Ackerman Capital Advisors LLC

Item 5: Fees and Compensation

       Separately Managed Account Compensation

        With regard to separately managed accounts, our firm receives compensation based on
a percentage of assets under management. Management fees are typically deducted quarterly
from client accounts after services are rendered (i.e., in arrears) based on average-weighted daily
capital balances during the quarter. These calculations are inclusive of cash and cash equivalents
in the relevant client accounts. The average-weighted daily capital balance is calculated by
dividing (x) the sum of the closing balances of a client account as of each day during the relevant
calendar quarter by (y) the number of days in the relevant calendar quarter. In addition, third-
party reporting fees, which are based on a flat, per account dollar amount are passed through to
accounts under management or advisement.

        Clients receive a quarterly invoice detailing the management fee calculation, the
reporting fees, and the deduction from the applicable account. Also, see Item 13 for further
information. Advisory fees commence at such time as activity with respect to securities occurs in
client accounts (which may include the receipt of securities through a transfer from a third-party
investment manager or broker-dealer) and ceases at such time as advisory services have
terminated and there is no activity with respect to securities. Since both average-weighted daily
capital balance and net market value are equity-based calculations, margin balances do not affect
the calculation of management fees.

        We charge management fees based on a standard fee schedule, typically ranging from
0.2% to 1.0% per annum based on portfolio values. In addition, certain existing clients have tiered
fee schedules that are not offered as part of the firm’s current fee schedule. We typically charge
pro-rated fees for any quarter in which the inception or termination of an account occurs during
such quarter. We reserve the right to modify such annual fee schedule for new advisory
agreements we enter into. In certain cases, mutually agreed upon assets may be excluded from
the calculation of management fees.

       Other Possible Fees

       In some circumstances, the advisory fee on a particular account may be lower or higher
than that generally charged by our firm or other investment advisors for similar services due to
minimum quarterly fee requirements or where fees may be negotiated.

         Separate account clients bear all of their own expenses, which may include custodial fees,
brokerage commissions, transaction charges, wire transfer fees, taxes and applicable registration
fees. As a result, our management fees for separate accounts are in addition to any transaction
fees which may be charged by the custodian bank or management fees and expenses charged by
any investment company (i.e. money market, mutual fund, or exchange-traded fund) in which the
client’s funds are invested. The fees and expenses charged by funds and ETFs are disclosed in the
relevant prospectus provided to our client by the custodian, and we receive no portion of such

fees and expenses. Some funds we purchase may require minimum holding periods to avoid
redemption fees, by the custodian or fund administrator.

        In some circumstances the custodian bank or broker invests cash in money market
securities or short-term investment funds available to the custodian. In these situations, the
custodian may be charging a fee for the management of such money-market type securities in
addition to the fee charged by our firm.

       Partnership Fees and Compensation

       ACM Enhanced Municipal Income, L.P.

        With regard to the ACM Partnership, the Investment Manager does not charge Limited
Partners management fees for its services to the fund, but reserves the right to charge additional
classes of investors, if any, management fees in the future.

        The general partner of ACM Partnership is entitled to receive a quarterly performance-
based profit allocation at the end of each quarter equal to fifteen percent (15%) of each Limited
Partner’s allocable share of net profits for the fiscal quarter, subject to a “high-water mark”
limitation (as further described below). Net profit includes unrealized appreciation or
depreciation of marketable positions according to the fund’s valuation procedures. Please refer
to the ACM Partnership’s Private Placement Memorandum for a full description of fees and
expenses.

       ACM Digital Holdings, L.P.

        With regard to the Digital Partnership, the Investment Manager charges a quarterly
management fee at the annual rate of 0.50%. The general partner of the Digital Partnership is
entitled to receive a quarterly performance-based profit allocation at the end of each quarter
equal to twenty percent (20%) of each Limited Partner’s allocable share of net profits for the fiscal
quarter, subject to a “high-water mark” limitation (as further described below). Net profit
includes unrealized appreciation or depreciation of marketable positions according to the fund’s
valuation procedures. Please refer to the Digital Partnership’s Private Placement Memorandum
for a full description of fees and expenses.

       High-Water Mark

       With respect to each of the Partnerships, the relevant respective performance fees are
subject to a “high-water mark” limitation. This means that after the first Performance Period in
which a performance re-allocation is earned, the performance re-allocation for a subsequent
Performance Period only applies to the extent that a limited partner’s pro rata share of net profits
measured on a cumulative basis, net of any losses, for all Performance Periods since admission
exceeds the highest level of such cumulative net profits achieved through the close of any prior
Performance Period since admission. Because opening capital account balances for Partnership
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Item 7: Types of Clients

       Our Clients

       Our clients are families, individuals, trusts, individual retirement accounts, profit sharing
and cash balance plans, charitable institutions, and other entities with substantial assets to which
we provide advice through separately managed accounts. We also provide advisory services to
two private funds structured as open-end hedge funds.

       Investment Requirements

        With regard to separately managed accounts, the current minimum investment to open
an account is generally $1,000,000, although investments of a lesser amount may be accepted.
Client accounts below this threshold typically belong to firm clients who were subject to prior
account minimums.

       Investors in the Partnerships are generally required to make a minimum investment of
$1,000,000. We have the discretion to, and on occasion may, accept subscriptions for a lesser
amount. The minimum investment is typically waived for investors for whom our firm also
manages separate accounts.

       This brochure is not an offer to invest with our firm, including the Partnerships.

Item 8: Method of Analysis, Investment Strategies and Risk of Loss

        Investing in securities involves risk of loss that clients should be prepared to bear.
Depending on the particular strategy that we utilize, our goal is to balance the appropriate level
of risk with the potential for returns. As with any investment strategy some level of risk is
unavoidable. Each strategy offering and associated IPS specifies a maximum percentage loss over
any twelve-month period which we attempt to not exceed.

       Separately Managed Accounts

       Core balanced strategy offerings for our separate account clients are:

           •   Capital Preservation – This strategy offering seeks to maximize total return while
               avoiding a loss over any twelve-month period. The strategy targets a 20%
               allocation to equities and an 80% allocation to fixed income.

           •   Conservative Allocation - This strategy offering seeks to maximize total return
               while avoiding a loss of greater than 10% over any twelve-month period. The
               strategy targets a 40% allocation to equities and 60% allocation to fixed income.

           •   Moderate Allocation – This strategy offering seeks to maximize total return while
               avoiding a loss of greater than 15% over any twelve-month period. The strategy
               targets a 60% allocation to equities and 40% allocation to fixed income.

           •   Aggressive Allocation - This strategy offering seeks to maximize total return while
               avoiding a loss of greater than 20% over any twelve-month period. The strategy
               targets an 80% allocation to equities and 20% allocation to fixed income.

        Each core strategy allows for tactical positioning above or below equity and fixed income
allocation targets within constraints outlined in the respective Investment Policy Statement.

        There is no guarantee that our firm will be successful in its efforts to manage these
strategies within the specified risk constraints and past performance is also no guarantee of
future returns.

        All strategy offerings are available in a “Tax Advantaged” version for retirement
accounts, charitable entities, or other accounts with no or limited tax sensitivity and a “Tax-
Managed” version for tax sensitive accounts. In “Tax Managed” accounts we seek to maximize
after-tax returns for a given level of risk.

        In addition to these balanced offerings, the firm also manages portfolios within a single
asset class, e.g. 100% equity or 100% fixed income.

        In managing separate accounts within the strategies set forth above, we typically invest
in exchange-traded funds (ETFs) and low cost, no-load mutual funds consistent with each
strategy’s IPS. We typically invest in funds representing the two primary asset classes, equities
and fixed income, on a global basis.

       We base our fund selection within a particular strategy on a number of criteria. First, we
evaluate the cost of ownership. We seek to invest in funds with expense ratios that are among
the lowest versus similar funds. Academic research has indicated that perhaps the most
important factor affecting fund performance is the cost of ownership.

        Among equity funds, we typically invest in low cost, passive funds which provide targeted
exposure to certain style risk factors. Additional funds which allow us to manage other non-style
risk exposures (e.g. global region/country exposures, and developed vs. emerging exposures) are
also included in the equity portfolio. Among fixed income funds, we typically invest in lower cost,
more passively managed funds which allow us to manage exposures to key risk factors (e.g.
interest rate sensitivity, credit exposure, regional country weightings, and currency exposures).

        Our portfolios are actively managed. We engage in tactical asset allocation in our
portfolios within the asset class allocation ranges outlined in each Investment Policy Statement.
We evaluate funds based on our proprietary model that combines valuation metrics with
measures of current price trends. Other factors which we may take into account include
macroeconomic trends and investor sentiment.

        Investing in exchange-traded funds and mutual funds involves significant risk of loss that
our clients, and any investors in our clients, should be prepared to bear.

       Certain of the risks associated with any investments on behalf of our advisory clients
include:

     Investment Judgment and Market Risk: The success of our investment programs depends,
     in large part, on correctly evaluating future price movements of potential investments. We
     cannot guarantee that we will be able to accurately predict these price movements and that
     our investment programs will be successful.
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