Item 5. Fees and Compensation
Fees in General
The amount and method of payment of such fees will be specified in the offering and governing
documents of each corresponding UIT, mutual fund, ETF, Pool or Private Fund and will
generally not be negotiable. Advisory fees will be invoiced monthly, quarterly, semi-annually, or
annually, in advance or in arrears, as specifically stated in each UIT’s, mutual fund’s, ETF’s,
Pool’s or Private Fund’s offering and governing documents or advisory services agreement.
Supervisory and Evaluation Fees
Elkhorn’s fees for portfolio supervisory and evaluation services to UITs sponsored by its
affiliates will be generally assessed as a fixed amount per unit.
Portfolio Consultant and Licensing Fees
For providing model portfolio investment recommendations to UITs not sponsored by Elkhorn’s
affiliates, we will be paid a fee based upon a percentage of the average net assets of the UIT.
Private Funds
The management fee for Private Funds managed or advised by Elkhorn is based on a percentage
of the investor’s net assets under management at fixed annual rates, that range from 0.50-2.00%
per year. The management fee charged by any Private Fund may be subject to negotiation for
certain investors. Management fees may be charged monthly or quarterly, generally in arrears,
and are pro-rated for partial periods.
We currently do not charge performance-based fees to the Private Funds, although it may do so
in the future. Investment managers may charge performance-based fees to a Private Fund or
other hedge or private fund or separately managed account in which a Private Fund may invest.
Such performance fees generally will be equal to a percentage of the net realized and unrealized
profits earned by a client for each year, although it may be assessed more frequently.
Performance fees will be charged in accordance with Section 205 of the Advisers Act and the
conditions of Rule 205-3 thereunder. All Private Fund offering documents disclose where
performance fees may be charged by an investment manager to the Private Fund.
Separate Managed Accounts
Our fees for investment management services to SMAs are assessed on a quarterly basis,
generally in advance. Fees are assessed at the rate in effect at the time of the billing. Any rate
change which occurs during the quarter will be reflected in next billing period. Generally,
one-quarter of our annual fee is assessed each quarter based on the value of the account at the
beginning of the quarter, which may or may not include accrued interest and dividends. Any
deposits or withdrawals during the quarter are billed, or credited as the case may be, on a pro-rata
basis at the end of the quarter. If an account is closed before the end of a quarter, generally a
prorated amount of the fee will be refunded to the client.
SMA clients will incur additional costs in connection with such accounts managed by us. Such
costs may include custodian fees and brokerage costs
Elkhorn’s standard annual fee is between 0.50% and 1.50% of assets depending upon the asset
class, but we may negotiate fees on a case by case basis.
Model Strategies
Our Model Strategies will be executed through and maintained by an independent investment
adviser and we are typically paid a fee based on the investor’s assets under management at fixed
annual rates that range from 0.10% to 1.50% to provide investment model allocations. This fee
is paid quarterly in arrears and is pro-rated for partial periods.