Edgestream Partners LP

ITEM 5 FEES AND COMPENSATION

We offer fee arrangements that involve management fees (generally a percentage of assets) and
performance-based compensation (generally a percentage of profits). Under certain
circumstances, fees are negotiable and management fees for certain investors in our clients have
been reduced and/or modified. Individual arrangements are based on investor-specific factors
including but not limited to the relationship between us and the investor, or the aggregate amount
subscribed into our clients by an investor and its related parties and affiliates. Performance fees
and management fees have been waived entirely with respect to investments by Edgestream’s
partners, the members, managers and employees of the Firm, and their respective family
members and affiliates; however, these investments are subject to the same rights and
obligations, including redemption rights and expense and transaction costs, as those of other
investors.

Asset Based Compensation

Investors in the Feeder Funds pay us management fees based on the net asset value of each
investor’s capital at a rate of up to 2% per annum (though as noted, such rates are lower for
certain investors). Management fees are calculated by the client’s administrator, accrue monthly
and are paid to us quarterly in arrears from the client’s account under our instruction.

Performance-Based Compensation

Currently, we are entitled to receive performance-based compensation from our clients
(“incentive allocations”) of 20% of the net profits attributable to each investor’s investment in
the Feeder Funds subject to a “high watermark” limitation. This means that we only receive an
incentive allocation when net profits for the performance period have recovered losses from prior
performance periods, as described in the offering materials of the Feeder Funds. The
performance period is quarterly for some investors and annually for others. Incentive allocations
are paid to an affiliate of ours and are calculated by the client’s administrator and deducted from
the client’s account under our instruction.

Fees and Expenses Applicable to All Clients

We do not receive asset-based fees or performance-based compensation in advance. If an
investor withdraws or redeems from a Feeder Fund before the end of a payment period, the
applicable asset-based fee or incentive allocation is charged or taken at the time of withdrawal or
redemption on the withdrawn or redeemed amount.

As described in the applicable Fund’s offering documents, our Funds bear all administrative and
operational expenses attributable to their administration and operation which include their pro
rata share of expenses through which Feeder Funds participate. The following summarizes the
types of expenses our Feeder Funds incur:

   ▬           brokerage commissions;
   ▬           dealer spreads;
   ▬           interest expenses;
   ▬           dividends payable with respect to securities sold short;
   ▬           custodial fees;
   ▬           exchange fees;
   ▬           give-up fees;
   ▬           automated order routing fees and expenses and related transactional fees and
               expenses;
   ▬           data feeds;
   ▬           primary and redundant third-party data center hosting fees and expenses;
   ▬           costs of dedicated communication facilities;
   ▬           other third-party fees and expenses required for trading;
   ▬           accounting, tax and other reporting expenses;

   ▬           fees and expenses associated with the preparation and filing of Forms PF, CPO-
               PQR and other regulatory filings which seek information about the clients and the
               Feeder Funds;
   ▬           legal, administrative and accounting fees and expenses;
   ▬           ongoing regulatory expenses;
   ▬           administrator fees and expenses;
   ▬           governmental, registration, license and membership fees (including, without
               limitation, exchange memberships);
   ▬           expenses associated with compliance with applicable laws, rules and regulations,
               including expenses associated with futures speculative position limit and
               securities shareholder monitoring and reporting;
   ▬           costs and expenses related to the offer and sale of interests in the Feeder Funds
               (including the cost of preparing and updating the Feeder Funds’ offering
               memoranda);
   ▬           taxes and other governmental charges (including the cost of compliance with the
               Foreign Account Tax Compliance Act and any similar or related regulations,
               intergovernmental agreements, or information-sharing agreements);
   ▬           expenses incurred in connection with any threatened, pending or anticipated
               litigation or examination or proceeding;
   ▬           insurance expenses of the clients/Funds and the Investment Manager for Directors
               and Officers and Errors and Omissions insurance;
   ▬           organizational costs and expenses to the extent not fully amortized;
   ▬           compensation to the anti-money laundering officers of the Cayman Islands’
               registered entities and the independent directors of non-U.S. entities and related
               travel, hotel and other expenses incurred by them in connection with their
               attendance at meetings or otherwise in connection with their services; and
   ▬           extraordinary or non-recurring expenses.

If one or more Feeder Funds, other clients and/or Edgestream are responsible for all or a portion
of a particular expense, we allocate that expense among all such entities in a fair and equitable
manner. When making such allocations among Feeder Funds and other clients, we generally
allocate expenses based on the Feeder Funds’ and clients’ respective capital balances. Some
...

ITEM 7 TYPES OF CLIENTS

Our Firm provides investment advice to its clients, each of which is a pooled investment vehicle.
The types of investors that indirectly invest in our clients (through the Feeder Funds) include
individuals, institutions, other investment entities, pension and profit-sharing plans, trusts,
estates, charitable organizations, corporations and other business entities. Investors must meet
certain standards of net worth and knowledgeability regarding the Firm’s investment program.

We do not provide investment advice to any person other than our clients. This brochure is not
intended to be an offer to invest in our clients or the Feeder Funds or to open a managed account
with us.

In addition, certain investors in the Feeder Funds have separate arrangements with respect to
their investments. The Feeder Funds, from time to time, establish such arrangements, without
the consent of or notice to the existing investors, by entering into a side letter concerning an
investor’s or prospective investor’s investment in a Feeder Fund that have the effect of
establishing rights, providing information flow, or altering or supplementing investment terms.
Such arrangements may provide an advantage to those investors that is not available to others,
for example by giving them transparency rights and/or different fee/allocation arrangements.

Edgestream and its affiliates may also provide certain information to investors or prospective
investors in response to questions, requests, side letter agreements, portfolio reviews, and/or in
connection with due diligence or portfolio monitoring meetings or other communications. Such
information will generally not be distributed to other investors and prospective investors who do
not request such information. Each investor or prospective investor is responsible for asking
such questions or requesting information as it believes is necessary in order to make its own
initial and ongoing investment decisions and must decide for itself whether the information
typically provided by Edgestream is adequate for its investment evaluation.