Examples

Example of Custom Account

Example of Shared Account

Fund Co-Management

This Investment Management Agreement establishes the relationship between an Investor and a Fund Manager for the management of an investment portfolio. The Fund Manager is granted discretionary authority to make investment decisions on behalf of the Investor, subject to fiduciary duties, risk management obligations, and the terms of the agreement. The document defines investment structures, fees, performance-sharing arrangements, withdrawal rights, reporting requirements, liability limitations, and termination procedures.

1. Investment Management Framework

The Investor appoints the Fund Manager to manage the investment portfolio, including making investment decisions, executing trades, rebalancing assets, and managing risk. The Fund Manager must act honestly, in good faith, and with the skill and diligence expected of a professional investment manager.

The agreement offers two investment structures:

Shared Investor Account

  • Minimum investment: VND 500 million per unit
  • Maximum participation: 6 units

Custom Investor Account

  • Minimum investment: VND 3.5 billion
  • Maximum participation: 10 units

The chosen structure determines fees, withdrawal rights, and performance-sharing arrangements. Assets remain legally owned by the Investor while management authority is delegated to the Fund Manager. Banking and trading activities will be conducted through approved institutions.

2. Investment Strategy and Risk Management

The portfolio’s primary objective is long-term capital appreciation while maintaining prudent risk controls and preserving capital. The intended asset allocation is:

  • Approximately 80% in publicly listed shares and equity-related securities.
  • Approximately 20% in cash or cash-equivalent instruments for liquidity and hedging and tactic trading purposes.

The Fund Manager may use active, passive, or blended investment strategies depending on market conditions. A formal hedging and risk-management framework will be maintained to reduce exposure to substantial capital losses over time. However, the agreement explicitly states that hedging does not guarantee protection against losses and may be ineffective during extraordinary market events, regulatory actions, liquidity crises, or force majeure circumstances.

3. Fees and Performance Compensation

Management Fee

The Investor pays an annual management fee equal to 4% of committed capital, payable at the start of the investment period. Such fees are generally non-refundable once earned.

Performance Participation

Performance fees apply only when portfolio returns exceed specified hurdle rates.

Shared Investor Accounts

  • Hurdle rates range from 20% to 25%, depending on the number of units invested.
  • Returns above the hurdle rate are split:
    • 60% to the Investor
    • 40% to the Fund Manager

Custom Investor Accounts

  • Fixed hurdle rate of 25%.
  • Excess returns are split:
    • 50% to the Investor
    • 50% to the Fund Manager

Performance calculations are based on portfolio Net Asset Value (NAV) after deducting all applicable fees, costs, taxes, and expenses. Performance participation is reviewed quarterly, and up to 80% of accrued entitlements may be distributed quarterly, subject to later adjustments if necessary.

4. Reporting, Contributions, and Withdrawals

The portfolio is valued monthly based on official market prices. NAV is published during the first week of each month, and the Fund Manager provides monthly reports including portfolio performance, valuations, and market commentary.

Additional investments may be made after the initial holding period, although the Fund Manager retains discretion to reject contributions based on operational, market, or risk considerations.

Withdrawal Rules

  • Initial investment must remain invested for at least six consecutive months.
  • Withdrawals may be requested every three months thereafter.
  • A minimum of one month’s written notice is required.
  • Withdrawal limits:
    • Shared Accounts: up to 50% of invested capital per request.
    • Custom Accounts: up to 25% of invested capital per request.

5. Investor and Fund Manager Obligations

The Investor warrants that:

  • Invested funds originate from lawful sources.
  • The Investor has authority and legal capacity to enter the agreement.
  • Investment suitability has been independently assessed.
  • Investment risks are understood and accepted.
  • Information provided is accurate and complete.

The Fund Manager warrants that:

  • He possesses the necessary expertise and experience.
  • Duties will be performed in good faith.
  • Appropriate books and records will be maintained.
  • Reasonable efforts will be used to manage the portfolio according to the agreement.

6. Risk Disclosure, Compliance, and Liability

The Investor expressly acknowledges that investments involve multiple risks including market, liquidity, operational, economic, political, and regulatory risks. Portfolio values may fluctuate and investors may suffer partial or total loss of capital. No minimum return or capital preservation is guaranteed, and past performance is not indicative of future results.

Both parties must maintain confidentiality regarding non-public information, with confidentiality obligations continuing for five years after termination.

The agreement also contains:

  • Tax provisions assigning tax responsibility to each party individually.
  • Anti-money laundering (AML) and Know Your Customer (KYC) compliance requirements.
  • Rights for the Fund Manager to suspend or refuse transactions when legally required.

The Fund Manager is generally protected from liability for losses caused by market conditions, force majeure events, cyber incidents, banking failures, or other circumstances beyond reasonable control, but remains liable for losses caused by fraud, gross negligence, wilful misconduct, or material breach of contract.

7. Termination and Legal Provisions

Either party may terminate the agreement with at least five calendar days’ notice before month-end. Upon termination:

  • Assets are settled.
  • Investment returns are calculated as of month-end.
  • Settlement is finalized during the first week of the following month.
  • A termination penalty equal to 20% of the settlement amount applies:
    • Payable to the Fund Manager if the Investor terminates.
    • Payable to the Investor if the Fund Manager terminates.

Disputes must first be addressed through negotiation, then mediation, and finally through the courts of Ho Chi Minh City, Vietnam. The agreement is governed by Vietnamese law. Amendments must be in writing and signed by both parties. Electronic and digital signatures are recognized as valid and enforceable.

Key Takeaways

  • The Fund Manager receives broad discretionary authority but owes fiduciary duties to the Investor.
  • Investors pay a 4% annual management fee plus performance sharing above specified hurdle rates.
  • The strategy targets long-term growth with an 80/20 equity-cash allocation.
  • Investments are subject to significant market risk, and there is no guarantee of returns or capital preservation.
  • Withdrawals are restricted by holding periods, notice requirements, and percentage limits.
  • Early termination triggers a substantial 20% settlement penalty payable to the non-terminating party.