Item 5 – Fees and Compensation
Crow Point does not have a standard fee schedule, as all of its fee arrangements are negotiable.
For the six U.S.-registered investment companies for which Crow Point serves as adviser, the
contractual annual fee ranges from a high of 1.25% percent of average net assets to a low of
0.88% of average net assets. In addition to the foregoing, Crow Point provides discretionary
investment management services directly to individual and institutional clients. These accounts
are managed in accordance with specific client needs and objectives set forth in the client’s
investment management agreement. Related advisory fees are based on a percentage of the
assets under management and are typically paid in arrears and will vary by account and strategy
but in a range of 0.25 to 0.75%.
Currently, Crow Point charges one client a performance fee. Performance fees are charged only
to Crow Point’s qualified clients and typically consist of an annual fee and a bonus fee calculated
as a percentage of excess returns over a client-specified benchmark. Crow Point’s performance
fees are charged only to qualified clients to comply with Rule 205-3 under the Advisers Act which
states that investment advisers may enter into an investment advisory contract on the basis of a
share in the capital gains or capital appreciation of client funds or a portion of client funds if the
client is a qualified client. A qualified client is among other things, a natural person or company
that has at least $1,000,000 under management and has a net worth of $2,000,000 or is a
qualified purchaser under Section 2(a)(51)(A) of the Investment Company Act of 1940.
Performance based fees may create an incentive for Crow Point 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 Crow Point is established in a client’s written agreement with Crow Point. Crow Point
typically bills its fees on a quarterly basis. Clients may, however, elect to be billed in advance or
arrears each calendar quarter. Clients may also elect to be billed directly for fees or to authorize
Crow Point 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. Crow Point’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,
Crow Point Partners, LLC
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.
Mutual funds and exchange traded funds also charge internal management fees, which are
disclosed in a fund’s prospectus. Such charges, fees and commissions are exclusive of and in
addition to Crow Point’s fee, and Crow Point does not receive any portion of these commissions,
fees, and costs.
Item 12 further describes the factors that Crow Point considers in selecting or recommending
broker-dealers for client transactions and determining the reasonableness of their
compensation (e.g., commissions).