ITEM 5: FEES AND COMPENSATION
All clients are large, sophisticated, qualified institutional investment advisory firms. Gracian does
not engage individual investors as clients.
Clients are charged a fixed consulting fee and/or a performance-based fee.
Consulting Fee
Gracian Capital LLC
Form ADV Part 2A
Clients are billed a fixed consulting fee for services to be provided over a mutually agreed upon
service term. The consulting fee is negotiated between Gracian and the client, and it is generally
based upon the size of the client’s firm.
Clients are generally billed monthly in advance of consulting services to be performed and remit
payment via electronic means (i.e., by wire, ACH, etc.). Clients should note that fees for
comparable services from other sources may vary, and may be lower or higher.
The consulting fee for the first month of service is generally due upon the date the client executes
the agreement, and each subsequent monthly fee is due upon the first of each month. The services
expire upon the end of the service term, which is defined in the agreement. At the end of each
term, Gracian and the client can mutually agree to renew the agreement.
If the consulting term is terminated before the end of a service period, a client may be entitled to
a prorated refund of the prepaid monthly consulting fee. The amount of the refund shall be
determined based upon the number of days in the prepaid period for which service was not
provided. For example, if the prepaid consulting term is terminated on the 10th day of a 30-day
month, then the client shall be entitled to a refund equal to 20/30 (or 66%) of the prepaid monthly
consulting fee. A client may obtain a refund of a prepaid fee upon written request.
If clients elect to implement securities transactions in response to Gracian’s research, they may
incur additional fees, charges, and/or transaction costs, that are levied by their broker-dealers.
These fees are separate from the consulting fee charged by Gracian.
Performance-based Compensation
In certain of its client agreements, Gracian may be entitled to receive performance fees. In such
cases, Gracian may be entitled to receive a percentage of the net profits generated in transactions
in the securities of the companies that are the subject of research provided by Gracian to the client.
All decisions with respect to the trading of securities by a client are made by the client, in its sole
discretion. Gracian has no authority, express or implied, to enter into any transactions on behalf
of a client or any of the client’s accounts/funds. For the avoidance of doubt, all assets of the client
and the client’s accounts/funds are assets of, and solely owned and/or controlled by, the client.
Performance fees are calculated by, and paid by, the client in its sole discretion. Performance fees
will only be charged in accordance with the provisions of CCR Section 260.234.
The performance fee in such arrangements is generally 10% of the client’s net profits (which are
determined, calculated, and paid by the client in its sole discretion). For example, if the client
determines (in its sole discretion and calculation) that its net profit generated is $1 million, then
the performance-based fee it would pay to Gracian would be $100,000.
If clients elect to implement securities transactions in response to Gracian’s research, they may
incur additional fees, charges, and/or transaction costs, that are levied by their broker-dealers.
These fees are separate from the advisory fee charged by Gracian.
Gracian Capital LLC
Form ADV Part 2A
Receipt of Additional Compensation
Neither Gracian nor any supervised person is associated with any broker-dealer or 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.