Item 5 – Fees and Compensation
This section describes our basic fee schedule. VCA reserves the right to negotiate all fees and
annual minimums based on individual client considerations, including but not limited to, number and
frequency of reports and client meetings, individual security investments versus common or
collective funds or mutual funds, investment guidelines and restrictions, or account size. We believe
that our fees are competitive with those charged by other investment advisers for comparable
services, but other firms may offer similar services for lower fees.
The specific manner in which fees are charged is established in a client’s written agreement with
VCA. VCA typically charges its clients a fixed percentage fee per annum for investment advice
based on the market value of the assets under management, payable quarterly in arrears. In limited
circumstances, we may offer fixed or other fee arrangements. Assets under management include a
client’s uninvested cash position for which VCA does not provide investment advice. First and last
quarter fees are generally calculated based on the number of days in the quarter VCA managed the
account. VCA will invoice the client or the client’s custodian directly if instructed by the client in the
investment advisory agreement or other written authorization. Clients can elect to be billed directly
for fees or authorize VCA to directly debit fees from their accounts. If you direct your custodian to
pay VCA from your account, your custodian should send a quarterly statement directly to you, which
should disclose transactions made in the account and VCA’s fees. VCA (or its service provider) will
generally receive copies of the custodian’s statements in paper or electronic form. It is important
that you compare the client reports you receive directly from us to the official custodial records you
receive from your custodian. VCA’s standard advisory contract is cancelable by either a client or
VCA thirty days after receipt or delivery of written notice. Other termination conditions may be
negotiated to accommodate special client requirements.
When VCA uses an affiliated or unaffiliated subadviser in providing advisory services, clients will not
incur any increase in advisory or other fees as a result of such sub-advisory arrangement. VCA
generally shares its fees with the entity providing sub-advisory services to VCA (in the case of
certain affiliates, this can be affected through the affiliated subadviser receiving the fee and
allocating a portion of the fee to VCA through intercompany transactions).
Our fees are exclusive of brokerage commissions, transaction fees, and other related costs and
expenses which will be incurred by the client. Refer to “Item 12. Brokerage Practices” for more
information.
To the extent that a client’s assets are invested in an account overseen or held by the client’s
trustee or custodian, the client should be aware that the trustee or custodian may also charge
management or transactional fees with respect to such assets. Mutual funds, UCITS, ETFs and
alternative investments bear their own operating expenses, including compensation paid to their
advisers and other service providers as well as other expenses and fees disclosed in their
respective prospectus or offering documents.
This Brochure describes VCA’s services provided to the following types of clients: institutional
accounts private funds, and collective funds. VCA’s separate Form ADV, Part 2A brochure
entitled: “Managed Account/Wrap-Fee Programs, Investment Model Delivery and Manager
Recommendations to Unaffiliated Third Parties Brochure” provides descriptions of our services
provided to such client types.
The written terms of each client’s contract will prevail with respect to all of those strategies listed
below. In addition to those listed below, VCA may develop new strategies managed in seed
accounts which may be offered with negotiated fees. Standard fee schedules and minimum
separate account size for strategies directly managed by VCA, (not utilizing subadvisers)
Advisory Fees – CITs
VCA receives fees for providing discretionary advisory services to CITs. VCA does not maintain a
standard fee schedule for discretionary services to CITs. The advisory fees are based on assets
under management and typically negotiated with, and paid by, each CIT pursuant to an agreement
between the parties and will vary by CIT and strategy.
Advisory Fees – Institutional / Other
VCA provides investment advisory services to CITs; UCITS authorized under the European
Directive; institutional clients including pension and profit-sharing plans, endowments and
foundations, governmental entities, other corporate entities and high net worth clients. To the extent
that these client accounts are invested in mutual funds, these funds generally charge a
management fee for their services as investment managers. This management fee, along with other
charges, is included in the “expense ratio” of the fund. These fees are described in each fund’s
prospectus and are in addition to the fees you pay to VCA. With the exception of our asset
allocation account clients, when a portfolio manager of one of our subadvisers determines to invest
assets of an individual discretionary account in a mutual fund (an affiliated registered investment
company) for which it (or an affiliate) also acts as adviser and/or subadviser and receives an
investment advisory fee, VCA will not charge an account level fee on the market value of assets
held in the affiliated mutual fund.
VCA manages Private Funds as an investment manager to, and receives an advisory fee based on
an investment management agreement with its parent company, Virtus Partners, Inc., who is the
managing member.
If a client account has chosen an asset allocation strategy using mutual funds or ETFs, an account
level asset allocation fee is generally charged in addition to the management fees the funds pay to
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