Item 5. Fees and Compensation
Management Fees and Compensation.
The Funds charge different management fees based on a percentage of the Fund’s net asset
value. Fees are typically calculated based on month end valuations and paid to the Fund either
monthly or quarterly in arrears depending on the specific Fund. Investors may select to pay
their fees through redemption of units. BNYM IM Cayman receives a management fee as set
out below which covers all management, portfolio management and risk management services,
as well as any other expenses relating to the offering of units. BNYM IM Cayman pays out of
the management fee received by it, the fees of the Investment Manager as agreed between the
two parties from time to time. Funds may also be subject to additional charges such as custody,
brokerage and other transaction costs, administrative and other expenses. Fees are not
generally negotiable, though they may be waived, varied or deferred at the discretion of BNYM
IM Cayman in accordance with the Fund’s offering materials. Such waivers, variations and
deferrals will cause some clients or groups of clients to pay fees that are different from the basic
fee schedules disclosed in fund offering materials. Please see the applicable Fund’s offering
materials for further information regarding fees.
Basic Fee Schedule (for Funds sub-advised by Walter Scott):
NCS Global Fund LLC, NCS International Fund LLC (Strategies: Global, EAFE)
Flat fee @ .75%
NCS Group Trust (Strategies: Global, EAFE)
When net funding is less than $175m:
On the first $100m @ 0.75%
Thereafter @ 0.50%
When net funding is equal to or in excess of $175m:
On the first $100m @ 0.70%
Thereafter @ 0.50%
NCS Group Trust (Strategies: Emerging)
On the first $50m @ .95%
Next $25m @ 0.85%
Thereafter @ 0.60%
NCS Group Trust (Strategy: US)
On the first $100m @ 0.70%
Thereafter @ 0.50%
Each Fund pays custody fee and other Fund expenses. BNYM IM Cayman (and not a Fund) will
pay the Investment Manager a sub-advisory fee out of the management fee received by BNYM IM
Cayman which is based on a percentage of a Fund’s net asset value.
Our fees are based on the valuations provided by custodians or administrators. Generally, we do
not price securities or other assets for purposes of determining fees. However, to the extent
permitted by applicable law, including ERISA, from time to time, we or one of our affiliates will be
tasked with, or participate in, determining in good faith the asset values of securities held in
pooled investment vehicles we advise, if the market price for a security is not readily available, or
where we or our affiliate, has reason to believe that the market price is unreliable. A conflict of
interest may arise in situations where we are involved in the determination of the valuation of an
investment because we would benefit by receiving a fee based on the impact, if any, of the
increased value of assets in the account. In such circumstances, we require, to the extent
possible, pricing from an independent third party pricing vendor. If vendor pricing is unavailable,
we then look to other observable inputs for the valuations including broker-dealers, index
providers, and, if applicable, fair value pricing committees of affiliated mutual fund entities. In the
event that a vendor price or other observable inputs are unavailable or deemed unreliable, we
make a reasonable determination of a security’s fair value. When pricing a security, we attempt,
in good faith and in accordance with applicable laws, to determine the fair value of the security or
other assets in question based upon all available factors that we deem relevant at the time of
determination. In determining the fair value of a security, we seek to determine the price a client
might reasonable expect to (1) receive upon the current sale of a security or asset; or (2) pay to
transfer the liability associated with the security or asset in an orderly arms’-length transaction
between market participants on the date on which the security or asset is valued. The price will
not be determined based upon what a client might reasonably expect to receive for selling such
security or asset at a later time or if it holds the security to maturity.