Item 5 - Fees and Compensation
The Adviser is compensated with investment management fees based on a percentage of the value of
assets under management and, in some cases, performance fees. With the exception of a mutual fund client,
fees are payable in arrears at the end of each quarter. Mutual fund client fees are payable monthly. The
Adviser’s typical fee schedules in effect on the date of this brochure are set forth below. Fees can vary from
the schedules below and may be negotiated based on specific services provided and client requirements, and
arrangements with particular clients vary.
Long Only Accounts
For investment management services involving a long-only strategy, the Adviser generally will
charge a management fee of 100 basis points per year, payable quarterly in arrears. Generally, these asset
based fees will be based either on the value of assets under management at the end of the calendar quarter or
on the average of the value of assets under management at the end of each of the three months within the
calendar quarter. Clients may elect to pay fees out of their account or to be billed separately.
The Adviser may also negotiate and charge performance fees, generally paid annually at the end of
each calendar year or over other annual periods determined in conjunction with the client. In the event of
termination of a client relationship or redemption of capital, performance fees will be paid at the time of such
termination or redemption, covering the applicable period. If the advisory arrangement is not terminated at
the end of the quarter, the Adviser will charge fees on a pro rata basis based on the fraction of the quarter that
the client had assets under management. For additional information regarding performance fees, please see
Section 3 Item 6 of this brochure.
Long/Short Market Neutral Strategy
For investment management services involving an unlevered long/short market-neutral strategy, the
Adviser generally will charge a management fee of 100 basis points per year, payable quarterly in arrears,
based on the value of the assets under management at the end of the calendar quarter.
Management fees for leveraged portfolios will generally be higher than 100 basis points per year and
are generally negotiated based on the notional value of assets under management.
In addition to the management fees described above, the Adviser will also charge a performance fee
of 20% on the portfolio's return (net of management fees) from the portfolio's inception date or high water
mark, as applicable, through the measurement date. For clients with agreements dated prior to 2007, the
performance fee may be calculated over the return of the 90-day T-bill.
Performance fees are generally paid annually at the end of each calendar year or over other annual
periods determined in conjunction with the client. In the event of termination of a client relationship or
redemption of capital, performance fees will be paid at the time of such termination or redemption, covering
the applicable period. If the advisory arrangement is not terminated at the end of the quarter, the Adviser
will charge fees on a pro rata basis based on the fraction of the quarter that the client had assets under
management. For additional information regarding performance fees, please see Section 3 Item 6 of this
brochure.
Other Expenses
Other expenses may be charged to a client’s account, including but not limited to audit fees, legal
fees, custody fees, and certain other expenses. Clients will also incur brokerage and other transaction costs;
please see Section 9 Item 12 for a discussion of brokerage practices.
Section 3