Ellington Global Asset Management LLC

Item 5. Fees and Compensation

Ellington is compensated for providing services as set forth in the relevant offering materials or
investment management, limited partnership, or limited liability company agreement applicable to
the Client. Compensation usually includes a management fee based upon the net assets of the
Client Account and an incentive fee based upon the performance of the Client Account. The
amount of management or performance-based fees paid by a Client Account and the frequency
with which they are deducted are described in the applicable offering materials or agreements.
Ellington does not customarily collect such fees in advance, though individual arrangements to do
so may be negotiated with institutional Clients. With respect to Clients that are funds operated by
Ellington, the investment management and performance fees are typically deducted from the
funds’ accounts by instructing the funds’ administrator or custodians to effect such payments or
allocations from the funds’ accounts to Ellington.

Fees and, as discussed below, expenses paid by institutional Clients for whom Ellington manages
separate accounts or dedicated vehicles are negotiated individually, while those to be paid by
investors in pooled investment vehicles managed by Ellington are as described in the applicable
offering memorandum. In some cases, investors in Ellington-managed pooled investment vehicles
individually negotiate more favorable fee terms with respect their investment in the vehicles.
Please see the discussion of “Side Letters” below for further information. In most cases, investors
in Ellington-managed pooled investment vehicles who are Ellington employees or related to
Ellington employees are not charged management or performance-based fees with respect to their
investments.

In addition, in some cases, the Ellington Group serves as the administrator or in a similar role with
respect to certain investments and transactions in which Clients have invested, and in that capacity
the Ellington Group in certain cases is paid a periodic fee for providing these administrative
services.

Please see “Performance-Based Fees and Side-by-Side Management” and “Administrative,
Servicing, and Other Fees” below for further discussion of such fees and the conflicts of interest
they can create. See “Brokerage Practices” below for additional information regarding brokerage
expenses or costs.

Valuation

The amount of management or performance fees earned by Ellington depends in part upon the
valuations assigned to Clients’ portfolio investments. These portfolio investments are valued in
accordance with Ellington’s valuation policy, unless provided otherwise in the relevant

                    ELLINGTON GLOBAL ASSET MANAGEMENT
                                   Form ADV Part 2A Brochure

management or governing document. Ellington’s Clients and investors should be aware that many
investments held in Client portfolios may be illiquid, infrequently traded, and difficult to value.
Ellington is deeply involved in the valuation procedures that are used to determine the value of
such investments, including by deciding whether to solicit third-party price indications and the
number of such indications to be solicited, the parties from whom to solicit such prices, and
whether to reject specific price indications as erroneous or unreasonable or to override prices
calculated by averaging such indications. In some cases, investments may be valued by Ellington
in good faith without regard to third-party price indications. Ellington consequently has a conflict
of interest in determining the valuation of Clients’ assets and liabilities because higher valuations
will have the effect of increasing the amount of fees paid to Ellington.

Expenses and Allocation of Expenses

In addition to the management and incentive fees paid to Ellington, unless provided otherwise,
Clients also bear their operational expenses or reimburse Ellington for any such expenses paid by
Ellington. The expenses that Clients pay can vary, so Clients and investors in Ellington-managed
pooled vehicles should review the applicable management agreement or offering memorandum to
determine which expenses they may pay. Unless provided to the contrary in the management
agreement or offering or similar document governing a Client Account, the expenses that may be
paid by Clients include the following:

       ▪   organizational and all initial and ongoing offering expenses (including expenses related
           to preparation of side letters and similar agreements with investors); the costs
           (including, without limitation, administration costs) of forming and operating any
           special-purpose vehicle (“SPV”) or any other entity through which the Client makes or
           holds an investment (including, without limitation, the Client’s pro rata share of any
           establishment or operational costs of any CLO, SPV, or related entity or vehicle in
           which the Client makes or holds an investment);

       ▪   investment expenses (such as brokerage commissions or mark-ups, custodial fees, bank
           service fees, short selling or borrowing fees, interest expenses, and expenses incurred
           in connection with conducting due diligence on potential investments and surveillance
           of investments (including, without limitation, travel, meal, and accommodation
           expenses (together “travel expenses”) of the Ellington Group));

       ▪   legal and compliance expenses, including costs of external legal and compliance
           consultants and advisers; litigation, settlement, and indemnification expenses; expenses
           associated with the Ellington Group’s internal legal counsel; expenses associated with
           regulatory and statutory filings, including filings made by the Ellington Group with
           respect to a Client’s activities even if filing under investment advisory, National
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Item 7. Types of Clients

Ellington generally provides investment advice to pooled investment vehicles and to institutional
Clients for whom the firm manages a separate account or dedicated investment vehicle. The
minimum investment amount and other requirements applicable to an investment in an Ellington-
managed pooled investment vehicle are described in the relevant offering memorandum or
investment management, partnership, or operating documents. Requirements for establishing a
separately managed account or dedicated investment vehicle are negotiable and may vary by
strategy or Client.