ITEM 5: FEES AND COMPENSATION
General
Clients typically compensate AnglePoint, in part, on the basis of asset management fees calculated
as a percentage of a client’s assets under management. Management fees may, in certain instances,
be calculated as a percentage of a client’s funded and unfunded capital commitments. AnglePoint
generally deducts or charges asset management fees from or to client accounts on a periodic basis
and such fee rates are to be individually negotiated with AnglePoint’s clients. Asset management
fees are generally payable by clients in advance of the beginning of each calendar quarter.
AnglePoint also enters into arrangements to receive performance-based fees/allocations. In such
cases, AnglePoint generally assesses performance-based fees/allocations based on realized and/or
unrealized capital appreciation, if any, over a threshold amount. AnglePoint generally deducts or
receives performance-based fees/allocations from clients on an annual basis and such
fee/allocation rates are individually negotiated with AnglePoint’s clients.
AnglePoint and its “supervised persons” (as defined in the glossary of terms of Form ADV) do not
accept compensation for the sale of securities or other investment products, including asset-based
sales charges or service fees from the sale of mutual funds.
Performance-Based Compensation
AnglePoint receives performance-based fees and allocations, as described above. AnglePoint
negotiates or agrees to such fees/allocations with clients before entering into advisory
relationships. The receipt of performance-based compensation creates an incentive for AnglePoint
to make investments that are riskier or more speculative than those AnglePoint would otherwise
make in the absence of such incentive compensation. AnglePoint generally addresses this conflict
by focusing on long-term relationships with its clients and Fund investors, and by managing the
Funds and other client accounts in accordance with their governing documents.
As described above, AnglePoint charges clients both asset-based fees and performance-based
fees/allocations, and such terms may be negotiated on a client-by-client basis and such terms vary
among clients. Charging asset-based fees and performance-based fees/allocations at different rates
or that are subject to different hurdle rates or preferred returns inherently creates a conflict of
interest because it create an incentive to allocate better performing assets into client accounts on
which AnglePoint charges higher performance-based fees/allocations. Different economic terms
also create an incentive for AnglePoint to disproportionately allocate time, services, or functions
to clients who are being charged or are paying higher fees and/or allocations or that may be subject
to a lower hurdle rate or preferred returns, or to allocate certain investments to such accounts or
vehicles. AnglePoint recognizes the possibility of such a conflict being detrimental to its clients
and seeks to address it through AnglePoint’s allocation policies and procedures and other relevant
measures. Please see Item 4, “Investment Allocations” for additional information on AnglePoint’s
investment allocation policies and procedures. AnglePoint does not charge performance-based
fees where such an arrangement would violate Section 205 of the U.S. Investment Advisers Act
of 1940 (the “Advisers Act”) pursuant to Rule 205-3 thereunder.
Valuation of Assets
The asset management fees and the performance-based fees/allocations charged to or made by a
client are calculated based on valuations ascribed to the client’s holdings by AnglePoint, which
presents a conflict. Valuations will also be used for determining the prices at which interests in
Funds are redeemed or purchased, which underscores the importance of the need to address any
such conflict. AnglePoint addresses this conflict by adhering to its valuation practices, which may
include, amongst others, engaging third party administrators, auditors, pricing sources, and
valuation agents, from time to time, to assist in certain valuation processes and confirmations.
AnglePoint’s valuation policies and procedures (i) seek to ensure that AnglePoint’s determination
of fair value of client assets is appropriate, (ii) require all such determinations to be made in good
faith, and (iii) address relevant accounting standards.
Specific valuation procedures differ based on the type of security and/or instrument and the
observability of market inputs. Certain terms related to AnglePoint’s valuation policies and
procedures are incorporated into written investment management agreements entered into with its
clients and/or the Funds’ governing documents. There can be no assurance that the value assigned
to an investment at a certain time will equal the value that the client is ultimately able to realize.
Expenses and Other Fees
Each client bears its own expenses and AnglePoint’s general policy is that it only assesses expenses
to client accounts to the extent that such expenses are permissible client expenses under the
applicable client agreements. Allocable client expenses generally include: organizational and
administration expenses; management fees and performance fees/allocations; taxes; costs incurred
in connection with the researching, evaluation, acquisition, monitoring and disposition of
investments (whether or not consummated); transaction costs; financing costs; insurance costs;
certain regulatory and tax compliance costs; and fees relating to service providers engaged for the
client’s business and operations, including, without limitation, attorneys, auditors, accountants,
valuation services, consultants, and custodians, and such other fees and expenses as are provided
for under the arrangement with each client.
Certain expenses are charged to more than one client, in which case AnglePoint determines the
appropriate allocation of expenses among each client depending on the nature of the expense.
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