SCHEDULE 14C INFORMATION
Information Statement Pursuant to
Section 14(c) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14c-5(d)(2))
[X] Definitive Information Statement
TIFF INVESTMENT PROGRAM, INC.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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TIFF INVESTMENT PROGRAM, INC.
FOUR TOWER BRIDGE
200 BARR HARBOR DRIVE, SUITE 100
WEST CONSHOHOCKEN, PENNSYLVANIA 19428
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TIFF Multi-Asset Fund
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INFORMATION STATEMENT
JANUARY 15, 2008
This Information Statement is being furnished to all persons owning shares
("members") of TIFF Multi-Asset Fund ("Multi-Asset Fund" or the "Fund"), a
series of TIFF Investment Program, Inc. ("TIP"), to provide the members with
information regarding a new money manager agreement between TIP and Brookfield
Redding, LLC (formerly, KG Redding, LLC) ("Brookfield Redding") for Multi-Asset
Fund (the "new money manager agreement"). This Information Statement explains
why the board of directors of TIP (the "board" or the "directors") approved
TIP's entering into the new money manager agreement with Brookfield Redding
with respect to Multi-Asset Fund and describes generally the terms of the new
money manager agreement. This Information Statement is being delivered to
members of record as of January 4, 2008 on or about January 15, 2008.
The Fund is providing this Information Statement solely for your
information as required by an exemptive order issued by the Securities and
Exchange Commission (the "SEC"), as described herein. WE ARE NOT ASKING YOU FOR
A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
This Information Statement consists of two parts:
PART I contains information relating to Multi-Asset Fund's new money
manager agreement, the previous money manager agreement and the advisory
agreement (as defined below).
PART II contains information about TIP, TIFF Advisory Services, Inc.
("TAS" or the "Advisor"), Brookfield Redding, and certain brokerage and other
miscellaneous matters.
I. NEW MONEY MANAGER AGREEMENT BETWEEN TIP AND BROOKFIELD REDDING
Multi-Asset Fund operates in large part on a "multi-manager" basis, which means
that its assets are divided into multiple segments, each managed by a different
money management firm as money managers to TIP. Brookfield Redding manages a
segment of Multi-Asset Fund.
The board has approved the new money manager agreement, the terms and substance
of which are identical to the previous money manager agreement. The new money
manager agreement has not affected the fee schedule applicable to Brookfield
Redding or the aggregate management fees paid by the Fund.
In general, a mutual fund cannot enter into a new advisory agreement, including
a money manager agreement such as the new money manager agreement, unless the
members of that mutual fund vote to approve the agreement. The Fund, however,
has entered into the new money manager agreement without member action pursuant
to an exemptive order issued by the SEC (the "Exemptive Order"). The Exemptive
Order permits TAS and TIP's funds, subject to board approval, to enter into and
materially amend contracts with money managers with respect to each series of
TIP without seeking or receiving member approval of those contracts. The
Exemptive Order does not apply to the advisory agreement with TIP's investment
advisor, TAS, or any amendments to such agreement. This Information Statement
is being provided to all members of the Fund as required by one of the
conditions of the order.
Description of the Advisory Agreement
TAS acts as the Fund's advisor pursuant to an advisory agreement dated March
31, 1995, as amended (the "Advisory Agreement"). The directors of TIP initially
approved the Advisory Agreement at a meeting held on September 13, 1994, and
last approved the continuance of the Advisory Agreement at a meeting held on
June 11, 2007. The Advisory Agreement was last approved by the shareholders of
the Fund by written action of the sole shareholder on March 30, 1995. The
purpose of submission of the Advisory Agreement to the sole shareholder was to
seek initial shareholder approval of the Advisory Agreement prior to the Fund's
commencement of operations on March 31, 1995. Under the Advisory Agreement, TAS
manages the investment program of the Fund and performs such duties as the
board and TAS agree are appropriate to support and enhance the investment
program of the Fund. The Advisory Agreement provides that TAS will seek to
achieve the Fund's investment and performance objectives by identifying and
recommending to the board independent money managers for the Fund, managing and
allocating cash among asset classes and money managers, as applicable,
monitoring the money managers' and the Fund's performance and employing certain
risk management and other techniques.
Under the Advisory Agreement, the Fund pays TAS on a monthly basis an
annualized fee of 0.20% of the first $500 million of the average daily net
assets of the Fund; 0.18% on the next $500 million; 0.15% on the next $500
million; 0.13% on the next $500 million; 0.11% on the next $500 million; and
0.09% on assets exceeding $2.5 billion. For the fiscal year ended December 31,
2007, the Fund paid TAS for its services to the Fund under the Advisory
Agreement advisory fees of $3,307,725 (unaudited). The Fund paid directly to
the Fund's money managers management fees of $5,188,733 (unaudited).
Previous Money Manager Agreement
Prior to the date of the new money manager agreement, Brookfield Redding
managed certain assets of the Fund pursuant to the previous money manager
agreement. The directors initially approved the previous money manager
agreement at a meeting held on June 10, 2003, and approved an amended fee
schedule on March 2, 2004. The board last approved the continuance of the
previous money manager agreement at a meeting held on June 11, 2007. Because
the Fund operates pursuant to the Exemptive Order, the previous money manager
agreement has not been submitted to a vote of members.
The previous money manager agreement provided for money manager fees payable to
Brookfield Redding based upon performance. A performance-based fee arrangement
specifies a base fee ("floor"), expressed as a percentage of net assets, a
maximum fee ("cap") and a fee formula that embodies the concept of a "fulcrum"
fee (i.e., a fee midway between the minimum and the maximum). Actual fees paid
to the money manager are proportionately related to performance above or below
the fulcrum point. The formula is designed to augment the fee if the excess
return of the manager's portfolio exceeds a specified level and to reduce the
fee if the portfolio's excess return falls below this level. Brookfield
Redding's fee formula entails a floor of 50 basis points, a cap of 250 basis
points and a fulcrum fee of 150 basis points. The portfolio must earn 500 basis
points over the return of the Morgan Stanley REIT Index in order for the
Brookfield Redding to earn the fulcrum fee (i.e., 150 basis points).
For the fiscal year ended December 31, 2007, the money manager fees paid to
Brookfield Redding for its services to the Fund under the previous money
manager agreement were $938,083 (unaudited).
New Money Manager Agreement
At a meeting held on June 11, 2007, the directors, including the directors who
are not "interested persons" (the "independent directors") of TIP, as such term
is defined in the Investment Company Act of 1940, as amended (the "1940 Act"),
approved the continuance of the previous money manager agreement for Brookfield
Redding to act as a money manager for the Fund.
In August, KG Redding, LLC informed TAS that its parent company, Redding
Management Inc. ("RMI"), had entered into an agreement to be acquired by
Brookfield Asset Management ("Brookfield") in a transaction that was effective
on November 16, 2007. RMI was merged into a wholly-owned U.S. subsidiary of
Brookfield and KG Redding, LLC subsequently changed its name to Brookfield
Redding, LLC.
Brookfield's acquisition of RMI constituted a change of control of KG Redding,
LLC and an "assignment" of the previous money manager agreement. Under the
terms of the previous money manager agreement, and as required under the
provisions of the 1940 Act, an assignment of the previous money manager
agreement resulted in the termination of such agreement.
After analyzing the transaction and potential impact on the Fund, TAS
recommended to the directors that Brookfield Redding continue to serve as a
money manager of the Fund following the closing date of the transaction. Thus,
upon the recommendation of TAS and after considering a variety of factors (as
described below under "Consideration of New Money Manager Agreement by the
Board"), the directors voted on September 17, 2007, to approve the new money
manager agreement effective upon the closing of the transaction.
The terms of the new money manager agreement, including the fee schedule, are
identical to those of the previous money manager agreement. The table below
sets forth the money manager fee rate payable to Brookfield Redding under the
previous money manager agreement and the money manager fee rate payable to
Brookfield Redding under the new money manager agreement
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MONEY MANAGER FEE RATE PAYABLE TO MONEY MANAGER FEE RATE PAYABLE TO
BROOKFIELD REDDING UNDER THE PREVIOUS BROOKFIELD REDDING UNDER THE NEW
MONEY MANAGER AGREEMENT MONEY MANAGER AGREEMENT
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Performance-based fee formula with a Performance-based fee formula with a
floor of 50 basis points, a cap of floor of 50 basis points, a cap of
250 basis points and a fulcrum fee of 250 basis points and a fulcrum fee of
150 basis points. The portfolio must 150 basis points. The portfolio must
earn 500 basis points over the return earn 500 basis points over the return
of the Morgan Stanley REIT Index in of the Morgan Stanley REIT Index in
order for the Brookfield Redding to order for the Brookfield Redding to
earn the fulcrum fee. earn the fulcrum fee.
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Because the fee is performance-based Because the fee is performance-based
rather than asset-based, there are rather than asset-based, there are
no economies of scale if the asset no economies of scale if the asset
size of the account is increased size of the account is increased
beyond the level mentioned above. beyond the level mentioned above.
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Consideration of New Money Manager Agreement by the Board
At a meeting held on September 17, 2007, the directors, including the
independent directors, approved the new money manager agreement. In considering
this action, the directors noted that in connection with their annual review of
the Fund's advisory arrangements (the "Annual Review"), on June 11-12, 2007,
they had approved the continuation of the previous money manager agreement
(which, as discussed above, is identical in terms and substance to the new
money manager agreement) for another one-year term commencing July 1, 2007. In
connection with the Annual Review, the board had requested and considered a
wide range of information of the type they regularly consider when determining
whether to continue a fund's money manager agreement as in effect from year to
year. A discussion of the board's consideration of the previous money manager
agreement at the June 2007 meeting was included in TIP's semi-annual report for
the period ended June 30, 2007. In approving the new money manager agreement,
the directors considered the information provided and the factors considered in
connection with the Annual Review, as well as such other information as they
considered appropriate. In considering the new money manager agreement, the
board noted that TAS, the Fund's Advisor, had recommended the approval of the
new money manager agreement, having concluded that it would be in the best
interest of the Fund to do so. They also considered additional information
provided by TAS and by Brookfield Redding.
The board considered a number of additional factors in evaluating the new money
manager agreement with Brookfield Redding. The board considered information
describing the transaction and Brookfield; the expected corporate structure of,
and anticipated changes at, Brookfield Redding following the transaction; the
key benefits of the transaction identified by Brookfield Redding; and other
information deemed relevant. It was noted that the existing management and
investment team would continue with Brookfield Redding after the transaction
and that no changes in staffing, operations, or investment strategies or
processes were expected to occur as a result of the transaction. The key
benefits of the transaction were identified as: (i) similar investment
philosophy and business culture; (ii) retention of key investment
professionals; (iii) enhanced resources and brand recognition; (iv)
infrastructure investment capabilities and expertise; and (v) reduction in key
man risk and succession issues. In addition, it was noted that the terms of the
proposed new money manager agreement, including the fee schedule, were
identical to the terms of the existing money manager agreement. The board also
noted the information received at regular meetings throughout the year related
to the services rendered by Brookfield Redding concerning the management of the
Fund's affairs. The board's evaluation of the services provided by Brookfield
Redding took into account the board's knowledge and familiarity gained as board
members, including the scope and quality of Brookfield Redding's investment
management capabilities. The board concluded that, overall, it was satisfied
with the nature, extent, and quality of the services currently being provided,
and expected to be provided following the transaction, by Brookfield Redding.
The board based its evaluation on the material factors presented to it at this
meeting and discussed above, including: (i) the terms of the agreement; (ii)
the reasonableness of the money manager fees in light of the nature and quality
of the money manager services provided and any additional benefits received by
Brookfield Redding in connection with providing a service to the Fund; (iii)
the nature, quality, cost, and extent of the services performed by Brookfield
Redding; (iv) the overall organization and experience of Brookfield Redding;
and (v) the nature and expected effects of the transaction with Brookfield. In
arriving at its decision, the board did not single out any one factor or group
of factors as being more important than the other factors, but considered all
of these factors together. Based upon its review, the board concluded that the
new money manager agreement was reasonable, fair, and in the best interests of
the Fund and its members, and that the fees provided in such agreement were
fair and reasonable. In the board's view, approving the new money manager
agreement was desirable and in the best interests of the Fund and its members.
After carefully considering the information summarized above and all factors
deemed to be relevant, the directors, including the independent directors,
unanimously voted to approve the new money manager agreement for the Fund.
Prior to a vote being taken to approve the new money manager agreement, the
independent directors met separately in executive session to discuss the
appropriateness of the agreement. In their deliberations with respect to these
matters, the independent directors were advised by their independent legal
counsel. The independent directors weighed the foregoing matters in light of
the advice given to them by their independent legal counsel as to the law
applicable to the review of investment advisory contracts. The independent
directors concluded that the new money manager agreement was reasonable, fair,
and in the best interests of the Fund and its members, and that the fees
provided in such agreement were fair and reasonable.
Description of the New Money Manager Agreement
A copy of the new money manager agreement is set forth as APPENDIX A to this
Information Statement. The following description of the new money manager
agreement is qualified in its entirety by reference to the full text of the
agreement as set forth in APPENDIX A.
The new money manager agreement, which took effect as of November 16, 2007,
requires Brookfield Redding to manage the investment and reinvestment of
designated assets of the Fund, subject to the supervision of TAS. The new money
manager agreement provides that the Fund shall compensate Brookfield Redding
based upon performance. Its fee formula entails a floor of 50 basis points, a
cap of 250 basis points and a fulcrum fee of 150 basis points. The portfolio
must earn 500 basis points over the return of the Morgan Stanley REIT Index in
order for the Brookfield Redding to earn the fulcrum fee. As of November 30,
2007, the net assets of the Fund were approximately $2 billion.
The new money manager agreement provides that it will continue in effect for
two years from its date of execution and thereafter from year to year if its
continuance is approved at least annually in conformity with the requirements
of the 1940 Act. The new money manager agreement may be amended by mutual
consent, but the consent of the Fund must be approved in conformity with the
requirements of the 1940 Act and any order of the SEC that may address the
applicability of such requirements in the case of the Fund. The new money
manager agreement may be terminated without payment of any penalty by (a) the
Fund, if a decision to terminate is made by the board of directors of TIP or by
a vote of a majority of the Fund's outstanding voting securities (as defined in
the 1940 Act), or (b) by Brookfield Redding, in each case with at least 30
days' written notice from the terminating party and on the date specified in
the notice of termination. The new money manager agreement will terminate
automatically in the event of its "assignment," as defined in the 1940 Act.
The new money manager agreement provides that Brookfield Redding shall not be
liable to the Fund, TIP, or TAS for any error of judgment, but Brookfield
Redding shall be liable to the Fund for any loss resulting from willful
misfeasance, bad faith, or gross negligence by Brookfield Redding in providing
services under the new money manager agreement or from reckless disregard by
Brookfield Redding of its obligations and duties under the new money manager
agreement.
II. OTHER INFORMATION
Information about TIP
TIP is a no-load, open-end management investment company that seeks to improve
the net investment returns of its members by making available to them a series
of investment vehicles, each with its own investment objectives and policies.
TIP was incorporated under Maryland law on December 23, 1993, and consists of
four mutual funds at present: TIFF Multi-Asset Fund, TIFF International Equity
Fund, TIFF US Equity Fund, and TIFF Short-Term Fund. The mutual funds are
available primarily to foundations, endowments, other 501(c)(3) organizations,
and certain other non-profit organizations.
Information about TAS
TAS is the investment advisor to the TIP mutual fund family (the "funds").
TAS's principal offices are at Four Tower Bridge, 200 Barr Harbor Drive, Suite
100, West Conshohocken, Pennsylvania 19428. TAS seeks to achieve the funds'
investment and performance objectives in large part by identifying and
recommending to the board independent money managers for each of the funds,
managing and allocating cash among asset classes and money managers, as
applicable, monitoring the money managers' and funds' performance, and
employing certain risk management and other techniques. The money managers are
responsible for day-to-day investment decisions for that portion of the funds'
assets allocated to them. Each money manager specializes in a particular market
sector or utilizes a particular investment style. A money management firm may
serve as a money manager to more than one of the funds. For all funds, TAS may
invest a substantial portion of the funds' assets in futures, contracts,
derivative investments, duration investments, and other securities and other
financial instruments in accordance with each of the funds' objectives,
policies, and restrictions.
Information about Brookfield Redding
Brookfield Redding is located at 71 South Wacker Drive, Suite 3400, Chicago,
Illinois 60606-2841. Brookfield Redding was a wholly owned subsidiary of
Redding Management, Inc. As of December 31, 2007, Brookfield Redding had
responsibility for $3.2 billion in assets under management. Kim Redding (CEO
and Portfolio Manager) and Jason Baine (Vice President and Portfolio Manager)
have been portfolio managers with Brookfield Redding since 2001 and have
managed assets for the Fund since 2003. As of November 16, 2007, Brookfield
Asset Management indirectly acquired 100% of Redding Management Inc.'s stock.
Redding Management, Inc. was subsequently merged into Brookfield Redding, Inc.,
which is a wholly-owned subsidiary of Brookfield Investment Management, Inc.,
which is in turn a wholly-owned subsidiary of Brascan (US) Corporation. Brascan
(US) Corporation is a wholly-owned subsidiary of Brascan US Holdings, Inc.,
which is a wholly-owned subsidiary of Brookfield. Brookfield, headquartered in
Toronto and New York, is a global asset manager focused on property, power, and
other infrastructure with assets under management in excess of $85 billion.
Brookfield is publicly listed on the New York Stock Exchange and the Toronto
Stock Exchange.
Brookfield Redding is not an investment advisor to any other registered
investment company with a similar investment objective to Multi-Asset Fund.
The following persons are officers and control persons of Brookfield Redding
and are located at 71 South Wacker Drive, Suite 3400, Chicago, Illinois
60606-2841:
Kim G. Redding, Chief Executive Officer
Nicholas D. Tannura, President
Jason S. Baine, Vice President
Dianne R. Staples, Chief Financial Officer
Joseph T. Sommer, Chief Compliance Officer
Certain Brokerage Matters
When selecting brokers or dealers TAS and the money managers are authorized to
consider the "brokerage and research services," as defined in Section 28(e) of
the Securities Exchange Act of 1934, provided to TIP's funds, to TAS, or to the
money manager. TAS and the money managers may cause TIP's funds to pay a
commission to a broker or dealer who provides such brokerage and research
services which is in excess of the commission another broker or dealer would
have charged for effecting the transaction. TIP, TAS, or the money manager, as
appropriate, must determine in good faith that such commission is reasonable in
relation to the value of the brokerage and research services provided.
Reasonableness will be viewed in terms of that particular transaction or in
terms of all the accounts over which TAS or the money manager exercises
investment discretion.
Interests of Directors and Officers of the Funds
No directors or officers have any substantial interest, direct or indirect, by
security holdings or otherwise, in the new money manager agreement with
Brookfield Redding. No director or officer purchased or sold securities of
Brookfield Redding or Brookfield during 2007. No director or officer of the
Fund is an officer, employee, director, general partner or shareholder of
Brookfield Redding or Brookfield.
Information Regarding the Service Providers to the Funds
Custodian, Administrator, Fund Accounting Agent, Transfer Agent, Registrar, and
Dividend Disbursing Agent. State Street Bank & Trust Company (formerly
Investors Bank & Trust Company) ("State Street"), 200 Clarendon Street, Boston,
MA 02116, serves as the custodian of the funds' assets as well as their
administrator, fund accounting agent, transfer agent, registrar, and dividend
disbursing agent. As custodian, State Street may employ sub-custodians outside
the United States.
Distributor. Quasar Distributors, LLC, 615 East Michigan Street, Milwaukee, WI
53202 serves as the distributor of the funds' shares.
Chief Compliance Officer Services and other Administrative Services. William E.
Vastardis serves as TIP's chief compliance officer in accordance with the terms
of an engagement letter between TIP and Vastardis Compliance Services, LLC
("VCS"). An affiliate of VCS, Vastardis Fund Services, LLC ("VFS"), provides
certain administrative services to TIP. VCS and VFS are located at 41 Madison
Avenue, 30th Floor, New York, NY 10010.
Outstanding Shares and Significant Shareholders
As of December 21, 2007, the Fund had the following number of shares
outstanding:
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NUMBER OF SHARES OUTSTANDING AND
TITLE OF CLASS ENTITLED TO VOTE*
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MULTI-ASSET FUND 126,942,754.585 shares
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* Each dollar of net asset value is entitled to one vote.
As of December 21, 2007, the following members owned of record or beneficially
5% of the shares of common stock of the Fund:
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NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
TITLE OF CLASS BENEFICIAL OWNER BENEFICIAL OWNER CLASS
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MULTI-ASSET FUND Saint Joseph's University 8,371,272.379 shares 6.59%
5600 City Avenue
Philadelphia, PA 19131
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TOTAL 8,371,272.379 shares 6.59%
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The TIP funds are designed primarily for foundations, endowments, other
501(c)(3) organizations, and certain other non-profit organizations.
Accordingly, as of December 21, 2007, the directors and officers of TIP as a
group owned less than 1% of the outstanding shares of the Fund.
To the knowledge of the funds', the independent directors and their immediate
family members did not own, beneficially or of record, securities of Brookfield
Redding or a person (other than a registered investment company) directly or
indirectly controlling, controlled by, or under common control with an
investment advisor of the funds.
Annual and Semi-Annual Reports
The funds' annual report for the fiscal year ended December 31, 2006, and
semi-annual report for the period ended June 30, 2007, were previously
distributed to members. THE FUNDS WILL FURNISH, WITHOUT CHARGE, AN ADDITIONAL
COPY OF ITS ANNUAL OR SEMI-ANNUAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31,
2006, OR SEMI-ANNUAL PERIOD ENDED JUNE 30, 2007, TO ANY MEMBER REQUESTING SUCH
REPORTS. An additional copy of the funds' semi-annual and annual reports may be
obtained, without charge, by contacting TIP by mail, telephone or email using
the contact information below or visiting the Securities and Exchange
Commission's website at www.sec.gov, copies of annual and semi-annual reports
are available without charge.
Four Tower Bridge
200 Barr Harbor Drive, Suite 100
West Conshohocken, PA 19428
1-800-984-0084
www.tiff.org
Electronic mail inquiries: Services offered by TIFF: info@tiff.org
Member-specific account data: memberservices@tiff.org
WE ARE NOT ASKING YOU FOR A PROXY,
AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
APPENDIX A
MONEY MANAGER AGREEMENT
This Agreement is between the TIFF Investment Program, Inc. ("TIP"), a
Maryland Corporation, for its TIFF Multi-Asset Fund, and such other of its
Funds as TIP and the Manager (as defined below) may agree upon from time to
time (the "Fund"), and KG Redding, LLC, a registered investment adviser under
the Investment Advisers Act of 1940 (the "Manager") and is effective as of
November 16, 2007 (the "Effective Date").
RECITALS
TIP is an open-end management investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
The Fund wishes to retain the Manager to render advisory services to the
Fund and the Manager is willing to render those services.
The parties therefore agree as follows:
1. MANAGED ASSETS
The Manager will provide investment management services with respect to
assets placed with the Manager on behalf of the Fund from time to time. Such
assets, as changed by investment, reinvestment, additions, disbursements of
expenses, and withdrawals, are referred to in this Agreement as the "Managed
Assets." The Fund may make additions to or withdraw all or any portion of the
Managed Assets from this management arrangement at any time.
2. APPOINTMENT AND POWERS OF MANAGER; INVESTMENT APPROACH
(a) Appointment. TIP, acting on behalf of the Fund, hereby appoints the
Manager to manage the Managed Assets for the period and on the terms set forth
in this Agreement. The Manager hereby accepts this appointment and agrees to
render the services herein described in accordance with the requirements
described in Section 3(a).
(b) Powers. Subject to the supervision of the board of directors of TIP
and subject to the supervision of TIFF Advisory Services, Inc. ("TAS") as
Investment Adviser to the Fund, the Manager shall direct investment of the
Managed Assets in accordance with the requirements of Section 3(a). The Fund
grants the Manager authority to:
(i) acquire (by purchase, exchange, subscription, or otherwise), to
hold, and to dispose of (by sale, exchange, or otherwise)
securities and other investments;
(ii) determine what portion of the Managed Assets will be held
uninvested; and
(iii) enter into such agreements and make such representations
(including representations regarding the purchase of securities
for investment) as may be necessary or proper in connection
with the performance by Manager of its duties hereunder.
(c) Power of Attorney. To enable the Manager to exercise fully discretion
granted hereunder, TIP appoints the Manager as its attorney-in-fact to invest,
sell, and reinvest the Managed Assets as fully as TIP itself could do. The
Manager hereby accepts this appointment.
(d) Voting. The Manager shall be authorized to vote on behalf of the Fund
any proxies relating to the Managed Assets, provided, however, that the Manager
shall comply with any instructions received from the Fund as to the voting of
securities and handling of proxies.
(e) Independent Contractor. Except as expressly authorized herein, the
Manager shall for all purposes be deemed to be an independent contractor and
shall have no authority to act for or to represent TIP, the Fund, or TAS in any
way, or otherwise to be an agent of any of them.
(f) Reporting. The Manager shall furnish to TIP upon reasonable request
such information that TIP may reasonably require to complete documents,
reports, or regulatory filings.
3. REQUIREMENTS; DUTIES
(a) Requirements. In performing services for the Fund and otherwise
discharging its obligations under this Agreement, the Manager shall act in
conformity with the following requirements (the "Requirements"):
(i) the 1940 Act, the Internal Revenue Code of 1986, as amended,
and all other applicable federal and state laws and regulations
which apply to the Manager in conjunction with performing
services for the Fund, if any;
(ii) TIP's Registration Statement under the 1940 Act and the
Securities Act of 1933 on Form N-1A as filed with the
Securities and Exchange Commission relating to the Fund and the
shares of common stock in the Fund, as such Registration
Statement may be amended from time to time (the "Registration
Statement");
(iii) the Manager's Investment Guidelines (appended to this Agreement
as Exhibit B), which may be amended from time to time through
mutual agreement by TAS and the Manager;
(iv) written instructions and directions of the board of directors
of TIP; and
(v) written instructions and directions of TAS.
(b) Responsibility with Respect to Actions of Others. TIP may place the
investment portfolio of each of its funds, including the Fund, with one or more
investment managers. To the extent the applicability of, or conformity with,
the Requirements depends upon investments made by, or activity of, the managers
other than the Manager, the Manager agrees to comply with such Requirements:
(i) to the extent that such compliance is within the Manager's Investment
Guidelines; and (ii) to the extent that the Manager is provided with
information sufficient to ascertain the applicability of such Requirements. If
it appears to the Fund at any time that the Fund may not be in compliance with
any Requirement and the Fund so notifies the Manager, the Manager shall
promptly take such actions not inconsistent with applicable law as the Fund may
reasonably specify to effect compliance.
(c) Responsibility with Respect to Performance of Duties. In performing
its duties under this Agreement, the Manager will act solely in the interests
of the Fund and shall use reasonable care and its best judgment in matters
relating to the Fund. The Manager will not deal with the Managed Assets in its
own interest or for its own account.
4. RECORDKEEPING AND REPORTING
(a) Records. The Manager shall maintain proper and complete records
relating to the furnishing of investment management services under this
Agreement, including records with respect to the securities transactions for
the Managed Assets required by Rule 31a-1 under the 1940 Act. All records
maintained pursuant to this Agreement shall be subject to examination by the
Fund and by persons authorized by it during reasonable business hours upon
reasonable notice. Records required by Rule 31a-1 maintained as specified above
shall be the property of the Fund; the Manager will preserve such records for
the periods prescribed by Rule 31a-2 under the 1940 Act and shall surrender
such records promptly at the Fund's request. Upon termination of this
Agreement, the Manager shall promptly return records that are the Fund's
property and, upon demand, shall make and deliver to the Fund true and complete
and legible copies of such other records maintained as required by this Section
4(a) as the Fund may request. The Manager may retain copies of records
furnished to the Fund.
(b) Reports to Custodian. The Manager shall provide to the Fund's
custodian (the "Custodian") and to Fund, on each business day, information
relating to all transactions concerning the Managed Assets.
(c) Other Reports. The Manager shall render to the board of directors of
TIP and to TAS such periodic and special reports as the board or TAS may
reasonably request.
5. PURCHASE AND SALE OF SECURITIES
(a) Selection of Brokers. The Manager shall place all orders for the
purchase and sale of securities on behalf of the Fund with brokers or dealers
selected by the Manager in conformity with the policy respecting brokerage set
forth in the Registration Statement. In Manager's selection of such brokers,
Manager may take into consideration the broker's commission rates or principal
spreads, research capabilities, executions, reliability, efficiency and other
factors. In addition, subject to the approval of TAS and compliance with
Section 28(e) of the Securities Exchange Act of 1934, as amended, in evaluating
the best overall terms available, the Manager may consider the brokerage and
research services provided to the Fund and to the Manager. The Fund shall be
responsible for all brokerage fees and costs. Neither the Manager nor any of
its officers, employees, or any of its "affiliated persons", as defined in the
1940 Act, will act as principal or receive any compensation in connection with
the purchase or sale of investments by the Fund other than the management fees
provided for in Section 6 hereof.
(b) Aggregating Orders. On occasions when the Manager deems the purchase
or sale of a security to be in the best interest of Fund as well as other
advisory funds of the Manager, the Manager, to the extent permitted by
applicable laws and regulations, may, but shall be under no obligation to,
aggregate the securities to be so sold or purchased in order to obtain the most
favorable price or lower brokerage commissions and efficient execution. In such
event, allocation of securities so purchased or sold, as well as the expense
incurred in the transaction, will be made by the Manager in the manner it
considers to be most equitable and consistent with its fiduciary obligations to
the Fund and its other funds.
(c) The Custodian. All Managed Assets, including cash and equivalents,
shall be held by the Custodian. The Manager shall not be liable to the Fund for
any action or omission of Custodian; provided, however, that where the
Custodian's act or omission is required by, and taken in reliance upon,
improper instructions given to the Custodian by a properly authorized
representative of the Manager, the Manager shall be liable for the act or
omissions of the Manager. "Properly authorized" shall mean those
representatives of the Manager who are authorized, pursuant to the Fund's
custody agreement with the Custodian, to give instructions to the Custodian
under such custody agreement. The Fund agrees to be responsible for any
custodial fees.
6. MANAGEMENT FEES; EXPENSES
(a) Management Fees. Exhibit A attached hereto sets out the fees to be
paid by the Fund to the Manager by the tenth business day of the following
month in connection with this Agreement. The applicable fee rate will be
applied to the average daily net assets (gross of expenses except custodian
transaction charges) of the Managed Assets, computed as described in the Fund's
Registration Statement, pursuant to this Agreement.
(b) Expenses. The Manager shall furnish at its own expense all office
facilities, equipment and supplies, and shall perform at its own expense all
routine and recurring functions necessary to render the services required under
this Agreement including administrative, bookkeeping and accounting, clerical,
statistical, and correspondence functions. The Manager shall not have
responsibility for calculating the Net Asset Value of the Fund's portfolio, but
must daily review the pricing of the Managed Assets. The Fund shall pay
directly, or, if the Manager makes payment, reimburse the Manager for, (i)
custodial fees for the Managed Assets, (ii) brokerage commissions, issue and
transfer taxes and other costs of securities transactions to which the Fund is
a party, including any portion of such commissions attributable to research and
brokerage services; and (iii) taxes, if any, payable by the Fund. In addition,
the Fund shall pay directly, or, if the Manager makes payment, reimburse the
Manager for, such non-recurring special out-of-pocket costs and expenses as may
be authorized in advance by the Fund.
7. NON-EXCLUSIVITY OF SERVICES
The Manager is free to act for its own account and to provide investment
management services to others. The Fund acknowledges that the Manager and its
officers and employees, and the Manager's other funds, may at any time have,
acquire, increase, decrease or dispose of positions in the same investments
which are at the same time being held, acquired or disposed of under this
Agreement for the Fund. Neither the Manager nor any of its officers or
employees shall have any obligation to effect a transaction under this
Agreement simply because such a transaction is effected for his or its own
account or for the account of another fund. Fund agrees that the Manager may
refrain from providing any advice or services concerning securities of
companies for which any officers, directors, partners or employees of the
Manager or any of the Manager's affiliates act as financial adviser, investment
manager or in any capacity that the Manager deems confidential, unless the
Manager determines in its sole discretion that it may appropriately do so. The
Fund appreciates that, for good commercial and legal reasons, material
nonpublic information which becomes available to affiliates of the Manager
through these relationships cannot be passed on to the Fund.
8. LIABILITY
The Manager shall not be liable to the Fund, TIP, or TAS for any error of
judgment, but the Manager shall be liable to the Fund for any loss resulting
from willful misfeasance, bad faith, or gross negligence by the Manager in
providing services under this Agreement or from reckless disregard by the
Manager of its obligations and duties under this Agreement. The Fund agrees to
indemnify and hold the Manager harmless against all damages, costs and
expenses, including reasonable attorney's fees, incurred by it in the course of
any threatened or actual litigation, arbitrations or administrative proceedings
brought by a shareholder, beneficiary, governmental agency or any other person
pertaining to the Managed Assets or otherwise relating to this Agreement;
provided, however, that the Fund shall not be liable in any such case to the
extent that, in the final judgment of a court of competent jurisdiction, it is
adjudicated that (i) the Manager's action or omission was not prudent or
otherwise violated the provisions of this Agreement or applicable law, or (ii)
the Manager's action or omission constituted willful misfeasance, bad faith, or
gross negligence with respect to, or reckless disregard of, the Manager's
obligations and duties under this Agreement.
9. REPRESENTATIONS AND UNDERTAKINGS
(a) The Manager hereby confirms to the Fund that the Manager is
registered as an investment adviser under the Investment Advisers Act of 1940,
that it has full power and authority to enter into and perform fully the terms
of this Agreement and that the execution of this Agreement on behalf of the
Manager has been duly authorized and, upon execution and delivery, this
Agreement will be binding upon the Manager in accordance with its terms.
(b) The Manager represents that it complies in all material respects with
all applicable laws, both federal and state.
(c) TIP hereby confirms to the Manager that it has full power and
authority to enter into this Agreement and that the execution of this Agreement
on behalf of the Fund has been duly authorized and, upon execution and
delivery, this Agreement will be binding upon TIP in accordance with its terms.
(d) TIP acknowledges receipt of the Manager's Form ADV and Commodity
Trading Advisor (CTA) Disclosure Document (if applicable).
(e) TIP represents that TIP and the Fund are in material compliance with
all applicable state and federal securities laws and regulations.
(f) To facilitate the Manager's fulfillment of its obligations under this
Agreement, TIP undertakes the following:
(i) TIP will promptly provide the Manager with amendments or
supplements, if any, to TIP's prospectus or Statement of
Additional Information applicable to the Managed Assets;
(ii) TIP will promptly notify the Manager expressly in writing of
changes, if any, in the fundamental and non-fundamental
investment policies of the Managed Assets; and
(iii) TIP will promptly provide the Manager with guidelines and
procedures, if any, applicable to the Manager or the Managed
Assets adopted from time to time by the board of directors of
TIP and will promptly provide the Manager copies of any
amendments thereto.
10. TERM
This Agreement shall continue in effect for a period of two (2) years
from the date hereof and shall thereafter be automatically renewed for
successive periods of one (1) year each, provided such renewals are
specifically approved at least annually in conformity with the requirements of
the 1940 Act; provided, however, that this Agreement may be terminated without
the payment of any penalty, by (a) the Fund, if a decision to terminate is made
by the board of directors of TIP or by a vote of a majority of the Fund's
outstanding voting securities (as defined in the 1940 Act), or (b) by the
Manager, in each case with at least 30 days' written notice from the
terminating party and on the date specified in the notice of termination.
This Agreement shall terminate automatically in the event of its
assignment (as defined in the 1940 Act).
11. AMENDMENT
Except as otherwise provided in this Agreement, this Agreement may be
amended by mutual consent, but the consent of the Fund must be approved in
conformity with the requirements of the 1940 Act and any order of the
Securities and Exchange Commission that may address the applicability of such
requirements in the case of the Fund.
12. NOTICES
Notices or other communications required to be given pursuant to this
Agreement shall be deemed duly given when delivered in writing or sent by fax
or three days after mailing registered mail postage prepaid as follows:
Fund: TIFF Investment Program, Inc.
c/o TIFF Advisory Services, Inc.
Four Tower Bridge
200 Barr Harbor Drive, Suite 100
W. Conshohocken, PA 19428
Fax: 610.648.8080
Manager: KG Redding, LLC
71 South Wacker Drive
Suite 3400
Chicago, IL 60606-2841
Fax: 312.377.8299
Each party may change its address by giving notice as herein required.
13. SOLE INSTRUMENT
This instrument constitutes the sole and only agreement of the parties to
it relating to its object and correctly sets forth the rights, duties, and
obligations of each party to the other as of its date. Any prior agreements,
promises, negotiations, or representations not expressly set forth in this
Agreement are of no force or effect.
14. COUNTERPARTS
This Agreement may be executed in counterparts, each of which shall be
deemed to be an original and all of which, taken together, shall be deemed to
constitute one and the same instrument.
15. APPLICABLE LAW
This Agreement shall be governed by, and the rights of the parties
arising hereunder construed in accordance with, the laws of the Commonwealth of
Pennsylvania without reference to principles of conflict of laws. Nothing
herein shall be construed to require either party to do anything in violation
of any applicable law or regulation.
IN WITNESS WHEREOF, the parties hereto execute this Agreement on and make it
effective on the Effective Date specified in the first paragraph of this
Agreement.
On behalf of the Fund by the KG Redding, LLC
TIFF Investment Program, Inc.
/s/ Richelle S. Maestro /s/ Kim G. Redding
- ------------------------------------ ----------------------------------------
Signature Signature
Richelle S. Maestro / VP Kim G. Redding, CEO
- ------------------------------------ ----------------------------------------
Print Name/Title Print Name/Title
EXHIBIT A TO
MONEY MANAGER AGREEMENT BETWEEN
KG REDDING, LLC AND TIFF MULTI-ASSET FUND
FEE CALCULATION
COMPENSATION*
As compensation for the services performed and the facilities and
personnel provided by the Manager pursuant to this Agreement, the Fund will pay
to the Manager a monthly fee according to the following formula:
100 bps + 0.20 x (Excess Return - 250 bps); floor = 50 bps, cap = 250 bps
FEE SCHEDULE*
The Manager will earn a fee equal to 1/12 of the formula set forth in
"Compensation" above based on (i) the previous 12 calendar months' (starting on
the first day and ending on the last day in such 12-month period) excess
performance times (ii) the average daily assets for the previous 12 months
(such average to be calculated with respect to the 12-month period that begins
1 day prior to the first day, and ends 1 day prior to the last day, of the
12-month period described in clause (i)).
*This new Agreement has been entered into following a termination
resulting from an assignment of the previous agreement between the parties,
dated as of June 10, 2003, as amended March 10, 2004, and shall not be
considered an early termination under the provisions of the previous agreement.
The compensation and fee schedule that were in effect at the time of the
termination of the previous agreement and the compensation and fee schedule set
forth herein are identical, and the fees payable to the Manager hereunder shall
be calculated using the applicable measuring periods as though there was no
termination.
CERTAIN DEFINED TERMS
"Excess Return" shall mean the return of the Manager that exceeds the
return of the benchmark.
"Managed Assets" shall mean the portion of the Fund's assets allocated to
the Manager.
EARLY TERMINATION
If the Manager ceases to render services hereunder at any time, the
Manager shall be entitled to a fee for services rendered hereunder for the
period for which it has not yet received compensation equal to 50 bps (if
termination is by the Manager) or 75 bps (if termination is by the Fund) based
on the average daily Managed Assets for the period, on or about the tenth day
of the month following the month in which the Manager ceased to render
services.
EXHIBIT B TO
MONEY MANAGER AGREEMENT BETWEEN
KG REDDING, LLC AND TIFF MULTI-ASSET FUND
MANAGER'S INVESTMENT GUIDELINES
Investments for the Managed Assets will be concentrated primarily in real
estate related securities, including securities of companies whose principal
activities include development, ownership, construction, management or sale of
real estate in the United States or Canada. It is currently anticipated that
Manager will invest the Managed Assets primarily in shares of real estate
investment trust ("REITs"). REITs are generally classified as Equity REITs,
Mortgage REITs and Hybrid REITs. Equity REITs generally invest the majority of
their assets in real property and derive their income primarily from rents.
Mortgage REITs generally invest the majority of their assets in loans secured
by real estate and derive their income primarily from interest payments. Hybrid
REITs generally combine the characteristics of Equity and Mortgage REITs.
Manager intends to invest primarily in Equity REITs. Manager may invest from
time to time in: (i) Mortgage or Hybrid REITs; and (ii) other real estate
industry companies.
Manager shall have sole and complete discretion over the investment and
reinvestment of the Managed Assets from time to time; provided, however, that
not more than 15% of the Managed Assets (determined based upon market values at
the time of purchase) shall be invested in securities of any one issuer and not
more than 10% of the Managed Assets (determined based upon market values at the
time of purchase) shall be invested in cash or cash equivalents.
If, at any time after the purchase of securities, the Fund is not in compliance
with the foregoing restrictions due to fluctuating market values, subsequent
transactions, or any other cause, Manager shall, as soon as reasonably
practicable and prudent, rebalance the Managed Assets to bring the same into
compliance with such restrictions. There will be no sector limitations within
the real estate securities market.