Our Vision. Spring In this issue: Sharing solutions with our clients and their shareholders through insights, technology and a solid tradition.

Transcription

1 Spring 2017 Our Vision Sharing solutions with our clients and their shareholders through insights, technology and a solid tradition. In this issue: Joe Redwine retires 2 Tradition of service excellence 3 SEC rule changes 5 DOL Fiduciary Rule 7 Impact of 871(m) regulations 10 Jason Ganz joins team 12 Series trust growth 13 Transfer Agent 2016 results 14 National Quality Review 16 Alt Credit and CTA awards 17 Quintillion Hedgeweek award 19 Feature: A fond farewell to our valued clients and partners After 39 years with U.S. Bank, Joe Redwine, president of U.S. Bancorp Fund Services, will retire at the end of July. Joe Neuberger, currently chief operating officer, will succeed Joe Redwine as president. Page 2

2 Joe Redwine announces retirement after 39 years with U.S. Bank It is with mixed emotions I share with you that I will be retiring from U.S. Bank at the end of this July. I ve been with U.S. Bank for more than 39 years and have had the distinct pleasure of serving as president of Fund Services since These past 26 years have been the most exciting, rewarding and fun of my entire career. I can attribute that experience to the privilege it has been to partner with you, watching your funds grow and succeed as we work as a team to provide you with distinct services that meet your individual needs. Joe Redwine President U.S. Bancorp Fund Services I am excited to announce that Joe Neuberger, currently chief operating officer of U.S. Bancorp Fund Services, will succeed me as president this April. From our culture to our core values, Joe [Neuberger] shares my dedication to the success of our company and our clients. Under his leadership, I am confident we will continue to build on the growth that our business has experienced over nearly five decades, said Joe Redwine. We have been working on a transition plan for the better part of a year. Joe has been with Fund Services since 1994 and has overseen Fund Administration, Legal Administration, Tax, Alternative Investments, Fund Accounting, Relationship Management, and most recently, Transfer Agent, Quasar and Regulatory Support Services. He has the talent and experience needed to continue providing you with the exceptional service you have come to expect from us. It is truly an honor to be named the next president of U.S. Bancorp Fund Services. I am passionate about our associates, clients, partnerships and commitment to a tradition of service excellence, said Joe Neuberger. Joe Neuberger Chief Operating Officer U.S. Bancorp Fund Services In my retirement, I look forward to remaining active in the industry, serving on one or more mutual fund boards as well as corporate boards. I will also have expanded opportunities to work with veterans groups, travel and spend more time with family and friends. I can conclude with just one thing, and that s my thanks to all of you, our valued clients, for trusting us as your service provider to help you grow your businesses and reach your goals. I wish you all the best and hope that our paths cross again in the future. Sincerely, Joe Redwine 2 U.S. Bancorp Fund Services

3 Continuing our tradition of service excellence to make possible happen For nearly five decades, we ve been delivering award-winning services and leading technology from a dedicated team of professionals. The advancements we made in 2016 have helped our clients achieve their possible. By serving a growing client base, developing leaders and enhancing initiatives, we continue to pursue opportunities that bring value to you and your shareholders. A culture of strong leadership Within the U.S. Bancorp Fund Services business unit, as well as U.S. Bank as a whole, we are proud of the leaders we cultivate. They are committed to operating as one U.S. Bank by delivering a consistent, predictable, and repeatable financial performance, and doing it with ethics and integrity. This year at U.S. Bank, Andy Cecere will succeed Richard Davis as CEO in April. Andy has been with U.S. Bank since 1985 and as Richard has stated many times, is one of the strongest and most capable leaders in the banking industry. We have also seen changes in our leadership team within U.S. Bancorp Fund Services throughout Luke Becker was promoted from controller to chief financial officer last January. As Quintillion celebrated their 10th anniversary, Linda Gorman was named CEO in February. Joe Neuberger, executive vice president of our Fund Administration, Relationship Management and Fund Accounting departments, gained the title of chief operating officer in October. This past March, we congratulated both Mike McVoy, chief compliance officer, and Anita Zagrodnik, as Mike retired, and Anita was promoted to his position. With more than 25 years of experience in the investment management industry, Anita joined U.S. Bancorp Fund Services in In her previous role, she served as the chief compliance officer of Ariel Investment Trust. Mike and Anita worked together to ensure a smooth transition for our clients as she leads our Regulatory Support Services department. Leaders don t create followers, they create more leaders. This is exactly what ours have done. We are excited about our new leaders and look forward to their guidance in our next period of growth. Throughout these organizational changes, we will continue to ensure you receive the expertise and resources you need to make your business goals possible. Spring

4 Performance excellence In 2016, our teams across U.S. Bancorp Fund Services continued to be awarded for their hard work and dedication to excellence. We take pride in our responsibility as a recognized market leader and continually strive to deliver exceptional client service and innovative solutions. We were honored with the following awards last year: Best administrator for reporting services - HFMWeek European Services Awards Most innovative administrator - HFMWeek US Hedge Fund Services Awards Best transfer agent and shareholder services - Fund Intelligence US Mutual Fund Services Awards Best administrator for small and start-up firms - Fund Intelligence US Mutual Fund Services Awards Best administrator for client services - Alternative Credit Intelligence European Services Awards Best overall administrator - Alternative Credit Intelligence European Services Awards Best administrator for client services - CTA Intelligence European Services Awards Investing in your success Year after year, we invest in our clients by hiring talent to serve you. In the past 12 months, we have increased our staff by 7 percent. Today, we have 1,403 employees working around the globe who are dedicated to delivering products and services that exceed your expectations. Our teams have worked tirelessly this past year to develop innovative systems that provide the data required to run your business. As we look ahead to this year, our focus remains on serving as a solid partner to help you reach your possible. Our strength and stability has been proven over more than four decades, and our team of experts is committed to your success. Let our tradition of service excellence help support your vision. 4 U.S. Bancorp Fund Services

5 Enhancing our services to address SEC reporting and liquidity rule changes In the wake of updated SEC rules related to modernized reporting and liquidity risk management last October, we established a task force of senior leaders and contributors from multiple business lines to guide the adoption of these changes. Our task force has been meeting with vendors to help ensure we are providing a complete and effective offering addressing the new requirements. Enhanced reporting requirements The SEC is requiring the reporting of a variety of new data points, to be phased in this summer and next. New disclosures effective Aug. 1, 2017 include, but are not limited to: Disclosing securities lending fees and expenses in the prospectus/statement of additional information (or N-CSR for closed-end funds) Identifying securities on loan in the schedule of investments Displaying the reference rate and spread of variable rate securities in the schedule of investments Categorizing securities sold short Disclosing gains and losses on holdings of affiliated issuers in the financial statements Enhancing disclosure requirements for derivatives We plan to have our financial reporting software updated and tested by June The SEC has also mandated a number of new disclosures through the use of two new filings, Form N-PORT and Form N-CEN, to become effective for most funds on June 1, New disclosures include risk metrics, monthly returns, flow information and securities lending counterparties. Our task force has been reviewing and meeting with current and potential vendors to determine whether they provide capabilities that meet our needs related to Form N-PORT and Form N-CEN filings. This task force is assessing all of the required data elements and is working to help ensure their availability in advance of the effective dates. We have determined that we already have access to a majority of the data points required. As the investment adviser of your funds, there may be certain data points that will be most efficient coming from your firm, either at the time of a trade or during the completion of the regulatory filings. Our task force is evaluating vendor solutions that could supplement the data we have in lieu of receiving certain data Spring

6 points from you. Once all necessary data points are compiled, we will be able to make these filings for you as we have done in the past with the legacy SEC filings. Technical specifications for the new forms are expected to be released by the SEC no earlier than summer Based on this timing, the vendors with Form N-PORT and Form N-CEN data aggregation and filing solutions are aiming to have their products fully developed and ready for testing by summer At the same time, many of the data vendors are still developing products to support these filings, particularly in the areas of risk metrics and liquidity. These data vendors are hoping to have fully developed data products ready for testing during the third quarter of Based on these projected release dates, we plan to have a vendor selected for the data aggregation and filing function by the end of the second quarter of By the end of the third quarter of 2017, we plan to have vendors selected for the additional data elements. This timeline will allow us to begin test filing in the first quarter of New liquidity risk management requirements The SEC has mandated a number of new requirements and disclosures related to liquidity risk management. Funds will be required to adopt and implement a written liquidity risk management program and classify each portfolio investment into one of four liquidity categories denoting the level of liquidity of the investment at current market conditions. The fund will also determine a minimum percentage of its net assets to invest in highly liquid investments, such as cash or investments reasonably expected to be settled to cash within three business days as well as maintain a 15 percent limit on holdings of illiquid investments, in order to avoid a breach. We have been testing products from several different vendors to evaluate their ability to assist in classifying and measuring liquidity levels. These vendors have been updating their products based on differences between the proposed rules and the final rules, adding asset class coverage, and developing client reporting. We will continue to monitor their progress to determine the best solution for complying with the new liquidity requirements. 6 U.S. Bancorp Fund Services

7 Swing pricing There has been a considerable amount of discussion in the industry surrounding the optional use of swing pricing. Our employees participate in the ICI Swing Pricing Task Force and will share industry viewpoints and progress on this topic with the U.S. Bancorp Fund Services task force as they become available. Moving forward In addition to the topics described above, our task force is drafting policies and procedures and will facilitate training and education both internally and externally. As more definite information becomes available, your relationship manager will be reaching out to you with details that are relevant to your funds. Additionally, we plan to cover these topics at our annual Client Conference in June. For more information on the updated SEC rules, please contact your relationship manager. DOL Fiduciary Rule influences trends in emerging share classes As the Department of Labor (DOL) considers a proposed 60-day delay of the implementation of the Fiduciary Rule, which may be finalized by the time of this publication, some in the financial intermediary community have been forced to reconsider the adoption of the so-called T share class for use in brokerage retirement accounts, such as IRAs. A number of prominent financial intermediaries began announcing plans of adopting the T share model for brokerage accounts at the end of 2016, but the DOL s proposed delay may change those plans in the coming months. What is a T share? As originally contemplated, a T share is a transaction-based (commissionable/loaded) share class that carries many of the sales charge characteristics of a traditional A share class. However, a T share will have a lower, uniform sales charge schedule across all fund categories, as shown in the graphic on page 9. Additionally, the T share will have consistent attributes, such as a uniform Rule 12b-1 fee of 25 basis points. The class will not have underwriter or dealer concessions, CDSCs, nor will it allow for any rights of accumulation, provide letters of intent or allow for exchanges. The T share will be the exclusive mutual fund option for selling broker-dealers offering retirement advice to customers in a traditional retail broker account. The selling broker utilizing the T share will now operate under the Best Interest Contract Exemption (BICE) with their customers in compliance with the DOL Fiduciary Rule. The BICE permits a broker-dealer to sell a commissionable product to a customer, while acting as a fiduciary, provided the selling broker and customer comply with the requirements of BICE. Spring

8 The financial intermediary community had largely supported the structure of the T share because it would allow firms to continue offering these kinds of options to customers who may not be best served in a fee-based advisory relationship. The uniform nature of the sales charge will also serve to remove incentives based on disparate commission schedules. Industry wide, approximately 3,800 T share cusips were expected to be registered with the SEC by April 1, according to Morningstar. About one-third of Quasar s clients that presently offer a Class A share had registered and planned to launch a T share. The proposed 60-day delay has led funds and financial intermediaries to postpone their intended plans until the fate of the Fiduciary Rule is known. Not all financial intermediaries will support the T share. Firms that do not plan to offer T shares do not plan to allow their brokers to offer any commissionable products to retirement account customers. Instead, customers may be referred to self-directed brokerage options, robo-advisers or fee-based advisory relationships, where the adviser is earning a set percentage of assets on an annual basis. What about the clean share? The SEC issued a January, 2017 no-action letter to the Capital Group, which allows the investment adviser to issue clean shares through its sponsored mutual funds. The clean share class may not contain any sales charges or distribution fees (12b-1 fees). Instead, the clean share class externalizes the pricing power to the selling broker, who may set their own fees for transactions and services to its customers. The narrowly tailored letter only applies to the clean share class, which must carry appropriate prospectus disclosures regarding the selling broker s ability to charge a commission on the sale of the shares. Open questions remain as to whether the clean shares will be able to charge sub-transfer agency fees or adviser payments to brokers, known as revenue sharing. The SEC s no-action letter was intentionally silent on these matters. Additionally, the financial intermediary community has had a very small amount of time to digest and react to the no-action letter in order to draw any conclusions as to its adoption rate in the marketplace. With all of the excitement and anxiety regarding share class trends, mutual fund assets continue to migrate away from 12b-1 share classes toward cheaper, institutional-type share classes. In these share classes, the financial advisers customarily want, and expect, funds to waive investment minimums and redemption fees for the use of these products in fee-based or advisory programs. 8 U.S. Bancorp Fund Services

9 T share class structure A reasonably priced brokerage share class with a sales charge on all purchases and a 12b-1 fee that is designed to provide low cost of access for investors who choose to utilize mutual funds. The table below outlines features designed to remove conflict and ensure the equitable treatment of mutual fund investors: Category Terms Mutual fund sales charge schedule (regardless of asset class) Sales charge 12b-1 $0-$249, %.25% $250,000-$499, %.25% $500,000-$999, %.25% $1,000,000 and above 1.00%.25% Rights of accumulation Letter of intent Load (sales charge) waivers Exchange provisions Back-end load Features applicable to T shares Dealer concession (fund family sales charge retention) CDSC None None None None None None None 12b-1 payout timing Immediate Exclusive share class for brokerage retirement accounts If other brokerage share classes are still available in the prospectus, updates will be necessary to effectuate these changes (e.g., Share class availability depends upon your financial intermediary s policies and procedures. Consult with your financial adviser for more information. ) Yes For more information on the DOL fiduciary rule, please contact your relationship manager. Spring

10 The impact of 871(m) regulations on offshore and onshore alternative investment funds and RICs What is Section 871(m)? Section 871(m) is a regulation within the U.S. Internal Revenue Code that addresses U.S. stock-based derivative transactions that, prior to its enactment, allowed foreign investors to receive the economic benefit of U.S. dividends without being subject to U.S. withholding tax. This strategy is often utilized by foreign investors of receiving the inherent value of U.S. stock dividends within the underlying structure of a derivative instrument whose underlying asset value contains U.S. equity securities. The 871(m) regulations state that any payment relating to, or increase in the value of, a derivative contract directly correlated to a U.S. equity security will result in a dividend equivalent amount (DEA). The DEA is deemed to have been received by the holders of the U.S.- sourced equity derivative when a payment is received via the derivative instrument, or it expires or terminates, and as long as the derivatives referenced assets are U.S. stocks that have made a dividend declaration and require tax withholding on any non- U.S. investors. The 871(m) regulations are written broadly to include the following types of products that reference a U.S. underlying stock: Swaps (notional principal contracts) Futures contracts Options (listed or OTC) Forwards contracts Repurchase agreements Convertible debt Derivatives over equity-linked indices Other equity-linked contracts Securities lending Affected parties Ultimately, 30 percent (potentially less due to treaty) will be withheld on DEAs paid to non-u.s. beneficial owners or investors. However, both U.S. and non-u.s. alternative investment funds will need to address the regulations to ensure U.S. withholding tax is correctly remitted and reporting requirements are in compliance with the new regulations. Regulated investment companies (RICs) will avoid major impact pertaining to U.S. withholding tax on dividend equivalent amounts held by foreign investors as the IRS has released guidance exempting RICs from U.S. withholding tax and reporting requirements under 871(m). Ordinary income distributions made by RICs 10 U.S. Bancorp Fund Services

11 are already subject to U.S. withholding tax and reporting requirements for foreign investors, so no additional withholding or reporting requirements are necessary under 871(m). However, RICs may have some reporting responsibilities if classified as an issuer or determining party of an equity derivative transaction subject to 871(m). A RIC would be an issuer or determining party if it s originating the derivative product and deemed the issuing or determining party of the applicable 871(m) derivative asset. U.S. alternative investment funds should review the assets they hold and the profile of their investors to determine the potential Section 871(m) exposure, if any, from a U.S. withholding tax and reporting perspective. A fund that holds the above potential Section 871(m) assets and also has foreign investors should monitor the assets and the underlying U.S. stocks for any dividend equivalent payment activity. Non-U.S. alternative investment funds that hold assets in scope for Section 871(m) should work with their brokers and custodians to ensure the withholding on applicable foreign investors is correctly being applied to Section 871(m) assets and dividend equivalent transactions, when applicable. Next steps Funds should look for any exposure in their portfolio based on the entity type and parameters discussed above to ensure compliance by the first quarterly U.S. withholding tax payment due date of March 31, As the 871(m) rules are complex, funds should also discuss requirements with interested parties, including non-u.s. investors, custodians and prime brokers, and portfolio managers, to ease the compliance burden of identifying 871(m) assets and ensure minimal gaps in reporting and withholding responsibilities. As there is no withholding impact to a RIC under 871(m), the next step would be to continue to monitor for any further 871(m) regulatory guidance deviates from what has been provided previously. There could also be reporting ramifications to a RIC and to the other parties of a U.S. equity derivative contract if it is classified as an issuer or determining party of an equity derivative transaction subject to 871(m) reporting. Spring

12 Please contact your fund administrator, relationship manager or U.S. Bancorp Fund Services Managing Tax Director Michael McMaster at to further discuss the new 871(m) final regulations. U.S. alternative investment funds should consider both their profile of investors and portfolio assets to assess their exposure. This includes looking through to the underlying assets of partnership and other look through assets held within a portfolio to determine 871(m) asset classification status. Funds should ensure procedures are in place if, and when, an 871(m) eligible asset receives a dividend equivalent payment and there are applicable foreign investors subject to U.S. withholding tax. The procedures should also include identifying non-u.s. investors subject to withholding, remitting the withholding and issuing the applicable U.S. tax forms. Non-U.S. alternative investment funds should ensure W-8 documentation is updated and correct with its brokers and custodians to ensure withholding is performed correctly on any dividend equivalent payments received from Section 871(m) assets. Funds should also work directly with their brokers and custodian to ensure compliance with the new regulation. Expanding our team to better serve you We re proud to welcome Jason Ganz as he joins us as senior vice president of Business Development with more than 15 years of experience related to hedge fund and private equity operations. Previous to joining U.S. Bancorp Fund Services, Jason worked as a director at SS&C GlobeOp. We are excited to continue expanding our dedicated team of professionals serving the hedge fund community, said Bob Kern, executive vice president of Business Development at U.S. Bancorp Fund Services. Jason Ganz Senior Vice President jason.ganz@usbank.com Jason s experience and expertise in alternative investments helps strengthen our team and provides additional support for our clients, said Bob Kern. In his new role, Jason will focus on providing alternative investment managers with quality product support and solutions. Jason joins the dedicated Alternative Investment Solutions Business Development staff, including: Jerry Barbara Senior Vice President of Business Development gerald.barbara@usbank.com Scott Syracuse Senior Vice President of Business Development scott.syracuse@usbank.com Gary Rossmann Senior Vice President of Business Development gary.rossmann@usbank.com 12 U.S. Bancorp Fund Services

13 Series trust growth in the marketplace Series trusts are an increasingly popular mutual fund structure for advisers across the industry. This fund structure provides investment managers with a comprehensive service model, allowing them to focus on product differentiation and growing their fund business. At U.S. Bancorp Fund Services, we provide management of all administrative aspects of the mutual fund, removing this responsibility from the investment manager. Other benefits of the series trust structure include lower cost of entry, faster time to market and an existing board of industry professional trustees, a dedicated CCO and trust officers. Currently, total assets held across the marketplace in series trust structures is more than $154 billion, which includes more than 800 funds and more than 370 advisers. As the popularity of series trusts has risen in the industry, we have expanded our capacity to meet this demand. While we have been providing series trust services since 1987, in the last five years, we have experienced tremendous growth of this product offering and have added six additional series trusts with 108 funds and 55 managers. In total, we service 10 separate series trusts with more than $50 billion in assets, 98 advisers and 204 funds. The chart below outlines the compound annual growth rate of our series trusts at U.S. Bancorp Fund Services: U.S. Bancorp Fund Services Series Trust Business Compound Annual Growth Rate Measure 1 year 3 year 5 year 10 year MST assets 76.76% 29.85% 33.77% 27.11% Number of MST clients 7.61% 8.74% 9.81% 10.96% Number of MST funds 18.50% 13.56% 12.85% 15.39% Series trusts are becoming the structure of choice for most startup fund situations and are also an opportunity for propriety funds to reorganize into series trusts. At U.S. Bancorp Fund Services, we have a team of professionals with years of experience servicing all aspects of administration for series trusts and proprietary funds. If you are interested in how your firm can benefit from a series trust structure, contact your relationship manager or visit our website at usbfs.com. Spring

14 Transfer Agent delivers consistent, exceptional results in 2016 With the advent of Money Market Reform, the Department of Labor Fiduciary Rule and the presidential election, 2016 was a year of transformation in industry regulations. Amid the uncertainty, our Transfer Agent team remained steadfast in providing you and your shareholders with reliable and exceptional service. Our core principles continue to reflect the highest quality standards, enabling us to achieve these unmatched results. We retained our ISO Certification, which included compliments from the Registrar as the best Knowledge Management System he has seen. Outstanding SSAE16 audit results with no exceptions were achieved in Financial Intermediary department Nearly 9.9 million trades were transmitted through NSCC for client funds, representing an increase of more than 11 percent from the prior year s volume. More than of 46,000 trading errors were resolved for intermediaries during the year. Training department Our Training department achieved the Learning Solutions ISO certification as a result of its creative and innovative solutions for workforce education and development. Transfer Agent Accounting and Regulatory Reporting We reunited lost shareholders with more than $121 million in assets that may otherwise have been escheated. More than 375,000 tax forms were generated for the 2015 tax year, with an accuracy rate of percent. In excess of $680 million in foreign transactions were reviewed to remain compliant with IRS regulations and prevent under withholding on accounts with a foreign component. More than 47,000 incoming wires were received for processing, representing an increase of nearly 21 percent over the prior year. AML/Fraud department 46 cases of fraudulent activity were identified and prevented, averting $3.1 million in losses. 1,750 individual account applications and transaction documents were reviewed for suspicious activity. Our Fraud team responded to a total of 1,098 red flags. 14 U.S. Bancorp Fund Services

15 Account Services and Contact Center In excess of 217,000 direct financial transactions were processed by our Account Services and Contact Center groups, with industry leading accuracy of percent. More than 46,000 correspondence items were sent in response to shareholder inquires and requests. Technology and System Support Services 2,950 12b-1 fee payment system runs, which generated more than $133 million in 12b-1 and service fee payments, were completed by our Technology and System Support team. 695,530 NAVs were entered with 100 percent accuracy, 30,815 daily accrual rates were populated with percent accuracy, and 6,748 dividend and capital gains distributions were processed with percent accuracy. Technology Delivery and Client Services Nearly 600,000 daily confirmation statements were generated with percent accuracy and 100 percent were mailed by T+2. We are grateful to you, our loyal partners who have chosen us as a service provider and look forward to many more years of success as we continue helping you achieve your business goals. Spring

16 National Quality Review recognizes U.S. Bancorp Fund Services with NQR Best and 5-Star Performance ratings We were honored to recently receive exceptional quality ratings from National Quality Review (NQR), including NQR Best designations across all categories for retail processing in the fourth quarter of 2016 and NQR Best overall 2016 performance for contact center. This recognition comes following an assessment of its 2016 overall performance as well as performance in the fourth quarter of We attribute our success to the ongoing dedication to ISO 9001:2008 standards and our outstanding quality management program. We are committed to our clients and their shareholders experiences, said Joe Redwine, president of U.S. Bancorp Fund Services. Incorporating ISO principles creates a knowledge management system that provides the highest-quality deliverables along with practices that are continuously improved. Overall 2016 Our leading Transfer Agent was recognized for overall 2016 performance in correspondence, contact center and retail processing. We achieved NQR Best designations for: Correspondence - typographical and grammatical accuracy Contact Center - overall performance and relationship/behavior Retail Processing - financial accuracy and non-financial timeliness Fourth quarter 2016 In addition, in the fourth quarter of 2016, we achieved NQR Best ratings in all five categories for retail processing. These include overall accuracy, financial accuracy, non-financial accuracy, financial timeliness and non-financial timeliness. Our Contact Center also received the NQR Best designation for relationship/behavior. Both groups maintained their NQR 5-Star Performer rating. Each quarter, our goal is to bring together industryleading customer service, robust technology and efficient processes to ensure we are exceeding the expectations of our clients. - Ian Martin Executive Vice President Transfer Agent, U.S. Bancorp Fund Services 16 U.S. Bancorp Fund Services

17 This significant performance is a result of our tradition of providing consistent topquartile or above service ratings. Receiving NQR Best designations across all retail processing categories as well as NQR Best overall 2016 performance for our contact center has been one of our greatest achievements yet, said Ian Martin, executive vice president of the Transfer Agent at U.S. Bancorp Fund Services. Each quarter, our goal is to bring together industry-leading customer service, robust technology and efficient processes to ensure we are exceeding the expectations of our clients. This recognition speaks to our consistent achievement of this goal. U.S. Bancorp Fund Services recognized for service excellence by Alt Credit Intelligence and CTA Intelligence We are honored to have recently received awards recognizing our alternative investment administration services from Alt Credit Intelligence and CTA Intelligence. in New York, we were named best administrator for client service. On Feb. 15, we were awarded best administrator overall and best middle office services at the 2017 Alt Credit Intelligence US Services Awards in New York. The next day, at the 2017 CTA Intelligence US Services Awards We have developed a specialized and unique strength in administration for fixed income, credit derivative and commodities asset classes. - Joe Redwine President U.S. Bancorp Fund Services This recognition of our success by industry experts is especially gratifying, given the very complicated nature of asset servicing for administration of futures, options, structured credit, mezzanine debt, senior bank loans, distressed debt, performing credit and nonperforming credit, said Joe Redwine, president of U.S. Bancorp Fund Services. These awards acknowledge the exceptional talent, expertise and dedication of our administration team, our technology and our commitment to customer service excellence. Spring

18 US Services Awards 2017 Winner The Alt Credit and CTA awards recognize and reward hedge fund service providers as well as CTA and managed futures service providers that have demonstrated exceptional customer service and innovation over the past year. Winners were chosen by a panel of judges who are selected for their experience and expertise. Judges were comprised of representatives from Alternative Credit Intelligence, leading institutional and private investors, and industry experts. Our success is driven by our resources, strength and financial stability that provides the expertise and systems necessary to support each client and their specific products. - Christine Waldron Executive Vice President Alternative Investment Solutions, U.S. Bancorp Fund Services We concentrate on bringing our partners the flexibility, accuracy and efficiency they need, so they can focus on their strengths investment management and asset growth, said Christine Waldron, executive vice president of Alternative Investment Solutions at U.S. Bancorp Fund Services. Save the date AIS Partner Outing Sept. 28, 2017 Join us at Preakness Hills Country Club for our sixth annual AIS Partner Outing. Enjoy an afternoon on the championship course followed by a relaxing evening with cocktails and hors d oeuvres as we come together with clients, partners and colleagues. 18 U.S. Bancorp Fund Services

19 Quintillion recognized for best UCITS Liquid Alternative Fund Administration by Hedgeweek Quintillion Limited, our European-based affiliate, was awarded Best UCITS Liquid Alternative Fund Administrator at the 2017 Hedgeweek Global Awards in London on March 3. These awards celebrate the achievements and accomplishments of the past year among leading hedge fund managers and service providers. We are honored to be recognized as the leading UCITS liquid alternative fund administrator, said Linda Gorman, CEO of Quintillion. We take pride in putting our strength and integrity into every relationship. Our team works diligently to understand each unique need of our clients and provide a customized servicing solution. - Linda Gorman CEO Quintillion The awards for managers were voted on by Hedgeweek readers, including investors, managers and other industry professionals who work as fund administrators, custodians, accountants and auditors, lawyers, consultants, and fund distributors. Final winners were confirmed by the Hedgeweek team. Continually updating technology and processes, we help ensure clients receive efficient and effective deliverables in an evolving market. Quintillion provides a universal solution in that we support a diverse selection of strategies, structures, domiciles and investor profiles, said Christine Waldron, executive vice president of Alternative Investment Solutions at U.S. Bancorp Fund Services. With leading technology and a tenured operations team, we deliver an unmatched consistency of service for all our clients funds. For more information on industry recognition we have received, visit our website at usbfs.com. After lunch, enjoy an afternoon on the beautiful, championship course or kick back and relax in the clubhouse with a variety of spa-like services. Spring

20 See us this spring at the following conferences and events From coast to coast and around the globe, our team of professionals will be on-site at industry-leading conferences to discuss your servicing needs. Visit us at the following conferences and events. May Su M T W Th F S May 3-5 ICI GMM Conference Washington, DC May 10 Wilson Willis Conference London, United Kingdom May 11 HFMWeek Texas Operational Leaders Summit Dallas, Texas June Su M T W Th F S June 7 Backstop User Conference Chicago, Illinois June 7-9 U.S. Bancorp Fund Services Client Conference Lake Geneva, Wisconsin June HFMWeek Operational Leader Summit Long Island, New York June 14 BattleFin Discovery Day New York, New York Building on four decades of investment experience With 48 years of service distinction, U.S. Bancorp Fund Services LLC combines industry-leading technology with high-quality customer service to provide our clients with customized solutions. For more information about our comprehensive suite of mutual fund, alternative investment and ETF products and services, call or visit usbfs.com. U.S. Bancorp Fund Services LLC 777 East Wisconsin Avenue Milwaukee, WI Please send your comments and suggestions to usbfsinfo@usbank.com. U.S. Bank does not guarantee the products, services or performance of its affiliates and third-party providers. Quintillion Limited is registered in Ireland with the Companies Registration Office Reg. No and Registered Office: City Quay, Dublin 2, Ireland. Quintillion Limited is authorised by the Central Bank of Ireland under the Investment Intermediaries Act, usbfs.com U.S. Bank