Item 5. Fees and Compensation
Fees and Allocations for Fund. Fund investors are qualified purchasers as defined in section
2(a)(51)(A) of the Investment Company Act of 1940, as amended. Therefore, information on
how Ripple is compensated for its advisory services and its fee schedule for the Fund are not
included here. Ripple’s compensation is negotiable and varies, but for the Fund, it is set forth
generally in the Fund’s confidential offering circular.
If the Fund terminates or an investor withdraws, the investor bears expenses, the pro rata portion
of the management fees and performance allocations/fees through the date of termination or
withdrawal, except that if an investor withdraws from the Fund on a date other than the last day
of a measurement period, there is no refund to that investor of any management fee that it
previously paid for that period.
Ripple may provide certain investors special fee and allocation arrangements that it does not
provide to other investors. Ripple may waive all or any portion of the management fees or
performance allocations/fees with respect to any investor.
Fees for Individually Managed Accounts. Ripple’s compensation is negotiable and varies, but for
its individually managed accounts, Ripple typically charges a management fee of 0.3% per
annum of the net asset value of the individually managed account, payable quarterly in arrears.
Accounts, if any, that invest in mutual funds also pay, indirectly, investment advisory fees to the
managers of those funds.
Ripple typically will bill an individually managed account client directly for its fees and
expenses and such clients agree to instruct their broker to pay such fees and reimbursements
directly to Ripple from the individually managed account client’s account.
General Disclosures. Ripple complies with Rule 205-3 under the Investment Advisers Act of
1940, if required. Performance allocations/fees may create an incentive for Ripple to make more
risky and speculative investments than it would otherwise make.
Ripple believes that its fees are competitive with fees charged by other investment advisers for
comparable services. Comparable services may be available, however, from other sources for
lower fees.
Withdrawal Rights. A Fund investor generally may, by notifying the Fund on or before the last
day of the preceding month and subject to certain other restrictions, withdraw as of the last day
of any calendar month. If an investor withdraws before the day preceding the first anniversary of
the investor’s first investment in the Fund, the Fund generally will charge a fee of 3% of the
investment withdrawn.
Except as may be otherwise negotiated in particular cases, the holder of an individually managed
account may terminate the account by giving 3 business days’ prior written notice and such
termination will take effect as of the Wednesday following the third business day after the
written notice. For individually managed accounts, expenses and the pro rata portion of the
management fee through the date of termination are charged to the account. All prepaid but
unearned advisory fees for individually managed accounts are refunded on termination of a
client’s account.
Expenses. Each client account is responsible for its own costs and expenses, including trading
costs and expenses (such as brokerage commissions, expenses related to short sales, and clearing
and settlement charges), ongoing legal, accounting and bookkeeping fees and expenses, and the
fees and expenses charged by any fund administrator for its accounting, bookkeeping and other
services. Ripple bears its own operating, general, administrative and overhead costs and
expenses, other than the expenses described above. Securities brokerage firms and futures
commission merchants (“FCMs”) that execute clients’ securities and commodities trades,
however, may pay all or part of these costs and expenses, as discussed in Item 12 below.