Item 5 – Fees and Compensation
The specific way fees are charged by Arnhold is established in each client’s written agreement with Arnhold. For
separate account management, Arnhold typically charges an annual fee based on a percentage of the value of
Client assets under management.
Investment management fees for separately managed accounts are typically based on the following schedule:
Assets Under Management ($) Annual Rate (%)
First $20,000,000 0.75%
Next $30,000,000 (Up to $50,000,000) 0.50%
Over $50,000,000 0.25%
Unless a different arrangement is made with a Client, Arnhold bills its management fees as of the end of each
month in arrears based on the month-end value of the assets, including cash and cash equivalents but excluding
certain assets. Management fees are generally deducted from Client accounts by the Custodian. However,
Clients can elect to be billed directly for fees. Management fees are typically prorated for partial periods. (Arnhold
may, in its discretion, waive advisory fees as noted below.) Arnhold calculates its fee for separately managed
accounts by applying the applicable fee schedule to the value of the assets of the Client account. In general,
management fees are based on a valuation of assets by the Client’s Custodian (or the fund’s administrator, in the
case of Private Funds). If your account has insufficient assets, we have the authority to sell securities in your
account in order to make cash available for management fee payment without notification to you. The obligation to
pay management fees may limit your ability to request liquidation of securities to withdraw cash from your account.
In certain cases, including with respect to private investments or investments where a third-party price is not
obtainable, the Advisor will use its fair valuation procedures to determine a value for the investment. Since the
Advisor’s compensation is generally based on the net asset value of an account, a conflict arises when the Advisor
rather than a third-party is valuing the assets held in an account. To mitigate that potential conflict, our policies
require our pricing personnel to follow specific steps when calculating the fair value of a security.
Page 5 Arnhold LLC
1370 Avenue of the Americas, 31st Floor, New York, NY 10019-4602
Phone: (212) 651-3700 * Fax: (646) 365-3065
E-Mail: info@arnholdllc.com
Separate Accounts can be subject to minimum annual fees in Arnhold’s discretion. Certain Clients or strategies
do not have standard fee schedules but are individually negotiated based on a variety of factors including, but not
limited to, prior contractual relationships and/or historical fee schedules. We reserve the right to negotiate fees
and we manage certain accounts without an advisory fee, such as accounts of employees, employees’ affiliates’
or their relations. You will pay more or less than other clients depending on certain factors, such as account size,
if you have another account with us, the fee structure we have agreed to, or if we negotiate different fees with
you. Our standard investment management agreement may be terminated by either party giving notice to the
other consistent with the terms set forth in the client’s agreement with Arnhold.
Based upon particular facts and circumstances, Arnhold, in its sole discretion, permits “family billing” or
“householding” arrangements where the account values of related accounts are combined for the purpose of
reducing the overall fees paid by the account. Arnhold may modify, amend or terminate any or all of these
arrangements at any time in its sole discretion. Because “family billing” would result in the client paying lower
fees to Arnhold, this creates an incentive for Arnhold to limit “family billing” arrangements or to combine accounts
in a manner that limits the reductions of fees.
The Advisor’s fee is exclusive of, and in addition to, brokerage fees, transaction fees, and other related costs and
expenses, which are incurred by the Client. Contracts with clients typically include a provision for indemnification
to Arnhold under certain circumstances. Arnhold can change its fee structure at any time.
For Private Funds, the applicable fees and expenses are described in each private fund’s investment management
agreement, subscription agreement, or other governing or offering documents.
Arnhold also has performance-based fee arrangements with certain Clients. See Item 6 below for additional
disclosures regarding performance-based compensation.
B. Other Fees and Expenses
Clients typically incur certain fees or charges imposed by third parties, other than Arnhold, in connection with
investments made on behalf of the Client’s account[s]. The Client is responsible for all custody and securities
execution fees charged by the Custodian and executing broker-dealer (if different). The investment management
fee charged by Arnhold is separate and distinct from these custody and execution fees.
Separate account assets that are invested in Private Funds (i.e., funds managed by Arnhold) will not be subject
to two levels of advisory fees. Either the advisory fee associated with the underlying Client account will be waived
or reimbursed or Arnhold will waive or reduce an amount equal to the pro‐rata portion of the
management/advisory fee that Arnhold (or its affiliates) earns from the Private Funds. However, separate
account assets that are invested in Private Funds will incur other fees and expenses associated with their
investments in these funds.
With respect to Private Funds and other Clients (including separately managed accounts) that invest in funds
...