Item 5. Fees and Compensation
Advisory Fees for Separately Managed Accounts
The Adviser provides discretionary investment management services to separately managed accounts for
a fee based on assets under management. The Adviser’s standard management fee rate for Managed
Accounts generally begins at 0.45% annually of assets under management. Actual management fees may
vary and are negotiable depending on a number of factors, including the applicable investment mandate,
the amount of leverage (if any) used to implement the long/short extensions in an SMA Client account, the
services performed, the level of SMA Client account customization, and the overall size of the SMA Client
account or the relationship with an SMA Client’s RIA. Fees are negotiable at the sole discretion of the
Adviser. A minimum annual fee or minimum SMA Client account size may be applied in certain cases.
Because management fees are negotiated and may vary based on the circumstances of each SMA Client
relationship, SMA Clients receiving similar advisory services may pay different fees.
Management fees paid by SMA Clients are typically calculated as a percentage of assets under
management. Management fees are generally billed quarterly in advance, based on the closing value of an
SMA Client account on the first business day of the new quarter. Generally, SMA Clients cause the SMA
Client account custodians to pay the Adviser’s management fee directly from the SMA Client account. SMA
Clients should review their custodial account statements to verify the accuracy of fee deductions.
In certain cases, the Adviser may provide services as a sub-adviser to Client accounts managed by another
investment adviser. In such arrangements, the Client may pay a single advisory fee to the Intermediary,
and the Adviser may receive a portion of that fee pursuant to a sub-advisory agreement.
The Adviser does not charge performance-based fees in Managed Accounts.
Fund Management Fees and Incentive Fees
The fee schedule for the Fund is described in detail in the Fund’s Investment Material. All investors in the
Fund are “qualified purchasers” as defined in Section 2(a)(51) of the Investment Company Act of 1940, as
amended (the “Investment Company Act”) or “knowledgeable employees” as defined in Rule 3c-5 under
the Investment Company Act.
The Fund will pay the Adviser an asset-based management fee each quarter in advance based on the
value of each Investor’s capital account in the Fund on the first business day of each quarter and adjusted
for subscriptions to, or withdrawals from, the Fund during each quarter (the "Fund Management Fee"). The
Adviser may elect to reduce, waive, or calculate differently the Fund Management Fee with respect to any
Fund investor, including without limitation, members, principals, employees, or affiliates of the Adviser or
the Fund’s general partner, an affiliate of the Adviser, relatives of such persons, and for certain large or
strategic investors.
The Fund will be required to pay the Fund Management Fee in advance. In the event of a withdrawal from
the Fund by an investor other than at the end of a quarter, the corresponding Fund Management Fee will be
pro-rated and the excess returned to the withdrawing Fund investor.
As a general matter, the Adviser will be entitled to receive annual performance-based compensation (the
“Incentive Fee”) from the Fund, which is compensation that is based on a share of net profits, if any,
expensed from each Fund investor’s capital account. The Incentive Fee is subject to a loss carryforward
provision. The Fund’s general partner may, in its sole discretion, elect to reduce, waive, or calculate differently
the Incentive Fee with respect to any Fund investor, including without limitation members, principals,
employees, or affiliates of the Adviser or the General Partner, relatives of such persons, and for certain large
or strategic investors. Additional information regarding performance-based fees and related conflicts of
interest is provided in Item 6 – Performance-Based Fees and Side-by-Side Management.
The Fund Management Fee and any Incentive Fee will be deducted from a Fund investor’s capital account
by the Fund’s administrator pursuant to instructions from the Adviser. Fund investors will not have the ability
to choose to be billed directly for fees incurred.
Expenses
Separately Managed Accounts
SMA Client accounts may incur certain fees and expenses in addition to the advisory fees charged by the
Adviser. These fees and expenses are generally charged directly by the applicable service provider and
are separate from, and in addition to, the advisory fees charged by the Adviser. These fees and expenses
may include, but are not limited to:
• brokerage commissions and other transaction costs associated with the execution of trades.
• custodial fees and charges imposed by the Client account custodian.
• margin interest or other financing costs associated with leveraged positions.
Financing costs, margin interest, or securities borrowing fees borne by SMA Client accounts may vary
significantly depending on market conditions and, in the case of securities borrowing fees, the availability
of securities for borrowing.
SMA Clients should review all fee disclosures provided by the custodian or other service providers to
understand the total costs associated with their Managed Accounts.
The Fund
The Adviser is responsible for and pays all overhead expenses of an ordinary and recurring nature such as
rent, supplies, secretarial expenses, its compliance expenses, stationery, charges for furniture and fixtures,
employee insurance, payroll taxes and compensation of employees.
In addition to bearing the Fund Management Fee and Incentive Fee, if any, Fund investors may also be
subject to other expenses related to Fund investments and operations, such as legal, accounting (including
...