Item 5 – Fees and Compensation
The Firm is generally compensated for its advisory services by charging each Client certain
fees (the “Fees”), which Fees are set forth in the Investment Management Agreement and/or
other Governing Documents of each Fund. Such Fees paid by a Fund are generally indirectly
borne by its investors. Fees are generally of two types: (1) a management fee, generally
calculated as a percentage of the Fund’s net asset value, and (2) a portion of each Fund’s
investment profit is allocated and distributed to its general partner, which is affiliated with
the Firm in accordance with the allocation provisions of the Governing Documents of the
relevant Fund.
Governing Documents for the applicable Funds set out the Fees with respect to such Fund.
Should the Firm seek to manage a separate account, the Firm may seek to negotiate the
Fees applicable to such an account.
The following schedule of fees outlines the typical structure of the Fees under which the
Firm renders its services. As it applies to a particular Fund, the actual schedule of fees will
be clearly outlined in the Governing Documents.
The Firm charges fees in one of two ways:
a. Asset-Based Fees: Clients pay an annualized quarterly advisory fee in
advance, typically one (01) percent per annum.
b. Performance-Based Fees: Clients may pay the Firm an annual performance-
based fee (fees based on a share of capital gains on or capital appreciation of
the assets of a Client), which is generally 30 to 40 percent of the Client’s
annual net income and gains. Any performance-based fee will be determined
with respect to any calendar year as of the close of business on the last
business day of the calendar year.
The Management Fee is deducted from the Fund’s assets and is generally calculated and
payable quarterly in advance.
Billing Method:
The specific way Fees are charged by the Firm is established in a Client’s Governing
Documents. Clients will generally be invoiced for asset-based fees, in advance, at the
beginning of each calendar quarter based upon the value of the Client’s account at the end of
the previous quarter. Performance-based fees will generally be invoiced, in arrears, on an
annual basis based upon the capital appreciation of the Client’s account at the end of the
previous year. New accounts will be charged a prorated fee for the remainder of the quarter
in which the relationship is incepted. Lower fees for comparable services may be available
from other sources.
Other Fees and Expenses:
The Firm’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, third-party investment and other third parties such as fees
charged by managers, custodial fees, 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. These fees will generally include a
management fee and other fund expenses. All fees paid to the Firm for investment advisory
services are separate and distinct from the fees and expenses charged by mutual funds and
ETFs to their shareholders. Certain mutual funds also charge an up-front or back-end sales
charge and/or redemption fees. In addition, some open-end mutual funds offer different
share classes of the same fund, and one share-class can have a higher expense ratio and
sales/redemption fees than another share class. The most economical share class will
depend on certain factors, including the amount of time the shares are held by a client and
the amount a client will be investing. Mutual fund expense ratios and sales/redemption fees
vary by fund, so it is vital for clients to read the mutual fund prospectus to understand all
the fees charged fully.
These other charges, fees, commissions, and expenses are exclusive of and in addition to the
Firm’s Fees, and the Firm does not receive any portion of these commissions, fees, and costs.
For additional information regarding brokerage practices, please see Item 12. Brokerage
Practices.
No supervised persons of the Firm accept compensation for the sale of securities or other
investment products, including asset-based sales charges or service fees from the sale of
mutual funds.