Item 5 Fees and Compensation
We provide discretionary investment advisory services on a fee basis. Our annual investment advisory
fee is based upon a percentage (%) of the market value of the client’s assets placed under our
management. We charge an annualized fee ranging between 0.60% and 1.50% of the value of your
assets under management. The fee is determined based on the type and complexity of the client’s
account. We may include the value of assets which are not held with Schwab, Millennium, or Betterment
including private equity and real estate funds which we may recommend to you and accounts managed
by third party advisers, in calculating our advisory fee. Our asset-based investment management fee is
billed and payable quarterly in advance or monthly in arrears depending on the custodian with which
the client’s assets are held, based on the value of your account/assets at the end of the previous quarter.
Whether a client’s account is billed in advance or in arrears is indicated in the client’s agreement at
Schedule A. Our fees may be negotiable in certain limited circumstances and arrangements with any
particular client may vary. Our annual advisory fee shall generally be no higher than 1.50% of the client’s
assets under management.
Fee differentials. Carmel Capital Partners, LLC investment advisory fee is negotiable at our discretion,
depending upon objective and subjective factors including but not limited to: the amount of assets to be
managed; portfolio composition; the scope and complexity of the engagement; the anticipated number
of meetings and servicing needs; related accounts; future earning capacity; anticipated future additional
assets; the professional(s) rendering the service(s); prior relationships with Carmel Capital Partners,
LLC and/or our representatives, and negotiations with the client. As a result of these factors, similarly
situated clients could pay different fees, the services to be provided by us to any particular client could
be available from other advisers at lower fees, and certain clients may have fees different than those
specifically set forth above.
As it relates to the pooled investment vehicles, in consideration for Carmel’s advisory and other services,
Carmel and/or certain of its affiliates generally are entitled to receive management fees, and may receive
performance allocations, with respect to the Funds. While the fees and compensation applicable to each
Fund are described in detail in the applicable governing documents, side letters and/or fee agreements,
an overview of Carmel’s basic fee schedule is summarized below. A potential investor should read and
review all governing documents in their entirety before making any investment decisions.
Pooled Investment Vehicles
Management Fees: In consideration for its advisory services to the Private Funds, Carmel receives a
“Management Fee” from each respective Private Fund. The specific payment terms and other conditions
of the Management Fees available to Carmel are set forth in the applicable Private Fund’s governing
documents, side letters and/or fee agreements. The Management Fees are listed above under the
“Advisory Business” section. Management Fees are generally paid to Carmel in one of two ways: by
deducting such fees from the applicable Private Fund or directly billing the Private Fund. Upon the
termination of Carmel’s Investment Management Agreement with a Private Fund, Carmel will refund to
the Private Fund the pro-rated portion of any Management Fee already received by the Private Fund for
the period following the effective date of such termination.
Carmel may, in its sole discretion, waive all or any portion of the Management Fee with respect to any
investor.
Management Fees
For Clients may elect to have our advisory fees deducted from their custodial account. Both Our
Agreement and the custodial/clearing agreement may authorize the custodian to debit the account for
the amount of our investment advisory fee and to directly remit that advisory fee to us in compliance
with regulatory procedures. In the limited event that we bill the client directly, payment is due upon
receipt of our invoice. We shall deduct fees and/or bill clients quarterly in advance or monthly in arrears
depending on the custodian with which the client’s assets are held, based upon the market value of the
assets on the last business day of the previous month. Whether a client’s account is billed in advance
or in arrears is indicated in the client’s agreement at Schedule A.
Additional Fees and Expenses
As part of our investment advisory services to you, we may invest, or recommend that you invest, in
mutual funds and exchange traded funds. The fees that you pay to our firm for investment advisory
services are separate and distinct from the fees and expenses charged by mutual funds or exchange
traded funds (described in each fund’s prospectus) to their shareholders. These fees will generally
include a management fee and other fund expenses. You will also incur transaction charges and/or
brokerage fees when purchasing or selling securities. These charges and fees are typically imposed by
the broker-dealer or custodian through which your account transactions are executed. We do not share
in any portion of the brokerage fees/transaction charges imposed by the broker-dealer or custodian. To
fully understand the total cost you will incur, you should review all the fees charged by mutual funds,
exchange traded funds, our firm, and others. For information on our brokerage practices, please refer to
the “Brokerage Practices” section of this Disclosure Brochure.
With respect to the pooled investment vehicles, organizational expenses may include: In general, each
Client, subject to its governing documents, will typically pay or otherwise bear its organizational
expenses, subject to a specified expense cap which may vary from Client to Client. Any organizational
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