Item 5: Fees and Compensation
Description
For advisory services for clients who are not qualified investors, the basic fee schedule is based upon a
percentage of the client’s assets under management. While management fees are negotiable, they
generally will not exceed 1% of the market value of the portfolio per year. All fees for separately
managed accounts will be stipulated in the client’s investment advisory agreement. The determination of
the fees will be based on the type and size of the account.
For private fund investors only: Management Fee + Performance Fee
The Management Fee is 1% of a client’s total assets under management that is calculated and billed
quarterly in arrears or advance as determined in the client’s agreement and/or the private fund’s offering
documents. Management Fees are negotiable for some clients in certain circumstances and may be lower
than the stated range.
In addition, qualified clients of Hestia pay a 20% performance-based fee that is calculated and billed
annually.
Performance based fees can only be utilized by qualified clients who meet the following requirements:
i) A natural person who, or a company that, immediately after entering into the contract has at
least $1,100,000 under the management of the investment adviser; or
ii) A natural person who, or a company that, the investment adviser entering into the contract
(and any person acting on his behalf) reasonably believes, immediately prior to entering into
the contract, has a net worth (together, in the case of a natural person, with assets held jointly
with a spouse) of more than $2,200,000 at the time the contract is entered into.
Fee Billing
Hestia may deduct the Management Fees from a client account by instructing the client’s custodian, but
only after obtaining written authorization from the client to deduct advisory fees from an account held by
a qualified custodian. Hestia sends the qualified custodian written notice of the amount of the fee to be
deducted from the client’s account. Hestia also sends the client a written invoice itemizing the fee,
including any formula used to calculate the fee, the time period covered by the fee, and the amount of
assets under management on which the fee was based. Clients have the option to have their fees billed
separately, by making prior arrangement with Hestia. The fees paid by the investors of the private funds
are deducted from their respective capital accounts.
Other Fees
Though not charged by or paid to Hestia, clients incur other additional costs in conjunction with our
management such as brokerage and custodian fees to a brokerage and/or bank; the rates and amounts of
which are determined by the brokerage or bank that clients choose. Please see Item 12 – Brokerage
Practices for more information on our approach to clients’ brokerage and custody options.
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In addition to the fees noted above, investors of the private fund managed by Hestia are responsible for
additional fees specific to the funds such as audit, fund administration fees, legal fees, trading fees,
margin costs, and financing costs. All investors of the private funds must refer to the fund’s respective
offering documents.
This is not exhaustive list of all fees borne by the client.
Fees Paid in Advance
Client’s may terminate their agreement at any time by providing notice to Hestia as required in the
client’s agreement. Any pre-paid fees will be refunded to the client on a pro-rata basis.
Additional Compensation
Neither Hestia nor any of its employees receive any compensation for recommending any particular
investment strategies, including the sale of securities or other investment products.