Item 5 – Fees and Compensation
Standard Fee Schedule
Hartwell is compensated for its investment advisory services through payments of fees made by our
clients. Hartwell’s standard fee schedule is included below. This standard fee schedule may be
modified from time to time.
The Firm’s standard fee schedule is 1% on an annual basis. Subject to applicable laws and regulations,
Hartwell retains discretion over the fees that it charges to its clients, as well as any changes in its fee
schedules. Fees may be negotiated or modified in Hartwell’s sole discretion in light of a client’s
special circumstances, such as asset levels, service requirements or other factors. The Firm may agree
to offer clients a fee schedule that is lower than that of any other comparable clients in the same
investment style. Also, there may be historical fee schedules with longstanding clients that differ from
those applicable to new client relationships. For comparable services, other investment firms may
charge higher or lower fees than those charged by Hartwell. Advisory fees may be subject to a
specified annual minimum; however, Hartwell reserves the right to waive all or a portion of its
management fee and negotiate minimum annual fees.
The Firm's fee is calculated based on market value typically at the close of the previous quarter, and
normally billed for three months in advance. Several accounts pay fees based on three month billing
in arrears. Hartwell will provide an invoice and related performance documents (listed in Item 13) to
clients directly each quarter. Clients have the option to either pay management fees directly to
Hartwell, or they can direct their custody bank to deduct the fees. Termination of the contract is by
written notice. Upon account termination, any unearned fees paid in advance will be refunded
promptly. Fees are also prorated at the inception of the investment advisory agreement to cover only
the period of time the account assets were under management.
Investors in the Firm’s private fund are subject to the terms and conditions of the fund's subscription
agreement and organizing documents, as further described below.
To calculate advisory fees, Hartwell generally relies on prices provided by third-party pricing
services for purposes of valuing portfolio securities held in client accounts. Hartwell may, on
occasion, be required to “fair value price” a security when a market price for that security is not
readily available or when the Firm has reason to believe that the market price is unreliable. When
“fair value pricing” a security, Hartwell will use various sources of information at its disposal to
determine a fair price that the security would obtain in the marketplace if, in fact, a market for the
security existed. For any fair value securities, the Firm maintains policies and procedures relating to
the pricing process in an effort to mitigate any conflicts of interest with respect to valuation. A
committee comprising the CCO and senior Portfolio Manager(s) will determine a fair value for any
security in question.
Performance fees for certain products are also available, subject to applicable law, and are negotiable.
See Item 6 for further information.
Fees for Specialized Accounts and Advisory Services
A subsidiary of Hartwell is a General Partner to Hartwell Capital Partners LP, (“the Fund”), which is
a private fund. The Fund is neither registered under the Securities Act of 1933, nor registered under
the Investment Company Act of 1940. Accordingly, interests in the Fund are offered exclusively to
investors satisfying the applicable eligibility and suitability requirements either in private placement
transactions within the United States or in offshore transactions. No offer to sell this Fund is made by
the descriptions in this Brochure, and as noted this Fund is available only to investors that are properly
qualified.
The Fund has an annual management fee of 1.0% of assets and 20% of any net profits of the
Partnership. Fees based in whole or in part on the performance of an account are structured in
compliance with applicable laws and regulations, including Rule 205-3 of the Investment Advisers Act
of 1940, as amended (the “Advisers Act”). Hartwell’s entitlement to a performance-based fee may
create an incentive to take risks in managing assets that it would not otherwise take in the absence of
such arrangements. Hartwell reserves the right to waive all or a portion of its management and
performance-based fees and negotiate investment minimums. The Fund's particular fee and expense
arrangements, brokerage practices, redemption and termination arrangements, including fees, if any, are
disclosed in the Fund's offering memoranda. As noted, the Fund is only available to investors who
qualify for the Fund, and no public offering of the Fund is being made by this disclosure or otherwise.
Investors should review all documents relating to the Fund prior to investing. Please see Item 6 for
further information.
Wrap Fee Programs
For additional information with respect to wrap fee programs and how Hartwell’s fees are calculated
in accordance with such programs, please see the sub-section entitled “Wrap Fee Programs” under
“Item 4 - Advisory Business” of this Brochure.
With regard to wrap fee program accounts, the all-inclusive fee may exceed the aggregate cost of the
services provided if such services were negotiated and purchased separately, depending on:
the level of the all-inclusive fee;
the amount of trading activity in a client’s account;
the cost of brokerage commissions (which costs are typically negotiated between the
client and the broker/dealer, rather than by the Firm, with transactions being effected
either by the broker/dealer or a third party);
the value of any other services rendered to the client; and
other miscellaneous factors.
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