Firm Overview
Vivaldi Capital Management LP (“VCM”) is an investment advisory firm that has been registered with the SEC since
February 2012. VCM is primarily owned by VFT Holdings LP, a Delaware limited partnership. VFT Holdings’ principal
owners are David Sternberg (through a corporation), Michael Peck, Randal Golden (though a corporation), Chad
Eisenberg, and Scott Hergott (through a limited liability company).
As of December 31, 2023, VCM’s assets under management were $3,727,839,086, of which $1,471,913,223 were
managed on a discretionary basis and $2,255,925,863 were managed on a non-discretionary basis.
Firm Products & Services
VCM is an investment advisory firm that specializes in providing integrated wealth management solutions to high-
net-worth individuals, family offices and institutions and their related entities, including trusts and retirement plans.
Wealth Management Services
VCM primarily provides its clients with integrated investment and other wealth planning and management services.
Our wealth management philosophy is rooted in a dedication to knowing our clients and their families personally so
that we can thoroughly understand their goals, interests, concerns, and risk tolerance. In accord with that
philosophy, each client works with a dedicated wealth advisor to tailor wealth management solutions that address
the client’s unique needs.
VCM’s investment processes are designed to allow us to tailor investment recommendations to each client and in
turn to construct an allocation that is unique to a client’s needs, objectives and circumstances. Prior to engaging
VCM, each client is asked to enter into one or more written agreements setting forth the terms, conditions, and
objectives governing VCM’s services. In addition, each client may be asked to furnish, or arrange to have furnished,
information regarding accounts held with other financial institutions along with information about other assets in
which they have an ownership interest.
For various clients, VCM provides separately managed accounts1; equity, mutual fund and fixed income portfolio
solutions; alternative investments; and institutional due diligence services (through an affiliate) on various fund
managers and products in which clients may invest (some of which may be affiliated). In addition, VCM provides
comprehensive wealth management, asset and performance reporting, offers individualized financial planning,
and helps orchestrate professional services provided by third parties (including accountants, attorneys, etc.).
VCM believes that its clients may benefit from allocation to alternative investments. Investing directly in hedge
funds, private equity, and/or real estate funds can be difficult for many individuals given that certain managers may
require large minimum investments which limit an individual’s ability to diversify his/her investments, may have
restrictive liquidity terms, or may no longer be open to new investors. To help offset these potential barriers to entry
1 A separately managed account (“SMA”) is a portfolio of securities directly owned by the investor and managed according to a specific discipline and/or
style by a professional investment manager. SMAs, while often managed in line with pooled vehicles the investment manager may also be managing,
differ from pooled vehicles like mutual funds in that each portfolio is unique to a single account. As a result, there generally will not be an exact correlation
between the holdings and transactions in the SMA with that of the pooled vehicle or other accounts the investment manager is managing.
Vivaldi Capital Management LP | 225 W. Wacker Drive | Suite 2100 | Chicago, IL 60606 | P: 312.248.8300 | F: 847.386.2910 5
into these types of investment opportunities, VCM has access (through an affiliated joint venture described below) to a
variety of private funds that allow VCM qualified clients to invest in relatively diversified and carefully constructed
pools of institutional-quality alternative investments, including hedge funds and private equity and real asset
funds, managed by unaffiliated investment advisers.
FTCS Investment Platform
On November 1, 2021, VFT Holdings and First Trust Capital Partners formed a joint venture to own and operate a
robust investment platform for registered investment advisors and their clients focused on alternative investment
solutions. The joint venture, called First Trust Capital Solutions L.P. (“FTCS”), is owned by First Trust Capital Partners
and VFT Holdings and its affiliates.
The investment platform (the “FTCS Investment Platform”) specializes in alternative strategies that include
privately-offered alternative investment allocation vehicles (together, the “First Trust Private Funds”), and closed- end
interval funds and tender offer funds advised/managed by an affiliate, First Trust Capital Management (“FTCM”).
FTCM operates as a wholly owned subsidiary of FTCS. FTCS oversees proprietary strategy models (referred to as
building blocks) which span a range of asset classes and objectives. See “Investment Strategies – Managed
Portfolios” below.
As opposed to traditional “fund-of-funds,” the First Trust Private Funds provide clients with the ability to customize
their investment allocations to various underlying funds through the selection of different single-manager or multi-
manager classes within each investment strategy group. The investment programs of each class of the First Trust
Private Funds are based upon the specific objectives of each over-arching strategy and the underlying fund(s) in
which the class invests. Investors should refer to these funds’ private placement memoranda and class supplement
documents, as well as the underlying funds’ private placement memoranda, for a more complete discussion of
these investments.2
FTCS also has a technology platform of private investment opportunities designed for investment advisors and their
high net worth and family office clientele. This business, which operates under the name First Trust Innovative
Technologies LP as a subsidiary of FTCS, performs due diligence on managers across all asset classes and
strategies, and maintains a proprietary database of firms, portfolio managers, and all related correspondence.
VCM and FTCS are parties to a Platform Access Agreement that provides VCM advisors access to the FTCS
Investment Platform, including the First Trust Private Funds, the proprietary strategy models, research materials
and technology platform, as well as certain administrative and other services, for a fixed annual fee. VCM advisors
utilize the models’ building blocks to construct diversified client portfolios to meet client goals and objectives,
which may include investments in First Trust Private Funds and other investment vehicles (whether managed by
FTCM or unrelated managers). VCM utilizes the technology provided by the FTCS Investment Platform for tracking,
reporting and creating a more seamless and effective client experience.
ERISA Investment Fiduciary Services
VCM, doing business as VCM Retirement Plan Services, provides investment advisory services and, through a sub-
advisory relationship with Pensionmark Financial Group, LLC (“Pensionmark”), an unaffiliated registered
investment adviser, investment management services to retirement plan sponsors and participants. In performing
2 The First Trust Private Funds are limited liability companies or limited partnerships and are exempt from registration under federal securities
regulations, including the Investment Company Act of 1940 (the “Investment Company Act”) and the Securities Act of 1933 (the “Securities Act”). As a result,
investment in the First Trust Private Funds is limited to persons who are “accredited investors” as defined under Securities Act rules and, in most cases,
“qualified purchasers” as defined in the Investment Company Act.
Vivaldi Capital Management LP | 225 W. Wacker Drive | Suite 2100 | Chicago, IL 60606 | P: 312.248.8300 | F: 847.386.2910 6
these services, VCM, with the assistance of Pensionmark, acts as a fiduciary and performs those duties required of a
fiduciary as defined under Section 404 of the Employee Retirement Income Security Act of 1974 (“ERISA”) and
Section 4975 of the Internal Revenue Code. VCM acts solely in the best interest of retirement investors in accordance
with the fiduciary responsibilities set forth in ERISA.
Under the sub-advisory agreement between VCM and Pensionmark, VCM is primarily responsible for all
communication with the retirement plan sponsors and participants and determining which plan provided and
monitored by Pensionmark is suitable for each client. As part of its process, VCM provides general enrollment and
education meetings with plan participants and meets with plan participants to gauge their risk tolerance and their
investment goals. Pensionmark, as the sub-advisor, furnishes continuous and regular supervision of the ERISA 3(38)
investment management for the plans and determines which investments are added, eliminated, or replaced within
the plans offered, in accordance an investment management methodology agreed upon by VCM.
VCM pays Pensionmark a fee based on an agreed upon fee schedule. VCM does not charge clients any fees or costs
higher than its standard client fee schedule or otherwise pass the fees paid to Pensionmark on to its clients.
To help avoid conflicts of interest and ensure compliance with relevant regulations, VCM will not recommend to
plan participants any of the public or private funds it or its affiliates manage and will not include those funds in its
model portfolios.
Fees & Compensation
Wealth Management Services
VCM generally charges clients for which it provides Wealth Management Services an annual asset-based fee (a
“Management Fee”) based on a schedule that takes into consideration the size of the clientʼs portfolio. The current
schedule is as follows:
Assets Under Management
Total Assets Min ($) Total Assets Max ($) Percent (%)
0 2 million 1.25
2 million 10 million 0.95
10 million 25 million 0.85
>25 million 0.75
The Management Fee may vary based on certain client-specific factors such as timing of the relationship, account
size, number of accounts held together under a household, as well as the asset classes in which the client invests
and the complexity of the relationship. In many circumstances, related family assets are aggregated for calculating
fee breakpoints. Certain clients may receive a discount based on the limited scope of services being provided or
during the initial period of investment. When engagements involve multiple households, the fee schedule is applied at
the family level and a discount is applied for each household depending on the size and complexity of the
relationship.
VCM typically requires a minimum initial account size of $1,000,000 but reserves the right to accept client accounts that
do not meet this minimum condition.
As a component of its investment strategy, VCM utilizes the First Trust Private Funds. VCM clients who invest a
portion of their assets in the First Trust Private Funds pay a single Management Fee on those assets (i.e., the client
Vivaldi Capital Management LP | 225 W. Wacker Drive | Suite 2100 | Chicago, IL 60606 | P: 312.248.8300
| F: 847.386.2910 7
pays no additional fees because of its involvement with the First Trust Private Funds). Depending on the
circumstance, VCM may debit the entire Management Fee from a custodial account and no management fee is
charged on the clients’ investment in the First Trust Private Funds, or vice versa, or the Management Fee could be
charged in part through a debit to a custodial account and in part by the First Trust Private Funds. The value of the
First Trust Private Fund investments is included in the client’s portfolio for purposes of determining the applicable
Management Fee rate, and detailed reconciliations are available for clients to review. VCM also utilizes a private fund that
it manages, Cornerstone Diversified Portfolio, LP (the “Cornerstone Fund”), for which fees are handled in the same
manner.
As a component of its investment strategy, VCM also utilizes registered mutual funds and exchange traded funds
(“ETFs”) advised by FTCM, for which FTCM receives fees as detailed in the offering materials for those funds. The
value of the FTCM-advised fund investments is included in the client’s portfolio for purposes of determining the
applicable Management Fee charged.
Fee Billing
The manner in which specific fees are calculated and charged is described in each client’s written investment
management agreement with VCM. In its agreement with its clients, VCM reserves the right to modify its billing
practices by advance written notice.
VCM bills the Management Fee on a calendar quarter basis. Typically, the Management Fee is billed in arrears,
although in certain situations it is billed in advance. To determine the Management Fee when billed in arrears, the
rate to which the client agreed in the client’s investment management agreement will be multiplied by the average
daily market value of assets under management during the calendar quarter. When billed in advance, the rate to
which the client agreed in the client’s investment management agreement will be multiplied by the value of the
client’s portfolio on the last day of the previous quarter. For illiquid assets, where valuations are not always readily
available, VCM will normally utilize the last available value plus or minus any intra-quarter capital activity. In any
partial calendar quarter, the fee will be pro-rated based on the number of days the client account was open during
that quarter.
Clients may pay for advisory services by check or by wire or may give VCM the authority to have the Management Fee
debited directly from the client’s account(s). Clients typically grant VCM authority to have the Management Fee
deducted directly from the client's account(s) held by an independent custodian. VCM will notify the custodian of
the amount of the Management Fee due for each quarter through the custodian's electronic disbursement system.
The custodian will send each client a statement, at least quarterly, indicating the amounts disbursed from each
account, including the amount of the Management Fee paid directly to VCM. Clients are urged to carefully review the
reports received from the custodian and to compare those reports with any reports received from VCM.
Additional Services
Fees for institutional due diligence (performed by an affiliate) and other additional services are negotiated on a
project-by-project basis.
Other Fees & Expenses
VCM’s fees are exclusive of brokerage commissions, transaction fees, and other related costs and expenses which
may be imposed by custodians, brokers, third party managers, and other third parties. These additional charges
may include custodial fees, deferred sales charges, transfer taxes, wire transfer fees, electronic fund fees,
Vivaldi Capital Management LP | 225 W. Wacker Drive | Suite 2100 | Chicago, IL 60606 | P: 312.248.8300 | F: 847.386.2910 8
commissions or mark-ups, and other fees and taxes on brokerage accounts and transactions in those accounts.
Clients pay these fees directly to the custodian and/or broker. See “Brokerage Practices” below for a description of the
factors that VCM considers in selecting or recommending broker-dealers for client transactions and in
determining the reasonableness of their compensation (e.g., commissions).
Separately managed accounts, non-affiliated managed funds, certain affiliated managed funds, mutual funds,
ETFs, and other investment products (including certificates of deposit (“CDs”) and other instruments) are subject to
additional fees, commissions and administrative costs that are borne by their investors. Clients’ trading activity in
stocks, bonds, mutual funds, ETFs, and other financial instruments (including CDs) will result in commissions and
other transaction costs in accordance with each client’s arrangements with its broker/dealer and custodian. Mutual
funds, ETFs and private funds also charge internal management fees, which are disclosed in a fund’s prospectus or
offering documents.
Neither VCM nor its supervised persons accept compensation for the sale of securities or other investment products.
Cornerstone Fund Management Fees
The Cornerstone Fund is subject to a variety of fees and expenses. These fees and expenses include management
and incentive fees and may include performance-based incentive allocations and management fees collected by
the managers chosen by VCM; fund legal, administrative, and audit costs; costs incurred in connection with the
acquisition, ownership, financing, hedging or sale of investments; and taxes for the Cornerstone Fund and for the
underlying funds in which it invests. These fees and expenses are described in detail in the Cornerstone Fund’s
confidential offering materials.
Each client that invests in the Cornerstone Fund indirectly bears his or her proportional share of the fees and
expenses of the fund. These fees and expenses are charged to the fund and not billed directly to the client.
The payment of management fees, performance-based fees, and administrative and operating expenses at the
underlying fund and possibly sub-fund levels, as well as the payment of administrative and operating expenses
incurred by the Cornerstone Fund, may result in a layering of fees and significant expenses.
Waivers
Compensation payable to VCM is generally not negotiable, but under certain circumstances VCM may, in its sole
discretion, reduce or waive all or a portion of its Management Fee, other compensation and/or expenses for a
particular investor based on factors such as assets under management with the firm, longevity, and type of
investment.
Transactions or Arrangements Between Certain Related Parties
As discussed in this Brochure, VCM and FTCM are related companies. As a component of its investment strategy,
VCM may utilize the Cornerstone Fund it manages or registered mutual funds, ETFs or private funds advised by
FTCM or its affiliate(s) (“Affiliated Funds”). In such situations, VCM or its affiliate(s) receive fees from the Affiliated
Funds for serving as investment adviser (in the case of the Cornerstone Fund) or benefit from fees collected by an
Affiliated Fund (in the case of the First Trust Private Funds, mutual funds or other funds advised by FTCM), as
detailed in the Affiliated Fund’s offering materials. These fees create a financial incentive for VCM to utilize Affiliated
Funds so that fees and expenses charged by the fund or manager benefit VCM or its affiliate, rather than a non-
affiliate.
Vivaldi Capital Management LP | 225 W. Wacker Drive | Suite 2100 | Chicago, IL 60606 | P: 312.248.8300 | F: 847.386.2910 9
Termination of Advisory Agreement
VCM’s investment management agreement provides for termination of the investment management relationship
between VCM and the client upon written notice. In the event a client terminates its account or otherwise withdraws
assets prior to the end of the quarter, a final invoice will be issued for payment promptly upon such notice of
termination. In addition, the client may be subject to investment withdrawal fees, gates or other restrictions charged by
any of the investments that the client may wish to redeem or sell at the time of the termination.
Termination of the investment management relationship with VCM does not terminate a client’s obligations to
meet capital calls for, or other commitments to, any private equity investments made through or with VCM as
described in those investments’ confidential offering materials.
Performance Based Fees & Side By Side Management
Payment of management fees, performance-based fees, and administrative and operating expenses charged by
any of the funds in which a client directly or indirectly invests results in a layering of fees which may result in a
significant cost of investment.
Performance Based Fees
VCM may earn a performance fee from the Cornerstone Fund. The performance-based fee is calculated based on a
percentage share of the net profit on, or capital appreciation of, the assets of the fund. The performance allocation
may create an incentive for VCM to cause the Cornerstone Fund to make investments that are riskier or more
speculative than would be the case if VCM were allocated only a fixed amount. Performance-based fees are only
charged in accordance with the provisions of Rule 205-3 of the Investment Advisers Act of 1940 (the “Advisers Act”) and
any applicable state regulations. Please see the Cornerstone Fund’s offering materials for additional information
about the performance-based fee.
Side by Side Management
From time to time, VCM may become aware that certain of the private funds in which the First Trust Private Funds
invest are willing to accept direct investments from VCM’s clients. In such cases, VCM may notify select clients about the
investment opportunity. Although VCM will always try to treat its clients fairly over time, these types of investment
opportunities will only be presented to those clients for whom VCM believes, based on the client’s stated financial
profile and investment objectives, they would be appropriate.3
In addition, conflicts could exist in the allocation of investment opportunities for SMAs, sub-advised assets, the
Cornerstone Fund and VCM’s affiliates. Conflicts may exist due to available funds or restrictions defined in the
investment management agreement. VCM has designed its procedures to provide fair and equitable allocation
among SMAs, sub-advised assets, the Cornerstone Fund, and VCM affiliates.
Because we endeavor at all times to put the interest of our clients first, we take the following additional steps to
address any potential conflicts:
• We disclose to investors and prospective clients the existence of material conflicts of interest, including the
potential for our firm and its employees to earn more compensation from some clients than others; and
3 Clients will only be presented with such opportunities if VCM knows that they can satisfy the higher minimums required for a direct investment.
Vivaldi Capital Management LP | 225 W. Wacker Drive | Suite 2100 | Chicago, IL 60606 | P: 312.248.8300 | F: 847.386.2910 10
• We have implemented policies and procedures for fair and consistent allocation of investment
opportunities among any funds, affiliates, or other client accounts, subject to the fund’s/client’s underlying
strategy, cash availability, availability of interests in the underlying funds, and other appropriate considerations.