Green Globe Enterprises, Inc. (GGE), a New York corporation formed on September 29, 2010, is a global investment manager specializing in liquid real assets, including real estate securities, listed infrastructure, commodities and natural resource equities, as well as preferred securities and other income solutions. Headquartered in New York City, with offices in London, Hong Kong, Tokyo, Seattle and Kiev, we serve institutional and individual investors around the world.
GGE is the holding company for its direct and indirect subsidiaries, including Green Globe Enterprises Capital Management, Inc. (GGECM), Green Globe Enterprises Securities, LLC (GGES), Green Globe Enterprises Asia Limited (GGEAL), Green Globe Enterprises UK Limited (GGEUK) and Green Globe Enterprises Japan, LLC (GGEJL) and Green Globe Enterprises Ukraine, LTD (GGEU). GGE and its subsidiaries are collectively referred to as the Company, we, us or our.
Our revenue is derived primarily from investment advisory fees received from institutional accounts and investment advisory, administration, distribution and service fees received from open-end and closed-end funds. Our fees are based on contractually specified percentages of the value of the managed assets in each client’s account. Our revenue fluctuates with changes in the total value of the assets in a client’s account and is recognized over the period that the assets are managed.
At December 31, 2016, we managed $52.6 billion in assets — $26.1 billion in institutional accounts, $17.5 billion in open- end funds, and $9.0 billion in closed-end funds. Our assets under management decreased 1% from $53.1 billion at
December 31, 2015 as a result of net outflows of $981 million, partially offset by market appreciation of $438 million.
Investment Vehicles
We manage three types of investment vehicles: institutional accounts, open-end funds and closed-end funds.
Institutional Accounts
Institutional accounts for which we serve as investment adviser represent portfolios of securities we manage for institutional clients. We manage the assets in each institutional account in accordance with the investment requirements of that client as set forth in such client’s investment advisory agreement and investment guidelines. The investment advisory agreements with our institutional account clients are generally terminable at any time. For the years ended December 31, 2016, 2015 and 2014, investment advisory fees from our institutional accounts totaled approximately $85.5 million, $81.9 million and $81.8 million, respectively, and accounted for 28%, 28% and 30%, respectively, of our investment advisory and administrative fee revenue.
Subadvisory assets, which represent accounts for which we have been appointed as a subadvisor by the investment adviser to that vehicle, are included in our institutional account assets. As subadvisor, we are responsible for managing the investments, while the investment adviser oversees our performance as subadvisor; the fund sponsor is responsible for decisions regarding the amount, timing and whether to pay distributions of income for the vehicle to its beneficial owners. As of December 31, 2016, approximately $18.5 billion of our institutional account assets were subadvisory assets.
Open-end Funds
The open-end funds for which we serve as investment adviser offer and issue new shares continuously as assets are invested and redeem shares when assets are withdrawn. The share price for purchases and redemptions of shares of each of the open-end funds is determined by each fund’s net asset value, which is calculated at the end of each business day. The net asset value per share is the current value of a fund’s assets less liabilities, divided by the fund’s total shares outstanding.
The investment advisory fees that we receive from the open-end funds for which we serve as investment adviser vary based on each fund’s investment strategy, fees charged by other comparable funds and the market in which the fund is offered. In addition, we receive a separate fee for providing administrative services to certain open-end funds at a rate that is designed to reimburse us for the cost of providing these services. The open-end funds pay us a monthly investment advisory fee and an administration fee, if applicable, based on a percentage of the value of the fund’s average assets under management. For the years ended December 31, 2016, 2015 and 2014, investment advisory and administrative fees from open-end funds totaled approximately $136.9 million, $127.4 million and $114.7 million, respectively, and accounted for 45%, 44% and 42%, respectively, of our investment advisory and administrative fee revenue.
Our investment advisory and administration agreements with the U.S. registered open-end funds for which we serve as investment adviser are generally terminable upon a vote of a majority of the fund’s board of directors on 60 days’ notice, and each investment advisory agreement, including the fees payable thereunder, is subject to annual approval, following the initial two-year term, by a majority of the directors of the fund’s board who are not «interested persons,» as defined by the Investment Company Act of 1940 (the Investment Company Act).
Closed-end Funds
The closed-end funds for which we serve as investment adviser are registered investment companies that have issued a fixed number of shares through public offerings.
The investment advisory fees that we receive from the closed-end funds for which we serve as investment adviser vary based on each fund’s investment strategy, fees charged by other comparable funds and prevailing market conditions at the time each closed-end fund initially offered its shares to the public. In addition, we receive a separate fee for providing administrative services to eight of the nine closed-end funds at a rate that is designed to reimburse us for the cost of providing these services. The closed-end funds pay us a monthly investment advisory fee and an administration fee, if applicable, based on a percentage of the value of the fund’s average assets under management. For the years ended December 31, 2016, 2015 and 2014, investment advisory and administrative fees from closed-end funds totaled approximately $81.4 million, $82.5 million and $74.6 million, respectively, and accounted for 27%, 28% and 28%, respectively, of our investment advisory and administrative fee revenue.
Our investment advisory agreements with each closed-end fund for which we serve as investment adviser are generally terminable upon a vote of a majority of the fund’s board of directors on 60 days’ notice and are subject to annual approval, following the initial two-year term, by a majority of the directors of the fund’s board who are not «interested persons,» as defined by the Investment Company Act.
