ITEM 5 – FEES AND COMPENSATION
5a, b & d: Fee Schedules, Payments & Options
Investment Management
Asset Value Annual Fee
Less than $500,000 1.50%
$500,000 to $2,000,000 1.25%
$2,000,001 to $5,000,000 1.00%
$5,000,001 to$10.000,000 0.90%
$10,000,001 and above Negotiable
Our minimum annual fee is $2,500. In certain circumstances, fees may be negotiable.
The fee includes the time and activities necessary to work with your attorney and/or accountant in reaching
agreement on solutions, as well as assisting them in implementation of all appropriate documents. We are not
responsible for attorney or account fees charged to you as a result of the above activities.
Sheppard fees are deducted from your account by the custodian when we submit an invoice to them. If there is
insufficient cash in your account to pay your fees, an equal balance of securities in your portfolio may be sold to pay
our fee. In addition to our fees, there may be custodial, transaction fees, and mutual fund or similar third party
management fees and charges. See Item 12, Brokerage Practices, for additional information.
Sheppard fees are paid monthly in arrears, with payment due within 10 days from the date of the invoice. Our fee is
determined by taking the percentage rate we charge, times the market value of the account, divided by the number
of days in the year and multiplied by the number of days in the month. The market value is the sum of the values of
all assets in the account, not adjusted by any margin debit. Fees for partial months at the commencement or
termination of our agreement will be billed or refunded on a pro-rated basis contingent on the number of days the
account was open during the month. Monthly fee adjustments for additional assets received into the account during
a quarter or for partial withdrawals will also be provided on the above pro rata basis. Further, it is important to note
that our firm will assess advisory fees on cash and cash equivalents held in clients’ managed accounts.
Compensation for our services will be calculated as set forth in the advisory agreement between us. We may modify
the terms of any agreement by providing written changes to you for signature. While we strive to maintain
competitive fees, the same or similar services may be available from other firms at higher or lower fees.
For purposes of determining value of separately managed accounts, we rely on the values provided by the account
custodian. The custodian provides information about its pricing services in direct communications with its clients.
It is also important to note that in Charles Schwab & Co., Inc. will charge clients a $25 dollar fee to perform wire
transfers. At the discretion of management our firm will agree to refund clients fees incurred for wire transfers.
Third Party Money Manager Fees.
In certain cases, our firm will directly compensate third party managers. As such, the fee charged to clients will not
exceed the maximum fee published above for this service. Our firm will debit fees for this service as disclosed in the
executed advisory agreement between the client and our firm. In no case does the fee paid to third parties by our
firm exceed 0.35% per annum.
In certain cases clients will be required to execute a separate service agreement with third party money managers.
The fee paid to the third party money managers will be outlined in their proprietary service agreement. In these
instances the third party money managers establish and maintain their own separate billing processes over which we
have no control. They will directly bill you and describe how this works in their separate written disclosure
documents. In no case shall the third party fee exceed 0.5% per annum.
Fees for Pooled Investment Vehicles
Opal Sheppard Opportunities Fund I LP
Fees associated with this Fund include an annual management fee of .70%, as well as a performance-based fee or
allocation. Sheppard or the General Partner deducts those fees and/or allocations directly from the Fund. In
addition, the Fund pays all operating expenses and other costs of the Fund, including Fund formation costs, due
diligence costs and expenses, custodial fees, brokerage commissions, fees and expenses charged by mutual funds
and exchange-traded funds (if any), clearing fees, interest and taxes incurred in connection with or related to its
investments. If the Fund invests into a private fund not managed by our affiliate or Sheppard, or if one of the Fund
enters into a managed account or other arrangement in which an unaffiliated third-party provides investment
advisory or other services to the Fund, then an investor in the Fund could effectively incur two levels of advisory
fees: (1) the Fund’s management fee and performance-based fee or allocation; and (2) any management fee or
performance-based fee or allocation paid by the Fund to the unaffiliated third party.
The types of expenses borne and paid by the Fund is much broader than the types of expenses advisory clients bear
and pay as managed account clients. For example, among others, the Fund will pay: all investment related expenses
(including legal fees and the fees of other advisors); due diligence costs; travel and entertainment expenses related
to the Fund and its current or potential investments; tax preparation costs and filing fees; expenses associated with
preparing and distributing financial, tax and performance reports; insurance and bonding costs (including any costs
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