Item 5. Fees and Compensation
AMO USA's investment advisory fees are typically based on assets under management and vary by
investment strategy, product, and role of the Firm. Fees for non-discretionary investment advisory, portfolio
monitoring and consulting services, and investment model licensing are either asset-based, incentive or
fixed fees.
AMO USA’s separately managed account fee rates are based on account assets and generally range from
0.04% to 0.80% per annum. Fees are generally charged in arrears on a quarterly basis or as provided in each
separately managed account client's investment management agreement. The Firm’s standard fee rates are
subject to change and may be negotiated under certain circumstances. Such circumstances may include,
without limitation, specialized advisory products or services varying from the general products and services
described in this brochure, existing client relationship, and account size. A separately managed account’s
securities composite, strategy, account discretion, servicing levels and contracting counterparties are taken
into account when determining fee rates. Separately managed account clients may pay fees outside of the
range indicated above.
Compensation received by AMO USA from the Private Funds for discretionary investment advice is
generally comprised of fees based on a percentage of assets under management (for all Private Funds) and
performance-based amounts (for some Private Funds when applicable). In general, AMO USA’s asset-
based fee for discretionary investment advice for the Private Funds ranges from 0.10% to 2.10% (per
annum) of the aggregate fair market value of the net assets of a Private Fund. These fees have been and, in
the future, may be negotiated with Clients or Private Fund investors on a case-by-case basis. With regard
to the majority of Private Funds, asset-based fees for the Private Funds accrue based on the
subscription/redemption timing (daily or monthly) and are billed monthly or quarterly in arrears as of the
close of the calendar month, quarter or half during which AMO USA performs the services to which the fees
relate. The asset-based fee shall be prorated for any billing period during which AMO USA does not serve
as the investment adviser for the entire billing period. If fees are paid in advance, upon termination of the
investment advisory services, any unearned portion of fees will be refunded to the Private Fund on a prorated
basis. This does not apply to asset-based fees allocated to the individual investors of a Private Fund. In
addition, the asset-based fee may be reduced periodically by an amount equal to placement or distribution
fees, if any, paid by a Private Fund, with the amount owed to the placement agent being paid directly by
the Private Fund. AMO USA, at its discretion, may waive all or a portion of the asset- based compensation
amount.
In instances where AMO USA acts as a sub-adviser to AMO JAPAN or AMOI, AMO JAPAN and AMOI
generally pay to AMO USA a portion of the fees they receive from their respective clients, which are, in
most cases, a fixed percentage of the account assets, but sometimes a variable percentage of the account
assets, which fluctuates according to the performance of the portfolio.
In some cases, AMO USA shares a portion of its advisory fees, determined by mutual agreement, with other
sub-advisers, who are directly or indirectly affiliated with AMO USA, and who AMO USA has engaged to
assist with the management of the advisory services provided to the relevant Client.
In addition to the above, AMO USA has also entered into a cost-plus service agreement with AMO JAPAN
with respect to certain discretionary and non-discretionary investment advisory services, information
services, and other investment-related support services that AMO USA provides to AMO JAPAN pursuant
to their respective individual advisory agreements (the “Covered Services”). According to the cost-plus
service agreement, operational expenses incurred by AMO USA for provision of the Covered Services are
calculated based upon the methodology set forth in the agreement. In the event that 110% of aggregated
value of such operational expenses is greater than the total fee amount AMO USA receives from the Covered
Services, AMO JAPAN will pay the difference to AMO USA. AMO JAPAN pays to AMO USA the
difference between the marked-up amount that is 110% of the relevant operating expenses associated with
the Covered Services such as human resources costs, system and infrastructure costs, rent and other fixed
costs and the aggregate amount of the fee earnings generated from the individual agreements and/or orders
with respect to the Covered Services.
AMO USA’s Quantitative Strategies Team develops algorithms for quantitative investment strategies and
may license or otherwise grant the right to use such algorithms to third-parties and may receive licensing
fees, which are typically expressed as a percentage of the assets deployed by such strategy, from the third-
parties.
The governing body for each Private Fund (whether trustee, general partner, managing member or board of
directors) in coordination with AMO USA will value, or arrange to have valued, the securities and
instruments held by the Private Funds using readily available market quotations and other commonly used
and recognized methods. Generally, the Private Funds will engage fund administrators to assist in
determining asset valuations, including the calculation of the asset-based and performance-based fee
amounts, if applicable.
Generally, asset-based and performance-based fees, if applicable, are deducted directly from the accounts
of Clients or paid to AMO USA by the investment manager/investment adviser of the relevant Client out
of such investment manager’s/investment adviser’s asset-based and performance-based fees collected from
the relevant Client.
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