Item 5 – Fees and Compensation
A. Describe how you are compensated for your advisory services. Provide your fee schedule.
Disclose whether the fees are negotiable.
The private placement memorandum for each DBC Fund Client contains a detailed description of the fees
applicable to an investment in such DBC Fund Client.
It is critical that investors and prospective investors refer to the relevant DBC Fund Client’s
private placement memorandum for a complete understanding of how DBC is compensated for its
advisory services.
Except to the extent provided in a side letter with respect to certain investors in a DBC Fund Client, such
fees are typically not negotiable.
The fees that are charged to the Investment Vehicles are determined on a case by case basis and are
governed by the applicable Management Agreement.
B. Describe whether you deduct fees from clients’ assets or bill clients for fees incurred. If clients
may select either method, disclose this fact. Explain how often you bill clients or deduct your fees.
The DBC Fund Clients pay DBC an asset-based management fee monthly in advance. In addition, either
DBC or its affiliate receives performance-based compensation from the DBC Fund Clients on an annual
basis. In certain cases, management fees and performance compensation with respect to certain investors
in the DBC Fund Clients are waived or modified in the sole discretion of DBC and/or its affiliates.
It is critical that investors and prospective investors refer to the relevant DBC Fund Client’s
private placement memorandum for a complete understanding of how DBC is compensated for its
advisory services.
Fees (and the payment mechanics with respect thereto) applicable to the Investment Vehicles are
negotiated separately and subject to the terms of the applicable Management Agreement.
C. Describe any other types of fees or expenses clients may pay in connection with your advisory
services, such as custodian fees or mutual fund expenses. Disclose that clients will incur brokerage
and other transaction costs, and direct clients to the section(s) of your brochure that discuss
brokerage.
Each Advisory Client is responsible for its own expenses, which typically include operational expenses,
brokerage and transaction costs related to the assets held by such Advisory Client (see Item 12 for
additional information on brokerage practices), and may also include legal and accounting expenses,
administration fees, and other fees and expenses as set forth in more detail in each Advisory Client’s
offering memorandum, other governing documents and/or the applicable Management Agreement.
D. If your clients either may or must pay your fees in advance, disclose this fact. Explain how a
client may obtain a refund of a pre-paid fee if the advisory contract is terminated before the end of
the billing period. Explain how you will determine the amount of the refund.
Management fees are typically paid monthly in advance by investors in the DBC Fund Clients and are
typically refundable, in part, if the relevant advisory contract is cancelled prior to the end of a payment
period.
Fees (and the payment mechanics with respect thereto) applicable to the Investment Vehicles are
negotiated separately and subject to the terms of the applicable Management Agreement.
E. If you or any of your supervised persons accepts compensation for the sale of securities or other
investment products, including asset-based sales charges or service fees from the sale of mutual
funds, disclose this fact and respond to Items 5.E.1, 5.E.2, 5.E.3 and 5.E.4.
1. Explain that this practice presents a conflict of interest and gives you or your supervised
persons an incentive to recommend investment products based on the compensation received,
rather than on a client’s needs. Describe generally how you address conflicts that arise,
including your procedures for disclosing the conflicts to clients. If you primarily recommend
mutual funds, disclose whether you will recommend “no-load” funds.
2. Explain that clients have the option to purchase investment products that you recommend
through other brokers or agents that are not affiliated with you.
3. If more than 50% of your revenue from advisory clients results from commissions and other
compensation for the sale of investment products you recommend to your clients, including
asset-based distribution fees from the sale of mutual funds, disclose that commissions provide
your primary or, if applicable, your exclusive compensation.
4. If you charge advisory fees in addition to commissions or markups, disclose whether you
reduce your advisory fees to offset the commissions or markups.
Neither DBC nor its employees receive, directly or indirectly, any compensation from the sale of
securities or investments that are purchased or sold for Advisory Client accounts. DBC is compensated
through the stated management fees and performance compensation agreed upon in the offering
memoranda, other governing documents and/or the Management Agreement of the respective Advisory
Client.