ITEM 5 – FEES AND COMPENSATION
Item 5.A Describe how you are compensated for your advisory services.
Provide your fee schedule. Disclose whether the fees are negotiable.
Note: If you are an SEC-registered adviser, you do not need to include
this information in a brochure that is delivered only to qualified
purchasers as defined in section 2(a)(51)(A) of the Investment
Company Act of 1940.
The Partnerships offer limited partnership interests only to certain
qualified investors and admission to the Partnerships is not open to the
general public. Limited partnership interests are sold only to qualified
investors who are “Accredited Investors” under Rule 501 of Regulation D
of the Securities Act of 1933, as amended, and “Qualified Eligible
Persons” under Regulation 4.7 of the Commodity Exchange Act. Given
the Partnerships’ ownership restrictions, Adamas has determined to limit
the sale of limited partnership interests to “Qualified Purchasers”, as such
term is defined in Section 2(a)(51) of the Investment Company Act of
1940, as amended. Please refer to the Partnerships’ offering documents
for a description of each respective fee schedule.
Item 5.B Describe whether you deduct fees from clients’ assets or bill clients for
fees incurred. If clients may select either method, disclose this fact.
Explain how often you bill clients or deduct your fees.
Adamas deducts applicable fees from each limited partner’s capital
account. Limited partners do not have the ability to choose to be billed
directly for fees incurred.
Adamas generally deducts the amount of management and administrative
fees (the “Management Fee”) applicable to each limited partner from such
limited partner’s capital account at the beginning of each quarter (i.e.,
quarterly in advance).
Historically, the performance allocation was charged to limited partners
holding Series A interests as of the December 31 that occurs at least one
year after such capital was contributed to the Partnership (and annually
thereafter). Similarly, the performance allocation was charged to limited
partners holding Series B interests as of the December 31 that occurs at
least three years after such capital was contributed to the Partnership (and
every three years thereafter, unless the Series B limited partner elects to
convert its Series B interests to Series A interests or withdraw such
capital). More specifically, on December 31, net profits attributable to an
investor’s limited partnership interests were reallocated so that Adamas
received a performance allocation equal to the percentage of net profits (as
such percentage is defined in each Partnership’s limited partnership
agreement) allocated to a limited partner’s capital account, before the
deduction of management fees. Each Partnership’s limited partnership
agreement provides that such reallocation would not reduce the limited
partner’s final allocation of net profits for such year below a “Threshold
Return” rate, as such term is defined in the Partnership’s limited
partnership agreement. In the event a limited partner had experienced net
losses, a performance allocation would not be due for a subsequent year
until the limited partner’s capital account had recovered such net losses, as
well as the applicable Threshold Return for such year. As a result of the
liquidation process, Adamas has waived any performance allocation which
may have been due to Adamas.
Item 5.C Describe any other types of fees or expenses clients may pay in
connection with your advisory services, such as custodian fees or
mutual fund expenses. Disclose that clients will incur brokerage and
other transaction costs, and direct clients to the section(s) of your
brochure that discuss brokerage.
The Partnerships’ offering documents set forth the fees and expenses to be
paid by limited partners. Prospective investors should carefully review the
offering documents and Partnership governing documents prior to
investing in a Partnership. As a result of the liquidation process, Adamas
has reduced its management fee, for all series of interests in each
Partnership, to 5 basis points per quarter.
Other than the expenses borne by the Investment Manager (as described
below), each Partnership bears all its own operating expenses, such as fees
payable to custodians and administrators, investment expenses (i.e.,
expenses which, in Adamas’ determination, are related to the investment
of the Partnership’s assets, such as the negotiation of the terms of an
investment, manager research or travel in connection therewith), legal
expenses, accounting, audit and tax preparation expenses, expenses
incurred in managing or liquidating in kind distributions received from
Portfolio Managers and extraordinary expenses. Such expenses are shared
by all of the investors in Adamas Opportunities and Adamas Partners,
respectively, including Adamas as the General Partner. To the extent that
expenses are, or have been, paid for by Adamas or the Investment
Manager, such expenses will be reimbursed by the respective Partnership.
In consideration for the management fee, the Investment Manager, will
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