ITEM 5 – FEES AND COMPENSATION
FEE CALCULATION METHODS
LFC typically charges the greater of an annual minimum fee or a percentage based on the fair market
value (“FMV”) of your assets under management (“AUM”). The FMV of your AUM, which includes
all funds and securities under LFC's investment authority, as well as any client-directed purchases in
managed accounts—is calculated on the last business day of each quarter for billing purposes. While
LFC will execute client-directed purchases in managed accounts, you are responsible for monitoring
these specific investments. LFC may also provide services for a flat fee, hourly rate, or other
compensation method as mutually agreed upon.
The calculated fee is tiered as follows:
• 1.0% of fair market value of managed assets less than $10 million; plus
• 0.75% of fair market value of managed assets $10 million to $20 million; plus
• 0.50% of fair market value of managed assets $20 million to $30 million; plus
• 0.35% of fair market value of managed assets over $30 million.
FMV is typically the value at which the assets trade in the secondary market but could also be a
valuation provided by an outside source such as an administrator, auditor, or pricing service, or a
valuation described by an investment entity’s offering documents. Private equity and real estate
investments for which a current FMV is not readily available are reflected at the most recent
valuation provided by the fund manager, estimated valuation from an independent asset appraisal, or
at original cost, adjusted for returns of capital distributions, as applicable.
Fees are billed quarterly in advance and typically deducted directly from LFC managed accounts on
a prorated or other specified allocation. Alternatively, by request and approval, fees may be paid by
check, ACH or credit card instead of being deducted from managed accounts. Transaction fees
associated with ACH or credit card payments are the responsibility of the client and will not be
credited towards LFC’s quarterly fee.
For new clients, if relationship/billing start date is other than the end of the billing period, the first
quarter’s fee will be prorated based on the date the contract is signed by the client(s) and deducted
in the following quarter along with the second quarter’s fee. In the event a client terminates their
agreement with LFC before the conclusion of a billing period, LFC will refund the client a prorated
amount for the remainder of that billing period.
Clients who have invested in an LFC Partnership/Private fund and for whom LFC manages other
assets will receive a credit for their share of the Partnership/Private Fund’s management fees to avoid
double billing.
On occasion, LFC recommends that certain qualified clients consider an investment in unaffiliated private
investments. These investments do not pay LFC an investment fee. LFC’s role relative to these
private investment funds shall be limited to initial and ongoing due diligence and investment
monitoring services. If a client decides to participate in such an investment, the FMV or estimated
valuation, as described above, of that investment will be included as part of a client’s AUM for
purposes of calculating LFC’s fee.
Please Note: LFC clients are under absolutely no obligation to consider or make an investment
in an unaffiliated private investment fund.
Fee Differentials: We price our advisory services based upon various factors. As a result, our
clients could pay diverse fees based upon the market value of their assets, the complexity of the
engagement, related accounts with LFC, the level and scope of the overall investment advisory
services to be rendered and client negotiations. LFC may, in its sole discretion, negotiate to charge
a lesser fee based upon certain criteria, such as anticipated future earning capacity, anticipated
future additional assets, dollar amount of assets to be managed, related accounts, account
composition, pre-existing/legacy client relationship, account retention and pro bono activities.
Family Office Services Fees
Depending on the scope of Family Office services provided, fees may be included in our basic fee
structure or billed as a separate, additional fee.
Company Retirement Plan Consulting Services
The terms and conditions of LFC’s retirement plan consulting services shall be set forth in a
Retirement Plan Consulting Agreement between LFC and the plan sponsor. LFC clients will
generally pay a fee of 0.35% of the FMV of the plan’s assets under advisement.
Additional Fees and Expenses
Fees payable to LFC do not include fees associated with purchasing or selling securities for your
account(s). Below are some examples of fees or expenses that you may incur and are paid directly
to third parties. See Item 12 for more details. These fees are charged by your broker-dealer, custodian,
mutual fund, or other investment adviser. LFC is not affiliated with any broker or custodian. We do
not receive, directly or indirectly, any of the fees charged to you.
• Brokerage commissions;
• Transaction fees;
• Investment management fees, advisory fees, performance fees and administrative fees
charged by Mutual Funds (MF), Exchange Traded Funds (ETFs), sub-advisors, hedge
funds, or other investment vehicles;
• Custodial fees;
• Deferred sales charges (for mutual funds or annuities);
• Transfer taxes; and/or
• Wire transfer and electronic fund processing fees.
Product Specific Fees and Expenses
• LFC Partnerships
LFC manages and receives compensation (management fees and/or administration costs)
from the firm’s affiliated private funds, LFC Horizon, LFC Matrix Resources & LFC
Novus. As stated above, LFC does not charge a separate fee on those assets to clients who
own an interest in the funds. LFC Equity Plus Tail Protection Fund, LLC, a Fund that is
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