Alternative Liquidity Fund : February 9, 2022 - Circular and EGM

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the action you should take, you are recommended to seek your own independent financial advice from your stockbroker, bank manager, solicitor, accountant or other appropriately qualified independent financial adviser, authorised under the Financial Services and Markets Act 2000 if you are in the United Kingdom, or from another appropriately authorised independent financial adviser if you are outside the United Kingdom.

If you have sold or otherwise transferred all of your Existing Shares, you should pass this document (but not any accompanying personalised Form of Proxy) as soon as possible to the purchaser or transferee or to the person through whom the sale or transfer was effected for onward transmission to the purchaser or transferee.

ALTERNATIVE LIQUIDITY FUND LIMITED

(incorporated in Guernsey under the Companies (Guernsey) Law, 2008,

as amended, as a non-cellular company limited by shares with registered number 60552 and registered as a registered closed-ended collective investment scheme with the GFSC)

Approval of waiver of Rule 9 of the City Code on Takeovers and Mergers

and

Notice of Extraordinary General Meeting

The Company is a registered closed-ended collective investment scheme registered pursuant to the Protection of Investors (Bailiwick of Guernsey) Law, 2020 (the "POI Law") and the Registered Collective Investment Scheme Rules and Guidance, 2021 (the "Rules") issued by the Guernsey Financial Services Commission ("GFSC"). Notification of the proposals outlined in this document has been given to the GFSC pursuant to Part 6 of the Rules. The GFSC has not reviewed this document and takes no responsibility for the correctness of any statements made or opinions expressed with regard to the Company.

Your attention is drawn to the "Letter from the Chairman" set out in Part 1 of this document which contains a recommendation from the Board that Shareholders vote in favour of the Waiver Resolution to be proposed at the Extraordinary General Meeting referred to below.

Notice of the Extraordinary General Meeting to be held at 9.00 a.m. on Monday 28 February 2022 at Sarnia House, Le Truchot, St Peter Port, Guernsey GY1 1GR is set out at the end of this document. The accompanying Form of Proxy for use at the Extraordinary General Meeting should be completed and returned as soon as possible and, to be valid, must arrive with Link Group at PXS 1, Link Group, Central Square, 29 Wellington Street, Leeds LS1 4DL no later than 9.00 a.m. on 24 February 2022.

The definitions used in this document are set out in Part 4 of this document.

Cenkos Securities plc ("Cenkos"), which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively for the Company and for no one else in relation to the matters described in this document and is not advising any other person and accordingly will not be responsible to anyone other than the Company for providing the protections afforded to clients of Cenkos, or for providing advice in relation to the contents of this document or any matter referred to in it.

No liability is accepted by Cenkos nor does it make any representation or warranty, express or implied, in relation to the contents of this document, including its accuracy, completeness or verification or for any other statement made or purported to be made by it, or on its behalf, in connection with the Company or the matters set out in this document and accordingly Cenkos disclaims all and any responsibility or liability whether arising in tort, contract or which it might otherwise have in respect of this document or any such statement, to the maximum extent permitted by law and the regulations to which it is subject.

This document is dated 9 February 2022.

Page 1

	TABLE OF CONTENTS
PART 1	LETTER FROM THE CHAIRMAN ...........................................................................	3
PART 2	INFORMATION ON WAVERTON AND THE WAVERTON CONCERT PARTY ....................	8
PART 3	ADDITIONAL INFORMATION .............................................................................	11
PART 4	DEFINITIONS.................................................................................................	19
NOTICE OF EXTRAORDINARY GENERAL MEETING ..........................................................	22

PART 1

LETTER FROM THE CHAIRMAN

ALTERNATIVE LIQUIDITY FUND LIMITED

(incorporated in Guernsey under the Companies (Guernsey) Law, 2008,

as amended, as a non-cellular company limited by shares with registered number 60552 and registered as a registered closed-ended collective investment scheme with the GFSC)

Directors:	Registered Office:
Quentin Spicer (Chairman)	Sarnia House
Dr Richard Berman	Le Truchot
Anthony Pickford	St Peter Port
	Guernsey GY1 1GR
	9 February 2022
Dear Shareholder

Rule 9 Waiver

1 Introduction

The Company was established to provide liquidity to investors in alternative assets following the 2008-2009 financial crisis. Since 25 February 2019, when the Company's current investment policy was adopted, the Company has pursued a realisation strategy in relation to the Existing Portfolio. That purpose has largely been achieved and as at 30 June 2021, the Company had returned the majority of its assets to Existing Shareholders. It is currently anticipated that the remaining assets in the Existing Portfolio will be realised fully within the next 12 to 24 months.

At an extraordinary general meeting of the Company held on 6 September 2021, Shareholders voted in favour of a number of resolutions to give effect to proposals relating to the issue of a new class of Ordinary Shares, the appointment of Waverton Investment Management Limited ("Waverton") as investment manager of a new Ordinary Portfolio and the adoption of a new investment objective and policy of the Ordinary Portfolio. The Directors were also granted authority to allot and issue (or sell from treasury) up to 250 million new Ordinary Shares for cash on a non-pre-emptive basis. The new Ordinary Shares will also be admitted to trading on the Specialist Fund Segment.

With effect from Admission, the Company's existing class of ordinary shares will be redesignated as the "Realisation Shares" to reflect the Board's policy to return cash from the proceeds of the investments, and the Company's existing assets currently held within the Existing Portfolio will be attributable to the "Realisation Portfolio". New ordinary shares to be issued pursuant to the Initial Issue and the Company's proposed ongoing placing programme will be designated as "Ordinary Shares" and the assets attributable to that new share class will be the "Ordinary Portfolio".

Conditional on Admission, Waverton will be appointed as investment manager to the Company with responsibility for the management of the Ordinary Portfolio. The assets attributable to the Ordinary Portfolio will be invested in a diversified portfolio of assets which Waverton considers have attractive medium to long-term return potential across both quoted public market and unquoted private market opportunities.

The Company currently intends to publish a prospectus in connection with the Initial Issue and ongoing placing programme of new Ordinary Shares in Q1 2022. The Company is targeting minimum gross proceeds of the Initial Issue of £50 million and maximum gross proceeds of the Initial Issue of £150 million. Ordinary Shares will be issued pursuant to the Initial Issue at £1.00 per Ordinary Share.

Waverton is a UK based investment management firm which, as at 31 December 2021, managed approximately £8.6 billion of assets for a variety of clients including private clients, funds and charities. In making investments, Waverton is at all times acting as agent for and on behalf of discretionary managed clients.

Waverton intends to procure an aggregate investment of between approximately £24.8 million and £30 million in the Ordinary Shares as part of the Initial Issue across investment mandates on a discretionary basis for private clients, funds and charities (the "Waverton Discretionary Mandates"). Waverton, persons acting with Waverton and the Waverton Discretionary Mandates (together the "Waverton Concert Party") are regarded as acting in concert for the purposes of the Takeover Code.

Although the exact size of the aggregate investment by the Waverton Concert Party as part of the Initial Issue will not be determined until closing of the Initial Issue and will depend on the Initial Issue size and the investment decisions taken by the relevant portfolio managers at Waverton on behalf of their respective Waverton Discretionary Mandates, the Waverton Concert Party will not invest an amount in the Initial Issue which would result, on Admission, in it being interested in more than 49.9 per cent. of the total voting rights in the Company. However, the aggregate investment of the Waverton Concert Party in the Initial Issue could represent greater than 30 per cent. of the total voting rights in the Company following completion of the Initial Issue; accordingly, the participation of the Waverton Concert Party in the Initial Issue will be subject to the approval of the Independent Shareholders of the waiver of the obligation that would otherwise arise on the Waverton Concert Party to make a Rule 9 offer as the result of the acquisition of an interest in shares carrying 30 per cent. or more of the total voting rights in the Company.

The purpose of this document is to provide you with details of the proposed aggregate investment in the Initial Issue by the Waverton Concert Party and to set out the reasons why the Board recommends that you vote in favour of the Waiver Resolution to be proposed at the Extraordinary General Meeting.

2 Rule 9 of the Takeover Code and background to the Rule 9 Waiver

The proposed participation by the Waverton Concert Party in the Initial Issue gives rise to certain considerations under the Takeover Code. Brief details of the Panel, the Takeover Code and the protections they afford are described below.

Under Rule 9 of the Takeover Code, any person who acquires an interest in shares (as defined in the Takeover Code) which (taken together with shares in which he is already interested and in which persons acting in concert with him are interested) carry 30 per cent. or more of the voting rights of a company which is subject to the Takeover Code, is normally required to make a general offer to all of the remaining shareholders to acquire their shares.

Rule 9 of the Takeover Code also provides, inter alia, that where any person, together with any persons acting in concert with him, is interested in shares carrying not less than 30 per cent. but does not hold shares carrying more than 50 per cent. of a company's voting rights, a general offer will normally be required if any further interest in shares is acquired by any such person.

An offer under Rule 9 of the Takeover Code must be made in cash and at the highest price paid by the person required to make the offer (or any persons acting in concert with him) for any such interests within the 12 months prior to the announcement of the offer.

For the purposes of the Takeover Code, a concert party arises where persons acting in concert pursuant to an agreement or understanding (whether formal or informal) co-operate, to obtain or consolidate control of that company. Control means a holding, or aggregate holdings, of interests in shares carrying in aggregate 30 per cent. or more of the voting rights (as defined in the Takeover Code), irrespective of whether the holding or holdings give de facto control.

Waverton

Waverton (as agent on behalf of the Waverton Discretionary Mandates) intends to procure an aggregate investment of between approximately £24.8 million and £30 million in the Ordinary Shares as part of the Initial Issue. As at the date of this document, no member of the Waverton Concert Party holds any Existing Shares. As noted above, the exact size of the aggregate investment by the Waverton Concert Party as part of the Initial Issue will not be determined until closing of the Initial Issue and will depend on the Initial Issue size and the investment decisions taken by portfolio managers at Waverton on behalf of their respective Waverton Discretionary Mandates. It is currently expected that approximately 70 per cent. of the aggregate investment of the Waverton Concert Party in the Initial Issue will be allocated to private clients with an allocation of approximately 25 per cent. to funds and approximately 5 per cent. to charities, although this will depend on investment decisions at closing of the Initial Issue. In any event, the aggregate investment of the Waverton Concert Party in the Ordinary Shares will be capped so that, on Admission, the Waverton Concert Party will not be interested in more than 49.9 per cent. of the total voting rights in the Company.

The Panel has agreed, however, to waive the obligation on the members of the Waverton Concert Party to make a general offer that would otherwise arise as a result of the holding of interests in Ordinary Shares following participation by the Waverton Concert Party in the Initial Issue provided the approval, on a poll of the Independent Shareholders, is obtained at the Extraordinary General Meeting. Accordingly, the Waiver Resolution is being proposed at the Extraordinary General Meeting and will be taken on a poll.

For the avoidance of doubt, the Rule 9 Waiver applies only in respect of the interest in Ordinary Shares by members of the Waverton Concert Party resulting from their aggregate investment in the Initial Issue and not in respect of other increases in their respective interests in Shares.

In the event that the Waiver Resolution is approved by Independent Shareholders, the Waverton Concert Party will not be restricted from making an offer for the Company.

Further details concerning Waverton and the Waverton Concert Party are set out in Part 2 of this document.

The notice of the Extraordinary General Meeting, at which the Waiver Resolution will be proposed, is set out at the end of this document.

If, following completion of the Initial Issue, the Waverton Concert Party will be interested in shares carrying not less than 30 per cent. of the Company's voting rights, further acquisition of interests in shares by the Waverton Concert Party will be subject to Rule 9 of the Takeover Code.