Item 5. Fees and Compensation
Investment Advisory Fees – Family Office and Foundation Clients
Investment advisory fees are individually negotiated with each such Client and generally take the form of a fixed
monthly or quarterly retainer fee in accordance with the terms of the operable investment advisory agreement.
The Family Office and Foundation Clients of the Firm satisfy the conditions to be considered “Qualified
Purchasers” and any such performance-based fees charged to such Clients are in accordance with applicable
federal securities laws.
Fund Fees
The Firm receives a quarterly management fee, calculated at an annual rate of 1.00% of the value of each
investor’s capital account or shares in the applicable Fund. The management fee will be paid quarterly in
advance, based on the value of each investor’s capital account as of the first day of each calendar quarter or on
the date of a contribution if other than the beginning of a quarter.
The Firm is also entitled to receive a performance fee (incentive allocation) ranging from 10% to 15% of the
amount by which any increase in net profits of the applicable Fund equals or exceeds a hurdle rate, and subject
to a loss carryforward provision, as detailed in the relevant Fund’s Offering Documents. The incentive
allocation is assessed as of the end of each fiscal year.
Fee Discretion
Deuterium may, in its sole discretion, negotiate to discount or waive certain fees for any Client or individual
investor based upon certain criteria (e.g., investment only accounts, anticipated future earnings, anticipated
future additional assets, dollar amount of assets to be managed, related accounts, account composition,
preexisting client relationship, account retention, etc.).
Fee Notice
Clients are advised that if the Firm causes them to hold cash or cash equivalents for an extended period of time,
Deuterium will continue to bill on these assets. This may be done for strategic, defensive, liquidity or other
purposes and, in this regard, Deuterium’s fee may be higher than charges by other advisers that provide the
same or similar services.
Additional Family Office and Foundation Account Fees and Expenses
Each such Client bears its own operating and administrative expenses and will reimburse Deuterium for such
external and internal operating and administrative expenses attributable to the sourcing, selection, closing and
monitoring of investments, including:
• Expenses incurred in connection with the sourcing, assessment, purchase, monitoring or sale of a
Client’s investment, including: loan fees; brokerage commission, interest and commitment fees;
research fees; transfer taxes and premiums; legal, accounting, investment banking and professional
fees; costs of procuring computer software and hardware to be used in research; travel;
communications; and other expenses related to the sourcing, evaluation, monitoring and disposition
of investments;
• Expenses incurred in connection with managing Client investments, including commissions, mark-ups,
interest, and fees for services related to custody, wire transfers, trustees, audit, record keeping, and
other administrative fees and expenses;
• Attorneys’, accountants’ and consultants’ fees and disbursements;
• Taxes and other charges levied against the Client by the government;
• Insurance, regulatory and litigation expenses; and
• Expenses incurred in connection with the preparation and delivery of Client financial statements.
Additional Fund Fees and Expenses
Each Fund will bear all expenses relating to its ongoing structure and operation, including: (i) the management
fee; (ii) all investment-related costs and expenses (i.e., expenses that, in the Firm’s sole discretion, are related to
the investment of the Fund’s assets, whether or not such investments are consummated), including
commissions and charges, clearing and settlement charges, option premiums and custodial and service fees,
research-related expenses (including research-related travel expenses), expenses relating to consultants,
attorneys, brokers or other professionals or advisors who provide research, advice or due diligence services
with regard to investments; (iii) fees and expenses related to portfolio exposure and performance management
systems, risk management services and software related to trade reconciliation, treasury, margin, financial and
counterparty management, risk monitoring, performance reporting, valuation quotation services (e.g.,
Bloomberg terminals, historical and live financial data and other similar services and data feeds) and trade order
management systems (including systems that facilitate trade compliance, commission management, stock
locates and transaction cost analysis, and third party service providers used for implementation, custom
reporting, updates, consultations, support, maintenance, monitoring and data extracts); (iv) the Fund’s legal,
accounting, tax preparation and other tax-related expenses (including preparation and mailing costs of financial
statements, tax returns and other reports to investors), auditing, consulting and other professional expenses;
(v) third-party administration costs, fees and expenses (including any costs, fees and expenses related to investor
communications, relations, reporting or other investor materials, tax preparation and related reporting,
performance information, data extraction and other types of reporting and any audit or accounting services
provided by a third-party administrator); (vi) all fees and charges of custodians, clearing agencies and banks;
(vii) compliance and reporting expenses and expenses attributable to regulatory filings that are made with
respect to the Fund or assets of the Fund (including Section 13, Section 16, Form D, Form PF, FATCA, anti-
money laundering compliance, state security filings, general regulatory compliance and non-U.S. position
...