ITEM 5. FEES AND COMPENSATION
Management Fees
Management Fees (each, a “Management Fee”) payable to the Adviser vary by Fund and are established
pursuant to the Funds’ respective constituent documents. Management Fees charged to the Registered
Funds generally will be asset-based and calculated at an annual rate as a percentage of the value of the net
assets in such Registered Fund, typically range from 1.00% to 2.50% per annum, and are payable monthly
in arrears. The Management Fee charged to the Investment Partnership is calculated as a percentage of
capital under management, is borne at a rate of 1.5% per annum, and is payable and deducted from the
assets of the Investment Partnership monthly in advance. For all Funds, the Management Fee will be
prorated for any period less than a full month as applicable.
The Management Fees charged to the institutional separately managed accounts generally will be asset-
based and calculated at an annual rate as a percentage of the value of the net assets in such account and can
range from 1.00% to 1.50% per annum, and are payable monthly in arrears. The Adviser, in its sole
discretion, may negotiate lower rates or may chose not to charge a Management Fee but Incentive
Compensation instead, or a combination of a Management Fee and Incentive Compensation. If the
Adviser chooses not to charge a Management Fee, the Incentive Compensation negotiated may be higher
than it would be if a Management Fee were also being charged. The Management Fee will be prorated
for any period less than a full month as applicable.
Incentive Compensation
The incentive allocation allocable to the Adviser in respect of the Investment Partnership is established
pursuant to the Investment Partnership’s constituent documents and is charged at year-end at a rate of
15% of net annual profits to capital accounts maintained by the Investment Partnership for its investors.
For this purpose, net profits generally include both realized gains and losses and unrealized appreciation
and depreciation of securities held in the Investment Partnership’s portfolios. In the event that net
losses have been incurred in an investor’s capital account with respect to a fiscal year, such losses will
carry over to each subsequent fiscal year until such investor’s capital account has recovered 100% of the
net capital depreciation allocated to such account over such year. The Adviser has one institutional
separately managed account that does not pay a Management Fee but has agreed to pay Incentive
Compensation.
The Adviser, in its sole discretion, may negotiate alternative fees with other Client accounts that it
manages in the future. Different investor facts and circumstances will be considered in determining such
management or performance fees, including the client/investor’s investment strategy, assets under
management, account composition, reporting requirements, economies of scale, if any, and any other
factors the Adviser deems relevant. All such fees will be set forth in agreements with such clients.
Other Expenses
As described in the constituent documents of each Fund, the Adviser will be authorized to incur and pay in
the name and on behalf of each Fund all expenses which it deems necessary or advisable. The Adviser
generally will be responsible for all of its own overhead expenses of an ordinarily recurring nature such as
rent, utilities, supplies, secretarial expenses, stationery, charges for furniture, fixtures and equipment,
expenses of marketing interests in the Investment Partnership, employee benefits including insurance, payroll
and other taxes and compensation (and related costs) of all personnel.
Separately managed account clients may also be subject to additional expenses, including but not limited
to direct expenses incurred by the Adviser as a result of activities undertaken on behalf of the separately
managed account client. These additional expenses are subject to negotiation and are contained within the
executed investment management agreement with the separately managed account client.
Clients will incur brokerage costs, third-party execution costs (if any) and other transaction costs associated
with the Adviser’s management of the Funds’ portfolio securities. Please refer to the discussion of the
Adviser’s brokerage practices in Item 12, “Brokerage Practices” below.
In addition to the applicable Management Fee or, if applicable, the incentive allocation, each Fund
generally will be responsible for a variety of other expenses related to its operation, including, as
applicable, fees and expenses incurred in connection with the issuance, registration and transfer of its
shares; brokerage and commission expenses; all expenses of transfer, receipt, safekeeping, servicing and
accounting for the cash, securities and other property of such Fund including all fees and expenses of its
custodian and accounting services agent; interest charges on any borrowings; costs and expenses of
pricing and calculating its daily net asset value per share and of maintaining its books of account required
under the 1940 Act; taxes, if any; a pro rata portion of expenditures in connection with meetings of such
Fund’s shareholders and Board or partners that are properly payable by such Fund; salaries and expenses
of officers and fees and expenses of members of a Board or members of any advisory board or committee
who are not members of, affiliated with or interested persons of the Adviser or Fund administrator;
insurance premiums on property or personnel of such Fund which inure to such Fund’s benefit, including
liability and fidelity bond insurance; the cost of preparing and printing reports, proxy statements,
prospectuses and the statement of additional information of such Fund or other communications for
distribution to existing shareholders; legal counsel, auditing and accounting fees; trade association
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