ITEM 5: FEES AND COMPENSATION
Fees and Billing
All fees are individually negotiated at the Firm’s discretion. Fees for Managed Accounts generally
include an asset-based fee ranging from 0% - 2% and a performance fee of 20%. Circumstances
considered when negotiating fees may include, without limitation, customary market rates, specialized
guidelines, and other performance/incentive fee/allocation arrangements.
Management fees for Managed Accounts or the Funds are calculated based on a periodic percentage of
the value of the assets under management (the “Management Fee”).
In consideration for its services to the Funds, the Firm will receive a Management Fee, normally
calculated at 2% annually of the net assets of the Funds. In addition, the Firm collects incentive
allocations based on the performance of investments. Please refer to Item 6, below, for a more detailed
description of incentive allocations, and related conflicts of interest.
Management Fees are generally billed monthly or quarterly in advance as specified in the relevant
investment management agreement or applicable pooled vehicle transaction document. The Firm also
receives a performance based fee or incentive fee/allocation (the “Performance Allocation”) as defined
below. The Performance Allocation is tied to the capital appreciation within the client account as
evaluated at the end of each calendar quarter and is payable quarterly, in arrears.
Managed Accounts must provide 30 days written notice in order to terminate the advisory relationship.
Upon termination, an invoice will be generated reflecting any amounts due to/from the Firm.
Additional Fees and Expenses
Organizational Expenses
The Funds may, at the Firm’s discretion, pay or reimburse the Firm and/or its affiliates for all expenses
related to the organization and initial offering expenses of each pooled investment vehicle in the Funds,
including, but not limited to, legal and accounting fees, printing and mailing expenses and government
filing fees (including blue sky filing fees). The Funds may elect to capitalize and amortize organizational
expenses over a period of 60 months from the date the Funds commences operations.
Operating Expenses
The Funds shall pay or reimburse the Firm and/or its respective affiliates for operating expenses, such as:
(i) all expenses incurred in connection with the ongoing offer and sale of interests in the Funds
(“Interests”), including, but not limited to, marketing expenses, documentation of performance and the
admission of investors, (ii) all operating expenses of the Funds such as tax preparation fees, governmental
fees and taxes, administrator fees, communications with investors, and ongoing legal, accounting,
auditing, bookkeeping, consulting and other professional fees and expenses (e.g., fees and expenses of
Funds appointed-directors serving on Boards of Directors of various portfolio companies), (iii) all Funds
trading and investment related costs and expenses (e.g., brokerage commissions, margin interest,
expenses related to short sales, custodial fees, clearing and settlement charges), (iv) fees and expenses
associated with regulatory filings, including, but not limited to, 13D, 13G, Form 3, Form 4 and Form 5;
and (v) all fees and other expenses incurred in connection with the investigation, prosecution or defense
of any claims, assertion of rights or pursuit of remedies, by or against the Funds, including, without
limitation, professional and other advisory and consulting expenses and travel expenses, and whether or
not pursuant to bankruptcy or other legal proceedings, or participation in informal committees of creditors
or other security holders of an issuer. The Firm or its respective affiliates may elect to be reimbursed for
such expenses, or to waive their right to reimbursement for any such expenses, as well as terminate any
such voluntary payment or waiver of reimbursement.
Any Managed Account clients will also bear investment related costs and expenses (e.g., brokerage
commissions, margin interest, expenses related to short sales, custodial fees, clearing and settlement
charges), as well as any additional agreed upon expenses as set forth in the relevant investment
management agreement.
Conflicts of Interest
No supervised person accepts compensation for the sale of securities or other investment products,
including asset-based sales charges or services fees from the sale of mutual funds.