ITEM 5 – FEES AND COMPENSATION
The Chimera Fund
As an investment adviser to the Chimera Fund, as further described in the Governing
Documents, Chimera will receive a management fee, calculated at an annual rate of 2% of
each Investor’s capital account. The management fee is calculated and paid monthly in
advance, based on the value of each Investor’s capital account, as of the first day of the
calendar month. Chimera may elect to reduce, otherwise modify or waive the management
fee with respect to any Investor. If capital contributions are made at any time other than at
the beginning of a calendar month, a pro rata portion of the management fee will be paid
to Chimera in respect of such capital contribution (based on the actual number of days
remaining in such partial month). If capital accounts are withdrawn at any time other than
at the beginning or end of a calendar month, the management fee shall not be refunded to
the Investor for such partial month.
SMAs and Sub-Advisor Clients
As the adviser to SMAs and sub-adviser to the Sub-Advisor Clients, Chimera will receive
a management fee that generally ranges between 0% and 2% of the assets that Chimera is
advising. In general, Chimera will either invoice the SMA or Sub-Advisor Client directly
for fees or, pursuant to their prior authorization in the investment management agreements,
deduct the management fee from the qualified custodian of the SMA or Sub-Advisor Client.
The Clients may pay a management fee that is higher or lower than that of another Client,
based on factors such as the amount of assets managed for the Client, performance-based
fee parameters, and certain risk parameters.
In certain circumstances, Chimera may reduce the typical management fees and
performance fees charged to certain Investors in the Chimera Fund and for certain other
Sub-Advisor Clients pursuant to “side letters” or the applicable investment management
agreement based on substantial capital commitments to the Fund.
Investment advisory fees are negotiable at Chimera’s sole discretion.
Other Expenses
The Chimera Fund bears and shall be responsible for its own expenses, including, but not
limited to, investment related expenses such as the Chimera Fund’s brokerage
commissions, interest on margin accounts and other indebtedness, custodial fees, bank
service fees, withholding and transfer fees, taxes, systems and technology expenses, third
party research tools, corporate licensing fees, legal and auditing expenses, accounting, fund
administration (including middle and back office services), filing fees and expenses
(including regulatory filings made in respect of the Fund such as Form PF preparation and
filing expenses), outsourced risk management advisory and software, investment related
consultants, marketing and syndication expenses, including those incurred in marketing
fund interests in the European Union, expenses incurred with respect to the preparation,
duplication and distribution to Investors and prospective Investors of Governing
Documents, annual reports and other financial information, any other services or service
provider expenses deemed necessary by the General Partner on behalf of the Chimera
Fund.
The General Partner and Chimera bears its own expenses, including office space and
utilities, computer equipment and software (not otherwise paid by the Chimera Fund) and
secretarial, clerical, employee related and other personnel, except as assumed by the
Chimera Fund or except as paid for through the permitted use of commission dollars. At
the option of the General Partner, the organizational expenses of the Chimera Fund may be
amortized over a period of 60 months from the date the Chimera Fund commenced
operations. The amortization of organizational expenses over 60 months is not in
accordance with U.S. generally accepted accounting principles (“GAAP”) and could result
in an exception opinion in the auditors’ report in the annual audited financial statements if
the effect of the difference between amortization and recognition of these expenditures
when incurred is deemed material to the financial statements.
The recipients of this Brochure should refer to the Governing Documents for specific
information about expenses to be borne by the Chimera Fund advised by Chimera.
Neither Chimera nor any of its supervised persons accept compensation for the sale of
securities or other investment products.