Johnson & Company is an advisory firm. We are NOT a FINRA-licensed broker/dealer nor are any of the principals registered or affiliated with such organizations. As such, we are legally prohibited from receiving compensation in the form of commissions, transaction-based (percentage of assets raised), contingency, performance or success fees.
All of our services and solutions are provided on a hard-dollar, fixed, flat-fee basis.
Aside from legal and regulatory restrictions, 20+ years experience has helped shape the type and delivery of the services we offer. The issue of marketing compensation based on contingency and/or performance is a distraction. However, it's not the core issue. The professional eco-system involved in the operation of a hedge fund is comprised of lawyers, accountants, fund administrators and technology providers none of whom work on a “success/performance fee” basis but who’s services are no more or less important than those who deliver marketing and asset raising services. In addition, office space, utilities, office materials and the associated expenses of marketing and raising assets are not obtained on a “use now, pay later” basis.
Moreover, a hedge fund has a compensation structure composed of a management fee and a performance fee. The management fee is designed to cover the operating costs of the manager regardless of performance: Losses or Profits.
Finding and appropriately engaging the RIGHT investors and intermediaries is always complicated, difficult, time-consuming and expensive, but more so in a hyper-competitive climate with increased dynamic regulatory intervention.
Our fees appropriately reflect the value of the information, insight, intelligence, resources and relationships we bring to each engagement as a means for a start-up, emerging manager or smaller fund to economically, effectively, efficiently and expediently improve enterprise-wide marketing preparation and business/operational/organizational capabilities to achieve high-level process execution marketing and success raising assets.
DO NOT CONTACT us if you are seeking a commission-only, performance or transaction-based engagement.
IMPORTANT NOTICE: The SEC has spotlighted broker-dealer registration requirements as an issue in marketing of hedge funds. It is important to remember that the long-term success of your fund may be at stake if you choose to raise assets without appropriate awareness and understanding of the legal/regulatory issues involved. As such, funds must be vigilant in vetting whether their employees who solicit investors on their behalf are engaged in activity requiring registration. Managers should review their compensation arrangements to make sure they are not transaction-based compensation’ payments. They also should consider the full spectrum of responsibilities of each employee engaged in soliciting investors. In addition, they should review all arrangements with external marketing entities. Transactions in which compensation is provided to an unregistered individual or firm can potentially expose a fund to substantial penalties.
If you are considering engaging internal or external means to raise assets, seek the advice of experienced legal counsel.