Fees and Costs

The Investment Manager is entitled to a performance fee if the Fund's return exceeds the Benchmark return above a performance hurdle. This fee is calculated as 20% of the amount by which the Fund’s return exceeds a hurdle rate of 8% (Hurdle Rate) above the return on the Australian All Ordinaries Index (Benchmark) on an annual basis. The performance fee is calculated by reference to a 12 month period between 1 July and 30 June each year (Performance Period).

The return of the Fund must exceed the Hurdle Rate of return above the Benchmark over the Performance Period before a performance fee becomes payable to the Investment Manager. The return of the Fund is measured by the change in the Net Asset Value per Unit over the Performance Period. The returns of the Fund and the Benchmark are calculated from the beginning of a Performance Period (or pro-rata thereof for the initial period of less than 12 months) independently of the returns in prior periods.

Any accrued management and performance fees due and payable are incorporated into the Net Asset Value of the Fund.

In the event that the return on a Unit is less than the Benchmark during a Performance Period, no performance fee will be payable for that Performance Period.

The Benchmark may not always be positive and accordingly, a performance fee may be payable even if the Fund has a negative return.

Where Units are redeemed, any accrued fees in respect of Units being redeemed will become payable. If the Fund is terminated, then any accrued or unpaid fees will become payable.

In consideration of the Trustee services provided to the Fund, the Trustee is entitled to a percentage of month-end funds under management (gross assets of the Fund) calculated according to a scale (plus GST). By example, for funds under management up to $50 million, a fee of 0.20% of funds under management (plus GST) is payable, subject to a minimum annual fee of $28,000 (plus GST) and for funds under management of between $50 million and $100 million, a fee of 0.05% of funds under management (plus GST) is payable, quarterly in arrears and accrued on a monthly basis.

All costs or general expenses incurred (or that will be incurred) by the Trustee in connection with the management of the Fund are payable out of the Fund. The Investment Manager is responsible for providing at its cost all staff, office space and office facilities required for the performance of its services. The Fund will pay all other expenses incidental to the Trustee and Investment Manager’s operations, including, but not limited to, fees payable to the Fund’s service providers (e.g. Administrator and custodian) and they’re reasonably incurred out of pocket expenses incurred on behalf of the Fund, taxes imposed on the Fund or the Trustee; governmental charges and duties; the Fund’s advisers (e.g. legal, accounting and audit), investment research, printing and distributing the Information Memorandum, subscription materials, marketing materials and any reports and notices to Unitholders or prospective Unitholders. The Fund may also pay unanticipated expenses arising from its business, such as litigation and indemnification expenses. All costs and expenses associated with the launch of the Fund, including professional fees will be paid by the Fund and amortized over the period of up to 60 months from the commencement of the Fund.

Fees and costs stated in this section are expressed exclusive of GST. The Fund will claim all input tax credits or reduced input tax credits as applicable for any GST incurred by the Fund. If the Trustee becomes liable to pay GST on any fees or costs, the Trustee is entitled to recover an amount with respect to GST from the Fund.