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In consideration for its alternative investment management services applicable to each Class of Units in the Sub-Fund, the AIF Manager shall receive from the Management Company (out of the Management Company`s own assets) a remuneration whose nature and amount shall be agreed upon between the AIF Manager and the Management Company in a separate letter.
In addition, in consideration for the investment management services applicable to each Class of Units in the Sub-Fund, the AIF Manager shall receive out of the assets of each Class of the Sub-Fund a performance fee (the "Performance Fee"), equivalent to 15% of the performance above an annualized hurdle rate of 6%, provided the Net Asset Value per Unit at the end of the performance period (as defined hereafter) exceeds the high watermark NAV (as defined hereafter).
The hurdle rate is not cumulative from year to year. Thus, any portion of the hurdle rate that is not earned for any performance period need not be recovered in future performance periods.
The "high watermark NAV" corresponds to the last Net Asset Value per Unit on which a Performance Fee has become payable or been paid, adjusted by the subscriptions and, if applicable, the redemptions since the last Performance Fee payment.
A "performance period" is a period of twelve months from the 1st of January to the 31st December in any year. The first performance period for a Class of the Sub-Fund begins on the last day of the Initial Offering Period (as defined under sub-section 13 below) for such Class of the Sub-Fund and ends on the last Valuation Day of the year.
The Performance Fee is calculated for each Class of Units of the Sub-Fund in respect of each performance period on the basis of the Net Asset Value per Unit after deduction of all expenses, liabilities, and Management Fee (but not the Performance Fee), and is adjusted to take account of all subscriptions and redemptions.
Provision will be made for this Performance Fee on each Valuation Day. In the event of a downturn in performance of the Net Asset Value per Unit during any calculation period, the provisions made in respect of the Performance Fee will be reduced accordingly. If these provisions fall to zero, no Performance Fee will be payable.
The Performance Fee will be calculated and accrued as an expense of the relevant Class of Units in respect of each performance period and will be payable to the AIF Manager, subject to realized performance. Realized performance is calculated based on policies that have either been sold by the Fund, surrendered back to the insurance carrier in exchange for surrender value by the Fund or where demise of the insured/insureds has led to the policy paying out maturity proceeds. Payments not linked directly to such policy, for instance fees to the Depositary or Sub-Custodian, are excluded from the realized performance. Realized performance is equal to the proceeds received either as a result of a sale, surrender or maturity, minus the purchase amount, minus all premiums paid for the policy by the Fund, plus any withdrawal proceeds received by the Fund as a result of a withdrawal. For example, the Fund purchases a policy for 200 000 USD, pays 50 000 USD in premiums during the time it owns the policy, makes a withdrawal of 20 000 USD and finally receives the maturity proceeds in the amount of 980 000 USD. In such case, the realized performance generated by this policy is equal to 750 000 USD.
In the event that a Unitholder redeems its Units in the Sub-Fund prior to the end of a performance period, any accrued but unpaid performance fee relating to those Units shall become payable to the AIF Manager at the last Valuation Day of the relevant performance period.
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In consideration for its alternative investment management services applicable to each Class of Units in the Sub-Fund, the AIF Manager shall receive from the Management Company (out of the Management Company`s own assets) a remuneration whose nature and amount shall be agreed upon between the AIF Manager and the Management Company in a separate letter.
In addition, in consideration for the investment management services applicable to each Class of Units in the Sub-Fund, the AIF Manager shall receive out of the assets of each Class of the Sub-Fund a performance fee (the "Performance Fee"), equivalent to 15% of the performance above an annualized hurdle rate equivalent to the four week US Treasury bill plus 1 percent, provided the Net Asset Value per Unit at the end of the performance period (as defined hereafter) exceeds the high watermark NAV (as defined hereafter). Further, the performance fee payable to the AIF manager after each performance period will not exceed the maximum annual performance fee (as defined hereafter).
The hurdle rate is not cumulative from year to year. Thus, any portion of the hurdle rate that is not earned for any performance period need not be recovered in future performance periods.
The "high watermark NAV" corresponds to the last Net Asset Value per Unit on which a Performance Fee has become payable or been paid, adjusted by the subscriptions and, if applicable, the redemptions since the last Performance Fee payment.
The "maximum annual performance fee" will be equal to one percent (1%) of the Net Asset Value prior to deducting the performance fee, on the last Valuation Day of the performance period. The maximum annual performance fee is not cumulative from year to year.
A "performance period" is a period of twelve months from the 1st of January to the 31st December in any year. The first performance period for a Class of the Sub-Fund begins on the last day of the Initial Offering Period (as defined under sub-section 13 below) for such Class of the Sub-Fund and ends on the last Valuation Day of the year.
The Performance Fee is calculated for each Class of Units of the Sub-Fund in respect of each performance period on the basis of the Net Asset Value per Unit after deduction of all expenses, liabilities, and Management Fee (but not the Performance Fee), and is adjusted to take account of all subscriptions and redemptions.
Provision will be made for this Performance Fee on each Valuation Day. In the event of a downturn in performance of the Net Asset Value per Unit during any calculation period, the provisions made in respect of the Performance Fee will be reduced accordingly. If these provisions fall to zero, no Performance Fee will be payable.
For establishment of the hurdle rate on each Valuation Day the 4-week US Treasury bill rates on the previous Valuation Day, published by US Federal reserve or other source deemed reputable from time to time, will be used. In cases when no such rates are available for such Valuation Day, the rate from last available preceding day will be used.
The Performance Fee will be calculated and accrued as an expense of the relevant Class of Units in respect of each performance period and will be payable to the AIF Manager, subject to realized performance. Realized performance is calculated based on policies that have either been sold by the Fund, surrendered back to the insurance carrier in exchange for surrender value by the Fund or where demise of the insured/insureds has led to the policy paying out maturity proceeds. Payments not linked directly to such policy, for instance fees to the Depositary or Sub-Custodian, are excluded from the realized performance. Realized performance is equal to the proceeds received either as a result of a sale, surrender or maturity, minus the purchase amount, minus all premiums paid for the policy by the Fund, plus any withdrawal proceeds received by the Fund as a result of a withdrawal. For example, the Fund purchases a policy for 200 000 USD, pays 50 000 USD in premiums during the time it owns the policy, makes a withdrawal of 20 000 USD and finally receives the maturity proceeds in the amount of 980 000 USD. In such case, the realized performance generated by this policy is equal to 750 000 USD.
In the event that a Unitholder redeems its Units in the Sub-Fund prior to the end of a performance period, any accrued but unpaid performance fee relating to those Units shall become payable to the AIF Manager on the last Valuation Day of the relevant performance period.
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