Item 5-Fees and Compensation
Pursuant to the investment management agreement entered into between HMAMF and Higher
Moment, HMAMF will pay to Higher Moment a fixed management fee payable monthly, in
arrears, equal to 0.125% (1.5% annualized) of the ending monthly net asset value of each
limited partner's capital account (the "Management Fee").
Pursuant to the Investment Management Agreement entered into between HMOMF and Higher
Moment, HMOMF will pay to Higher Moment a fixed management fee payable monthly, in
arrears, equal to 0.167% (2.0% annualized) of the ending monthly net asset value of each
limited partner's capital account (the "Management Fee").
Pursuant to the investment management agreement entered into between HMMSMF and
Higher Moment, HMMSMF will pay to Higher Moment a fixed management fee payable
monthly, in arrears, equal to 0.167% (2.0% annualized) of the ending monthly net asset value
of each limited partner's capital account (the "Management Fee").
With respect to all Clients, Higher Moment has the right to reduce or waive, from time to
time, all or part of the Management Fee attributed to certain investors in the Clients (each an
“Investor: together “Investors”), including, without limitation, Investors that are members,
partners, affiliates or employees of Higher Moment, members of the immediate families of
such persons and trusts or other entities for their benefit.
In consideration for the Management Fee, Higher Moment will bear the costs of office space,
utilities and personnel. The Management Fee may exceed the expenses borne by Higher
Moment on behalf of the respective Fund.
Each Fund bears its own expenses, including, without limitation, investment-related expenses
whether relating to investments that are consummated or unconsummated (e.g., brokerage
commissions, due diligence costs, expenses of consultants, interest on margin accounts and
other indebtedness, borrowing charges on securities sold short, custodial fees, clearing and
settlement charges and interest expense); research-related expenses, including, without
limitation, news and quotation equipment and services; legal expenses; professional fees
September 2016 6
(including, without limitation, expenses of consultants and experts); the costs of organizing
and maintaining any trading vehicles; costs relating to swaps (and similar agreements);
auditing and tax preparation expenses; fees and expenses of the “tax matters partner” or
“partnership representative” (which amounts may arise separately as a Fund-level expense);
accounting expenses; market data costs; costs of third-party administrators; costs of any third
party engaged to serve as an independent investor representative; fees paid to directors;
costs of printing and mailing reports and notices; organizational and offering expenses; costs
of the Investment Manager’s liability insurance and related insurance; management fees;
indemnification expenses; corporate licensing fees and other professional fees; bank service
fees; taxes (including withholding and transfer taxes) and other similar amounts (any of which
may arise separately as a Fund-level expense); trademarks; regulatory and compliance
expenses relating to the Fund or the Master Funds, including expenses of preparing regulatory
filings of the Funds, or of the Investment Manager as a result of its management of the Funds,
such as Form PF; other expenses related to the purchase, monitoring, sale, settlement,
custody or transmittal of the Funds’ assets (directly or through trading vehicles); and
extraordinary expenses and other similar expenses related to the Funds.
Certain organizational expenses of each Fund are being amortized by the respective Fund
over a 60-month period from commencement of the respective Fund. Amortization of
organizational expenses by the respective Fund does not conform to U.S. generally accepted
accounting procedures ("GAAP").
Clients may terminate Higher Moment’s advisory services at any time without penalty
generally upon one months’ advance written notice. Withdrawals or redemptions by Investors
in a Client can be made on the terms described in the applicable Offering Documents.
See Item 12 which describes the factors that Higher Moment considers in selecting broker-
dealers for Client transactions and determining the reasonableness of their compensation
(e.g., commissions). All such fees and expenses and other important information regarding an
investment in a Fund, are more fully set forth in each Fund’s Offering Documents.
September 2016 7