Item 5. Fees and Compensation
FCA offers services for a fee based upon assets under management (“AUM”), which is based on billable
assets as set forth in each client’s Advisory Agreement. FCA also charges a performance fee to certain
qualifying clients, which is outlined in Item 6 below.
In addition, FCA and/or its affiliates have received in the past consulting or advisory fees from two
private funds – FF Fund I, L.P. and Title Arbitrage Group, LLC in which FCA clients have invested. The
non-recurring consulting services provided to the General Partner of Title Arbitrage Group were
comprised of guidance on how to improve the fund’s marketing presentation and messaging to potential
investors at the outset of the fund’s inception. The services provided to FF Fund I included but were not
limited to recommending private investments that were sourced by FCA, some of which were also
invested in by other clients of FCA. The fee arrangements described in this paragraph are no longer
active.
FCA does not charge a management fee to the FCA SPVs. However, as the investment adviser, FCA is
eligible to receive a performance-based payment, which is outlined in the Offering Documents relating
to the SPVs and summarized in Item 6 below.
The additional compensation referenced in the preceding paragraphs and in Item 6 presents a conflict
of interest, as it creates an incentive to make recommendations to clients based on such compensation.
Please refer to additional information below and in Item 10 regarding, among other things, how FCA
addresses the conflict.
Clients should be aware that the fees charged by FCA may be higher or lower than fees charged by
other investment advisers for comparable services. Therefore, clients should carefully review and
consider all fees charged by FCA, along with applicable third-party fees to fully understand the total
amount of fees to be paid.
Investment Management Fees
FCA offers investment management services for an annual fee based on the amount of assets under the
Firm’s management. This management fee generally varies between 0.50% and 1.25%, depending upon the
size and composition of a client’s portfolio and the type of services rendered. The annual fee is prorated
and charged quarterly, in arrears, based upon the daily average value of the client’s managed assets
(including cash, cash equivalents and accrued interest) during the prior quarter being managed by FCA, as
valued by the custodian or FCA’s third party reporting service provider, which is utilized for calculating
fees on Alternative Investments not held with FCA’s custodian.
For the initial period of an engagement, the fee is calculated on a pro rata basis and charged at the end of
the initial quarter.
FCA also charges certain qualifying clients a performance fee, which is based on the return of one or
more of the client’s specific private investments recommended and/or managed by FCA. Please refer to
Item 6 below for further information, including the conflicts surrounding this type of fee and how FCA
addresses the conflict.
In the event the Advisory Agreement is terminated, the fee for the final billing period is prorated through
the effective date of the termination and the outstanding portion of the fee is charged to the terminating
client, as appropriate.
Fee Discretion
FCA has in the past and may in the future, in its sole discretion, negotiate to charge a lesser fee based
upon certain criteria, such as anticipated future earning capacity, anticipated future additional assets, dollar
amount of assets to be managed, related accounts, account composition, pre-existing/legacy client
relationship, account retention and pro bono activities. In addition, for certain family and friends of the
Firm, FCA has, and can do so again in the future, negotiated reduced fees and in some cases waived fees
in their entirety.
Additional Fees and Expenses
In addition to the advisory fees paid to FCA, clients generally will also incur certain charges imposed by
other third parties, such as broker-dealers, custodians, trust companies, banks and other financial institutions
(collectively “Financial Institutions”). These additional charges generally include securities brokerage
commissions, transaction fees, custodial fees, fees attributable to alternative assets, fees charged by the
Independent Managers, margin costs, charges imposed directly by a mutual fund or ETF in a client’s
account, as disclosed in the fund’s prospectus (e.g., fund management fees and other fund expenses),
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. The Firm’s brokerage practices are
described at length in Item 12, below. While not being charged currently, in the future clients may also incur
separate fees for financial planning and consulting services provided by FCA as separately provided for, and
outlined, in the clients’ agreements with FCA.
Clients should review all applicable direct and indirect fees charged, including but not limited to custodian
fees, transaction fees, fees associated with all investments (e.g., mutual funds and ETFs, insurance
products), and advisory and performance fees to fully understand the total amount of fees to be paid by the
client and to thereby evaluate the advisory services being provided. It is important that clients understand
how all these fees can affect investment returns over time. For further information, please refer to the
SEC’s Investor Bulletins available at https://www.investor.gov/introduction-investing/general-
resources/news-alerts/alerts- bulletins/investor-bulletins.
Clients can avoid paying layers of fees by making their own decisions regarding the investments made in
their accounts. However, in doing that, clients would not have the benefit of receiving experienced
investment advice provided by FCA.
Direct Fee Debit and Billing
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