FEES AND COMPENSATION
U.S. Funds and Offshore Funds
Generally, NewSmith Asset Management LLP receives an incentive allocation of 20% of the net capital
appreciation (the "Incentive Allocation") allocated to each limited partner (depending on the class of
interests held by such limited partner), subject to the provision for a loss recovery account (the “Loss
Recovery Account”) which is credited with any net capital depreciation allocated to such limited partner,
at the end of each U.S. Fund’s fiscal year. NSAM will not receive any Incentive Allocation with respect
to a limited partner’s capital account until such limited partner has recovered all net capital depreciation,
if any, debited to its Loss Recovery Account (as adjusted for withdrawals of capital by the Limited
Partner). NSAM receives a management fee of 1.5% - 2.0% annually of the capital account balance of
each limited partner of the U.S. Funds (depending on the Hedge Fund and class of interests held by such
limited partner) for providing administrative services. The management fee is payable monthly in arrears.
At the end of each Offshore Fund’s fiscal year, NSAM receives incentive fees from the Offshore Funds of
20% of the net realized and unrealized appreciation in the net asset value (“NAV”) of each series of
shares of the Offshore Funds. An incentive fee will only be paid with respect to the net realized and
unrealized appreciation in the NAV of a series of shares (before any accruals for incentive fees and after
adjusting for any increase in the NAV of a series due to the issuance of new shares of such series during
the applicable period) in excess of the “Prior High NAV” of such series of shares. The Prior High NAV
of a series of shares is the NAV of that series immediately after the payment of a year-end incentive fee
with respect to such series. The Prior High NAV of a series will be reduced pro rata for interim-year
redemptions of shares of such series. NSAM receives a management fee from each of the Offshore Funds
that is 1.5% - 2.0% of the net asset value of each class of shares of the Offshore Funds (depending on
Hedge Fund and class of shares invested in), payable monthly in arrears.
NSAM may elect to receive all or a portion of the incentive fee from each Offshore Fund currently or on
a deferred basis subject to a deferred compensation arrangement. Investment advisory contracts with the
Offshore Funds may generally be terminated upon 90 days prior written notice. Incentive fees are
assessed in accordance with the requirements of Rule 205-3 under the Investment Advisers Act of 1940.
If shares of the Offshore Funds or interests in the U.S. Funds (together, “Interests”) are redeemed prior to
a calendar year-end, an incentive fee/incentive allocation (as applicable) with respect to such redeemed
Interests will be determined and paid at such time with respect to such Interests.
UCITS Sub-Funds
As noted in ITEM 4, detailed subscription terms for shares in the UCITS sub-funds are specified in the
relevant supplement (contained within the Prospectus for NewSmith Investment Funds plc) for that Fund.
Generally, NSAM is permitted to receive (1) a preliminary charge, (2) an investment management fee and
(3) a performance fee.
(1) The preliminary charge can be received on the sale of Shares to an investor. The current percentage
rates of any preliminary charge are shown in the relevant supplement for each Fund. The maximum
amount for such preliminary charge is 5% of the value of the relevant subscription.
5 BROCHURE
(2) An investment management fee can be received out of the assets of each Fund at the applicable rate
specified in the relevant supplement for each fund on the Net Asset Value of that Fund or each Class of
Shares in that Fund. The fee will, unless otherwise specified in the relevant supplement, accrue and be
calculated on each Dealing Day on the Net Asset Value of the relevant Fund or Class of Shares in the
Fund (before deducting any accrued Performance Fees) concerned on the previous Dealing Day and shall
be payable monthly in arrears.
NSAM may from time to time, and at its sole discretion, and out of its own resources decide to rebate to
intermediaries and/or Shareholders part or all of the Investment Management Fee. The Investment
Management Fee is exclusive of value added tax (if any), which will be added, where applicable.
(3) NSAM may also be entitled to a performance fee where specified in the relevant supplement for each
Fund in respect of a Class of Shares of a Fund.
NSAM may from time to time, and at its sole discretion, and out of its own resources decide to rebate to
intermediaries and/or Shareholders part or all of the Performance Fee. The Performance Fee is exclusive
of value added tax (if any), which will be added, where applicable. The UCITS umbrella fund
(NewSmith Investment Funds plc) will pay the reasonable out-of-pocket expenses of NSAM.
Additional Investment Advisory Accounts
NSAM’s management of additional investment advisory accounts for institutional clients generally
provides for the same terms as those described in this Item 5 (FEES AND COMPENSATION-U.S. Funds
and Offshore Funds). However, fees for these “segregated mandates” are negotiable and such accounts
may be charged fees different from those described in ITEM 5.
Additional Expenses
Our fees are exclusive of brokerage commissions, transaction fees, custodial fees, expenses relating to
short sales, clearing and settlement charges, initial and variation margin, interest expense, pricing
services, consulting and other professional fees relating to particular investments (including consulting
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