ITEM 5: FEES AND COMPENSATION
Private Investment Fund
A. Types of Fees
Adviser currently offers multiple share classes for certain of its Funds. The specific management fees
and annual performance-based fees charged are detailed in each Fund’s offering documents. Typically,
management fees range from 1.5% - 2% of assets under management, while performance-based
compensation ranges from 15-20%. For certain classes, an early redemption fee may be imposed,
which is paid to the Fund.
Under Adviser’s investment management agreement with the Funds, Adviser will receive an annual
management fee based on a percentage of the account balance of each Fund investor. Adviser, in its
discretion, may waive or reduce the management fee as to all or any of the Investors in the Funds or
agree with an Investor to waive or alter the management fee as to that Investor.
Under the Funds’ governing documents, Adviser will also receive annual performance-based
compensation in arrears equal to a fixed percentage of the net capital appreciation (i.e., capital
appreciation less capital depreciation) of each Investor’s account in the Fund. The performance-based
compensation is payable only if, and to the extent that, the net capital appreciation of the Investor’s
account exceeds any net capital depreciation accumulated in prior years (as adjusted for withdrawals of
capital). Adviser, in its discretion, may waive or reduce the performance-based compensation as to all or
any of the Investors in a Fund or agree with an Investor to waive or alter the performance-based
compensation as to that Investor.
Lower fees for comparable services may be available from other sources. The expenses of the Funds,
including Adviser’s management fee and performance-based compensation, may constitute a higher
percentage of average net assets than would be found in other investment vehicles. Investors should refer to
the Fund’s offering documents for further information about fees and expenses.
Sub-Advisory Accounts
Both the management fee and the performance fee are negotiated separately with each Sub-Advisory Client
and are dependent on numerous factors. Adviser will receive an annual management fee based on a
percentage of the account balance of each Sub-Advisory Client, ranging from 1.5-2%, payable on a monthly
or quarterly basis in arrears per the terms of the Sub-Advisory Client’s written agreement. Generally,
Adviser will receive the performance fee annually in arrears equal to a fixed percentage of the net capital
appreciation of the Sub-Advisory Client’s account, generally ranging from 15-20%, though other
arrangements may be negotiated on a client-by-client basis. The method of fee calculation and collection
varies by each Sub-Advisory Client. In some instances, Adviser will calculate the fees due and send an
invoice for payment; in others, the Sub-Advisory Client’s own administrator will calculate the fees due and
submit payment. Adviser does not have discretionary authority to automatically deduct fees due from the
accounts of its Sub-Advisory Clients.
B. Payment Method
The management fee will be paid by the Fund quarterly in advance by deduction from each Investor’s
account in the Fund on the first business day of the calendar quarter. The performance-based compensation
is also paid by deduction from each Investor’s account in the Fund on December 31 (or the closest business
day prior to December 31) for the 12-month performance period ending on the prior calendar year for each
year in which performance-based compensation is earned. If an Investor withdraws all or a portion of its
account in the Fund on a date other than the end of a calendar quarter, a prorated management fee will be
deducted from the amount withdrawn for the period from the preceding quarter-end to the date of
withdrawal. If an Investor withdraws all or a portion of its account in the Fund on a date other than
December 31, payment of performance-based compensation will be made on the amount withdrawn for the
period from the January 1 in the year of the withdrawal to the date of withdrawal.
The management fee will be paid by Sub-Advisory Client accounts as described above. Capital
contributions made on a day other than the first business day of a calendar quarter will be subject to a pro
rata portion of the management fee for such quarter. A pro rata refund of the management fee will be made
in the case of intra-quarter withdrawals or distributions.
C. Costs and Expenses
The Funds bear all expenses of their organization and operation, expenses incurred in the purchase and sale
of investments, and accounting fees, as determined by Adviser. Such expenses include but are not limited
to: (i) investment-related expenses, including brokerage and execution charges, commissions, custodial
charges, and fees for quotation and other data services; (ii) fees related to accounting, trading, portfolio
management and risk management systems; (iii) research subscriptions and expenses and legal and
consulting fees related to investment research; (iv) broken trade and broken deal fees; (v) expenses to
register securities and transfer taxes; (vi) costs and expenses incurred for the purpose of protecting and
enhancing the value of the Fund’s investments (including the costs of instituting and defending litigation);
(vii) taxes, filing and registration fees of the Fund; (viii) all costs, fees and expenses relating to investor
communications, relations, accounting and the preparation and mailing of financial, tax and performance
information to investors; (ix) fees, costs and expenses incurred in connection with borrowings; (x)
administration fees, costs and expenses; and (xi) fees for attorneys, accountants, consultants and other
professionals or experts. Fund investors may also indirectly bear a portion of any fees or expenses charged
by investment funds (including mutual funds or other hedge funds) in which the Fund invests or other
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