Page 41 - Transforming To Stay Successful

NOW & THEN: A SHIFT IN WHERE OUR COSTS COME FROM
With our new business and investment model, we’ll also see a shift in where our
costs come from. To understand the changes, we need to look at our three
categories, or “buckets,” of costs.

“Internal Costs” are directly paid by BCI, and cover salaries,
consulting fees, rent, travel, systems, pens and paper — basically,
what keeps us operational.

“External Direct Costs” are directly paid by BCI, or pools, to
third parties to manage assets, and include fees to auditors,
our custodian, external asset managers for public equity, and
QuadReal. The fees charged by external investment management
and custodial services are largely driven by the market value of
assets under management.

“External Indirect Costs” are paid on our behalf by third parties,
and netted against investment returns. They include fees to
external managers (infrastructure, private equity,
renewable resources).

COSTS MATTER 41