Item 5 – Fees and Compensation
aIL’s advisory fees are negotiable, and generally vary depending on the services being provided according to
the schedule agreed to by the client and included in their investment management agreement. Fee arrangements
will vary by client, and are based on a number of different factors, including investment mandate, services
performed, and account size. Fees and allocations may be fixed, fixed plus performance or performance only.
Please refer to Item 6 of this Brochure for additional information about performance-based fees. Generally,
fees are paid monthly or quarterly in arrears based on account balances at the close of each month, quarter or
the average of the month-ends within a quarter, or in advance based on assets outstanding at the end of prior
month or quarter, pursuant to the prospectus, investment management agreements or other relevant offering
document for the vehicle. We will either invoice clients for these fees, or in certain situations deduct these fees
from the client’s custody account. In some instances, fee schedules are negotiable and can vary depending on
a variety of factors such as the client, size of the account, and the investment strategy selected.
aIL may also charge fees for certain services at a fixed or hourly rate. These fees are negotiable and depend
upon the needs of the client, complexity of the situation, and experience of the personnel providing services
under these arrangements.
Some clients may from time to time seek to negotiate most favored nation (“MFN”) clauses in their investment
management agreements with Aberdeen Investments. These clauses may require us to notify the MFN client
if we subsequently enter into an investment management agreement with another client that offers more
favorable pricing or other contractual terms than those currently offered to the MFN client. The applicability
of an MFN clause will depend on the degree of similarity between clients, including the type of client, the
scope of investment discretion, reporting and other servicing requirements, the amount of assets under
management, the fee structure and the particular investment strategy (and therefore the relevant investment
adviser) selected by each client. We have sole discretion over whether or not to grant any MFN clause in all
circumstances.
All advisory arrangements may be terminated by either party upon prior written notice, according to the
termination provisions outlined in the investment management agreement. If a contract is terminated, all
advisory fees are subject to a pro-rata adjustment based upon the date of termination. Upon termination of the
agreement, any prepaid, unearned fee will be promptly refunded, and any earned, unpaid fees will be due and
payable.
For our standard segregated and/or commingled account fee schedules for U.S. clients and investors,
please refer to Appendix A of this brochure.
Registered Fund Fees
With respect to U.S. SEC registered open-end and closed-end funds advised or sub-advised by aIL, each fund’s
prospectus sets forth the applicable fees and expenses. On an annual basis, the Board of Directors/Trustees
(the “Board”) of each registered Investment Company reguistered under the 1940 Act (“Registered Fund”),,
including the independent Board members, considers renewal of the Registered Fund’s investment
management services agreement, including the advisory fee paid by the Registered Fund to the Fund’s Adviser
or Sub Adviser. These fees are typically higher than the representative fee schedules shown in Appendix A.
Sub-advised Mutual Funds and Other Pooled Vehicle Fees
We serve in a sub-advisory capacity for U.S. and offshore investment companies both registered and
unregistered that are managed by third parties. Fees for such services are negotiated with the manager, and
may be set forth in the fund’s registration statement or other similar offering document.
Aberdeen Investments may have the opportunity to participate in co-investments alongside a manager that we
have invested with through one of our portfolios. This occurs mostly viainvestment in private equity. The
manager may choose to waive the management fee for the co-investment if abrdn is invested in the managers
main fund. In these instances, some portfolios may benefit by receiving a fee waiver on the co-investment
because another Aberdeen Investements portfolio is invested within the main fund. This could lead to a
perceived conflict of interest where one portfolio makes an investment to benefit others. This potential conflict
is mitigated by the investment due diligence and approval process.
Model Delivery and Wrap Programs
aIL may participate in arrangements where it provides a model portfolio to clients of Sponsors or RIAs but
does not exercise investment discretion or trade in the client’s account, including, but not limited to, UMAs.
aIL’s actual fees, minimum fees, and minimum account sizes may be negotiable, and in arrangements where
it provides a model portfolio, may be lower than those for providing investment advisory services where it has
full discretion, depending on the circumstances.
Payment of a bundled asset-based wrap fee may or may not produce accounting, bookkeeping, or income tax
results better than those resulting from the separate payment of securities commissions and other execution
costs on a trade-by-trade basis and advisory fees.
With respect to SMA programs for which aIL is not the Sponsor, the client pays an asset-based fee to the
Sponsor Firm or RIA and the Sponsor firm or RIA is responsible for paying the investment advisory fee to
aIL. aIL’s fees from the Sponsor firm are negotiable and differ from program to program. Program fee paid by
clients covers trading charges only when transactions are executed through the Sponsor or its affiliates. To the
extent that trades are “stepped-out” to broker-dealers other than the Sponsor (or executed away from the
...