HAST.L Regulatory News (HAST)

HENDERSON INVESTMENT FUNDS LIMITED

HENDERSON ALTERNATIVE STRATEGIES TRUST PLC

LEGAL ENTITY IDENTIFIER: 213800J6LLOCA3CUDF69

This announcement contains inside information.

24 February 2020

HENDERSON ALTERNATIVE STRATEGIES TRUST PLC (the "Company" or "HAST")

Publication of Circular and Notice of General Meeting

Further to the announcement on 16 January 2020, the Company's Board announces that it has today published a circular (the "Circular"), including a notice of General Meeting, setting out details of recommended proposals for: (i) the modification of the Company's investment objective and policy with a view to realising the Company's assets in an orderly manner that achieves a balance between returning cash to Shareholders promptly and maximising value; and (ii) the amendment of the terms of the Investment Management Agreement between the Company and the Manager in order to reduce the management fee payable during the realisation process (the "Proposals").

The General Meeting is to be held at 10.30 a.m. on 25 March 2020.

A copy of the Circular and Notice of General Meeting will be submitted shortly to the National Storage Mechanism ("NSM") and will be available for inspection at the NSM, which is situated at: www.morningstar.co.uk/uk/nsm. These documents will also shortly be available on the Company's website at: https://www.janushenderson.com/en-gb/investor/product/henderson-alternative-strategies-trust-plc/.

Copies of the Circular and Notice of General Meeting will be posted to shareholders and will also be available from the Company's correspondence address at 201 Bishopsgate, London, EC2M 3AE.

Any capitalised terms not defined in this announcement shall have the same meaning as those defined in the Circular. Certain extracts from the Circular are set out below. However, this announcement does not contain all the information which is contained in the Circular and Shareholders should read the Circular and, in particular, the section headed "Risks associated with the Proposals", to make an informed decision at the General Meeting.

Background to the Proposals

The Company reported in its half-year results to 30 September 2019 that the senior portfolio manager, Alex Barr, had undertaken a comprehensive review of the Company's competitive positioning and of its portfolio. In addition, he had been meeting Shareholders and listening to their views.

As announced on 16 January 2020, following that review, the Board and the Manager engaged in discussions to review the options available for the future of the Company. This review concluded that the best way to improve performance, and therefore to reduce the persistent discount to NAV per Share, would be to change the Company's investment policy to enable the Company to own more illiquid alternative investment strategies not readily available for direct investment, and which would reward skilled selection and demand enhanced due diligence. However, the review also concluded that there was little appetite from larger Shareholders for any increase in the illiquidity of the portfolio and, for many, a preference for realising their investment in an orderly fashion.

Accordingly, the Board is proposing a change to the Company's investment policy to enable the Company to undertake an orderly realisation of its assets. If the Proposals are approved by Shareholders, the Board will write to Shareholders again in due course regarding proposals to return capital to Shareholders. It is the current intention of the Board that the Company should maintain its listing and investment trust status while a substantial proportion of the portfolio is realised and before the Company enters into voluntary liquidation. Depending on the rate and amount of realisation and the anticipated cost savings as between any return of capital while listed and a return of capital during a liquidation process, the Board may consider proposing that the Company enter earlier into voluntary liquidation.

The proposed modification of the investment policy to enable the Company to undertake an orderly realisation of assets is considered a material change which requires the consent of Shareholders in accordance with the Listing Rules.

Revised investment objective and policy

Revised investment objective

The Board is proposing that the investment objective be restated as follows:

"To conduct an orderly realisation of the assets of the Company, to be effected in a manner that seeks to achieve a balance between returning cash to Shareholders promptly and maximising value."

Revised investment policy

The Board and the Manager believe that the Company's portfolio will require careful investment management in order to achieve the Company's proposed new investment objective.

If the Resolution is passed at the General Meeting, the Company's existing investment policy will be replaced and the Company will adopt and adhere to the following amended and restated investment policy for as long as the Company maintains its listing and is subject to the Listing Rules.

"The Company's investments will be realised in an orderly manner, that is, with a view to achieving a balance between returning cash to Shareholders promptly and maximising value.

The Company may not make any new investments save that:

i. investments may be made to honour commitments under existing contractual arrangements;

ii. further investment may be made into the Company's existing investments without redemption rights in order to preserve the value of such investments; and

iii. realised cash may be invested in liquid cash-equivalent securities, including investment grade short-dated corporate bonds, government bonds, cash funds, or bank cash deposits pending its return to Shareholders in accordance with the Company's revised investment objective.

No more than 10% of the Company's total assets may be invested in any single cash equivalent instrument or placed on deposit with any single institution save that this limit does not apply to the Company's investment in:

i. government bonds, which shall be unconstrained; or

ii. money market funds which themselves have published investment policies to invest no more than 10% (or a lower threshold) of their total assets in: (a) money market instruments issued by the same body; and (b) deposits made with the same credit institution.

The Company will not procure or utilise any structural gearing facility.

The Company will continue to comply with the restrictions imposed by the Listing Rules in force from time to time."

Any material change to the revised investment policy would require Shareholder approval in accordance with the Listing Rules.

This policy will involve a continuing evaluation of the portfolio in order to assess the most appropriate realisation strategy to be pursued in relation to each investment. Whilst some investments may be considered appropriate for sale in the shorter term, other investments may be held for a longer period with a view to enabling their inherent value to be realised successfully.

The strategy for realising individual investments will be flexible and may need to be altered to reflect changes in the circumstances of a particular investment or in the prevailing market conditions. The Board will meet regularly and until such time as the Company enters into liquidation to review progress in implementing the Company's new investment objective and policy and the then current position of unrealised holdings.

The Board and the Manager regard the orderly realisation of the Company's assets as the best strategic option at the present time. Should, however, Shareholders reject the proposed change, the Board and the Manager will continue to fulfil the existing investment objective and policy and work to identify other options for the future of the Company.

To be overly prescriptive on the timeframe could prove detrimental to the realisation process. Sensitive, however, to the on-going costs of running the portfolio, the Manager aims to realise the portfolio in an orderly manner that achieves a balance between returning cash to Shareholders as quickly as possible and maximising value.

Given the illiquid nature of some of the Company's investments, it is very difficult to provide any certainty on the timeframe for realisation. However, the Board is aware that Shareholders will expect some guidance on the expected timeframe and, although Shareholders should place only limited reliance on this information, it is the Board's current estimate that a substantial proportion of the portfolio may be realised within a few months but that the portfolio may take in the region of two years to be fully realised.

Proposed amendment to the Investment Management Agreement

The Board believes that the continued appointment of the Manager is important to achieving the revised investment objective. As the Board and the Manager are both cognisant of the level of on-going costs to Shareholders during the realisation process and, ultimately, following liquidation, they have agreed, subject to Shareholder approval of the change to the Company's investment policy, to amend the management fee payable under the Investment Management Agreement in order to reduce the amount of the fees payable to the Manager. Details of the proposed changes are set out below.

The current management fee is 0.60 per cent. per annum of NAV for assets up to £250 million and 0.55 per cent. per annum of NAV for assets in excess of £250 million. This is paid quarterly in arrear based on the level of net chargeable assets at the relevant quarter end.

The Company and the Manager have entered into a side letter to the Investment Management Agreement (the "Side Letter") pursuant to which, conditional on and with effect from the passing of the Resolution, during the realisation process but prior to liquidation of the Company, cash and cash-equivalent securities shall be excluded from the calculation of Net Asset Value for the purposes of determining the management fee of 0.60 per cent. per annum of NAV. An additional lower management fee of 0.10 per cent. per annum will be charged on the value of the assets that are cash-equivalent securities.

The Side Letter also provides that, in the event that the Company enters into liquidation, with effect from the date of entering into liquidation the management fee will be reduced to 0.50 per cent. per annum of the NAV (but again with cash and cash-equivalent securities excluded from the calculation of Net Asset Value for the purposes of determining the management fee and an additional lower management fee of 0.10 per cent. per annum charged on the value of the assets that are cash-equivalent securities).

In each case, the management fee will be calculated and accrued weekly and paid quarterly in arrear.

Directors

Whilst she is fully supportive of the Proposals, Mary-Anne McIntyre has indicated her intention to step down from the Board with effect from the close of the General Meeting. The Board wishes Mary-Anne its sincere best wishes and thanks her for her invaluable contribution during her tenure on the Board.

General Meeting

The Proposals are subject to Shareholder approval. A notice convening a General Meeting of the Company, which is to be held at 10.30 a.m. on 25 March 2020, is set out at the end of the Circular. At this General Meeting, an ordinary resolution will be proposed to approve the change in investment policy.

The Resolution requires a majority of those Shareholders voting to vote in favour in order to be passed.

Shareholders are requested to complete and return the Form of Proxy accompanying the Circular in accordance with the instructions printed thereon, so as to be received as soon as possible, and in any event no later than 10.30 a.m. on 23 March 2020. The completion and return of the Form of Proxy will not preclude Shareholders from attending the meeting and voting in person should they so wish.

Recommendation

The Board considers that the Proposals and the resolution to be proposed at the General Meeting are in the best interests of the Company and its Shareholders as a whole.

Accordingly, the Board unanimously recommends that Shareholders vote in favour of the resolution to be proposed at the General Meeting.

The Directors intend to vote in favour, or procure the vote in favour, of the Resolution at the General Meeting in respect of their beneficial holdings of Shares which, in aggregate, amount to 137,977 Shares representing approximately 0.36 per cent. of the Company's issued Share capital (excluding Shares held in treasury).

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