Item 5. Fees and Compensation:
(A) Generally: All fees are individually negotiated. Circumstances considered when
negotiating fees include, without limitation, customary market rates, specialized
guidelines, strategies, fee and service arrangements with the client, relationships
with Firm or Joint Adviser. This practice creates a conflict of interest because some
clients pay more than other clients for advisory services, and not all clients have
the same or similar fee structures.
Management fees for all accounts are calculated based on a percentage of the
value of the investable portfolio (referred to herein as “Management Fees”).
Firm offers investment management services directly to a client or through a joint
advisory arrangement with client, Firm, and a Joint Adviser.
Management Fees will be deducted from client accounts quarterly in advance
based on the values at the end of the prior quarter. The maximum Management
Fee amount due to Firm is 1.00% of the investable portfolio per annum. (For clients
who established accounts with Firm prior to 2022, Management Fees are
comprised of two components, a base fee and a supplemental strategy fee (if
applicable) with each component not to exceed 0.50% of the investable portfolio
per annum, i.e., 1.00% annually. Firm does not offers this arrangement to new
clients.)
Management Fees are set forth in the investment advisory agreement among Firm,
the Joint Adviser, as applicable, and the client. Clients should refer to the
applicable investment advisory agreement for complete information on the fee
arrangement.
With respect to joint advisory arrangements, in addition to the Management Fee,
clients will also pay an additional advisory fee to the Joint Adviser. Clients subject
to joint advisory arrangements should be aware that the combined fees and
expenses associated with managing their portfolio can exceed those which might
be available if the services were acquired separately. Clients should consult with
the Joint Adviser and its ADV brochures for more information on such fees.
(B) Payment of Fees: Where there is an active market and market pricing is readily
available for a security, the Firm will rely upon securities pricing furnished by the
custodian that maintains the client’s account to calculate the fee. When pricing
interests in privately placed pooled investment vehicles, the Firm will generally rely
on the monthly account statements provided by the investment’s management,
plus any net contributions, and any relevant market information that suggests
valuations in those reports are inaccurate.
For private investments where there is not an active market or that pricing for a
particular security is not readily available, the Firm attempts to determine the fair
value by various means, including utilizing the value provided by the custodian
or obtaining the fair value directly from the company of the underlying security.
(C) Additional Fees and Expenses:
Separately managed account clients will also bear any agreed upon expenses as
set forth in the relevant investment advisory agreements.
All fees paid to Firm for investment advisory services are separate and distinct
from the fees and expenses charged by Managers to their investors. These fees
and expenses are described in each Manager’s offering memorandum, private
placement memorandum, subscription agreement, prospectus and/or ADV Part 2.
These fees will generally include a management fee, and additionally may include
an incentive fee, other expenses, and a possible distribution fee. If the Manager
also imposes sales charges, a client may pay an initial, deferred, or ongoing sales
charge. A client may be able to invest in a Manager directly, without the services
of Firm. In that case, the client would not receive the services provided by Firm
which are designed, among other things, to assist the client in determining which
vehicle or vehicles are most appropriate to such client’s financial condition and
objectives.
The client will incur brokerage and other transaction costs charged by broker-
dealer(s) executing the transactions and the custodians maintaining the client’s
assets. These costs include, but are not limited to, brokerage transaction and
money movement costs, commissions, ticket charges, fed fund wire fees, custodial
fees, IRA custodial fees, safekeeping fees, and margin interest. These costs are
in addition to the Firm’s Management Fees and are not shared with the Firm.
(D) Fees Paid in Advance: For a separately managed account, Management Fees
are calculated and deducted from client accounts quarterly in advance.
(E) Termination of Services:
A client agreement may be canceled at any time, by either party, for any reason
upon receipt of written notice. In the event no written notice of termination is
received from the client, closure of all accounts serves as 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.
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