Item 5 Fees and Compensation
A. Advisory Services
The Registrant does not provide investment advisory services to individual investors.
Rather, the Registrant's investment services are limited to its management of the affiliated
private fund. As the investment adviser to the affiliated private fund, the Registrant
receives a management fee and/or incentive fees. The Registrant’s compensation for the
affiliated private fund is calculated as follows:
The Registrant’s management fee will be equal to:
(i) 0.02916 of the Net Asset Value of the Institutional Class C (0.35% per annum)
(ii) 0.04166 of the Net Asset Value of the Founders Class A (0.50% per annum)
(iii) 0.0625 of the Net Asset Value of the Regular Class B (0.75% per annum)
The management fee will be prorated for capital contributions accepted on a day
other than the first of a month. No portion of the Registrant’s management fee will be
refunded in connection with any withdrawals from a Limited Partner’s capital
account permitted by the Registrant during a month.
For further information pertaining to the calculation of the Registrant’s management fee
and/or any incentive fees please review the affiliated private fund’s subscription
documents.
B. The affiliated private fund allow for the Registrant to deduct its fees directly from fund
assets in compliance with regulatory procedures. The Registrant deducts fees monthly in
advance, based upon the Net Asset Value of each share class, as described above in Item
5.A, on the last business day of the previous month.
In the event that an affiliated private fund does not have sufficient liquid assets to pay the
Registrant’s fee, the fee shall accrue until such time that the affiliated private fund has
sufficient liquid assets, at which time the Registrant shall collect the full amount of its
fee.
C. The Registrant does not provide investment supervisory services to individual investors.
Rather, the Registrant's investment supervisory services are limited to its management of
the affiliated private fund. The affiliated private fund is a “fund of funds” and does not
have regular frequent interactions with brokers/dealers who execute trades on behalf of
its clients.
However, the Registrant may determine to allocate the affiliated private fund’s assets
among separately managed accounts, and those accounts in turn, may use the services of
a broker-dealer/custodian to execute transactions. Broker-dealers charge brokerage
commissions and/or transaction fees for effecting certain securities transactions.
If the affiliated private fund invests into a private fund not managed by the Registrant, or
if one of the private funds enters into a managed account or other arrangement in which
an unaffiliated third-party provides investment advisory or other services to the private
fund, then an investor in the private fund effectively will incur two levels of advisory
fees: (1) the affiliated private fund’s management fee and performance-based fee or
allocation; and (2) any management fee or performance-based fee or allocation paid by
the affiliated private fund to the unaffiliated third party.
D. Registrant's annual investment advisory fee shall be prorated and paid monthly, in
advance, based upon the Net Asset Value of the given class of stocks, as described above
in Item 5.A, on the last business day of the previous month. The Registrant does not
generally require an annual minimum fee or asset level for investment advisory services.
The Registrant, in its sole discretion, may charge a lesser investment management fee
based upon certain criteria (i.e. anticipated future additional assets, dollar amount of
assets to be managed, etc.).
The Investment Advisory Agreement between the Registrant and the affiliated private
fund will continue in effect until terminated by either party by written notice in
accordance with the terms of the Investment Advisory Agreement. Upon termination, the
Registrant shall refund the pro-rated portion of the advanced advisory fee paid based
upon the number of days remaining in the billing quarter.
E. Securities Commission Transactions. Registrant’s Principal, Richard Simkus, in his
individual capacity, is a registered representative of Frontier Solutions, LLC (“Frontier
Solutions”), a FINRA member broker-dealer. In the event the client chooses to purchase
investment products through Frontier Solutions, Frontier Solutions will charge brokerage
commissions to effect securities transactions, a portion of which commissions Frontier
Solutions pay to Mr. Simkus. The brokerage commissions charged by Frontier Solutions
may be higher or lower than those charged by other broker-dealers. If clients purchase
mutual funds on a commission-basis in a brokerage account, Frontier Solutions, as well
as Mr. Simkus, will also receive Rule 12b-1 fees during the period that the client
maintains the investment.
1. Conflict of Interest: The recommendation that an investor purchase a
commission product from Frontier Solutions presents a conflict of interest, as the
receipt of commissions may provide an incentive to recommend investment
products based on commissions to be received, rather than on a particular
investor’s need. No investor is under any obligation to purchase any commission
products from Mr. Simkus. The Registrant’s Chief Compliance Officer,
Richard Simkus, remains available to address any questions regarding the
above conflict of interest.
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