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Increase in the flat fee
Since we introduced the flat fee with our real estate funds just over five years ago the management of the fund has charged a commission of 0.84% p.a. on the average total fund assets of the fund to cover all recurrent costs of the fund management and to cover the costs of the custodian bank, the external auditors and other external costs (see § 15 of the funds' by-laws for details).
Over the past few years the real estate management environment has changed considerably. To continue to comply with the requirements now placed on a first-class real estate management company, the fund management company has
supplemented and increased its capacities in the real estate sector, in particular with regard to portfolio management
enhanced risk management, for example in the areas of audit and compliance.
The costs of this range of measures and the increase in costs for external services can only be met in part by further increases in efficiency. As a result, a modification of the current fees - which have been in effect since 1999 - is necessary.
For these reasons the current flat fee is to be raised from 0.84% p.a. to 0.90% p.a. as of 1 January 2006. As such it is still lower than the 1% p.a. fee provided for in the fund's by-laws and so it is not necessary for this change to be published officially (via a newspaper advert).
SFA key figures for real estate funds
In order to improve transparency in Swiss real estate fund reporting the SFA (Swiss Funds Association) has standardised the way in which the relevant key figures for real estate funds are to be calculated and set this out in binding guidelines. This will make it easier to compare the funds of different providers.