Item 5: Fees and Compensation
A. Fee Schedule
Advisory Fees
The following information describes how CI is compensated for the advisory services we
provide to our clients. The specific manner in which fees are charged and the
compensation we receive may differ between clients depending upon the individual
Investment Management Agreement with each client. CI reserves the right to negotiate
our compensation with clients depending on the scope of our advisory relationship and
we may charge higher or lower fees than are available from other firms for comparable
services. Fees are negotiated with each client based on a variety of factors, such as the
amount of assets being managed, future deposits to the accounts under our
management, and/or the nature of the relationship with the client. CI has the discretion
to waive all or a portion of our fees.
Investment Management Fees. In consideration for providing investment management
services, and pursuant to the terms of the Investment Management Agreement with each
client, for certain clients CI assesses an annual Investment Management Fee between
0.15% to 0.60%. Investment Management Fees are paid quarterly, based on the market
value of our clients’ account(s) on the last day of the previous quarter. Investment
Management Fees are negotiable and may vary across clients.
Additional Fees and Expenses. Clients will incur transaction charges and/or brokerage
fees when purchasing or selling securities. These charges and fees are typically imposed
by the qualified custodian through which account transactions are executed. For more
information on our brokerage practices, please refer to the “Brokerage Practices” section
of this Brochure.
Termination. The Investment Management Agreement with our clients may be
terminated by either party at any time upon five (5) days written notice. Upon
termination of our status as the client’s investment adviser, CI will not take any further
action with respect to the client’s account(s) unless specifically notified by the client in
writing. Clients will be responsible for instructing their custodian and monitoring their
account for the final disposition of assets. All Advisory Fees and Performance Based Fees
accrued up until the termination date will be paid on a pro-rata basis to CI no later than
30 business days after the termination date.
Refunds. CI does not require that our clients pay our fees in advance. Upon receipt of a
proper notice of termination from the client, as described in the Investment Management
Agreement, any earned unpaid fees will be billed on a pro-rata basis based on the amount
of work performed by us up to the point of termination.
Brokerage Commissions. CI does not receive brokerage commissions from the sale of
securities or other investment products. Our compensation is limited to Investment
Management and Performance Based Fees.
Any material conflicts of interest between clients and CI or our employees are disclosed
in this Brochure. If at any time, additional material conflicts of interest develop, CI will
provide our clients with written notification of those material conflicts of interest or an
updated Brochure.
Performance-Based Fees for Portfolio Management
In consideration for providing investment management services, for certain clients CI may
assess Performance Based Fees (PBF) between 15.0% and 20.0% as follows.
At the end of each Performance Period, CI shall assess a PBF (the “Performance Based
Fee”), in an amount equal to: (i) 20%, with respect to the first $25 million invested by the
Client in the Account, (ii) 15%, in the case of all amounts invested by the Client in the
Account above $25 million, in each such case, of any Outperformance Amount with
respect to such Sub-Capital Account for such Performance Period. The “Outperformance
Amount” means, with respect to any Performance Period, the amount, if any, by which
(i) the Account outperforms a benchmark return or index agreed upon between the Client
and the Advisor (the “Benchmark Index”), net of any Management Fees.
The Outperformance Amount will be calculated based on the Benchmark Index, which
will compound monthly during the period in which the Performance Based Fee is being
determined. To the extent the Account’s performance underperforms the Benchmark
Index for any Performance Period, such the amount by which the Benchmark Index’s
performance has exceeded the performance of the Account (the “Underperformance
Amount”) will be carried forward to the next Performance Period and will be required to
be earned before any Performance Based Fee may be made.
If the Client withdraws any of the Account as of any date other than the last day of a
Performance Period, (i) the Outperformance Amount for the applicable Performance
Period will be determined through the withdrawal date, and (ii) the Performance Based
Fee if any, will be calculated as set forth above and appropriately prorated for such
withdrawal, if applicable.
Because the Performance Based Fee is determined based on outperformance of the
Benchmark Index, CI will be entitled to receive Performance Based Fees for a Performance
Period in which a Sub-Capital Account outperforms the Benchmark Index (subject to
recouping any Underperformance Amount during a previous Performance Period), even
if the Account declined in value for such Performance Period.
“Performance Period” means, with respect to the Account, the period that (i) commences
with (a) the open of business on the date of the establishment of such Account or (b) the
day following the last day of the preceding Performance Period and (ii) ends on the close
of business on December 31 of each fiscal year.
Performance Based Fees are calculated annually and are billed and payable annually in
arrears after the end of each calendar year ending December 31. Lower fees for
comparable services may be available from other sources.
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