FEES AND EXPENSES
Manager and Service Provider Fees
The Manager will be entitled to receive such fees and expenses from the Company relating to each Fund as specified in Appendix 1 for a particular Fund. The Manager will pay the fees of the Investment Manager, the Administrator, the Distributors and the Depositary out of its fees and the Manager may rebate all or part of its fees to any party that invests in or provides services to the Company or in respect of any Fund. The Investment Manager will pay the fees of any Sub-Investment Manager appointed by it and any costs associated with the provision of Research out of its fees.
Organisational Fees
The Company’s organisational expenses (including expenses relating to the preparation of the contracts to which it is a party, the cost of printing the Prospectus, the obtaining of a listing of Shares on the Global Exchange Market and the fees and expenses of its professional advisers) will initially be borne by the Manager. However, the Company may reimburse the Manager these organisational expenses over such period as may be determined by the Directors in consultation with the Manager. Any such expenses borne by the Company have been amortised over the first five annual accounting periods of the Company.
Appendix 1 discloses the Funds where amortised costs remain at the date of this Prospectus in relation to its establishment.
Operational Fees
The Company will also pay certain other costs, charges, fees and expenses incurred in its operation, including without limitation: (i) fees and expenses incurred in relation to banking and brokerage in respect of the purchase and sale of Fund securities, (ii) taxes, (iii) insurance, (iv) the costs and expenses of preparing, printing, publishing and distributing prospectuses, annual and semi-annual reports, and other documents to current and prospective Shareholders, (v) the costs and expenses of obtaining authorisations or registrations of the Company or of any Shares with the regulatory authorities in various jurisdictions, including the fees and expenses of any paying agent or local representative (such fees and expenses being at normal commercial rates), (vi) the costs of listing and maintaining a listing of Shares on any stock exchange, (vii) the costs of convening and holding Directors’ and Shareholders’ meetings, (viii) professional fees and expenses for legal, auditing and other consulting services, and (ix) such other costs and expenses (including non-recurring and extraordinary costs and expenses) as may arise from time to time and that have been approved by the Directors as necessary or appropriate for the continued operation of the Company or of any Fund.
Ongoing Charges Cap
The Manager may voluntarily agree to cap the total annual fees and expenses for a particular Fund, (or for any particular class of Shares in a Fund), and either generally or in respect of a particular investment, at such amount as shall be specified. This fixed rate will cover all costs and expenses connected with the management and operating activities of the relevant Fund, including: (i) investment management and advisory fees, (ii) administration, (iii) registration, (iv) transfer agency, (v) custody and trustee fees, and (vi) other operating expenses, but excluding fees and expenses incurred in relation to banking activities of the Company (including the costs of any overdraft) and such non-recurring and extraordinary or exceptional costs and expenses (if any) as may arise from time to time such as without limitation: (a) material litigation and (b) withholding taxes deducted from interest and dividend payments to the relevant Fund, and (c) stamp duties or other documentary transfer taxes, or similar duties and brokerage fees (excluding costs for research) arising on the purchase or sale of securities by the relevant Fund. The Manager will absorb (directly or by way of a refund to the relevant Fund) any difference that may arise between the actual cost of the operations of the relevant Fund and this fixed fee. This gives investors the benefit of a fully transparent and predictable cost structure.
Directors’ Fees
While the Articles empower the Company to pay total Directors’ fees in any one year up to US $21,000 (or such other amount as the Directors may from time to time determine and disclose to Shareholders) the Manager has agreed to discharge all Directors’ fees and expenses including out-of-pocket expenses. Only the independent directors are paid fees. None of the Directors has entered into a service contract with the Company nor is any such contract proposed, and none of the Directors is an executive of the Company.
Deduction and Allocation of Expenses
The expenses of each Fund of the Company are deducted from the total income of such Fund before dividends are paid. Expenses of the Company that are not directly attributable to the operation of a particular Fund are allocated among all Funds in a manner determined by the Directors. Expenses of the Company that are not directly attributable to a specific class of Shares and that are directly attributable to a specific Fund are allocated among all classes of such Fund in a manner determined by the Directors. In such cases, the expenses will normally be allocated among all classes of such Fund pro rata to the value of the net assets of the Fund that are attributable to those classes. Expenses of the Company that are directly attributable to a specific class of Shares shall be allocated to that class.
Costs of Investing
Costs are an important consideration in choosing a Fund as it is the Shareholders who pay the costs of operating a Fund, plus any transaction costs incurred when a Fund buys or sells securities. These costs can erode a substantial portion of the gross income or the capital appreciation that a Fund can achieve. Even seemingly small differences in expenses can, over time, have a dramatic effect on a Fund’s performance.
