Item 5 Fees and Compensation
Question: Describe how you are compensated for your advisory services. Provide your fee schedule.
Disclose whether the fees are negotiable.
Note: If you are an SEC-registered adviser, you do not need to include this information in a brochure
that is delivered only to qualified purchasers as defined in section 2(a)(51)(A) of the Investment
Company Act of 1940.
Answer: Eight Capital Master Fund pays the advisor a management fee of 1.5% per annum on assets
under management whether 2 year lock-up and 2% per annum on assets under management whether
1 year lock-up. The Investment Manager pays the Sub-Advisor on a monthly basis for its research
related expenses along with the transfer pricing premium applicable under local laws.
Question: Describe whether you deduct fees from clients’ assets or bill clients for fees incurred. If
clients may select either method, disclose this fact. Explain how often you bill clients or deduct your
fees.
Answer: The management fees are deducted on an accrual basis from client’s assets at the end of
every month. The Sub-Advisory Fee is calculated as of the last business day of each calendar month
and is payable monthly in arrears.
Question: Describe any other types of fees or expenses clients may pay in connection with your
advisory services, such as custodian fees or mutual fund expenses. Disclose that clients will incur
brokerage and other transaction costs, and direct clients to the section(s) of your brochure that
discuss brokerage.
Answer: The Fund will pay all investment related and operating expenses including its own legal,
accounting and external audit expenses and all other expenses that the Investment Manager has not
expressly agreed to pay. The Investment Manager is responsible for its own administrative expenses
including, but not limited to, office space, telephone, and salaries of administrative staff and
owners/managers.
Question: If your clients either may or must pay your fees in advance, disclose this fact. Explain how
a client may obtain a refund of a pre-paid fee if the advisory contract is terminated before the end of
the billing period. Explain how you will determine the amount of the refund.
Answer: The fees are not deducted in advance. Management fees are deducted at the end of every
month.
Question: If you or any of your supervised persons accepts compensation for the sale of securities or
other investment products, including asset-based sales charges or service fees from the sale of mutual
funds, disclose this fact and respond to Items 5.E.1, 5.E.2, 5.E.3 and 5.E.4.
1. Explain that this practice presents a conflict of interest and gives you or your supervised persons
an incentive to recommend investment products based on the compensation received, rather than on a
client’s needs. Describe generally how you address conflicts that arise, including your procedures for
disclosing the conflicts to clients. If you primarily recommend mutual funds, disclose whether you
will recommend “no-load” funds.
2. Explain that clients have the option to purchase investment products that you recommend through
other brokers or agents that are not affiliated with you.
3. If more than 50% of your revenue from advisory clients results from commissions and other
compensation for the sale of investment products you recommend to your clients, including asset-
based distribution fees from the sale of mutual funds, disclose that commissions provide your
primary or, if applicable, your exclusive compensation.
4. If you charge advisory fees in addition to commissions or markups, disclose whether you reduce
your advisory fees to offset the commissions or markups.
Note: If you receive compensation in connection with the purchase or sale of securities, you should
carefully consider the applicability of the broker-dealer registration requirements of the Securities
Exchange Act of 1934 and any applicable state securities statutes.
Answer: Not Applicable