Ducenta Squared Asset Management (“DSAM”, “We”, “Us”) is a registered Investment Adviser with the Securities and Exchange Commission under the Investment Advisers Act of 1940.
Brokerage and investment advisory services and fees differ, it is important for the retail investor to understand the differences. Free and simple tools are available to research firms and financial professionals atInvestor.gov/CRS, which also provides educational materials about broker dealers,investment advisers,and investing. Additional information and disclosures pertaining to DSAM are available through the Investment Adviser Public Disclosure site https://adviserinfo.sec.gov/, through a request for the adviser’s ADV 2A to firstname.lastname@example.org, or by clicking here.
What investment services and advice can you provide me?
We provide investment management services to individual retail investors and institutional investors, trusts, charitable corporations, pension plans, investment companies and pooled investment vehicles. We offer a variety of investment strategies that utilize fixed income securities and other instruments, including investment advisory services to retail investors directly and through wrap platforms sponsored by third parties. Other services such as financial planning, tax, or estate planning are not a component of services offered. Advisory services typically consist of discretionary separate account management focusing on fixed income investments. We do not currently offer non-discretionary advisory services to retail investors. The discretionary authority provided to us by you permits us to conduct buy and sell transactions in your account to execute the strategy you have contracted us to perform, within your investment objective and risk tolerances as defined in our client agreement. Any discretionary authority you provide to us is revocable by you at any time by written notice. As a component of our standard services, client portfolios are proactively reviewed for consistency with strategy and investments are consistently monitored. Our minimum account size for institutional investors is $1,000,000. Minimum account sizes for private wealth strategies vary from $300,000 for Core and Core Plus strategies to $500,000 for High Yield Strategies. Private wealth strategies have a minimum fee of $2,500 for Core or Core Plus strategies and a minimum fee of $3,000 for High Yield strategies. Each client is responsible for establishing and maintaining an appropriate account with a Qualified Custodian. Additional information and disclosures pertaining to DSAM are available through the Investment Adviser Public Disclosure site https://adviserinfo.sec.gov/, through a request for the adviser’s ADV 2A to email@example.com, or by clicking here.
Given my financial situation, should I choose an investment advisory service? Why or why not?
How will you choose investments to recommend to me?
What is your relevant experience, including your licenses, education and other qualifications? What do these qualifications mean?
What fees will I pay?
DSAM’s annual investment management fees for separately managed accounts and certain other client accounts, including private funds, vary depending on the investment strategy, product type and the size of a specific client account. Fixed income products generally range up to .55% (55 basis points) of assets under management in the client account. Our annual investment management fees for separately managed accounts and other client accounts are negotiable based upon the size of the account, relationship and/or the nature and level of services we provide. The fees are based upon the aggregate fair value of the client’s portfolio as defined in our client Agreement. Fees are assessed quarterly, and may be payable in advance or in arrears, dependent upon the relationship. For clients managed through wrap platforms, additional
fees charged by platform sponsors apply. Such sponsor fees typically encompass fees for additional services, such as custody, and are separate from the fee charged by DSAM. Clients may also incur charges imposed by third parties such as investment management fees, custodial fees, deferred sales charges, odd-lot differentials, transfer taxes, wire transfer and electronic fund fees, transaction charges imposed by the broker-dealer executing securities transactions for the client’s account, other fees and taxes on brokerage accounts and securities transactions, and fees and expenses imposed directly by any funds held in or for the client’s account.
We currently manage accounts that pay a performance fee. Conflicts of interest arise from our management of both performance fee-based accounts and non-performance based fee accounts in that there is an incentive to allocate limited investment opportunities to clients that pay higher fees or take greater risk in an attempt to generate higher returns. We have adopted order aggregation and trade allocation policies and procedures designed to treat all clients fairly and equitably, and to prevent these conflicts from influencing the allocation of investment opportunities among clients. During periods of unusual market conditions, we may deviate from our normal trade allocation practices.
You will pay fees and costs whether you make or lose money on your investments. Fees and costs will
reduce any amount of money you make on your investments over time. Please make sure you
understand what fees and costs you are paying.
Additional information and disclosures pertaining to DSAM are available through the Investment Adviser Public Disclosure site https://adviserinfo.sec.gov/, through a request for the adviser’s ADV 2A to
firstname.lastname@example.org, or by clicking here.
Help me understand how these fees and costs might affect my investments. If I give you $10,000 to invest, how much will go to fees and costs, and how much will be invested for me?
What are your legal obligations to me when acting as my investment adviser? How else does your firm make money and what conflicts of interest do you have?
When we act as your investment adviser, we have to act in your best interest and not put our interest
ahead of yours. At the same time, the way we make money creates some conflicts with your interests. You
should understand and ask us about these conflicts because they can affect the investment advice we
provide you. Here are some examples to help you understand what this means.
DSAM has a conflict of interest regarding advice given on adding new assets or transferring assets into accounts managed by our firm in that we receive compensation based upon the total value of assets in your account. Please also note the above disclosure pertaining to side-by-side management of asset based fee accounts and performance based fee accounts. Principals of DSAM have an interest in a proprietary account managed by a related person. The proprietary account is currently limited to investments in securities issued by the United States Treasury and Agency Mortgage Backed Securities. While these markets have significant breadth, the potential exists that we may buy and sell securities of issuers for client portfolios in which other related persons or our proprietary accounts may also invest. Additional information and disclosures pertaining to DSAM are available through the Investment Adviser Public Disclosure site https://adviserinfo.sec.gov/, through a request for the adviser’s ADV 2A to email@example.com, or by clicking here.
How might your conflicts of interest affect me, and how will you address them?
How do your financial professionals make money?
DSAM’s key personnel, including all portfolio managers, have entered into employment agreements with DSAM. They are also eligible for an annual cash bonus based on several factors, including the Firm’s overall profitability. Additional benefits received by DSAM’s key personnel are normal and customary employee benefits generally available to all salaried employees. Each of DSAM’s key personnel owns an equity interest in DSAM and each thus benefits from increases in the net income of DSAM. Compensation arrangements induce recipients to recommend DSAM products and services over products and services from unaffiliated entities even though products and services from other such entities may be similar at a lower cost.
Do you or your financial professionals have legal or disciplinary history?
No, free and simple tools are available to research firms and financial professionals at Investor.gov/CRS, which also provides educational materials about broker-dealers, investment advisers, and investing.
As a financial professional, do you have any disciplinary history? For what type of conduct?
Additional information and disclosures pertaining to DSAM are available through the Investment Adviser Public Disclosure site https://adviserinfo.sec.gov/, or through a request for the adviser’s ADV 2A/2B or Form CRS to firstname.lastname@example.org, or by clicking here. To request up to date information you may reach DSAM at (213) 687–9170.
Who is my primary contact person? Is he or she a representative of an investment adviser or a broker- dealer? Who can I talk to if I have concerns about how this person is treating me?