Item 5 – Fees and compensation
A. Describe how you are compensated for your advisory services. Provide your fee schedule. Disclose
whether the fees are negotiable.
WILLC generally is compensated for its advisory services to each Fund through an asset-based
management fee equal to 1.0% per annum of the Fund’s net asset value, calculated and payable
monthly in arrears.
WILLC also receives performance-based compensation annually from each Fund, paid as an
allocation of profits, equal to 15% of the Fund’s net profits in excess of a certain predefined
benchmark. The performance-based allocation for each Fund also is subject to a high watermark
provision. The performance-based allocation applies only to an investor who is a Qualified Client, as
defined in Rule 205-3 of the Advisers Act.
The fees payable to WILLC by each Fund generally are not negotiable as to any particular investor.
WILLC has, in certain instances, waived or reduced the fees or allocations for a particular Fund that
otherwise would have been payable. Such fee waivers and reductions were applied equally to all
Fund investors.
For its services to the separate account, WILLC currently receives no fixed management fee. WILLC
receives an annual incentive fee equal to 10% of the account’s net profit, subject to a high
watermark provision, generally calculated and paid annually.
The separate account fees are negotiable.
Investors should refer to the Fund’s offering documents for a complete understanding of how WILLC
is compensated for its advisory services. The compensation information above is a summary only.
B. Describe whether you deduct fees from clients’ assets or bill clients for fees incurred. If clients
may select either method, disclose this fact. Explain how often you bill clients or deduct your fees.
WILLC deducts fees from investors’ assets invested in each Fund. In general, as described above,
WILLC receives a management fee paid monthly in arrears and an incentive allocation paid at the
end of each fiscal year or at the time of an investor withdrawal. Investors in the Funds do not have
the choice to be billed directly for fees incurred.
WILLC has negotiated the billing schedule with the separate account client. WILLC bills the client
quarterly, in arrears, for the separate account management fees, if any; and annually, if applicable,
for the separate account incentive fees.
C. Describe any other types of fees or expenses clients may pay in connection with your advisory
services, such as custodian fees or mutual fund expenses. Disclose that clients will incur brokerage
and other transaction costs, and direct clients to the section(s) of your brochure that discuss
brokerage.
Each Fund pays all of its operating and administrative expenses as incurred, including without
limitation: (i) expenses associated with the continuous offering of interests in the Fund; (ii) the
Fund’s legal, tax, accounting, auditing and administrative expenses; (iii) direct trading and
investment-related expenses, including brokerage and transaction fees and expenses; (iv) the costs
of computer software, internet connectivity, price quote feeds, hardware and services purchased or
leased from third parties to handle trading-related activities; (v) solicitation, legal and other
expenses incurred with respect to activism and proxy contests; (vi) interest expense and dividend
expense; and (vii) any extraordinary expenses, the amount of which cannot be estimated.
In addition to the foregoing, WILLC maintains a staff of accountants, bookkeepers, and employees
who prepare each Fund’s daily accounting and trade reconciliation, locate stock for short sales and
manage the Fund’s brokerage relationships. WILLC will pass through to each Fund its share (as
reasonably determined by WILLC) of their salaries, software, systems and overhead.
In addition to costs mentioned above, the 2 Funds together pay all costs related to compensation of
WILLC’s CFO and costs related to maintaining WILLC’s compliance program as mandated by the SEC.
These costs are shared pro rata between the 2 Funds based on Fund net assets. The 2 Funds
together pay CFO-related costs, if any, that may be attributable to WILLC or WILLC’s separate
account.
In recent years, WILLC has sought reimbursement of its proxy-related expenses from Target
companies, with some success. Any such reimbursement is passed through to each Advisory Client
in the same proportion in which it paid the expenses.
The expenses described in this section are expected to constitute approximately 5% to 6% per year
of each Fund’s net assets.
WILLC’s brokerage practices are described further in Item 12 below.
D. If your clients either may or must pay your fees in advance, disclose this fact. Explain how a client
may obtain a refund of a pre-paid fee if the advisory contract is terminated before the end of the
billing period. Explain how you will determine the amount of the refund.
WILLC does not collect fees in advance.
E. If you or any of your supervised persons accepts compensation for the sale of securities or other
investment products, including asset-based sales charges or service fees from the sale of mutual
funds, disclose this fact and respond to Items 5.E.1, 5.E.2, 5.E.3 and 5.E.4.
Not applicable to WILLC.
1. Explain that this practice presents a conflict of interest and gives you or your supervised
persons an incentive to recommend investment products based on the compensation
received, rather than on a client’s needs. Describe generally how you address conflicts that
arise, including your procedures for disclosing the conflicts to clients. If you primarily
recommend mutual funds, disclose whether you will recommend “no-load” funds.
Not applicable to WILLC.
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