Item 5 – Fees and Compensation
Anderson Hoagland charges an asset-based fee to provide regular and continuous investment
advisory services to its clients. The Company’s fees are calculated based upon a percentage of
the market value of a client’s assets managed using values reported periodically by the client’s
qualified custodian, which is an independent third-party bank, trust company or brokerage firm
(See Item 15 – Custody for more information regarding custodial arrangements).
For fee purposes, client accounts are classified into two broad categories:
(1) If a client’s investment policy calls for equity exposure between 20% and 100%, an “Equity
Account” fee schedule is applied as shown below; and
(2) If a client’s investment policy calls for fixed income exposure between 80% and 100%, a
“Fixed Income Account” fee schedule is applied as shown below:
Equity Account Fixed Income Account
Annual Rate Annual Rate Assets Managed
1.25% 0.80% Up to $5,000,000
1.00 0.60 On the next $20,000,000
0.75 0.45 On the next $25,000,000
0.50 0.30 Balance over $50,000,000
Anderson Hoagland does not receive sales commissions, service fees, or 12b-1 fees from any
third party in connection with providing investment advisory services to its clients.
For clients who engage Anderson Hoagland for non-discretionary consulting relating to private
investments, Anderson Hoagland charges an annual consulting fee equal to 0.45% (calculated
and paid quarterly) of the net asset value of these investments as reported periodically by the
provider of the investment.
Anderson Hoagland reserves the right to negotiate fees that vary from its published fee schedules
based on factors such as anticipated time to be spent with a particular client and (or) specific
client circumstances. The Company will occasionally enter into arrangements where it charges a
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client a fixed fee per quarter for investment management services or charges for consulting time
on an hourly or project basis.
Calculation of Fees
Anderson Hoagland’s advisory fee for each client account is charged quarterly in advance based
on the market value of the assets in the account reported by the client’s custodian as of the last
business day of the previous calendar quarter. For example, an equity account valued at $1
million on December 31st would be charged a fee at the beginning of the following January
covering the first quarter, January 1 through March 31. Using the equity fee schedule in (2)
above, the account fee for the first quarter would be $3,125 ($1 million x 1.25% x ¼ of a year).
The Company’s fees are pro-rated for partial periods, which occur based on the inception date
of an advisory relationship or the date of its termination. Anderson Hoagland’s fees are typically
deducted directly from the client’s account by the client’s custodian and remitted to the
Company based on an authorization given to the custodian by the client when the custodial
account is opened. Alternatively, a client has the option to elect to receive an invoice directly
from the Company for investment management fees.
Fees for non-discretionary consulting clients are charged quarterly in arrears and computed on
the basis of the net asset value of the client’s investment, not on the basis of committed capital,
as reported in such statement or report most recently received prior to a calendar quarter from
the third-party provider or administrator of a private investment.
Other Fees and Expenses
In addition to the fees paid to Anderson Hoagland for investment advisory services, a client will
incur separate fees imposed by the independent custodian chosen by the client to maintain
custody of the client’s investments (See Item 15 - Custody). Each custodian receives separate
compensation for its services in accordance with its published fee schedule. A custodian’s fee
may be computed based on a percentage of the value of assets in the custodial account.
Alternatively, a custodian that is a broker-dealer may not charge an asset based fee but instead
receive compensation in the form of transaction based fees such as commissions on trades
occurring in the custodial account. In any case, a client’s custodian is independent of Anderson
Hoagland and has the discretion to revise its fees at any time.
When securities are purchased or sold by Anderson Hoagland on behalf of a client, the client will
also incur brokerage and possibly other transaction costs (See Item 12 - Brokerage Practices). If
an account holds mutual funds or exchange-traded funds (ETFs), the funds’ investment
management fees and other expenses are deducted automatically and paid to the funds’
management companies in accordance with the methodology outlined in the prospectus issued
for each fund. These fees are in addition to the investment management fees paid to Anderson
Hoagland, which does not receive any additional compensation or service fees from mutual funds
or ETFs that are held in a client’s account.
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Clients who invest in private investments will incur multiple layers of fees and expenses in
connection with such investments. Private investment vehicles are typically organized as limited
liability companies (LLCs) or limited partnerships (LPs), where each vehicle charges its own
management and (or) performance-based fees as well as a wide range of expenses, including but
not limited to investment, operating, legal, accounting, administrative, regulatory and
extraordinary expenses. In addition, clients who do not meet the minimum investment amount
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