HFR Investments LLC

Item 5 – Fees and Compensation

HFR’s operating costs and expenses are paid for by its affiliate HFRAM for the Services
provided under a Services Agreement between the two firms. These expenses, without
limitation, include: trader, employee and agent compensation and benefits (including
without limitation performance-based compensation, signing bonuses, discretionary
bonuses, and other incentives); the acquisition cost of fixed assets; leasehold improvements;
depreciation; office rent; information systems; software development and licensing;
litigation and settlement expenses; research; communications equipment; quotation
services; insurance; recruiting expenses (including payments to third-party recruiting
agencies); transportation and other overhead expenses (all of the foregoing costs and
expenses identified as well as all related costs and expenses, the “Expenses”).

Any unaffiliated client that may engage HFR for its advisory services will pay HFR’s
management fee for advisory and co-advisory services which range from 0% - 1%. The

management fee charged to a Trust that hires HFR for advisory services through the HFRAM
Platform will generally be between 0% and 3.50 % per year, accrued each valuation day, and
payable monthly or quarterly in arrears as agreed between HFR and each client. HFR may
waive or adjust the management fee, incentive fee or fund expenses charged to investors.

The fees payable by an investor in respect of Customized Advisory Services or a Customized
Portfolio may be negotiated on a case-by-case basis. Such fees may differ from the
management and incentive fees charged by HFR, its affiliate for the HFR Managed Account
Platform or fund of funds. All or a portion of the fees payable by investors for these services
may, in HFR’s discretion, be waived or modified for investors for a specified time frame or
indefinitely.

This Brochure is delivered only to qualified purchasers as defined in section 2(a)(51)(A) of
the Investment Company Act of 1940.

Item 7 – Types of Clients

Pursuant to the Services Agreement with HFRAM, HFR offers or provides investment
advisory and investment management services to its affiliate HFRAM on behalf of HFRAM’s
clients pursuant to a Services Agreement with HFRAM, to hedge fund vehicles structured as
exempt investment companies under section 3(c)(7) of the Investment Company Act of
1940 who are clients of HFRAM, and to pooled investment vehicles or institutional
managed accounts.

HFR typically requires a minimum of $15 million for a separately managed account to be
opened. Smaller accounts may be opened at HFR’s discretion.