Arbiter Partners Capital Management LLC

Item 5 - Fees and Compensation
Management and Performance Fees. Our investment funds generally have management fees and
performance allocations. Our funds have management fees of 0.35 to 1% and performance or
incentive allocations or fees of 12 to 20% above a high watermark for new investors, and some
classes may have a preferred return. Contributions are generally subject to a 1-year hard lock
followed by a 3- to 6-year soft lock (depending on the fund), during which withdrawals generally
are subject to an early redemption charge paid into the fund (not to the management company) to
compensate the remaining investors for the liquidity demands imposed by the short-term trading
of the early redeeming investor. The initial incentive or performance allocation in our funds may
be made as of the end of the hard lock-up period, and thereafter as of the end of each calendar

year, while one or more of our funds may crystalize performance allocations at the end of the
calendar year. The initial incentive or performance allocation for our special opportunity funds
is expected to be made when we determine that the circumstances of such special opportunity
indicate that the positions should be closed and the investment proceeds distributed to the
investors, or, if earlier, upon the withdrawal or redemption of an investor
Our funds have offered classes of interests with lower fee structures for legacy investors (with
limited capacity for follow-on subscriptions at such lower fees), some of which include a hurdle.
Our special opportunity funds have lower fee structures for investors who invest in our primary
funds. We retain complete discretion to set the terms of any new classes of interests offered.
Our lowest current management fees for third party accounts are in certain classes issued in our
special opportunity funds, where lower management fee classes range from 0.35% through 0.5%
per annum and lower incentive allocation classes have been as low as 12%.
We also offer our advisory services to separately managed accounts and single investor funds,
where a client or investor agrees to place under our management an amount of assets that is
substantial enough to justify such separate management. These accounts have included asset
based and performance fees on negotiated terms that vary significantly from those terms applied
in respect of our investment funds.
Management fees are paid regardless of whether the respective fund or account produces positive
investment return and generally are paid monthly in arrears directly from the fund or by billing
the client of a separately managed account and are subject to pro ration for partial periods.
Notwithstanding the foregoing, our management fees and incentive allocations are subject to
modification from time to time, including by agreement with individual clients or with individual
investors, or as may be reflected in the offering materials of any investment fund with respect to
such fund or any class of interests offered by such fund. We have previously waived such
management fees and incentive allocations for investors who are employees, other affiliated
persons and family members or estate planning vehicles of such persons.
Other Expenses. In addition to management fees, each of the funds and the managed accounts
bear their own investment and operating expenses. These may include, but are not limited to:
(i) expenses associated with the acquisition or disposition of investments, including brokerage
and transaction costs, and the costs of any currency or other hedging transactions, if any; (ii) risk
management expenses (including software licensing and consultants’ fees), (iii) research and
other expenses incurred in connection with evaluating or monitoring actual or potential
investment opportunities, including Bloomberg and other third party research, consultants,
publications, data and data services, current and historical pricing and market information and
travel expenses incurred in connection therewith; (iv) financing costs, including interest and fees
on margin accounts or in connection with borrowing cash or securities, including securities sold
short; (v) administration expenses (including, but not limited to, fees and expenses of a third
party administrator and other expenses related to middle and back office services and software
necessary for trade capture and portfolio management), audit and tax preparation (including
third-party tax preparation) and accounting expenses (including third party accounting services
and accounting software); (vi) custody expenses, including custodial fees and bank service fees;
(vii) fees and expenses related to directors and officers insurance premiums; (viii) expenses of
regulatory compliance (including expenses related to various filings (or portions thereof) that
Arbiter Partners is required to make as a result of managing the portfolios of its fund and other

clients, such as Section 13, Section 16 and Form PF filings); (ix) class action and proxy voting
services fees, including fees and expenses of Institutional Shareholder Services, Inc. (or any
replacement thereto); (x) expenses incurred in connection with reviewing and/or providing
periodic reports to the investors and clients, and portfolio valuation expenses (including data
feeds and third-party valuation agents); (xi) legal fees and costs (including settlement costs)
arising in connection with litigation or regulatory proceedings involving a client or Arbiter
Partners or its personnel in connection with the services provided to a client; and
(xii) organization expenses, including, without limitation, legal and similar expenses incurred in
connection with the offering of interests in a fund to prospective and existing investors.
Investment and operating expenses are incurred and paid regardless of whether the respective
fund or client account produces positive investment returns. These fees and expenses are further
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Item 7 - Types of Clients
Our clients are our funds, which are pooled investment vehicles exempt from registration under
the Investment Company Act of 1940, as amended (the “Investment Company Act”), separately
managed accounts for large or institutional investors and family offices (which include, but are
not limited to, a private endowment and a foundation), and the Isaac Accounts.
The investors in our funds are primarily high net-worth individuals, family offices, and
charitable trusts. We also have a limited number of institutional investors, including fund-of-
funds and insurance companies. Each investor must meet certain prescribed criteria, such as
being an “accredited investor” as defined in Rule 501(a) of Regulation D, promulgated under the
Securities Act of 1933, as amended (the “Securities Act”), and for certain of our funds, being
“qualified purchasers” as defined under the Investment Company Act. Our minimum initial
investor account size is generally $1 million, but is subject to the specific disclosures in the
offering materials related to such funds, including our ability to waive such minimums in our
discretion.
Our minimum account size for a managed account or single investor fund is $25 million (which
we may calculate on an aggregated basis for related accounts), however we have waived the
minimum for the Isaac Accounts and may increase or waive such minimum in the future.