Advanced Portfolio Management LLC

Item 5: Fees and Compensation

The fee schedule of the Adviser for accounts varies from account to account. The Adviser’s standard
management fee for each Fund and SMA based on assets under management ranges from 0.5% to 1.75%
annually (the "Management Fee"). Under the standard methodology, the Management Fee is paid quarterly,
in advance, based on the net assets of each Fund as of the last business day of the immediately preceding
month adjusted for the current month's subscriptions and redemptions.

The Management Fee will be prorated for any period that is less than a full fiscal quarter. The Adviser may
waive, modify, negotiate, or establish fees for certain strategic investors.

The Adviser’s standard performance-based fee, which is compensation that is based on a share of capital
gains on or capital appreciation of the assets of a Client (such as a Client that is a hedge fund or other pooled
investment vehicle) is outlined in Item #6.

Consistent with the Investment Advisers Act of 1940 ("Advisers Act") and Rule 205-3 thereunder, to the
extent applicable, the Adviser receives incentive allocations or performance fees generally based upon net
profits allocable to each account or, with respect to Funds, each Investor. The performance allocation or
performance fee payable to the Adviser varies from account to account. The standard fee is 10% to 20% of
the net profits allocable to a particular account or, with respect to Funds, each Investor. To the extent that
fees are negotiable, some accounts, or Investors in a Fund, may pay more or less than other accounts or
investors for the same management services, depending, for example, on account inception date, size of
investment or total Client assets under management by the Adviser. The Adviser may waive, modify,
negotiate or establish fees for certain strategic investors.

Investors in certain multimanager funds may be paying two levels of fees.

In addition to paying investment management fees and, if applicable, performance-based fees, Client accounts
may also be subject to other investment expenses such as custodial charges, brokerage fees, commissions,
and related costs; interest expenses, taxes, duties, and other governmental and regulatory charges; transfer
and registration fees or similar expenses; costs associated with foreign exchange transactions; and other
portfolio expenses.

Client assets may be invested in pooled investment vehicles. In these cases, Clients will bear their pro rata
share of the underlying fund’s operating and other expenses including, in addition to those listed above: sales
expenses, legal expenses, internal and external accounting, audit and tax preparation expenses; and
organizational expenses.

The Adviser is not compensated on the subscription, redemption, sale or purchase of any investments.

Advisory fees are paid on percentage of assets under advisement. All fees are calculated based on pro rata
amounts accounting for deposits and withdrawals. Likewise, any funds paid in advance are credited and
refunded in the event of withdrawals on a pro rata basis.

Fees on SMAs are calculated using the same methods as fees on funds. Fees are generally deducted from
client assets. Additionally, clients are paying two layers of advisory fees on investments made in pooled
invested vehicles.

Refunds of prepaid fees are made automatically. The Client can also make the request to the Adviser and the
Adviser will refund on a daily basis any fees that has been prepaid.

Item 7: Types of Clients

The Adviser manages the following private, pooled investment vehicles:

    •   APM Thematic Equity LLC (“Thematic)
The Adviser also serves as an investment adviser with discretionary trading authority over the SMAs.

Clients have historically included banks, pension funds, insurance companies and endowments.

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

The Adviser invests in investment limited partnerships, investment limited liability companies, other private
investment funds, derivatives, and exchange traded and non-exchange traded securities utilizing multi-
manager, multi- strategy, and direct investment approach.

The descriptions set forth in this Brochure of specific advisory services that we offer to Clients, and
investment strategies pursued, and investments made by us on behalf of our Clients, should not be understood
to limit in any way our investment activities. We may offer any advisory services, engage in any investment
strategy and make any investment, including any not described in this Brochure, that we consider appropriate,
subject to each Client’s investment objectives and guidelines as set forth in the Offering Documents. The
investment strategies we pursue are speculative and entail substantial risks. There can be no assurance that
the investment objectives of any Client will be achieved.

Investment Objectives

Our investment objectives are to preserve capital and create stable, recurring, risk-adjusted returns that are
generally less correlated with the returns of the major traditional asset classes. The Adviser seeks to achieve
these objectives through the construction and dynamic management of portfolios of investments in
investment managers and/or direct investments in securities (collectively, the “Investment Vehicles”). The
Adviser may also pursue risk and return management through the application of “overlay tactics” (a form of
risk management derived from regular risk and return attribution analysis) as and when required to access
and manage traditional asset class returns and/or mitigate risk.

Investment Process

The Adviser believes that active investing, carefully implemented, creates exposures to unconstrained, skill-
based active returns. The primary objective of the investment process is to identify all of the potential sources
of risk and sources of return to construct efficient, well- diversified portfolios that are exposed only to those
risks that offer appropriate expected return. By exploiting the relationships between the risks and returns
associated with discrete sources of diversification, the Adviser constructs and manages portfolios that
generate returns that are generally less correlated with and characterized by generally lower levels of risk
than are available within the major traditional asset classes.

For each Investment Vehicle, the Adviser performs extensive quantitative and qualitative research on
potential security investments and/or investment managers. The Adviser constructs portfolios for the
Investment Vehicles using a variety of quantitative methods. Final portfolio allocation is determined by
qualitative judgment informed by this quantitative analysis.

The Adviser also sometimes seeks asset class returns in the form of an index swap, total rate of return swap,
futures contract, or other index product.

The Adviser monitors each portfolio on a continual basis, collecting information on security exposures and,
in certain cases, from underlying investment managers, frequently updating due diligence information, and
performing regular risk and return attribution analysis. The Adviser may achieve an additional level of risk
and return management through the application of “overlay tactics” as described above.

Risk of Loss Factors

The Investment Strategies may be deemed to be a highly speculative investment and is not intended as a
complete investment program. Investments in securities involves a risk of loss that Clients should be prepared
to bear. It is designed only for sophisticated persons who are able to bear the economic risk of the loss of
their entire investment, who have a limited need for liquidity in their investment. There can be no assurances
that Clients will achieve their investment objectives. The following risks should be carefully evaluated before
making an investment. The list of risks below does not purport to be an exhaustive list of the risks relating to
an investment.

Use of Leverage

Leverage increases potential returns if Clients earn a greater return on investments purchased with borrowed
funds than the Client’s cost of borrowing such funds. However, the use of leverage exposes the portfolio to
additional levels of risk, including (i) greater losses from investments than would otherwise have been the
case had we not borrowed to make the investments, (ii) margin calls or interim margin requirements which
may force premature liquidations of investment positions and (iii) losses on investments where the investment
fails to earn a return that equals or exceeds the cost of borrowing such funds. In the event of a sudden,
precipitous drop in asset value, we might not be able to liquidate assets quickly enough to repay borrowings,
further magnifying losses.

In an unsettled credit environment, we may find it difficult or impossible to obtain leverage for clients. In
such event, we could find it difficult to implement our strategy. In addition, any leverage obtained, if
terminated on short notice by the lender, could result in us being forced to unwind our positions quickly and
at prices below what we may deem to be fair value for such positions.

Equity-Related Instruments in General

We will invest in equity securities and equity-related instruments, including but not limited to publicly listed
equity securities, privately offered equity securities and financial instruments that may reference a single
...