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Back to News Kanaan Flexi FoF Amalgamation with Kanaan Balanced FoF
25 May 2017

Dear Kanaan BCI Flexible and Balanced FoF Investor.


Our Kanaan BCI Flexible FoF are usually invested in exactly the same underlying funds as is the case with Kanaan BCI Balanced FoF, with the only difference that Kanaan BCI Balanced FoF accommodates also compulsory contribution funds namely pension type funds like living annuities and RA’s, which must comply with the Pension Fund Act in terms of which 25% of Kanaan BCI Balanced FoF must be invested in conservative funds.  Because of the socio political uncertainty in SA caused by Nene Gate since 2015 we have started to switch clients over to Living annuities invested in Kanaan BCI Flexible FoF to the more conservative Kanaan BCI Balanced FoF to such an extent that the total assets under management, in the case of Kanaan BCI Flexible FoF became less than R50 million, because of which we had to merge the two funds in terms of FSB regulations.  However, if we still had more than R50 million in Kanaan BCI Flexible FoF, we would have merged any case as it wouldn’t make sense to continue running two separate funds, with the exact same composition, causing unnecessary escalation of fees.   


Within the next few weeks you will receive a formal letter from the administrator, BCI, to inform you that we have instructed them to merge the two funds. As mentioned previously, we do not feel comfortable to invest overly aggressive at this stage. We can always separate the two again in future, but in the meantime it does not make sense to duplicate fees by running two funds parallel next to each other.


The letter that you will receive is called a ballot letter according to which you can vote, but you can also just ignore the letter if you want to (see a copy of the Ballot letter here).   If you are invested in Kanaan BCI Flexible FoF, you can vote if you want to, but you can also ignore it if you want to, as a final decision will be based on a majority vote.  If you are invested in the Kanaan BCI Balanced FOF you will also receive the Ballot letter even though it is not really applicable to you and you can therefore ignore it.


If you have any questions feel free to contact me.


Friendly greetings


Andre Delport

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