6 About the Fund and the Offer

6

Section 6 About the Fund and the Offer

6.1 FUND OVERVIEW

The Fund is structured as a stapled entity comprised of 360 CEIT and 360 CEAT, which are each managed investment schemes and structured as unit trusts, registered with ASIC on 7 February 2020 under Chapter 5C of the Corporations Act.

The Fund portfolio is expected to be comprised of 10-20 investments across Australia and New Zealand, diversified by sector and location. The Fund will target a return which will come mostly via capital growth, which we expect to be led from both the underlying earnings growth of the investee businesses and improvements in their valuations.

6.2 FUND ORGANISATIONAL STRUCTURE

Figure 5: 360 Capital Active Value Equity Fund Structure.

360 CapitalActive Value Equity Fund

360 Capital Equity InvestmentTrust2

Stapled 360 Capital Equity Active Trust2

360 Capital Equities Management Pty Ltd

360 Capital FM Limited Investment Manager1

ResponsibleEntity

Passive equity investments Active equity investments

(1) Investment Manager operating as authorised representative of 360 Capital FM Limited (2) Registered Managed Investment Trust

The figure above illustrates the structure of the Fund.

Units in 360 CEIT and 360 CEAT will be stapled together to form a Stapled Unit such that a unit in 360 CEIT and a unit in 360 CEAT may only be purchased, sold and otherwise dealt with together.

360 CEIT will hold passive assets that do not result in 360 CEIT being deemed a trading trust. 360 CEIT will be a “pass through” trust and will be able to distribute a higher proportion of the income it receives.

360 CEAT enables the Fund to undertake a broader investment mandate than would otherwise be possible with only a passive investment trust. Activities that would be held in 360 CEAT include (but are not limited to) such things as short term repositioning of assets, underwriting and mergers and acquisitions activities. 360 CEAT will be a trading trust and will pay tax on income from its activities. As a result of its status as a trading trust, holders of 360 CEAT units will receive after tax, franked distributions (to the extent franking credits are available and as determined by the Responsible Entity). Please refer to Section 11 for more information regarding the taxation of distributions from the Fund.

6.3 THE RESPONSIBLE ENTITY

The Responsible Entity of the Fund is 360 Capital FM Limited. The Responsible Entity is a member of the 360 Capital Group.

The 360 Capital Group is an ASX-listed (ASX: TGP), alternative asset investment and funds management group concentrating on strategic investment and active investment management of alternative assets. As at the date of this PDS, the 360 Capital Group has a market capitalisation of approximately $215 million and manages listed and unlisted funds on behalf of investors.

The 360 Capital Group senior management team has an average of 25 years’ experience across the Australian real estate, banking, finance, equity investment, telecommunications and funds management sectors.

The Staff and Directors of 360 Capital Group own in excess of 33% of the 360 Capital Group’s securities and the 360 Capital Group has a philosophy of co-investment in the funds it manages. The 360 Capital Group will have up to $10.0 million invested into the Fund as long-term co-investment capital. Please see Section 7 for Responsible Entity Director biographies.

Section 6 About the Fund and the Offer

6.4 THE INVESTMENT MANAGER

The Responsible Entity will delegate the investment management to the Investment Manager, pursuant to the IMA.

The Investment Manager is 360 Capital Equities Management Pty Limited. Dennison Hambling is the Managing Director of the Investment Manager. Please see Section 7 for Mr. Dennison Hambling’s biography.

The board of directors of the Investment Manager, along with their biographies are set out in Section 7.2.1.

6.5 KEY TERMS OF THE IMA

The IMA is summarised in Section 13.2. Key terms include:

• The IMA sets out the services to be provided by the Investment Manager, these include: – Overseeing the investment strategy; – Providing administrative support to assist and ensure the maintenance of the Fund’s corporate and statutory records and compliance with the Corporations Act; – Actively managing and supervising the Fund’s investments; – Developing acquisition divestment strategies; and – Investment evaluation and implementation;

• Other than where there is a Cause Event the Investment Manager is appointed for a minimum term of 10 years and thereafter may be removed on 18 months’ notice. Where there is a Cause Event the Investment Manager may be removed at any time by a Special Resolution; and • The Investment Manager is not entitled to an annual base Management Fees but is entitled to a Performance Fee, refer to Sections 10.3.3 and 10.3.4.

6.6 STAPLED UNIT PRICING

The Stapled Unit price will be calculated on the end of each calendar month in accordance with the Fund’s unit pricing policy. For the most recent Stapled Unit price, refer to the Fund Website. The Stapled Unit price is derived from the NAV per Stapled Unit adjusted for accrued fees (including Performance Fees) and capitalised and unamortised costs and expenses. The NAV is based on the value of the gross assets of the Fund less the liabilities. The Responsible Entity may include in the Stapled Unit price provisions and adjustments, including for future liabilities.

Expenses that may be capitalised (depending on the underlying accounting treatment of the investment) are all those relating to the acquisition of investments such as advisory and legal costs.

The price applicable to acquire Stapled Units is calculated as the Stapled Unit price plus any Buy Spread (Entry Price). As at the date of this PDS, there is a 0.25% Buy Spread for Stapled Units. This buy spread may change from time to time. The price applicable to redeem Stapled Units at a Liquidity Event (i.e. Exit Price) is calculated as at the date of the redemption as the Stapled Unit price less any Sell Spread to reflect the costs and expenses anticipated with selling the investments of the Fund. As at the date of this PDS, there is a 0.25% Sell Spread for Stapled Units. This sell spread may change from time to time.

The prevailing Stapled Unit price, Entry Price and Exit Price will be published on the Fund website. In the event that the Responsible Entity changes the Buy Spread or the Sell Spread, Unitholders will be notified on the Fund website.

6.7 LIQUIDITY

After the expiry of the Fund’s Initial Term of 18 months, Unitholders will have the ability to have their Stapled Units redeemed as follows.

Following the initial liquidity date, being 30 September 2021, then at the end of each three month period (in February, May, August, November), subject to its obligations at law, the Responsible Entity will use reasonable endeavors to redeem those Stapled Units which are the subject of a liquidity request form received prior to the relevant liquidity date. Liquidity request forms will be provided by the Responsible Entity on request.

The Responsible Entity will endeavor to process the relevant liquidity requests and pay the liquidity proceeds within three months of the relevant liquidity date (noting under the Constitution the Responsible Entity has 12 months to do so).

To provide liquidity, the Responsible Entity may:

• sell Fund assets; • raise new equity for the Fund; • reconsider the gearing ratio of the Fund; or • undertake a combination of these or other measures.

Liquidity Events will not be offered if the Fund is listed.

Liquidity Event payments may be satisfied over multiple instalments and will be made at the Exit Price calculated as and when the relevant Stapled Units are redeemed.

The Responsible Entity may be cancel, defer, scale back or suspend the liquidity arrangements where it believes that having regard to the number of outstanding liquidity events the nature of the Fund’s assets and other relevant circumstances it would be in the best interests of remaining Unitholders to do so or in other exceptional circumstances.

6.8 DISTRIBUTION POLICY

Fund distributions may be paid quarterly, each February, May, August and November, and not within the first 12 months of the date of this PDS. Any distributions remain at the discretion of the Responsible Entity. Correspondence will be made to Investors of the Fund via email or post. Distributions are not intended to be paid out of borrowings.

6.9 VALUATION POLICY

The Responsible Entity will calculate the NAV of the Fund every month in line with its unit pricing policy.

In respect of any assets it owns and controls, the Fund intends to engage an external valuation firm to undertake an independent valuation of the assets at least once in each two-year period.

In respect of any assets the Fund does not entirely own (including where it has a shareholding or unitholding in an investment vehicle), the valuation policies in respect of those assets will be subject to the valuation policies of the owners of those assets which may be outside the control of the Fund.

6.10 CAPITAL MANAGEMENT

The Responsible Entity will periodically review the capital structure of the Fund and, where considered appropriate, undertake capital management initiatives which may involve the issue of other Stapled Units (through bonus options issues, placement, pro-rata issues, etc.) or the buy-back of Stapled Units.

6.11 CHANGES TO INVESTMENT STRATEGY

It is expected that the Fund’s investment strategy will be implemented as detailed in this PDS. The Investment Manager reserves the right to change the Fund’s investment strategy should it be in the best interests of Unitholders, subject to any approval it may require under the Constitution.

6.12 FEES

Refer to Section 10 for a summary of the fees applicable to the Fund.

6.13 DENOMINATION

The Fund will be denominated in Australian dollars.

6.14 BORROWINGS

At the completion of the Offer there will be no gearing in the Fund. Whilst the Fund does not currently intend to use borrowings, the Fund will be able to target a maximum loan to value ratio of 50% of gross assets on a look through basis.

If the Fund determines to use borrowings, it will do so in the best interests of Unitholders having regard to, amongst other things, the terms and the identity of the lender.

The use of leverage may affect the Fund’s ability to deliver returns and may magnify the Fund’s gains and losses.

Section 6 About the Fund and the Offer

6.15 DETAILS OF THE OFFER 6.15.1 Description of the Offer

The Responsible Entity is seeking to raise equity for the Fund to acquire assets that satisfy the investment criteria. Refer to Section 5.1.

The Responsible Entity may, in its discretion, accept or reject applications in whole or in part or issue fewer Stapled Units than are applied for.

The new Stapled Units will rank equally in all respects with all other Stapled Units issued by the Fund. The rights and liabilities attaching to Stapled Units are detailed in the Constitutions and a summary of the major provisions is set out in Section 13.1.

6.15.2 Terms and conditions of the offer

Topic

What is the type of security being offered?

What are the rights attaching to the Stapled Units?

What is the Stapled Unit price?

What is the minimum Application size?

When will I receive Stapled Units?

Are there any brokerage, commission or stamp duty considerations? Summary

Stapled Units in the Fund.

Refer to Section 13.1.

The Stapled Unit price will be calculated monthly in accordance with the Fund’s pricing policy. Refer to Section 13.1.

The minimum Application size is $20,000 worth of Stapled Units in aggregate (10,000 Stapled Units) and increments of $5,000 thereafter.

Successful Applicants under the Offer will be issued Stapled Units at the end of the calendar month at the prevailing Stapled Unit Price.

Stapled Units will be issued at the end of each calendar month at the prevailing Entry Price. If your completed Application Form and Application Amount is received before or at 2pm AEST on the last business day of the calendar month your Stapled Units will be allotted at the Entry Price applicable at the end of the relevant month. If your completed Application Form or Application Amount is received after 2pm AEST on the last business day of the calendar month the Responsible Entity will apply the Entry Price for the next calendar month. You will not receive any interest on your application monies.

No brokerage, commission or stamp duty is payable by Applicants on acquisition of Stapled Units under the Offer.

Are there tax implications? The taxation consequences of an investment in the Fund will depend upon the Unitholder’s particular circumstances. Unitholder should make their own enquiries about the taxation consequences of an investment in the Fund.

6.15.3 ASX listing

The Responsible Entity does not currently intend to apply to the ASX for admission to the Official List. However, the Responsible Entity reserves the right to apply for admission to the Official List in the future.

6.15.4 Acknowledgements

Each Applicant under the Offer agrees to be bound by the terms of the Constitution and the terms and conditions of the Offer: (a) acknowledged having personally received a printed or electronic copy of the PDS (and any supplementary or replacement PDS) including or accompanied by the Application Form and having read them all in full; (b) declared that all details and statements in their Application Form are complete and accurate. (c) declared that the Applicant(s), if a natural person, is/are over 18 years of age; (d) acknowledged that, once the Responsible Entity receives an Application Form, it may not be withdrawn and an

Application Form is an irrevocable acceptance of the Offer; (e) applied for the number of Stapled Units at the Australian dollar amount shown on the front of the Application Form; (f) agreed to being allocated the number of Stapled Units applied for (or a lower number allocated in a way described in this PDS), or no Stapled Units at all; (g) authorised the Responsible Entity and its respective officers or agents, to do anything on behalf of the Applicant(s) necessary for Stapled Units to be allocated to the Applicant(s), including to act on instructions received by the Registry upon using the contact details in the Application Form; (h) acknowledged that the Fund may not pay distributions, or that any distributions paid may not be franked; (i) acknowledged that the information contained in this PDS (or any supplementary or replacement PDS) is not financial product advice or a recommendation that Stapled Units are suitable for the Applicant(s), given the investment objectives, financial situation or particular needs (including financial and tax issues) of the Applicant(s); and (j) acknowledged and agreed that the Offer may be withdrawn or suspended by the Responsible Entity or may otherwise not proceed in the circumstances described in this PDS.

6.15.5 Further information

The PDS (including the Application Form) and information about the Offer can be accessed in electronic form on the Fund Website.

If you have questions or would like more information in relation to the Offer, please contact the Fund on 1300 082 130 (free call from within Australia) or +61 2 8016 2884 (from outside Australia).

If you are unclear in relation to any matter or are uncertain as to whether the Fund is a suitable investment for you, you should seek professional advice from your stockbroker, solicitor, accountant or other independent professional adviser.