FEES AND COMPENSATION
GatePass offers services on a fee basis, which includes fees based upon assets under management
or advisement, fixed fees, and carried interest (as described below). Additionally, GatePass and certain of
the Firm's Supervised Persons, in their individual capacities, offer insurance products under a separate
commission-based arrangement.
Individual Clients
Advisory Fees
GatePass offers investment management services for an annual fee based on the amount of
assets under the Firm's management. This management fee varies in accordance with the following fee
schedule but the actual fee to which the Individual Client is subject will be specified on the investment
management agreement that the Individual Client executes with GatePass:
PORTFOLIO VALUE BASE FEE*
Up to $2,000,000 1.25%
$2,000,001-$5,000,000 0.75%
$5,000,001-$10,000,000 0.60%
$10,000,001 -$20,000,000 0.50%
Above $20,000,000 0.35%
*Fees are progressive. For example, if Client’s assets under management across all related accounts total $6 million, the quarterly fee is calculated
by multiplying $2 million x 1.25% plus $3 million x 0.75% plus $1 million x 0.60%, then multiplying by the number of days in the quarter divided
by the number of days in the year.
GatePass’s annual fee is billed and payable on a pro-rata basis, quarterly in advance, based
upon the market value of the assets being managed by the Firm on the last day of the previous quarter.
Adjustments are made for deposits and withdrawals in excess of $50,000 during the quarter. If the
investment management agreement is executed at any time other than the first day of a calendar
quarter, GatePass’s fees apply on a pro rata basis, which means that the management fee is payable in
proportion to the number of days in the quarter for which you are a client. In the event the portfolio
management agreement is terminated, the fee for the final billing period will be prorated through the
effective date of termination, and the outstanding or unearned portion of the fee will be charged or
refunded to the client, as appropriate. The Firm's management fee is negotiable, depending on
Individual Client circumstances.
GatePass will charge a minimum fee for separately managed accounts which are less than the
Firm’s minimum account size of $500,000. GatePass will determine the minimum fee by taking the
Individual Client’s annual fee rate multiplied by the minimum account size divided by four. At the start
of each calendar quarter, GatePass will compute the investment management fee and will charge the
higher of the quarterly standard investment management fee or the minimum fee. GatePass may waive
the minimum fee in its sole discretion.
Additionally, for asset management services the Firm provides with respect to certain Individual
Client holdings (e.g., held-away assets, accommodation accounts, alternative investments, etc.), GatePass
can negotiate a fee rate that differs from the range set forth above.
GatePass may, in its sole discretion, negotiate to charge a lesser and/or fixed 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 Individual
Client relationship, account retention, pro bono activities, or competitive purposes.
Additional Fees and Expenses
In addition to the advisory fees paid to GatePass, clients 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 may include securities
brokerage commissions, transaction fees, custodial fees, reporting charges, fees charged by the
Independent Managers, margin and other borrowing costs, charges imposed directly by a mutual fund or
ETF/ETN 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 transfer 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.
Direct Fee Debit
Clients generally provide GatePass with the authority to directly debit their accounts for
payment of the investment advisory fees. The Financial Institutions that act as the qualified custodian
for Individual Client accounts, from which the Firm retains the authority to directly deduct fees, have
agreed to send statements to Individual Clients not less than quarterly detailing all account transactions,
including any amounts paid to GatePass. Alternatively, clients may elect to have GatePass send a
separate invoice for direct payment.
Use of Margin
GatePass can recommend that certain clients utilize margin in the client's investment portfolio or
other borrowing. GatePass only recommends such borrowing for non-investment needs, such as bridge
loans and other financing needs. The Firm's fees are determined based upon the value of the assets being
managed gross of any margin or borrowing.
Account Additions and Withdrawals
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