All private securities listed through online investment platforms and Exempt Market Dealers (EMDs) like SVX are likely to carry more risk than those available on the public markets. Our goal it to make you aware of those risks before making an investment. For further details on the risks in the private markets, refer to the SVX Risks section. Some of the offering specific risks have been identified below:
The Fund will invest in countries classified as transition or developing countries. These countries can be subject to a number of risks including political risk, the risk of economic recession, the risk of high or rapidly changing inflation rates and the risk of diplomatic changes. Companies from developing markets are generally subject to standards of disclosure, auditing / financial reporting practices and requirements regarding the provision of information which are not comparable with those of developed markets. Foreign investments may be subject to restrictions and controls of varying degrees which can increase the cost of the investment, delay investments or impede repatriation of capital.
The companies, institutions, organisations and vehicles in which the Fund invests are often experiencing rapid growth. These entities sometimes face challenges in recruiting and retaining qualified staff and management. These entities may also have a limited track record. The Investment Manager will seek to mitigate this risk as much as possible by investing primarily in regulated or supervised institutions, conducting thorough due diligence prior to investment and monitoring existing investments closely.
The Fund invests almost exclusively in assets which are unlisted and not traded on a regulated market. The investments, and ultimately the Fund, are therefore relatively illiquid. The valuation of these illiquid, unlisted assets may vary substantially from the value actually realised at the exit of the investment.
Loss of key personnel, especially with the Investment Manager, is an organizational risk. Loss of these personnel could have an adverse effect on the Fund’s ability to execute its investment strategy.
The Fund will invest in securities denominated in U.S. dollars and this currency exposure will not be hedged against Canadian dollars. The Fund will invest in securities denominated in USD or in securities denominated in local currencies which are hedged into USD or CAD. The Fund may also take unhedged positions in local currencies where local currency appreciation is part of the investment thesis.
This type of investment has substantial risk. Investors should make an investment only if they are prepared to not receive any return on their investment and/ or to lose their investment in its entirety.