Item 5. Fees and Compensation
Asset-Based Compensation
The Adviser charges the Clients investment management fees based on either the daily notional account
value, mandate size, net asset value or synthetic net asset value (determined by adding/subtracting the
performance from the Adviser’s trading activity net of management fees and brokerage commissions),
depending on the relevant strategy and terms of the Governing Documents in place. Investment
management fees are charged either monthly or quarterly in advance or in arrears depending on the
particular strategy and the arrangement between the Adviser and the individual Client as set forth in the
Governing Documents. When management fees are charged in advance, a Client will receive a refund of
the unused portion of any pre-paid management fees. If a new Account is established during a quarter or
month, or a Client or Investor makes an addition to its account during a quarter or month, the management
fee will be charged as of the effective date of the IMA or the date of the additional contribution based on
the value of the assets as of the applicable date and will be prorated for the number of days remaining in
the quarter or month. Generally, the Adviser charges its Clients a management fee ranging from 0.25% to
0.85%. For separately managed accounts, the management fee is individually negotiated by product and
set forth in the applicable Governing Documents, which all investors and potential investors should review
carefully before making or maintaining an investment.
Clients are responsible for the payment of all third-party fees (i.e., custodian fees, brokerage fees,
transaction fees, etc.). Those fees are separate and distinct from the fees and expenses charged by the
Adviser. Please see Item 12 of this Brochure regarding broker/custodian arrangements.
Please refer to the applicable Governing Documents for more specific information on fees and expenses
applicable to Clients.
Performance-Based Compensation
The Adviser at times will also be paid a performance-based fee or allocation, which is compensation that
is based on realized and unrealized appreciation, less management fees, of a Client. This compensation at
times is to be paid to the Adviser at a rate of 10% performance in any given calendar year. The performance
fee is typically subject to a loss carryforward (sometimes referred to as a “high-water mark”).While the
Adviser does not directly deduct the investment management fee from the Accounts in most cases, the
Accounts have granted authority to the Adviser to instruct the Account’s custodian to deduct the investment
management fee from the Client’s account. Still other Accounts require pre-approval prior to the custodian
deducting applicable investment management fees. In any case, the Adviser prepares bills and makes them
available to all Clients.
While the amount of compensation is generally not negotiable, the Adviser from time to time, in its sole
discretion, may waive or reduce the management fee and/or performance-based fee for certain investors
that are members, principals, employees or affiliates of the Adviser or friends and relatives of such persons
and for certain strategic investors.
Other Expenses
With respect to the Accounts, in addition to paying investment management fees and, if applicable,
performance-based fees or other compensation, Client accounts will also be subject to other investment
expenses such as custodial charges, brokerage fees, commissions and related costs; interest margin
expenses; taxes, duties and other governmental charges; transfer and registration fees or similar expenses;
costs associated with foreign exchange transactions; other portfolio expenses; revenue sharing; and costs,
expenses and fees (including, investment advisory and other fees charged by investment advisers with, or
funds in, which the Client’s account invests) associated with products or services that may be necessary or
incidental to such investments or accounts.
A pooled investment vehicle Client, in addition to paying investment management fees, will also be subject
to other investment expenses such as legal, compliance, audit, accounting and third party administrator fees
and expenses; organizational expenses; investment expenses such as brokerage commissions, research fees
and expenses; interest on margin accounts and other indebtedness; borrowing charges on securities sold
short; custodial fees; insurance costs related to the pooled investment vehicle; and any other expenses
related to the purchase, sale or transmittal of Client assets.
Please refer to Item 12 of this Brochure for a discussion of the Adviser’s brokerage practices.