QP Global Family Offices, LLC (“QP Global”, “(qp)”, “we”, “us”, or the “firm”) offers a bespoke
family office services platform to a limited number of families of significant means. Services
include, but are not limited to wealth management, risk management, direct private investments,
education, succession planning, aggregated reporting, record keeping, trust & estate work, tax
planning, cash flow management and budgeting. The overarching objective for QP Global is to
serve as each family’s single-family office. QP Global is a Delaware limited liability company
organized in December 2017 by two of the firm’s Managing Members, Peter Pauley and Brendan
MacMillan. The principal owner of the firm is QP GFO Holdings, LLC. The principal owners
of QP GFO Holdings, LLC are Brendan MacMillan and Peter Pauley.
We serve a limited number of family clients and each family may own and/or control multiple
accounts including trusts, foundations, limited liability companies and family limited partnerships
to which we will provide investment advisory and other services. QP Global will advise a family
on all of these entities on their behalf on either a discretionary or non-discretionary basis. The
relationship with each family is governed by a Master Service Agreement which is executed by both
QP Global and the relevant family. Such Master Service Agreement may impose reasonable
restrictions on the types of investments that may be made by QP Global for the relevant family
client. For example, restrictions may require us to exclude or restrict the trading of specific
securities and/or certain industries or types of securities.
As disclosed in our Form ADV Part 1, QP Global managed approximately $577,720,838 (as of
December 31, 2019) in client assets on a non-discretionary basis. QP Global does not manage any
client assets on a discretionary basis.
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The firm will charge a fixed annual fee for investment advisory services which will vary for each
family based upon on a number of factors unique to each family, including the type and complexity
of assets and the advisory services offered. Client fees are generally billed quarterly in advance,
based upon the negotiated fixed fee in the advisory contract. QP Global may also charge additional
fees on a project or hourly rate for agreed upon services with each family. All additional services
will be negotiated and agreed upon with the family in advance. Families that use QP Global’s
aggregated reporting services for analysis of assets not managed by QP Global may incur an
additional service fee, which we will determine in advance and will be included in the Master
Service Agreement. These fees may be waived at QP Global’s discretion.
If a client terminates its account or the applicable Master Service Agreement with QP Global, such
client may do so with 90 days’ prior notice. In such situations, any pre-paid fees will be refunded
based on daily pro-ration of the fee that was billed or based on such other terms and conditions as
set forth in the applicable Master Service Agreement.
Fees Charged by Financial Institutions, Custodians and Third Party Managers QP Global’s clients will pay the costs and expenses, determined by the firm as necessary, advisable
or appropriate to reach each client’s investment objectives. The fees and expenses could include;
management fees, custodial fees, accounting, brokerage commissions, clearing fees, interest on
margin accounts, borrowing charges and other cost and expenses in connection with the family’s
account/accounts.
All fees paid to QP Global for investment advisory services are separate and distinct from the fees
and expenses charged by brokers and third party managers. Neither QP Global, nor any of its
principals or employees, share in any portion of these fees, commissions or costs. Please see page 7
of the Brochure regarding Brokerage Practices.
Special Project Fees Some clients may desire special services that are not part of QP Global’s traditional investment
advisory services. These projects may include: disposing of certain business assets, acquiring new
businesses, investment projects, debt restructuring, finance negotiations, paying bills, arranging
lines of credit or otherwise assisting with a family’s finances. QP Global shall agree with the
relevant family on the fees and expenses to be billed for such services.
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QP Global does not currently charge performance-based fees or other fees based on a share of capital
appreciation of a client’s assets.
Types of Families Served QP Global provides bespoke family office services and highly customized wealth management
advice to a limited number of family clients, which may be comprised of high-net-worth individuals,
their family members, trusts, estates, foundations, corporations, family partnerships and limited
liability companies.
We typically have a minimum account size of $200,000,000, although we may waive the minimum
investment requirement. QP Global does not expect to have more than twenty families as clients.
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QP Global takes an investment-centric approach to a family’s wealth. We seek opportunities in all
asset classes and aggregate the best ideas into highly customized portfolios. The entire (qp) team
engages with the family at each stage of the process, to whatever degree each family desires or
requires. The process is begun by creating a family investment policy. We focus on understanding
the family’s attitude towards risk, investment horizon, liquidity preferences and reviewing their tax
status to set a targeted real return for each of their portfolios. This process is very collaborative with
each family. Upon completion of the investment policy, QP Global develops an asset allocation
model taking into account the current opportunity set within each asset class and modeling out the
expected asset class returns against defined risk measures. Each portfolio could have any
combination of third party managers (hedge, long only, private equity), passive market investments
made directly by QP Global, portfolio and macro hedges, currency hedges and direct investments
in private companies. As each portfolio is created we analyze risk and correlation across the
portfolio on medium and long term time horizons, with a deep belief that families of significant
means have a distinct advantage over most investors through their ability to arbitrage time.
Our overarching focus is on the preservation of capital, in real terms over very long periods of time,
while achieving a client’s specific set of financial objectives, which (qp) helps determine from a
continuous series of meaningful conversations with family members, knowing that objectives may
change over time. We help families better preserve their capital through a holistic approach that has
clear purpose, and which is expressed through customized, dynamic asset allocation, sophisticated
risk management and superior investments. We manage a family’s wealth through the framework
of three distinct segments:
Security Sleep at night: Preserve and protect lifestyle against short-term risks.
• Cash, insurance & place to live
• Liquidity for the unexpected
• Hedging and shorting to reduce risk and volatility
• Time horizon less than two years
• Safety over return
• Human capital
Maintaining Purchasing Power Stay wealthy: Maintain lifestyle over the long run in real terms with high confidence:
• Accept risks to maintain purchasing power over long time horizon
• About the journey (living through ups and downs)
• Diversification (a free lunch)
• Portfolio of superior managers with risk overlay
• Minimize drags (fees, taxes) to maximize compounding and chance of success
Enhancing Wealth Enhance: Investments that did or could materially enhance lifestyle:
• Concentrated ownership
• High risk ventures in measured ways
• Withstand failure for big payoffs
• Often measured in non-monetary ways
Risk Management Depending on the securities bought and sold or strategies employed with respect to a client’s
account, such account may face a number of potential risks and each client should be prepared to
bear the risk of loss with respect to such account. The assets in a client’s account are not guaranteed
and may lose some or all of their value.
Each portfolio that we oversee for the families we advise is continuously assessed along multiple
risk variables, including but not limited to; asset class risk, interest rate risk, market risk, liquidity
risk, currency risk, sector risk, country risk, concentration risk, negative gamma events, correlation
risks and historical scenario analysis. A significant component to QP Global’s investment process
is to utilize custom built risk analytics to understand the underlying risks in each portfolio that we
manage. Moreover, for the family clients looking to reduce risk in certain periods, we will develop
and implement custom risk management programs leveraging option structures, swaps, CDS, short
securities portfolio, other risk management tools and bespoke overlay strategies that specifically
mitigate the risks aggregated in that family’s assets, as we determine. This would include, if
appropriate, both tail hedges constructed and executed by QP Global and by third-party managers
and security specific risks that can be directly offset from over-the-counter securities. We look at
risk across the temporal frontier and across risk towers to ensure that all available pertinent
perspectives are incorporated into a family’s risk management program and that we have reduced
risk, as cost efficiently as possible and still meet a family’s goals, objectives and tolerances.
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QP Global is not registered as a broker-dealer and does not have a pending application to register
as such. QP Global and its principals and employees do not have any relationships or arrangements
with other financial services companies that pose any material conflicts of interest.
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Personal Trading QP Global has a fiduciary obligation to the families that it advises. All investment activities of the
firm, the principals, employees and officers of QP Global are subject to this fiduciary obligation of
care to the firm’s clients.
QP Global has adopted a Code of Ethics which sets forth high ethical standards of business conduct
required of the firm’s employees, including compliance with all applicable federal securities laws.
QP Global’s Code of Ethics includes policies and procedures for the review of quarterly securities
transactions reports as well as initial and annual securities holdings reports for each of the firm’s
access persons.
The foundation of the Code of Ethics is based on the underlying principles that:
• Employees must at all times place the interests of the client first,
• Employees must make sure that all personal securities transactions are conducted consistent
with the Code of Ethics, and
• Employees should not take inappropriate advantage of their position.
In addition, employees may not participate in any initial public offering or engage in any outside
business activities or private placements before obtaining authorization from the Chief Compliance
Officer.
All QP Global employees must direct their brokers to send duplicate copies of trade confirmations
and brokerage statements to the Chief Compliance Officer. These records are used to monitor
compliance with the foregoing policies.
QP Global’s Code of Ethics is available upon request.
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QP Global has discretionary authority over the placement of clients’ brokerage trades (and the
commission rates that are paid). In selecting broker-dealers to effect portfolio transactions for the
Funds, QP Global uses its best judgment to choose broker-dealers most capable of providing best
execution on an overall basis. In determining what is in a client’s best interest in this respect, QP
Global will consider the available prices and rates of brokerage commissions, and other relevant
factors including, without limitation, execution capabilities, the value of ongoing relationships QP
Global may have with various broker-dealers and research and other services, as defined in Section
28(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Section 28(e) of the Exchange Act provides a safe harbor that allows an investment adviser to pay
more than the lowest available commission in order to obtain research and brokerage products and
services (commonly referred to as a “soft dollar” arrangement) and allows soft dollars generated by
one client to be used to service accounts other than such client. That practice involves a conflict of
interest, but Section 28(e) of the Exchange Act provides that an adviser will not breach its fiduciary
duty to a client if the products and services consist of “research” or “brokerage” and certain other
conditions and requirements are met.
Although QP Global does not currently participate in any soft dollar arrangements, QP Global may
receive equipment, subscriptions and reimbursement for professional memberships from broker-
dealers, and may purchase research and other services directly from vendors, obtaining
reimbursement from broker-dealers. The commissions paid to a broker-dealer may exceed the
amount of commissions another broker-dealer would charge for the same transaction. Such research
and other services, moreover, may be available to QP Global on a cash basis. Accordingly, clients
of QP Global will be deemed to be paying for research and brokerage products and services with
“soft” or commission dollars. The use of commissions or “soft dollars” to pay for research and
brokerage products and services will fall within the safe harbor created by Section 28(e) of the
Exchange Act. QP Global will be required to determine, in good faith, that the amount of
commissions paid is reasonable in relation to the value of the brokerage, research and other services
provided by the broker-dealer, viewed in terms of either the particular transaction or QP Global’s
overall responsibilities to all of its clients. The research and other services provided may relate to
a specific transaction placed with the broker-dealer, but for the most part will consist of a wide
variety of information useful to the assets of the clients and QP Global. Where a product or service
obtained with soft dollars provides “mixed-use” research or brokerage, QP Global will make a
reasonable allocation of the cost that may be paid for with soft dollars.
QP Global believes it is important to its investment decision making processes to have access to the
aforementioned research and brokerage products and services, but certain conflicts of interest exist.
By using commissions paid by one or more clients’ accounts to obtain such products and services,
QP Global receives a direct benefit because it does not have to produce or pay for the products and
services itself. QP Global has an incentive to select a broker based on its own interest in receiving
such products and services and what proprietary and third party products and services a broker can
provide, rather than a client’s interest in paying the lowest available commission. In addition, QP
Global will use soft dollar benefits to service all clients, regardless of which client paid for such
benefits, and will not seek to allocate soft dollar benefits to a client proportionately to the soft dollar
credits that client generates.
Trade Errors QP Global seeks to detect trade errors and to correct and mitigate them in an expeditious manner.
Any gains from trade errors will be kept by the applicable client’s account while any losses from
trade errors (other than those due to gross negligence, fraud or willful misconduct) will be absorbed
by the applicable client’s account.
Aggregated Trades QP Global may (but is not required to) combine orders on behalf of one family account with orders
for other family accounts for which it or its principals have trading authority. When it does, the firm
will generally allocate the securities or proceeds arising out of those transactions (and the related
transaction expenses) on an average price basis among the various participants. We believe
combining orders in this way will, over time, be fair to all participants. However, the average price
could be less advantageous to a family than if that family had been the only account effecting the
transaction or had completed its transaction before the other participants.
QP Global may place orders for the same security for different families at different times and in
different relative amounts based upon differences in each accounts investment objectives, size of
order and ability of participating in “block” transactions. The level of participation by different
families in the same security may also be dependent upon other factors relating to the suitability of
the security for a particular family or account.
Directed Brokerage If a family instructs QP Global to execute some or all transactions through a specific broker, it
should be understood that under those circumstances, we will not have the authority to negotiate
commissions or obtain volume discounts and best execution may not be achieved. Additionally,
under these circumstances a disparity in commission charges may exist between the commissions
charged to other families since QP Global may not be able to aggregate orders to reduce transaction
costs or the client may receive less favorable prices.
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QP Global monitors the underlying securities, third-party managers and private investments that we
selected for each family’s account on a regular basis and meets with each family at least quarterly
to review for consistency with the family’s investment policy and performance relative to the
appropriate and agreed upon benchmark. Reviews may be conducted on a more regular basis at the
family’s request. The frequency of the reviews are generally driven by the family’s circumstances,
changes to a members financial situation or assets and investments that the family currently hold or
are being proposed to them to be held.
The family’s custodians provide them with monthly reports showing the assets in each of their
accounts, the market value and each account’s performance for that period. In addition, QP Global
will provide periodic reports which will detail investment activity, holdings, portfolio performance,
risk management, comparisons of current allocations to target allocations and market overview.
Certain third-party managers may provide additional reports which will also be shared with families.
Additional reports can be provided to families upon request.
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QP Global’s practice is not to have custody of family’s assets, which such assets will be placed with
a qualified custodian. Our family clients will receive account statements directly from the applicable
qualified custodian and each such client should carefully review those statements. QP Global’s
reports to each family are prepared in part using statements from underlying managers and/or
custodians. QP Global encourages families to compare the reports from QP Global with the
statements received from qualified custodians.
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For family clients that grant QP Global discretionary authority to determine which securities and/or
third-party managers to allocate assets to and the amounts of securities to be bought and sold for
their accounts, QP Global requests that such authority be granted in writing, typically in the client’s
executed Master Services Agreement.
If a family wishes to impose limitations on this discretionary authority, such limitations shall be
included or added to the Master Services Agreement. Families may change or amend these as
desired. Changes must be submitted to QP Global in writing.
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In accordance with its fiduciary duty to clients and Rule 206(4)-6 of the Advisers Act, QP Global
has adopted and implemented written policies and procedures governing the voting of client
securities. All proxies that QP Global receives will be treated in accordance with these policies and
procedures.
QP Global’s authority to vote proxies for clients is established by the client’s Master Services
Agreement. QP Global has established proxy voting policies and procedures and the Chief
Compliance Officer oversees the proxy voting process. The proxy voting procedures are designed
to ensure that proxies are voted in the best interest of the clients. In addition, the proxy voting
policy includes guidelines for the Chief Compliance Officer to follow if a material conflict of
interest arises between QP Global, its employees, and/or its clients to ensure that any material
conflict is resolved in the best interest of the client.
A copy of QP Global’s proxy voting policies and procedures, as well as specific information about
how QP Global has voted in the past, is available upon written request.
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QP Global does not require or solicit prepayment of fees six months or more in advance.
QP Global has never filed for bankruptcy and is not aware of any financial condition that is expected
to affect its ability to manage client accounts.
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