Item 5—Fees and Compensation
A. Opus is paid for its investment advisory services through an asset management fee,
typically calculated based on average fair market value of assets under management with
Opus (the “Asset Management Fee”). Additionally, consistent with a client’s investment
management agreement with Opus (an “Investment Advisory Agreement”), clients typically
bear certain out-of-pocket expenses incurred by Opus in connection with the services
provided to the client. The standard fee scales for strategy specific clients and for insurance
clients investing in a mix of strategies are shown below. The Asset Management Fee and
other fees described herein are generally subject to modification, waiver or reduction by
Opus in its sole discretion, which may not be disclosed to other clients. Fees may differ
from one client to another. Services paid to some Affiliated Clients are, in certain instances,
charged at cost.
SEPARATE ACCOUNT MANAGEMENT
Capital Preservation & Income
0.20% per annum on the first $50 million
0.15% per annum on the next $50 million
0.10% per annum thereafter
Short Broad Market
0.30% per annum on the first $25 million
0.25% per annum on the next $25 million
0.15% per annum thereafter
Intermediate Broad Market
0.30% per annum on the first $25 million
0.25% per annum on the next $25 million
0.15% per annum thereafter
Investment Grade Core
0.30% per annum on the first $25 million
0.25% per annum on the next $25 million
0.15% per annum thereafter
Passive Equity
0.10% per annum
Equity Transition Strategy
0.25% per annum
All Other Strategies
0.35% per annum on the first $10 million
0.25% per annum on the next $15 million
0.20% per annum on the next $25 million
0.15% per annum thereafter
The Asset Management Fee includes investment management services, amortized cost
accounting services, client reporting, client meetings. Coordinating custody and Schedule
D reporting are each separately available. In addition to the Asset Management Fee,
certain advisory clients compensate Opus for coordinating custody through a third-party
"qualified custodian" at rate of 0.05% per annum on assets under management. This
service is no longer offered to new investors. Schedule D reporting is available for the
greater of .05% of average fair market value of assets under management with Opus or
$16,000 per year.
All fees are subject to negotiation Factors considered may include the capabilities of the
client-selected custodian that would impact trade affirmation and settlement, as well as
daily cash and position reconciliation. Schedule D reporting includes providing Schedule D
reports and files, and other related investment schedules and disclosures that are filed by
the insurance company with the National Association of Insurance Commissioners (NAIC)
and/or the individual states, as required.
B. Each client’s Investment Advisory Agreement describes how fees are charged by
Opus. Opus will typically bill its fees on a quarterly basis, in arrears. Generally, fees for
existing clients are assessed based on the average fair market value of applicable assets at
the close of business on the last business day of each calendar month during the quarterly
period, unless the client’s Investment Management Agreement states otherwise. Typically,
Asset Management Fees for new investors will be assessed based on the average daily fair
market value during the quarterly period, unless the client’s Investment Management
Agreement states otherwise. At termination of an account, any earned, unpaid fees will be
due and payable. Accounts initiated or terminated during a calendar quarter are charged a
pro-rated fee.
C. Client Expenses. Each client pays for expenses relating to it, including, but not
limited to, fees and charges imposed by custodians, brokers and other third parties such as
brokerage commissions, fees and commissions and discounts incurred in connection with
the purchase or sale of securities, transfer, registration, transaction fees, and other related
costs and expenses, custodial fees, deferred sales charges, odd-lot differentials, transfer
taxes, wire transfer and electronic fund fees, and other fees and taxes on brokerage
accounts and securities transactions. Certain clients may receive custodial coordination
services per their Investment Advisory Agreement, and the associated custodial fees will be
paid by Opus on their behalf. Mutual funds and exchange traded funds (“ETFs”) also charge
internal management fees and have other expenses of the type described above, which are
disclosed in an ETF’s offering documents and fund’s prospectus and are paid indirectly by a
client.
These charges, fees and commissions are in addition to Opus’ Asset Management Fee, and
Opus shall not receive any portion of these commissions, fees, and costs except for those
additional services provided for in the Investment Advisory Agreement.
D. Brokerage Fees. When a broker is used in connection with an investment for an
account, such client will incur brokerage and other transaction costs, as described above.
Item 12 further describes the factors that Opus considers in selecting or recommending
broker-dealers for client transactions and determining the reasonableness of their
compensation (e.g., commissions).