Hermes Investment Management Limited

Item 5 – Fees and Compensation
Segregated Account Fees
HIML’s standard fee schedule for institutional segregated investment accounts (“Segregated Accounts”) for its investment
strategies in basis points are as follows:
 Strategy                                      $50m        $100m           $150m       $200m        $250m        $500m         $1bn
 Asia ex-Japan Equity                            75             75            75           75           75          75            75
 EM Asia (Cayman) Equity                        100             100          100           95           90          85            80
 Global Emerging Markets Equity                 100             70            70           70           70          70            70
 Global Emerging Markets ex-China Equity         75             60            60           45           45          45            45
 China Equity                                    75             60            60           45           45          45            45
 Global Equity ESG                               55             40            40           40           40          40            40
 Global Equity Low Carbon                        55             40            40           40           40          40            40
 US SMID Equity                                  75             65            65           45           45          45            45
 Global Small Cap Equity                         75             60            60           60           60          60            60
 Global High Yield Credit                        60             50            50           35           35          35            35
 Sustainable Global Investment Grade Credit      35             30            30           25           25          25            25
 Unconstrained Credit                            65             50            50           45           45          45            45
 Climate Change High Yield Credit                60             50            50           35           35          35            35
 Emerging Markets Debt                           65             55            55           45           45          45            45
 SDG Engagement Equity                           75             70            70           65           65          65            65
 SDG Engagement High Yield Credit                60             50            50           45           45          45            45
 Sustainable Global Equity                       75             60            60           45           45          45            45
 US High Yield Credit                            60             50            50           35           35          35            35
 MDT US Equity                                   45             45            40           35           35          30            25
 Global Short Duration Bond                      30             25            25           20           20          20            20

 •   Direct Lending:                                                   •    Using the market value of assets on the last trading day
 A headline management fee of 75bps                                         of each calendar quarter.
 A performance fee of 10% over a hurdle of SONIA                       In any partial calendar quarter, fees are pro- rated based on
 +461.93bps                                                           the number of days in which the account is open during the
                                                                      quarter. For purposes of calculating HIML’s management fees,
 •   European Direct Lending:
 A headline management fee of 75bps                                   the market value of assets in a Segregated Account shall
 A performance fee of 10% over a hurdle of Euribor +350bps            consist of the market value of securities and other investments
                                                                      held in the account and will not be reduced by any margin or
 •   European Direct Lending II:
                                                                      other indebtedness of clients with respect to such securities or
 A headline management fee of 75bps
                                                                      other investments. Assets of Segregated Accounts that have a
 A performance fee of 10% over a hurdle of Euribor +350bps
                                                                      business relationship to each other may, at the discretion of
 •   European Direct Lending III:                                     HIML, be aggregated for purposes of calculating the
 A headline management fee of 75bps                                   management fee applicable to each Segregated Account. In
 A performance fee of 10% over a hurdle of Euribor +350bps
                                                                      certain circumstances, Segregated Account fees and
 •   European Real Estate Debt:                                       minimums may be negotiable. To the extent that fees are
A headline management fee of 60bps                                    negotiable, some clients may pay more or less than other
                                                                      clients for the same management services, depending, for
Note: fees are subject to negotiation and subject to change.          example, on account inception date,
Please refer to “Conflicts of Interest Relating to Performance-
Based Fees” in Item 6 of this brochure for further
information regarding actual or potential conflicts of interest
that may arise in connection with performance-based fees.

Fees are typically charged quarterly in arrears and there are
different calculation methodologies as follows:
 •    Using the average of the daily NAVs over the period,
 •    Using the average of the month end values within the
      period,
...

Item 7 – Types of Clients
     HIML provides investment advisory services to institutional
     clients, which currently includes the following:
      •    Pension and profit-sharing plans including pension
           plans subject to the Employee Retirement Income
           Security Act of 1974 (ERISA);
      •    Trusts;
      •    Estates;
      •    Charitable organizations;
      •    Corporations or other business entities;
      •    Broker-dealer
           intermediaries;
      •    Other Investment
           Advisers;
      •    Investment Companies.

     Accounts Requirements
     Clients are required to enter into a written investment
     management or advisory agreement prior to the
     establishment of an advisory relationship with HIML, except
     for Managed Account clients that do not enter into an
     agreement directly with HIML. Instead, as discussed in Item
     4 above, Managed Account clients will enter into an
     investment management and/or other agreements with the
     Sponsor or Platform Provider for the Managed Account
     Program.

     Minimum investment can vary depending on the
     investment strategy, but generally HIML requires a
     minimum investment of $50 Million to open a Segregated
     Account and all mandates must meet a minimum revenue
     requirement of$200,000.

     HIML’s target account size for Managed Account

                                                                                     Hermes Investment Management Limited               15

the case of Managed Account Program accounts, provided in         Top-down analysis is applied to assess the general credit
the Managed Account Program Sponsor’s brochure or other           market and sector condition which determines the overall
Program documentation).                                           appetite for credit risk across the portfolios, how the team
                                                                  wants to allocate that risk and depending on the nature of the
Equity                                                            strategy, whether to employ any defensive or hedging
HIML equity strategies encompass a variety of investment          strategies.
objectives and styles including value, growth & blend across
                                                                  The core consideration for the research process is the analysis
different geographical regions such as emerging markets,
                                                                  of the issuer’s ability to fulfil its financial obligations and ESG
Asia, US & global equities and different market
                                                                  related risks. Experienced portfolio managers/analysts
capitalization. The Investment teams use several methods for
                                                                  operate on a sector responsibility basis which includes both
asset selection which include fundamental analysis,
                                                                  investment grade and sub-investment grade issuer coverage,
quantitative analysis & qualitative analysis or combinations of
                                                                  and information sharing with HIML’s equity teams. The
all. The teams will use either a bottom-up or a top-down
                                                                  Investment teams also have access and collaborate with EOS
approach or both in their investment process, to identify and
                                                                  staff who provide stewardship services in respect of the
buy quality stocks that are attractively priced.
                                                                  portfolios.
The teams will also integrate ESG along with other factors
including business model, financials, cash flow and growth        Real Estate
prospects into their investment processes. ESG integration is     HIML Real Estate team provides client-focused property
delivered through HIML proprietary ESG tools. The                 investment solutions through segregated and pooled
Investment teams also have access and collaborate with EOS        structures that invest in real estate and real estate debt. The
at Federated Hermes Limited (“EOS”) staff who provide             investment process adopts a top-down portfolio risk
stewardship services in respect of the portfolios. As             management and bottom-up property selection to capitalize
discussed under “Conflicts of Interest Relating to                on mismatch between price and value by targeting assets that
Information Sharing Among Affiliates” in Item 6, information      are highly competitive within their local marketplaces and
barriers have been implemented to prevent the exchange of         which have sustainable income streams. The team seeks to
material non-public information among the Federated               maximize performance on a risk-adjusted basis.
Advisory Companies, and EOS.
                                                                  Direct Lending
The teams will use a variety of sources in the screening and
                                                                  The Direct Lending team aims to provide attractive risk
selection process including proprietary screening tools, third-
                                                                  adjusted returns to investors, yielding a stable income stream
party research materials, meetings with company
                                                                  and preserving investors’ capital by taking a conservative
management and industry & sector analyses.
                                                                  approach to the asset class. The team invests in senior-
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