JNL/AQR MANAGED FUTURES STRATEGY FUND LTD.
INVESTMENT SUB-ADVISORY AGREEMENT
This AGREEMENT is effective this 10th day of June, 2011, by and between
XXXXXXX NATIONAL ASSET MANAGEMENT, LLC, a Michigan limited liability company and
registered investment adviser ("Adviser"), and AQR CAPITAL MANAGEMENT, LLC, a
Delaware limited liability company and registered investment adviser
("Sub-Adviser").
WHEREAS, Adviser is the investment manager for the JNL/AQR Managed Futures
Strategy Fund ("Fund") a series of the JNL Series Trust (the "Trust"), an
open-end management investment company registered under the Investment Company
Act of 1940, as amended ("1940 Act");
WHEREAS, the Adviser represents that it has entered into an Investment
Advisory and Management Agreement ("Management Agreement") dated as of January
31, 2001, with the Trust, and amended the Management Agreement on August 29,
2011 to add the Fund;
WHEREAS, the Adviser and Sub-Adviser are contemporaneously entering in to a
sub-advisory agreement with respect to sub-advisory services to the Fund ("Fund
Sub-Advisory Agreement");
WHEREAS, JNL/AQR Managed Futures Strategy Fund Ltd. (the "Company") is a
wholly owned subsidiary of the Fund;
WHEREAS, the Adviser represents that it has entered into an Investment
Advisory and Management Agreement ("Management Agreement") dated as of June 10,
2011 with the Company; and
WHEREAS, Adviser desires to retain Sub-Adviser as Adviser's agent to
furnish investment advisory services to the Company.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
1. APPOINTMENT. Adviser hereby appoints Sub-Adviser to provide certain
sub-investment advisory services to the Company for the period and on the terms
set forth in this Agreement. Sub-Adviser accepts such appointment and agrees to
furnish the services herein set forth for the compensation herein provided.
2. DELIVERY OF DOCUMENTS. Adviser has or will furnish Sub-Adviser with
copies properly certified or authenticated of each of the following prior to the
commencement of the Sub-Adviser's services:
a. The Memorandum of Association and Articles of Association of the
Company, and all amendments thereto or restatements thereof (such Memorandum and
Articles as presently in effect and as it shall from time to time be amended or
restated, is herein called the "Memorandum of Association");
b. The Trust's Registration Statement on Form N-1A under the Securities Act
of 1933, as amended and under the 1940 Act as filed with the SEC and all
amendments thereto insofar as such Registration Statement and such amendments
provide disclosure regarding the Company; and
c. Resolutions of the Board of Directors of the Company (the "Board of
Directors") authorizing the appointment of Sub-Adviser and approving this
Agreement.
3. MANAGEMENT. Subject always to the supervision of the Adviser, who in
turn is subject to the supervision of the Board of Directors, Sub-Adviser will
furnish an investment program in respect of, make investment decisions for, and
invest and reinvest, all assets of the Company and place all orders for the
purchase and sale of securities and other financial instruments, including
foreign or domestic securities or other financial instruments or property
(including, without limitation, commodities and commodities-related instruments,
financial futures, options or other derivative instruments of any type), all on
behalf of the Company. In the performance of its duties, Sub-Adviser will
monitor the Company's investments, and will comply with the provisions of
Memorandum of Association, as amended from time to time, and make investment
decisions in conformity with the stated investment objectives, policies and
restrictions of the Company as set forth in the applicable provisions of the
Fund's Registration Statement, which may be amended or supplemented from time to
time, provided Sub-Adviser has received prior notice of any changes made to the
investment objective, policies and restrictions of the Company and has been
given a reasonable amount of time to implement any changes or amendments to such
documentation, investment objectives, policies and restrictions. Sub-Adviser and
Adviser will each make its officers and employees available to the other from
time to time at reasonable times to review investment policies of the Company
and to consult with each other regarding the investment affairs of the Company.
Sub-Adviser will report to the Board of Directors and to Adviser with respect to
the implementation of such program.
Notwithstanding any other provision of this Agreement, the Adviser agrees
that the Sub-Adviser shall not be liable for any failure to recommend the
purchase or sale of any security on behalf of the Company on the basis of any
information which might cause such purchase or sale to, in the Sub-Adviser's
reasonable opinion, constitute a violation of any applicable laws, rules or
regulations.
The Sub-Adviser further agrees that it:
a) Will use the same skill and care in providing such services as it uses
in providing services to its other client mandates for which it has investment
responsibilities;
b) In providing services hereunder to the Company, will act in strict
conformity with the applicable provisions of: Cayman Islands law, the 1940 Act,
the Investment Advisers Act of 1940, as amended ("Advisers Act"), and the
Securities Exchange Act of 1934, as amended ("1934 Act") and will comply with
all applicable Rules and Regulations of the SEC in all material respects and in
addition will conduct its activities under this Agreement in accordance with any
applicable regulations of any governmental authority pertaining to its
investment advisory activities, including but not limited to compliance with
Rule 38a-1 under the 1940 Act and Rule 206(4)-7 under the Advisers Act;
c) Exercise voting rights in respect of Company's portfolio securities and
other investments consistent with its fiduciary duties hereunder;
d) Will report regularly to Adviser and to the Board of Directors, and
periodically to the Trust's Board of Trustees (the "Board of Trustees"), as
reasonably agreed between the Adviser and Sub-Adviser and will make appropriate
persons available for the purpose of reviewing with representatives of Adviser,
the Board of Directors, and the Board of Trustees at reasonable times agreed to
by the Adviser and Sub-Adviser, the management of the Company, including,
without limitation, review of the general investment strategies of the Company,
the performance of the Company in relation to the specified benchmarks and will
provide various other reports from time to time as reasonably requested by
Adviser;
e) Will prepare and maintain such books and records with respect to the
Company's securities transactions in accordance with applicable law, and will
furnish Adviser and Board of Directors such periodic and special reports as the
Adviser may reasonably request;
f) Will act upon reasonable instructions from Adviser not inconsistent with
the fiduciary duties and investment objectives hereunder;
g) Will treat confidentially and as proprietary information of Company all
such records and other information relative to the Company maintained by the
Sub-Adviser, and will not use such records and information for any purpose other
than performance of its responsibilities and duties hereunder, except after
prior notification to and approval in writing by the Company, which approval
shall not be unreasonably withheld and may not be withheld where the Sub-Adviser
may be exposed to civil or criminal contempt proceedings for failure to comply,
when requested to divulge such information by duly constituted authorities, or
when so requested by Company, provided, however, that notwithstanding the
foregoing, Sub-Adviser may disclose such information as required by applicable
law, regulation or upon request by a regulator or auditor of Sub-Adviser; and
h) Will provide investment reporting on, and evaluation of, the Company's
investments and provide statistical information the Adviser may reasonably
request with regard to existing or potential securities holdings of the Company.
4. CUSTODY OF ASSETS. Sub-Adviser shall at no time have the right to
physically possess the assets of the Company or have the assets registered in
its own name or the name of its nominee, nor shall Sub-Adviser in any manner
acquire or become possessed of any income, whether in kind or cash, or proceeds,
whether in kind or cash, distributable by reason of selling, holding or
controlling such assets of the Company. In accordance with the preceding
sentence, Sub-Adviser shall have no responsibility with respect to the
collection of income, physical acquisition or the safekeeping of the assets of
the Company. All such duties of collection, physical acquisition and safekeeping
shall be the sole obligation of the custodian.
The Sub-Adviser is authorized, as agent of the Adviser, to give
instructions to the Company's custodian with respect to the assets of the
Company in order to carry out its duties under the terms of this Agreement,
including with respect to the delivery of securities and other investments and
payments of cash for the account of the Company. The Sub-Adviser shall have no
liability for the acts or omissions of any custodian of the Company's assets.
The Sub-Adviser shall have no responsibility for the segregation requirement of
the 1940 Act or other applicable law other than to notify the Company and Fund's
custodian of investments that require segregation and appropriate assets for
segregation.
5. BROKERAGE.
(a) The Sub-Adviser is responsible for and is hereby appointed as the
Adviser's agent with the authority to act in regard to making decisions to buy
and sell securities for the Company, broker-dealer selection, and negotiation of
brokerage commission rates. Sub-Adviser shall have the express authority to (i)
place orders for the execution of such securities transactions, including any
derivative transactions, with or through such brokers, dealers, foreign currency
dealers, futures commission merchants ("FCM") or issuers as the Sub-Adviser may
reasonably select; (ii) negotiate, execute and enter into brokerage contracts
and other trading agreements, including but not limited to, futures account
agreements, ISDA Master Agreements and other trading documents related thereto,
on behalf of the Company, and (iii) negotiate, open, continue and terminate
brokerage accounts and other brokerage arrangements with respect to all
portfolio transactions entered into by Sub-Adviser on behalf of the Company. In
order to meet margin or collateral requirements for futures, forwards and other
derivative instruments, the Sub-Adviser may direct payments of cash, cash
equivalents, and securities and other property into segregated accounts or FCM
accounts established hereunder as the Sub-Adviser deems desirable or
appropriate, provided that Sub-Adviser's actions are in accordance with the
terms of this Agreement, and applicable law;
(b) Sub-Adviser will provide copies of brokerage agreements entered into by
the Company to the Adviser, if applicable. It is the Sub-Adviser's general
policy in selecting a broker to effect a particular transaction to seek to
obtain "best execution", which means prompt and efficient execution of the
transaction at the best obtainable price with payment of commissions which are
reasonable in relation to the value of the brokerage services provided by the
broker; and
(c) Consistent with this policy, the Sub-Adviser, in selecting
broker-dealers and negotiating commission rates, will take all relevant factors
into consideration, including, but not limited to: the best price available; the
reliability, integrity and financial condition of the broker-dealer; the size of
and difficulty in executing the order; the broker's execution capabilities and
any research provided by the broker that aids the Sub-Adviser's investment
decision-making process; and the value of the expected contribution of the
broker-dealer to the investment performance of the Company on a continuing
basis. Subject to such policies and procedures and other written instructions as
the Adviser or the Board of Directors may adopt, the Sub-Adviser shall have
discretion to effect investment transactions through broker-dealers (including,
to the extent permissible under applicable law, broker-dealer affiliates) who
provide brokerage and/or research services, as such services are defined in
section 28(e) of the 1934 Act, and to cause the Company to pay any such
broker-dealers an amount of commission for effecting a portfolio investment
transaction in excess of the amount of commission another broker-dealer would
have charged for effecting that transaction, if the Sub-Adviser determines in
good faith that such amount of commission is reasonable in relation to the value
of the brokerage or research services provided by such broker-dealer, viewed in
terms of either that particular investment transaction or the Sub-Adviser's
overall responsibilities with respect to the Company and other accounts to which
the Sub-Adviser exercises investment discretion (as such term is defined in
section 3(a)(35) of the 1934 Act. Allocation of orders placed by the Sub-Adviser
on behalf of the Company to such broker-dealers shall be in such amounts and
proportions as the Sub-Adviser shall determine in good faith in conformity with
its responsibilities under applicable laws, rules and regulations. The
Sub-Adviser will submit reports on brokerage placements to the Adviser as
reasonably requested by the Adviser, in such form as may be mutually agreed to
by the parties hereto, indicating the broker-dealers to whom such allocations
have been made and the basis therefore.
6. EXPENSES. The Sub-Adviser shall bear all expenses incurred by it in
connection with the performance of its services under this Agreement other than
the cost (including brokerage commissions, transactional fees and taxes, if any)
incurred in connection with purchases and sales of the Company's portfolio
securities.. The Company will bear the costs or other expenses to be incurred in
its operations, as agreed to by the Company, the Fund and the Adviser.
7. COMPENSATION. For the services provided and the expenses assumed
pursuant to this Agreement, for sub-advisory services to the Company and as
sub-adviser to the Fund the Adviser to the Fund will pay and the Sub-Adviser
agrees to accept as full compensation therefore, a single sub-advisory fee
accrued daily and payable monthly on the average daily net assets in the Fund in
accordance with Schedule B of the Fund Sub-Advisory Agreement. Thus, no separate
compensation shall be payable under this Agreement.
8. SERVICES TO OTHERS. Adviser understands, and has advised the Board of
Directors, that Sub-Adviser, its affiliates, principals, members, directors,
officers and employees now, or may in the future render the same, similar or
dissimilar services, including investment advisory and management services, to
others, including investment companies, funds, firms, individuals, associations
or accounts. Adviser has no objection to Sub-Adviser acting in such capacities
and Sub-Adviser, its affiliates, principals, members, directors, officers and
employees shall not be limited or restricted from providing such services,
provided that whenever the Company and one or more other investment advisory
clients of Sub-Adviser, its affiliates, principals, members, directors, officers
and employees have available funds for investment, investments suitable and
appropriate for each will be allocated in a manner believed by Sub-Adviser to be
equitable to each. Sub-Adviser may group orders for the Company with orders for
other funds and accounts to obtain the efficiencies that may be available on
larger transactions when it determines that investment decisions are appropriate
for each participating account. Sub-Adviser cannot assure that such policy will
not adversely affect the price paid or received by the Company. Adviser
recognizes, and has advised the Board of Directors, that in some cases this
procedure may adversely affect the size and the opportunities of the position
that the Company may obtain in a particular security. In addition, Adviser
understands, and has advised the Board of Directors, that the persons employed
by Sub-Adviser to assist in Sub-Adviser's duties under this Agreement will not
devote their full time to such service and nothing contained in this Agreement
will be deemed to limit or restrict the right of Sub-Adviser or any of its
affiliates to engage in and devote time and attention to other businesses or to
render services of whatever kind or nature.
9. LIMITATION OF LIABILITY. Sub-Adviser, its officers, directors,
employees, agents or affiliates will not be subject to any liability to the
Trust, Adviser or the Company or their directors, officers, employees, agents or
affiliates for any error of judgment or mistake of law or for any loss suffered
by the Company, the Trust, any shareholder of the Company or the Adviser either
in connection with the performance of Sub-Adviser's duties under this Agreement
or its failure to perform due to events beyond the reasonable control of the
Sub-Adviser or its agents, except for a loss resulting from Sub-Adviser's
willful misfeasance, or gross negligence in the performance of its duties or by
reason of its reckless disregard of its obligations and duties under this
Agreement. Cayman Island, and United States' State and Federal securities laws
may impose liabilities under certain circumstances on persons who act in good
faith, and therefore nothing herein shall in any way constitute a waiver or
limitation of any right which Adviser may have under any applicable laws.
Under no circumstances shall any party hereto be liable to another for
special, punitive or consequential damages, arising under or in connection with
this Agreement, even if previously informed of the possibility of such damages.
10. INDEMNIFICATION. Adviser and the Sub-Adviser each agree to indemnify
the other party (and each such party's affiliates, employees, directors and
officers) against any claim, damages, loss or liability (including reasonable
attorneys' fees) arising out of any third party claims brought against an
indemnified party that are found to constitute willful misfeasance or gross
negligence on the part of the indemnifying party.
11. DURATION AND TERMINATION. This Agreement will become effective as to
the Company upon execution or, if later, on the date that initial capital for
the Company is first provided to it and, unless sooner terminated as provided
herein, will continue in effect for two years from the date of its execution.
Thereafter, if not terminated, this Agreement will continue in effect for
successive periods of 12 months, provided that such continuation is specifically
approved at least annually by the Board of Directors. Notwithstanding the
foregoing, this Agreement may be terminated at any time, without the payment of
any penalty, on sixty days' written notice by the Adviser, or on sixty days'
written notice by the Sub-Adviser. This Agreement will immediately terminate in
the event of its assignment. Sections 9 and 10 herein shall survive the
termination of this Agreement.
12. CONFIDENTIAL TREATMENT. It is understood that any information or
recommendation supplied by, or produced by, Sub-Adviser in connection with the
performance of its obligations hereunder is to be regarded as confidential and
for use only by the officers, directors or employees of the Adviser and the
Company that have a need to know such information in connection with its duties
and obligations and shall not be disclosed to any third party without the prior
consent of the Sub-Adviser, the Adviser and the Company. Furthermore, except as
required by law, or as agreed to by the Adviser and Sub-Adviser, the Adviser and
Company will not disclose any list of securities held by the Company.
13. USE OFNAME:If the Sub-Adviser shall cease to furnish services to the
Company under this Agreement or similar contractual arrangement, for any reason
whatsoever, the Company or the Adviser, at its expense:
(a) as promptly as practicable, shall take all necessary action to cause
the Prospectus, Statement of Additional Information, Memorandum of Association
and any other relevant documentation to be amended to accomplish a change of
name to eliminate any reference to "AQR Capital Management, LLC" or "AQR"; and
(b) within 60 days after the termination of this Agreement or such similar
contractual arrangement, shall cease to use in any other manner, including, but
not limited to, use in any sales literature or promotional material, the name
"AQR Capital Management, LLC" or any name, xxxx or logo type derived from it or
similar to it or indicating that the Company is managed by or otherwise
associated with the Sub-Adviser or misleadingly implying a continuing
relationship between the Company and the Sub-Adviser or any of its affiliates,
unless such use is with respect to reporting historical performance information
of the Company during a period when such use of name was authorized or as agreed
upon by both parties.
14. ENTIRE AGREEMENT; AMENDMENT OF THIS AGREEMENT. This Agreement
constitutes the entire agreement between the parties with respect to the
Company. No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought.
15. NOTICE. Any notice under this Agreement shall be in writing, addressed
and delivered or mailed, postage prepaid, to the other party at such address as
designated herein.
a) TO ADVISER:
Xxxxxxx National Life Insurance Company
0 Xxxxxxxxx Xxx
Xxxxxxx, XX 00000
Attn: Legal Department - Contracts Administrator
b) TO SUB-ADVISER:
AQR Capital Management , LLC
Two Xxxxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxx
16. MISCELLANEOUS. The captions in this Agreement are included for convenience
of reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect. If any provision of this
Agreement is held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement will be binding upon and shall inure
to the benefit of the parties hereto.
17. APPLICABLE LAW. This Agreement shall be construed in accordance with
applicable federal law and the laws of the State of Illinois.
18. COUNTERPART SIGNATURES. This Agreement may be executed in several
counterparts, including via facsimile, each of which shall be deemed an
original for all purposes, including judicial proof of the terms hereof, and
all of which together shall constitute and be deemed one and the same agreement.
IN WITNESS WHEREOF, the Adviser and the Sub-Adviser have caused this Agreement
to be executed as of this 10th day of June, 2011.
XXXXXXX NATIONAL ASSET MANAGEMENT, LLC
By: /s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title:President and Chief Executive Officer
AQR CAPITAL MANAGEMENT, LLC
By:/s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Deputy General Counsel
