Overview of The ARK Fund
Management of The ARK Fund by ARK Capital Pty Ltd
The Company has a management agreement with ARK Capital Pty Ltd pursuant to which the functions of the management of the Company as would normally be undertaken by a CEO are performed by ARK Capital, a company controlled and operated jointly by Dr Andrew Radomiljac, Mr Craig Anderson and Mr John Kenny. The same parties control and operate Rewards. On 18 August 2006, the Company’s shareholders met and authorised the Company to enter into the contract and the Company has since been managed by ARK Capital. ARK Capital receives remuneration in the form of a fee equal to fifteen percent (15%) (plus GST) of the earnings before interest and income tax of the Company to 20 November 2007 and seven and a half percent (7.5%) (plus GST) thereafter. This fee is calculated and paid in cash once a year (following the end of the financial year) by reference to the preceding 12 month period ending on 30 June of each year.
Future Transactions with Rewards
The future of ARK is to pursue transactions such as those already undertaken with Rewards, namely, deriving a return from the annual farm rental and also enjoying the capital growth of the land asset. ARK as a property fund will be the landlord and the operator of the farms will be the tenant. Going forward, ARK expects its investment returns to average 10% over the long term in line with traditional property funds.
ARK therefore has become a pure property investor and in its capacity as a landlord will earn a cash rental yield. The business or operational risk is ultimately borne by the growers/investors in Rewards’ managed investment schemes. The sole risk borne by ARK is the landlord’s risk.
