Item 5 – Fees and Compensation
Markin is compensated by both asset-based management fees and performance-based fees
(together, “Advisory Fees”). The Firm’s asset-based fees are calculated based upon a percentage
of the net asset value of Clients’ assets under management. Performance-based fees are charged
for certain strategies only offered to “qualified clients,” as defined by Rule 205-3 of the
Investment Advisers Act of 1940, as amended (the “Advisers Act”), and are based upon a
percentage of the net profits of the account being managed as of quarter end.
Fees for investment advisory services are negotiable and vary among Clients, depending in part
on the size of the account, the scope and complexity of the services provided, the strategy
selected, and other factors. Advisory Fees may be lowered or waived at the Firm’s discretion.
When calculating net profits, performance-based fees are based on absolute returns over the
quarter and depending on the Client, may be subject to high water marks. Under a high water
mark procedure, Markin is eligible to receive a performance-based fee as to an account for a
particular quarter only if and to the extent that the appreciation in the net asset value of that
account for that quarter exceeds any depreciation in the net asset value for that account that has
not been recouped with a lookback duration of a pre-determined length. Generally, the high-
water mark procedure prevents the Firm from receiving a performance-based fee on profits that
simply restores previous losses. If a Client makes a withdrawal to an account that has
unrecovered losses, those unrecovered losses as to that account will be reduced in proportion to
the withdrawal that is being made. Once made, performance-based fees will not be reduced by
losses incurred in later periods.
The specific manner in which Advisory Fees are charged and collected is established in the
Governing Documents. Fees may vary between Clients and strategies. For Advisory and Sub-
Advisory Clients, the Firm’s asset-based management fees are typically paid monthly in arrears
based upon the ending market value of the applicable account(s). For the initial month, the asset-
based management fee is prorated. Cash, accrued interest, and the value of any securities held
on margin will be included in the fee calculation. Performance-based fees are due in arrears on
a quarterly basis. In most instances, per a written authorization provided by the Client (or by the
Sub-Advisory Client’s primary adviser, as applicable), the custodian will calculate and deduct
the Advisory Fees due from the Client’s account and remit payment of such fees to Markin.
Advisory and Sub-Advisory Clients should receive from their custodian an account statement at
least quarterly, which shows the deduction of fees and transactions during the period.
Upon termination of the advisory relationship, Advisory and Sub-Advisory Clients will be
charged fees on a pro-rata basis based upon the number of days in the month for which advisory
services were provided.
For the Funds, management fees are paid monthly in advance and are computed separately for
each Investor based upon the net asset value of each Investor’s capital account. Performance-
based fees are calculated in arrears on a quarterly basis and are subject to a high-water mark as
described in each Fund’s Governing Documents.
Fee Schedule
Markin’s asset-based fee is generally equal to 75-200 bps of the net asset value of the Advisory
or Sub-Advisory Client’s account. Markin’s performance-based fees generally range from 10-
20% of net profits subject to high-water marks. For Sub-Advisory Clients, Markin’s fees may be
in addition to any fees charged by the Sub-Advisory Client’s primary adviser and Sub-Advisory
Clients should reference their primary adviser’s Form ADV and advisory agreement for further
information. For the Fund, Markin’s asset-based fee ranges from 150-200 bps of the net asset
value, and it charges a performance-based fee of 20% of net profits.
As to capital contributed on a date other than the first day of the month, Markin is paid a prorated
management fee.
Expenses and Other Costs
In addition to Markin’s Advisory Fees, Clients will incur brokerage commissions and other
related costs and expenses in connection with transactions in their accounts. Clients may also
incur charges imposed by custodians, broker-dealers, and other third parties such as custodial
fees, account maintenance fees, activity or inactivity fees, wire transfer fees, electronic fund
transfer fees, termination fees, postage and handling charges, exchange fees, and other fees and
charges on accounts or transactions. These additional fees and expenses are exclusive of and in
addition to the Advisory Fees paid to Markin, and Markin will not receive any portion of those
charges.
Markin typically invests Clients’ assets in exchange-traded funds. Clients investing in exchange-
traded funds will also bear indirectly as fund shareholders their proportionate share of the fund’s
internal expenses, which include management fees paid to the ETF’s adviser. These internal fees
and charges are known as the ETF’s expense ratio. Each ETF’s expense ratio will vary over time
and is disclosed in its prospectus. Markin does not receive sales charges from exchange-traded
funds and does not share in any expense ratios.