Item 5. Fees and Compensation
A. We enter into an advisory agreement with each client, pursuant to which the client will
pay Perlmutter Advisors a fee. The Firm will collect its fee by submitting an invoice to
the client for pre-approval and the payment.
Perlmutter Advisors offers investment management services on a fixed fee basis and/or a
performance fee basis. We may offer investment management services on a percentage
of assets under management basis.
Fixed fee amounts will be negotiated and included in the client's advisory agreement.
If we agree to a fee based on a percentage of assets under management, our maximum
percentage fee will be 2% of the assets in the client's portfolio that are managed by the
Firm. The fee will be calculated on either the value or the cost of the relevant assets, as
the client and the Firm shall agree in advance when negotiating the advisory agreement.
The method and frequency of asset valuation will be determined by us and the applicable
client and reflected in the client's advisory agreement.
A performance based fee in the form of a carried interest in IAC, not to exceed 20% of
the cash from sales, refinancing and other capital transactions available for distribution
after the return of invested capital, is provided to affiliates of the Firm. The performance
fee is provided for in the IAC limited liability company agreement.
The fees payable by the Trust and IAC are fixed fees, payable in arrears.
B. Management fees are charged and invoiced in arrears, monthly to IAC and quarterly to
the Trust. We do not typically charge a set-up fee.
C. Client accounts are subject to regulatory fees, transaction costs, custodian and
sub-custodian fees, professional fees, consulting fees, reasonable travel costs, property
management fees and other costs and expenses, regardless of whether IAC or the Trust,
as the case may be, shall realize any profits. The Trust also reimburses the firm for
reasonable travel expenses incurred in carrying out its duties under the investment
management agreement, between the Firm and the Trust. Each member of an Operating
Company will be allocated a share of the cost of such Operating Company. For example,
IAC (and thereby its members) is subject to property management fees, leasing
commissions, sales commissions and financing origination fees. In negotiating fees
payable to third party service providers, we make commercially reasonable efforts to
minimize those costs.
In addition, the Firm may perform other related services with respect to client
investments in real estate and charge market rate fees for such services, all as agreed to in
the advisory agreement to be entered into between the client and the firm.
All additional fees to Perlmutter Advisors and its affiliates will be payable in arrears at
the end of each quarter.
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D. We do not charge clients in advance.
E. Neither Perlmutter Advisors nor its supervised persons accept compensation for the sale
of securities or other investment products.
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