Key Terms

If a class of shares is given full voting, it means a holder of that class of shares will have a right to vote on all matters requiring approval of members, whether under the Companies Act or the Constitution of the relevant investment entity.

If a class of shares is given limited voting, it means a holder of that class of shares will only have a right to vote as a member on:

• the acquisition or disposal of the whole or part of any undertaking, asset or property of the SPV or Syndicate; and

• any dealing in any way with any undertaking, asset or property of the SPV or Syndicate.

Although this voting right may be 'limited', it is still very important. It means a holder of that class of share will have a say in anything that happens to the property of the SPV or Syndicate. Where investor shares have limited voting, this can provide some comfort as they will be involved in key decisions related to the portfolio investment.

If a class of shares is given no voting, it means a holder of that class of shares will have:

• a right to:

  • • attend any general meeting of the investment vehicle; and

    • speak on any resolution before the general meeting; but

• no right to vote on any matter for the members, whether at that meeting or otherwise.

The method of calculation of any management fee should be clearly set out in the relevant management agreement.

For deal-by-deal structures, if a management fee is payable, we often see it calculated as follows:

Investor's Total Subscription Amount multiplied by Management Fee Percentage multiplied by Number of Years Payable

EXAMPLE:

• An investor's total subscription amount is $10,000.

• Management Fee Percentage is 1.5%.

• Number of Years Payable is 2.

• Total management fee payable by that investor is $10,000 x 1.5% x 2 = $300.