UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-22920
The Advisors’ Inner Circle Fund III
(Exact name of registrant as specified in charter)
SEI Investments
One Freedom Valley Drive
Oaks, PA 19456
(Address of principal executive offices) (Zip code)
SEI Investments
One Freedom Valley Drive
Oaks, PA 19456
(Name and address of agent for service)
Registrant’s telephone number, including area code: (877) 446-3863
Date of fiscal year end: July 31, 2021
Date of reporting period: July 31, 2021
Item 1. | Reports to Stockholders. |
A copy of the report transmitted to stockholders pursuant to Rule 30e-1 under the Investment Company Act or 1940, as amended (the “Act”) (17 CFR § 270.30e-1), is attached hereto.
The Advisors’ Inner Circle Fund III
SGA International Equity Fund
ANNUAL REPORT
JULY 31, 2021
Investment Adviser:
Strategic Global Advisors, LLC
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Funds’ shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports from the Funds or from your financial intermediary such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Funds electronically by contacting your financial intermediary, or, if you are a direct investor, by calling 866-778-6397.
You may elect to receive all future reports in paper free of charge. If you invest through a financial intermediary, you can follow the instructions included with this disclosure, if applicable, or you can contact your financial intermediary to inform it that you wish to continue receiving paper copies of your shareholder reports. If you invest directly with the Funds, you can inform the Funds that you wish to continue receiving paper copies of your shareholder reports by calling 866-778-6397. Your election to receive reports in paper will apply to all funds held with your financial intermediary if you invest through a financial intermediary or all Strategic Global Advisors, LLC Funds if you invest directly with the Funds.
THE ADVISORS’ INNER CIRCLE FUND III | SGA INTERNATIONAL EQUITY FUND | |
JULY 31, 2021 | ||
TABLE OF CONTENTS
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Trustees and Officers of the Advisors’ Inner Circle Fund III | 22 | |||
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The Fund files its complete schedule of investments with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q or as an exhibit to its reports on Form N-Port within sixty days after period end. The Fund’s Form N-Q and Form N-Port reports are available on the SEC’s website at http://www.sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to Fund securities, as well as information relating to how a Fund voted proxies relating to fund securities during the most-recent 6-month period ended June 30, is available: (i) without charge, upon request, by calling 1-866-778-6397; and (ii) on the SEC’s website at http://www.sec.gov.
THE ADVISORS’ INNER CIRCLE FUND III | SGA INTERNATIONAL EQUITY FUND | |
JULY 31, 2021 (UNAUDITED) | ||
We are pleased to present the annual report for the SGA International Equity Fund. The following commentary covers the twelve months from August 1, 2020 through July 31, 2021.
Performance Review
The SGA International Equity Fund Institutional Class Shares returned 27.48% for the twelve months ending July 31, 2021, versus the MSCI EAFE Index (Net) benchmark return of 30.31% as markets navigated the COVID-19 pandemic, volatile oil prices, and unprecedented fiscal and monetary stimulus.
The SGA Alpha Model had negative performance over the past year among non-U.S. large cap developed equities, primarily driven by underperformance in the last half of 2020. Within the Model, the Quality and Sentiment categories detracted while the Growth category modestly contributed. Those three categories all performed poorly in 2020 but have had modestly positive performance so far in 2021. Similarly, the Valuation category performed poorly in 2020, however, it has rebounded much stronger in 2021 driving an overall positive contribution over the last twelve months.
Stock selection was positive in Real Estate, Consumer Discretionary, and Financials, offset by weak selection in Consumer Staples, Health Care, and Information Technology. In Information Technology, an underweight position in semiconductor firm ASML detracted from relative performance. Following the vaccine announcement, several companies within Consumer Staples experienced a pullback including grocer Koninklijke Ahold Delhaize and drug store retailer Welcia Holdings. In Real Estate, Daito Trust was a top contributor despite disclosing that rising lumber costs may dampen gross margins. In Consumer Discretionary, many companies benefitted from a stay at home environment including online gaming companies Evolution AB and Entain. Within Financials, U.K.-based multi-line insurer Aviva plc made progress divesting non-core businesses, paving the way for recently-announced accelerated capital returns to shareholders.
Stock selection was positive in the U.K., Finland, and Singapore, offset by weak selection in Japan, Israel, and the Netherlands. Negative selection in Japan included NEC and pharmaceutical firm Shionogi which reported disappointing COVID-19 vaccine development efforts. In Israel, Check Point Software underperformed after lowering earning guidance. In the Netherlands, the largest detractors were Koninklijke Ahold Delhaize and the underweight in ASML Holdings. Finland-based refiner Neste Corporation benefited from investor focus on ESG due to its ability to use renewable feedstocks. In the U.K., mining company Evraz cited a recovery in key markets and insurer Aviva also contributed to relative returns. U.K.-based retailer Next leveraged its online presence to overcome persistent lockdowns. In Singapore, diversifed bank DBS Group recovered well due its strong balance sheet, deposit franchise, credit quality, and stable wealth management income.
Portfolio Structure
Active sector weightings are generally a result of our bottom-up stock selection process. Through our risk control and portfolio construction process, we generally keep sector weights fairly close to the MSCI EAFE benchmark, and modest sector over- and under-weights are a result of various factors in our optimization and stock selection process.
Market Outlook
Market sentiment remains constructive as vaccination rates rise and pent-up consumer demand is released. The World Bank estimates that global economic growth may reach 5.6 percent in 2021, its strongest post-recession growth rate in 80 years. Looking forward, investors will likely remain focused on inflation levels and their implications on central bank policy and financial conditions. Policies thus far have
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THE ADVISORS’ INNER CIRCLE FUND III | SGA INTERNATIONAL EQUITY FUND | |
JULY 31, 2021 (UNAUDITED) | ||
remained relatively accommodative, with the Federal Reserve, European Central Bank, and the Bank of Japan committed to keeping interest rates lower for longer. An imbalance between global aggregate demand and supply has led to some temporary price increases as production has lagged. As manufacturers ramp up capacity, we expect price pressures to normalize in the second half of the year. Prices for several commodities, including lumber and copper, have already subsided from near-term peaks; however, wage increases may prove to be stickier and lead to more permanent inflation.
In the second quarter, global equity markets were led by the Information Technology, Health Care, and Energy sectors. Outperformance in value indices receded in the second quarter as sovereign fixed income yields consolidated following a notable rise in the first quarter. We expect volatility to remain elevated as markets anticipate future pivots in monetary and fiscal policy. In this period of elevated volatility, we believe a disciplined investment process with exposures to both value and growth is critical to take advantage of mispriced opportunities.
Please note, as of August 23, 2021 the SGA International Equity Fund has been liquidated. The SGA International Equity strategy is currently available as a separate account, commingled investment trust, and through retail platforms. Please contact sga-marketing@sgadvisors.com for additional details.
Definition of Comparative Index
Alpha is the rate of return that exceeds what the model predicted.
The MSCI EAFE Index (Europe, Australasia, Far East) is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the US & Canada. The MSCI EAFE Index consists of the following 21 developed market country indices: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, and the United Kingdom.
The MSCI World Net Index captures large and mid cap representation across 23 Developed Markets (DM) countries. With 1,557 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country.
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THE ADVISORS’ INNER CIRCLE FUND III | SGA INTERNATIONAL EQUITY FUND | |
JULY 31, 2021 (UNAUDITED) | ||
Growth of a $10,000 Investment
AVERAGE ANNUAL TOTAL RETURN FOR THE YEAR ENDED JULY 31, 2021 | ||||||||||
1 Year Return | 3 Year Return | Annualized Inception to Date* | ||||||||
Institutional | 27.48% | 5.11% | 6.85% | |||||||
MSCI EAFE Index | 30.31% | 7.66% | 9.40% |
*The Fund commenced operations on September 30, 2016.
The performance data quoted herein represents past performance and the return and value of an investment in the Fund will fluctuate so that, when redeemed, may be worth less than its original cost. The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost, and current performance may be higher or lower than the performance quoted. The Fund’s performance assumes the reinvestment of all dividends and all capital gains. Index returns assume reinvestment of dividends but, unlike a fund’s returns, do not reflect the deduction of any fees or expenses. If such fees and expenses were included in the index returns the performance would have been lower. Please note that one cannot invest directly in an unmanaged index.
There are no assurances that the Fund will meet its stated objectives. The Fund’s holdings and allocations may change at any given time; they do not constitute, and should not be considered, recommendations to buy individual securities.
Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
See definition of comparative indices on page 2.
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THE ADVISORS’ INNER CIRCLE FUND III | SGA INTERNATIONAL EQUITY FUND | |
JULY 31, 2021 | ||
Assets: | ||||
Cash | $ | 2,265,162 | ||
Receivable from Investment Adviser | 31,489 | |||
Reclaim Receivable | 18,624 | |||
Dividend and Interest Receivable | 2,240 | |||
Prepaid Expenses | 13,934 | |||
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Total Assets | 2,331,449 | |||
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Liabilities: | ||||
Audit Fee payable | 22,410 | |||
Payable due to Transfer Agent | 7,165 | |||
Payable due to Custodian | 4,813 | |||
Payable due to Administrator | 3,794 | |||
Legal Fees Payable | 3,325 | |||
Chief Compliance Officer Fees Payable | 2,092 | |||
Pricing Fees Payable | 1,431 | |||
Distribution Fees Payable (Investor Shares) | 1,394 | |||
Printing Fees Payable | 1,198 | |||
Other Accrued Expenses | 135 | |||
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Total Liabilities | 47,757 | |||
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Net Assets | $ | 2,283,692 | ||
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Net Assets Consist of: | ||||
Paid-in Capital | $ | 2,282,810 | ||
Distributable earnings | 882 | |||
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Net Assets | $ | 2,283,692 | ||
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Institutional Shares: | ||||
Net Assets | $ | 2,283,692 | ||
Outstanding Shares of beneficial interest (unlimited authorization — no par value) | 1,125,788 | |||
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Net Asset Value, Offering and Redemption Price Per Share | $ | 2.03 | ||
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4
The accompanying notes are an integral part of the financial statements.
THE ADVISORS’ INNER CIRCLE FUND III | SGA INTERNATIONAL EQUITY FUND | |
FOR THE YEAR ENDED | ||
JULY 31, 2021 | ||
Investment Income: | ||||
Dividends | $ | 196,871 | ||
Less: Foreign Taxes Withheld | (18,821 | ) | ||
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Total Investment Income | 178,050 | |||
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Expenses: | ||||
Investment Advisory Fees | 57,354 | |||
Administration Fees | 53,341 | |||
Trustees’ Fees | 17,604 | |||
Chief Compliance Officer Fees | 6,809 | |||
Distribution Fees (Investor Shares) | 263 | |||
Professional Fees | 76,801 | |||
Transfer Agent Fees | 49,866 | |||
Registration and Filing Fees | 33,351 | |||
Custodian Fees | 17,444 | |||
Printing Fees | 15,337 | |||
Pricing Fees | 10,365 | |||
Insurance and Other Expenses | 27,405 | |||
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Total Expenses | 365,940 | |||
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Less: | ||||
Investment Advisory Fee Waived | (57,354 | ) | ||
Reimbursement of Expenses from Investment Adviser | (250,975 | ) | ||
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Net Expenses | 57,611 | |||
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Net Investment Income | 120,439 | |||
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Net Realized Gain (Loss) on: | ||||
Investments | 1,798,259 | |||
Foreign Currency Transactions | (4,356 | ) | ||
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Net Realized Gain | 1,793,903 | |||
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Net Unrealized Appreciation (Depreciation) on: | ||||
Investments | (224,387 | ) | ||
Foreign Currency Translation | 100 | |||
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Net Unrealized Depreciation | (224,287 | ) | ||
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Net Realized and Unrealized Gain on Investments and Foreign Currency Transactions | 1,569,616 | |||
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Net Increase in Net Assets Resulting from Operations | $ | 1,690,055 | ||
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5
The accompanying notes are an integral part of the financial statements.
THE ADVISORS’ INNER CIRCLE FUND III | SGA INTERNATIONAL EQUITY FUND | |
Year Ended July 31, 2021 | Year Ended July 31, 2020 | |||||||
Operations: | ||||||||
Net Investment Income | $ | 120,439 | $ | 96,402 | ||||
Net Realized Gain (Loss) on Investments and Foreign Currency Transactions | 1,793,903 | (200,492 | ) | |||||
Net Unrealized Depreciation on Investments and Foreign Currency Translation | (224,287 | ) | (35,942 | ) | ||||
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Net Increase (Decrease) in Net Assets Resulting From Operations | 1,690,055 | (140,032 | ) | |||||
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Distributions: | ||||||||
Institutional Shares | (1,724,800 | ) | (195,779 | ) | ||||
Investor Shares | – | (9,613 | ) | |||||
Return of Capital: | ||||||||
Institutional Shares | (291,811 | ) | – | |||||
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Total Distributions: | (2,016,611 | ) | (205,392 | ) | ||||
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Capital Share Transactions: | ||||||||
Institutional Shares | ||||||||
Issued | 352,297 | – | ||||||
Reinvestment of Distributions | 2,016,611 | 195,779 | ||||||
Redeemed | (5,463,263 | ) | (849 | ) | ||||
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Net Institutional Shares Transactions | (3,094,355 | ) | 194,930 | |||||
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Investor Shares | ||||||||
Issued | – | 5,011 | ||||||
Reinvestment of Distributions | – | 9,613 | ||||||
Redeemed | (335,921 | ) | (222 | ) | ||||
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Net Investor Shares Transactions | (335,921 | ) | 14,402 | |||||
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Net Increase (Decrease) in Net Assets From Capital Share Transactions | (3,430,276 | ) | 209,332 | |||||
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Total Decrease in Net Assets | (3,756,832 | ) | (136,092 | ) | ||||
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Net Assets: | ||||||||
Beginning of Year | 6,040,524 | 6,176,616 | ||||||
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End of Year | $ | 2,283,692 | $ | 6,040,524 | ||||
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Amounts | designated as “—” are either not applicable, $0 or have been rounded to $0. |
6
The accompanying notes are an integral part of the financial statements.
THE ADVISORS’ INNER CIRCLE FUND III | SGA INTERNATIONAL EQUITY FUND | |
STATEMENTS OF CHANGES IN NET ASSETS (concluded) |
Year Ended July 31, 2021 | | Year Ended July 31, 2020 | ||||||||
Shares Transactions: | ||||||||||
Institutional Shares | ||||||||||
Issued | 30,641 | – | ||||||||
Reinvestment of Distributions | 960,252 | 17,787 | ||||||||
Redeemed | (447,226 | ) | (78 | ) | ||||||
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Total Institutional Shares Transactions | 543,667 | 17,709 | ||||||||
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Investor Shares | ||||||||||
Issued | – | 499 | ||||||||
Reinvestment of Distributions | – | 874 | ||||||||
Redeemed | (30,827 | ) | (21 | ) | ||||||
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Total Investor Shares Transactions | (30,827 | ) | 1,352 | |||||||
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Net Increase in Shares Outstanding From Share Transactions | 512,840 | 19,061 | ||||||||
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Amounts designated as “—” are either not applicable, $0 or have been rounded to $0.
7
The accompanying notes are an integral part of the financial statements.
THE ADVISORS’ INNER CIRCLE FUND III | SGA INTERNATIONAL EQUITY FUND | |
Selected Per Share Data & Ratios | ||||||||||||||||||||
For a Share Outstanding | ||||||||||||||||||||
Institutional Shares | ||||||||||||||||||||
Year Ended July 31, 2021 | Year Ended July 31, 2020 | Year Ended July 31, 2019 | Year Ended July 31, 2018 | Period Ended July 31, 2017(1) | ||||||||||||||||
Net Asset Value, Beginning of Year/Period | $ | 9.86 | $ | 10.40 | $ | 11.48 | $ | 11.58 | $ | 10.00 | ||||||||||
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Income (Loss) from Investment Operations: | ||||||||||||||||||||
Net Investment Income* | 0.21 | 0.16 | 0.31 | 0.24 | 0.15 | |||||||||||||||
Net Realized and Unrealized Gain (Loss) | 2.43 | (0.36) | (1.13)^ | 0.05 | 1.43 | |||||||||||||||
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Total from Investment Operations | 2.64 | (0.20) | (0.82) | 0.29 | 1.58 | |||||||||||||||
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Dividends and Distributions: | ||||||||||||||||||||
Net Investment Income | (0.53) | (0.32) | (0.16) | (0.24) | — | |||||||||||||||
Capital Gains | (9.28) | (0.02) | (0.10) | (0.15) | — | |||||||||||||||
Return of Capital | (0.66) | — | — | — | — | |||||||||||||||
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Total Dividends and Distributions | (10.47) | (0.34) | (0.26) | (0.39) | — | |||||||||||||||
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Net Asset Value, End of Year/Period | $ | 2.03 | $ | 9.86 | $ | 10.40 | $ | 11.48 | $ | 11.58 | ||||||||||
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Total Return† | 27.48% | (2.20%) | (6.84%) | 2.43% | 15.80% | |||||||||||||||
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Ratios and Supplemental Data | ||||||||||||||||||||
Net Assets, End of Year/Period (Thousands) | $ | 2,284 | $ | 5,738 | $ | 5,871 | $ | 1,660 | $ | 1,618 | ||||||||||
Ratio of Expenses to Average Net Assets | 0.95% | 0.95% | 0.95% | 0.95% | 0.95%†† | |||||||||||||||
Ratio of Expenses to Average Net Assets (Excluding Waivers and Reimbursements) | 6.05% | 6.77% | 9.90% | 20.14% | 31.81%†† | |||||||||||||||
Ratio of Net Investment Income to Average Net Assets | 2.01% | 1.59% | 2.91% | 2.05% | 1.80%†† | |||||||||||||||
Portfolio Turnover Rate | 77% | 58% | 52% | 45% | 145%‡ |
* | Per share calculations were performed using average shares for the period. |
† | Total return is for the period indicated and has not been annualized. Returns shown do not reflect the deductions of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares |
†† | Annualized |
‡ | Portfolio turnover is for the period indicated and has not been annualized. |
^ | The amount shown for a share outstanding throughout the period does not accord with the aggregate net loss on investments for that period because of the sales and repurchases of Fund shares in relation to fluctuating market value of the investments of the Fund. |
(1) | The Fund commenced operations on September 30, 2016. |
Amounts designated as “—” are either not applicable, $0 or have been rounded to $0.
8
The accompanying notes are an integral part of the financial statements.
THE ADVISORS’ INNER CIRCLE FUND III | SGA INTERNATIONAL EQUITY FUND | |
JULY 31, 2021 | ||
1. Organization:
The Advisors’ Inner Circle Fund III (the “Trust”) is organized as a Delaware statutory trust under a Declaration of Trust dated December 4, 2013. The Trust is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company with 47 funds. The financial statements herein are those of the SGA International Equity Fund (the “Fund”). The investment objective of the Fund is to seek total return, consisting of current income and long-term capital appreciation. Under normal circumstances, the Fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in equity securities. The Fund invests in at least three countries, and invests at least 40% of its total assets in securities of non-U.S. companies. The Fund is classified as a diversified investment company. Strategic Global Advisors, LLC (the “Adviser”), serves as the Fund’s investment adviser. The Fund currently offers Institutional Shares and Investor Shares. The Fund commenced operations on September 30, 2016. The financial statements of the remaining funds of the Trust are presented separately. The assets of each fund are segregated, and a shareholder’s interest is limited to the fund in which shares are held.
The Investor Share class liquidated on November 30, 2020.
2. Significant Accounting Policies:
The following is a summary of the Significant Accounting Policies followed by the Fund.
Use of Estimates — The Fund is an investment company that applies the accounting and reporting guidance issued in Topic 946 by the U.S. Financial Accounting Standards Board. The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the fair value of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates and such differences could be material.
Security Valuation — Securities listed on a securities exchange, market or automated quotation system for which quotations are readily available (except for securities traded on NASDAQ), including securities traded over the counter, are valued at the last quoted sale price on an exchange or market (foreign or domestic) on which they are traded on valuation date (or at approximately 4:00 pm ET if a security’s primary exchange is normally open at that time), or, if there is no such reported sale on the valuation date, at the most recent quoted bid price. For securities traded on NASDAQ, the NASDAQ Official Closing Price will be used. The prices for foreign securities are reported in local currency and converted to U.S. dollars using currency exchange rates.
Investments in registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
Securities for which market prices are not “readily available” are valued in accordance with fair value procedures established by the Fund’s Board of Trustees (the “Board”). The Fund’s fair value procedures are implemented through a fair value committee (the “Committee”) designated by the Board. Some of the more common reasons that may necessitate that a
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THE ADVISORS’ INNER CIRCLE FUND III | SGA INTERNATIONAL EQUITY FUND | |
JULY 31, 2021 | ||
security be valued using Fair Value Procedures include: the security’s trading has been halted or suspended; the security has been de-listed from a national exchange; the security’s primary trading market is temporarily closed at a time when under normal conditions it would be open; the security has not been traded for an extended period of time; the security’s primary pricing source is not able or willing to provide a price; or trading of the security is subject to local government imposed restrictions. When a security is valued in accordance with the fair value procedures, the Committee will determine the value after taking into consideration relevant information reasonably available to the Committee.
For securities that principally trade on a foreign market or exchange, a significant gap in time can exist between the time of a particular security’s last trade and the time at which the Fund calculates its net asset value. The closing prices of such securities may no longer reflect their market value at the time the Fund calculates its net asset value if an event that could materially affect the value of those securities (a “Significant Event”) has occurred between the time of the security’s last close and the time that the Fund calculates net asset value. A Significant Event may relate to a single issuer or to an entire market sector. If the Adviser of the Fund becomes aware of a Significant Event that has occurred with respect to a security or group of securities after the closing of the exchange or market on which the security or securities principally trade, but before the time at which the Fund calculates its net asset value, it may request that a Committee meeting be called.
The Fund uses MarkIt Fair Value (“MarkIt”) as a third party fair valuation vendor. MarkIt provides a fair value for foreign securities in the Fund based on certain factors and methodologies (involving, generally, tracking valuation correlations between the U.S. market and each non-U.S. security) applied by MarkIt in the event that there is a movement in the U.S. market that exceeds a specific threshold established by the Committee. The Committee establishes a “confidence interval” which is used to determine the level of correlation between the value of a foreign security and movements in the U.S. market before a particular security is fair valued when the threshold is exceeded. In the event that the threshold established by the Committee is exceeded on a specific day, the Fund values its non- U.S. securities that exceed the applicable “confidence interval” based upon the fair values provided by MarkIt. In such event, it is not necessary to hold a Committee meeting. In the event that the Adviser believes that the fair values provided by MarkIt are not reliable, the Adviser contacts the Administrator and can request that a meeting of the Committee be held.
If a local market in which the Fund owns securities is closed for one or more days, the Fund shall value all securities held in that corresponding currency based on the fair value prices provided by MarkIt using the predetermined confidence interval discussed above.
In accordance with U.S. GAAP, the Fund discloses fair value of its investments in a hierarchy that prioritizes the inputs to valuation techniques used to measure the fair value. The objective of a fair value measurement is to determine the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). Accordingly, the fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:
● | Level 1 — Unadjusted quoted prices in active markets for identical, unrestricted assets or liabilities that the Fund has the ability to access at the measurement date; |
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THE ADVISORS’ INNER CIRCLE FUND III | SGA INTERNATIONAL EQUITY FUND | |
JULY 31, 2021 | ||
● | Level 2 — Other significant observable inputs (includes quoted prices for similar securities, interest rates, prepayment speeds, credit risk, referenced indices, quoted prices in inactive markets, adjusted quoted prices in active markets, adjusted quoted prices on foreign equity securities that were adjusted in accordance with pricing procedures approved by the Board, etc.); and |
● | Level 3 — Prices, inputs or exotic modeling techniques which are both significant to the fair value measurement and unobservable (supported by little or no market activity). |
Investments are classified within the level of the lowest significant input considered in determining fair value. Investments classified within Level 3 whose fair value measurement considers several inputs may include Level 1 or Level 2 inputs as components of the overall fair value measurement.
For the year ended July 31, 2021, there have been no significant changes to the Fund’s fair valuation methodology.
As of July 31, 2021, the Fund holds no securities or investments and only holds cash, as shown on the Statement of Assets and Liabilities, which is held in various time deposit accounts.
Federal Income Taxes — It is the Fund’s intention to qualify as a regulated investment company for Federal income tax purposes by complying with the appropriate provisions of Subchapter M of the Internal Revenue Code of 1986, as amended. Accordingly, no provisions for Federal income taxes have been made in the financial statements.
The Fund evaluates tax positions taken or expected to be taken in the course of preparing the Fund’s tax returns to determine whether it is “more-likely than-not” (i.e., greater than 50-percent) that each tax position will be sustained upon examination by a taxing authority based on the technical merits of the position. Tax positions not deemed to meet the more-likely-than-not threshold are recorded as a tax benefit or expense in the current year. The Fund did not record any tax provision in the current period. However, management’s conclusions regarding tax positions taken may be subject to review and adjustment at a later date based on factors including, but not limited to, examination by tax authorities (i.e., from commencement of operations, as applicable), on-going analysis of and changes to tax laws, regulations and interpretations thereof.
As of and during the year ended July 31, 2021, the Fund did not have a liability for any unrecognized tax benefits. The Fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the year, the Fund did not incur any significant interest or penalties.
Security Transactions and Investment Income — Security transactions are accounted for on trade date. Costs used in determining realized gains and losses on the sale of investment securities are based on the specific identification method. Dividend income and expense are recorded on the ex-dividend date. Interest income is recognized on the accrual basis from settlement date. Certain dividends from foreign securities will be recorded as soon as the Fund is informed of the dividend if such information is obtained subsequent to the ex-dividend date.
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Foreign Currency Translation — The books and records of the Fund are maintained in U.S. dollars. Investment securities and other assets and liabilities denominated in a foreign currency are translated into U.S. dollars on the date of valuation. The Fund does not isolate that portion of realized or unrealized gains and losses resulting from changes in the foreign exchange rate from fluctuations arising from changes in the market prices of the securities. These gains and losses are included in net realized and unrealized gains and losses on investments on the Statement of Operations. Net realized and unrealized gains and losses on foreign currency transactions represent net foreign exchange gains or losses from foreign currency exchange contracts, disposition of foreign currencies, currency gains or losses realized between trade and settlement dates on securities transactions and the difference between the amount of the investment income and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid.
Forward Foreign Currency Exchange Contracts — The Fund may enter into forward foreign currency exchange contracts to protect the value of securities held and related receivables and payables against changes in future foreign exchange rates. A forward currency contract is an agreement between two parties to buy and sell currency at a set price on a future date. The market value of the contract will fluctuate with changes in currency exchange rates. The contract is marked-to-market daily using the current forward rate and the change in market value is recorded by the Fund as unrealized gain or loss. The Fund recognizes realized gains or losses when the contract is closed, equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Any realized or unrealized gains (losses) during the period are presented on the Statement of Operations. Risks may arise from unanticipated movements in the value of a foreign currency relative to the U.S. dollar. Risks may also arise upon entering into these contracts from the potential inability of counterparties to meet the terms of their contracts and are generally limited to the amount of unrealized gain on the contracts at the date of default. As of July 31, 2020, the Fund had no open forward foreign currency contracts.
Expenses — Most expenses of the Trust can be directly attributed to a particular fund. Expenses which cannot be directly attributed to a particular fund are apportioned among the funds of the Trust based on the number of funds and/or relative net assets.
Cash — Idle cash may be swept into various time deposit accounts and is classified as cash on the Statement of Assets and Liabilities. The Fund maintains cash in bank deposit accounts which, at times, may exceed United States federally insured limits. Amounts invested are available on the same business day.
Dividends and Distributions to Shareholders — The Fund distributes substantially all of its net investment income annually. Any net realized capital gains are distributed annually. All distributions are recorded on ex-dividend date.
Redemption Fees — The Fund retains a redemption fee of 2.00% on redemptions of capital shares held for less than ninety days. For the year ended July 31, 2020, the Fund did not retain any fees. Fees collected are retained by the Fund for the benefit of the remaining shareholders and are included in capital shares transactions in the Statements of Changes in Net Assets.
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THE ADVISORS’ INNER CIRCLE FUND III | SGA INTERNATIONAL EQUITY FUND | |
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Classes — Class specific expenses are borne by the specific class of shares. Income, realized and unrealized gain (loss), and non-class specific expenses are allocated to the respective class on the basis of relative daily net assets.
3. Transactions with Affiliates:
Certain officers of the Trust are also employees of SEI Investments Global Funds Services (the “Administrator”), a wholly-owned subsidiary of SEI Investments Company, and/or SEI Investments Distribution Co. (the “Distributor”). Such officers are paid no fees by the Trust, other than the Chief Compliance Officer (“CCO”) as described below, for serving as officers of the Trust.
The services provided by the CCO and his staff are paid for by the Trust as incurred. The services include regulatory oversight of the Trust’s Advisors and service providers as required by SEC regulations. The CCO’s services and fees have been approved by and are reviewed by the Board.
During the year ended July 31, 2021, the Fund received a reimbursement of $17,870 from the Administrator, which is included in capital share transactions in the Statements of Changes in Net Assets, related to an operating error.
4. Administration, Distribution, Shareholder Servicing, Custodian and Transfer Agent Agreements:
The Fund and the Administrator are parties to an Administration Agreement under which the Administrator provides administration services to the Fund. For these services, the Administrator is paid an asset based fee, which will vary depending on the number of share classes and the average daily net assets of the Fund. For the year ended July 31, 2021, the Fund paid $53,341 for these services.
The Fund has adopted the Distribution Plan (the “Plan”) for the Investor Shares. Under the Plan, the Distributor, or third parties that enter into agreements with the Distributor, may receive up to 0.25% of the Fund’s average daily net assets attributable to Investor Shares. Under the Plan, the Distributor may make payments pursuant to written agreements to financial institutions and intermediaries, such as banks, savings and loan associations and insurance companies, including, without limit, investment counselors, broker-dealers and the Distributor’s affiliates and subsidiaries (collectively, “Agents”), as compensation for services and reimbursement of expenses incurred in connection with distribution assistance. The Plan is characterized as a compensation plan since the distribution fee will be paid to the Distributor without regard to the distribution expenses incurred by the Distributor or the amount of payments made to other financial institutions and intermediaries. The Trust intends to operate the Plan in accordance with its terms and with the Financial Industry Regulatory Authority (“FINRA”) rules concerning sales charges.
The Fund has adopted a shareholder servicing plan (the “Service Plan”) under which a shareholder servicing fee of up to 0.25% of average daily net assets of Investor Shares of the Fund will be paid to other service providers. Certain brokers, dealers, banks, trust companies and other financial representatives receive compensation from the Fund for providing a variety of services, including record keeping and transaction processing. Such fees are based on the assets of the Fund that are serviced by the financial representative. Such fees are paid by the Fund to the extent that the number of accounts serviced by the financial representative multiplied by the account fee charged by the Fund’s transfer agent would not exceed the amount that would have been charged had the accounts serviced by the financial representative been registered directly through the transfer agent. All fees in excess of this calculated amount are paid by the Adviser. For the year ended July 31, 2021, no shareholder servicing fees were charged to the fund.
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JULY 31, 2021 | ||
Brown Brothers Harriman & Co. acts as custodian (the “Custodian”) for the Fund. The Custodian plays no role in determining the investment policies of the Fund or which securities are to be purchased or sold by the Fund.
DST Systems, Inc. serves as the transfer agent and dividend disbursing agent for the Fund under a transfer agency agreement with the Trust.
5. Investment Advisory Agreement:
Under the terms of an investment advisory agreement, the Adviser provides investment advisory services to the Fund at a fee calculated at an annual rate of 0.95% of the Fund’s average daily net assets. The Adviser has contractually agreed to reduce its fees and/or reimburse expenses to the extent necessary to keep total annual fund operating expenses (excluding interest, taxes, brokerage commissions and other costs and expenses relating to the securities that are purchased and sold by the Fund, 12b-1 fees, acquired fund fees and expenses , other expenditures which are capitalized in accordance with generally accepted accounting principles, other non-routine expenses not incurred in the ordinary course of such Fund’s business (collectively, “excluded expenses”)) for Institutional Shares and Investor Shares from exceeding 95 basis points as set forth below until November 30, 2021 (each, a “contractual expense limit”). This agreement may be terminated by: (i) the Board, for any reason at any time; or (ii) the Adviser, upon ninety (90) days’ prior written notice to the Trust, effective as of the close of business on November 30, 2020. (the “Expense Limitation”). The Adviser may recover all or a portion of its fee reductions or expense reimbursements, up to the expense cap in place at the time the expenses were waived, within a three-year period from the year in which it reduced its fee or reimbursed expenses if the Fund’s total annual fund operating expenses are below the Expense Limitation. As of July 31, 2021, the fees which were previously waived and reimbursed to the Fund by the Adviser which may be subject to possible future reimbursement, up to the expense cap in place at the time the expenses were waived and reimbursed to the Fund, to the Adviser were $382,307, $355,370, and $308,329 expiring in 2022, 2023, and 2024 respectively.
6. Investment Transactions:
For the year ended July 31, 2021, the Fund made purchases of $4,180,852 and sales of $11,741,199 in investment securities other than long-term U.S. Government and short-term securities. There were no purchases or sales of long-term U.S. Government securities.
7. Federal Tax Information:
The amount and character of income and capital gain distributions to be paid, if any, are determined in accordance with Federal income tax regulations, which may differ from U.S. GAAP. As a result, net investment income (loss) and net realized gain (loss) on investment transactions for a reporting period may differ significantly from distributions during such period. These book/tax differences may be temporary or permanent. To the extent these differences are permanent, they are charged or credited to paid-in capital and distributable earnings, in the period that differences arise. During the year ended July 31, 2021, there were no such permanent differences.
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THE ADVISORS’ INNER CIRCLE FUND III | SGA INTERNATIONAL EQUITY FUND | |
JULY 31, 2021 | ||
The tax character of dividends and distributions declared during the fiscal years ended July 31, 2021 and 2020 was as follows:
Ordinary Income | Long-Term Capital Gain | Return of Capital | Total | |||||||
2021 | $ | 634,716 | $1,090,084 | $291,811 | $2,016,611 | |||||
2020 | 205,392 | - | - | 205,392 |
As of July 31, 2021, the components of Distributable Earnings on a tax basis were as follows:
Undistributed Ordinary Income | $ | — | ||
Post October Losses | — | |||
Capital Loss Carryforwards | — | |||
Unrealized Appreciation | 882 | |||
|
| |||
Total Distributable Earnings | $ | 882 | ||
|
|
Post-October losses represent losses realized on investment transactions from November 1, 2020 through July 31, 2021 that, in accordance with Federal income tax regulations, the Fund may elect to defer and treat as having arisen in the following fiscal year.
For Federal income tax purposes, capital losses may be carried forward and applied against future capital gains. Net capital losses earned may be carried forward indefinitely and must retain the character of the original loss. The Fund had no capital loss carryforwards as of July 31, 2021.
During the fiscal year ended July 31, 2021, the Fund utilized $27,529 of capital loss carryforwards to offset capital gains.
The Federal tax cost and aggregate gross unrealized appreciation and depreciation for the investments held (includes foreign currency) by the Fund at July 31, 2021, were as follows:
Federal Tax Cost* | Aggregate Gross Unrealized Appreciation | Aggregate Gross Unrealized Depreciation | Net Unrealized Appreciation | |||||||||
— | — | — | $ | — |
* The fund had no investments as of July 31, 2021.
8. Concentration of Risks:
As with all mutual funds, there is no guarantee that the Fund will achieve its investment objective. You could lose money by investing in the Fund. A Fund share is not a bank deposit and it is not insured or guaranteed by the FDIC or any government agency. The principal risk factors affecting shareholders’ investments in the Fund are set forth below.
Equity Risk – Since it purchases equity securities, the Fund is subject to the risk that stock prices may fall over short or extended periods of time. Historically, the equity market has moved in cycles, and the value of the Fund’s securities may fluctuate from day to day. Individual companies may report poor results or be negatively affected by industry and/or economic trends and developments. The prices of securities issued by such companies may suffer a decline in response.
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THE ADVISORS’ INNER CIRCLE FUND III | SGA INTERNATIONAL EQUITY FUND | |
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In addition, the impact of any epidemic, pandemic or natural disaster, or widespread fear that such events may occur, could negatively affect the global economy, as well as the economies of individual countries, the financial performance of individual companies and sectors, and the markets in general in significant and unforeseen ways. Any such impact could adversely affect the prices and liquidity of the securities and other instruments in which the Fund invests, which in turn could negatively impact the Fund’s performance and cause losses on your investment in the Fund. These factors contribute to price volatility, which is the principal risk of investing in the Fund.
Foreign Company Risk – Investing in foreign companies, including direct investments and investments through depositary receipts, poses additional risks since political and economic events unique to a country or region will affect those markets and their issuers. These risks will not necessarily affect the U.S. economy or similar issuers located in the U.S. Securities of foreign companies may not be registered with the U.S. Securities and Exchange Commission (the “SEC”) and foreign companies are generally not subject to the regulatory controls imposed on U.S. issuers and, as a consequence, there is generally less publicly available information about foreign securities than is available about domestic securities. Income from foreign securities owned by the Fund may be reduced by a withholding tax at the source, which tax would reduce income received from the securities comprising the portfolio. Foreign securities may also be more difficult to value than securities of U.S. issuers. While depositary receipts provide an alternative to directly purchasing the underlying foreign securities in their respective national markets and currencies, investments in depositary receipts continue to be subject to many of the risks associated with investing directly in foreign securities.
Management/Systematic or Quantitative Process Risk – The value of the Fund may decline if the Adviser’s judgments about the attractiveness, relative value or potential appreciation of a particular security or strategy prove to be incorrect. Because the Adviser relies, in part, on a systematic, quantitative screening process in selecting securities for the Fund, the Fund is subject to the additional risk that the Adviser’s judgments regarding the investment criteria underlying the screening process may prove to be incorrect.
Foreign Currency Risk – As a result of the Fund’s investments in securities denominated in, and/or receiving revenues in, foreign currencies, the Fund will be subject to currency risk. Currency risk is the risk that foreign currencies will decline in value relative to the U.S. dollar or, in the case of hedged positions, that the U.S. dollar will decline in value relative to the currency hedged. In either event, the dollar value of an investment in the Fund would be adversely affected.
Mid-Capitalization Company Risk – The mid-capitalization companies in which the Fund may invest may be more vulnerable to adverse business or economic events than larger, more established companies. In particular, investments in these mid-sized companies may pose additional risks, including liquidity risk, because these companies tend to have limited product lines, markets and financial resources, and may depend upon a relatively small management group. Therefore, mid-cap stocks may be more volatile than those of larger companies. These securities may be traded over-the-counter or listed on an exchange.
REITs Risk – REITs are pooled investment vehicles that own, and usually operate, income-producing real estate. REITs are susceptible to the risks associated with direct ownership of real estate, such as the following: declines in property values; increases in property taxes, operating expenses, interest rates or competition; overbuilding; zoning changes; and losses from casualty or condemnation. REITs typically incur fees that are separate from those of the Fund. Accordingly, the
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THE ADVISORS’ INNER CIRCLE FUND III | SGA INTERNATIONAL EQUITY FUND | |
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Fund’s investments in REITs will result in the layering of expenses such that shareholders will indirectly bear a proportionate share of the REITs’ operating expenses, in addition to paying Fund expenses. REIT operating expenses are not reflected in the fee table and example in this prospectus.
Large Purchase and Redemption Risk – Large purchases or redemptions of the Fund’s shares may force the Fund to purchase or sell securities at times when it would not otherwise do so, and may cause the Fund’s portfolio turnover rate and transaction costs to rise, which may negatively affect the Fund’s performance and have adverse tax consequences for Fund shareholders.
ETFs Risk – ETFs are pooled investment vehicles, such as registered investment companies and grantor trusts, whose shares are listed and traded on U.S. and non-U.S. stock exchanges or otherwise traded in the over-the-counter market. To the extent that the Fund invests in ETFs, the Fund will be subject to substantially the same risks as those associated with the direct ownership of the securities comprising the index on which an index ETF is based or the other holdings of an active or index ETF, and the value of the Fund’s investment will fluctuate in response to the performance of the underlying index or holdings. ETFs typically incur fees that are separate from those of the Fund. Accordingly, the Fund’s investments in ETFs will result in the layering of expenses such that shareholders will indirectly bear a proportionate share of the ETFs’ operating expenses, in addition to paying Fund expenses.
Liquidity Risk – Certain securities may be difficult or impossible to sell at the time and the price that the Fund would like. The Fund may have to accept a lower price to sell a security, sell other securities to raise cash, or give up an investment opportunity, any of which could have a negative effect on Fund management or performance.
Preferred Stocks Risk – Preferred stocks are sensitive to interest rate changes, and are also subject to equity risk, which is the risk that stock prices will fall over short or extended periods of time. The rights of preferred stocks on the distribution of a company’s assets in the event of a liquidation are generally subordinate to the rights associated with a company’s debt securities.
Convertible Securities Risk – The value of a convertible security is influenced by changes in interest rates (with investment value declining as interest rates increase and increasing as interest rates decline) and the credit standing of the issuer. The price of a convertible security will also normally vary in some proportion to changes in the price of the underlying common stock because of the conversion or exercise feature.
Derivatives Risk – The Fund’s use of forward contracts and swaps for all purposes, including speculative purposes, is subject to market risk, leverage risk, correlation risk, credit risk, valuation risk and liquidity risk. In addition, the Fund’s use of derivatives for hedging purposes is subject to hedging risk. Market risk is the risk that the market value of an investment may move up and down, sometimes rapidly and unpredictably. Leverage risk is the risk that the use of leverage may amplify the effects of market volatility on the Fund’s share price and may also cause the Fund to liquidate portfolio positions when it would not be advantageous to do so in order to satisfy its obligations. Correlation risk is the risk that changes in the value of the derivative may not correlate perfectly or at all with the underlying asset, rate or index. Credit risk is the risk that the counterparty to a derivative contract will default or otherwise become unable to honor a financial obligation. Valuation risk is the risk that the derivative may be difficult to value. Liquidity risk is described below. Hedging risk is the risk that derivative instruments used for hedging purposes may also limit any potential gain that may result from the increase in value of the hedged asset. To
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THE ADVISORS’ INNER CIRCLE FUND III | SGA INTERNATIONAL EQUITY FUND | |
JULY 31, 2021 | ||
the extent that the Fund engages in hedging strategies, there can be no assurance that such strategy will be effective or that there will be a hedge in place at any given time. Each of these risks could cause the Fund to lose more than the principal amount invested in a derivative instrument.
9. Concentration of Shareholders:
At July 31, 2021, the percentage of total shares outstanding, held by shareholders owning 10% or greater of the aggregate total shares outstanding, for each Fund, which are comprised of individual shareholders and omnibus accounts that are held on behalf of various individual shareholders was as follows:
No. of Shareholders | % Ownership | |||||||
Institutional Shares | 2 | 96 | % | |||||
Investor Shares | 0 | 0 | % |
In the normal course of business, the Fund enters into contracts that provide general indemnifications. The Fund’s maximum exposure under these arrangements is dependent on future claims that may be made against the Fund and, therefore, cannot be established; however, based on experience, the risk of loss from such claim is considered remote.
10. Subsequent Events:
The Fund has evaluated the need for disclosures and/or adjustments resulting from subsequent events through the date the financial statements were available to be issued. Based on this evaluation, see the below disclosure to the financial statements as of July 31, 2021:
The Board of Trustees of the Trust on July 23, 2021, at the recommendation of the Adviser, has approved a plan of liquidation providing for the liquidation of the Fund’s assets and the distribution of the net proceeds pro rata to the Fund’s shareholders. In connection therewith, the Fund is closed to investments from new and existing shareholders effective immediately. The Fund ceased operations and liquidated on August 23, 2021.
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THE ADVISORS’ INNER CIRCLE FUND III | SGA INTERNATIONAL EQUITY FUND | |
July 31, 2021 | ||
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
To the Board of Trustees of The Advisors’ Inner Circle Fund III and Shareholders of SGA International Equity Fund
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of SGA International Equity Fund (one of the funds constituting The Advisors’ Inner Circle Fund III, referred to hereafter as the “Fund”) as of July 31, 2021, the related statement of operations for the year ended July 31, 2021, the statement of changes in net assets for each of the two years in the period ended July 31, 2021, including the related notes, and the financial highlights for each of the periods indicated therein (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of July 31, 2021, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended July 31, 2021 and the financial highlights for each of the periods indicated therein in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
September 28, 2021
We have served as the auditor of one or more investment companies in Strategic Global Advisors, LLC since 2016.
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THE ADVISORS’ INNER CIRCLE FUND III | SGA INTERNATIONAL EQUITY FUND | |
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DISCLOSURE OF FUND EXPENSES (Unaudited) |
All mutual funds have operating expenses. As a shareholder of a mutual fund, your investment is affected by these ongoing costs, which include (among others) costs for Fund management, administrative services, and shareholder reports such as this one. It is important for you to understand the impact of these costs on your investment returns.
Operating expenses such as these are deducted from the mutual fund’s gross income and directly reduce your final investment return. These expenses are expressed as a percentage of the mutual fund’s average net assets; this percentage is known as the mutual fund’s expense ratio.
The following examples use the expense ratio and are intended to help you understand the ongoing costs (in dollars) of investing in your Fund and to compare these costs with those of other mutual funds. The examples are based on an investment of $1,000 made at the beginning of the period shown and held for the entire period from February 1, 2021 to July 31, 2021.
The table on the next page illustrates your Fund’s costs in two ways:
• Actual Fund Return. This section helps you to estimate the actual expenses after fee waivers that your Fund incurred over the period. The “Expenses Paid During Period” column shows the actual dollar expense cost incurred by a $1,000 investment in the Fund, and the “Ending Account Value” number is derived from deducting that expense cost from the Fund’s gross investment return.
You can use this information, together with the actual amount you invested in the Fund, to estimate the expenses you paid over that period. Simply divide your ending starting account value by $1,000 to arrive at a ratio (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply that ratio by the number shown for your Fund under “Expenses Paid During Period.”
• Hypothetical 5% Return. This section helps you compare your Fund’s costs with those of other mutual funds. It assumes that the Fund had an annual 5% return before expenses during the year, but that the expense ratio (Column 3) for the period is unchanged. This example is useful in making comparisons because the SEC requires all mutual funds to make this 5% calculation. You can assess your Fund’s comparative cost by comparing the hypothetical result for your Fund in the “Expense Paid During Period” column with those that appear in the same charts in the shareholder reports for other mutual funds.
Note: Because the return is set at 5% for comparison purposes — NOT your Fund’s actual return — the account values shown may not apply to your specific investment.
Beginning Account Value 2/01/21 | Ending Account Value 7/31/21 | Annualized Expense Ratios | Expenses Paid During Period* | |||||||||||||
SGA International Equity Fund - Institutional Shares |
| |||||||||||||||
Actual Portfolio Return | $1,000.00 | $1,112.30 | 0.95 | % | 4.98 | |||||||||||
Hypothetical 5% Return | 1,000.00 | 1,020.08 | 0.95 | 4.76 |
* | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period shown). |
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THE ADVISORS’ INNER CIRCLE FUND III | SGA INTERNATIONAL EQUITY FUND | |
July 31, 2021 | ||
Review of the Liquidity Risk Management Program (Unaudited) |
Pursuant to Rule 22e-4 under the 1940 Act, the Fund’s investment adviser has adopted, and the Board has approved, a liquidity risk management program (the “Program”) to govern the Fund’s approach to managing liquidity risk. The Program is overseen by the Fund’s Liquidity Risk Management Program Administrator (the “Program Administrator”), and the Program’s principal objectives include assessing, managing and periodically reviewing the Fund’s liquidity risk, based on factors specific to the circumstances of the Fund.
At a meeting of the Board held on March 18, 2021, the Trustees received a report from the Program Administrator addressing the operations of the Program and assessing its adequacy and effectiveness of implementation for the period from January 1, 2020 through December 1, 2020. The Program Administrator’s report included an assessment of how market conditions caused by the COVID-19 pandemic impacted the Fund‘s liquidity risk during the period covered by the report. The Program Administrator’s report noted that the Program Administrator had determined that the Program is reasonably designed to assess and manage the Fund’s liquidity risk and has operated adequately and effectively to manage the Fund’s liquidity risk during the period covered by the report. [See Appendix A for variations of the sentence to insert here regarding what was included in the report.]
There can be no assurance that the Program will achieve its objectives in the future. Please refer to the prospectus for more information regarding the Fund’s exposure to liquidity risk and other principal risks to which an investment in the Fund may be subject.
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THE ADVISORS’ INNER CIRCLE FUND III | SGA INTERNATIONAL EQUITY FUND | |
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(Unaudited) | ||
TRUSTEES AND OFFICERS OF THE ADVISORS’ INNER CIRCLE FUND III |
Set forth below are the names, years of birth, positions with the Trust, length of term of office, and the principal occupations for the last five years of each of the persons currently serving as Trustees and Officers of the Trust. Unless otherwise noted, the business address of each Trustee is SEI Investments Company, One Freedom Valley Drive, Oaks Pennsylvania 19456. Trustees who are deemed not to be “interested persons” of the Trust are referred to as “Independent Trustees.” Mr. Doran is a Trustee who
Name and Year of Birth
| Position with Trust and Length of
| Principal Occupations in the Past Five Years
| ||
INTERESTED TRUSTEES 2 3
| ||||
WILLIAM M. DORAN (Born: 1940) | Chairman of the Board of Trustees | Self-Employed Consultant since 2003. Partner at Morgan, Lewis & Bockius LLP (law firm) from 1976 to 2003. Counsel to the Trust, SEI Investments, SIMC, the Administrator and the Distributor. Secretary of SEI Investments since 1978.
| ||
INDEPENDENT TRUSTEES 3
| ||||
JON C. HUNT (Born: 1951) | Trustee and Lead Independent Trustee (since 2014) | Retired since 2013. Consultant to Management, Convergent Capital Management, LLC (“CCM”) from 2012 to 2013. Managing Director and Chief Operating Officer, CCM from 1998 to 2012.
| ||
THOMAS P. LEMKE (Born: 1954) | Trustee (since 2014) | Retired since 2013. Executive Vice President and General Counsel, Legg Mason, Inc. from 2005 to 2013.
| ||
NICHELLE MAYNARD-ELLIOT (Born: 1968) | Trustee (since 2021) | Independent Director since 2018. Executive Director, M&A at Praxair Inc. from 2011-2019.
|
1. | Each Trustee shall hold office during the lifetime of this trust until the election and qualification of his or her successor, or until he or she sooner dies, resigns, or is removed in accordance with the Trust’s Declaration of Trust. |
2. | Denotes Trustees who may be deemed to be “interested” persons of the Fund as that term is defined in the 1940 Act by virtue of their affiliation with the Distributor and/or its affiliates. |
3. | Trustees oversee 47 funds in The Advisors’ Inner Circle Fund III. |
4. | Directorships of Companies required to report to the Securities and Exchange Commission under the Securities Exchange act of 1934 (i.e., “public companies”) or other investment companies under the 1940 act. |
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THE ADVISORS’ INNER CIRCLE FUND III | SGA INTERNATIONAL EQUITY FUND | |
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(Unaudited) | ||
TRUSTEES AND OFFICERS OF THE ADVISORS’ INNER CIRCLE FUND III |
may be an “interested” persons of the Trust as that term is defined in the 1940 Act by virtue of their affiliation with the Trust’s Distributor. The Trust’s Statement of Additional Information (“SAI”) includes additional information about the Trustees and Officers. The SAI may be obtained without charge by calling 1-888-228-0002. The following chart lists Trustees and Officers as of July 31, 2021.
Other Directorships
Held in the Past Five Years4
Current Directorships: Trustee of Delaware Wilshire Private Markets Master Fund, Delaware Wilshire Private Markets Fund, Delaware Wilshire Private Markets Tender Fund, Gallery Trust, Schroder Series Trust, Schroder Global Series Trust, SEI Daily Income Trust, SEI Institutional International Trust, SEI Institutional Investments Trust, SEI Institutional Managed Trust, SEI Asset Allocation Trust, SEI Tax Exempt Trust, Adviser Managed Trust, New Covenant Funds, SEI Insurance Products Trust and SEI Catholic Values Trust. Director of SEI Investments, SEI Investments (Europe), Limited, SEI Investments—Global Funds Services, Limited, SEI Investments Global, Limited, SEI Investments (Asia), Limited, SEI Global Nominee Ltd., SEI Investments – Unit Trust Management (UK) Limited and SEI Investments Co. Director of the Distributor.
Former Directorships: Trustee of O’Connor EQUUS (closed-end investment company) to 2016. Trustee of SEI Liquid Asset Trust to 2016. Trustee of Winton Series Trust to 2017. Trustee of The Advisors’ Inner Circle Fund, The Advisors’ Inner Circle Fund II, Bishop Street Funds, The KP Funds and Winton Diversified Opportunities Fund (closed-end investment company) to 2018.
Current Directorships: Trustee of Delaware Wilshire Private Markets Master Fund, Delaware Wilshire Private Markets Fund, Delaware Wilshire Private Markets Tender Fund, Chiron Capital Allocation Fund Ltd., City National Rochdale Funds, Gallery Trust, Schroder Series Trust and Schroder Global Series Trust.
Former Directorships: Trustee of O’Connor EQUUS (closed-end investment company) to 2016. Member of Independent Committee of Nuveen Commodities Asset Management to 2016. Trustee of Winton Series Trust to 2017. Trustee of Winton Diversified Opportunities Fund (closed-end investment company) to 2018.
Current Directorships: Trustee of Delaware Wilshire Private Markets Master Fund, Delaware Wilshire Private Markets Fund, Delaware Wilshire Private Markets Tender Fund, Chiron Capital Allocation Fund Ltd.,Gallery Trust, Schroder Series Trust, Schroder Global Series Trust, JP Morgan Active Exchange-Traded Funds and Symmetry Panoramic Trust.
Former Directorships: Trustee of Munder Funds to 2014. Trustee of Victory Funds to 2015. Trustee of O’Connor EQUUS (closed-end investment company) to 2016. Trustee of Winton Series Trust and AXA Premier VIP Trust to 2017. Trustee of Winton Diversified Opportunities Fund (closed-end investment company) to 2018.
Current Directorships: Trustee of Gallery Trust, Schroder Series Trust, Schroder Global Series Trust, Delaware Wilshire Private Markets Master Fund, Delaware Wilshire Private Markets Fund, Delaware Wilshire Private Markets Tender Fund. Director of Chiron Capital Allocation Fund Ltd. Director of Element Solutions Inc., Director of Xerox Holdings Corporation, and Director Nominee for Lucid Group, Inc.
23
THE ADVISORS’ INNER CIRCLE FUND III | SGA INTERNATIONAL EQUITY FUND | |
JULY 31, 2021 | ||
(Unaudited) | ||
TRUSTEES AND OFFICERS OF THE ADVISORS’ INNER CIRCLE FUND III |
Name and Year of Birth
| Position with Trust and Length of
| Principal Occupations in the Past Five Years
| ||
INDEPENDENT TRUSTEES (continued) 2
| ||||
JAY C. NADEL (Born: 1958) | Trustee (since 2016) | Self-Employed Consultant since 2004. Executive Vice President, Bank of New York Broker Dealer from 2002 to 2004. Partner/Managing Director, Weiss Peck & Greer/Robeco from 1986 to 2001.
| ||
RANDALL S. YANKER (Born: 1960) | Trustee (since 2014) | Co-Founder and Senior Partner, Alternative Asset Managers, L.P. since 2004.
| ||
| ||||
OFFICERS | ||||
MICHAEL BEATTIE (Born: 1965) | President (since 2014)
| Director of Client Service, SEI Investments Company, since 2004. | ||
JAMES BERNSTEIN (Born: 1962) | Vice President and Assistant Secretary (since 2017) | Attorney, SEI Investments, since 2017.
Prior Positions: Self-employed consultant, 2017. Associate General Counsel & Vice President, Nationwide Funds Group and Nationwide Mutual Insurance Company, from 2002 to 2016. Assistant General Counsel & Vice President, Market Street Funds and Provident Mutual Insurance Company, from 1999 to 2002. | ||
JOHN BOURGEOIS (Born: 1973) | Assistant Treasurer (since 2017)
| Fund Accounting Manager, SEI Investments, since 2000. |
1. | Each Trustee shall hold office during the lifetime of this trust until the election and qualification of his or her successor, or until he or she sooner dies, resigns, or is removed in accordance with the Trust’s Declaration of Trust. |
2. | Denotes Trustees who may be deemed to be “interested” persons of the Fund as that term is defined in the 1940 Act by virtue of their affiliation with the Distributor and/or its affiliates. |
3. | Directorships of Companies required to report to the Securities and Exchange Commission under the Securities Exchange act of 1934 (i.e., “public companies”) or other investment companies under the 1940 act. |
24
THE ADVISORS’ INNER CIRCLE FUND III | SGA INTERNATIONAL EQUITY FUND | |
JULY 31, 2021 | ||
(Unaudited) | ||
TRUSTEES AND OFFICERS OF THE ADVISORS’ INNER CIRCLE FUND III |
Other Directorships
Held in the Past Five Years3
Current Directorships: Trustee of City National Rochdale Funds, Gallery Trust, Schroder Series Trust and Schroder Global Series Trust.
Former Directorships: Trustee of Winton Series Trust to 2017. Director of Lapolla Industries, Inc. to 2017. Trustee of Winton Diversified Opportunities Fund (closed-end investment company) to 2018.
|
|
Current Directorships: Trustee of Delaware Wilshire Private Markets Master Fund, Delaware Wilshire Private Markets Fund, Delaware Wilshire Private Markets Tender Fund, Chiron Capital Allocation Fund Ltd., Gallery Trust, Schroder Series Trust and Schroder Global Series Trust. Independent Non- Executive Director of HFA Holdings Limited.
Former Directorships: Trustee of O’Connor EQUUS (closed-end investment company) to 2016. Trustee of Winton Series Trust to 2017. Trustee of Winton Diversified Opportunities Fund (closed-end investment company) to 2018. |
|
None.
|
|
None.
|
|
None.
|
|
25
THE ADVISORS’ INNER CIRCLE FUND III | SGA INTERNATIONAL EQUITY FUND | |
JULY 31, 2021 | ||
(Unaudited) | ||
TRUSTEES AND OFFICERS OF THE ADVISORS’ INNER CIRCLE FUND III |
Name and Year of Birth
| Position with Trust and Length of
| Principal Occupations in the Past Five Years
| ||
OFFICERS (continued)
| ||||
| ||||
ANDREW METZGER (Born: 1980) | Treasurer, Controller and Chief Financial Officer (since 2021) | �� | Director of Fund Accounting, SEI Investments, since 2020. Senior Director, Embark, from 2019 to 2020. Senior Manager, PricewaterhouseCoopers LLP, from 2002 to 2019. | |
RUSSELL EMERY (Born: 1962) | Chief Compliance Officer (since 2014) | Chief Compliance Officer of SEI Structured Credit Fund, LP since 2007. Chief Compliance Officer of The Advisors’ Inner Circle Fund, The Advisors’ Inner Circle Fund II, Bishop Street Funds, The KP Funds, The Advisors’ Inner Circle Fund III, Gallery Trust, Schroder Series Trust, Schroder Global Series Trust, SEI Institutional Managed Trust, SEI Asset Allocation Trust, SEI Institutional International Trust, SEI Institutional Investments Trust, SEI Daily Income Trust, SEI Tax Exempt Trust, Adviser Managed Trust, New Covenant Funds, SEI Insurance Products Trust and SEI Catholic Values Trust. Chief Compliance Officer of O’Connor EQUUS (closed-end investment company) to 2016. Chief Compliance Officer of SEI Liquid Asset Trust to 2016. Chief Compliance Officer of Winton Series Trust to 2017. Chief Compliance Officer of Winton Diversified Opportunities Fund (closed-end investment company) to 2018. | ||
ERIC C. GRIFFITH (Born: 1969) | Vice President and Assistant Secretary (since 2020) | Counsel at SEI Investments since 2019. Vice President and Assistant General Counsel, JPMorgan Chase & Co., from 2012 to 2018. | ||
MATTHEW M. MAHER (Born: 1975) | Vice President and Assistant Secretary (since 2018) | Counsel at SEI Investments since 2018. Attorney, Blank Rome LLP, from 2015 to 2018. Assistant Counsel & Vice President, Bank of New York Mellon, from 2013 to 2014. Attorney, Dilworth Paxson LLP, from 2006 to 2013. | ||
ROBERT MORROW (Born: 1968) | Vice President (since 2017) | Account Manager, SEI Investments, since 2007. | ||
ALEXANDER F. SMITH (Born: 1977) | Vice President and Assistant Secretary (since 2020) | Counsel at SEI Investments since 2020. Associate Counsel & Manager, Vanguard, 2012 to 2020. Attorney, Stradley Ronon Stevens & Young, LLP, 2008 to 2012. | ||
BRIDGET E. SUDALL (Born: 1980) | Privacy Officer (since 2015) and Anit-Money Laundering Officer (since 2015) | Senior Associate and AML Officer, Morgan Stanley Alternative Investment Partners, from 2011 to 2015. Investor Services Team Lead, Morgan Stanley Alternative Investment Partners, from 2007 to 2011. |
26
THE ADVISORS’ INNER CIRCLE FUND III | SGA INTERNATIONAL EQUITY FUND | |
JULY 31, 2021 | ||
(Unaudited) | ||
TRUSTEES AND OFFICERS OF THE ADVISORS’ INNER CIRCLE FUND III |
Other Directorships Held in the Past Five Years
|
|
None.
|
None.
|
None.
|
None.
|
None.
|
None.
|
None.
|
27
THE ADVISORS’ INNER CIRCLE FUND III | SGA INTERNATIONAL EQUITY FUND | |
July 31, 2021 | ||
NOTICE TO SHAREHOLDERS (Unaudited) |
For shareholders that do not have a July 31, 2021 tax year end, this notice is for informational purposes only. For shareholders with a July 31, 2021 tax year end, please consult your tax advisor as to the pertinence of this notice. For the fiscal period ended July 31, 2021, the Fund is designating the following items with regard to distributions paid during the period.
Return of | Long Term Capital Gain Distribution | Ordinary Income Distributions | Total Distributions | Dividends Qualifying for Corporate Dividend Received Deduction(1) | Qualifying Dividend Income(2) | U.S. Government Interest(3) | Interest Related Dividends(4) | Qualified Short- Term Capital Gain(5) | ||||||||
16.92% | 63.20% | 19.88% | 100.00% | 0.01% | 34.00% | 0.00% | 0.02% | 100.00% |
(1) Qualifying dividends represent dividends which qualify for the corporate dividends received deduction and is reflected as a percentage of ordinary income distributions (the total of short term capital gain and net investment income distributions).
(2) The percentage in this column represents the amount of “Qualifying Dividend Income” as created by the Jobs and Growth Tax Relief Reconciliation Act of 2003 and is reflected as a percentage of ordinary income distributions (the total of short term capital gain and net investment income distributions). It is the intention of the Fund to designate the maximum amount permitted by law.
(3) “U.S. Government Interest” represents the amount of interest that was derived from direct U.S. Government obligations and distributed during the fiscal year. This amount is reflected as a percentage of ordinary income.
(4) The percentage in this column represents the amount of “Interest Related Dividend” and is reflected as a percentage of ordinary income distributions. Interest related dividends are exempted from U.S. withholding tax when paid to foreign investors.
(5) The percentage of this column represents the amount of “Short-Term Capital Gain Dividends” and is reflected as a percentage of short term capital gain distributions that is exempted from U.S. withholding tax when paid to foreign investors.
The Fund intends to pass through a foreign tax credit to shareholders. For the fiscal period ended July 31, 2021, the total amount of foreign source income is $174,259. The total amount of foreign tax paid is $0. A shareholders allocable share of the foreign tax credit will be reported on Form 1099-DIV.
The information reported herein may differ from the information and distributions taxable to the shareholders for the calendar year ending July 31, 2021. Complete information will be computed and reported in conjunction with your 2021 Form 1099-DIV.
28
Strategic Global Advisors Funds
P.O. Box 219009
Kansas City, MO 64121-9009
1-866-778-6397
Investment Adviser:
Strategic Global Advisors, LLC
100 Bayview Circle
Suite 650
Newport Beach, CA 92660
Administrator:
SEI Investments Global Funds Services
One Freedom Valley Drive
Oaks, PA 19456
Distributor:
SEI Investments Distribution Co.
One Freedom Valley Drive
Oaks, PA 19456
Legal Counsel:
Morgan, Lewis & Bockius LLP
1701 Market Street
Philadelphia, PA 19103
This information must be preceded or accompanied by a current prospectus for the Fund described.
SGA-AR-001-0500
Item 2. | Code of Ethics. |
The Registrant has adopted a code of ethics that applies to the Registrant’s principal executive officer, principal financial officer, controller or principal accounting officer, and any person who performs a similar function. There have been no amendments to or waivers granted to this code of ethics during the period covered by this report.
Item 3. | Audit Committee Financial Expert. |
(a)(1) The Registrant’s board of trustees has determined that the Registrant has at least one audit committee financial expert serving on the audit committee.
(a)(2) The Registrant’s audit committee financial experts are Thomas P. Lemke and Jay Nadel, and each of Messrs. Lemke and Nadel is considered to be “independent”, as that term is defined in Form N-CSR Item 3(a)(2).
Item 4. | Principal Accountant Fees and Services. |
Fees billed by PricewaterhouseCoopers LLP (“PwC”) relate to The Advisors’ Inner Circle Fund III (the “Trust”).
PwC billed the Trust aggregate fees for services rendered to the Trust for the last two fiscal years as follows:
FYE July 31, 2021 | FYE July 31, 2020 | |||||||||||||
All fees and services to the Trust that were pre-approved | All fees and services to service affiliates that were pre-approved | All other fees and services to service affiliates that did not require pre-approval | All fees and services to the Trust that were pre-approved | All fees and services to service affiliates that were pre-approved | All other fees and services to service affiliates that did not require pre-approval | |||||||||
(a) | Audit Fees(1) | $730,515 | $0 | $11,990 | $581,815 | $0 | $607,218 | |||||||
(b) | Audit-Related Fees | $4,000 | $0 | $0 | $0 | $0 | $0 | |||||||
(c) | Tax Fees(2) | $0 | $0 | $90,000 | $0 | $0 | $335,050 | |||||||
(d) | All Other Fees | $0 | $0 | $1,473 | $0 | $0 | $15,941 |
Fees billed by Ernst & Young LLP (“E&Y”) relate to the Trust
E&Y billed the Trust aggregate fees for services rendered to the Trust for the last two fiscal years as follows:
FYE July 31, 2021 | FYE July 31, 2020 | |||||||||||||
All fees and services to the Trust that were pre-approved | All fees and services to service affiliates that were pre-approved | All other fees and services to service affiliates that did not require pre-approval | All fees and services to the Trust that were pre-approved | All fees and services to service affiliates that were pre-approved | All other fees and services to service affiliates that did not require pre-approval | |||||||||
(a) | Audit Fees(1) | $23,330 | None | None | $23,330 | None | None | |||||||
(b) | Audit-Related Fees | None | None | None | None | None | None | |||||||
(c) | Tax Fees | None | None | None | None | None | None | |||||||
(d) | All Other Fees | None | None | None | None | None | None |
Fees billed by Deloitte & Touche LLP (“D&T”) relate to the Trust
D&T billed the Trust aggregate fees for services rendered to the Trust for the last two fiscal years as follows
2021 | 2020 | |||||||||||||
All fees and services to the Trust that were pre-approved | All fees and services to service affiliates that were pre-approved | All other fees and services to service affiliates that did not require pre-approval | All fees and services to the Trust that were pre-approved | All fees and services to service affiliates that were pre-approved | All other fees and services to service affiliates that did not require pre-approval | |||||||||
(a) | Audit Fees(1) | $25,000 | None | None | None | None | None | |||||||
(b) | Audit-Related Fees | None | None | None | None | None | None | |||||||
(c) | Tax Fees | None | None | None | None | None | None | |||||||
(d) | All Other Fees | None | None | None | None | None | None |
Notes:
(1) | Audit fees include amounts related to the audit of the Trust’s annual financial statements and services normally provided by the accountant in connection with statutory and regulatory filings. |
(2) | Tax return preparation fees for affiliates of the Funds. |
(e)(1) The Trust’s Audit Committee has adopted and the Board of Trustees has ratified an Audit and Non-Audit Services Pre-Approval Policy (the “Policy”), which sets forth the procedures and the conditions pursuant to which services proposed to be performed by the independent auditor of the Funds may be pre-approved.
The Policy provides that all requests or applications for proposed services to be provided by the independent auditor must be submitted to the Registrant’s Chief Financial Officer (“CFO”) and must include a detailed description of the services proposed to be rendered. The CFO will determine whether such services:
(1) require specific pre-approval; (2) are included within the list of services that have received the general pre-approval of the Audit Committee pursuant to the Policy; or (3) have been previously pre-approved in connection with the independent auditor’s annual engagement letter for the applicable year or otherwise. In any instance where services require pre-approval, the Audit Committee will consider whether such services are consistent with SEC’s rules and whether the provision of such services would impair the auditor’s independence.
Requests or applications to provide services that require specific pre-approval by the Audit Committee will be submitted to the Audit Committee by the CFO. The Audit Committee will be informed by the CFO on a quarterly basis of all services rendered by the independent auditor. The Audit Committee has delegated specific pre-approval authority to either the Audit Committee Chair or financial expert, provided that the estimated fee for any such proposed pre-approved service does not exceed $100,000 and any pre-approval decisions are reported to the Audit Committee at its next regularly-scheduled meeting.
Services that have received the general pre-approval of the Audit Committee are identified and described in the Policy. In addition, the Policy sets forth a maximum fee per engagement with respect to each identified service that has received general pre-approval.
All services to be provided by the independent auditor shall be provided pursuant to a signed written engagement letter with the Registrant, the investment adviser, or applicable control affiliate (except that matters as to which an engagement letter would be impractical because of timing issues or because the matter is small may not be the subject of an engagement letter) that sets forth both the services to be provided by the independent auditor and the total fees to be paid to the independent auditor for those services.
In addition, the Audit Committee has determined to take additional measures on an annual basis to meet the Audit Committee’s responsibility to oversee the work of the independent auditor and to assure the auditor’s independence from the Registrant, such as (a) reviewing a formal written statement from the independent auditor delineating all relationships between the independent auditor and the Registrant, and (b) discussing with the independent auditor the independent auditor’s methods and procedures for ensuring independence.
(e)(2) Percentage of fees billed applicable to non-audit services pursuant to waiver of pre-approval requirement were as follows (PwC):
2021 | 2020 | |||||||||
Audit-Related Fees | 0% | 0% | ||||||||
Tax Fees | 0% | 0% | ||||||||
All Other Fees | 0% | 0% |
(e)(2) Percentage of fees billed applicable to non-audit services pursuant to waiver of pre-approval requirement were as follows (E&Y):
2021 | 2020 | |||
Audit-Related Fees | None | None | ||
Tax Fees | None | None | ||
All Other Fees | None | None |
(e)(2) Percentage of fees billed applicable to non-audit services pursuant to waiver of pre-approval requirement were as follows (D&T):
2021 | 2020 | |||
Audit-Related Fees | None | None | ||
Tax Fees | None | None | ||
All Other Fees | None | None |
(f) Not applicable.
(g) The aggregate non-audit fees and services billed by PwC for services rendered to the Registrant, and rendered to the Registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the Registrant for the last two fiscal years ended July 31st were $91,473 and $350,991 for 2021 and 2020 respectively.
(g) The aggregate non-audit fees and services billed by E&Y for services rendered to the Registrant, and rendered to the Registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the Registrant for the last two fiscal years ended July 31st were $0 and $0 for 2021 and 2020 respectively.
(g) The aggregate non-audit fees and services billed by D&T for services rendered to the Registrant, and rendered to the Registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the Registrant for the last two fiscal-years-ended July 31st were $0 and $0 for 2021 and 2020, respectively.
(h) During the past fiscal year, all non-audit services provided by the Registrant’s principal accountant to either the Registrant’s investment adviser or to any entity controlling, controlled by, or under common control with the Registrant’s investment adviser that provides ongoing services to the Registrant were pre-approved by the Audit Committee of Registrant’s Board of Trustees. Included in the Audit Committee’s pre-approval of these non-audit service were the review and consideration as to whether the provision of these non-audit services is compatible with maintaining the principal accountant’s independence.
Item 5. | Audit Committee of Listed Registrants. |
Not applicable to open-end management investment companies.
Item 6. | Schedule of Investments. |
Schedule of Investments is included as part of the Report to Shareholders filed under Item 1 of this form.
Item 7. | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. |
Not applicable to open-end management investment companies.
Item 8. | Portfolio Managers of Closed-End Management Investment Companies. |
Not applicable to open-end management investment companies.
Item 9. | Purchases of Equity Securities by Closed-End Management Company and Affiliated Purchasers. |
Not applicable to open-end management investment companies.
Item 10. | Submission of Matters to a Vote of Security Holders. |
There have been no changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees during the period covered by this report.
Item 11. | Controls and Procedures. |
(a) The Registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the Registrant’s disclosure controls and procedures, as defined in Rule 30a-3(c) under the Act (17 CFR § 270.30a-3(c)), as of a date within 90 days of the filing date of the report, are effective based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the Act (17 CFR § 270.30a-3(b)) and Rule 13a-15(b) or Rule 15d-15(b) under the Exchange Act (17 CFR § 240.13a-15(b) or § 240.15d-15(b)).
(b) There has been no change in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR § 270.3a-3(d)) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting.
Items 12. | Disclosure of Securities Lending Activities for Closed-End Management Investment Companies. |
Not applicable to open-end management investment companies.
Items 13. | Exhibits. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) | The Advisors’ Inner Circle Fund III | |
By (Signature and Title) | /s/ Michael Beattie | |
Michael Beattie, President | ||
Date: October 7, 2021 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By (Signature and Title) | /s/ Michael Beattie | |
Michael Beattie, President | ||
Date: October 7, 2021 | ||
By (Signature and Title) | /s/ Andrew Metzger | |
Andrew Metzger, | ||
Treasurer, Controller, and CFO | ||
Date: October 7, 2021 |