Item 5 Fees and Compensation
Investment Management and Other Services
Clients generally are charged a fixed fee, or a fee based on a percentage of the net market value of
the assets placed under Lavelle's management, typically, 0.5%, subject to a minimum of $50,000.
Fees are negotiable on a client-by-client basis, however, and are determined based on a number of
factors including but not limited to the amount and type of work involved, the size of the relative
portfolios and the amount of Lavelle's resources dedicated to providing the services. Clients will be
billed on a quarterly basis in advance, based on the settlement date balances on the closing day of the
prior quarter as reflected on client statements.
A client may terminate its agreement with 90 days' written notice at any time prior to the expiration date
of the agreement.
Also, as further discussed in Item 10 below, Lavelle will select Independent Managers from those
made available by brokers that act as custodians and brokers for Lavelle's client accounts, such as
Charles Schwab & Co., Inc. ("Schwab") or Fidelity Brokerage Services and National Financial
Services, LLC (together, "Fidelity"). Independent Managers that Lavelle recommends to clients charge
fees in addition to and separately from Lavelle's fees and typically bill clients on a quarterly basis.
Those fees and other terms may be disclosed to clients in each Independent Manager's Form ADV, in
the information provided by the brokers to Lavelle or its clients, or in the account agreements executed
by the brokers and Lavelle and the client. Also, brokerage firms such as Schwab and Fidelity charge
custodial fees and brokerage commissions and transaction fees for effecting certain securities
transactions (i.e., transaction fees are charged for individual securities, certain no-load mutual funds
and certificates of deposit, and commissions and fees are charged for individual securities
transactions). Lavelle may elect to cause client accounts to pay an asset-based fee to the brokerage
firm with respect to some or all of the assets held in the client account. Brokerage firms may charge a
client account additional fees for certain services even when the client account pays an asset-based
fee.
Lavelle typically debits a client's account, if custodied at Schwab, for any amount owing to Lavelle. If
Lavelle causes a client's Schwab custodied account to pay directly, Lavelle submits an automatic
payment on behalf of the client via Schwab given discretionary agreement between Lavelle and
client. Each client will receive from Schwab at a minimum a quarterly account statement confirming
the quarterly fee.
In addition to Lavelle's fees, fees charged by Independent Managers, custodial fees, brokerage
commissions, transaction fees and asset-based fees, a client account that invests in mutual funds or
exchange-traded funds will also incur charges imposed at the fund level (e.g. management fees, and
other expenses).
For clients who invest in SPVs in addition to maintaining a managed account, SPV-related fees
(management and performance-based) are charged separately and in addition to any advisory fees on
public or liquid assets.
SPVs
Lavelle or its affiliate will receive a performance-based carried interest distribution on a liquidity event
or annual performance-based profit allocation, as detailed in each SPV's offering materials. Lavelle
also may receive a management fee as detailed in each SPV's offering materials. As a result of the
carried interest distribution or profit allocation, returns realized by SPV investors are substantially less
than the returns they would realize from engaging in the same activities directly. Relationships with
SPVs are terminable on expiration of the SPV's term, on dissolution of the partnership or on a
withdrawal by Lavelle or its affiliate as the SPV's general partner. SPV investors generally may not
withdraw any capital from an SPV, except as otherwise provided in an SPV's offering documents.
If a client is also paying a discretionary advisory fee to Lavelle, the value of that client's SPV
investment may be included in the fee calculation unless otherwise agreed. Lavelle does not charge
both performance-based fees and advisory fees on the same assets unless explicitly disclosed.. In
addition, SPVs may invest in other private funds. In that case, SPVs will incur fees and expenses
imposed by that private fund (e.g., management fees, performance-based fees, and other expenses).
General Disclosures
Lavelle believes that its fees are competitive with fees charged by other investment advisers for
comparable services. Comparable services may be available, however, from other sources for lower
fees.
The disclosure in this Item 5, together with the disclosure in Item 12, allow a plan that is subject to the
Employee Retirement Income Security Act of 1974 and that invests with Lavelle to use the "alternative
reporting option" to report Lavelle's compensation as "eligible indirect compensation" on Schedule C of
the plan's Form 5500 Annual Return/Report of Employee Benefit Plan.
Lavelle complies with Rule 205-3 under the Investment Advisers Act of 1940, to the extent required by
applicable law. Performance-based fees, profit allocations and carried interest distributions may create
an incentive for Lavelle to make more risky and speculative investments than it would otherwise make.
On termination of any client account, expenses, the pro rata portion of the management fee through
the date of termination are charged to the account. All prepaid but unearned advisory fees are
refunded on termination of a client's account.
Each account is responsible for its own costs and expenses, including trading costs and expenses
(such as brokerage commissions, expenses related to short sales, and clearing and settlement
charges), ongoing legal, accounting, and bookkeeping fees and expenses, and the fees and expenses
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