Fees and Compensation — Form ADV Part 2A (8/30/2017)
[Brochure]
Item 5 – Fees and Compensation
Covariance typically charges clients a fee that is based on the value of the assets under management in each
Client Portfolio. Fees are assessed monthly and in arrears. In addition to the compensation paid to Covariance,
management or performance fees may be paid to the Underlying Fund. Covariance will deduct the appropriate
amount from each Fund or Client Portfolio to pay Covariance management fees and fees payable to
Underlying Funds
Covariance’s fee for the Program is based upon several factors including whether the client is investing in a
comprehensive investment (“outsourced CIO”) solution or a subset of Funds. The fees for clients subscribing to
Covariance’s outsourced CIO solution generally start at an annual rate of .40% of the client’s assets under
management. Given the institutional nature of Covariance’s clients, Covariance’s fees, which are negotiable
and may vary, will be dependent on the specific needs of each client and may vary depending on the
complexity of the underlying investment strategy. As described in Item 4, fees for Non-program services are
negotiable and may vary. Covariance will prorate its fees for Non-program services, when applicable, based
upon the number of days such assets were under management versus the total number of days in the month.
Clients are subject to indirect fees and expenses associated with the Funds and Client Portfolios, such as
administration, custody fees and brokerage fees. Additionally, the Underlying Funds will have their own costs,
expenses and fees, including for administrative, custodial and brokerage services. These will have the effect of
reducing the value of such investments. Covariance may also utilize various hedging strategies that may entail
using brokerage services. Please see Item 12 for further discussion of Brokerage Fees.
Account Minimums and Types of Clients — Form ADV Part 2A (8/30/2017)
[Brochure]
Item 7 – Types of Clients
Generally, Covariance seeks to provide investment advice to trusts, foundations and other not-for-profit
entities that have been organized to serve educational, charitable and healthcare institutions. Covariance
manages certain assets for TIAA, but does not currently plan to invest client assets in investment vehicles
managed or sponsored by TIAA affiliates (other than Covariance sponsored or managed investment vehicles).