Investment policy of the VC-Company
Investment Objectives:
The investment objective of the VC Company is long-term capital growth through flexible investment policy in shares, fixed-interest securities and direct or indirect participation in small and medium-sized enterprises, as well as real estate and properties. The obtainment of short-term yields is of secondary importance.
The VC-Group works from the viewpoint that in a world where investment possibilities at single companies, branches of industries and whole national economies are subject to permanent, fast changes, their goals can only be realized by a flexible and agile investment policy. The VC-Group correspondingly leverages all possibilities for paper investment of every kind, which distributed enterprises or official places of the different countries in which common shares, though also preferred shares and fixed-interest securities, with or without stock exchange listing, can be realized, thus having an opportunity to offer convertible bonds and loans to be traded with attractive discounts.
Regardless of its growth-orientated investment objectives, the VC company is authorized, for security purposes, the acquisition of debenture bonds in arbitrary amounts from the American and German governments or corporations in affiliated political areas, as well as in the currencies of Canada, the United States and the European Union or other important countries, the use of time deposits among banks, or the acquisition of bonds from German, Canadian or American regional administrative bodies at banks or free trade dealers.
The investments of the VC group (excluding investments made for security purposes) are distributed on the securities of different enterprises and governments so that not more than 15% of the VC group's complete capital is invested in securities of an enterprise or a government, with the exception of debenture bonds of the U.S. government and the Federal Republic of Germany.
Furthermore the directorate generally distributes the investments through numerous different branches of industry; although the directorate is entitled to invest up to 30% of the total capital of the VC group in one single branch of industry, it has never done this in the past and has no plans to in the future either. Also, the directorate is authorized, for security purposes, to invest up to 100% of the VC group's total assets in silent or direct partnerships with small and medium-sized enterprises within the Federal Republic of Germany, provided value analyses and verified balances are presented and the investment promises an over-average value development. This is also with the goal of long-term capital growth. For the time being, there is no intention to pursue short-term profits.
Restrictions
Unless otherwise noted, the VC group has imposed certain restrictions on itself that, together with their investment policy, compose their fundamental management principles. Investment policy and restrictions of the VC group (concerning fundamental management principles) cannot be changed without the consent of the majority of share holders. Under U.S. law, for this to take place, it is required that (A) The consent of at least 51% of entitled shareholders during a shareholder meeting in which more than 50% of the shareholders entitled to vote are personally present, or represented by their legal agent, and / or (B) the consent of more than 50% the issued entitled shareholders in the VC group, where the respectively lower number is held as valid.
In agreement with these restrictions the VC company refrains from:
- the investment in closed investment companies; the investment in partnerships (except for debenture bonds or shares) for exploration or development programs in oil, gas or other mineral resources; the acquisition or sale of goods futures with the exception of share appointment contracts.
- the acquisition of more than 10% of a particular securities type in one company or group, including voting shares or the acquisition of shares for the practice of control rights or executive business duties; excluded are direct or indirect partnerships with small and medium-sized enterprises in the Federal Republic of Germany.
- the making of short sells; Purchase or sale of back premiums, pre-option deals, straddle- or ladder-business (however, bonus payments may be carried out in connection with share appointment contracts as well as the carrying out of sales and purchases).
- the granting of loans, with the exception of the acquisition of tranche bonds traded publicly, debenture bonds, payment promises and other fault contractual titles; the VC group is entitled, though, to transact in pension securities in the Federal Republic of Germany, Canada and the United States being publicly distributed.
- the taking up of credit, in so far as these are not for the recall or for moving of shares; and also that this only as a temporary measure and only up to 30% of total assets; the legal pledging of assets, unless for securing such a loan, and that only so long not more than 30% total assets are used and only with consent of the directorate. Not more than 60% of the selling price of properties and real estate counted as assets of the VC group may be invested.
- the investment of more than 10% of assets in securities of and participations in companies who have been in business for less than three years.
- the investment of more than 10% of assets in options regardless if entered on either of the New York exchanges (NYSE und AMEX) or on the Frankfurt stock exchange, where investment in options not traded on these stock exchanges may not amount to more than 5% of the total assets of the VC group.
- the investment of more than 15% of the fortune of the VC group in securities from foreign issuers that are not traded on a certified stock exchange in the United States, Canada or other foreign countries; exceptions are the direct or indirect participations in small and medium-sized enterprises in the Federal Republic of Germany, the European Union and the USA. The portfolio of the VC group can contain the above named securities on a scale that can hinder opportunities for timely sale; the VC group is then not willing to handle such securities and partnerships in these numbers.
- the investment of more than 30% of assets in one single branch of industry.
- the participation in a securities fund with total liability. According to investment policy, should an upper limit on the maximum amount of investment in any particular securities be given, an inquiry into the corresponding securities must be immediately carried out. The assessment is carried out by the methods described by the groups share acquisition policies. None of the investment policies or restrictions (except restrictions 8 and 9) prevents the VC company from the acquisition of securities already found in its portfolio.
Participation in small and medium-sized enterprises (SMEs)
According to its self-imposed principles, the VC group can participate as a silent or direct partner with small and medium-sized enterprises in the Federal Republic of Germany. The silent partnerships are paid 6% interest plus a profit dependent compensation in the amount of 2% of the participation amount. The investment decision is based on the certified information received. The silent and direct participations are to be secured by declarations of guarantee from the managing director/owner of the respective partner and if necessary by further material securities. The investor should be aware that these investments contain certain risk factors, therefore there can be no guarantee either that losses cannot arise from the acquisition of silent or direct partnerships, or that the investment objectives of the VC company are always achieved.