ADVANCED SERIES TRUST AST Ivy Asset Strategy Portfolio SUBADVISORY AGREEMENT
AST Ivy Asset Strategy Portfolio
Agreement made as of this29th day of April, 2015 between
Prudential Investments LLC (PI or the Manager), a New York limited liability company and Ivy Investment Management Company, a Delaware
Corporation (Ivy or the Subadviser),
WHEREAS, the Manager has entered into a Management Agreement (the
Management Agreement) dated May 1, 2003, with Advanced Series Trust (formerly American Skandia Trust), a Massachusetts business
trust (the Trust) and a diversified, open-end management investment company registered under the Investment Company Act of 1940,
as amended (the 1940 Act), pursuant to which PI acts as Manager of the Trust; and
WHEREAS, the Manager, acting pursuant to the Management Agreement,
is authorized to and desires to retain the Subadviser to provide investment advisory services to the Trust and one or more of its
series as specified in Schedule A hereto (individually and collectively, with the Trust, referred to herein as the Trust) and to
manage such portion of the Trust as the Manager shall from time to time direct, and the Subadviser is willing to render such investment
advisory services; and
NOW, THEREFORE, the Parties agree as follows:
1. (a) Subject to the supervision of the Manager and the Board
of Trustees of the Trust, the Subadviser shall manage such portion of the Trust's portfolio as delegated to the Subadviser by the
Manager, including the purchase, retention and disposition thereof, in accordance with the Trust's investment objectives, policies
and restrictions as stated in its then current prospectus and statement of additional information (such prospectus and statement
of additional information as currently in effect and as amended or supplemented from time to time, being herein called the "Prospectus"),
and subject to the following understandings:
(i) The Subadviser shall provide supervision of such portion of the Trust's investments as the Manager shall direct, and shall
determine from time to time what investments and securities will be purchased, retained, sold or loaned by the Trust, and what
portion of the assets will be invested or held uninvested as cash.
(ii) In the performance of its duties and obligations under this Agreement, the Subadviser shall act in conformity with the copies of the Amended and Restated Declaration of Trust of the Trust, the By-laws of the Trust, the Prospectus of the Trust, and the Trust's valuation procedures as provided to it by the Manager (the Trust Documents) and with the instructions and directions of the Manager and of the Board of Trustees of the Trust, co-operate with the Manager's (or its designees') personnel responsible for monitoring the Trust's compliance and will conform to, and comply with, the requirements of the 1940 Act, the Commodity Exchange Act of 1936, as amended (the CEA), the Internal Revenue Code of 1986, as amended, and all other applicable federal and state laws and regulations. In connection therewith, the Subadviser shall, among other things, prepare and file such reports as are, or may in the future be, required by the Securities and Exchange Commission (the Commission). The Manager shall provide Subadviser timely with copies of any updated Trust Documents.
(iii) The Subadviser shall determine the securities, futures contracts and other instruments to be purchased or sold by such portion of the Trust's portfolio, as applicable, and may place orders with or through such persons, brokers, dealers or futures commission merchants, including any person or entity affiliated with the Subadviser (collectively, Brokers), to carry out the policy with respect to brokerage as set forth in the Trust's Prospectus or as the Board of Trustees may direct in writing from time to time. Any direction to effect transactions through a selected broker (Directed Broker), shall be in writing. The Trust agrees that the Subadviser will not be required to effect any transaction through the Directed Broker if it reasonably believes that to do so may result in a breach of any fiduciary duties it may have, including, without limitation, best execution.
In providing the Trust with investment supervision, it is recognized that the Subadviser will give primary consideration to securing the most favorable price and efficient execution. Within the framework of this policy, the Subadviser may consider the financial responsibility, research and investment information and other services provided by Brokers who may effect or be a party to any such transaction or other transactions to which the Subadviser's other clients may be a party. The Manager (or Subadviser) to the Trust each shall have discretion to effect investment transactions for the Trust
through Brokers (including, to the extent legally permissible,
Brokers affiliated with the Subadviser) qualified to obtain best execution of such transactions who provide brokerage and/or research
services, as such services are defined in Section 28(e) of the Securities Exchange Act of 1934, as amended (the 1934 Act), and
to cause the Trust to pay any such Brokers an amount of commission for effecting a portfolio transaction in excess of the amount
of commission another Broker would have charged for effecting that transaction, if the brokerage or research services provided
by such Broker, viewed in light of either that particular investment transaction or the overall responsibilities of the Manager
(or the Subadviser) with respect to the Trust and other accounts as to which they or it may exercise investment discretion (as
such term is defined in Section 3(a)(35) of the 1934 Act), are reasonable in relation to the amount of commission. On occasions
when the Subadviser deems the purchase or sale of a security, futures contract or other instrument to be in the best interest of
the Trust as well as other clients of the Subadviser, the Subadviser, to the extent permitted by applicable laws and regulations,
may, but shall be under no obligation to, aggregate the securities, futures contracts or other instruments to be sold or purchased.
In such event, allocation of the securities, futures contracts or other instruments so purchased or sold, as well as the expenses
incurred in the transaction, will be made by the Subadviser in the manner the Subadviser considers to be the most equitable and
consistent with its fiduciary obligations to the Trust and to such other clients.
(iv) The Subadviser shall maintain all books and records with respect
to the Trust's portfolio transactions effected by it as required by Rule 31a-l under the 1940 Act, and shall render to the Trust's
Board of Trustees such periodic and special reports as the Trustees may reasonably request. The Subadviser shall make reasonably
available its employees and officers for consultation with any of the Trustees or officers or employees of the Trust with respect
to any matter discussed herein, including, without limitation, the valuation of the Trust's securities.
(v) The Subadviser or an affiliate shall provide the Trust's Custodian
on each business day with information relating to all transactions concerning the portion of the Trust's assets it manages, and
shall provide the Manager with such information upon request of the Manager.
(vi) The investment management services provided by the Subadviser
hereunder are not to be deemed exclusive, and the Subadviser shall be free to render similar services to others. Conversely, the
Subadviser and Manager understand and agree that if the Manager manage the Trust in a "manager-of-managers" style, the
Manager will, among other things, (i) continually evaluate the performance of the Subadviser through quantitative and qualitative
analysis and consultations with the Subadviser, (ii) periodically make recommendations to the Trust's Board as to whether the contract
with one or more subadvisers should be renewed, modified, or terminated, and (iii) periodically report to the Trust's Board regarding
the results of its evaluation and monitoring functions. The Sub adviser recognizes that its services may be terminated or modified
pursuant to this process.
(vii)(a) The Subadviser acknowledges that the Manager and the Trust
intend to rely on Rule 17a-l0, Rule l0f-3, Rule 12d3-1 and Rule 17e-l under the 1940 Act, and the Subadviser hereby agrees that
it shall not consult with any other subadviser to the Trust with respect to transactions in securities for the Trust's portfolio
or any other transactions of Trust assets.
(b) The Subadviser shall keep the Trust's books and records required
to be maintained by the Subadviser pursuant to paragraph 1(a) hereof and shall timely furnish to the Manager all information relating
to the Subadviser's services hereunder needed by the Manager to keep the other books and records of the Trust required by Rule
31a-I under the 1940 Act or any successor regulation. The Subadviser agrees that all records which it maintains for the Trust are
the property of the Trust, and the Subadviser will tender promptly to the Trust any of such records upon the Trust's request, provided,
however, that the Subadviser may retain a copy of such records. The Subadviser further agrees to preserve for the periods prescribed
by Rule 31a-2 of the Commission under the 1940 Act or any successor regulation any such records as are required to be maintained
by it pursuant to paragraph 1(a) hereof.
(c) To the extent applicable, the Subadviser is a commodity trading advisor duly registered with the Commodity Futures Trading Commission (the CFTC) and is a member in good standing of the National Futures Association (the NFA). To the extent applicable, the Subadviser shall maintain such registration and membership in good standing during the term of this Agreement. Further, to the extent applicable, the Subadviser agrees to notify the Manager promptly upon (i) a statutory disqualification of the Subadviser under Sections 8a(2) or 8a(3) of the CEA, (ii) a suspension, revocation or limitation of the Subadviser’s commodity trading advisor registration or NFA membership, or (iii) the institution of an action or proceeding that could lead to a statutory disqualification under the CEA or an investigation by any governmental agency or self-regulatory organization of which the Subadviser is subject or has been advised it is a target.
(d) In connection with its duties under this Agreement, the Subadviser agrees to maintain adequate compliance procedures to ensure its compliance with the 1940 Act, the CEA, the Investment Advisers Act of 1940, as amended, and other applicable state and federal regulations, and applicable rules of any self-regulatory organization.
(e) The Subadviser shall furnish to the Manager copies of all records prepared in connection with (i) the performance of this Agreement and (ii) the maintenance of compliance procedures pursuant to paragraph 1(c) hereof as the Manager may reasonably request.
(f) The Subadviser shall be responsible for the voting of all shareholder proxies with respect to the investments and securities held in the Trust's portfolio, subject to such reasonable reporting and other requirements as shall be established by the Manager.
(g) The Subadviser acknowledges that it is responsible for evaluating whether market quotations are readily available for the Trust's portfolio investments and whether those market quotations are reliable for purposes of valuing the Trust's portfolio investments and determining the Trust's net asset value per share and promptly notifying the Manager upon the occurrence of any significant event with respect to any of the Trust's portfolio investments in accordance with the requirements of the 1940 Act and any related written guidance from the Commission and the Commission staff. Upon reasonable request from the Manager, the Subadviser (through a qualified person) will assist the valuation committee of the Trust or the Manager in valuing investments of the Trust as may be required from time to time, including making available information of which the Subadviser has knowledge related to the investments being valued.
2. The
Manager shall continue to have responsibility
for all services to
be provided to the Trust pursuant to the Management Agreement and, as more particularly discussed above, shall oversee and review
the Subadviser's performance of its duties under this Agreement. The Manager
shall provide (or cause the Trust's
custodian to provide) timely information to the Subadviser regarding such
matters as the composition
of assets in the portion of the Trust managed by the Subadviser, cash requirements and cash available for investment in such portion
of the Trust, and all other information as may be
reasonably necessary for the Subadviser to perform
its duties hereunder (including any excerpts of minutes
of meetings of the Board of Trustees of the Trust that
affect the duties of the Subadviser).
3. For the services provided pursuant to this Agreement, the Manager shall pay the Subadviser as full compensation therefor, a fee equal to the percentage of the Trust's average daily net assets of the portion of the Trust managed by the Subadviser as described in the attached Schedule A. Liability for payment of compensation by the Manager to the Subadviser under this Agreement is contingent upon the Manager' receipt of payment from the Trust for management services described under the Management Agreement between the Fund and the Manager. Expense caps or fee waivers for the Trust that may be agreed to by the Manager, but not agreed to by the Subadviser, shall not cause a reduction in the amount of the payment to the Subadviser by the Manager.
4.
The Subadviser shall not be liable for any error of
judgment or for any loss suffered by the Trust or the Manager in connection with the
matters to which this Agreement relates, except a
loss resulting from willful misfeasance,
bad faith or gross negligence on the Subadviser's part
in the performance of its duties or from its reckless disregard of its obligations and duties under this Agreement,
provided, however, that nothing in this Agreement shall be deemed to waive any rights the Manager
or the Trust may have against the
Subadviser under federal or state securities laws. The Manager
shall indemnify the Subadviser, its affiliated persons, its officers,
directors and employees, for any liability and expenses,
including attorneys' fees, which
may be sustained as a result
of the Manager' willful
misfeasance, bad faith, gross negligence, reckless disregard of its duties hereunder or violation
of applicable law, including, without limitation, the 1940
Act and federal and
state securities laws. The Subadviser shall indemnify the
Manager, their affiliated persons, their officers, directors and employees,
for any liability and expenses, including attorneys' fees,
which may be sustained as a
result of the Subadviser's willful misfeasance, bad faith, gross negligence, or
reckless disregard of its duties hereunder or violation of applicable
law, including, without limitation, the
1940 Act and federal and
state securities laws.
5. This Agreement shall continue in effect for a period of more than two years from the date hereof only so long as such continuance is specifically approved at least annually in conformity with the requirements of the 1940 Act; provided, however, that this Agreement may be terminated by the Trust at any time, without the payment of any penalty, by the Board of Trustees of the Trust or by vote of a majority of the outstanding voting securities (as defined in the 0000 Xxx) of the Fund, or by the Manager or the Subadviser at any time, without the payment of any penalty, on not more than 60 days' nor less than 30 days' written notice to the other party. This Agreement shall terminate automatically in the event of its assignment (as defined in the 0000 Xxx) or upon the termination of the Management Agreement. The Subadviser agrees that it will promptly notify the Trust and the Manager of the occurrence of any event that would result in the assignment (as defined in the 0000 Xxx) of this Agreement, including, but not limited to, a change of control (as defined in the 0000 Xxx) of the Subadviser.
To the extent that the Manager delegates to the Subadviser management of all or a portion of a portfolio of the Trust previously managed by a different subadviser or the Manager, the Subadviser agrees that its duties and obligations under this Agreement with respect to that delegated portfolio or portion thereof shall commence as of the date the Manager begins the transition process to allocate management responsibility to the Subadviser.
Any notice or other communication
required to be given pursuant to this Agreement shall be
deemed duly given if delivered or mailed by registered
mail, postage prepaid, (1) to the Manager at Gateway Center Three, 000 Xxxxxxxx Xxxxxx, 0xx
Xxxxx, Xxxxxx, XX 00000-0000,
Attention: Secretary (for PI); (2) to the Trust
at Gateway Center Three,
000 Xxxxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxx, XX 00000-0000,
Attention: Secretary; or (3) to the Subadviser at Ivy Investment Management Company,
0000 Xxxxx Xxxxxx, Xxxxxxxx Xxxx, XX 00000, Attention: Global Director of Institutional Marketing,
with a copy to the Investment Management Department at the same address.
6. Nothing in
this Agreement shall limit
or restrict the right of any
of the Subadviser's directors,
officers or employees who may also be a Trustee, officer
or employee of the Trust 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 business, whether of a similar or a dissimilar nature, nor
limit or restrict the
Subadviser's right to engage in any
other business or to render services of
any kind to any other corporation,
firm, individual or association.
7. During the term of this Agreement, the Manager agrees to furnish the Subadviser at its principal office all prospectuses, proxy statements, and reports to shareholders which refer to the Subadviser in any way, prior to use thereof and not to use material if the Subadviser reasonably objects in writing five business days (or such other time as may be mutually agreed) after receipt thereof. During the term of this Agreement, the Manager also agrees to furnish the Subadviser, upon request, representative samples of marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public, which make reference to the Subadviser. The Manager further agrees to prospectively make reasonable changes to such materials upon the Subadviser's written request, and to implement those changes in the next regularly scheduled production of those materials. All such prospectuses, proxy statements, replies to shareholders, marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public which make reference to the Subadviser may be furnished to the Subadviser hereunder by electronic mail, first-class or overnight mail, facsimile transmission equipment or hand delivery.
8. The parties agree that non-public portfolio holdings and other business information are confidential (“Confidential Information”). Neither party shall, without the prior written approval of the other party, disseminate to any third party, except otherwise provided for herein, all or any portion of such other party’s Confidential Information, for any purpose other than performance under this Agreement, any fiduciary obligations with respect to the Trust, or if required by law or regulatory action. The Manager agrees that the Subadviser’s Confidential Information may not be used as the basis to trade in any of the mutual funds managed by the Subadviser and/or its affiliates, nor to purchase or sell shares of any security contained in the Confidential Information, unless such Confidential Information has been made publicly available.
9. The Manager acknowledges and agrees that the Subadviser shall have no responsibility for filing claims on behalf of the Manager or the Trust or for providing advice with respect to any class action, bankruptcy proceeding or any other action or proceeding in which the Funds or the Trust may be entitled to participate as a result of its securities, commodities, swaps or other financial instrument or other holdings. The Subadviser's responsibility, with respect thereto, shall be limited to reasonable cooperation with the custodian and the Manager. The Manager acknowledges that the Subadviser is not the official recordkeeper with respect to the managed assets.
10.
This Agreement may be amended by
mutual consent, but the consent of the Trust
must be obtained in conformity
with the requirements
of the 1940 Act.
11. This Agreement shall be governed
by the laws of the State of New
York.
12. Any question
of interpretation of any term or
provision of this Agreement having a counterpart
or otherwise derived from a
term or provision of the 1940 Act,
shall be resolved by
reference to such term
or provision of the
1940 Act and to interpretations
thereof, if any, by
the United States courts
or, in the absence of any controlling decision of any such court, by
rules, regulations or orders of
the Commission issued pursuant to the
1940 Act. In addition,
where the effect of a requirement of the 1940 Act, reflected
in any provision of
this Agreement, is
related by rules,
regulation or order of
the Commission, such
provision shall be
deemed to incorporate the effect of such rule, regulation or
order.
IN WITNESS WHEREOF, the Parties hereto have caused this instrument
to be executed by their officers designated below as of the day and year first above written.
PRUDENTIAL INVESTMENTS LLC
By: /s/ Xxxxxxx Xxxxx
Name: Xxxxxxx Xxxxx
Title: V.P. Investment Management
Ivy Investment Management Company
By: /s/ Xxxx X. Xxxxxxx Xx., CFA
Name: Xxxx X. Xxxxxxx Xx., CFA
Title: Chief Administrative Officer
SCHEDULE A
As compensation for services provided by Ivy Investment Management Company (Ivy), Prudential Investments LLC will pay Ivy an advisory fee on the net assets managed by Ivy that is equal, on an annualized basis, to the following:
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Subadvisory Fee Rate* |
| AST Ivy Asset Strategy Portfolio |
0.55% of average daily net assets to $500 million; 0.47% of average daily net assets on next $1 billion; and 0.43% of average daily net assets over $1.5 billion
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* Ivy has agreed to a fee waiver arrangement that applies to the AST Ivy Asset Strategy Portfolio (Portfolio). If applicable, under this arrangement, Ivy will waive its subadvisory fee for the Portfolio in an amount equal to the acquired fund subadvisory fee paid to Ivy for any portfolio affiliated with the Manager. In addition, Ivy will waive its subadvisory fee for the Portfolio in an amount equal to the management or subadvisory fee it receives for acquired funds that are not affiliated with the Manager. Notwithstanding the foregoing, the subadvisory fee waivers will not exceed 100% of the subadvisory fee.
Dated as of: April 29, 2015
