INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSTITUTIONAL INVESTMENTS TRUST
AGREEMENT made as of this 4th day of April, 2000, between SEI
Investments Management Corporation (the "Adviser") and Xxxxxxxx Investment
Management North America Inc., (the "Sub-Adviser").
WHEREAS, SEI Institutional Investments Trust, a Massachusetts business
trust (the "Trust"), is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated June 14, 1996 (the "Advisory Agreement") with the Trust, pursuant to which
the Adviser will act as investment adviser to the Emerging Markets Equity
Fund (the "Fund"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain
the Sub-Adviser to provide investment advisory services to the Adviser in
connection with the management of the Fund, and the Sub-Adviser is willing to
render such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and
the Trust's Board of Trustees, the Sub-Adviser shall manage all of the
securities and other assets of the Fund entrusted to it hereunder (the
"Assets"), including the purchase, retention and disposition of the
Assets, in accordance with the Fund's investment objectives, policies
and restrictions as stated in Schedule A attached hereto and in the
Fund's prospectus and statement of additional information, as currently
in effect and as amended or supplemented from time to time and provided
to the Sub-Adviser (referred to collectively as the "Prospectus"), and
subject to the following:
(a) The Sub-Adviser shall, in consultation with and subject to the
direction of the Adviser, determine from time to time what Assets will
be purchased, retained or sold by the Fund, and what portion of the
Assets will be invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement,
the Sub-Adviser shall act in conformity with the Trust's Declaration of
Trust (as defined herein) and the Prospectus and with the written
instructions and directions of the Adviser and of the Board of Trustees
of the Trust and will conform to and comply with the requirements of
the 1940 Act, the Internal Revenue Code of 1986, and all other
applicable federal and state laws and regulations, as each is amended
from time to time.
(c) The Sub-Adviser shall determine the Assets to be purchased or sold by
the Fund as provided in subparagraph (a) and will place orders with or
through such persons, brokers or dealers to carry out the policy with
respect to brokerage set forth in the Fund's Registration
1
Statement (as defined herein) and Prospectus or as the Board of
Trustees or the Adviser may direct in writing from time to time, in
conformity with federal securities laws. In executing Fund transactions
and selecting brokers or dealers, the Sub-Adviser will not be required
to direct brokerage fees and 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 Trustees of the Trust and
provided to the Sub-Adviser, the Sub-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 the Fund which 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 Adviser,
Sub-Adviser or the Trust's principal underwriter) to take into account
the sale of shares of the Trust 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
the Fund's Assets be purchased from or sold to the Adviser,
Sub-Adviser, the Trust's principal underwriter, or any affiliated
person of either the Trust, Adviser, the 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. Notwithstanding any other provision in this Agreement and
documents referenced therein, in the execution of transactions for the
Fund, the Sub-Adviser is authorized to select any broker or dealer
which in the Adviser's opinion is capable of properly executing the
transaction or transactions then under consideration in a manner which
is most beneficial to the Fund.
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the 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 Adviser or the Board of
Trustees such periodic and special reports, balance sheets or financial
information, and such other information with regard to its affairs as
the Adviser or Board of Trustees may reasonably request.
The Sub-Adviser shall keep the books and records relating to the Assets
required to be maintained by the Sub-Adviser under this Agreement and
shall timely furnish to the Adviser all information relating to the
Sub-Adviser's services under this Agreement needed by the Adviser to
keep the other books and records of the Fund required by Rule 31a-1
under the
2
1940 Act. The Sub-Adviser shall also furnish to the Adviser any other
information relating to the Assets that is required to be filed by the
Adviser or the Trust with the SEC or sent to shareholders under the
1940 Act (including the rules adopted thereunder) or any exemptive or
other relief that the Adviser or the Trust obtains from the SEC, and
will make all filings required to be made by the Sub-Adviser under
Section 13 of the Securities Act of 1933 and the related rules and
forms. The Sub-Adviser agrees that all records that it maintains on
behalf of the Fund are property of the Fund and the Sub-Adviser will
surrender promptly to the Fund any of such records upon the Fund'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 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 Adviser).
(e) The Sub-Adviser shall provide the Fund's custodian on each business day
with information relating to all transactions of such day concerning
the Assets and shall provide the Adviser with such information upon
request of the Adviser.
(f) The investment management services provided by the Sub-Adviser under
this Agreement are not to be deemed exclusive and the Sub-Adviser shall
be free to render similar services to others, as long as such services
do not materially impair the services rendered to the Adviser or the
Trust. The Adviser understands that the Sub-Adviser's affiliates offer
a broad range of brokerage and investment banking services, that the
employees of the Sub-Adviser and its affiliates may from time to time
act as directors, officers, or employees of companies whose securities
are publicly traded, and that as a result, such employees may acquire
information of a confidential nature. The Adviser agrees that the
Sub-Adviser may, but shall not be required to, render investment advice
with respect to any such company, and that the Sub-Adviser may in its
discretion withhold any such knowledge or information or refuse to
advise with respect to such company, whether or not the Assets shall
include securities of such company, if in the Sub-Adviser's judgment
the disclosure of such knowledge or information or the rendering of
investment advice on the basis thereof would be unfair, inequitable, a
breach of any fiduciary obligation of the Sub-Adviser to some other
person, or unlawful. For the same reasons, the Sub-Adviser may, in its
discretion, exclude securities and other property from the Assets, and
the Sub-Adviser shall not be required to give advice on securities and
other property which it or its affiliates have distributed, are
distributing or propose to distribute.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition it may incur that is likely to impair the Sub-Adviser's
ability to fulfill its commitment under this Agreement.
(h) The Sub-Adviser shall review all proxy solicitation materials and be
responsible for voting and handling all proxies in relation to the
securities held in the Fund. The Adviser shall instruct the custodian
and other parties providing services to the Fund to promptly forward
proxies to the Sub-Adviser.
3
(i) Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners,
officers or employees.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have
responsibility for all services to be provided to the Fund pursuant to
the Advisory Agreement and shall oversee and review the Sub-Adviser's
performance of its duties under this Agreement; provided, however, that
in connection with its management of the Assets, nothing herein shall
be construed to relieve the Sub-Adviser of responsibility for
compliance with the Trust's Declaration of Trust (as defined herein),
the Prospectus, the written instructions and directions of the Board of
Trustees of the Trust, the requirements of the 1940 Act, the Internal
Revenue Code of 1986, and all other applicable federal and state laws
and regulations, as each is amended from time to time.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the
Secretary of State of the Commonwealth of Massachusetts (such Agreement
and Declaration of Trust, as in effect on the date of this Agreement
and as amended from time to time, herein called the "Declaration of
Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Current Prospectus(es) of the Fund with Amendments.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in Schedule B which
is attached hereto and made part of this Agreement. The fee will be
calculated based on the average monthly market value of the Assets
under the Sub-Adviser's management and will be paid to the Sub-Adviser
monthly.
5. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or
damages (including reasonable attorney's fees and other related
expenses) howsoever directly arising from or in connection with any
breach of this Agreement or negligence, willful default, fraud or bad
faith of the Sub-Adviser in the performance of its duties hereunder or
as otherwise may be required by law.
6. DURATION AND TERMINATION. This Agreement shall become effective upon
its approval by the Trust's Board of Trustees and by the vote of a
majority of the outstanding voting securities of the 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
4
outstanding voting securities of the Fund(s) involved, the Agreement
shall become effective upon its approval by the Trust's Board of
Trustees. Any Sub-Adviser so selected and approved shall be without the
protection accorded by shareholder approval of an investment adviser's
receipt of compensation under Section 36(b) of the 1940 Act.
This Agreement shall continue in effect for a period of more than two
years from the date hereof only so long as continuance is specifically
approved at least annually in conformance with the 1940 Act; provided,
however, that this Agreement may be terminated with respect to the Fund
(a) by the Fund at any time, without the payment of any penalty, by the
vote of a majority of Trustees of the Trust or by the vote of a
majority of the outstanding voting securities of the Fund, (b) by the
Adviser at any time, without the payment of any penalty, on not more
than 60 days' nor less than 30 days' written notice to the Sub-Adviser,
or (c) by the Sub-Adviser at any time, without the payment of any
penalty, on 90 days' written notice to the Adviser. This Agreement
shall terminate automatically and immediately in the event of its
"assignment", or in the event of a termination of the Adviser's
agreement with the Trust. As used in this Section 6, the terms
"assignment" and "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 the 1940 Act.
7. GOVERNING LAW. This Agreement shall be governed by the internal laws of
the Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed
as being inconsistent with the 1940 Act.
8. SEVERABILITY. Should any part of this Agreement be held invalid by a
court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and
their respective successors.
9. NOTICE. Any notice, advice or report to be given pursuant to this
Agreement shall be deemed sufficient if delivered or mailed by
registered, certified or overnight mail, postage prepaid addressed by
the party giving notice to the other party at the last address
furnished by the other party:
To the Adviser at: SEI Investments Management Corporation
Xxx Xxxxxxx Xxxxxx Xxxx
Xxxx, XX 00000
Attention: Legal Department
To the Sub-Adviser at: Xxxxxxxx Investment Management North
America Inc.
00 Xxxxxx Xxxxxx
Xxxxxx XX0X0XX Xxxxxxx
Attn: Xxxxx Xxxxxxx
Xxxxxxxx Investment Management Limited
5
c/o
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxx Bridgerow
Notice shall be effective upon receipt.
10. NON-HIRE/NON-SOLICITATION. The parties hereby agree that so long as the
Sub-Adviser provides services to the Adviser or the Trust and for a
period of one year following the date on which the Sub-Adviser ceases
to provide services to the Adviser and the Trust, neither party shall
for any reason, directly or indirectly, on its own behalf or on behalf
of others, hire or solicit any person employed by the other party,
whether or not such person is a full-time employee or whether or not
any person's employment is pursuant to a written agreement or is
at-will. The parties further agree that, to the extent that a party
breaches the covenant described in this paragraph, the other party
shall be entitled to pursue all appropriate remedies in law or equity.
11. REPRESENTATIONS OF THE SUB-ADVISER. The Sub-Adviser represents that it
is registered as an investment adviser under the Investment Advisers
Act of 1940 and is regulated in the conduct of its investment business
in the United Kingdom by the Investment Management Regulatory
Organisation Limited ("IMRO"). The Sub-Adviser confirms that the
Adviser is a Non-private Customer as defined by IMRO, and the Adviser
confirms that it has taken independent legal advice on this Agreement.
12. LIABILITY OF THE SUB-ADVISER. (i) The Sub-Adviser shall not be liable
for any loss or damage arising out of the performance of its duties
hereunder unless such loss or damage arose out of or in connection with
its breach of this Agreement or its negligence, willful default, bad
faith, or fraud in the performance of its duties hereunder. (ii) As the
Assets are held in the custody of State Street Bank and Trust Company,
the Sub-Adviser shall have no responsibility or liability with respect
to custody arrangements or the acts, omissions or other conduct of any
custodian or sub-custodian of the Assets. (iii) The presence of any
exculpatory language in this Agreement shall not be deemed by the
Adviser, the Fund, the Sub-Adviser, any custodian or party appointed
pursuant to this Agreement as in any way limiting causes of action and
remedies which may, notwithstanding such language, be available either
under common law or statutory law principles applicable to fiduciary
relationships or under U.S. federal securities laws.
13. DISCLOSURE. The Adviser confirms that it has received, not less than 48
hours prior to signing this Agreement, Part II of Form ADV of the
Sub-Adviser.
14. APPLICABLE LAW. This Agreement shall be construed in accordance with
and governed by the laws of the State of New York without regard to its
conflicts of laws or principles thereof.
15. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating
6
to this Agreement's subject matter. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an
original, but such counterparts shall, together, constitute only one
instrument.
A copy of the Declaration of Trust is on file with the Secretary of
State of the Commonwealth of Massachusetts, and notice is hereby given that the
obligations of this instrument are not binding upon any of the Trustees,
officers or shareholders of the Fund or the Trust.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
SEI INVESTMENTS MANAGEMENT CORPORATION XXXXXXXX INVESTMENT MANAGEMENT
NORTH AMERICA INC.
By: /s/ Xxxx Xxxxxxxxx By: /s/ Xxxxxxx Xxxxx
Name: Xxxx Xxxxxxxxx Name: Xxxxxxx Xxxxx
Title: Senior Vice President Title: Executive Vice President
7
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI INVESTMENTS MANAGEMENT CORPORATION
AND
XXXXXXXX INVESTMENT MANAGEMENT NORTH AMERICA INC.
SEI INVESTMENTS
Emerging Markets Equity
Objectives, Guidelines & Reporting Requirements
Global Emerging Markets Mandate
SUB-ADVISOR: XXXXXXXX INVESTMENT MANAGEMENT NORTH AMERICA
Effective Date:
These objectives, guidelines and reporting requirements cover each Account
("Account") related to the SEI Emerging Markets Equity Strategies listed below.
The Sub-Advisor shall manage the assets within the terms of the Investment
Sub-Advisory Agreement, the Prospectus and the Statement of Additional
Information of the Fund or those policies and guidelines specific to a separate
account agreement each subject to the following. In the event that these
objectives are less restrictive or conflict with the three formal documents or
separate account agreement described above, those documents supersede the
objectives and guidelines outlined below. However, these objectives and
guidelines are intended to further specify the broad terms stated in the formal
documents listed above.
These objectives and guidelines apply to the following accounts and should be
followed by all additional accounts initiated after the effective date of this
document unless specifically stated. This list will be updated as needed.
SIT International Strategy (SIT)
SEI Global Master Funds (Offshore) *
Primus Emerging Markets Equity
SEI/Mediolanum Alpha Fund (Mediolanum)
SEI Insurance Product Trust (SIPT)
*See appendix for differences in Offshore mandate
PERFORMANCE OBJECTIVE
On a rolling three-year basis, the objective is to achieve an annualized return
of 4.0%, net of fees, in excess of the returns generated by the MSCI EMF Index
(the "Benchmark"). Performance attribution should demonstrate stock selection
consistently adding to excess returns.
8
GUIDELINES AND RESTRICTIONS
PERMITTED INVESTMENTS
In seeking to achieve the Performance Objective, the Subadvisor should invest
primarily in equity securities of issuers domiciled in, or organized under the
laws of, the countries that comprise the MSCI EMF Index, subject to the
guidelines or restrictions expressed in Table 1.
For the purposes of these guidelines, equity securities are defined to include
common stocks, securities convertible into common stocks, preferred stocks,
warrants and rights to subscribe to common stocks. The Sub-Adviser may also
invest in appropriate issuers through depository receipts including American
Depository Receipts and Global Depository Receipts. Securities should be readily
marketable. No holding should exceed its benchmark weight + 5%. If the security
is not in the benchmark then the maximum weight of that security should not
exceed 5% of the portfolio. Buying on margin and short selling are not
permitted. Please refer to the SEI International Trust Prospectus for a listing
of Permitted Investments.
COUNTRY AND REGIONAL EXPOSURES
Table 1 shows the MSCI EMF Index Country weights. The guidelines are put in
place to insure that the majority of total active risk (tracking error) should
come from specific asset risk and not from country exposure risk.
Subject to prior approval of SEI Asset Management, the Sub-Adviser may invest up
to 10% of the Mandate's assets in non-benchmark countries. The Sub-Adviser may
invest up to 5% of the Mandate's assets in individual non-benchmark countries
included in the MSCI World Index, subject to the condition that those
investments should derive more than 50% of their revenues or have more than 50%
of their assets in the emerging market countries. Investment in American
Depositary Receipts and Global Depository Receipts of Global Emerging Markets
issuers is permitted.
Table 1
-------------------------------------------------------------------------------------------------------------
COUNTRY MAXIMUM WEIGHT MINIMUM WEIGHT INVESTMENT VEHICLE
-------------------------------------------------------------------------------------------------------------
Argentina Bnmk + 5% Bnmk - 5% Local / ADR
-------------------------------------------------------------------------------------------------------------
Brazil Bnmk + 10% Bnmk - 10% Local / ADR
-------------------------------------------------------------------------------------------------------------
Chile Bnmk + 5% Bnmk - 5% ADR
-------------------------------------------------------------------------------------------------------------
China Bnmk + 5% Bnmk - 5% Local / ADR
-------------------------------------------------------------------------------------------------------------
Colombia Bnmk + 5% Bnmk - 5% ADR
-------------------------------------------------------------------------------------------------------------
Czech Republic Bnmk + 5% Bnmk - 5% Local / ADR
-------------------------------------------------------------------------------------------------------------
Greece Bnmk + 10% Bnmk - 10% Local / ADR
-------------------------------------------------------------------------------------------------------------
Hungary Bnmk + 5% Bnmk - 5% Local / ADR
-------------------------------------------------------------------------------------------------------------
India Bnmk + 10% Bnmk - 10% ADR
-------------------------------------------------------------------------------------------------------------
Indonesia Bnmk + 5% Bnmk - 5% Local / ADR
-------------------------------------------------------------------------------------------------------------
Israel Bnmk + 5% Bnmk - 5% Local / ADR
-------------------------------------------------------------------------------------------------------------
Korea Bnmk + 15% Bnmk - 15% Local / ADR
-------------------------------------------------------------------------------------------------------------
9
-------------------------------------------------------------------------------------------------------------
Malaysia Bnmk + 10% Bnmk - 10% Local / ADR
-------------------------------------------------------------------------------------------------------------
Mexico Bnmk + 15% Bnmk - 15% Local / ADR
-------------------------------------------------------------------------------------------------------------
Pakistan Bnmk + 5% Bnmk - 5% Not Permitted
-------------------------------------------------------------------------------------------------------------
Peru Bnmk + 5% Bnmk - 5% Local / ADR
-------------------------------------------------------------------------------------------------------------
Philippines Bnmk + 5% Bnmk - 5% Local / ADR
-------------------------------------------------------------------------------------------------------------
Poland Bnmk + 5% Bnmk - 5% Local / ADR
-------------------------------------------------------------------------------------------------------------
South Africa Bnmk + 15% Bnmk - 15% Local / ADR
-------------------------------------------------------------------------------------------------------------
Sri Lanka Bnmk + 5% Bnmk - 5% Not Permitted
-------------------------------------------------------------------------------------------------------------
Taiwan Bnmk + 15% Bnmk - 15% Local / ADR
-------------------------------------------------------------------------------------------------------------
Thailand Bnmk + 5% Bnmk - 5% Local / ADR
-------------------------------------------------------------------------------------------------------------
Turkey Bnmk + 5% Bnmk - 5% Local / ADR
-------------------------------------------------------------------------------------------------------------
Russia* Bnmk + 5% Bnmk - 5% Local** / ADR
-------------------------------------------------------------------------------------------------------------
Venezuela Bnmk + 5% Bnmk - 5% Local / ADR
-------------------------------------------------------------------------------------------------------------
*ADR investment only in Mediolanum account
** Only RTS (Russian Trading Syatem) allowed when investing in local shares.
Table 2 below contains the regional target allocations and ranges for the
manages sub accounts. Holdings outside of these ranges may be maintained only
after consultation with SEI.
Table 2
-------------------------------------------------------------------------------------------------------------
REGIONAL EXPOSURES MAXIMUM MINIMUM
-------------------------------------------------------------------------------------------------------------
Latin America Bnmk + 20% Bnmk - 20%
-------------------------------------------------------------------------------------------------------------
Asia Bnmk + 20% Bnmk - 20%
-------------------------------------------------------------------------------------------------------------
Europe Bnmk + 20% Bnmk - 20%
-------------------------------------------------------------------------------------------------------------
EMEA Bnmk + 20% Bnmk - 20%
-------------------------------------------------------------------------------------------------------------
CURRENCY MANAGEMENT
This mandate is unhedged. Hedging should NOT be undertaken for the purposes of
enhancing returns. Currency hedging may be used strictly and only to cover
anticipated purchases and sales of securities.
CASH MANAGEMENT
The Fund should be FULLY INVESTED AT ALL TIMES. SEI will be managing cash flows
within the fund and will maintain a cash balance for any withdrawals to the
Fund. The Global Emerging Markets manager will be notified of additional cash
flows into the portfolio by SEI on a timely basis.
When possible the fully invested fund should be targeted at a cash level less
than 1.5% of the account's assets. It is understood that due to transactional
issues or settlement delays, the account could reach a maximum of 3.0% cash or
be in an overdraft position. However, this would be considered an aberration
from normal practice and when breached, a conversation should be initiated
10
with SEI. In order to facilitate a low cash percentage in the Subadvisors
portfolio, SEI Investments will manage cash flows within the SEI portfolio. The
Subadvisor will be notified by SEI Investments of any potential cash flows into
or out of the Subadvisors portfolio on a timely basis.
ACCOUNT DISPERSION
Because each account managed for SEI Investments is similar, dispersion among
the accounts should be minimized. However, due to uneven funding schedules,
performance between accounts may differ. The dispersion should be kept to within
1.0% annually among all accounts managed for SEI Investments.
REPORTING REQUIREMENTS
MONTHLY REPORTING
- Please e-mail or fax a report of the monthly return for each of the
accounts managed on SEI's behalf
- Conference call between the SEI analyst and one of the fund's portfolio
manager
- Any material organizational changes
- Any material changes in assets under management
QUARTERLY REPORTING
- Quarterly performance questionnaire
- Quarterly compliance questionnaire
- Reported composite Information
ANNUAL REPORTING
- An annual review of the markets and organization
- Attend mutual fund board meeting once every two years
ORGANIZATION/OWNERSHIP CHANGES
The Sub-advisor will provide prompt notification of material changes in
ownership or key personnel. This includes, but is not limited to, the addition
or departure of any executive, portfolio manager, analyst, trader, marketing or
servicing personnel and/or any other individual significant to the investment
process or functioning of the overall business.
INVESTMENT PROCESS CHANGES
The Sub-advisor will provide prompt notification of material changes to the
investment process. This includes, but is not limited to, changes in philosophy,
universe screening models, valuation models, and portfolio construction
methodologies.
11
APPENDIX
SEI INVESTMENTS
Global Master Funds Equity
Objectives, Guidelines & Reporting Requirements
Global Emerging Markets Mandate
SUB-ADVISOR: XXXXXXXX INVESTMENT MANAGEMENT NORTH AMERICA
Effective Date:
These objectives, guidelines and reporting requirements cover each Account
("Account") related to the SEI Emerging Markets Equity Strategies listed below.
The Subadvisor shall manage the assets within the terms of the Investment
Subadvisory Agreement, the Prospectus and the Statement of Additional
Information of the Fund or those policies and guidelines specific to a separate
account agreement each subject to the following. In the event that these
objectives are less restrictive or conflict with the three formal documents or
separate account agreement described above, those documents supersede the
objectives and guidelines outlined below. However, these objectives and
guidelines are intended to further specify the broad terms stated in the formal
documents listed above.
PERFORMANCE OBJECTIVE
On a rolling three-year basis, the objective is to achieve an annualized return
of 4.0%, gross of fees, in excess of the returns generated by the MSCI EMF Index
ex South Africa (the "Benchmark").
COUNTRY AND REGIONAL EXPOSURES
This sub account has the same guidelines, restrictions and reporting
requirements as the other sub accounts managed for SEI. The only exception is
the country exposures as outlined in Table 3
Table 3
12
-------------------------------------------------------------------------------------------------------------
COUNTRY MAXIMUM WEIGHT MINIMUM WEIGHT INVESTMENT VEHICLE
-------------------------------------------------------------------------------------------------------------
Argentina Bnmk + 5% Bnmk - 5% Local / ADR
-------------------------------------------------------------------------------------------------------------
Brazil Bnmk + 10% Bnmk - 10% Local / ADR
-------------------------------------------------------------------------------------------------------------
Chile Bnmk + 5% Bnmk - 5% ADR
-------------------------------------------------------------------------------------------------------------
China Bnmk + 5% Bnmk - 5% Local / ADR
-------------------------------------------------------------------------------------------------------------
Colombia Bnmk + 5% Bnmk - 5% ADR
-------------------------------------------------------------------------------------------------------------
Czech Republic Bnmk + 5% Bnmk - 5% Local / ADR
-------------------------------------------------------------------------------------------------------------
Greece Bnmk + 10% Bnmk - 10% Local / ADR
-------------------------------------------------------------------------------------------------------------
Hungary Bnmk + 5% Bnmk - 5% Local / ADR
-------------------------------------------------------------------------------------------------------------
India Bnmk + 10% Bnmk - 10% ADR
-------------------------------------------------------------------------------------------------------------
Indonesia Bnmk + 5% Bnmk - 5% Local / ADR
-------------------------------------------------------------------------------------------------------------
Israel Bnmk + 5% Bnmk - 5% Local / ADR
-------------------------------------------------------------------------------------------------------------
Korea Bnmk + 15% Bnmk - 15% Local / ADR
-------------------------------------------------------------------------------------------------------------
Mexico Bnmk + 15% Bnmk - 15% Local / ADR
-------------------------------------------------------------------------------------------------------------
Pakistan Bnmk + 5% Bnmk - 5% Not Permitted
-------------------------------------------------------------------------------------------------------------
Peru Bnmk + 5% Bnmk - 5% Local / ADR
-------------------------------------------------------------------------------------------------------------
Philippines Bnmk + 5% Bnmk - 5% Local / ADR
-------------------------------------------------------------------------------------------------------------
Poland Bnmk + 5% Bnmk - 5% Local / ADR
-------------------------------------------------------------------------------------------------------------
South Africa 10% 0% Local / ADR
-------------------------------------------------------------------------------------------------------------
Sri Lanka Bnmk + 5% Bnmk - 5% Not Permitted
-------------------------------------------------------------------------------------------------------------
Taiwan Bnmk + 15% Bnmk - 15% Local / ADR
-------------------------------------------------------------------------------------------------------------
Thailand Bnmk + 5% Bnmk - 5% Local / ADR
-------------------------------------------------------------------------------------------------------------
Turkey Bnmk + 5% Bnmk - 5% Local / ADR
-------------------------------------------------------------------------------------------------------------
Russia Bnmk + 5% Bnmk - 5% ADR
-------------------------------------------------------------------------------------------------------------
Venezuela Bnmk + 5% Bnmk - 5% Local / ADR
-------------------------------------------------------------------------------------------------------------
13
SCHEDULE B
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI INVESTMENTS MANAGEMENT CORPORATION
AND
XXXXXXXX INVESTMENT MANAGEMENT NORTH AMERICA INC.
(SEI INSTITUTIONAL INVESTMENTS TRUST)
REMUNERATION
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
FOR THE FIRST SIX MONTHS DURING WHICH THE SUB-ADVISER PROVIDES INVESTMENT
MANAGEMENT/ADVISORY SERVICES WITH RESPECT TO THE FUND, STARTING FROM THE
EFFECTIVE DATE OF THIS AGREEMENT (THE "INITIAL PERIOD"):
0.60% of the Total Assets (as defined below in this Schedule A).
AFTER THE INITIAL PERIOD:
If the Total Assets are in an amount less than $350 million, the fee is 0.70% of
the Total Assets.
If the Total Assets are in an amount of $350 million or more and less than $750
million, the fee is 0.60% of the Total Assets.
If the Total Assets are in an amount of $750 million or more, the fee is 0.55%
of the Total Assets.
TOTAL ASSETS
For the purpose of determining the above fees, "Total Assets" means the assets
of all funds for which SEI Investments Management Corporation is the Investment
Manager or Investment Adviser, and Xxxxxxxx Investment Management North America
Xxx.xx the Portfolio Manager or Sub-Adviser.
14
