Item 5 Fees and Compensation
Highmore charges a percentage of assets under management to clients. Certain clients are also
charged a performance-based fee. Both asset-based and performance-based fee and account
minimums are negotiable based on a number of factors including size, responsibilities involved, type of
relationship, etc. For Highmore's Highmore Solutions services, Highmore designs project specific
compensation models.
Portfolio Management Services
Our annual fee for portfolio management services varies depending upon the market value of your
assets under our management, the type and complexity of the asset management services provided,
as well as the level of administration requested either directly or assumed by the client. However,
portfolio management services involving both discretionary and non-discretionary management are
typically no more than 2% of asset under management and are generally payable monthly in arrears
and deducted directly from the client's account. Under certain circumstances, Highmore may also
charge a performance-based fee for qualified accounts based on a share of capital gains on or capital
appreciation which is further described in Performance-Based Fees and Side-By-Side Management.
However, services mentioned above, the fees charged, and the method by which fees are charged are
negotiable and are detailed in each investment management agreement. Highmore's fees are separate
from custodial fees, fund expenses and brokerage transactions which clients may pay in connection
with the services that we provide. Please also see the Brokerage Practices section of this brochure.
Clients may terminate the portfolio management agreement upon written notice to our firm. However,
client's invested in private funds or direct investments may be subject to a lock-up provision as
described in the offering documents.
If a client's investment management agreement is terminated or a withdrawal is made from a client
account during a period, the fee payable to the Firm will be calculated based on the value of the assets
on the termination date or withdrawal date and prorated for the number of days during the period in
which the investment management arrangement was in effect.
Highmore imposes a minimum of $20,000,000 for personal accounts and $50,000,000 for institutional
accounts (these minimums are negotiable and can be waived at our discretion).
Advisory Services Offered to Private Funds (Hedge Funds, Private Equity, Real Estate)
Specific information regarding our advisory fees as it relates to private funds can be found in the
applicable Private Offering Memorandum or offering documents. All fees and expenses assessed to
the private funds are fully disclosed to investors in the respective hedge fund's Private Placement
Memorandum or offering documents and in Investor Subscription documents.
In addition to advisory fees, the Firm may also receive a performance-based allocation based on a
share of capital gains on or capital appreciation of the Hedge Fund's assets.
The Hedge Fund's minimum subscription amount is $1,000,000 for individuals and $5,000,000 for
institutions (these minimums are negotiable and can be waived at the investment manager's
discretion).
Investment advice we provide to private funds is under a separate agreement. We may recommend
investments in the hedge funds we manage for our client accounts. Therefore, as a client of our firm,
you are advised that we will receive compensation from private funds where we act as the adviser and
that a conflict of interest exists when investing your assets in the hedge funds we advise. We will only
make such investments where we believe it is consistent with our fiduciary duty and your investment
objectives. We will earn fees from the private funds for investments made in the private funds we
advise and may earn separate fees from you for asset allocation, monitoring, and other services. The
fees that you pay to our firm for investment advisory services are separate and distinct from the fees
and expenses charged by private funds. For tax-qualified accounts with assets invested in the hedge
fund, the advisory fee on such assets will be offset by the amount of the management fee paid to us by
the hedge fund.
Highmore Solutions
The Firm charges a fixed fee for its Highmore Solutions. Highmore Solutions provides services
typically to other investment advisers and institutions including; due diligence, investment sourcing,
investment monitoring, asset allocation, portfolio completion, behavioral analytics, philanthropic
solutions, investment content, and sales support. Highmore may also serve as a sub-advisor in regard
to some Highmore Solutions clients. These fees may be negotiated at the Firm's discretion based on a
number of factors including size, responsibilities involved, and the type of relationship.
Highmore Cash Management
Highmore cash management services fees are negotiated based on a number of factors including size,
responsibilities involved, type of relationship, etc.
Compensation for the Sale of Securities or Other Investment Products
Persons providing investment advice on behalf of our firm are licensed as independent insurance
agents. These persons will earn commission-based compensation for selling insurance products,
including insurance products they sell to you. Insurance commissions earned by these persons are
separate and in addition to our advisory fees. This practice presents a conflict of interest because
persons providing investment advice on behalf of our firm who are insurance agents have an incentive
to recommend insurance products to you for the purpose of generating commissions rather than solely
based on your needs. You are under no obligation, contractually or otherwise, to purchase insurance
products through any person affiliated with our firm.