Muhlenkamp & Company’s compensation consists solely of the fees we receive for investment management.
For managed account clients, our fees are as follows:
$2.50 per $1,000 on the first million dollars Annual Rate:1.00%
$1.25 per $1,000 on the balance Annual Rate: 0.50%
Our minimum fee is $250 quarterly, payable in advance, based on the market value of the assets in the account on the last business day of the calendar quarter. The fee may be paid directly by the client, or deducted from the client’s account by the custodian each quarter.
Multiple accounts belonging to the same client may be combined for the purpose of calculating the overall advisory fee. The fee structure is negotiable in the case of client accounts having assets under management of $30 million or more. The fee structure is also negotiable where Muhlenkamp & Company works in conjunction with another investment adviser who also performs a distinct service for the same client and charges a separate advisory fee for its services. Fees and account minimums may be altered for family or institutional accounts.
Muhlenkamp & Company’s services may be terminated at any time by either party. Upon cancellation of the contract, a prorated portion of the quarterly fee set forth above will be refunded.
Under the terms of certain advisory contracts with its clients, Muhlenkamp & Company only manages a portion of the client’s investments in stocks and/or bonds. The management of these accounts is carried on in essentially the same manner in which other accounts are managed, but it may not be conducted with a complete awareness of each client’s other holdings, some of which a client may wish to keep confidential. The fees charged are the same as those charged to other managed account clients, and payable quarterly in the same manner set forth above.
Clients will incur brokerage commissions and fees in addition to our advisory fees. Clients who own mutual funds in their accounts may also incur fees in the form of fund operating expenses in addition to our advisory fees. Although we have no financial interest in such additional fees, they are relevant in determining the overall cost of a client’s investment program.
There are no other fees or charges for managed account clients.
Muhlenkamp & Company, Inc. does not have performance-based fees, nor do we engage in side-by-side management activities. This means we do not manage accounts with different fee structures such as performance-based fees, hourly fees, or flat fees.
Wrap Fee Programs
Muhlenkamp & Company may serve as a portfolio manager for managed accounts under wrap fee programs sponsored by other firms (“wrap program accounts”). We manage these portfolios using the same investment strategies that we apply to other managed accounts. Wrap program accounts may be traded differently than those of other clients in that Muhlenkamp & Company generally uses the wrap program sponsor (“Sponsor”) to execute transactions. Unless requested by the Sponsor, we generally do not directly provide account statements or one-on-one presentations. The Sponsor is the client’s primary contact and determines the suitability of Muhlenkamp & Company as an investment manager, develops and updates investment guidelines as needed, and determines the amount of assets allocated to Muhlenkamp & Company for management.
Wrap program accounts pay a single fee to the Sponsor, covering the services rendered by both the Sponsor and us as adviser. Each Sponsor pays Muhlenkamp & Company, Inc. a portion of the wrap fee on a quarterly basis based on the value of its client accounts that we manage.