Item 5: Fees and Compensation
A. Fee Schedule
Performance-Based Fees for Portfolio Management
Qualified clients will pay an annual fee of 0.00% of assets under management along with
a 15% - 25% performance fee based on capital appreciation. The fee will be based on the
contributed capital the client puts in. If the client's portfolio rises in value, the client will
pay 15% - 25% on that increase in value, but if the portfolio drops in value, the client will
not incur a new performance fee until the portfolio reaches the last highest value, adjusted
for withdrawals and deposits, which is generally known as a “high water mark.” The high-
water mark will be the highest value of the client’s account on the last day of any previous
quarter, after accounting for the client’s deposits or withdrawals for each billing period.
Performance fees are calculated and charged by Interactive Brokers LLC based upon a
percentage of net profits including margin and options transactions for the quarter.
At the end of each Financial Quarter, the Investment Manager shall be allocated 15-25%
of the Mark-to-Market end of Quarter closing gains (realized and unrealized) ("Incentive
Allocation/Performance Fee") of the Separately Managed Investment Account,
depending upon size of initial investment/capital contribution (cc):
Assets Under Management Performance Fee
$1,000,000-$4,999,999.99 cc 25% performance fee
$5,000,000-$9,999,999.99 cc 20% performance fee
$10,000,000-$24,999,999.99 cc 18% performance fee
$25,000,000-$49,999,999.99 cc 17% performance fee
$50,000,000-$99,999,999.99 cc 16% performance fee
$100,000,000+ cc 15% performance fee
The final fee schedule will be memorialized in the client’s advisory agreement. This
service may be canceled immediately upon written notice. Clients must pay the prorated
performance-based fees for the billing period in which they terminate the Investment
Advisory Contract up to and including the day of termination.
In general, a “Qualified Client” is:
(1) a natural person or company who at the time of entering into such agreement
has at least $1,100,000 under the management of the investment adviser;
(2) a natural person or company who the adviser reasonably believes at the time
of entering into the contract: (A) has a net worth of jointly with his or her spouse
of more than $2,200,000 excluding the value of the client’s primary residence; or
(B) is a qualified purchaser as defined in the Investment Company Act of 1940,
§2(a)(51)(A) (15 U.S.C. 80a-2(51)(A)); or
(3) a natural person who at the time of entering into the contract is: (A) An
executive officer, director, trustee, general partner, or person serving in similar
capacity of the investment adviser; or (B) An employee of the investment adviser
(other than an employee performing solely clerical, secretarial, or administrative
functions with regard to the investment adviser), who, in connection with his or
her regular functions or duties, participates in the investment activities of such
investment adviser, provided that such employee has been performing such
functions and duties for or on behalf of the investment adviser, or substantially
similar function or duties for or on behalf of another company for at least 12
months.
B. Payment of Fees
Payment of Performance-Based Portfolio Management Fees
Performance-based portfolio management fees are withdrawn directly from the client's
accounts with client's written authorization on a quarterly basis. Fees are paid in arrears.
C. Client Responsibility For Third Party Fees
Clients are responsible for the payment of all third-party fees (i.e. custodian fees,
brokerage fees, transaction fees, etc.). Those fees are separate and distinct from the fees
and expenses charged by GHC. Please see Item 12 of this brochure regarding broker-
dealer/custodian.
D. Prepayment of Fees
GHC collects its fees in arrears. It does not collect fees in advance.
E. Outside Compensation For the Sale of Securities to Clients
Great Hill Capital, LLC does not engage in “soft dollar” arrangements or benefits.