You can invest with ChainStreet Capital under either asset-based management fee or performance-only basis. You can choose either depending on your qualification and choice but ChainStreet never charges any set up or redemption fee.
Asset-based management fee structure: can hire us on an asset-based management fee arrangement.
Total Asset Under Management Yearly Fee Example First $1- 1,000,000 1.4% AUM = $400,000 Yearly Fee = 1.4% of $400,000 Subsequent $1,000,000 – $5,000,000 1.00% AUM = $1,700,000 Yearly Fee = (1.4% of $1,000,000) + (1% of $700,000) Subsequent $5,000,000 – any amount 0.5% AUM = $5,300,000 Yearly Fee = (1.4% of $1,000,000) + (1% of $4,000,000) + (0.5% of $300,000)
You pay us on quarterly basis. The 1/4th of the yearly fee each quarter. You pay us in arrears at the end of each quarter based on account value at the end of quarter. For example – 100K is account value at the end of the quarter then 0.35% ( 1/4th of the yearly fee) of account value is charged on your account at the end of the quarter. We waive our management fee for the first partial month. If you leave in the middle of the quarter then you pay the management fee on pro-rated basis. Brokerage firm will charge the applicable trading and custodian fees from your account.
If your account grows, we earn more; if you are losing money, we earn less. You can invest or add money and leave at any time.
Performance-only fee structure: Due to security regulations only Qualified investors can hire us on Performance-only fee structure. No management fee based on asset is charged. A performance fee equal to 20% of New Profits (Realized + Unrealized P/L) is assessed after the period of at least one year. High Water Mark (HWM) will be used for performance based fee calculation. HWM is the previous high in the individual account (adjusted for deposit, withdrawals and fee). In other words, if an account loses money over a period, the account must first recoup previous losses and then any profit above the HWM is subject to a 20% performance fee.
Example: All numbers presented in this example are arbitrary and are presented for illustration purposes only. They in no way reflect performance either good or bad.
Assume the performance fee of 20%.
Assume a total starting Account value of $1,000,000.The high-water mark is set to $1,000,000.
We will not get paid unless your account value grows higher than $1,000,000 (current high-water mark).
Assume that at the end of the first year the Account has grown to $1,200,000. This equates to a net profit of $200,000. The fee is calculated at 20% of that net profit, leaving $1,160,000. Client’s return is 16% for that year. The Account now has a high-water mark of $1,160,000. Assume that at the end of the second year the Account value has remained at or below $1,160,000. Because the Account has not exceeded the “high water mark” of $1,160,000, no fee is assessed at the end of the second year. The basis,or high-water mark, remains at $1,160,000. No fees will ever be assessed until the account exceeds the high-water mark of $1,160,000. The high-water mark will be adjusted for additions, withdrawals and fees. Once a new high-water mark is established, another lesser high-water mark cannot be established unless it gets adjusted due to withdrawal.
Simply said, if you are losing money, you don’t pay us a dime. You can invest or add money anytime and leave at the end of any quarter.
In nutshell, you pay either performance based fee or asset based management fee.
What is an qualified investor?
A Qualified investor is generally someone who has at least $1 million under management with the adviser or net worth (individually or together with spouse) in excess of $2 million. Qualified investors might choose the performance-only or asset-based fee arrangement; non-qualified investors must choose the asset-based fee arrangement.
(Securities regulations say we can’t work on a performance-only arrangement for non-qualified investors. Sorry. )
Where the money is held?
ChainStreet Capital never takes ownership of your money. All funds are held at independent, third-party custodians (e.g., Interactive Brokers LLC). Only permissions we will have — to perform transactions on your account and deduct fees. Various controls established by the custodians help ensure that we can’t withdraw or transfer your money.
Our primary independent third party custodian, Interactive Brokers, are a member of NYSE – FINRA – SIPC and regulated by the US Securities and Exchange Commission. They have been in trading business for 33 years. While no one can ensure you against a decline in the value of your portfolio holdings, the money and securities in your accounts will be held by Interactive Brokers , and are protected by two levels of insurance for a maximum of $30 million per joint account.
We have different account minimum for performance-only and asset-based fee arrangement.
Performance only arrangement ( limited to qualified investors due to security regulations ) — Qualified investors must invest at least $1,000,000. Total one $1 million asset under management can be spread over several accounts.
Asset-based fee arrangement ( open to everyone ) — $40,000 minimum. We don’t recommend individual account size less than $40k but in limited circumstances we may waive this limit.
ChainStreet Capital can manage virtually any account type that can be opened at a brokerage firm, including taxable accounts, Rollover IRAs, IRAs, Roth IRAs, Beneficiary IRAs, trusts, solo 401(k) and more.