Item 5 Fees and Compensation
The fees and compensation to SRCM are described in our investment management contracts. With
rare exceptions, SRCM will only accept Qualified Clients, and therefore charges clients a
management fee based on an annual rate of 75 basis points (0.75%) of the assets under management,
plus a performance-based fee (described in Item 6 below). SRCM, in its sole discretion, may
negotiate its fees.
For accounts that are not charged a performance-based fee, or for Custom Accounts SRCM charges
a management fee based on an annual rate of 150 basis points (1.50%).
SRCM’s management fees are charged quarterly in advance and deducted directly from Client
Accounts. The management fee rate will be applied to the net value of accounts on margin. Clients
may not elect to be billed for fees incurred, but in limited special situations SRCM may, at its sole
discretion, bill clients for fees in lieu of deducting fees directly from Client Accounts.
The expenses that are charged to the Separate Accounts include, but are not limited to:
brokerage commissions and other transaction costs assessed by the custodian or brokerage
firm,
internal operating expenses at mutual funds or exchange-traded funds, and
markups and markdowns (adjustments to price) charged by a broker-custodian on certain
bond purchases and sales.
One of the conflicts that may arise in connection with management fee and incentive fee
compensation calculation would be a conflict of interests relating to valuation. Valuation of clients’
investments (which will indirectly determine the amount of the management and incentive fee) may
involve uncertainties and judgmental determinations, and if such valuations should prove to be
incorrect, clients could be adversely affected. At times independent pricing information may not be
available for certain securities and other investments. Accordingly, while best efforts will be used
to value all applicable investments in such client accounts fairly, certain investments may be
difficult to value and may be subject to varying interpretations of value.
Upon receiving notice a client is terminating SRCM’s advisory services, SRCM will refund any
unearned prepaid fees. However, SRCM will not refund prepaid fees with respect to client
withdrawals of cash and/or securities.
SRCM will calculate refunds of prepaid fees on a pro-rated basis from the date SRCM completes
its services for the client. If this date is prior to the quarter end, SRCM will calculate the refund
using the days remaining in the quarter after SRCM ceases to provide services. SRCM prorates
the fee by dividing the total fee by the number of days in the quarter and multiplying that amount
by the remaining days in the quarter. The resulting figure will be the refund.
Clients understand and agree that the SRCM fee schedule in effect for any account shall continue
until thirty (30) days after SRCM has notified the client in writing of any change in the fee schedule
that may be applicable to the client’s account(s), at which time the new schedule will become
Swift Run Capital Management, LLC Form ADV: Disclosure Brochure Page | 6
effective unless the client notifies SRCM that an account is not to be continued under the revised
SRCM fee schedule.
SRCM is not compensated in the form of commissions for trades generated in Client Accounts
(please see Item 12 for more information). Further, SRCM and its supervised person(s) do not
otherwise accept sales commissions or similar compensation for the sale of securities or investment
products.