INVESTMENT MANAGEMENT AGREEMENT
EXHIBIT D.(I)
INVESTMENT MANAGEMENT AGREEMENT
This Agreement is made by and between Hartford Investment Financial Services, LLC, a Delaware limited liability company (the “Adviser”), and The Hartford Alternative Strategies Fund a statutory trust organized under the laws of the State of Delaware (the “Trust”).
WHEREAS, the Adviser, an investment adviser registered under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), has agreed to furnish investment advisory services to the Trust, an open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”); and
WHEREAS, the Trust and the Adviser wish to enter into this Agreement setting forth the investment advisory services to be performed by the Adviser for the Trust, and the terms and conditions under which such services will be performed; and
WHEREAS, this Agreement has been approved in accordance with the provisions of the 1940 Act, and HIFSCO is willing to furnish such services upon the terms and conditions herein set forth.
NOW, THEREFORE, in consideration of the promises and the mutual agreements herein contained, the parties hereto agree as follows:
1. General Provision
The Trust hereby employs the Adviser and the Adviser hereby undertakes to act as the investment manager of the Trust and to perform for the Trust such other duties and functions as are hereinafter set forth and such other duties as may be necessary or appropriate in connection with its services as investment manager. The Adviser shall, in all matters, give to the Trust and its Board of Trustees the benefit of its best judgment, effort, advice and recommendations and shall at all times conform to, and use its best efforts to enable the Trust to conform to (i) any applicable provisions of the 1940 Act and any applicable rules or regulations thereunder, (ii) any other applicable provisions of state or federal law; (iii) the provisions of the Certificate of Trust and By-Laws of the Trust as amended from time to time; (iv) the policies and determinations of the Board of Trustees of the Trust; (v) the investment policies and investment restrictions of the Trust as reflected in the Trust’s registration statement under the 1940 Act or as such policies may, from time to time, be amended by the Trust’s shareholders, and (vi) the Prospectus and Statement of Additional Information of the Trust in effect from time to time. The appropriate officers and employees of the Adviser shall be available upon reasonable notice for consultation with any of the Trustees and officers of the Trust with respect to any matters dealing with the business and affairs of the Trust including the valuation of any of the Trust’s securities that are either not registered for public sale or not being traded on any securities market.
2. Investment Management Services
(a) Subject to the direction and control by the Trust’s Board of Trustees, the Adviser shall, or shall cause an affiliate to: (i) regularly provide investment advice and recommendations to the Trust with respect to its investments, investment policies and the purchase and sale of securities; (ii) supervise continuously the investment program of the Trust and the composition and performance of its portfolio securities and determine what securities shall be purchased or sold by the Trust; and (iii) arrange, subject to the provisions of Section 4 hereof, for the purchase of securities and other investments for the Trust and the sale of securities and other investments held in the Trust.
(b) The Adviser shall provide, or shall cause an affiliate to provide, such economic and statistical data relating to the Trust and such information concerning important economic, political and other developments as the Adviser shall deem appropriate or as shall be requested by the Trust’s Board of Trustees.
3. Administrative Services
In addition to the performance of investment advisory services, the Adviser shall perform, or shall cause an affiliate to perform, the following services in connection with the management of the Trust:
(a) assist in the supervision of all aspects of the Trust’s operation, including the coordination of all matters relating to the functions of the custodian, transfer agent or other shareholder servicing agents (if any), accountants, attorneys and other parties performing services or operational functions for the Trust;
(b) provide the Trust with the services of persons, who may be the Adviser’s officers or employees, competent to serve as officers of the Trust and to perform such administrative and clerical functions as are necessary in order to provide effective administration for the Trust, including the preparation and maintenance of required reports, books and records of the Trust;
(c) provide the Trust with adequate office space and related services necessary for its operations as contemplated in this Agreement; and
(d) provide such other services as the parties hereto may agree upon from time to time.
4. Sub-Advisers and Sub-Contractors
The Adviser, upon approval of the Board of Trustees, may engage one or more investment advisers that are registered as such under the Advisers Act to act as sub-adviser with respect to existing and future Portfolios of the Trust. Such sub-adviser or sub-advisers shall assume such responsibilities and obligations of the Adviser pursuant to this Investment Management Agreement as shall be delegated to the sub-adviser or sub-advisers, and the Adviser will supervise and oversee the activities of any such sub-adviser or sub-advisers. In addition, the Adviser may subcontract for any of the administrative services set forth in Section 3 above.
5. Brokerage Transactions
When placing orders for the purchase or sale of the Trust’s portfolio securities, the Adviser or any sub-adviser appointed by the Adviser shall use its best efforts to obtain the best net security price available for the Trust. Subject to and in accordance with any directions that the Board of Trustees may issue from time to time the Adviser or the sub-adviser, if applicable, may also be authorized to effect individual securities transactions at commission rates in excess of the minimum commission rates available, if the Adviser or the sub-adviser, if applicable, 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 or dealer, viewed in terms of either that particular transaction or the Adviser’s or the sub-adviser’s overall responsibilities with respect to the Trust and other advisory clients. The execution of such transactions shall not be deemed to represent an unlawful act or breach of any duty created by this Agreement or otherwise. The Adviser or the sub-adviser will promptly communicate to the Board of Trustees such information relating to portfolio transactions as the Board may reasonably request.
6. Expenses
Expenses to be paid by the Trust, include, but are not limited to (i) interest and taxes; (ii) brokerage commissions; (iii) any premiums for fidelity and other insurance coverage requisite to the Trust’s operations; (iv) the fees and expenses of its non-interested Trustees; (v) legal, audit and fund accounting expenses; (vi) custodian and transfer agent fees and expenses; (vii) expenses incident to the redemption of its shares; (viii) fees and expenses related to the registration under federal and state securities laws of shares of the Trust for public sale; (ix) expenses, if any, of printing and mailing prospectuses, reports, notices and proxy material to shareholders of the Trust; (x) any other expenses incidental to holding meetings of the Trust’s shareholders; and (xi) such extraordinary non-recurring expenses as may arise, including litigation affecting the Trust and any obligation which the Trust may have to indemnify its officers and Trustees with respect thereto. Any officer or employee of the Adviser or of any entity controlling, controlled by or under common control with the Adviser, who may also serve as officers, trustees or employees of the Trust shall not receive any compensation from the Trust for their services.
7. Compensation of the Adviser
As compensation for the services rendered by the Adviser, the Trust shall pay to the Adviser as promptly as possible after the last day of each month during the term of this Agreement, a fee accrued daily and paid monthly, as set forth in Schedule B to this Agreement, as it may be amended from time to time:
The Adviser, or an affiliate of the Adviser, may agree to subsidize the Trust to any level that the Adviser, or any such affiliate, may specify. Any such undertaking may be modified or discontinued at any time except to the extent the Adviser explicitly agrees to maintain such undertaking for a specified period.
If it is necessary to calculate the fee for a period of time that is less than a month, then the fee shall be (i) calculated at the annual rates provided in Schedule B but prorated for the number of days elapsed in the month in question as a percentage of the total number of days in such month, (ii) based upon the average of the Trust’s daily net asset value for the period in question, and (iii) paid within a reasonable time after the close of such period.
8. Liability of the Adviser
(a) The Adviser shall not be liable for any loss or losses sustained by reason of any investment including the purchase, holding or sale of any security, or with respect to the administration of the Trust, as long as the Adviser shall have acted in good faith and with due care; provided, however, that no provision in this Agreement shall be deemed to protect the Adviser against any liability to the Trust or its shareholders by reason of its willful misfeasance, bad faith or gross negligence (or, alternatively, in respect of any Portfolio for which the sub-adviser at the time of such loss is Hartford Investment Management Company, its negligence) in the performance of its duties or by reason of its reckless disregard of its obligations and duties under this Agreement.
(b) The rights of exculpation and indemnification are not to be construed so as to provide for exculpation or indemnification provided under 8(a) of any person for any liability (including liability under U.S. federal securities laws that, under certain circumstances, impose liability even on persons that act in good faith) to the extent (but only to the extent) that exculpation or indemnification would be in violation of applicable law, but will be construed so as to effectuate the applicable provisions of this section to the maximum extent permitted by applicable law.
9. Duration of Agreement
(a) This Agreement shall be effective on September 30, 2011. This Agreement, unless sooner terminated in accordance with 9(b) below, shall continue in effect from year to year thereafter provided that its continuance is specifically approved at least annually (1) by a vote of a majority of the members of the Board of Trustees of the Trust or by a vote of a majority of the outstanding voting securities of the Trust, and (2) in either event, by the vote of a majority of the members of the Trust’s Board of Trustees who are not parties to this Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on this Agreement.
(b) This Agreement (1) may be terminated at any time without the payment of any penalty either by a vote of a majority of the members of the Board of Trustees of the Trust or by a vote of a majority of the Trust’s outstanding voting securities, on sixty days’ prior written notice to the Adviser; (2) shall immediately terminate in the event of its assignment and (3) may be terminated by the Adviser on sixty days’ prior written notice to the Trust, but such termination will not be effective until the Trust shall have contracted with one or more persons to serve as a successor investment adviser for the Trust and such person(s) shall have assumed such position.
(c) As used in this Agreement, the terms “assignment”, “interested person” and “vote of majority of the Trust’s outstanding voting securities” shall have the meanings set forth for such terms in the 1940 Act, as amended.
(d) Any notice under this Agreement shall be given in writing, addressed and delivered, or mailed postpaid, to the other party to this Agreement to whom such notice is to be given at such party’s current address.
10. Other Activities
Nothing in this Agreement shall limit or restrict the right of any director, officer, or employee of the Adviser to engage in any other business or to devote his or her time and attention in part to the management or other aspects of any other business, whether of a similar nature or a dissimilar nature, nor to limit or restrict the right of the Adviser to engage in any other business or to render services of any kind to any other corporation, firm individual or association.
11. Additional Series
The amendment of Schedule A to this Agreement for the sole purpose of adding one or more series of the Trust shall not be deemed an amendment of this Agreement or an amendment affecting an already existing series and requiring the approval of shareholders of that series.
12. Invalid Provisions
If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby.
13. Governing Law
To the extent that federal securities laws do not apply, this Agreement and all performance hereunder shall be governed by the laws of the State of Delaware, without reference to the conflict of laws provisions thereof.
14. Amendments
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 whom enforcement of the change, waiver, discharge, or termination is sought, and no amendment of this Agreement will be effective until approved in a manner consistent with the 1940 Act and rules and regulations under the 1940 Act and any applicable Securities and Exchange Commission exemptive order from such rules and regulations. Any such instrument signed by the Trust must be (a) approved by the vote of a majority of the Trustees who are not parties to this Agreement or “interested persons” of any party to this Agreement, cast in person at a meeting called for the purpose of voting on such approval, and (b) by the vote of a majority of the Trustees of the Trust, or by the vote of a majority of the outstanding voting securities of the Trust. The amendment of Schedule A and/or Schedule B to this Agreement for the sole purpose of (i) adding or deleting one or more Portfolios or (ii) making other non-material changes to the information included in the Schedule shall not be deemed an amendment of this Agreement.
15. Entire Agreement
This Agreement, including the schedules hereto, constitutes the entire understanding between the parties pertaining to the subject matter hereof and supersedes any prior agreement between the parties on this subject matter.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the 30th day of September, 2011.
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Hartford Investment Financial Services, LLC |
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/s/ Xxxxx X. Xxxxx |
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By: Xxxxx X. Xxxxx |
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Title: President |
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/s/ Xxxxx X. Xxxxx |
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By: Xxxxx X. Xxxxx |
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Title: President |
Schedule B
Fees
As compensation for the services rendered by the Adviser, each Portfolio shall pay to the Adviser as promptly as possible after the last day of each month during the term of this Agreement, a fee accrued daily and paid monthly based upon the following annual rates calculated based on the average daily net asset value of the Trust:
The Hartford Alternative Strategies Fund
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Average Daily Net Assets |
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Annual Rate |
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First $500 million |
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0.6000 |
% |
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Next $500 million |
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0.5500 |
% |
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Next $4 billion |
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0.5000 |
% |
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Next $5 billion |
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0.4800 |
% |
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Amount Over $10 billion |
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0.4700 |
% |
