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MAPS Incentive Fees

WHAT ARE INCENTIVE FEES?

An incentive fee may be deducted by some external fund managers from the Multi Asset Portfolio Funds if they achieve certain investment returns on the funds they manage. Depending on the particular fund, circumstances in which an incentive fee may be deducted by the fund manager include the following:

  • If the investment return is positive in any calendar quarter
  • If the investment return exceeds a certain level each year
  • If the investment returns achieved in a particular year are greater than the previous highest investment return
  • If the returns achieved by these funds exceed the performance of a benchmark

Where an incentive fee is deducted this will be reflected in the unit price.

INCENTIVE FEES IN MULTI ASSET PORTFOLIOS:

Within MAPS three of the external managers can earn incentive fees linked to their performance.

  • GMO, an external manager within MAPs, can earn a fee of 10% on the increase in the value of the fund each year above inflation (G7 Consumer Price Index). The incentive fee is calculated after the external management fee is paid
  • AQR Capital Management, LLC (“AQR”), an external manager within MAPs, can earn a fee of 10% on the increase in value above the inter-bank interest rate for the sub-fund it manages. The incentive fee is calculated on a daily basis (after the external management fee is paid) and is paid annually.
  • MontLake Dunn, an external manager within MAPs, can earn a fee of 20% of the increase in the fund value in each calendar quarter, provided the underlying fund price (Gross Asset Value) at quarter end has risen from the previous quarter end fund price. The incentive fee is calculated daily and deducted and paid quarterly after the external management fee is paid.
  • Mid Ocean, an external manager within MAPs, can earn a fee of 15% on the increase in the value of the fund. The incentive fee is paid at the end of each calendar year.

Information is correct as at 30 March 2017 but is subject to change.