Item 5. Fees and Compensation
Audent offers services on a fee basis, which includes fixed, as well as fees based upon assets under
management. Additionally, certain of the Firm’s Supervised Persons, in their individual capacities, offers
securities brokerage services and/or insurance products under a separate commission-based arrangement.
For investment management fees associated with participation in the Wrap Program, please see the Wrap
Brochure.
Investment Management Fees
Audent charges investment management fees that vary between private fund clients and separately managed
accounts.
Separately Managed Accounts
Audent offers investment management services for an annual fee based on the amount of assets under the
Firm’s management. This management fee varies depending upon the strategy being utilized, as follows:
• Carret Muni/Carret MO – 0.80%
• Carret Opportunity/ Carret Opp – 0.80%
• Bond Enhancement/BE – 0.80%
• Concentrated Equity/ CE – 1.4%
• Fallen Angels/ FA - 1.4%
• Special Purchase Account/ SPA – 1.0%
• Global Alpha Balanced Strategy/GABS – 1.0%
• Global Alpha Investment Strategy/ GAIS – 1.0%
The annual fee is prorated and charged quarterly, in advance, based upon the market value of the assets
being managed by Audent on the last day of the previous quarter as determined by a third party that is
independent from the Firm (including the client’s custodian or another third-party).
If assets are deposited or withdrawn after the beginning of a billing period, the fee will be prorated and
adjusted as part of the next quarter’s bill. For the initial period of an engagement, the fee is calculated on
a pro rata basis. In the event the advisory agreement is terminated, the fee for the final billing period is
prorated through the effective date of the termination and the outstanding or unearned portion of the fee is
charged or refunded to the client, as appropriate.
Additionally, for asset management services the Firm provides with respect to certain client holdings (e.g.,
held-away assets, accommodation accounts, alternative investments, etc.), Audent can negotiate a fee rate
that differs from the range set forth above. Clients are advised that a conflict of interest exists for the Firm
to recommend that clients engage Audent for additional services for compensation, including rolling over
retirement accounts or moving other assets to the Firm’s management. Clients retain absolute discretion
over all decisions regarding engaging the Firm and are under no obligation to act upon any of the
recommendations.
Fee Discretion
Audent may, in its sole discretion, negotiate to charge a lesser fee based upon certain criteria, such as
anticipated future earning capacity, anticipated future additional assets, dollar amount of assets to be
managed, related accounts, account composition, pre-existing/legacy client relationship, account
retention,pro bono activities, or competitive purposes.
Additional Fees and Expenses
In addition to the advisory fees paid to Audent, clients also incur certain charges imposed by other third
parties, such as broker-dealers, custodians, trust companies, banks and other financial institutions
(collectively “Financial Institutions”). For assets managed outside the Wrap Program, these additional
charges include securities brokerage commissions, transaction fees, custodial fees, fees attributable to
alternative assets, reporting charges, fees charged by the Independent Managers, margin and other
borrowing costs, charges imposed directly by a mutual fund or ETF in a client’s account, as disclosed in
the fund’s prospectus (e.g., fund management fees and other fund expenses), deferred sales charges, odd-
lot differentials, transfer taxes, wire transfer and electronic fund fees, and other fees and taxes on brokerage
accounts and securities transactions. The Firm’s brokerage practices are described at length in Item 12,
below. For additional fees and expenses associated with participation in the Wrap Program, please see the
Wrap Brochure.
We recommend products where we also receive a carried interest. In receiving this carried interest, a form
of profit sharing, we often provide consulting services to the managing member of a pooled investment
vehicle offered by an Independent Manager. This represents an indirect fee received by Audent. Please
see above related to Use of Independent Managers.
Private Fund Fees
Audent offers private fund investment opportunities through pooled investment vehicles that execute on
specific strategies. These private funds include single purpose vehicles designed to invest into a single
investment opportunity or designed to execute on a specified securities investment strategy such as
Concentrated Equity Strategy, Fallen Angels Strategy, Bond Enhancement Strategy, Global Alpha Income
Strategy, Global Alpha Balanced Strategy or other strategies developed by Audent. We typically charge
20% carried interest or similar performance-based fee subject to a hurdle or clawback provision (as
negotiated with each client). We also charge a management fee on select funds, which is individually
negotiated with each private fund offered.
Direct Fee Debit
Clients provide Audent and/or certain Independent Managers with the authority to directly debit their
accounts for payment of the investment advisory fees. The Financial Institutions that act as the qualified
custodian for client accounts, from which the Firm retains the authority to directly deduct fees, have agreed
to send statements to clients not less than quarterly detailing all account transactions, including any amounts
paid to Audent. Alternatively, clients may elect to have Audent send a separate invoice for direct payment.
Use of Margin
Audent can be authorized by clients to use margin in the management of the client’s investment portfolio.
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