Item 5 Fees and Compensation
BAM offers investment management services to clients on a discretionary and non-discretionary basis.
For private funds, fees are based on a combination of a performance allocation to BAM or an affiliated
entity and/or a management fee based on a percentage of the assets under management for the
applicable account (see Item 6 in this document for more information).
For separately managed accounts (“SMAs”), the terms and conditions of advisory fees are negotiable,
and must be mutually agreed upon by the client and BAM before entering into an advisory agreement.
All client accounts are managed in accordance with the agreed upon investment objectives, regardless
of the fee arrangement.
For SMAs, we encourage our clients to verify the accuracy of the fee calculation submitted to the
custodian by BAM, as the custodian will not determine whether the fee has been properly calculated.
Advisory fees charged by BAM are separate and distinct from fees and expenses charged by exchange-
traded, closed-end, or mutual funds, which may be recommended to clients. A description of these fees
and expenses are available in each mutual fund’s prospectus. Additionally, the fees charged by BAM
are exclusive of all custodial and transaction costs paid to custodians, brokers or any other third parties.
Clients should review all fees charged by BAM, custodians and brokers, and others (including but not
limited to third-party sub-advisers) to fully understand the total amount of fees incurred.
BAM also receives fees related to various Turnkey Asset Management (“TAMP”) platforms. These
fees are set at a fixed rate and calculated based on assets under advisement with a given TAMP
platform.
Private Fund – Broyhill Vitruvian Value, LP (“BVV LP”) Fees
BVV LP has four limited partner classes: Founders A, Class A, Founders B, and Class B. Each limited
partner class has similar, yet slightly different, terms. All charge an incentive allocation (a type of
performance-based fee) (allocated to the general partner, BVV GP LLC) on calendar year income
earned over a hurdle rate. In addition, the four limited partner classes charge a monthly management
fee, payable to BAM monthly in advance, as follows: (1) the Founders A share class and Founders B
share class charge 1/12 of 0.50% of the gross asset value of the limited partner’s account at the start of
each month, and (2) the Class A share class and Class B share class charge 1/12 of 1.00% of the gross
asset value of the limited partner’s account at the start of each month.
Private Fund - BAM Credit Opportunities Fund (“BAMCOF”) Fees
BAMCOF pays BAM a management fee each calendar year, calculated as follows: 0.50% annually on
BAMCOF assets that are invested with and/or managed by external managers (“External Investments”)
and 1.00% annually on BAMCOF assets managed directly by BAM (“Direct Investments”). No fees
shall be charged on undrawn investment commitments.
BMC Fund, Inc.
BAM also serves as Investment Manager to BMC Fund, Inc. (“BMC”), a closed-end, diversified
investment company registered under the Investment Company Act of 1940, which serves as the
primary investment vehicle for the Broyhill Family Office. M. Hunt Broyhill serves as BMC’s
Chairman and President and holds a minority ownership interest in BAM. BAM provides investment
management services to BMC pursuant to an investment management agreement. The management fees
for this entity are billed quarterly in arrears based on the fund’s fiscal quarters which end January 31,
April 30, July 31, and October 31. The AUM used for billing is the NAV determined quarterly by the
fund administrator, with input from BMC’s valuation committee for the private investments in the fund.
Turnkey Asset Management Program (“TAMP”) Fees
BAM may also receive fees from TAMP platforms for providing regularly updated portfolio models for
use by investment advisers that subscribe to the TAMP’s platform. The fees we receive are negotiated
with each TAMP platform provider that we have a relationship with, and are based on the amount of
underlying client capital that the underlying registered investment advisers have allocated (via the
TAMP platform) to the strategy BAM provides. These fees do not and will not exceed any limit
imposed by any regulatory agency. This relationship will be memorialized in each contract between
BAM and each TAMP platform.
Investment Advisory Fees for SMAs
Unless specified otherwise, the Account(s) in a household with total assets under management of more
than $1,000,000 shall be charged an annual investment advisory fee of 1.0% of assets (25% of such fee
calculated and paid quarterly) based on the net value of the assets in the Account/Household on the last
business day of the prior quarter (“Fee”). Accounts in a household with total assets under management
less than $1,000,000 shall be charged a slightly higher annual investment advisory fee of 1.5% (with
25% of such fee calculated and paid quarterly). A household is defined as all accounts included in a
given investment management agreement.
Once a group of household accounts collectively being billed at the higher 1.5% advisory fee rate
collectively are worth more than $1,000,000 at an end-of-quarter value (due to gains or client deposits),
the advisory fee rate will decrease to 1.0% for the following quarter and subsequent quarters. The
advisory fee rate will not revert back to the higher 1.5% if the household value drops below $1,000,000
due to valuation decreases, however the advisory fee rate will be increased back to 1.5% in subsequent
quarters if the household assets under management drops below $1,000,000 owing to a withdrawal (or
multiple withdrawals) at the Client’s discretion.
The Annual Advisory Fee shall be payable quarterly, in advance, upon deposit of any funds or securities
in the Account. The first payment is due upon acceptance of this Agreement and shall be based upon the
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