Item 5 – Fees and Compensation
Fees payable to us and/or our affiliates by each Client for management and advisory
services are set out in the applicable Governing Documents and in some cases include
a performance-based fee (the “Performance Fee”) and in all cases an asset-based
management fee (the “Management Fee” and, together with the Performance Fee,
the “Advisory Fees”), all of which are charged in arrears. Advisory Fees for the Funds
are generally not negotiable. Advisory Fees for Managed Accounts are negotiated.
Accordingly, certain Managed Accounts have more favorable Advisory Fee
arrangements than other Clients. Winton reserves the right to waive or reduce
Advisory Fees for employees with respect to the Funds or a Managed Account.
Multi-Strategy and Diversified Macro Strategy
Management Fees for Funds that follow these strategies are or are expected to be
charged at up to 1.2% per annum of net assets (before reduction for the relevant
period’s Advisory Fees). Management Fees for Managed Accounts that follow these
strategies are charged at negotiated rates up to 1% per annum of the relevant trading
level of the account. Performance Fees, if any, for Funds that follow these strategies
are charged at between 15% and 20% per annum of net capital appreciation in excess
of unrecouped losses. Performance Fees, if any, for Managed Accounts that follow
these strategies are charged at negotiated rates and are charged at up to 20% per
annum of net capital appreciation in excess of unrecouped losses. Performance Fees,
if any, are generally payable either on an annual or on a calendar quarterly basis.
Trend Following Strategy
Management Fees for Funds that follow this strategy are charged at up to 1% per
annum of net assets (before reduction for the relevant period’s Advisory Fees).
Management Fees for Managed Accounts that follow this strategy are charged at
negotiated rates up to 1% per annum of the relevant trading level of the account.
There are currently no Performance Fees payable for Managed Accounts that follow
this strategy. Performance Fees, if any, for Funds that follow this strategy are charged
at up to 25% per annum of net capital appreciation in excess of unrecouped losses
and will in some cases be at negotiated rates. Performance Fees, if any, are payable
on an annual basis or on a calendar quarterly basis.
In addition to Advisory Fees, we are entitled to be reimbursed for certain fees and
expenses that we incur in connection with our investment advisory services as set out
in the Governing Documents of the Funds. Funds will be subject to other fees, costs
and expenses as set out in the relevant Governing Documents of the Funds. These
will generally include, without limitation and where applicable, brokerage
commissions, transaction fees, administration fees, custodial fees, fees and expenses
associated with the establishment and offering of the Funds, expenses associated
with communication with investors, trading costs, fees and interest associated with
borrowings, directors’ fees and expenses, legal fees, audit fees, company secretarial
fees and expenses, data costs including without limitation market data and third-
party research data attributable to one or more Clients, the costs of technology
service provision, including without limitation cloud computing and third-party
software provision, the costs of proxy voting service providers, fees of paying agents
, the costs and expenses related to the use of third-party service providers and third-
party software and systems to assist in the preparation and submission of regulatory
and compliance filings and other operating expenses. Managed Accounts are subject
to similar fees, costs and expenses, as set out in the offering documents of Managed
Accounts, if applicable. To the extent that a Client invests in securities or other
interests of another collective investment fund, the Client will bear its pro rata share
of such collective investment fund’s expenses, such as investment management fees
and performance fees (where no fee free class of interests is available to the Client
for investment) or allocations and other operating expenses. Not all Clients will be
subject to the same type or amount of fees and expenses. We do not receive any
portion of such fees, costs or expenses. Certain Clients, as set out in the applicable
offering memorandum or investment management agreement, are subject to a
research charge which is used to fund a research payment account (“RPA”) and used
for the purposes of acquiring third-party research for the Clients. The RPA is operated
in order to facilitate compliance with regulatory requirements applicable to Winton
Capital Management Limited. An annual research budget will be agreed with any
participating Client.
On termination of any Managed Account or Fund, any earned, unpaid Advisory Fees
will be due and payable without penalty or other deduction.
Neither we nor our employees accept any compensation from third parties for the
sale (or purchase) of investment products. We receive all our compensation from
Clients.
See Item 6 below for more information about Performance Fees and related conflicts
of interest.
Item 12 below describes the factors that we consider in selecting or recommending
counterparties or brokers for the execution of Client transactions and determining
the reasonableness of their compensation.