Tracker on Bankable "AIF" (Sample email to client)
Dear Jean-Marc,
Many thanks for the meeting.
The solution discussed concerns a European AIF underlying that invests into non-US underlyings.
Very important: Investing in U.S. underlying assets would be a game changer and could significantly increase costs.
Please find enclosed our Tracker Factsheet. Such Guernsey solution on a liquid underlying is classified as a structured product / alternative asset and is a contractual product within an existing issuer.
Such a tracker is in fact an AMC with only one asset. The product sponsor (your client) acts as the strategy manager.
Indicative pricing:
Structuring costs CHF 5k
Running costs 40bps p.a. & Product maintenance CHF 1k p.a.
For issue size $1mio equivalent or more.
(All prices excl. VAT and to be paid upfront)
The running fees should be better retained cash for the whole product lifetime. Otherwise, you would have to sell a stake in the fund to meet the annual fees (non-sense with CHF 500.- minimum brokerage!).
In addition to the above fees, there are some additional costs to consider:
Custodian fees (going to be the Paying Agent) approx. CHF 1500-2000 p.a.
Custodian purchase/rebalancing approx. CHF 150-500 minimum or 10 bps brokerage (AIF likely CHF 500)
Stamp Duty on initial subscription amount 15 bps (only 99.85% reach the custodian account!)
No stamp duty apply on rebalancings.
Secondary market (just in case) 50bps above and below NAV apply.
Once the final product conditions have been confirmed by the product sponsor, subsequent changes, e.g. issue date, etc., are subject to a charge of CHF 1500!
We would match your client with one of our cooperation partners for final contracting and implementation. Our margin is included.