The management and administration of Premium’s investment portfolio is outsourced to Treasury Group Investment Services Limited (TIS).  As Premium’s investment manager, TIS is responsible for managing the Company’s share portfolio to deliver the Company’s stated objective.

Manage the manager

The Management Agreement between the Company and TIS appoints TIS exclusively to manage the investments of the Company, in accordance with the Investment Mandate as set out in the Prospectus. This management contract has duration of 25 years from the date the Company listed in 2003. This agreement has a break clause which requires giving 12 months notice. The approach to investment can be amended by agreement between TIS and the Company. The Prospectus and the Management Agreement envisage that TIS will manage the funds with an absolute return style.

The Management Agreement allows TIS to appoint a Custodian of the investment assets of the Company and to appoint other investment managers to act as its agents in the management of the portfolio. TIS have appointed RBC Dexia as the custodian of investment assets and a number of investment managers to implement different parts of its investment strategy.

Performance Fees

The base management fees earned by the managers are paid by TIS out of the base management fees paid by the Company, although there is provision in the Prospectus and the Management Agreement with TIS for investment managers to earn performance fees which are payable by the Company.

Base management fees are payable at the rate of 0.9% per annum of the market capitalisation of the investment portfolio at the end of each month, adjusted for cashflows during the month on a time weighted basis. Performance fees are payable severally to TIS and any investment manager appointed by TIS at the rate of 10% of the outperformance of 5 year government bond rate plus (+) 3%.