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Fund Management Agreement

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When entering into a new discretion agreement for the management of funds, the most important question is whether the Fund is in a position to conclude the agreement and, in particular, to transfer the investment powers, allowances, etc. that are defined in it. In practice, this should not be a problem. But consider whether the appointment can also confer on the director of special powers, for example to lend shares or lend against funds of assets that may not have been discussed during the beauty parade presentation. For example, if the custodian belongs to the same group as the fund manager, the administrator generally assumes responsibility for the internal custodian`s defaults. On the other hand, if the Fund designates a separate custodian, at the request of the fund manager, I assume that the administrator would have discovered that many of you would not be responsible for the external custodian`s failure. Most managers would object to any recovery of the basic administration tax, but could relapse to the performance fees previously paid. How is the “clean” tax clean? Does it include, for example, commissions, management fees for the manager`s internal investment funds and deposit fees? These are all questions they need to raise if you don`t have a clear position! One might think that if a limited stock is available, a performance fee will create a temptation (and I say no stronger than that) for the manager to allocate the portfolio to funds subject to performance fees, unlike those that are not. In practice, the compliance officer for UK fund managers would “stamp” such behaviour.

Suddenly, after the announcement of disputes by the Unilever Pensionstreuh-nder, underperformance is a “hot topic”. Directors must now carefully assess how they assess the relative and absolute performance of managers on the basis of the performance criteria set out in the agreements. Increasingly, those who are not e.p.a. are called “Luddites.” In a world where paper is becoming more and more old-fashioned, it is a matter of giving instructions by email. This is not without risks for both parties. Some managers will insist on compensation for losses. Before giving compensation, give some thoughts on how the instructions of one (or more of the trustees) are delivered to the manager by email. It is worth reading the particularly obscure paragraph in small print entitled “Notices”.

What may work for one fund is not the case for another. One approach is to ensure that clear, fairly innocuous basic principles are adopted that do not require the fund manager to do something that he or she would not do on the basis of financial criteria If there is a difficult decision, for example, if Nike shares are to be purchased or sold, do you want the manager to make the decision for financial reasons and not affect performance? Directors who are forced by members to engage in a particular policy – make sure that:- consultants, once quite deliciously referred to as “fund managers,” owe directors a duty of care. If a manager is seriously under-responsible, it is the directors who are in the firing line. Many will then look at the role of their other advisors, such as consultants, in the decision to appoint the underperforming manager. It is important that the consultant`s role and duties are clearly explained in his engagement letter to the Fund. Check for example: – Despite my concerns – this can be an area in which retired agents are interested in their members. It would be interesting to read, at the conference in the next few years, the IRS policy of the pension funds of the various major retailers, and then compare and contrast the performance of the funds concerned. That is to say that no amount of risk control or performance measurement is guaranteed in the legal agreement a level of performance of the fund! It`s something I find quite difficult to understand.