Management Fee
The management fee is equal to 1% per annum of the Net Assets. This is payable monthly and therefore calculated as 0.0833% (being one-twelfth of 1%) of the Net Assets of the Company on the last Friday of each month.
Performance Fee
A performance fee is payable to the Manager when pre-tax profit of the Company (before provision for performance fee) exceeds a return of 8% on the Net Assets during any given Performance Calculation Period. The performance fee is 20% of that portion of pre-tax profit (before provision for performance fee) which exceeds the 8% hurdle.
Where there is an increase or decrease in the Net Assets during a Performance Calculation Period by reason of an issue of securities in the Company or a capital reduction, share buyback or dividend distribution undertaken by the Company, a pro-rata adjustment is made to the performance fee calculation to ensure the change does not affect the Manager's assessed performance.
The performance fee is calculated as follows:
- Performance Fee = 0.20 x (Profit - Hurdle)
Where:
Profit = Pre-tax profit of the Company (before provision for performance fee) for the Performance Calculation Period
Hurdle = 0.08 x (NA + AH - RH)
and
NA is the audited Net Assets on the last day of the preceding Performance Calculation Period as calculated in the Company's financial statements
AH is the aggregate amount of each Additional Performance Hurdle for the Performance Calculation Period calculated in accordance with clause (b)
RH is the aggregate amount of each Reduced Performance Hurdle for the Performance Calculation Period calculated in accordance with clause (c)
- On each occasion during any Performance Calculation Period where Additions are received by the Company (other than by reason of a distribution or other return of capital from an existing investment held by the Company) an additional performance hurdle ('Additional Performance Hurdle') is calculated as follows:
Where:
Additions is the amount of additional equity capital contributed to the Company
Days Held is the period from and including the business day after the Additions are received by the Company until and including the last day of the Performance Calculation Period
Days in Period is the number of days in the Performance Calculation Period
- On each occasion during any Performance Calculation Period where capital is returned by the Company to Shareholders (including without limitation under any return of capital, share buyback or cancellation) and on each occasion during a Performance Calculation Period where a dividend is paid to Shareholders, a reduction to the performance hurdle ('Reduced Performance Hurdle') is calculated as follows:
Where:
Reduction is the amount of capital returned by the Company to Shareholders or the amount of any dividend paid by the Company to Shareholders
Days remaining is the period from and including the business day after dispatch of payment of the Reduction to Shareholders until and including the last day of the Performance Calculation Period
Days in Period is the number of days in the Performance Calculation Period
- For the purposes of calculating the performance fee, 'Performance Calculation Period' is:
- the period from the date of the Management Agreement to 30 June 2005;
- the period from the first day after the preceding Performance Calculation Period to 30 June of the succeeding year; and
- if the Term expires on a day other than 30 June, the last Performance Calculation Period is the period from the first day after the preceding Performance Calculation Period and the date the Management Agreement is terminated.
- If the calculation of the performance fee is zero or a negative value, no performance fee is payable to the Manager for that Performance Calculation Period.
- The Auditor has the power to determine the correct calculation of the performance fee.
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Fee Structure
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