Item 5: Fees and Compensation
Management Fees
The Adviser charges each client a management fee based on the Net Asset Value (“NAV”)
which is deducted from the Funds’ portfolios on a monthly basis and in the case of EJF, is
remitted to the Adviser (or an affiliate of the Adviser) on a quarterly basis. For the
Accounts, fees charged are based on a percentage of the monthly average NAV of the
account over the month (adjusted for cash flows).
For the Funds, the management fee is equal to one twelfth of 0.625% per month of (1) the
month-end Yen NAV of each Series of Shares including the (Series J & Series K Shares); and
(2) and one twelfth of 1.25% of the month-end 2 x NAV of each Series of Shares including
the (Series JJ and Series KK Shares); in either case and where relevant, plus any value added
tax thereon. The management fee is accrued each month, calculated before any accrual for
or payment of any management fees and incentive fees, and is payable in arrears as of the
last business day of each quarter. Management fees are pro-rated for partial periods. The
management fee was reduced on 1st January 2018 from the previous rate of 1.00% and 2.00%
per annum (for Series J &K and Series JJ & KK respectively).
As of 1st January 2018 EJF issued a new Series of Shares which carries a management fee of
1.5% per annum based on the month-end Yen NAV for the Series. The new Series of Shares
which is not currently offered to the same category of investor as Series J,K,JJ and KK is
called the ‘Alternative Fee Shares’ and are subject to certain other terms which are set out
in the Performance Based Fee section of this Brochure.
The management fees applicable to the Accounts vary. For those Accounts that follow the
same strategy as EJF, as well as for the UCITS L/S Fund, the fees are commensurate with
fees set out earlier in this section. The long only strategy adopts a management fee rate
based on assets under management and is typically below 1% per annum. The long only
strategy does not currently attract a performance fee based on performance relative to a
stated benchmark.
Other fees
Other fees that may be charged to EJF and other clients are set out below:
Administrator fees
Fees are generally charged on a sliding scale depending on the amount of assets managed.
The administrator will also be reimbursed any reasonable out-of-pocket expenses or costs
necessarily incurred in the performance of its duties.
Prime broker and custody fees
Prime brokerage (including custody fees) will not exceed normal commercial rates. They
may also levy transaction charges and other charges which can include value added tax.
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ERIM LLP Form ADV Part 2A
Other fees and expenses
Other fees and expenses charged may include the following: (a) charges and expenses of
legal advisers, accountants and independent auditors, (b) brokers’ commissions including
research expenses, broker funding costs (c) all taxes or stamp duties and corporate fees
payable to governments or agencies, (d) Directors’ fees (if any) and expenses, (e) interest on
borrowings if applicable, including borrowings from the Prime Broker, (f) communication
expenses with respect to investor services and all expenses of meetings of Shareholders and
of preparing, printing and distributing financial and other reports, proxy forms, prospectuses
and similar documents, (g) the cost of insurance for the benefit of the Directors, (h)
litigation and indemnification expenses and extraordinary expenses not incurred in the
ordinary course of business, (i) the cost of obtaining and maintaining the listing of shares on
a stock exchange (if applicable) and (j) some other organisational and operating expenses
including Depositary fees arising under the requirements of the Alternative Investment Fund
Management Directive (“AIFMD”).
Please see the section on “Brokerage practices” for a description of other brokerage
charges.
In the case of our separate Account clients only additional custody fees are applicable which
are paid directly to the Prime Broker (as custodian) under the contract signed directly
between the respective client and the Prime Broker.
The fees described in Item 5 will be deducted from the respective client accounts and are
not negotiable.
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ERIM LLP Form ADV Part 2A