EXHIBIT (d)(6)
INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT made this day of 11th day of December 2000, by and between Commonfund
Institutional Funds, a Delaware business trust (the "Company"), Commonfund Asset
Management Company , a Delaware Corporation (the "Investment Manager"), and
Capital Guardian Trust Company (the "Sub-Adviser").
WHEREAS, the Company is an open-end, management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), which
consists of several series, each having its own investment policies; and
WHEREAS, the Company has entered into an investment advisory agreement with the
Investment Manager pursuant to which the Investment Manager will act as
investment manager to the Fund; and
WHEREAS, the Investment Manager, acting with the approval of the Company, wishes
to retain the Sub- Adviser to render discretionary investment advisory services
with respect to that portion of each portfolio identified on the attached
Schedule A to this Investment Sub-Advisory Agreement, as it may be amended from
time to time (each a "Fund") that may be allocated by the Investment Manager for
management by the Sub-Adviser from time to time (together with all income earned
on those assets and all realized and unrealized capital appreciation related to
those assets (with respect to a Fund, the "Managed Assets"), and the Sub-Adviser
is willing to render such services.
NOW, THEREFORE, in consideration of mutual covenants herein contained, the
parties hereto agree as follows:
DUTIES OF SUB-ADVISER. The Sub-Adviser shall manage the investment and
reinvestment of the Managed Assets and determine in its discretion, the
securities and other property to be purchased or sold and the portion of the
Managed Assets to retain in cash. The Sub-Adviser shall review all proxy
solicitation materials and shall exercise any voting rights associated with
securities comprising the Managed Assets in the best interests of the Fund and
its shareholders. The Sub-Adviser shall provide the Investment Manager and the
Company with records concerning the Sub-Adviser's activities that the Company is
required to maintain, and to render regular reports to the Investment Manager
and to the Company concerning the Sub-Adviser's discharge of the foregoing
responsibilities.
The Sub-Adviser shall discharge the foregoing responsibilities subject to the
written instructions and directions of the Company and its Board of Directors
and their agents, including the officers of the Company and the Investment
Manager, and in compliance with (i) such policies as the Company may from time
to time establish and communicate to the Sub-Adviser, (ii) the objectives,
policies, and limitations for each Fund set forth in the Prospectus and
Statement of Additional Information as those documents may from time to time be
amended or supplemented from and delivered to the Sub-Adviser (the "Prospectus
and Statement of Additional Information"), (iii) the Declaration of Trust of the
Company, and (iv) applicable laws and regulations including the 1940 Act and the
Internal Revenue Code of 1986. If a conflict in
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policies or guidelines referenced herein occurs, the Prospectus and Statement of
Additional Information shall control.
The Sub-Adviser agrees to perform such duties at its own expense and to provide
the office space, furnishings and equipment and the personnel required by it to
perform the services on the terms and for the compensation provided herein. The
Sub-Adviser will not, however, pay for the cost of securities, commodities, and
other investments (including brokerage commissions and other transaction
charges, if any) purchased or sold for a Fund, nor will the Sub-Adviser bear any
expenses that would result in the Company's inability to qualify as a regulated
investment company under provisions of the Internal Revenue Code.
DUTIES OF INVESTMENT MANAGER. The Investment Manager shall continue to have
responsibility for all services to be provided to a Fund pursuant to the
Advisory Agreement between it and the Company and shall oversee and review the
Sub-Adviser's performance under this Agreement.
The Investment Manager shall furnish to the Sub-Adviser current and complete
copies of the Declaration of Trust and By-laws of the Company, and the current
Prospectus and Statement of Additional Information as those documents may be
amended from time to time.
CUSTODY, DELIVERY AND RECEIPT OF SECURITIES. The Company shall designate one or
more custodians to hold the Managed Assets. The custodians, as so designated,
will be responsible for the custody, receipt and delivery of securities and
other assets of a Fund including the Managed Assets, and the Sub-Adviser shall
have no authority, responsibility or obligation with respect to the custody,
receipt or delivery of securities or other assets of a Fund including the
Managed Assets. In the event that any cash or securities of a Fund are delivered
to the Sub-Adviser, it will promptly deliver the same over to the custodian for
the benefit of and in the name of the Fund.
Unless otherwise required by local custom, all securities transactions for the
Managed Assets will be consummated by payment to or delivery by a Fund of cash
or securities due to or from the Managed Assets. Repurchase agreements including
tri-party repurchase agreements and other trading agreements may be entered into
by a Fund acting through designated officers or agents; custodians under
tri-party repurchase agreements will act as sub-custodians of the Fund.
PORTFOLIO TRANSACTIONS.
Selection of Brokers. The Sub-Adviser is authorized to select the brokers or
dealers that will execute the purchases and sales of portfolio securities and
other property for a Fund in a manner that implements the policy with respect to
brokerage set forth in the Prospectus and Statement of Additional Information
for the Fund or as the Board of Directors or the Investment Manager may direct
from time to time and in conformity with federal securities laws.
In executing Fund transactions and selecting brokers or dealers, the Sub-Adviser
will use its best efforts to seek on behalf of the Fund the best overall terms
available. In assessing the best overall terms available for any transaction,
the Sub-Adviser shall consider all factors that it deems relevant, including the
breadth of the market in the security, the price of the security, the financial
condition and execution capability of the broker or dealer, and the
reasonableness of the commission, if any, both for the specific transaction and
on a continuing basis. In evaluating the best overall terms available, and in
selecting the broker-dealer to execute a particular transaction, the Sub-Adviser
may also consider the brokerage and research services provided (as those terms
are defined in Section 28(e) of the Securities Exchange Act of 1934). Consistent
with any guidelines established by the Board of Directors and communicated to
the Sub-Adviser, the Sub-
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Adviser is authorized to pay to a broker or dealer who provides such brokerage
and research services a commission for executing a portfolio transaction for a
Fund that is in excess of the amount of commission another broker or dealer
would have charged for effecting that transaction if, but only if, the
Sub-Adviser determines in good faith that such commission was reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer viewed in terms of that particular transaction or terms of the
overall responsibilities of the Sub-Adviser to the Fund. In addition, the
Sub-Adviser is authorized to allocate purchase and sale orders for securities
to brokers or dealers (including brokers and dealers that are affiliated with
the Investment Manager, Sub-Adviser or the Company's principal underwriter) to
take into account the sale of shares of the Company if the Sub-Adviser believes
that the quality of the transaction and the commission are comparable to what
they would be with other qualified firms. In no instance, however, will Fund
assets be purchased from or sold to the Investment Manager, Sub-Adviser, the
Company's principal underwriter, or any affiliated person of either the
Company, the Investment Manager, Sub-Adviser or the principal underwriter,
acting as principal in the transaction, except to the extent permitted by the
Securities and Exchange Commission ("SEC") and the 1940 Act.
Aggregating Orders. The that Sub-Adviser may aggregate orders for purchase or
sale of Managed Assets with similar orders being made concurrently for other
accounts managed by Sub-Adviser, if, in Sub-Adviser's reasonable judgment, such
aggregation shall result in an overall economic benefit to the Fund, taking
into consideration the transaction price, brokerage commission and other
expenses. The Company acknowledges that the determination of such economic
benefit to a Fund by Sub-Adviser may represent Sub-Adviser's evaluation that a
Fund is benefited by relatively better purchase or sales prices, lower
commission expenses and beneficial timing of transactions or a combination of
these and other factors. In any single transaction in which purchases and or
sales of securities of any issuer for the account of a Fund are aggregated with
other accounts managed by Sub-Adviser, the actual prices applicable to the
transaction will be averaged among the accounts for which the transaction is
effected, including the account of a Fund.
COMPENSATION OF THE SUB-ADVISER. For the services to be rendered by the
Sub-Adviser under this Agreement, the Investment Manager shall pay to the
Sub-Adviser compensation at the rate specified in Schedule B as it may be
amended from time to time. Such compensation shall be paid at the times and on
the terms set forth in Schedule B. All rights of compensation under this
Agreement for services performed as of the termination date shall survive the
termination of this Agreement. Except as may otherwise be prohibited by law or
regulation (including any then current SEC staff interpretations), the
Sub-Adviser may, in its discretion and from time to time, waive a portion of
its fee.
OTHER EXPENSES. The Company shall pay all expenses relating to mailing
prospectuses, statements of additional information, proxy solicitation material
and shareholder reports to shareholders.
REPORTS.
The Company and the Sub-Adviser agree to furnish to each other, current
prospectuses, proxy statements, reports to shareholders, certified copies of
financial statements, and such other information with regard to their affairs
as each may reasonably request. The Investment Manager
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will furnish to the Sub-Adviser advertising and sales literature or other
material prepared for distribution to Fund shareholders or the public, which
refer to the Sub-Adviser or its clients in any way, prior to the use thereof,
and the Investment Manager shall not use any such materials if the Sub-Adviser
reasonably objects in writing within ten (10) business days (or such other time
as may be mutually agreed) after receipt thereof.
The Sub-Adviser shall provide to each Fund's custodian, on each business day,
information relating to all transactions in the Managed Assets and shall provide
such information to the Investment Manager upon request. The Sub-Adviser will
make all reasonable efforts to notify the Custodian of all orders to brokers for
the Managed Assets by 9:00 am EST on the day following the trade date and will
affirm the trade to the Custodian before the close of business one business day
after the trade date.
The Sub-Adviser will promptly communicate to the Investment Manager and to the
Company such information relating to portfolio transactions on behalf of a Fund
as they may reasonably request.
The Sub-Adviser shall promptly notify the Company and the Investment Manager of
any financial condition likely to impair the ability of the Sub-Adviser to
fulfill its commitments under this Agreement.
STATUS OF SUB-ADVISER. The Sub-Adviser is and will continue to be registered as
such under the federal Investment Advisers Act of 1940. The services of the
Sub-Adviser to the Company for each Fund are not to be deemed exclusive, and the
Sub-Adviser shall be free to render similar services to others so long as its
services to the Fund are not impaired thereby. The Sub-Adviser shall be deemed
to be an independent contractor and shall, unless otherwise expressly provided
or authorized, have no authority to act for or represent the Company in any way
or otherwise be deemed an agent of the Company.
CERTAIN RECORDS. The Sub-Adviser shall maintain all books and records with
respect to transactions involving the Managed Assets required by subparagraphs
(b)(5), (6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the
1940 Act. The Sub-Adviser shall provide to the Investment Manager or the Board
of Directors such periodic and special reports, balance sheets or financial
information, and such other information with regard to its affairs as the
Investment Manager or the Board of Directors may reasonably request.
The Sub-Adviser shall keep the books and records relating to the Managed Assets
required to be maintained by the Sub-Adviser under this Agreement and shall
timely furnish to the Investment Manager all information relating to the
Sub-Adviser's services under this Agreement needed by the Investment Manager to
keep the other books and records of the Company required by Rule 31a-1 under the
1940 Act. The Sub-Adviser shall also furnish to the Investment Manager any other
information relating to the Managed Assets that is required to be filed by the
Investment Manager or the Company with the SEC or sent to shareholders under the
1940 Act (including the rules adopted thereunder) or any exemptive or other
relief that the Investment Manager or the Company obtains from the SEC. The
Sub-Adviser agrees that all records that it maintains on behalf of the Company
are property of the Company and the Sub-Adviser will surrender promptly to the
Company any of such records upon the Company's request; provided, however, that
the Sub-Adviser may retain a copy of such records. In addition, for the duration
of this Agreement, the Sub-Adviser shall preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act any such records as are required to be maintained
by it pursuant to this Agreement, and
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shall transfer said records to any successor sub-adviser upon the termination of
this Agreement (or, if there is no successor sub-adviser, to the Investment
Manager).
LIMITATION OF LIABILITY OF SUB-ADVISER. The duties of the Sub-Adviser shall be
confined to those expressly set forth herein, and no implied duties are assumed
by or may be asserted against the Sub-Adviser hereunder, except as may be
imposed by law. The Sub-Adviser shall not be liable for any error of judgment or
mistake of law or for any loss arising out of any investment or for any act or
omission in carrying out its duties hereunder, except a loss resulting from
willful misfeasance, bad faith or gross negligence in the performance of its
duties, or by reason of reckless disregard of its obligations and duties
hereunder, except as may otherwise be provided under provisions of applicable
state law or Federal securities law which cannot be waived or modified hereby.
(As used in this Paragraph 10, the term "Sub-Adviser" shall include directors,
officers, employees and other corporate agents of the Sub-Adviser as well as
that entity itself).
PERMISSIBLE INTERESTS. Agents and shareholders of the Company may be interested
in the Sub-Adviser (or any successor thereof) as directors, partners, officers,
or shareholders, or otherwise; directors, partners, officers, agents, and
shareholders of the Sub-Adviser are or may be interested in the Company as
shareholders or otherwise; and the Sub-Adviser (or any successor) is or may be
interested in the Company as a shareholder or otherwise. In addition, brokerage
transactions for the Company may be effected through affiliates of the
Sub-Adviser if approved by the Board of Directors of the Company subject to the
rules and regulations of the Securities and Exchange Commission.
DURATION AND TERMINATION. This Agreement shall become effective for each Fund
set forth in Schedule A upon its approval by the Board of Directors of the
Company and by a vote of the majority of the outstanding voting securities of
each Fund; provided, however, that at any time the Adviser shall have obtained
exemptive relief from the Securities and Exchange Commission permitting it to
engage a Sub-Adviser without first obtaining approval of the Agreement from a
majority of the outstanding voting securities of the Fund(s) involved, the
Agreement shall become effective upon its approval by the Company's Board of
Directors. This Agreement shall remain in effect until two years from date of
execution, and thereafter, for periods of one year so long as such continuance
thereafter is specifically approved at least annually by the vote of a (a)
majority of those Directors of the Company 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 such approval, and (b) by the Directors of the Company,
or by the vote of a majority of the outstanding voting securities of the Fund;
provided, however, that if the shareholders of a Fund fail to approve the
Agreement as provided herein, the Sub-Adviser may continue to serve hereunder in
the manner and to the extent permitted by the Investment Company Act of 1940 and
rules and regulations thereunder. The foregoing requirement that continuance of
this Agreement be "specifically approved at least annually" shall be construed
in a manner consistent with the Investment Company Act of 1940 and the rules and
regulations thereunder.
This Agreement may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Directors of the Company or by vote of a
majority of the outstanding voting securities of a Fund on not less than 30 days
nor more than 60 days written notice to the Sub-Adviser, by the Investment
Manager at any time without the payment of a penalty upon 90 days written notice
to the Sub-Adviser, or by the Sub-Adviser at any time without the payment of any
penalty on 90 days written notice to the Investment Manager. This Agreement will
automatically and immediately terminate in the event of its assignment or in the
event of the termination of the Investment Manager's advisory agreement with the
Company. Any termination of this Agreement in accordance with the terms hereof
will not affect the obligations or liabilities
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accrued prior to termination. Any notice under this Agreement shall be given in
writing, addressed and delivered, or mailed postpaid, to the other party at any
office of such party.
As used in this Section 12, the terms "assignment", "interested persons," and a
"vote of a majority of the outstanding voting securities" shall have the
respective meanings set forth in the 1940 Act and the rules and regulations
thereunder; subject to such exceptions as may be granted by the SEC under said
Act.
NOTICE. Any notice required or permitted to be given by either party to the
other shall be deemed sufficient if sent by registered or certified mail,
postage prepaid, addressed by the party giving notice to the other party at the
last address furnished by the other party to the party giving notice. At the
outset, such notices shall be delivered to the following addresses:
(i) if to the Company:
c/o Commonfund Asset Management Company
Attention: President
00 Xxx Xxxxxxx Xx,
X.X. Xxx 000, Xxxxxx, XX 00000;
(ii) if to the Investment Manager, at the foregoing address; and
(iii) if to the Sub-Adviser:
Capital Guardian Trust Company
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
SEVERABILITY. 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.
GOVERNING LAW. This Agreement shall be construed in accordance with the laws of
the State of New York and the applicable provisions of the 1940 Act. To the
extent that the applicable laws of the State of New York, or any of the
provisions herein, conflict with the applicable provisions of the 1940 Act, the
latter shall control.
MISCELLANEOUS. This instrument constitutes the sole and only agreement of the
parties to it relating to its object; any prior agreements, promises or
representations not expressly set forth in this Agreement are of no force and
effect. No waiver or modification of this Agreement shall be effective unless
reduced to writing and signed by the party to be charged. No failure to
exercise and no delay in exercising on the part of any party hereto of any
right, remedy, power or privilege hereunder shall operate as a waiver thereof.
Except as set forth in Section 12, this Agreement binds and inures to the
benefit of parties, their successors and assigns. This Agreement may be
executed in more than one counterpart each of which shall be deemed an original
and both of which, taken together, shall be deemed to constitute one and the
same instrument. A copy of the Certificate of Trust of the Company is on file
with the Secretary of State of the State of Delaware and notice is hereby given
that the obligations under this instrument are not binding on any of the
Directors, officers or shareholders of the Company. Where the effect of a
requirement of the 1940 Act reflected in any provision of this Agreement is
altered by rule, regulation or order of the SEC, whether of special or general
application, such provision shall be deemed to incorporate the effect of such
rule, regulation or order.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first written above.
COMMONFUND INSTITUTIONAL FUNDS
By: /s/ Xxxx X. Xxxxxxxxxxx
---------------------------------------
Attest: /s/L.O.
COMMONFUND ASSET MANAGEMENT COMPANY
By:/s/ Xxxx X. Xxxxxx
---------------------------------------
Attest: /s/L.O.
CAPITAL GUARDIAN TRUST COMPANY
By:/s/Xxxxxxx X. Xxxx
---------------------------------------
Attest: /s/M.A.
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SCHEDULE A
TO THE
INVESTMENT SUB-ADVISORY AGREEMENT
AMONG
COMMONFUND INSTITUTIONAL FUNDS
COMMONFUND ASSET MANAGEMENT COMPANY
AND
CAPITAL GUARDIAN TRUST COMPANY
FUND
CIF International Equity Fund
Date of this Schedule: ______
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SCHEDULE B
TO THE
INVESTMENT SUB-ADVISORY AGREEMENT
DATED _______, 0000
XXXXX
XXXXXXXXXX INSTITUTIONAL FUNDS
COMMONFUND ASSET MANAGEMENT COMPANY
AND
CAPITAL GUARDIAN TRUST COMPANY
FEES
Daily Accrual
Fees shall be accrued each day by applying to the Net Asset Value of the
Managed Assets at the end of that day, the daily rate, using a 365 day year,
equivalent to the following:
Fund Managed Assets($) (% Per Annum)
---- ----------------- -------------
CIF International First $ 25 million 0.75%
Equity Fund Next $ 25 million 0.60%
Next $ 200 million 0.425%
Thereafter 0.375%
Additionally, the following fee discount will be applied based upon the total
aggregated fees:
Clients between $1.25 million and $4 million 5% discount
Clients between $4 million and $ 8 million 7.5% discount
Clients between $8 million and $12 million 10% discount
Clients over $12 million 12.5% discount
Quarterly Payment
Fees shall be paid within 30 days following the end of each calendar quarter.
COMMONFUND ASSET MANAGEMENT CAPITAL GUARDIAN TRUST COMPANY
COMPANY
By: /s/ Xxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxx
------------------- ---------------------
Name:Xxxx X. Xxxxxx Name: Xxxxxxx X. Xxxx
Title: President Title: Vice President
Date of this Schedule B: ______
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