Item 5. Fees and Compensation
We provide investment management and investment advisory services for a fee. This fee is
typically charged as a percentage of your assets under our management. While this fee is typically
expressed as an annual percentage, it is calculated based on the market value of the account at
month end, quarter end or based on an average and generally invoiced on a monthly or quarterly
basis in arrears. In some cases, the Firm may hire Sub-Advisers and pay such Sub-Advisers
management fees from our management fees or our fees may be net of underlying fees/expenses
of the Sub-Advisers and/or Underlying Funds to which we allocate, depending on the
circumstances of a client’s agreement. Where the Firm develops customized manager-of-
managers programs tailored to meet clients’ investment goals, fees are negotiated on a case-by-
case basis.
Unless otherwise directed by the client, the Firm calculates the gross period management fees
based upon a 30-day month and a 360-day year. Market values are sourced from the accounting
systems of affiliated service providers unless specifically directed otherwise by the client.
We have entered into performance-based fee arrangements with certain clients in accordance
with Section 205-3 of the Advisers Act. These arrangements are negotiated with each client but
typically provide for an annual asset-based management fee based on the market value of the
account as of a specified date, typically semi-annually or quarterly, and invoiced on a semi-
annual or quarterly basis in arrears, plus a performance fee based on the portfolio’s return above
a benchmark for the relevant billing period.
All fees paid to the Firm are separate from any fees and expenses that are charged by pooled
funds to shareholders of fund shares (for accounts that hold shares of pooled funds). A complete
explanation of expenses charged by the pooled fund is contained in each fund's disclosure
documents (such as prospectus for mutual funds or Schedule A for collective funds).
Our investment management and advisory fees range from 3 to 50 bps depending on the investment
objectives selected by the client and the dollar amount of the investment. Depending on the
circumstances of a client’s agreement, clients may also incur investment management fees from
the various Managers selected within a particular manager-of-managers program. In all cases,
Manager investment management fees are negotiated by the Firm with the individual Managers.
We may charge a one-time onboarding fee to clients where significant manual setup is required in
connection with the client’s portfolio. Such fees will be negotiated with the client and will only
be charged pursuant to the client’s written agreement.
For separate accounts, in addition to paying investment management fees to the Firm and the
Managers, clients may also incur other investment expenses such as mark-ups, mark-downs,
commissions, interest on margin accounts and other indebtedness; odd-lot differentials, transfer
taxes, wire transfers, electronic fund fees, borrowing charges on securities sold short; custodial
fees; bank service fees; client-related insurance costs; and any other expenses related to the
purchase, sale or transmittal of the client’s assets. Investors may indirectly bear these fees and
expenses and, as a result, will bear higher expenses than if they invested directly in the underlying
securities.
Please review your investment advisory agreement for further information on how we charge and
collect fees. Please see Item 12 of this brochure for more information on our brokerage practices.
Terminations
Agreements relating to the provision of services provided by the Firm generally are terminable at
any time by either the client or us subject to a mutually acceptable period of notice, which is
usually 60 days. For a withdrawal or termination, the Firm considers the actual date of withdrawal
of funds to be a fee-earning day. The Firm does not consider the date of receipt of funds to be a
fee-earning day except in the case of an initial funding on a new account. Market values are
sourced from the accounting systems of affiliated service providers unless specifically directed
otherwise by the client. Investments in pooled funds that we manage are also subject to minimum
investment and/or redemption requirements. Please refer to your investment management
agreement, the collective investment fund’s Schedule A or mutual fund prospectus, as applicable,
for more information.
Sales Commissions
The Firm does not charge or receive compensation in connection with the sale of
securities/private funds/mutual funds/or other investment products. However, certain employees
of our affiliates accept compensation (also referred to as “commissions”) for the sale of
securities/private funds/mutual funds/or other investment products. Accepting commissions gives
rise to a conflict of interest in that it may give employees of our affiliates an incentive to
recommend investment products based on the compensation they will receive, rather than solely
on a client’s needs. Please refer to Item 6, below, for a discussion of these conflicts of interest.
Item 6. Performance Fees and Side-by-Side Management
Our performance-based fee arrangements and our side-by-side management activities entail
inherent conflicts that are described in this Item 6.
We have entered into performance-based fee arrangements with certain institutional clients. Most
of these arrangements provide for an asset-based management fee, based on the market value of
the account at a specified date, typically semi-annually or quarter-end, plus a performance fee
based on the portfolio’s net return in excess of a specified benchmark during a designated period
of time. The performance fee is typically based on both realized and unrealized gains and losses.
For more detailed information on how performance fees are calculated, please refer to your
...