Item 5. FEES AND COMPENSATION
The annual fee for Portfolio Management Services will be charged as a percentage of assets
under management pursuant to an investment agreement entered into by and between
Montrusco Bolton and each client. The annual fee will typically range from 0.20% to 1.12%
depending on the type of mandate and the amount of assets placed under management.
Except in the case of Fund-level fees, as described in more detail below, the Portfolio
Management Services fee is negotiable in the sole discretion of Montrusco Bolton.
Clients are invoiced or their account directly debited, as authorized, in arrears at the end of
each calendar quarter. While fees are charged quarterly in arrears, they are calculated
monthly based upon the value of the portfolio (market value or fair market value in the
absence of market value) on the last day of each month-end for the quarter as determined
by the custodian.
Fees are generally assessed on the market value of all client assets under management,
including cash and cash equivalents, but exclude any non-managed assets held in client
accounts. In cases where there is an insufficient cash balance in the account to cover fees
for services, Montrusco Bolton will sell securities in the account to raise the necessary funds,
unless otherwise agreed upon with the client or specified in the clients or firm investment
agreement or policies. Any securities for which market value is not available are valued
pursuant to internal valuation processes, protocols and procedures, as more fully described
below.
Under certain circumstances, Montrusco Bolton groups certain related client accounts for the
purposes of determining the annualized fee. There is also a minimum required investment of
$10,000,000 for separate managed accounts and $150,000 per Montrusco Bolton Fund.
Montrusco Bolton has the sole discretion to waive this minimum required investment. At
times, Montrusco Bolton waives this minimum required investment for friends, supervised
persons and their immediate family members as well as others in its sole discretion.
General Information
Personal Investments in Funds: Certain executive officers and/or other employees of
Montrusco Bolton have invested or may invest a portion of their personal net worth in one or
more of the Funds.
Negotiability of Fees: In certain circumstances, all fees and account minimums may be
negotiable. In addition, certain family members and personal acquaintances of Montrusco
Bolton’s affiliated persons receive advisory services at a discounted rate which is not
available to advisory clients generally. Certain clients are also party to side letters that
provide for specific fee arrangements or other terms that differ from the standard investment
agreement. Montrusco Bolton’s Pricing Committee reviews each new account and fee
assessed to reasonably ensure pricing practices are reasonable and consistent with those
applied with other clients. Fees and services are reviewed and re-evaluated regularly, at a
minimum on a semi-annual basis, or more frequently as needed, to reasonably ensure they
remain competitive with outsourcing alternatives and continue to serve the best interests of
clients. Fees are clearly disclosed to all clients.
Valuations and NAV Corrections: As disclosed above, client account assets are valued
based on market value, or in the absence of market value, fair market value. To the extent
possible, Montrusco Bolton relies on the valuations provided by third parties, such as the
account custodian or third-party pricing service. When there is an error in the calculation of
a Montrusco Bolton Fund’s net asset value, the error will be corrected retroactively, subject
to certain materiality thresholds. The materiality threshold at which investor accounts are
corrected and the applicable Fund is made whole is 50 basis points of NAV. The correction
of investor accounts is subject to a further materiality threshold of $25, below which
individual investor accounts need not be reprocessed.
Side Letter Arrangements: Montrusco Bolton (or the General Partner of the relevant
Montrusco Bolton Fund, as appropriate) has and may in the future, waive or modify the
terms of Fund investment for certain large, strategic or seed investors, side letters or
otherwise, in its sole discretion, including but not necessarily limited to, a waiver or lowering
of the Management or Performance Fees or fee structure. Montrusco Bolton may also agree
to increased or more frequent performance reporting.
Termination: A client agreement may be canceled at any time, by either party, for any
reason upon receipt of 30 days written notice. Upon termination of any account, any prepaid,
unearned fees will be promptly refunded, and any earned, unpaid fees will be due and
payable. The client has the right to terminate an agreement without penalty within five
business days after entering into the agreement. Investors in a Montrusco Bolton Fund,
should refer to the appropriate Fund’s private placement memorandum and governing
documents for information regarding redemptions and withdrawals of investments.
Other Expenses: Clients should also note that, although they will not incur fund-level fees
on investments made in most Montrusco Bolton Fund investments, they typically will incur a
pro rata share of applicable fund expenses including, but not necessarily limited to, audit,
legal, trustee, transfer agent and custodian fees, as well as expenses related to the
preparation of reports for and communications with investors. Montrusco Bolton has
implemented procedures to ensure the fair allocation of such expenses among managed
funds and related entities, in accordance with applicable regulatory guidance, to mitigate
potential conflicts of interest.
In addition to fees paid to our firm, clients will also be responsible for the fees and expenses
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