Item 5 - Fees and Compensation
A. Our fees and compensation are described in the advisory contracts we enter into with our
clients. The Domestic Fund currently offers the investment options as are summarized
below. Investors holding Class A limited partnership interests (“Class A Interests”) in
the Domestic Fund pay a quarterly management fee of 0.5% per quarter (approximately
2% on an annualized basis), and are subject to a quarterly performance-based allocation
of up to 20% of aggregate net capital appreciation. Investors holding Class B limited
partnership interests (“Class B Interests”) in the Domestic Fund do not pay a
management fee and are subject to a quarterly performance-based allocation of up to 30%
of aggregate net capital appreciation. Such fees and allocations are generally not
negotiable; however we have the authority to waive all or a portion of the fees and
allocations we receive from the Domestic Fund with respect to any particular investor
therein.
B. Any separately managed accounts that we may manage in the future would be charged
fees on a case-by-case basis, which may include management fees and/or performance
based fees.
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C. We generally deduct our management fees from client accounts quarterly in advance.
Generally, we or our affiliates receive performance-based fees or allocations from client
accounts on an annual basis in arrears and upon withdrawals or redemptions by investors
in the Funds.
D. A Fund generally bears the direct costs and expenses associated with its operations,
including, but not limited to:
(i) fees to the Fund’s administrator;
(ii) investment expenses (e.g., expenses which the Advisor reasonably determines to
be related to the investment of the Fund’s assets, including, without limitation,
brokerage commissions, expenses relating to short sales, clearing and settlement
charges, custodial fees, bank service fees and interest expenses and the cost of
investigating actual or potential investments);
(iii) the cost (including, but not limited to, any related consulting, hardware and
maintenance expenses) of: trade execution and management systems,
compliance, risk and portfolio systems and reports, integration and data transfer
connectivity costs to and from third party systems, and products and services
relating to research concerning the Fund’s investments or potential investments,
including, without limitation, the following: (A) professional fees (including,
without limitation, expenses of consultants and experts) relating to investments
(including, without limitation, with respect to compliance by the Advisor with
securities and investment advisory laws and regulations); (B) the costs of
obtaining third-party research products and services (including, without
limitation, the cost of research reports relating to securities, issuers, market
segments or geographic regions, the costs of portfolio modeling and analyses, the
costs of computerized financial databases (e.g., Bloomberg), pricing and
quotation services); and (C) the costs of subscriptions or publications regarding
investments;
(iv) legal expenses;
(v) accounting, auditing and tax preparation expenses;
(vi) organizational expenses and expenses relating to the offer and sale of Fund
interests;
(vii) liability and other insurance for the benefit of the Fund, the Advisor and the
Advisor’s affiliates;
(viii) other similar expenses related to the Fund; and
(ix) extraordinary expenses.
We may also allocate a portion of certain clients’ capital to money market funds or
exchange-traded funds. In addition to the fees and expenses discussed above, investors
will indirectly incur similar fees and expenses if we invest client’s capital in such money
market funds or exchange traded funds, as these funds in turn pay similar fees to their
investment managers and other service providers.
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In the event that expenses are incurred for the benefit of a Fund and other entities, we will
allocate a portion of such expenses to the Fund and/or such other entities in a manner that
we deem appropriate.
We are responsible for our own overhead expenses including rent and utilities and the
compensation of our employees.
E. Management fees are generally paid quarterly in advance, and are not refundable if a
withdrawal or redemption is made or the advisory contract is cancelled prior to the end of
a payment period.
F. We do not accept compensation for the sale of securities or other investment products.