ITEM 5 – FEES AND COMPENSATION
Management fees may vary with each client. The base annual fee is equal to 2% of the
client’s assets under management. Management fees are payable monthly in arrears according to
the terms of the relevant agreement with each client.
A.R.T. or an affiliate may receive a performance-based allocation in addition to
management fees. Such performance-based allocation is in amounts of up to 20% of the net profits,
as defined and calculated in each client’s Memorandum or agreement. With respect to the 20%
performance allocation, such amounts are calculated and allocable as of the end of each fiscal year
(or any applicable shorter period), to the extent such net profits represent “new appreciation.”
“New appreciation” is measured from a “high water mark” in the net asset value allocable to each
of such client’s underlying investors and therefore excludes any portion of appreciation in such
net asset value that merely represents a recovery of prior reductions in the net asset value (with
appropriate adjustments for intervening distributions and withdrawals).
A.R.T. will only receive performance-based allocation where the receipt of such allocation
will comply with Rule 205-3 under the Investment Advisers Act of 1940 (the “Advisers Act”), if
applicable. Management fees are prorated for partial periods, while the performance-based allocation
generally is charged to investors at year-end or upon redemption at the full annual rate.
A.R.T.’s clients do not have the ability to negotiate or select the fee methodology. A.R.T.
reserves the right to enter into different terms, including the full or partial waiver or modification
of the base annual management fee and any performance allocation, and the modification of
investment and/or withdrawal terms on an investor-by-investor basis. However, A.R.T. generally
only modifies fees and allocations for certain A.R.T. principals, employees, affiliates, and
members of their families and trusts established for their benefit (“A.R.T. Investors”).
Management fees were waived in the past for certain investors that were not A.R.T. Investors
(including a management fee waiver for all investors in 2021) and may be waived for certain
investors (A.R.T. Investors and/or non-A.R.T. Investors) in A.R.T.’s discretion in the future.
Management fees are deducted from each client’s assets and payable monthly in arrears
according to the terms of the client’s Memorandum or agreement. A.R.T. or an affiliate may
receive annual performance allocations, deducted from a client’s assets, in accordance with the
client’s Memorandum or agreement.
Clients also are responsible for ongoing expenses related to their investment program,
including but not limited to, brokerage commissions and fees, execution, give-up, exchange,
clearing and settlement charges, delivery, escrow expenses, bank, broker and dealer fees, margin
interest and other financing costs, other consulting and service fees (including investment-related
fees and taxes), fees and expenses directly related to potential investments of the client (whether
or not such investments are consummated), and any litigation and indemnification costs and
expenses. Please see Item 12 for more information.
Expenses: A.R.T.'s clients may be responsible for their own operating expenses, including
but not limited to brokerage commissions, legal, auditing and tax preparation, accounting, the
administration and/or dispute of tax audits, printing and mailing expenses, advisory and service fees,
expenses of the clients' continuous offering of interests or shares in the client (“Shares”) (including,
without limitation, legal expenses, costs of registering or making the entities available for sale in
certain jurisdictions, costs related to the preparation and printing of constituent documentation,
offering memoranda, promotional material, and contracts and mailing costs), directors' fees and
reimbursable expenses (including travel expenses) (if applicable), expenses in connection with the
conduct of meetings of the board of directors (if applicable) and holders of Shares, any taxes,
insurance premiums, custodial or transfer agency expenses, fees that may be payable to the client's
administrator or any other registrar and transfer agent that may be retained to provide services to the
client, recordkeeping expenses, compliance and regulatory expenses (including, without limitation,
third party expenses incurred by the client or A.R.T., registration and filing fees and compliance
reporting expenses), transparency and similar investor reporting, expenses of litigation and
arbitration, and travel and other costs, fees and expenses directly related to the Company’s investment
activities, and a pro rata share of the expenses of any master fund in which the client is invested (if
applicable), and early redemption fees, as described in the client's Memorandum or agreement.
A.R.T. does not require its clients to pay fees in advance.
Neither A.R.T. nor its supervised persons accept compensation for the sale of securities or
other investment products.