Notice of EGM and Circular

    RNS Number : 6283K
  New Star RBC Hedge250 IDX (1X GBP)
  22 December 2008
   

    New Star RBC Hedge 250 Index Exchange Traded Securities PCC Limited

    Recommended Proposals for the Introduction of Compulsory Redemption Powers for the Board and the Compulsory Redemption of 3X Shares

    22 December 2008


    Proposals are hereby announced to introduce compulsory redemption powers for the Board in respect of 1X Shares and 3X Shares and to
invoke such powers for the compulsory redemption of 3X Shares at Net Asset Value per Share.

    The Company is proposing to hold a separate meeting (the "1X Cell Meeting") of the 1X Shareholders, a separate meeting (the "3X Cell
Meeting") of the 3X Shareholders and an EGM of all Shareholders on 13 January 2009 at 10.00 a.m. (GMT), 10.10 a.m. (GMT) and 10.20 a.m.
(GMT), respectively.

    Notices convening the Cell Meetings and the EGM are being posted to Shareholders, who are being asked to vote at the EGM as the proposal
to amend the Articles requires the approval of Shareholders. 1X Shareholders and 3X Shareholders are being asked to vote at separate Cell
Meetings as the introduction of compulsory redemption provisions represents a variation of the rights attached to the 1X Shares and 3X
Shares.

    The Proposals

    Since the Company's launch on 28 November 2006, the Company has sought to achieve its investment objective of providing access to
performance representative of the hedge fund asset class. The investment policy of the Company is to provide access to such performance
through investment exposure to the RBC Hedge 250 Index® ("the Index"). In the period since the Company's launch to 17 December 2008 (being
the latest practicable date prior to publication of this document), the net asset value total return on the Sterling, Euro and US$ 1X Shares
have been -69.9 per cent., -70.9 per cent. and -68.4 per cent. respectively (based on estimated NAVs). Between 1 January 2008 and 17
December 2008, the net asset value total return on the Sterling, Euro and US$ 3X Shares have been -72.4 per cent., -72.9 per cent. and -71.1
per cent. respectively (based on estimated NAVs).

    The total NAV of the 3X Cell has decreased from US$62.8 million at 1 January 2008 to US$11.6 million at 17 December 2008 (based on
estimated NAVs). The Directors and the Manager believe that the costs associated with the management of the 3X Cell mean that it is not
practical to continue running the 3X Cell and the costs will become punitive on the 3X Shareholders. Further to this there is a risk that
continuing declines in the Index could, as a consequence of the leverage effect, make the 3X Cell insolvent.

    Accordingly, the Directors and the Manager have concluded that the interests of Shareholders would be best served by a compulsory
redemption of the 3X Shares at Net Asset Value per Share, less direct costs. Subject to the 3X Cell Resolution and 3X EGM Resolution being
passed, and to the 3X Cell satisfying the solvency test imposed by the Companies (Guernsey) Law 2008, the 3X Shares will be automatically
redeemed without further notice except via Regulatory News Announcement with effect on 1 April 2009 and the redemption mechanics and
settlement of redemption proceeds should occur as indicated in the Expected Timetable. For 3X Shareholders who have already submitted
redemption requests for 1 April 2009 pursuant to the Regulatory News Announcement dated 10 November 2008, these will be supplemented by the
compulsory redemption of 3X Shares.

    Without limitation, the Swap Counterparty reserves the right to limit aggregate reductions by the Company and all of its other
counterparties for any calendar quarter end on a pro-rata basis to no greater than 20 per cent. of the Index Notional Amount (a "Gate"). If
a Gate is imposed, then any reduction which has not been fulfilled will be scheduled to occur on the subsequent calendar quarter end on a
pro-rata basis. The process will be repeated until all reductions have been fulfilled.

    However, to the extent that Index funds representing more than 5 per cent. of the Index by Fund Weight for a given month (a) have
limited or suspended redemptions, and/or (b) do not provide the Index Administrator with NAV Data, an Index Suspension Event shall be deemed
to be in effect. In the event of an Index Suspension Event, the Index Administrator may delay determination and publication of the final
Index Level for such month. In the event of such a delay, settlement of the redemption proceeds in respect of the 3X Shares will be delayed
by the duration of such delay.

    Assuming that Shareholders resolve to approve the 1X Cell Resolution and 1X EGM Resolution, the Directors will have the power to invoke
the compulsory redemption of 1X Shares as set forth in the revised Articles. The Directors, however, do not currently intend to exercise the
compulsory redemption power in respect of the 1X Shares.

    Shareholder Meetings

    Approval to the variation of Cell rights resulting from the proposed amendment to the Articles as described above will be sought at the
1X Cell Meeting and 3X Cell Meeting to be held at 10.00 a.m. (GMT) and 10.10 a.m. (GMT) on 13 January 2009 respectively or at any
adjournments thereof.

    Provided the 1X Cell Resolution is approved the EGM will consider and vote on a special resolution to amend the Articles with respect to
the 1X Shares (the "1X EGM Resolution"). Provided the 3X Cell Resolution is approved the EGM will consider and vote on a special resolution
to amend the Articles with respect to the 3X Shares (the "3X EGM Resolution").

    The EGM will be held at 10.20 a.m. (GMT) on 13 January 2009 (or as soon thereafter as the 3X Cell Meeting, or any adjournment thereof,
has concluded). Any adjournment of the 1X Cell Meeting will not affect whether the EGM will be held.

    Quorum and Voting at Meetings

    The quorum required for the 1X Cell Meeting is such number of 1X Shareholders holding or representing by proxy not less than one-tenth
(in value) of the issued 1X Shares. Every 1X Shareholder present in person or by proxy at the 1X Cell Meeting will have one vote on a show
of hands, and on a poll every 1X Shareholder present in person or by proxy will have one vote for every 1X Share held by him. The majority
required for the passing of the special resolution to be proposed is not less than three quarters of the votes recorded. If the 1X Cell
Meeting is adjourned for any reason, including because it is inquorate, it would reconvene at 10.00 a.m. on 27 January 2009 and the quorum
at such reconvened meeting would then be one 1X Shareholder present in person.

    The quorum required for the 3X Cell Meeting is such number of 3X Shareholders holding or representing by proxy not less than one-tenth
(in value) of the issued 3X Shares. Every 3X Shareholder present in person or by proxy at the 3X Cell Meeting will have one vote on a show
of hands, and on a poll every 3X Shareholder present in person or by proxy will have one vote for every 3X Share held by him. The majority
required for the passing of the special resolution to be proposed is not less than three quarters of the votes recorded. If the 3X Cell
Meeting is adjourned for any reason, including because it is inquorate, it would reconvene at 10.10 a.m. on 27 January 2009 and the quorum
at such reconvened meeting would then be one 3X Shareholder present in person.

    The quorum required for the EGM is such number of Shareholders holding or representing by proxy not less than one-tenth (by number of
Shares) of the issued Shares of the Company. Every Shareholder present in person or by proxy at the EGM will have one vote on a show of
hands, and on a poll every Shareholder present in person or by proxy will have one vote for every Share held by him. The majority required
for the passing of the special resolutions to be proposed is not less than three quarters of the votes recorded. If the 3X Cell Meeting is
adjourned for any reason, including because it is inquorate, the EGM shall be automatically adjourned. If the EGM is adjourned, including
because it is inquorate or adjourned as a result of the 3X Cell Meeting being inquorate, it will be reconvened to be held at 10.20 a.m. on
27 January 2009 (or as soon thereafter as any reconvened 3X Cell Meeting, or any adjournments thereof, have concluded). The quorum at such
reconvened meeting would then be one Shareholder present in person (in the case of an automatic adjournment) or one Shareholder present in person or represented by proxy (in the case of a meeting
adjourned because it is inquorate).

    If the 3X Cell Meeting and EGM are adjourned for any reason, the timetable of events expected to occur thereafter as outlined in this
document will be delayed such that the compulsory redemption of the 3X Shares will be expected to occur at 1 July 2009 NAV. Any revision to
the expected timetable of events will be notified by a Regulatory News Announcement.

    Costs of the Proposals

    The costs of the Proposals will be allocated in accordance with the terms of the Articles and will be borne by the 1X Cell and 3X Cell
pro-rata in accordance with their respective NAVs. These are expected to amount to approximately £54,000. Such costs will be allocated in
accordance with the terms of the Articles and will be deducted prior to the calculation of the Net Asset Value per Share to be used for the
compulsory redemptions described in this document. The costs of redeeming the 3X Shares will be borne by the 3X Cell.

    Settlement of Redemptions

    Subject to the 3X Cell Resolution and 3X EGM Resolution being approved, 3X Shareholders holding certificated Shares will be sent a
cheque, which is expected to be despatched as soon as reasonably practicable after 15 May 2009 and normally by 30 May 2009. This is due to
the fact that, in normal circumstances, the Index Administrator will determine the final Index level for the end of each month on or about
the 45th calendar day following the end of the month and the full redemption proceeds will normally be dispatched within 15 days after the
publication of the final Index level by the Index Administrator.

    Settlement of any cash payable in respect of 3X Shares in uncertificated form will be made through the creation of a payment obligation
in favour of the relevant Shareholder's payment bank in accordance with CREST payment arrangements as soon as reasonably practicable after
15 May 2009 and normally by 30 May 2009.

    Cancellation of the admission of 3X Shares to trading on the LSE and to the Official List

    Providing the 3X Cell Meeting and/or EGM are not adjourned for any reason, admission of the 3X Shares to trading on the LSE and to the
Official List are expected to be cancelled at 8 a.m. on 2 April 2009. Subject to the passing of the 3X Cell Resolution and the passing of
the 3X EGM Resolution on 13 January 2009, the 3X Shares will be compulsorily redeemed. The Register in respect of the 3X Shares will be
closed from 5.00 p.m. on 31 March 2009 and the last date for dealings on the LSE will be 27 March 2009. Thereafter dealings should be for
cash settlement only and will be registered in the normal way if the transfer, accompanied by the documents of title, is received by Capita
Registrars by 5.00 p.m. on 31 March 2009. If Shareholders dispose of their 3X Shares otherwise than through the LSE they must make their own
arrangements with the other parties concerned as regards entitlements to redemption proceeds to be issued or distributed (as the case may
be).

    Expected Timetable

 Latest time for receipt of Forms of Proxy       10.00 a.m. on 11 January 2009
 for the 1X Cell Meeting
 Latest time for receipt of Forms of Proxy       10.10 a.m. on 11 January 2009
 for the 3X Cell Meeting
 Latest time for receipt of Forms of Proxy       10.20 a.m. on 11 January 2009
 for the EGM
 1X Cell Meeting*                                10.00 a.m. on 13 January 2009
 3X Cell Meeting*                                10.10 a.m. on 13 January 2009
 EGM*                                          10.20 a.m. on 13 January 2009**
 Announcement of results of voting at the                      13 January 2009
 Cell Meetings and EGM
 Notice to terminate the swap arrangements in                  14 January 2009
 respect of 3X Cell given
 Termination of the swaps                                        31 March 2009
 Valuation Day                                                   31 March 2009
 3X Register closed                                 5.00 p.m. on 31 March 2009
 Redemption of 3X Shares                                          1 April 2009
 Cancellation of admission of 3X Shares to           8.00 a.m. on 2 April 2009
 the Official List and trading on the LSE
 Final Index level published                                    by 15 May 2009
 Determination of final NAV                                        15 May 2009
 Cheques despatched to Shareholders and CREST                 from 15 May 2009
 payments

    * If the 1X Cell Meeting and/or the 3X Cell Meeting is/are adjourned for any reason it/they shall be reconvened on 27 January 2009 for
the same time as such meetings are currently convened for. If both Cell Meetings are adjourned or if the 3X Cell Meeting only is adjourned,
the EGM will be automatically adjourned until 27 January 2009 for the same time as such meeting is currently convened for (or as soon
thereafter as the 3X Cell Meeting, or any adjournments thereof, have been completed) and the timetable for the events occurring thereafter
(including all references throughout this document to dates within such timetable) will be delayed accordingly.
    ** Or as soon thereafter as the 3X Cell Meeting has concluded or adjourned.


    For further information, please contact: 

    Alex Duncan
    New Star Asset Management
    Tel. [phone]

    David Benda / Nathan Brown
    Numis Securities Limited 
    Tel. [phone] / 1426


    Notes

    The information in this announcement should be read in conjunction with the full text of the Circular. Capitalised terms used in this
announcement shall, unless the context otherwise requires, bear the meaning given to them in the circular issued by the Company dated 22
December 2008.

    This announcement should not be construed as advice relating to legal, taxation or any other matters and does not constitute a
recommendation to sell or the solicitation of an offer to subscribe for or buy, nor shall there be any sale of, any securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful or would impose any unfulfilled registration, publication or
approval requirements on the Company or Numis Securities Limited.

    Copies of the Circular have been submitted to the UK Listing Authority and will shortly be available for inspection at the UK Listing
Authority's Document Viewing Facility which is situated at: 

    Financial Services Authority 
    25 The North Colonnade 
    Canary Wharf 
    London 
    E14 5HS 
    Tel. [phone] 



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