Kinetics Asset Management LLC

Item 5    Fees and Compensation

The Firm receives a management fee based on the assets under management in client accounts. In addition, certain
accounts are charged a performance fee (also referred to as an incentive fee). Fees from KMF are deducted and
paid monthly in arrears pursuant to the investment advisory agreement between the Firm and KMF. Fees for SMAs
are generally paid or deducted from a client’s account quarterly in arrears although certain clients may elect to have
management fees paid to the Firm in advance. Fees paid to the Firm for its sub-advisory services to the UCITS
fund are paid quarterly in arrears.

Performance fees are generally deduced from an investor’s capital account annually, at the end of every calendar
year, but may also be deducted quarterly. Performance fees may also be subject to a “high water mark,” or other
“hurdle rate,” pursuant to the confidential written offering documents or investment management agreement.
Management and performance fees are subject to waiver by the Firm in certain instances including, but not limited
to, investments by Employees and owners of the Firm.

Clients invested through a model delivery or wrap program pay a fee directly to the wrap program sponsor and/or
custodian. The Firm is entitled to a portion of the wrap fee that a client pays to their custodian or plan sponsor.

Employees and owners of the Firm are generally not charged either management or performance fees for
investments made in a separately managed account. Clients who contract with the Firm for the management of
separately managed accounts are generally charged the fees reflected below. Clients who engage the Firm to
provide management for Custom Accounts may pay a fee that is higher or lower than accounts that have holdings
similar to other strategies offered. The fees negotiated for separate accounts depend on several factors, including,
but not limited to, the size of the investment, the complexity of the investment strategy, the resources required to
adhere to certain investment restrictions and to build out information technology systems to support the account,
whether economies of scale will be achieved, whether special reporting or regulatory filings will be required and
the extent of client support that will be necessary.

The Firm receives a management fee of between 0.90% and 1.25% of the assets under management for its services
as investment manager to KMF. The complete list of expenses attributable to each fund is located in each fund’s
most recent prospectus, which can be accessed here: www.kineticsfunds.com. For accounts that are sub-advised
by the Firm, the Firm is entitled to a portion of the fees that investors pay to the investment manager.

Although fees are negotiable for SMAs, the Firm’s basic fee schedule for equity strategies is as follows:

                                         Separately Managed Accounts
                                     Assets Under Management     Fee
                                          First $5 million      1.00%
                                          Next $5 million       0.85%
                                          Next $15 million      0.75%
                                          Next $25 million      0.65%
                                         Over $50 million       0.60%

Investors holding shares of KMF are subject to certain fees and expenses, which primarily consist of brokerage and
transaction fees charged by executing brokers, administration fees charged by the administrator, and audit fees
charged by the auditor. Investors should consult the prospectus of KMF for a complete list of fees and expenses
relating to an investment. There may also be fees for exchange fees, SEC fees, advisory and administrative fees
charged by mutual fund companies and exchange-traded funds held in the portfolios, custodial fees, transfer taxes,
wire transfer and electronic fund processing fees, and commissions or mark-ups/mark-downs on security
transactions. Many fees, including custodian, audit and administrative fees may be negotiated between KMFs and
the service provider. Custodial fees for SMAs are negotiated between the client and the respective custodian and/or
administrator.

Supervised persons (defined as any officers, partners, directors, or other persons occupying a similar status or
performing similar functions, employees, or other persons who provide investment advice on the Firm’s behalf and
are subject to the Firm’s supervision and control) are not compensated on the sale of securities or other investment
products; however, as noted under Item 10, KBD, an affiliate of the Firm, has a contractual agreement with the
Firm (or its affiliate) for the payment of fees for the referral of investors to the Firm. Similarly, the Firm has
contractual agreements with other third-party marketers as further described under Item 10 of this Brochure. KBD
is a broker-dealer registered with the SEC and a member of the Financial Industry Regulatory Authority
(“FINRA”). Any fees paid by the Firm to KBD or third-party marketers are paid directly by the Firm and are not
paid by clients.

Private Fund Fees

With respect to private investment funds (“Private Funds”), Kinetics generally receives fees as set forth in each
Private Fund’s respective confidential Private Placement Memorandum, which generally consists of a management
fee and performance fee. Management fees are based on a per annum percentage of underlying assets. Performance
or incentive fees are based on a share of capital gains on or capital appreciation of, the assets of a client. These
performance fees are generally subject to a “high water mark.” Any such performance fees will comply with the
applicable requirements of the Advisers Act and specifically Section 205-3 thereof (otherwise referred to as the
“Performance Fee Rule”). Some Private Fund investors, including employees of the Firm, may negotiate or be
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Item 7     Types of Clients

The Firm provides discretionary investment advisory services to registered mutual funds, retail and institutional
separate accounts, wrap and model delivery programs, a Private Fund, and a UCITS fund.

KMF is set up in a master/feeder structure, except for one fund that is not part of the master/feeder structure.
Kinetics Portfolio Trust, a statutory trust organized pursuant to a Declaration of Trust under the laws of the State
of Delaware, was established in 2000 and is comprised of a series of mutual funds, certain of which are non-
diversified, and others of which are diversified. KMF is a Maryland corporation established in 1999 that is
comprised of open-end management investment companies. Each fund is a feeder fund that invests all of its
investable assets in a corresponding “master” portfolio.

The Firm executes an investment advisory agreement with each separate account client prior to exercising
investment authority over client assets. The Firm provides investment advisory services to a wide variety of clients,
including, but not limited to, individuals, trusts, banks, investment companies, pension and profit-sharing plans,
endowments and foundations, corporations, partnerships, and certain other foreign entities.

In the case of retail separate accounts, the Firm generally accepts clients who are invested through a wrap program;
however, clients may invest directly with the Firm through one of its separate account strategies.

Investors in the KMF, UCITS, the Private Fund, or SMA products are required to adhere to the criteria established
in the Prospectus, SAI, or investment advisory agreement, as applicable, for purposes of maintaining an account.
The minimum investment for all but the institutional classes of KMF is $2,500. Institutional class minimums are
$1,000,000. Separate retail account minimums are $250,000 and separate institutional account minimums are
$5,000,000. The minimum investment for the UCITS is $100,000. All minimum investments are subject to waiver
by the Firm. The requirements for opening and maintaining an SMA vary and may be negotiated on a case-by-
case basis.