Item 5. Fees and Compensation
A. Advisory Fees and Compensation.
Asset-Based Compensation
The Adviser charges each client an investment management fee of up to 2% per annum based on the
value of each client’s assets under management. Investors in pooled investment vehicles managed by
the Adviser are subject to such investment management fees indirectly through their investment in the
pooled investment vehicle.
Investment management fees are charged quarterly in advance, based on the total market value of the
assets in the client account (including net unrealized appreciation or depreciation of investments and
cash, cash equivalents and accrued interest) on the first business day of each quarter. If a new client
account is established during a quarter or a client makes an additional investment in its account during a
quarter, the investment management fee will be charged as of the effective date of the investment
management agreement or the date of the additional investment based on the value of the assets as of
the applicable date and will be prorated for the number of days remaining in the quarter.
The investment management fees are generally not negotiable; however, the Adviser, in its sole
discretion, may waive or modify the fees for certain investors in pooled investment vehicles who are
members, employees or affiliates of the Adviser or a related person of the Adviser, relatives of such
persons and for certain large or strategic investors. For example, investment management fees assessed
on investments in pooled investment vehicles by the Adviser and certain of its principals and employees
or their family members and related vehicles and certain large or strategic investors are reduced or
waived entirely.
Performance-Based Compensation
The Adviser (or its related person) will also be paid or allocated, as applicable, a performance-based fee
or allocation, which is compensation that is based on a share of capital gains on or capital appreciation of
the assets of a client. This compensation may be paid or allocated, as applicable, to the Adviser (or its
related person) and may equal up to 20% of net profits, subject to a loss carryforward.
The performance-based compensation paid or allocated to the Adviser (or its related person) is generally
not negotiable; however, the Adviser, in its sole discretion, may waive or modify such compensation for
certain investors in the pooled investment vehicles who are members, employees or affiliates of the
Adviser or a related person of the Adviser, relatives of such persons and for certain large or strategic
investors. For example, performance-based compensation assessed on investments in pooled investment
vehicles by the Adviser and certain of its principals and employees or their family members and related
vehicles and certain large or strategic investors are reduced or waived entirely.
B. Payment of Fees.
The Adviser deducts the investment management fee from client accounts by instructing the client’s
custodian. The Adviser deducts client accounts for investment management fees quarterly.
Performance-based compensation is deducted from client accounts at the end of each fiscal year or upon
withdrawal or redemption by a client and paid to or reallocated to, as applicable, the Adviser (or its related
person).
C. Other Fees and Expenses.
Client assets may be invested in a master-feeder structure. Feeder funds bear a pro rata share of the
expenses associated with the related master fund. In addition to paying investment management fees
and, if applicable, performance-based compensation, client accounts will also be subject to other
investment expenses in accordance with the client’s investment management agreement or offering
documents such as custodial charges, brokerage fees, commissions and related costs; interest on margin
accounts and other indebtedness; taxes, duties and other governmental charges; transfer and registration
fees or similar expenses; costs associated with foreign exchange transactions; other portfolio expenses;
and costs, expenses and fees associated with products or services that may be necessary or incidental to
such investments or accounts. Please refer to Item 12 of this Firm Brochure for a discussion of the
Adviser’s brokerage practices. 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: legal, compliance, administrator, audit and accounting
expenses (including third party accounting services); organizational expenses; pooled investment vehicle-
related insurance costs (including D&O and E&O insurance for the Adviser and its affiliates, and outside
directorship liability); research fees and expenses (including research-related travel); borrowing charges on
securities sold short; bank service fees; and any other expenses related to the purchase, sale or transmittal
of the pooled investment vehicle’s assets. Client assets may be invested in money market mutual funds,
ETFs or other registered investment companies. In these cases, the client will bear its pro rata share of
the investment management fee and other fees of the underlying pooled investment vehicle, which are in
addition to any fees or other compensation paid to the Adviser.
The allocation of expenses by the Adviser between it and any client and among clients represents a
conflict of interest for the Adviser. The Adviser has adopted an expense allocation policy that is designed
to address this conflict. The Adviser allocates expenses to each client in accordance with the client's
arrangements with the Adviser (including applicable client disclosures). The Adviser seeks to allocate
shared expenses for products and services benefitting the Adviser and the client and not covered in the
client's arrangements in a fair and reasonable manner. The Adviser allocates common client expenses
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