ITEM 5 – FEES AND COMPENSATION
General
CPWM charges its clients a management fee which is based upon the value of assets under management,
calculated as of the close of business on the last day of the prior quarter. The specific manner in which fees are
charged and calculated is established in a client’s written agreement with CPWM.
Management fees are generally payable in advance and are debited directly from a client’s brokerage account(s)
unless clients request, and CPWM agrees, to bill clients directly.
CPWM’s current fee schedule is as follows:
Fee Market Value of Investments
1.25% per annum for the first $2,000,000; plus
1.00% per annum for amounts greater than $2,000,000 and up to $10,000,000; plus
0.75% per annum for amounts greater than $10,000,000
**Note: There is a minimum fee of $2,500/quarter, which may be waived, in CPWM’s sole
discretion.
The management fee schedule above is subject to negotiation and CPWM may, in its sole discretion, agree to a
fee schedule that is different from what is set forth above.
CPWM’s management fees may be prorated for additions and withdrawals made in the account during the
applicable fee period.
Accounts initiated during a calendar quarter will typically be charged a prorated fee based upon the number of
calendar days the account was under our management during the relevant quarter. Termination of the advisory
relationship is subject to thirty (30) days prior written notification. When the relationship is terminated during
a calendar quarter, fees are prorated; therefore, any prepaid, unearned fees will be refunded by crediting the
client’s brokerage account promptly upon receipt or delivery of written notification regarding termination.
Ours fees are separate from, and are exclusive of brokerage commissions, transaction fees, and other related
costs and expenses, which a client is solely responsible for. Item 12 further describes the factors that we
consider in selecting or recommending broker-dealers for client transactions and determining the
reasonableness of their compensation (e.g., commissions).
In addition, clients may incur certain charges imposed by custodians, brokers, investment managers and other
third parties such as, but not limited to, management and/or incentive fees charged by third party 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. Separately managed accounts,
mutual funds and exchange-traded funds also charge internal management fees, which are disclosed in a fund’s
prospectus and other documentation provided to the client, and which are the sole responsibility of the client,
and are in addition to the management fees charged by CPWM.
Commissions
CPWM currently has an investment advisory representative that has ownership interest in an otherwise
unaffiliated insurance company. When in line with a client’s investment strategy and objectives, CPWM
employees may recommend the purchase of insurance products to CPWM clients. In the event that insurance
is purchased from the insurance company owned by the affiliated person such individual may receive a
commission, as well as other financial benefits by virtue of his ownership in the insurance company. When
making such recommendation, CPWM employees are required to disclose to clients that an affiliated person will
receive a financial benefit, including the receipt of commissions, prior to the purchase by the client of such
insurance product from the insurance company. Additionally, CPWM clients are advised that they have the
option to purchase insurance products that we recommend through other brokers or agents of their choosing.
CP Funds
As disclosed above, CPWM also acts as the general partner and/or investment manager to the CP Funds, the fee
structures of which are summarized below.
CPMA Fund
CPWM is the general partner of CP Multi-Asset Fund, LP (the “CPMA Fund”), a Delaware limited partnership
organized to allow investors to invest lower minimum amounts in the GEM Liquid Markets Fund A, LP (the “GEM
Investment Fund”), an endowments style program. Global Endowment Management, LP, the general partner
of GEM Investment Fund charges the CPMA Fund a management fee at an annual rate of 0.35% of the Net Asset
Value (NAV) of each limited partner’s capital account. The fee is calculated and paid monthly in advance based
on the NAV as of the beginning of the first day of the month, after giving effect to any contributions as of such
date. CPWM does not receive any portion of management fees due to the general partner of the GEM Investment
Fund. Investors in CPMA Fund that are not otherwise advisory clients of CPWM may also be charged by CPWM
an advisory and administrative fee of up to 0.35%.
In addition, investors in the CPMA Fund are responsible for the fund’s operating costs and expenses, including,
without limitation, expenses associated with the organization and management of the Fund or incurred in
connection with the purchase, retention or sale of its investments in the GEM Investment Fund, and costs
relating to administration, custody, bookkeeping, accounting, audit, reporting and similar services. Please refer
to the CPMA Fund’s Offering Documents for a more detailed explanation of these expenses.
CPE Fund
CPWM is the general partner of CP Endowment Fund, LP (the “CPE Fund”), a Delaware limited partnership that
was organized for the purpose of investing in GEM Growth Fund, LP (the “GEM Growth Fund”). Global
Endowment Management, LP, the general partner of GEM Growth Fund, charges the CPE Fund a management
fee at an annual rate of 0.20% of the Net Asset Value (NAV) of each limited partner’s capital account. In addition,
...