOHV$PRQJUHFHQWWUDQVDFWLRQVLVWKH8QLWHG)HGHUDWLRQRI7HDFKHUV·SXUFKDVHRI WKHVTXDUHIRRWEXLOGLQJDW%URDGZD\DQG'HXWVFKH%DQN·VDFTXLVLWLRQRIWKHVWRU\EXLOGLQJDW :DOO6WUHHWIURP-30RUJDQ&KDVHIRULWVQHZKHDGTXDUWHUV 2YHUDOOFRPSDQLHVRFFXS\LQJSHUFHQWRIWKHGHVWUR\HGDQGGDPDJHGVSDFHQRZVD\WKH\ZLOOVWD\ LQWKHDUHDNHHSLQJRYHUMREV'RZQWRZQ&RPSDQLHVWKDWDFFRXQWHGIRUSHUFHQWRIWKHVSDFHDUH SODQQLQJWROHDYHWDNLQJDERXWMREVZLWKWKHP$QRWKHUDSSUR[LPDWHO\'RZQWRZQMREVDUH DWULVNDVOHDVHVH[SLUHRYHUWKHQH[WILYH\HDUV$VPDOOQXPEHURIILUPVDUHVWLOOXQGHFLGHGDQGVRPHRIWKH GHFLVLRQVUHSRUWHGKHUHFRXOGFKDQJHGXHWRVXEVLGLHVRURWKHUIDFWRUV (VWLPDWHVKDYHFKDQJHGVLQFH7HQDQW:LVH·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





DUHFRQWHPSODWLQJIXUWKHUGHFHQWUDOL]DWLRQRIRSHUDWLRQVDQGZLOOPRYHVRPHEXWQRWDOOMREVRXWRI 'RZQWRZQ([DPSOHVRIWKHVHILUPVDUH'RZ-RQHV &RPSDQ\0HUULOO/\QFKDQG0RUJDQ6WDQOH\ -RKQ:KHHOHUVHQLRUGLUHFWRURIWKHUHDOHVWDWHEURNHUDJHILUP&XVKPDQ :DNHILHOGVDLGUHFHQWO\ ´,QWKHODVWPRQWKZHKDYHVHHQDQLQFUHDVHRIWHQDQWLQWHUHVWDQGPRUHWHQDQWVORRNLQJDWVSDFH7KHWHQDQWV UHFRJQL]HWKDW'RZQWRZQKDVGHDOWZLWKWKHFKDOOHQJHVSURYLGHGE\7KHDUHDLVPRYLQJIRUZDUGZLWK VRPHVKRUWWHUPVROXWLRQVOLNHWKHIHUU\VHUYLFHEHLQJEHHIHGXSWRUHSODFHWKH3$7+VHUYLFHµ:KHHOHUDOVR SRLQWHGRXWWKDWWKHVXEVLGLHVEHLQJGLVFXVVHGFDQDGGXSWRQHDUO\WZR\HDUVRIUHQWDEDWHPHQW %XVLQHVVHVZLOOQHHGWRFRPSDUHWKHYDOXHRIWKH'RZQWRZQVXEVLGLHVZLWKWKRVHDYDLODEOHLQRWKHU ORFDWLRQV1HZ-HUVH\KDVD%XVLQHVV(PSOR\PHQW,QFHQWLYHV3URJUDPZKLFKKDVEHHQOXULQJFRPSDQLHV DZD\IURP1HZ




1DWLRQDODQGPHWURSROLWDQHFRQRPLFWUHQGVDGGWRWKHXQFHUWDLQW\6WDQOH\0RVHVFKDLURIWKH 8UEDQ3ODQQLQJSURJUDPDW+XQWHU&ROOHJHLQODWH0DUFKSRLQWHGWRUHFHQWGDWDVKRZLQJWKDW 1HZ
5HVLGHQWLDO,QFHQWLYHV 7RKHOSUHVWRUHWKHUHVLGHQWLDOEDVHDPLOOLRQVHWDVLGHRIWKHIHGHUDOFRPPXQLW\GHYHORSPHQW EORFNJUDQWSURJUDPIXQGVZRXOGSURYLGHFDVKDZDUGVRIXSWRSDLGRXWRYHUWZR\HDUVIRUSHRSOH ZKRVLJQOHDVHVRUEX\DSDUWPHQWVEHORZ&DQDO6WUHHWLQFOXGLQJPXFKRI&KLQDWRZQDQG/LWWOH,WDO\DQG UHPDLQWKHUHIRUWZR\HDUV7KHDPRXQWRIWKHJUDQWGHSHQGVRQSUR[LPLW\WRWKH´LPPHGLDWHLPSDFW]RQHµ VRXWKRI&KDPEHUV6WUHHWZHVWRI1DVVDX6WUHHWDQGH[WHQGLQJWRWKH+XGVRQ5LYHULQFOXGLQJDOORI %DWWHU\3DUN&LW\7KHVHUHVLGHQWVUHFHLYHWKHPD[LPXPZKLOHRWKHUVZLOOUHFHLYHXSWR +RXVHKROGVZLWKFKLOGUHQZLOOUHFHLYHDERQXVRIWR 7KLVSURJUDPDSSHDUVWRKDYHJLYHQDERRVWWRWKH'RZQWRZQUHVLGHQWLDOPDUNHW%DWWHU\3DUN&LW\ 'RZQWRZQ·VODUJHVWUHVLGHQWLDOGHYHORSPHQWKDGEHFRPHDYLUWXDOJKRVWWRZQIROORZLQJWKHDWWDFNVEXWE\ 0DUFKDIWHUWKHJUDQWSURJUDPZDVDQQRXQFHGRFFXSDQF\IRUDOOWKHGHYHORSPHQW·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





&HQWXU\WKHSRSXODUGLVFRXQWVWRUHDQGDIWHUEHJDQWRORRNIRUDQDSDUWPHQWLQWKHQHLJKERUKRRG 6KHVHWWOHGRQ-RKQ6WUHHWURXJKO\EHWZHHQ%URDGZD\DQGWKH(DVW5LYHUDERXWDWKLUGRIDPLOHIURP *URXQG=HURDQGLVSD\LQJIRUDVTXDUHIRRWVWXGLRZLWKDWHUUDFH´,W·VVHOILVKWRVD\EXWLW·VD KHDOLQJSURFHVVIRUPHµ0UV5RFNPRUHVD\V´-XVWWRJRLQWRDFDQG\VWRUHDQGPDNHDFRQWULEXWLRQWRWKH QHLJKERUKRRG,·PKDSS\WRGRLWµ$QWKRQ\5LFFLOHWWKHOHDVHH[SLUHRQKLV(DVWWK6WUHHWDSDUWPHQWLQ 0DUFKDQGPRYHGWR%DWWHU\3DUN&LW\´,ZDQWHGWREHSDUWRIWKHUHVXUUHFWLRQµ0U5LFFLVDLG 3DPHOD/LHEPDQSUHVLGHQWRIWKHUHDOHVWDWHEURNHUDJHILUP7KH&RUFRUDQ*URXSQRWHV´3HRSOH DUHOHDSLQJEDFNLQWRWKHPDUNHW«µDQGDWWULEXWHVWKHUHERXQGWRDFRPELQDWLRQRIORZLQWHUHVWUDWHVDQG GLVWUXVWRIWKHVWRFNPDUNHW´$IWHU6HSWHPEHUWKWKHUHZDVDQRYHUZKHOPLQJIHHOLQJDPRQJSHRSOHWKDW WKH\VKRXOGOLYHIRUWKHPRPHQWµVD\V/LHEPDQ´7KHUHZDVDORWRIWUHSLGDWLRQDERXWJRLQJLQWRWKHVWRFN PDUNHWVRWKH\IHOWUHDOHVWDWHLVVRPHWKLQJWKH\FDQXVHQRZDQGLQYHVWPHQWZLVHLW·VDJUHDWSODFHWREHµ

7KH2XWORRNIRU'RZQWRZQ6PDOO%XVLQHVVHV 6HHGFRFKLHIH[HFXWLYH%LOO*ULQNHUVDLGLQDKLJKO\IDYRUDEOH)HEUXDU\:DOO6WUHHW-RXUQDO DUWLFOHRQWKH6HHGFRSURJUDP´,IHHOOLNHWKHJX\ZLWKKLVILQJHULQWKHGLNH,IEXVLQHVVGRHVQ·WFRPHEDFN WKHQPRVWRIWKLVLVIRUQDXJKWµDYLHZWKDWLVVKDUHGE\6HHGFR·VPDMRUIXQGHUVDQGSDUWQHUV(ODERUDWLQJRQ WKLVVWDWHPHQWLQD0DUFKLQWHUYLHZ*ULQNHUVDLG´0D\EHDEHWWHUPHWDSKRUIRUZKDWZHDUHGRLQJ LVEXLOGLQJDEULGJHIRUWKHVHJX\VWRJHWDFURVVWKHLPPHGLDWHFULVLVWRWKHQH[WDYDLODEOHDLGµ8OWLPDWHO\WKH EULGJHVKDYHWRFRQQHFWZLWKDUHEXLOWFXVWRPHUEDVHVPDOOEXVLQHVVHVRIWKHW\SHDVVLVWHGE\WKH6HHGFR SURJUDPGHSHQGRQHPSOR\HHVRIELJEXVLQHVVHVDQGUHVLGHQWVDVWKHLUFXVWRPHUV'XDQH$Q]DORQH FRRZQHURI&KDUOLH·V5HVWDXUDQWDQG%DUORFDWHGLQWKH)UR]HQ=RQHSXWLWWKLVZD\´,IDQ\ERG\DVNVPH VSHFLILFDOO\ZKDW,QHHG,GRQ·WWKLQNWKH\UHDOO\ZDQWWRKHDUWKHDQVZHU,QHHGWKHWR SHRSOHWKDWDUHJRQHIURPWKDWDUHDEDFN$QG,NQRZWKDWQRERG\FDQJLYHPHWKDWµ 7KHUHODWLRQVKLSLVUHFLSURFDODFFRUGLQJWR&RQJUHVVPDQ-HUUROG1DGOHUZKRUHSUHVHQWV/RZHU 0DQKDWWDQ+HQRWHGWKDW´,IWRRPDQ\RIWKHVPDOOEXVLQHVVHVDUHJRQH«LW·VJRLQJWREHDZDVWHODQG«7KH ELJJHVWVLQJOHIDFWRULQZKHWKHU/RZHU0DQKDWWDQDJDLQEHFRPHVWKHILQDQFLDOHQJLQHIRU1HZ




EXVLQHVVHVVLJQLQJQHZRUUHQHZDOOHDVHVIRUVSDFHVRXWKRI&DQDO6WUHHWSHUHPSOR\HHIRUEXVLQHVVHV LQWKH´5HVWULFWHG=RQHµERXQGHGE\&KDPEHUV6WUHHW%URDGZD\5HFWRU6WUHHWDQGWKH+XGVRQ5LYHURQ 6HSWHPEHUDQGUHORFDWLQJVRXWKRI&DQDO6WUHHWDQGSHUHPSOR\HHIRUEXVLQHVVHVLQWKH5HVWULFWHG =RQHRQ6HSWHPEHUDQGUHORFDWLQJHOVHZKHUHLQ1HZ
/DUJHU4XHVWLRQV 'HFLVLRQPDNHUVDGGUHVVLQJWKHIXWXUHRI'RZQWRZQZLOOXOWLPDWHO\QHHGWRFRPHWRWHUPVZLWK ODUJHULVVXHVRIKXPDQVFDOHXUEDQLVPDQGWKHEXLOWHQYLURQPHQW7KH:RUOG7UDGH&HQWHUZDVFRQFHLYHG LQDQHUDRIIHGHUDOO\VXEVLGL]HGXUEDQUHQHZDOVOXPFOHDUDQFHSURMHFWVGHVLJQHGWRUHVWRUHFLW\YLWDOLW\DQG HQKDQFHSURSHUW\YDOXHV&RQFHSWVVXFKDVWKHVXSHUEORFNDQGWKHYHUWLFDOFLW\VWURQJO\LQIOXHQFHGDUFKLWHFWV DQGSODQQHUVRIWKDWJHQHUDWLRQ$OWKRXJKWKH:RUOG7UDGH&HQWHUZDVQRWDIHGHUDOXUEDQUHQHZDOVLWHLW ZDVVKDSHGE\WKHVDPHNLQGRIWKLQNLQJDQGGULYHQE\DSRZHUIXOSXEOLFDJHQF\WKDWZDVEDVLFDOO\ DFFRXQWDEOHWRQRRQH 3ODQQLQJIRUWKHXOWLPDWHO\GRRPHGSURMHFWRULJLQDWHGLQWKHODWHVDQGFRQWLQXHGLQWRWKH VVSDQQLQJWKHSHULRGRI-RKQ.HQQHG\·VHOHFWLRQDQGKLVYLVLRQRISXWWLQJDPDQRQWKHPRRQ,WZDVD WLPHZKHQJUDQGSODQVFRXOGEHPDGHZLWKQRSHUFHLYHGOLPLWVWR$PHULFD·VDELOLW\WRDFKLHYHJUHDWWKLQJV





%\WKHWLPHWKH:RUOG7UDGH&HQWHUZDVRIILFLDOO\GHGLFDWHGLQWKHQDWLRQKDGVXIIHUHGWKURXJKWKH GLVLOOXVLRQPHQWRI9LHWQDPDQG3UHVLGHQW1L[RQZDVDERXWWRUHVLJQLQGLVJUDFH,IWKHVWXSHQGRXV:RUOG 7UDGH&HQWHUKDGEHHQSURSRVHGWHQ\HDUVODWHUWKDQLWZDVLWLVXQOLNHO\WKDWLWZRXOGKDYHEHHQEXLOW 7KHUDWLRQDOHIRUWKH:RUOG7UDGH&HQWHUZDVWRSURYLGHDSODFHZKHUHEXVLQHVVHVHQJDJHGLQ DFWLYLWLHVFRQQHFWHGZLWKWKH3RUWRI1HZ




3HQQV\OYDQLDLQD0DUFK1HZ
$QRQVLWHPHPRULDOWRWKHYLFWLPV

œ

6XSSRUWIRU/RZHU0DQKDWWDQ´DVWKHILQDQFLDOFDSLWDORIWKHZRUOG>WKURXJKGHYHORSPHQW RI@QHZRIILFHVSDFHµ

œ

'HYHORSPHQWRI´DGLYHUVHPL[HGXVHPDJQHWIRUWKHDUWVFXOWXUHWRXULVPHGXFDWLRQDQG UHFUHDWLRQFRPSOHPHQWHGZLWKUHVLGHQWLDOFRPPHUFLDOUHWDLODQGQHLJKERUKRRGDPHQLWLHVµ

œ

$QHZWUDQVSRUWDWLRQKXE

œ

5HVWRUDWLRQRI´DOORUDSRUWLRQRIWKHVWUHHWJULGDQG>UHLQWHJUDWLRQRI@WKHIRUPHU:RUOG 7UDGH&HQWHUVLWH>ZLWK@WKHUHVWRIGRZQWRZQµ

œ

$´QHZPXVHXPGHGLFDWHGWR$PHULFDQIUHHGRPWROHUDQFHDQGWKHYDOXHVWKDWWKH :RUOG7UDGH&HQWHUUHSUHVHQWHGµ7KHSODQGRHVQRWSURYLGHDQ\HODERUDWLRQRIZKDWLV PHDQWE\´WKHYDOXHVWKDWWKH:RUOG7UDGH&HQWHUUHSUHVHQWHGµ

7KLVSODQZDVKHDYLO\FULWLFL]HGE\DUFKLWHFWXUHDQGXUEDQSODQQLQJFULWLF+HUEHUW0XVFKDPSZKR ZURWHLQWKH$SULO1HZ




FRPSDQLHVµWKDWLVFORVHO\DVVRFLDWHGZLWKWKH1HZLWVJRDOV@/DVWZHHNWKHFRUSRUDWLRQZDVIRUFHGWRZLWKGUDZD UHTXHVWIRUSURSRVDOVIRUFRPSUHKHQVLYHPDVWHUSODQVLVVXHGWRDUFKLWHFWXUHDQGSODQQLQJILUPVZKHQWKH 3RUW$XWKRULW\GHWHUPLQHGWKDWWKHVWDWHDJHQF\KDGQRULJKWWREXLOGRQWKHDFUHJURXQG]HURVLWHµ7KH LVVXHVUDLVHGDQGWKHIDFWWKDWWKLVLVDQHUDRILQFOXVLYHSXEOLFGHEDWHFRXOGSUHVDJHDSURWUDFWHG1HZ
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·VKRSHWKDWRWKHURUJDQL]DWLRQVZRXOGFRPHWKURXJKWRH[WHQGWKHEULGJHVWRUHFRYHU\DUH EHLQJUHDOL]HG$PRQJRWKHUVWKH6PDOO%XVLQHVV$GPLQLVWUDWLRQWKH(PSLUH6WDWH'HYHORSPHQW &RUSRUDWLRQWKH1HZ




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·VVWUHDPOLQHGDQGLQ*ULQNHU·VWHUP´ORRVH\JRRVH\µXQGHUZULWLQJDQGGXHGLOLJHQFH ZLOOUHVXOWLQKLJKHUUDWHVRIGHIDXOWVWKDQORDQVXQGHUZULWWHQZLWKPRUHFRQYHQWLRQDOOHQGLQJSUDFWLFHV 6HHGFR·VPDQDJHPHQWH[SHQVHVUHIOHFWWKHPLQLPDOLVWDGPLQLVWUDWLYHVWUXFWXUHDQGSURFHVVWKHVH FRVWVUHSUHVHQWHGRQO\DERXWIRXUSHUFHQWRIWRWDOFRPPLWWHGIXQGVRIPLOOLRQDVRI$SULO &DVKDVVLVWDQFHRIDOOIRUPVFRQVWLWXWHGSHUFHQWRIWKHWRWDOFRPPLWWHGIXQGVDQGVL[SHUFHQWZHQWIRUD SRUWLRQRI'7$·V'RZQWRZQFOHDQXSH[SHQVHVWHFKQLFDODVVLVWDQFHDQGFRQWULEXWLRQVWRZDUGV'7$DQG $$)(FRVWVRIRSHUDWLRQV 6HHGFRHVWDEOLVKHGZRUNLQJUHODWLRQVKLSVZLWKNH\RUJDQL]DWLRQVLQWKHSURJUDPDUHDVWKH$OOLDQFH IRU'RZQWRZQ1HZ




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




7KHKHDOWKDQGZHOOEHLQJRI'RZQWRZQVPDOOEXVLQHVVGHSHQGVRQELJEXVLQHVVDQGUHVLGHQWVEHLQJ WKHUH6PDOOEXVLQHVVRZQHUVW\SLFDOO\GHVFULEHWKHPVHOYHVDV´VXUYLYRUVµDQGRQH·VLPSUHVVLRQEDVHGRQ WZRPRQWKVRIILHOGUHVHDUFK'RZQWRZQLVWKDWWKHRYHUZKHOPLQJPDMRULW\DUHIROORZLQJDWOHDVWVRIDU *ULQNHU¶VH[KRUWDWLRQWR´+DQJLQWKHUH7KLQJVDUHJRLQJWRJHWEHWWHUµ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





(QGQRWHV   %LOO+DUULV7KH:RUOG7UDGH&HQWHU$7ULEXWH6DODPDQGHU%RRNV/WG/RQGRQS  $QJXV.UHVV*LOOHVSLH7ZLQ7RZHUV7KH/LIHRI1HZ




  7HVWLPRQ\E\-DPHV$3DUURWW3K')LVFDO3ROLF\,QVWLWXWH´(FRQRPLF,PSDFWRIWKH6HSWHPEHU 7HUURULVW$WWDFNVDQG6WUDWHJLHVIRU(FRQRPLF5HELUWKDQG5HVXUJHQFHµ+HDULQJEHIRUHWKH1HZ




  ,QWHUYLHZ0DUFK  ,ELG  ZZZUHVWDUWFHQWUDOFRP  ,QWHUYLHZZLWK'XQFDQ0DFDXOD\7RP-XVWLQDQG0LFKDHO'UHZRI5($&0DUFK  ,QWHUYLHZZLWK0DULD,PSHULDOH[HFXWLYHGLUHFWRUDQG$NLUD$UUR\R1$3,/ 1DWLRQDO$VVRFLDWLRQIRU 3XEOLF,QWHUHVW/DZ )HOORZ$VVRFLDWLRQRIWKH%DURIWKH&LW\RI1HZ




Related Documents

Back In Business
May 2020 1
Back In The Ussr
May 2020 7
Coming Back In G
October 2019 12
Back In Black Tab
May 2020 13
Back In The Day2
June 2020 5