Item 5 – Fees and Compensation
The extent and nature of advisory services that we provide will vary depending upon the specific arrangements
made with each client. As a result, our fees will differ among our client accounts due to a number of factors,
including, but not limited to, the size of the account, the existence of other related accounts, the historical or
projected nature of account inflows and outflows, and the nature and extent of supplemental services to be
provided to the account. Additionally, fees charged to U.S. clients may vary from fees charged to clients
outside the U.S.
Fees for Separate Account Clients
For its Domestic Value strategies, Ariel’s standard annual asset-based fee schedule is as follows:
• 1.00% on the first $10 million;
• 0.75% on the next $10 million; and
• 0.50% on the balance over $20 million.
For its Focused Value strategy, Ariel’s standard annual asset-based fee schedule is as follows:
• 0.65% on the first $20 million;
• 0.55% on the next $30 million; and
• 0.45% on the balance over $50 million.
For its Global strategies, Ariel’s standard annual asset-based fee schedule is as follows:
• 0.80% on the first $25 million;
• 0.75% on next $25 million;
• 0.65% on next $50 million;
• 0.55% on next $100 million; and
• 0.50% on the balance over $200 million.
For its Emerging Markets Value strategy, Ariel’s annual asset-based fee schedule is as follows:
• 0.95% on the first $25 million;
• 0.90% on the next $25 million; and
• 0.75% on the balance over $50 million.
For its Emerging Markets Value ex-China strategy, Ariel’s annual asset-based fee schedule is as follows:
• 1.05% on the first $25 million;
• 0.90% on the next $25 million; and
• 0.80% on the balance over $50 million.
Fees for separate account clients are negotiable. Fees for some existing clients differ from the above schedules.
In some limited instances separate account clients are subject to performance-based compensation. See Item 6
for further information regarding performance-based fees. Client accounts managed with the same investment
strategy do not all have the same fee structure.
The firm generally bills clients for fees quarterly in arrears, following the end of the quarter for which services
were rendered. Fees are calculated by applying the applicable fee schedule to the fair market value of the assets
of the client account, as reasonably determined as of the last business day of each quarter or as otherwise
specified in the client’s agreement. Alternatively, the fee will be calculated on a pro-rata basis in the event that
the first or last quarter during which the agreement is in effect is less than a complete calendar quarter or in
those instances where there is a significant principal addition or withdrawal during the quarter.
The firm bills clients directly or otherwise according to each client’s specific direction. Some clients direct us
to provide billing statements to the custodian and further direct the custodian to pay Ariel’s fees from the
assets of the account. Those clients that do so, and also elect to receive a copy of our client statements, are
encouraged to compare any statements received from Ariel with the statements received from the custodian.
Advisory contracts typically provide for termination effective 30 days after written notice by the client or
Ariel. In the event of termination, our standard contract provides that we are entitled to fees earned through the
effective date of termination.
Fees for Funds
The Mutual Funds pay Ariel a management fee on a monthly basis. Such fee is calculated based on each
Mutual Fund’s average daily net assets. The applicable fee schedule provides for reduced fee rates at higher
Mutual Fund asset levels. The Mutual Funds are no-load, which means shareholders pay no commissions or
sales charges. Specific fees and expense-related information are contained in the Mutual Funds’ prospectuses,
statement of additional information, and annual report.
Ariel’s standard fee schedule for its investment advisory services to Private Funds and CITs are specified in
the offering documents for each Private Fund and CIT. Generally, management fees are paid monthly in
arrears out of the assets of the fund. Each Private Fund investor may negotiate its own management fee
schedule. The management fees for the CITs are based on the unit class in which each qualified retirement plan
is invested. The CITs may be divided into one or more classes of units, each with its own expense and fee
obligations and assessments.
The firm receives asset-based fees from the non-proprietary mutual funds to which we provide investment
management services. The amount of fees charged depends on the fund’s investment objective and investment
strategy, size of the fund and other factors. Specific fees and expense-related information are contained in each
fund’s prospectus, statement of additional information, and annual report.
Management Fees for Licenses to Third Parties
Asset-based fees received from third parties with whom we license our strategies are negotiated with each third
party.
Fees and Expenses other than Fees for Investment Advisory Services
Other fees or expenses associated with client accounts beyond the fees paid to Ariel for providing advisory
services include, but are not limited to, brokerage commissions, custodial fees, other transaction costs, and
taxes. For more information about brokerage commissions, see Item 12.
In addition to the expenses mentioned above, the Trust pays fees for transfer agency, fund accounting, and
fund administration services. Also, the Trust has adopted a Distribution Plan (“12b-1 Plan”) pursuant to Rule
12b-1 under the U.S. Investment Company Act of 1940 Act, as amended (the “Company Act”) for services
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