Item 5 - Fees and Compensation
CPIM does not have a standard fee schedule, as all of its fee arrangements are negotiable. CPIM’s
discretionary investment management services are structured in accordance with specific client
needs and objectives. Investment advisory fees are based on a percentage of assets under
management and are paid in arrears. Additionally, CPIM may charge clients a performance fee
which would consist of an annual fee and a bonus fee calculated as a percentage of excess
returns over a client-specified benchmark CPIM would only charge such fees in compliance with
Rule 205-3 of the Advisers Act. Rule 205-3 states that such fees may only be charged to qualified
clients. Qualified clients are generally defined as individuals or companies with assets under
management with CPIM in excess of $1,000,000 or have a net worth greater than $2,000,000.
CPIM may establish fee schedules and minimum account sizes in the future, which will be subject to
negotiation and variation to take account of such circumstances as CPIM and its clients deem
appropriate.
Performance based fees that CPIM may receive may create an incentive for CPIM to make
investments for the pertinent accounts that are riskier or more speculative than would be the
case in the absence of a performance fee. Further, advisers have an inherent conflict of interest to
favor accounts that pay more in fees, such as performance-based fees.
The specific manner in which fees are charged by CPIM is established in a client's written
agreement with CPIM. CPIM will generally bill its fees on a quarterly basis. Clients may elect to be
billed in advance or arrears each calendar quarter. Clients may also elect to be billed directly for
fees or to authorize CPIM to directly debit fees from client accounts. Management fees are
prorated for each capital contribution and withdrawal made during the applicable calendar
quarter (with the exception of de minimis contributions and withdrawals). Accounts initiated or
terminated during a calendar quarter will be charged a prorated fee. Upon termination of any
account, any prepaid, unearned fees will be promptly refunded, and any earned, unpaid fees will be
due and payable.
CPIM's fees are exclusive of brokerage commissions, transaction fees, and other related costs and
expenses which are incurred by the client. Clients may incur certain 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.
Item 12 further describes the factors that CPIM considers in selecting or recommending broker-
dealers for client transactions and determining the reasonableness of their compensation (e.g.,
commissions).