Fees and Risks
Fees and Expenses
The following fees and expenses will be incurred in connection with your investment in our financial products or entering into a discretionary investment management agreement.
Investment management fee under a discretionary investment management agreement: Investment management fee under a discretionary investment management agreement will be incurred in an amount not exceeding 1% (before Japanese consumption tax) per annum of the net asset value of the managed assets. Performance-based fee (if applicable), and other expenses such as fees payable to trustee banks, will be incurred in addition to the investment management fee.
The investment strategy presented in this website may, if concluded for the benefit of the investor, be implemented through investment in a fund which carries the substantial same or similar investment strategy. In such case, the invested fund will incur fees and expenses separate and aside from the above-mentioned fees. Such fees and expenses will include the following:
Investment Management Fee: The rate of investment management fee will vary for each product and agreement, depending on various factors such as investment strategy, asset size, investment structure, and whether or not performance-based fee will be applicable. In general, the maximum annual fee rate is 2.0% of the net asset value of the managed assets. Details of the applicable investment management fee cannot be disclosed herein in advance in detail, as the applicable fee will vary depending on the circumstances for each case and each amount of investment.
Performance-based fee: Whether or not performance-based fee will be incurred, and the rate of the performance-based fee will vary for each product and agreement, depending on various factors such as investment strategy, asset size and investment structure. In general, the maximum fee rate is 20% of the excess return of the managed assets. Details of the applicable performance-based fee cannot be disclosed herein in advance, as the applicable fee will vary depending on the circumstances for each case.
Other expenses: Various expenses (such as organizational costs, operational costs, financing costs, and transaction fees) will be incurred, depending on various factors such as the type of product or investment structure. Details of the applicable expenses cannot be disclosed herein in advance, as the applicable expenses will vary depending on the status of investment management, asset size and other circumstances.
The total amount of the fees and expenses to be incurred for the discretionary investment management agreement and the invested fund as described above will vary depending on various factors such as investment strategy, status of investment management and asset size. Accordingly, the applicable total amount, maximum rate and other details of such fees and expenses cannot be disclosed herein in advance.
Risks of Investment
The financial products in which investment will be made under the discretionary investment management agreement will include various financial instruments such as funds, equities, bonds, currencies, futures and derivatives. Principal value of such financial instruments may fluctuate due to various factors such as changes in market conditions and other indices, and losses may be incurred as a result. Investment in foreign currency denominated assets involves risks of losses due to currency fluctuations. There is no assurance that investment in such financial products will result in a full return of investment, and such investment may result in the loss of principal. Risks of investment vary depending on the type of fund in which investment is to be made; however, major risks include market fluctuation risk, liquidity risk, credit risk, currency risk, interest rate risk and derivative risk. In the case where derivative transactions will be utilized for managing clients' assets, margin deposits and other cash collateral (collectively, the "Margin") may be taken from the managed assets. In such case, the notional principal amount with respect to such derivative transactions may exceed the amount of the Margin deposited, and the amount of losses incurred due to changes in the price of securities, interest rate, indices or other matters subject to such derivative transactions may exceed the amount of Margin deposited, which may result in losses exceeding the initial principal. The ratio of the Margin for derivative transactions cannot be calculated in advance as it will be determined based on the specific terms of each transaction.
The investment strategy presented in this website involves investments that are generally considered to be highly speculative. The following are examples of the potential risks involved, and are not intended as a comprehensive list of such risks.
Investments in debt securities and other similar financial products including bonds, bank loans, mortgage-backed securities, mezzanine bonds and other related products: The value of these products may fluctuate based on various factors, including interest rates, market conditions and credit quality. If bonds are sold prior to maturity, gains or losses may be incurred due to the sale, and interest that accrues on the bonds may be subject to taxation. Investments in products such as high-yield bonds (also known as "junk bonds"), bank loans (including those with a senior lien or subordinated lien), non-governmental mortgage-backed securities and mezzanine bonds are generally considered to be speculative, and carry a greater risk of default than investments in investment-grade bonds. Their market value may fluctuate based on various factors, including interest rates, market conditions, credit quality, political events and currency devaluation, and it tends to be more volatile than investment-grade bonds. Accordingly, these products are not suitable for all investors and investment in these products should be considered upon careful review of the features of the potential risks and returns involved.
Investments in equities and other similar financial products: Even investment in large capitalization stocks involves the various risks associated with investment in stocks, including the risk of loss in the stock value due to overall market or economic conditions. The market price of small and mid-capitalization stocks tends to be more volatile than large capitalization stocks, for reasons such as that small and mid-capitalization stocks are more vulnerable to financial and other risks, and their trade volumes are more limited.
Investments in foreign securities and foreign-currency denominated securities: Investing in these products involves risks including currency fluctuation and changes in the political and economic environment, which may affect the value of the invested assets and dividends therefrom, and may result in the loss of principal. Investing in emerging market countries involves greater risks of losses, for reasons such as that such investment tends to be more volatile than investment in countries with more developed economies or markets due to factors such as market size and liquidity. In addition, the economies of emerging market countries are generally less regulated, and may be adversely affected by trade barriers, foreign exchange controls, protectionist measures and political and social instability. There is a greater volatility risk if there is less liquidity or less reliable information available.
Alternative investments including hedge funds and private equity funds: Alternative investments including hedge funds and private equity funds are speculative and involve high risks. The invested funds may employ leverage by participation in investments with highly leveraged capital structures (leverage involves a high degree of interest rate risk and may increase the exposure of such investments to factors such as rising interest rates, downturns in the economy, or changes in the condition of the assets underlying such investments). The performance of the invested fund may widely fluctuate as a result of these risk factors, and all or a large part of the initial principal may be lost as a result.
Investments in private equity funds under the discretionary investment management agreement: Investments in private equity funds generally cannot be redeemed prior to maturity. Transfers of interests in the funds are generally subject to certain restrictions; therefore, no public market exists for the interests and none is expected to develop. Accordingly, it is extremely difficult to convert such investments into cash prior to maturity, and such investments have almost no liquidity. The invested funds may incur fees and other expenses, which may substantially reduce realized returns after the deduction of fees and expenses. Such fees and expenses may also result in returns on such investments decreasing below the total amount of initial principal. In the case where the investment strategy presented in this website is implemented through investment in a fund, the terms and other details of such fund may hereafter be finalized by the parties involved, and in such case, the contents described in this website may be subject to change without prior notice and additional risks may arise in connection with such change.
Neuberger Berman East Asia Limited
1-5-1 Marunouchi, Chiyoda-ku, Tokyo 100-6512 Japan
Neuberger Berman East Asia Limited is a "Financial Instruments Business Operator"
under the Financial Instruments and Exchange Act of Japan,
and is authorized and regulated by the Financial Services Agency in Japan with its registration number 2094
Kanto Local Finance Bureau, and member of Japan Investment Advisers Association, Japan Investment Trust Association and Type II Financial Instruments Firms Association