Key Information Document
Purpose
This document provides you with key information about this investment product. It is not marketing material. The information is required by law to help you understand the nature, risks, costs, potential gains and losses of this product and to help you compare it with other products.
Product
WAD Capital Fund I (prefund)
WAD Capital Fund I (prefund) is authorised in Belgium and regulated by the FSMA. This product is managed by WAD Capital Partners BV which is authorised in Belgium and supervised by the FSMA. For more information on this product please refer to http://www.wadcap.com/ or call +32496258413.
Accurate as of: 04-07-2024
You are about to purchase a product that is not simple and may be difficult to understand.
What is this product?
Type
WAD Capital Fund I (the "Fund") will be a limited partnership (‘commanditaire vennootschap’ / ‘société en commandite’) under Belgian law with the GP as managing partner (‘gecommanditeerde vennoot’ / ‘commandité’) and shall take on the form of a ‘private privak’ (‘pricaf privée’) under the terms of the legislation applicable to companies that have assumed the status of private privak (the "Privak Regulations").
Term
The Fund has a limited term that will end 10 years after the Fund's incorporation unless such term is extended at the initiative of the Manager with the approval of the Supervisory Committee by up to two (2) additional periods of maximum one (1) year.
Objectives
Investment objective The principal objective of the Fund is to provide investors with a return by means of long-term capital appreciation.
Investment approach The underlying Fund’s investment strategy is to invest in small-cap companies (1-3 million EUR EBITDA) in partnership with early-to-mid-career executives in the B2B energy transition and healthcare services sectors. The Fund will screen 300-700 applicants selecting 10 CEOs in Residence. The Fund will then collaborate with the CEO’s to source, diligence, finance, and underwrite growth plans for prospective acquisitions, funding most of the capital for the CEO’s search and the equity capital at the time of the transaction. The primary target of eligible profitable SMEs are based in Europe within a radius of 300km from Brussels. The Fund will not invest in real estate, publicly-traded debt or equity securities, or in distressed or loss-making companies, or in companies outside of Europe. The Fund will invest no more than 15 million EUR in one (1) single portfolio company and its follow-on investments except when a higher amount is approved by the Supervisory Committee.
Investment policy
The Fund is being formed to make investments in shares and similar securities and in debt instruments and other items on the balance sheet, including debt and working capital, using the "WAD Program", a dedicated ETA (Entrepreneurship through Acquisition) program designed to support entrepreneurs (the “CEO’s in Residence” or “CIR”) in acquiring their own company with the assistance from the GP, the Key Persons, and financing from the Fund. Given the nature of the Fund, it will operate in two stages. An initial search stage during which the CIR will follow the WAD Program and with the help of the General Partner and Key Persons, seek a suitable target (the "Search Stage") and a subsequent investment stage during which the necessary funds will be raised from the investors to make the (initial) investments and the targets are acquired, held, and ultimately divested at the appropriate moment in time (the "Investment Stage"). The Search Stage is expected to take up to 24 months.
Benchmark
The Fund allows discretionary choices regarding the specific investments that will be made in accordance with the investment strategy and focus. The Fund does not aim to track any benchmark or index.
Redemption policy
The Fund is closed-ended. An interest in the Fund cannot be redeemed before the termination or dissolution of the Fund except in limited circumstances outlined in the prospectus, such as legal or regulatory reasons.
Distribution policy
Proceeds from the realization of investments in the portfolio of the Fund or other income of the Fund available for distribution by the Fund will be distributed as described in the term sheet.
Asset segregation
The assets and liabilities of the Fund are not segregated.
SFDR Article 6. The Fund does not promote environmental or social characteristics.
Derivatives policy
The Fund does not use financial derivatives. It makes direct investments in shares, debt instruments, and working capital of companies.
Intended retail investor
This product is intended for eligible investors with the financial capacity to maintain their investment or who can run the risk of loss on an investment in the securities of the Fund. The typical investor is expected to stay invested for the duration of the Fund's life, which is at least 10 years. The minimal investment is 0.5 million euro.
Practical information
Depository: Er is geen bewaarder (depository)
Further information: More information about the Fund, including the legal documentation and the annual report of the Fund, can be obtained from the registered office of the Fund (Gaston Crommenlaan 8, 9050 Gentbrugge, Belgium) or via investors@wadcap.com. These documents are available in English and are available free of charge.
What are the risks and what could I get in return?
Risks
| Lower Risk | Higher Risk | |||||
|---|---|---|---|---|---|---|
| 1 | 2 | 3 | 4 | 5 | 6 | 7 |
The risk indicator assumes you keep the product for 10 Years. You cannot cash in early. The summary risk indicator is a guide to the level of risk of this product compared to other products. It shows how likely it is that the product will lose money because of movements in the markets or because we are not able to pay you.
We have classified this product as 6 out of 7, which is the second-highest risk class. This rates the potential losses from future performance at a high level, and poor market conditions are very likely to impact the capacity to pay you.
The Fund's underlying investments are extremely illiquid. The repayment of capital and any capital gain of the Fund is subject to the sale of the Fund's underlying investments. For more information on the risks of this investment, please refer to the legal documentation.
This product does not include any protection from future market performance so you could lose some or all of your investment. If we are not able to pay you what is owed, you could lose your entire investment.
Performance scenarios
The figures shown include all the costs of the product itself but may not include all the costs that you pay to your advisor or distributor. The figures do not take into account your personal tax situation which may also affect how much you get back.
What you will get from this product depends on future market performance. Market developments in the future are uncertain and cannot be accurately predicted.
The scenarios shown are illustrations based on results from the past and on certain assumptions. Markets could develop very differently in the future.
The stress scenario shows what you might get back in extreme market circumstances. This product cannot be easily cashed in.
Recommended holding period: 10 Years
Example Investment: EUR 10 000
| Scenarios | Minimum | Stress | Unfavourable | Moderate | Favourable |
|---|---|---|---|---|---|
| If you exit after 10 Years (recommended holding period) |
There is no minimum guaranteed return.
You could lose some or all of your investment.
|
What you might get back after costs
4 870 EUR
Average return each year
-6.9 %
|
What you might get back after costs
53 260 EUR
Average return each year
18.2 %
|
What you might get back after costs
68 710 EUR
Average return each year
21.3 %
|
What you might get back after costs
85 650 EUR
Average return each year
24.0 %
|
This table shows various potential illustrative return scenarios that could be achieved at the 10.0 year anniversary for a commitment of EUR 10 000. It should be noted the EUR 10 000 commitment is for illustrative purposes only to allow comparisons between different products. The minimum commitment for the share class is described in the offering documents. The performance scenarios set out above are based on a “Monte Carlo" simulation that uses historical co-investment performance and cash flow data to construct 10000 iterations. The average return each year cannot be compared to an internal rate of return (IRR) that considers the timing and size of capital calls and distributions for investors and which is a widely used performance metric for private equity funds. The EU PRIIP Regulation prescribes another method (i.e. not IRR) for performance scenarios which is a time-weighted annual return over the recommended holding period that does not take into consideration the timing of investor cashflows.
What happens if WAD Capital Partners BV is unable to pay out?
You run the risk that the Fund will be unable to meet its obligations, for example in the event of insolvency or bankruptcy. If the Fund is unable to meet its obligations, you could lose all of your investment. Your investment is not covered by any compensation or guarantee scheme. Assuming that in such a scenario a new general partner is appointed, bankruptcy of the PRIIP Manufacturer has no impact on the ability for the fund to meet its obligations.
What are the costs?
The person advising on or selling you this product may charge you other costs. If so, this person will provide you with information about these costs and how they affect your investment.
Costs over time
The tables show the amounts that are taken from your investment to cover different types of costs. These amounts depend on how much you invest and how long you hold the product. The amounts shown here are illustrations based on an example investment amount and different possible investment periods.
We have assumed:
in the first year you would get back the amount that you invested (0% annual return). For the other holding periods, we have assumed the product performs as shown in the moderate scenario
EUR 10 000 is invested.
| Example Investment |
10 000 EUR
|
|---|---|
| Scenarios |
If you exit after 10 Years (recommended holding period)
|
| Total Costs | 18 692 EUR |
| Annual Cost impact (*) |
4.2% each year
|
(*) This illustrates how costs reduce your return each year over the holding period. For example, it shows that if you exit at the recommended holding period, your average return per year is projected to be 25.5 % before costs and 21.3 % after costs.
Composition of costs
| One-off costs upon entry or exit |
If you exit after 10 Years
|
|---|---|
| Entry costs |
0.0% the impact of the costs you pay when entering your investment.
0 EUR
|
| Exit costs |
0.0% the impact of the costs of exiting your investment when it matures.
0 EUR
|
| Ongoing costs | |
| Management fees and other administrative or operating costs |
1.7% the impact of the costs that we take each year for managing your investments.
1 527 EUR
|
| Transaction costs |
0.1% the impact on your investments each year. This is an estimate of the costs incurred when we buy and sell the underlying investments for the product. The actual amount will vary depending on how much we buy and sell.
100 EUR
|
| Incidental costs taken under specific conditions | |
| Performance fees |
2.4% carried interest of up to 20% (with catch-up) after having paid a preferred return of 8%.
17 065 EUR
|
How long should I hold it and can I take money out early?
Recommended holding period: 10 Years
This product is illiquid by nature and designed for long-term investment. You should be prepared to stay invested until the maturity date. Interest holders cannot realize their investment as no secondary market will be organized nor will the product be listed on an exchange.
How can I complain?
If you wish to make a complaint about this Fund or any aspect of the services provided by the PRIIP Manufacturer you may contact:
WAD Capital Partners
Gaston Crommenlaan 8
9050 Gentbrugge Belgium
Email: investors@wadcap.com
Website: https://wadcap.com/
Other relevant information
Additional information: This document contains only a fraction of all information relating to the Fund. For more information, please refer to the Fund's legal documentation.