Item 5. Fees and Compensation
A. Advisory Fees and Compensation
AUM-Based Compensation
For the private funds Kettle Hill Partners, LP and Kettle Hill Partners II, LP the Adviser charges Investors
management fees at a rate of 1.5% per annum. For the private fund KHX, LP the Adviser charges Investors
management fees at a rate of 2.0% per annum. The Adviser charges management fees from the Investment
Companies and the UCITS ranging from 0.5% to 1.0% per annum. The management fees charges from
the Investment Companies and the UCITS is a portion of the overall management fees charged to
shareholders, which, depending on the share class, range from 0.75% to 1.50% per annum. For the
Separate Account, the Adviser charges a management fee of 0.35% per annum.
For the Private Funds, management fees are paid quarterly in advance based on the value of assets under
management as of the first day of each calendar quarter (adjusted for contributions but not withdrawals
made during the quarter). Management fees are prorated for any period that is less than a full calendar
quarter and deducted in calculating the net profit or net loss of the Private Fund. In its sole discretion, the
Adviser may waive or modify management fees for Private Fund Investors. The management fees for the
Separate Account are paid after the end of each quarter and will be prorated for any period that is less than
a full calendar quarter and will be deducted in calculatingthe net profit or net loss of the Separate Account.
For the Investment Companies, and the UCITS, the management fees are calculated based on average
daily net assets values, and are paid monthly, in arrears. The Separate Account management fees are
calculated by using the average of the beginning of month net assets for the quarter.
Performance-Based Compensation
The Adviser charges a performance-based fee from the Private Funds, which is compensation in the form
of an allocation that is based on a share of capital gains on or capital appreciation of the assets of the Private
Funds. This compensation may be paid to the Adviser or to a related person of the Adviser and is generally
at a rate of 20% per annum, subject to a high watermark. In its sole discretion, the Adviser may waive or
modify the performance-based allocation for Private Fund Investors.
The Adviser receives performance fees from the UCITS, ranging from 0% to 10.5% per annum. The
performance fees received from the UCITS is a portion of the overall performance fees charged to
shareholders, which, depending on share class, range from ranges from 0% to 15% per annum. The Adviser
is not paid a performance-based fee by the Investment Companies.
The Adviser charges performance-based fees from the Separate Account of 20% per annum, subject to a
hurdle rate and carry-forward provision, as detailed in the investment management agreement.
The details on how fees are charged by the Adviser are described in each Fund’s offering documents.
B. Payment of Fees
The Adviser deducts management fees from the Private Funds on a quarterly basis. For all other Clients,
the Adviser’s management fees are paid by the Clients. The Adviser does not deduct management fees
from such Client accounts.
C. Other Fees and Expenses
The Adviser is responsible for and pays, or causes to be paid, the following overhead expenses: office rent;
furniture and fixtures; stationery; secretarial/internal administrative services; salaries; entertainment
expenses; employee insurance and payroll taxes. Expenses paid by the Clients include: management fees;
legal, audit and accounting expenses (including third party accounting/administration services); investment
expenses such as commissions, research fees and expenses; interest on margin accounts and other
indebtedness; borrowing charges on securities sold short;custodial fees; and any other expenses related to
the purchase, sale or transmittal of Client assets. In certain circumstances, the Adviser pays a portion of
the expenses, including legal and accounting expenses, of Kettle Hill Partners, LP, Kettle Hill Partners II, LP
and KHX, LP. Although the Adviser has no obligation to pay such Private Fund expenses in the future, if the
Adviser does not do so, this may affect future returns. In addition, Clients will incur brokerage and other
transaction costs. Please refer to Item 12 of this Brochure for a discussion of the Adviser’s brokerage
practices.
Client assets are invested in money market mutual funds, exchange-traded funds (“ETFs”) and other
registered investment companies. In these cases, the Client will bear the investment management fee and
other fees of the money market fund, ETF or registered investment company, which are in addition to the
fees paid to the Adviser.
D. Prepayment of Fees. For Private Funds, the management fees are paid to the Adviser in advance and
prorated for any period during which the Adviser is not providing investment advisory services for the entirety
of the period. For all other Clients, the management fees are paid to the Adviser quarterly or monthly in arrears
based on the applicable governing documents.