Item 5. Fees and Compensation:
(A) The Funds are generally charged a management fee and
performance fee. The amount and manner in which management
fees are assessed by ACA are based on contractually specified
percentages set forth in the Advisory Agreement. The management
fee paid by each of the Funds varies between one and two percent
(1.00%-2.00%) per annum of the net asset value of the Funds.
Generally, management fees are negotiable and collected quarterly
in advance. The Firm pays the Underlying Managers a portion of
the management fee and performance fee charged by the Funds.
Such fees will be discussed with each investor and/or fully disclosed
in the relevant offering documents. The exact amount of fees paid
by the Firm to the Underlying Managers will vary based on the
arrangements negotiated with the Underlying Managers, however
these fees will generally be between twenty-five and fifty percent
(25.00%-50.00%) of the management fee, and up to fifty percent
This amount represents the regulatory assets under management (gross asset value) of the One Oak Funds
which may be deployed by the Firm in accordance with the Mutual Referral and Advisory Services Agreement.
(50.00%) of the performance fee. In addition, ACA may negotiate
lower investment minimums and different liquidity provisions than
those typically imposed by Underlying Managers. Investors in the
Funds are advised that this presents a potential conflict of interest in
that ACA may be incentivized to select Underlying Managers that
are willing to accept a smaller portion of the fee paid to ACA, lower
investment minimums and better liquidity provisions. Investors in
the Funds may pay higher fees than they would if they accessed an
underlying fund manager directly.
MedTech Fund is not charged a management fee but is however
subject to an incentive allocation of fifteen percent (15.00%), which
is collected at the end of MedTech Fund’s term, as described in more
detail in Item 6 below.
(B) Payment of Fees: Management fees are deducted from assets on a
quarterly basis.
(C) Additional Fees and Expenses: The Funds and MedTech Fund are
responsible for any financing or brokerage-related expenses (such
as custodial, brokerage, margin interest, negative rebates, exchange
fees, market access or technology fees); administrative and
operational expenses (such as fund administration, tax, audit, legal,
insurance, cash management, regulatory, compliance, due diligence,
monitoring, reporting, communications, risk management or
software); and organizational expenses (including expenses related
to the drafting of the offering documents and any directly or
indirectly related structuring costs). Investors in the Funds incur all
fees and expenses applicable to such Funds’ investment in the
Underlying Funds, including any fees paid for advisory,
administration, distribution, accounting and other services. All fees
and expenses of the Underlying Funds are generally in addition to
the fees each Fund pays. Additionally, ACA may withhold between
two and three percent (2.00%-3.00%) of an investor’s investment in
cash to pay each Fund’s expenses, including but not limited to fees
payable to the Firm.
(D) Fees Paid in Advance: The Firm’s management fee may be prepaid
on the first day of each calendar quarter.
(E) Additional Compensation of Supervised Persons:
Messrs, LaGrego and Formato may receive, directly or indirectly,
commissions or other compensation in connection with the Firm’s
transactions. Specifically, certain Underlying Managers may, but
are not required, to utilize brokerage services provided by Weeden
Prime Services, LLC. Investors are advised that this may present a
conflict of interest whereby ACA may be incentivized to select
Underlying Managers using the services of Weeden Prime Services,
LLC. However, the Firm believes that any brokerage commissions
paid to any related broker-dealers, including Weeden Prime
Services, LLC, will be consistent with “best execution” practices.
(i) The Firm endeavors to disclose herein all conflicts of interest
which could impair the rendering of unbiased and objective
advice. Lower fees for comparable services may be available
from other sources.
(ii) Clients have the option to purchase investment products
which the Firm recommends through other brokers or agents
that are not affiliated with the Firm and/or not used by the
Firm. N/A
(iii) If commissions provide more than fifty percent (50.00%) of
Firm’s revenue or compensation, disclose: N/A
(iv) The Firm does not reduce advisory fees to offset the
commissions and/or markups received directly or indirectly
by associated persons as referenced above.
(v) As noted above, certain representatives of the Firm may be
registered with a broker-dealer or affiliated with an
insurance company. As such, these representatives may
receive additional compensation.