Issue link: https://read.uberflip.com/i/1494883
10 In some cases, SIMC has entered into performance fee arrangements with qualified Clients. Unless otherwise noted below, SIMC negotiates its performance fees arrangements on a Client-by-Client basis. SIMC will structure any performance or incentive fee arrangement subject to Section 205(a)(1) of the Advisers Act in accordance with the available exemptions thereunder, including the exemption set forth in Rule 205-3. SIMC's fee structure generally consists of a base fee and a performance fee. The base fee is negotiable on a Client-by- Client basis, and is paid regardless of the account's performance. The performance fee is calculated by comparing the performance of the specific Client's portfolio to a benchmark index. The benchmark index is a blend of standard industry benchmarks (e.g., S&P 500 Index) customized to match the specific Client's portfolio allocation. SIMC is entitled to a performance fee if the actual return for the specific Client's portfolio exceeds the benchmark index. Typically the performance fee is a percentage of the excess return. The percentage is negotiated on a Client-by-Client basis, and may range from 5% to 60%. For purposes of calculating the fees, the performance measurement period can range from one to three years. In measuring Clients' assets for the calculation of performance-based fees, SIMC includes realized and unrealized capital gains and losses. Currently, both the base fee and performance fee are paid quarterly in arrears. SIMC will either invoice the Client or deduct the fees from the Client's accounts if such custody account is maintained with SPTC. For certain SEI Alternative Funds, SIMC or its affiliate is entitled to a payment in respect of a portion of the profits generated by the fund (i.e., a "carried interest") which is not negotiated on a Client-by-Client basis. The carried interest payments are payable in either one of two ways (i) once investors have received a certain level of distributions or (ii) the investor's investment has surpassed certain fixed appreciation thresholds. Performance based fee arrangements may create an incentive for SIMC to recommend investments which may be riskier or more speculative than those which would be recommended under a different fee arrangement. Performance based fee arrangements also could create an incentive for SIMC to favor higher fee paying accounts over other accounts in the allocation of investment opportunities. As a result, SIMC may have a financial incentive to invest Client assets through the SEI Alternative Funds. SIMC has a robust Client review process designed and implemented to review the suitability of investments for Client accounts, to ensure that all Clients are treated fairly, and to prevent this conflict from influencing the allocation of investment opportunities among Clients. Item 7 – Types of Clients Please refer to Item 4 for a description of the Clients to whom SIMC generally provides its services. Accounts serviced by the Institutional Group are typically greater than $25 million; however, there is no required minimum account size. SIMC reserves the right to accept accounts less than $25 million in its sole discretion. Item 8 – Methods of Analysis, Investment Strategies and Risk of Loss SIMC's Overall Investment Philosophy SIMC's philosophy is based on five key components: asset allocation, portfolio design, sub-advisor selection, portfolio construction and risk management. SIMC's philosophy and process offers Clients personalization, diversification, coordination and management and represents a strategy geared toward achieving long-term investment goals in various financial climates. Asset Allocation. SIMC's approach to asset allocation takes clients' goals into account, along with more traditional yardsticks like market indices and standard deviation. . We believe that acknowledging and accounting for common behavioral biases while simultaneously harnessing the power of efficient portfolio