Item 5 – Fees and Compensation
Compensation for Advisory Services
Generally
Tiptree Advisors generally charges advisory fees to Tiptree Advisors’ advisory clients based on: (i)
client assets under management; and (ii) the performance of an Advisory Account over a specific
time period (such as a year).
Depending on the client, Tiptree Advisors’, in its sole discretion may waive or reduce fees under
certain circumstances, and the rate and type of fee may vary based on:
• the nature of a particular client or investor in a Tiptree Advisors Fund;
• the applicable investment strategy;
• any restrictions or requirements imposed on Tiptree Advisors;
• the amounts invested; or
• the relationship the client or investor has with Tiptree Advisors or its affiliates.
Investment advisory contracts terminate on, or shortly following, one party’s receipt of written
notice of termination from the other party. Investors may withdraw from Tiptree Advisors Funds
pursuant to the terms of the relevant offering memorandum. Investors are typically not able to
withdraw or redeem from the Tiptree Advisors Funds during the middle of the month. To the extent
a withdrawal/redemption is made mid-quarter, the pro-rata portion of the management fee will be
reimbursed to the withdrawing/redeeming investor where applicable if the fee is taken quarterly.
Tiptree Advisors’ fees for advisory services to the Tiptree Advisors Funds are typically calculated
by Tiptree Advisors’ fund administrator and deducted from the Tiptree Advisors Funds.
The Tiptree Advisors Funds offer interests or units (as applicable) only to certain qualified
Investors and admission in the Tiptree Advisors Funds is not open to the general public. Interests
or units (as applicable) are sold only to qualified Investors who are “accredited investors” under
Rule 501 of Regulation D of the Securities Act of 1933, as amended, and “qualified purchasers” as
such term is defined in Section 2(a)(51) of the Investment Company Act of 1940, as amended. Each
Tiptree Advisors Fund’s offering documents contain a detailed description of the applicable fund’s
fee schedule. It is critical that Investors refer to the relevant fund’s governing documents for a
complete understanding of how Tiptree Advisors is compensated for its advisory services.
Tiptree Advisors’ performance-based fees are based on the increase in the net asset value of an
Advisory Account (“net appreciation”) for the relevant time period, which may be subject to a
performance measure (for example, a high water mark, hurdle rate, loss carry forward or other
adjustment) (each, a “Performance Measure”). “Net appreciation” generally includes net
investment profits (realized and unrealized), less investment transaction costs, applicable fees and
all other accrued expenses. A performance fee is generally accrued monthly and payable as of
December 31st of each year.
The Coherence Long/Short Credit Funds typically charge 1% management fee and 10% incentive
fee/allocation.
Separate Account Compensation
In addition, Tiptree Advisors manages various separate accounts for certain related-party
insurance companies. Terms applicable to any separate accounts are negotiated (including
applicable investment restrictions) and vary from those applicable to the Tiptree Advisors Funds.
Separate accounts are typically billed for Tiptree Advisors’ advisory services and the fees are paid
out separately. Some separate accounts are charged asset-based management fees and
performance-based fees and some separate accounts are only charged asset-based management
fees.
Additional Expenses
Tiptree Advisors’ fees are exclusive of, as applicable, brokerage commissions, transaction fees,
origination fees, administration fees and other related costs and expenses, which are the clients’
responsibility. Custodians, broker-dealers, any third-party investment advisers and other third
parties may impose fees on Tiptree Advisors’ clients, such as management fees, custodial fees,
deferred sales charges, odd-lot differentials, transfer taxes, wire transfer and electronic fund fees,
and other fees and taxes on brokerage accounts and securities transactions. Mutual funds and
exchange traded funds also charge internal management fees, which are disclosed in a fund’s
prospectus. These charges, fees and commissions are generally exclusive of and in addition to
Tiptree Advisors’ fees.
The Tiptree Advisors Funds also generally will bear legal, administration and operating fees
(including entity-level taxes and other governmental fees and expenses), internal and external
accounting and auditing expenses incurred in preparing, printing and delivering all reports
(including such expenses incurred in connection with any fund document), insurance premiums
and all filing costs and fees.
The Tiptree Advisors Funds also generally bear all costs and expenses incurred in connection with
the actual or proposed making, financing, holding, monitoring, hedging, management or disposition
of any investments of the Tiptree Advisors Funds (whether such investments or transactions are
consummated or not), including, without limitation, appraisal expenses, fees and expenses of
custodians, brokerage costs, finder's fees, spreads, mark-ups, clearing and settlement costs,
investment banking fees, expenses relating to short sales, commitment fees, financing costs and
interest charges, bank service fees, broken deal expenses and other transactional charges,
consultants', accountants' and other experts' fees, travel and entertainment expenses incurred for
investment-related purposes, legal and due diligence expenses and consulting fees, fees of the
related administrator, tax preparation expenses, external legal, external accounting and auditing
expenses, expenses incurred in preparing, printing and delivering all reports, insurance premiums,
...