ITEM 5 - FEES AND COMPENSATION
The specific manner in which fees are charged by Adviser is established in each Fund’s PPM
or a client’s written agreement with Adviser, if applicable. Generally and pursuant to contract,
fees for the management of private investment companies, such as the Funds, will be based
upon a percentage of the total assets in the account (including margined assets). Currently,
Geomatrix receives a management fee, equal to two percent (2.0%) per annum, of the net asset
value of the Funds. Such management fee is accrued daily and calculated on the basis of the
net asset value of the Feeder Funds as at certain valuation dates and payable monthly in
arrears.
Performance fees, if any, generally will be an annual percentage rate of the net realized and
unrealized profits for each year (the “Performance Fee”). In certain cases, the Performance
Fee may be charged after restoration of any losses carried forward from prior years and, in
certain cases, after achieving a threshold annual return on invested capital at varying rates.
Generally the annual percentage rate of Performance Fee will approximate 10% to 20% of the
net realized and unrealized profits, subject to negotiations. Performance Fees generally will
be billed after the close of each calendar year.
Currently, no external investors receive more favorable fee terms than any other external
investor. However, certain Fund investors may receive more favorable terms that are not
afforded to other investors, such as reduced performance fee for employees and related entities
of Adviser. Fund details, including the associated advisory fees, other expenses, and
investment strategies, are described in each Fund’s PPM.
If and when Adviser provides direct investment advisory services for certain institutions and
high net worth individuals on a discretionary basis, Adviser’s actual fees, minimum fees, and
minimum account sizes may also be negotiated and may vary from the fees described above.
A client may pay more or less fees than similar clients depending on the particular
circumstances of the client, size, additional or differing levels of servicing or as otherwise
agreed with specific clients. Clients that negotiate fees, including a flat fee, may end up
paying a higher fee than that set forth in the fee schedules above as a result of fluctuations in
the client’s assets under management and account performance.
If and when Adviser provides direct investment advisory services for certain institutions and
high net worth individuals on a discretionary basis in the future, clients may elect to be billed
directly for advisory management fees or to authorize Adviser to directly debit advisory
management fees from client accounts. Management fees shall be prorated for each capital
contribution and withdrawal made during the applicable calendar quarter (with the exception
of de minimis contributions and withdrawals). Accounts initiated or terminated during a
calendar quarter will be charged a prorated fee. Upon termination of any account, any
prepaid, unearned fees will be promptly refunded, and any earned, unpaid fees will be due and
payable.
Geomatrix’s fees are exclusive of brokerage commissions, transaction fees, and other related
costs and expenses which shall be incurred by the client. Clients may incur certain charges
imposed by custodians, brokers, and other third parties such as management fees, custodial
fees, transaction charges, ADR fees, deferred sales charges, odd lot differentials, transfer
taxes, wire transfer and electronic fund fees, and other fees and taxes on brokerage accounts
and securities transactions. Mutual funds and exchange traded funds also charge internal
management fees, which are disclosed in a fund's prospectus. Such charges, fees and
commissions are exclusive of and in addition to Geomatrix’ s fee, and Geomatrix shall not
receive any portion of these commissions, fees, and costs.
Item 12 further describes the factors that Geomatrix considers in selecting or recommending
broker dealers for client transactions and determining the reasonableness of their
compensation (e.g., commissions).