Item 5: Fees and Compensation
Investment Management Fees – Separately Management Accounts
Clients enter into an Investment Advisory Agreement (“IAA”) with Herr Investment Group LLC that
outlines the services provided and fees paid to Herr Investment Group LLC. For on-going
management, the client will pay an asset management fee (aka advisory fee) based on the value of the
client’s account.
Herr Investment Group LLC retains the discretion to decide the level of fees on a client-by-client
basis. Fees can range from 0.60% to 1.85% annually of the assets being managed as negotiated with
each respective client depending on various factors including, but not limited to, complexity of the
client’s needs, assets to be placed under management, anticipated future additional assets, scope
and frequency of necessary services, portfolio style, trading frequency and activity, and account
composition. The specific annual fee is identified in the IAA between Herr Investment Group LLC and
each client. If a tiered fee schedule is used, Herr Investment Group LLC will not aggregate all of the
client’s accounts for the purpose of reaching a given tier in the fee schedule but will charge each
account separately. This practice may result in the client paying overall higher advisory fees than if
the accounts were aggregated and charged an advisory fee based-off of the single tiered schedule.
As is common, Herr Investment Group LLC discounts or waives its advisory fee for employees,
affiliates, and certain family members.
Herr Investment Group LLC considers cash to be a distinct asset class and the value of such assets
are included in the advisory fee calculation. When yields on cash/money market funds are low
enough, the amount of income those investments generate will not exceed the dollar amount of the
advisory fee that client accounts pay proportionately with respect to those assets. Consequently,
clients will indirectly experience a negative effective return on any cash position during such periods
of low interest rates.
Advisory fees are billed in arrears. For accounts custodied at Interactive Brokers as is generally
required (see Item 12 – Brokerage Practices below), the fee is calculated daily, and billed monthly,
at the annual percentage rate specified in the client’s IAA. For accounts custodied at other than
Interactive Brokers, the calculation method and billing cycle will be specified in the IAA.
In the event the IAA is terminated, the fee for the final billing period is assessed through the effective
date of the termination and the outstanding portion of the fee is billed to the Client.
Direct Fee Debit
By signing the IAA, clients generally provide Herr Investment Group LLC with written authorization
to directly debit their accounts for payment of the investment advisory fees. The financial institution
that acts as the qualified custodian for Client accounts, from which we retain the authority to
directly deduct fees, has agreed to send statements to Clients not less frequently than quarterly
detailing all account transactions, including any amounts paid to Herr Investment Group LLC.
HIG 2A 03202024
Herr Investment Group LLC - Brochure – March 2024
Additional Fees and Expenses
In addition to the advisory fees paid to Herr Investment Group LLC, separately managed account
clients also incur certain charges imposed by other third parties, such as the custodial broker, trust
companies, banks and other financial institutions (collectively "Financial Institutions"). These
additional charges include, but are not limited to, securities brokerage commissions, transaction
fees, redemption fees, short term transaction fees, custodial fees, charges imposed directly by a
mutual fund or ETF held in a Client's account as disclosed in the fund's prospectus (e.g., fund
management fees and other fund expenses), deferred sales charges, 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.
Investment Management Fees – Private Fund
As compensation for its advisory services to the Fund, Herr Investment Group LLC receives a
management fee, payable monthly in arrears, at an annual rate equal to 2.00% of the Fund’s net
asset value, as further outlined in the Fund’s offering documents. Note that earlier investors/limited
partners in the fund are grandfathered under an annual rate of up to 1.85%. The management fee
is not negotiable, although Herr Investment Group LLC, reserves the discretion to waive fees for one
or more investors, in whole or in part, without additional notification to other fund investors. Herr
Investment Group does not collect a management fee from its affiliated and employee investors or
certain of their family members.
Additional Fees and Expenses – Private Fund
In addition to the management fee, each investor in the Fund bears its allocable share of expenses
associated with the operations of the Fund, including expenses arising in connection with the
ongoing offering of interests, governmental filing fees, investment research, relevant subscriptions,
brokerage commissions, charges for transactions in securities and other instruments, custodial fees
and expenses, administrative fees and expenses, reporting expenses, taxes, interest, legal,
compliance and accounting fees, expenses associated with mailing and reproducing offering
materials, communications with investors and prospective investors, regulatory and filing fees,
including Form ADV, Form PF and blue sky filings, marketing, travel, entertainment, education and
conference expenses, insurance coverage, including for Herr Investment Group and its personnel,
as well as litigation and other extraordinary and non-recurring expenses, if any.
Operating Expenses of Special Investments
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