Responsible entity and administrative services
E&P Investments Limited (also a subsidiary of E&P Financial Group Limited) is the Responsible Entity of the Fund (Responsible Entity).
The Responsible Entity’s duties include establishing the Fund’s compliance plan and procedures and monitoring against regulatory and legislative requirements, the issuance of disclosure documents, the appointment and monitoring of external service providers to the Fund and overall administration of the Fund.
The Responsible Entity (E&PIL) has entered into an Administrative Services Agreement (ASA) with K2 Asset Management Limited (ACN 085 445 094) (K2) whereby K2 will provide E&PIL with support and administration services in areas including investor relations, reporting, and administration. Under the ASA, K2 will also provide fund accounting services.
The Responsible Entity will forego (via a formal waiver) a part of the fees it currently charges equal to the amount payable to K2 for the support and administration services, being 0.05% of the Gross Asset Value (GAV) of the Fund, subject to a minimum per annum of $350,000 (excluding GST). This will reduce the Responsible Entity’s own fee from 0.08% of the GAV of the Fund (excluding GST) to 0.03% of GAV (or less, if the minimum were to apply). For the fund accounting services, K2 will be paid from the Fund $120,000 (exclusive of unclaimable GST) per annum.
Reimbursement of expenses
The Responsible Entity and E&P Financial Group USA Inc (a related entity of the Responsible Entity) are entitled, pursuant to the management agreements, to recover certain direct expenses incurred in the management of the Fund’s activities. The expenses recovered from the Fund are primarily in respect of the Fund related payroll expenses, office lease and depreciation recoveries. Certain payroll and overhead expenses that are not recovered from the Fund are borne by E&P Financial Group USA with the intention that such ongoing costs are met out of the Management fees paid by the Fund or US REIT.
Under the Fund’s Constitution a number of the above fees and charges may be changed within certain parameters. Where a fee or change specified in the Constitution was proposed to be changed the Responsible Entity would announce the change before it was implemented.