Item 5: Fees and Compensation
KGH Ltd generally will receive a quarterly fee equal to a percentage of KGH Ltd’s quarterly
costs incurred (expressed on a cost-plus basis), which is billed to the General Partner in
arrears.
Key Group and its employees do not accept compensation, including sales charges or service
fees, from any person for the sale of securities or other investment products.
Item 6: Types of Clients
The Firm exclusively intends to provide services to its client, the General Partner.
Item 7: Methods of Analysis, Investment Strategies and Risk of Loss
Methods of Analysis & Investment Strategy
Key Group primarily provides an extensive long-term fundamental analysis on a broad
universe of issuers within sectors and sub-sectors, as identified and directed by the General
Partner. Key Group may also be directed to provide client-specific non-discretionary
investment research on certain commodities and commodity-related sub-sectors and certain
industrial sub- sectors. The potential investment universe on which Key Group provides client-
specific non-discretionary investment research includes, but is not restricted to, global
equities, fixed income, and commodities.
FORM ADV PART 2A
Risk of Loss Factors
Investing in securities involves risk of loss. The following list of risk factors does not purport to
be a complete enumeration or explanation of the risks involved in an investment. There is no
assurance that the research provided will insulate a client from loss of its investment. Past
performance of investment research is no assurance of future results.
Sector Risks
The Firm’s investment research is focused on certain sectors. The value of the issuers that its
research covers will be vulnerable to factors affecting the natural resources and energy
industries, such as increasing regulation and developments in the energy sector and energy
conservation incentives which can increase compliance costs and affect business
opportunities for companies that are the subject of the Firm’s client-specific research. Key
Group’s focus on investments in select industries means the value of the issuers that its
research covers may rise and fall more than the value of a similar investment in a strategy that
invests more broadly. The issuers that the Firm’s research covers may also be affected by
changing commodity prices, which can be highly volatile and subject to risks of oversupply and
reduced demand.
Use of Leverage
The Firm’s client-specific research and trade execution services may include transactions that
involve the use of leverage. The act of borrowing capital to make investments exposes the
client to additional levels of risks, including (i) greater losses from investments than otherwise
would have been the case, (ii) margin calls that could force the client to liquidate investment
positions and (iii) losses on investments where the investment fails to earn a return that equals
or exceeds the cost of borrowing the capital in the first place. Also, a sharp decline in the value
of investments held by the client may affect the client’s ability to liquidate the investments
quickly, resulting in increased losses.
Short Sales
The Firm’s client-specific research and trade execution services may include short-selling.
Short selling, or the sale of securities not owned by the client, involves certain specific risks.
Short selling exposes the client to the risk of loss in an amount greater than the initial
investment, and such losses can increase rapidly and without limit. There is also the risk that
the securities borrowed by the client would need to be returned to the lender on short notice.
Such a request could require the client to purchase the securities in the open market at prices
that are significantly higher than the proceeds from the initial sale of the securities.
FORM ADV PART 2A
Counterparty Risk
Key Group may, if directed by the client, engage in transactions in securities and financial
instruments that involve counterparties. Under certain conditions, the client could suffer
losses if a counterparty to a transaction were to default or if the market for certain securities
and/or financial instruments were to become illiquid. In addition, the client could suffer losses
if there were a default or bankruptcy by certain other third parties, including brokerage firms
and banks with which the client does business, or to which securities have been entrusted for
custodial purposes.
Dependence on Key Personnel
Key Group is dependent on the demand for services from and directions provided by the
General Partner and if Key Group were to lose either its contract with the General Partner or
his investment directions, the Firm’s ability to continue operations could be adversely
affected.
Trade Execution Risk
Many of the investment techniques used by Key Group require the rapid and efficient
execution of transactions, or the ability to accumulate or liquidate large positions. Inefficient
execution can result in additional costs for the client.
Global Events (War in Ukraine) and Public Health Emergencies
Investment markets can be affected by several external factors such as political and economic
uncertainty, regional conflicts (such as the war in Ukraine), environmental concerns and
widespread public health emergencies (such as the COVID-19 pandemic) resulting in market
volatility and disruption.
Even if the spread of the COVID-19 virus itself is substantially contained for a period of time,
it will be difficult to assess what the longer-term impacts of an extended period of
unprecedented economic dislocation and disruption will be on future macro- and micro-
economic developments, the health of certain industries and businesses, and commercial and
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