Item 5. Fees and Compensation:
(A) Generally: All fees are individually negotiated. Circumstances
considered when negotiating fees may include, without limitation,
customary market rates, specialized guidelines, and other
performance/incentive fee or allocation arrangements with the
client.
Management fees for clients are calculated based on an annual
percentage of the value of the assets under management.
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In addition, the Firm may collect incentive/performance fees or
allocations based on the performance of investments. Please refer
to Item 6, below, for a more detailed description of performance/
incentive fees or allocations, and related conflicts of interest.
(B) Payment of Fees: Management fees are billed periodically
(monthly or quarterly) as specified in the client’s investment
management agreement or offering memorandum.
The Firm does not currently receive management fees in
connection with advisory services provided to separate accounts.
In consideration for its services to the Partnership, the Firm
receives a monthly management fee (“Management Fee”) equal to
1/12th of 2.0% (approximately 2.0% annually) of each investor’s
share of the Partnership’s net asset value. The Management Fee is
payable monthly, in advance, and calculated as of the first day of
each calendar month. A pro rata Management Fee is charged to
investors on any amounts permitted to be invested during any
calendar month. No part of the Management Fee is refunded in
the event that an investor withdraws all or any of the value in the
investor’s capital account during a calendar month. The Firm, in
its sole discretion, may waive or reduce the Management Fee with
respect to one or more investors for any period of time, or agree to
apply a different Management Fee for that investor.
Please refer to Item 6 for a description of the terms associated with
the Firm’s receipt of performance/incentive fees or allocations.
(C) Additional Fees and Expenses:
Based on the Firm’s discretion, the Partnership may pay for its
operating expenses, including, but not limited to, all accounting,
auditing, tax preparation, legal, administration, research and
trading costs. The Firm pays for its own administrative and
overhead expenses incurred in connection with providing services
to the Partnership.
In addition, clients will incur brokerage and other transaction costs.
Clients should review carefully Item 12, which discusses conflicts
of interest related to brokerage practices. Brokerage commissions
and/or transaction ticket fees charged by the custodian are billed
directly to the client. The Firm will not receive any portion of such
commissions or fees from the custodian or client. In addition,
clients may incur certain charges imposed by third parties other
than the Firm in connection with investments made through the
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account, including but not limited to, IRA and qualified retirement
plan fees.
Separately managed account clients will also bear any agreed upon
expenses as set forth in the relevant investment management
agreement.
(D) Fees Paid in Advance: As stated above in connection with the
Partnership, the Management Fee is payable monthly, in advance,
and calculated as of the first day of each calendar month.
Termination of Services: Termination terms are specified in the
relevant offering documents or investment management
agreement. In general, client may terminate its investment
management agreement by giving the Firm thirty days prior
written, or otherwise as the Firm may determine in its sole
discretion.
(E) Additional Compensation of Supervised Persons: No
supervised person accepts compensation for the sale of securities
or other investment products, including asset based sales charges
or service fees from the sale of mutual funds.
1. Although this is not applicable to the Firm, in the event that a
supervised person were to accept additional compensation, as
described above, such practice would present a conflict of
interest and give the Firm or its supervised persons an incentive
to recommend investment products based on the compensation
received, rather than on a particular client’s needs. In such a
scenario, lower fees for comparable services may be available
from other sources. In addition, clients may be able to invest
directly in the mutual funds in which the Firm invests clients’
accounts and thereby avoid the additional fees charged to client
by the Firm.
2. Although this is not applicable to the Firm, in the event that a
supervised person were to accept additional compensation, as
described above, all clients should note that they would have
the option to purchase investment products that the Firm
recommends through other brokers or agents that are not
affiliated with the Firm and/or not used by the Firm.
3. If more than 50% of the Firm’s revenue from advisory client’s
results from commissions for the sale of investment products
that the Firm recommends to clients, disclose that commissions
provide the Firm’s primary compensation. Not applicable:
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The Firm is not registered as a broker-dealer and is not
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