ITEM 5: FEES AND COMPENSATION
The specific manner in which fees are charged by Cornerstone is established in a client’s written
agreement with Cornerstone. Clients are billed directly for fees. Depending on the specifics of
a client’s investment management agreement, fees may be payable monthly or quarterly in
advance (except that the first invoice on a new account may cover a partial first month or
quarter and the entire following month or quarter) or monthly or quarterly in arrears, based on
the value of assets under management at the end of the applicable period. Management fees
will be prorated for each capital contribution and withdrawal made during the applicable
period (with the exception of de minimis contributions and withdrawals).
Cornerstone’s fees are exclusive of brokerage commissions, transaction fees, and other related
costs and expenses which shall be incurred by the client. Clients may incur certain additional
charges imposed by custodians, brokers, and other third parties such as fees charged by
managers, custodial fees, deferred sales charges, odd‐lot differentials, transfer taxes, wire
transfer and electronic fund fees, and other fees and taxes on brokerage accounts and
securities transactions. To the extent client assets are invested in mutual funds and exchange
traded funds, such funds charge advisory, administrative and other fees, which are disclosed in
a fund’s prospectus. As a result, clients will pay two levels of advisory fees with respect to such
assets, one to Cornerstone and one to the fund’s investment adviser. Fund charges, fees and
commissions are exclusive of and in addition to Cornerstone’s fee, and Cornerstone does not
receive any portion of these commissions, fees, or costs.
Advisory arrangements may be terminated by the client upon assignment or by either party
upon prior written notice according to the termination provisions outlined in the investment
management agreement. If a contract is terminated, advisory fees are subject to pro‐rata
adjustment based upon the date of termination.
PORTFOLIO VALUATION
Where Cornerstone is responsible to price a client’s portfolio for fee billing or investment
performance calculation purposes, Cornerstone will generally use pricing information provided
by an independent pricing service (the “Primary Pricing Source”).
Based on our investment style and the types of securities in which we generally invest on behalf
of our clients (see Item 8, “Methods of Analysis, Investment Strategies and Risk of Loss,” below
for additional information), the Primary Pricing Source is typically able to provide pricing
information for securities included within our clients’ portfolios. In the event the Primary
Pricing Source is unable to obtain a price, Cornerstone will determine a fair value for that
security.
When determining a fair value, our objective is to identify a price we believe we could
reasonably receive in a sale between market participants at the specific measurement date
without forced liquidation.
We would encounter a clear conflict when fair valuing securities, as we have an incentive to
value these securities higher in an effort to generate greater fees and higher investment
returns. We have controls in place to mitigate this conflict, including: 1) responsibilities in
establishing a fair valuation described above; 2) policies and procedures designed to provide
reasonable assurance securities are valued properly; and 3) involvement of the Pricing
Committee.
FEES FOR SERVICES
Fee schedules are negotiable and can vary depending on a variety of factors such as the type of
client, the size of the account, and the investment program selected. In particular, fees
negotiated with Cornerstone's affiliates may be more or less than the standard fee schedule set
forth herein.
Fees for Institutional Investment Management
Below are Cornerstone’s advisory fees based on mandate and assets under management.
Large‐Cap Enhanced First $25 m .40%
Next $25 m .30%
Next $50 m .20%
Balance .15%
Mid‐Cap Core First $25 m .50%
Next $25 m .40%
Next $50 m .30%
Balance .20%
Small‐Cap Core First $25 m .60%
Next $25 m .50%
Next $50 m .40%
Balance .30%
Systematic International Equity First $25 m .50%
Next $25 m .40%
Next $50 m .30%
Balance .25%
Systematic Global Equity First $25 m .50%
Next $25 m .40%
Next $50 m .30%
Balance .25%
Systematic Emerging Markets First $25 m .75%
Next $25 m .65%
Next $50 m .55%
Balance .45%
US Equity Opportunities First $25 m .60%
Next $25 m .50%
Next $50 m .40%
...