Item 5 – Fees and Compensation
For the IO Fund and Mauritius Fund KBK receives a fee of 2% for its services to the Fund as
the Investment Manager. If KBK obtains additional clients, KBK will implement the
following fee structure:
• 2% annual portfolio fee of account balance.
For services provided to the SNTG, KBK receives an annual asset-based Sub-Advisory Fee as
follows:
• . 50% of on the first $100,000,000 assets under management;
• .40% on the next $150,000,000 assets under management; and
• .30% on assets under management thereafter.
These fees are negotiable depending upon the needs of the client and complexity of the
situation and the final fee schedule is attached as Schedule A of the Investment Management
Agreement. Fees are paid quarterly in arrears and clients may terminate their contracts with
thirty days’ written notice. Refunds are given on a prorated basis, based on the number of
days remaining in a month at the point of termination. Clients may terminate their contracts
without penalty, for full refund, within 5 business days of signing the advisory contract.
Consulting Services Fees
One Time Consulting Fees Per Account
Fees for one-time assessment services rendered are billed at 0.1% of the account value. The fee
is due at the time of the second meeting. The fee is based on the account’s month end value as
provided in the investor’s most recent monthly statement. The minimum fee is $250.00.
Account Value Billing Rate Minimum Fee to the Investor*
$100,000 0.1% $250.00 $250.00
$200,000 0.1% $250.00 $250.00
$350,000 0.1% $350.00
$500,000 0.1% $500.00
$750,000 0.1% $750.00
$1,000,000 0.1% $1,000.00
$1,000,001 and > Negotiable
The above fee schedule for one-time assessment services applies to each individual investment
account which is separately registered and separately held in custody at a financial services firm.
*In those situations which require consulting work not anticipated in the above fee schedule, the
fee for additional consulting work is $125 per hour. Quotes for additional consulting work
needed will be provided prior to any execution of that consulting work.
Ongoing Monitoring Consulting Fees Per Account
Fees for ongoing monitoring services rendered are billed quarterly in arrears at 0.05% (0.20%
annually) of the third month’s account value. The fee is due upon receipt of the quarterly report.
The minimum quarterly fee is $125.00.
Account Value Quarterly Rate Minimum Fee to the Investor
$100,000 0.05% $125.00 $125.00
$200,000 0.05% $125.00 $125.00
$350,000 0.05% $175.00
$500,000 0.05% $250.00
$750,000 0.05% $375.00
$1,000,000 0.05% $500.00
$1,000,001 and > Negotiable
The above fee schedule for ongoing monitoring services applies to each individual investment
account which is separately registered and separately held in custody at a financial services firm.
Fees are negotiable depending upon the complexity and scope of the services, the client’s
financial situation, the client’s objectives and is payable in arrears. Should the engagement last
longer than six months between acceptance of the agreement and delivery of the services, any
prepaid unearned fees will be promptly returned to the client less a pro rata charge for bona fide
services rendered to date.
Either Party may terminate this Agreement by written notice at any time. The client will be
responsible for prorated fees based on services performed prior to the termination of the
Consulting Agreement.
Additional Fee Information
At this time, KBK submits quarterly invoices to its clients for the fees due based on the
advisory services provided for the relevant period.
The Firm’s fees are exclusive of brokerage commissions, transaction fees, and other
related costs and expenses which shall be incurred directly by the client. Clients may
incur certain charges imposed by custodians, brokers, and other third parties such as
fees charged by fund managers, custodial fees, deferred sales charges, odd-lot
differentials, transfer taxes, wire transfer and electronic funds fees, and other fees and
taxes on brokerage account and securities transactions. Mutual funds and exchange
traded funds also charge internal management fees, which are disclosed in a fund’s
prospectus. It is the Firm’s policy not to accept “kick-backs” or retrocession fees from any
third non-affiliated party providing services to the Firm’s clients.
Termination of the Agreement
Although an Agreement between KBK and its clients are ongoing agreements and
constant adjustments are required, the length of service to the client is at the client’s
discretion. The client or the investment manager may terminate an Agreement by
written notice to the other party with a (30) thirty – day notice or as agreed upon
otherwise between the client and the Firm.
If an agreement is terminated during a period in which the client has already paid KBK
its advisory fees in advance, then the Firm will reimburse, on a pro-rated basis, the
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