Item 5 – Fees and Compensation
A. Fee Schedule
The fees and compensation payable to the Adviser are negotiable and vary among its Clients.
However, the Adviser is generally entitled to a Management Fee (“Management Fee”) and a
Performance Fee (“Performance Fee”) which are each defined and controlled by the terms of the
Governing Documents applicable to each Client. Such fees are generally described and summarized
below for purposes of this Brochure.
1. Management Fee
With respect to the Private Funds, the Adviser typically receives an asset-based Management
Fee calculated as a percentage of each investor’s capital account balance, payable monthly in
advance. The Management Fee is 1.5% The Adviser may agree and has agreed with certain
investors in Private Funds to a variation of such fees or related terms.
With respect to the Sub-advised Funds, the Adviser generally receives a management fee similar
to those paid by the Private Funds but such fees are subject to additional negotiation as to
amount and timing. Management Fees are generally charged monthly or quarterly and payable
in advance or in arrears. Management Fees paid by Sub-advised Funds may be and in some cases
are different or more or less favorable than those paid by the Private Funds or other Sub-advised
Funds. The details of such fees are described in detail in each Sub-advised Fund’s offering
documents.
2. Performance Fees
With respect to the Private Funds, the Adviser generally receives a Performance Fee equal to a
percentage of the net income allocated to each investor for the year, but only to the extent net
income allocated to that investor exceeds any cumulative losses that were allocated to that
investor for earlier periods and that have not been recovered (a “high water mark”). This
Performance Fee is generally between 15% and 20% and is typically made at the end of each
calendar year.
With respect to the Sub-advised Funds, the Adviser generally receives a Performance Fee similar
to those paid by the Private Funds but such fees are and may be subject to additional negotiation
as to fee rates, the amounts, and timing, as further described in each Investment Management
Agreement. Performance Fees paid by Sub-advised Funds may be and in some cases are different
or more or less favorable than those paid by the Funds or other Sub-advised Funds.
See Item 6 below for more information concerning performance fees.
B. Payment of Fees
Management Fees are generally calculated and payable either quarterly or monthly as noted above,
while Performance Fees are calculated as of the last business day of the calendar year and payable
annually. Clients receive an invoice for any applicable fees owed.
C. Third-Party Fees
The direct expenses borne by each Client are described more fully in each Client’s offering documents
or IMAs. However, Clients will generally pay such costs and expenses that the Adviser determines to
be reasonably necessary, appropriate, advisable or convenient to carry on its business and realize its
objective, including but not limited to: (i) management fees; (ii) all general investment expenses (i.e.,
expenses which the Adviser reasonably determines to be directly related to the investment of the
Client’s assets); (iii) all administrative, legal, accounting, auditing, record-keeping, tax form
preparation, compliance and consulting costs and expenses; (iv) fees, costs and expenses of third-
party service providers that provide such services; and, (v) any extraordinary expenses, among other
expenses.
These fees are exclusive of brokerage commissions, transaction fees, and other related costs and
expenses which will also be borne by the Clients. Such charges, fees and commissions are exclusive of
and in addition to the Management Fee and Performance Fee. Please see Item 12 of this Brochure for
more information regarding how the Adviser selects brokers and determines the reasonableness of
their compensation.
The Adviser may, in its sole discretion, elect to cap, waive, or otherwise limit certain expenses of a
Client in order to reduce the overall expense burden to investors. Any such expense limitation or
waiver is voluntary and may be modified or revoked by the Adviser at any time, without prior notice,
to the extent permitted by and in accordance with the applicable Client’s Offering Documents or IMAs.
There can be no assurance that any expense cap or waiver will be maintained for any particular period,
and investors should not rely on the continuation of any voluntary expense limitation when making
an investment decision.
D. Prepayment of Fees
Clients are generally required to pay Management Fees in advance. If the advisory contract is
terminated prior to the end of the billing period, the Management Fee will generally be prorated to
reflect the portion of the billing period for which the Adviser did not serve as investment manager for
the Client, and such amount will be refunded to the Client in accordance with the terms of the
applicable Client’s IMA or Offering Documents.
The Adviser generally requires Sub-advised Fund clients to provide written notice of its desire to
withdraw any capital amount between 45-60 days in advance, in some cases subject to a one year
lock up period or early withdrawal fee. Private Fund investors are generally subject to advance notice
and a one-year lock-up period with an early withdrawal reduction.
E. Outside Compensation for the Sale of Securities
Neither the Adviser nor any of its supervised persons receives any compensation from the sale of
securities or other investment products.
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