ITEM 5 – FEES AND COMPENSATION
Management Fees
The specific manner in which management fees are charged is described in each Fund’s Private
Placement Memorandum and set out in written agreement with Fund Manager. Generally, fees
for the management of private investment funds, such as the Funds, are based upon a percentage
of the total assets under management (including margined assets).
Currently, PCMCL acts as the investment manager (“Fund Manager”) to and receives
management fees directly from the Funds. Such management fees are generally set at 2% per
annum of the net asset value of the relevant Fund as at each valuation point (but before deduction
of the fees of the applicable fund administrator) and accrued and payable monthly in arrears.
Fund Manager pays the fees of Advisor out of the management fees received by Fund Manager.
The fees of Advisor are calculated in accordance with the terms of the agreements entered into
between Fund Manager and Adviser.
The management fees charged by Fund Manager for separate account clients may differ from the
management fees for the Funds as described above. A separate account client may pay more or
less fees than another separate account client, depending on the particular circumstances of the
client, such as the size of the client’s assets under management and levels of service required.
Calculation and Deduction of Management Fees
Management fees are directly debited from client accounts typically on a monthly basis in
arrears. The calculation of management fees is based on the net asset value as of the last
business day of the month. Accounts initiated or terminated during a calendar quarter will be
charged a prorated fee. Upon termination of any account, any prepaid, unearned fees will be
promptly refunded, and any earned, unpaid fees will be due and payable. No management fee is
payable before services are provided.
Operating Expenses
Investors in the Funds will indirectly bear all fees and expenses incurred in the ongoing ordinary
business operations of the Funds, including legal, accounting and other professional fees and
expenses of various service providers, advisors and consultants (“Operating Expenses”).
The Operating Expenses typically include, but not limited to: (i) general operating expenses,
such as fees and expenses of administrators, auditors, accountants, legal advisors, prime brokers
and custodian, government and fiscal charges, registration and licensing fees, stamp duties and
taxes; and (ii) investment-related expenses, such as brokerage commissions and charges, clearing
and settlement charges, bank service fees, interest expenses, borrowing charges, foreign
exchange costs and other related transaction costs and expenses.
Item 12 further describes the factors considered in selecting or recommending broker-dealers for
investment transactions and determining the reasonableness of their compensation (e.g.,
commissions).
Prepaid Fees
Adviser does not charge clients fees in advance.
Compensation for the Sale of Securities
Neither Adviser nor its supervised persons accepts compensation for the sale of securities or
other investment products, including asset-based sales charges or service fees from the sale of
investment funds.