TOMS Capital Investment Management LP

Form CRS | August 15, 2023

 

TOMS Capital Investment Management LP. (“TCIM”) is registered with the Securities and Exchange Commission as an investment adviser. When we use the terms “we,” “us” and “our” in this document, we are referring to TCIM. Brokerage and investment advisory services and fees differ, and it is important for you to understand these differences. 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. 

 

What investment services and advice can you provide me?

 

We offer discretionary investment advisory services to “retail investors,” that is, natural persons and their legal representatives, and other clients. In exercising our investment discretion, we decide what securities to buy and sell in your account. We will cause your account to invest primarily in publicly traded equities, and invest opportunistically in other corporate securities and derivatives. We may cause you to take positions in other securities, derivatives and other financial instruments, though generally for the primary purpose of hedging exposures embedded in your primary investment positions. We monitor your portfolio and investment strategy on an ongoing basis as a standard part of our services. We do not have any formal requirements for retail investors to open or maintain an account or establish a relationship with us. For additional information, please see Items 4 and 7 of Form ADV Part 2A, available at https://adviserinfo.sec.gov/.

 

You should consider asking us questions like the following:

• 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? 

 

We generally receive an annual fee from our clients based on assets under management, which is charged monthly in advance. This means that the more assets you have in your account, the more you will pay in fees. We, therefore, have an incentive to encourage you to increase the assets in your account. The asset‐based fee reduces the value of the client’s account.  We or an affiliate also charge our clients performance fees – a percentage of the profits generated at the end of the fiscal year. Performance-based fees create the incentive for us to make riskier or more speculative investments on behalf of a client than we might make otherwise. We do not offer any wrap-fee programs or other direct-fee arrangements. Clients will be responsible for certain costs which include: transaction fees paid to brokers in order to purchase and sell investments (called “commission fees”), fees to a broker‐dealer or bank that will hold your assets (called “custodial fees”), investment-related expenses, research-related expenses, legal fees, auditor fees, regulatory fees, and other expenses as described in the client’s respective offering documents or its advisory agreement.

 

The amount paid to us does not vary based on the type of investments we select on your behalf. The amount you pay will depend, for example, on the amount of assets in your account and the performance of your account. 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. For additional information, please see Item 5.E of Form ADV Part 1A, and Item 5 of Form ADV Part 2A, available at https://adviserinfo.sec.gov/.

 

You should consider asking us questions like the following:

• 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 interests and not put our interest ahead of yours. At the same time, the way we make money may create 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.

 

We provide advisory services to multiple clients, including separate account clients and private pooled investment vehicles (“funds”). Certain of our other clients are charged different, and in some cases higher, fees than our retail investor clients. Our other advisory activities and the fees we charge for such activities create a conflict of interest in that our time and effort will not be devoted exclusively to our retail investor clients but will be allocated between all of our clients. This also creates an incentive for us to allocate investment opportunities to those clients or investors who pay higher compensation. However, to seek to address this conflict of interest, we allocate investment opportunities among our clients in accordance with our allocation policy.  For additional information, please see the Items 5, 6, and 10 of Form ADV Part 2A, available at https://adviserinfo.sec.gov/.  

 

You should consider asking us questions like the following:

• How might your conflicts of interest affect me, and how will you address them?

 

How do your financial professionals make money?

 

Our investment professionals receive compensation that consists of a base salary and a discretionary bonus. While we do not strictly tie their salary and bonus to any particular metric, such as the amount of client assets serviced, we take into account a variety of factors in determining this compensation, which may include: new idea generation; performance of client accounts serviced; and ability to attract and maintain client relationships. TCIM’s Chief Investment Officer receives a percentage share of TCIM’s net income in compensation.  Neither we nor any of our supervised persons receives compensation (such as brokerage commissions) for the sale of investment products.

 

Do you or your financial professionals have legal or disciplinary history? 

 

No. Please visit Investor.gov/CRS for a free and simple search tool to research TCIM and your financial professionals. 

 

You should consider asking us questions like the following:

• As a financial professional, do you have any disciplinary history? For what type of conduct?

 

For additional information about our advisory services, please see our Form ADV, visit Investor.gov or TCIM’s website at www.tcim.com. If you would like additional, up-to-date information or a copy of this disclosure, please call our General Counsel, Sheera Gross at (212) 337-4100.

 

You should consider asking us questions like the following:

• 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?