Item 5 - Fees and Compensation
A. Describe how you are compensated for your advisory services. Provide your fee schedule. Disclose
whether the fees are negotiable.
For management of its funds of funds, Method Advisors receives an annual management fee payable
quarterly in advance, as follows: (i) during the three year period commencing from the date of the closing
the management fee will be 0.80% per year based on the total investment contributions made by the
investor (ii) during the period commencing on the day following the third anniversary of the closing
through the 5th anniversary of the closing, the management fee will be .55% per year based on the
investment contributions made by the investor, and (iii) for all periods after the day immediately following
the fifth anniversary of the initial closing, there will be no management fee.
Method Advisors also receives a "carried interest" after certain performance targets are met. Further details
on the calculations of the carried interest are available through the Partnerships’ Limited Partnership
Agreements.
For its non-discretionary advisory services, clients pay an asset-based management fee of 0.75% per year
based on the net asset value of the account, calculated on a quarterly basis. No management fee is charged
on the cash assets of the account.
Both discretionary and non-discretionary management fees are negotiable.
B. Describe whether you deduct fees from clients’ assets or bill clients for fees incurred. If clients may
select either method, disclose this fact. Explain how often you bill clients or deduct your fees.
Method Advisors bills clients directly for fees incurred. Fees are paid quarterly.
C. Describe any other types of fees or expenses clients may pay in connection with your advisory services,
such as custodian fees or mutual fund expenses. Disclose that clients will incur brokerage and other
transaction costs, and direct clients to the section(s) of your brochure that discuss brokerage.
Investors in a Method Advisors’ fund of funds are responsible for their pro rata share of the organizational
expenses of the Partnership, including legal fees. Investors are also responsible for all other expenses of the
Partnership including, but not limited to, the following: (a) accounting fees, costs and expenses of the
Partnership (including, without limitation, fees and expenses of the annual audit of the Partnership, the
preparation of the annual and interim financial statements of the Partnership, and the Federal and state tax
returns of the Partnership), (b) legal fees, costs and expenses of counsel for the Partnership, including any
litigation fees, costs and expenses, and the amounts of any judgments or settlements paid in connection
with any litigation, (c) legal and other fees, costs and expenses of and incidental to the purchase and sale of
portfolio securities to the extent such fees, costs and expenses are not paid by portfolio for others, (d) other
legal fees, costs and expenses incidental to the Partnership and its management and business, (e) costs and
expenses associated with planning and holding annual and any special meetings of the Partners of the
Partnership, (f) Organization Expenses, (g) custodian fees, investment banking fees, transfer taxes,
commissions, brokerage fees and registration expenses, (h) taxes which may be assessed against the
Partnership, (i) costs of liability insurance, (j) interest costs from borrowing, and (k) extraordinary fees,
costs and expenses incurred in operating the Partnership.
When expenses are properly attributable to more than one Fund, the expenses may be allocated among the
Funds. When expenses are shared among the Funds, the Company aims to allocate these expenses in an
equitable manner. As such, the Company has implemented a set of expense sharing guidelines.
Method Advisors’ non-discretionary clients are not charged for expenses incurred by the firm in connection
with the advisory services it provides. However, these clients may pay expenses directly to the investment
partnerships Method Advisors recommends for investment, according to the governing documents of those
partnerships.
D. If your clients either may or must pay your fees in advance, disclose this fact. Explain how a client may
obtain a refund of a pre-paid fee if the advisory contract is terminated before the end of the billing period.
Explain how you will determine the amount of the refund.
Client fees are paid quarterly in advance.
E. If you or any of your supervised persons accepts compensation for the sale of securities or other
investment products, including asset-based sales charges or service fees from the sale of mutual funds,
disclose this fact.
Neither Method Advisors nor its employees accept compensation for the sale of securities or other
investment products, including asset-based sales charges or service fees from the sale of mutual funds.