Item 5 – Fees and Compensation
Management Fees
SMAs
For providing advisory or sub-advisory services to SMAs, NAA is generally paid a monthly or
quarterly management fee, which is based upon a percentage of the client’s assets under
management. The management fee is equal to a mutually agreed upon annual fee prorated and
multiplied by the value of the client’s assets as of each calendar month-end or quarter-end, as
applicable.
Fee Schedule
Annual SMA 0.20% to 0.65% of client’s assets under
Management Fee management
Fees are generally based on the investment strategy of the SMA and breakpoints in fees based on
amount of assets are available. Fees are negotiable based upon the type of service provided, the
size of the account, and the relationship between the client and NAA. In addition, NAA may waive
or reduce its Management Fees at its sole discretion. The fee schedule may also be modified by
NAA upon notice to the client and upon the client’s signed, written consent.
The Management Fee is calculated and accrued monthly and is generally payable monthly or
quarterly in arrears, as applicable, subject to any different payment and calculation terms in a
client’s IMA. The fee for the period in which an account becomes effective and the period in
which an account is terminated, in each case if the account is not in effect throughout such period,
will be pro-rated for the number of days in which the account was in effect. Management Fees are
typically billed to clients on a monthly or quarterly basis, as applicable.
Management Fees may be withdrawn directly from the client’s accounts with the client’s written
authorization or invoiced and billed directly to the client with payments due within 30 days of
receiving the invoice. Clients may select the method in which they are billed.
In some circumstances, NAA and a client may agree that management fees will be payable in
advance. Should an SMA client terminate an advisory arrangement, where management fees have
been paid in advance, the client will receive a pro rata rebate of the allocable portion of the fee
not earned by NAA during the period.
Direct Indexing Clients
For providing sub-advisory services to direct indexing accounts, NAA is generally paid a monthly
or quarterly fee, which is based upon a percentage of the client’s assets under management. The
fee is equal to a mutually agreed upon annual fee prorated and multiplied by the value of the
client’s assets as of each calendar month-end or quarter-end, as applicable.
Fee Schedule
Annual Direct Index 0.15% to 0.60% of client’s assets under
Sub-Advisory Fee management
Fees are generally based on the investment strategy. Fees are negotiable based upon the type of
service provided, the size of the account, and the relationship between the adviser and NAA. In
addition, NAA may waive or reduce its fees at its sole discretion. The fee schedule may also be
modified by NAA upon notice to the adviser and upon the adviser’s signed, written consent.
The sub-adviser fee is calculated and accrued monthly and is generally payable monthly or
quarterly in arrears, as applicable, subject to any different payment and calculation terms in the
agreement. The fee for the period in which an account becomes effective and the period in which
an account is terminated, in each case if the account is not in effect throughout such period, will
be pro-rated for the number of days in which the account was in effect. Fees are typically billed
to clients or the adviser on a monthly or quarterly basis, as applicable.
Sub-Advisory fees may be withdrawn directly from the client’s accounts with the client’s written
authorization or invoiced and billed directly to the client. Clients may select the method in which
they are billed.
In some circumstances, NAA may agree that the sub-advisory fees will be payable in advance.
Should an adviser terminate the arrangement, where fees have been paid in advance, the client will
receive a pro rata rebate of the allocable portion of the fee not earned by NAA during the period.
Private Fund Fees
The Management Fee (and other fees) applicable to any Private Fund will be set forth in the Private
Fund’s Private Placement Memorandum, or other applicable offering documents. Fees for sub-
advisory services provided to Private Funds are negotiable based upon the totality of services
provided and the relationship between the client and NAA.
NAA charges the Master-Feeder Hedge Funds a fixed management fee at the Master Fund level
at the monthly rate of 0.125% (i.e., approximately 1.5% annually) with respect to Class A Shares
or 0.104% (i.e., approximately 1.25% annually) with respect to Class I Shares of the net asset value
of each series of offered shares (before the making of any Performance Allocation, which is
discussed below, and the deduction of any accrued Management Fee) payable monthly in arrears
(generally within 15 days after month end), and prorated for partial periods.
Performance Allocation
In addition, with respect to the Master-Feeder Hedge Funds, an Advisory Affiliate of NAA is
entitled to receive a performance allocation equal to 15% of any appreciation in the net asset value
of the shares of the Master Fund, subject to exceeding a “High Water Mark” and an applicable
“Hurdle Rate” (i.e., the minimum amount of profit or returns a hedge fund must earn before it can
charge an incentive fee).
It should be noted that the fees paid to the Master-Feeder Hedge Funds are negotiable by investors
only prior to an investment in the Funds, at the discretion of NAA or its Advisory Affiliates.
Mutual Fund Fees
Fees for the Mutual Funds are described in each fund’s prospectus and statement of additional
information.
Licensing and Model Portfolio Fees
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