Item 5: Fees and Compensation
Item 5.A.
In general, the fees for the Investment Funds and Separate Account are not negotiable.
The Advisory Clients (defined in Item 4.B. above) generally pay an annual management fee of 1.5% of
portfolio assets, calculated and payable quarterly in advance as of the first day of each quarter, depending
on the specific Investment Fund and the share class. The Investment Funds also pay an incentive allocation
based on the performance of the portfolio. An incentive allocation of 20% of any realized and unrealized
gains is paid on an annual basis.
Performance-based allocations are only charged consistent with the SEC rules and regulations, including
Rule 205-3 under the Investment Advisers Act of 1940. The General Partner of the Investment Funds, in
its sole discretion, may waive or calculate differently the management fees and incentive allocations with
respect to investments made by affiliates or employees and certain other investors in the Investment Funds
or Separate Account.
Incentive allocations are calculated and accrued monthly but are generally allocated annually at year-end.
Incentive allocations are also subject to a high water mark.
Salzman may in the future charge other types of fees and use different fee structures, including variations
of incentive allocations.
Item 5.B.
With respect to the Investment Funds, Salzman deducts fees directly from client assets. The Management
Fee is deducted quarterly and is calculated and payable quarterly in advance. The Management Fee is
prorated for any capital contribution or withdrawal that occurs other than as of the first day of a quarter.
Organizational expenses may be amortized over a period of up to five years.
The Incentive Allocation is accrued monthly; however, investors pay the Incentive Allocation at the end
of each fiscal year. If a withdrawal occurs at any time other than at the end of a fiscal year, the withdrawing
investor will be responsible for the Incentive Allocation at the time of the withdrawal.
With respect to the Separate Accounts, Salzman calculates fees internally, which are then verified by
either the client or a third-party. Salzman provides an invoice to the Separate Accounts for payment of the
fees. Salzman follows the same procedures regarding outstanding Incentive Allocations which may be
payable.
Lastly, all fees are reviewed by Salzman’s Chief Compliance Officer.
Item 5.C.
The Investment Funds bear their own expenses. These expenses include investment expenses, legal
expenses, internal and external accounting expenses, auditing and tax preparation expenses, custodial and
prime brokerage expenses, premiums for liability insurance covering the General Partner, the Firm and
their members, partners, officers, employees and affiliates, fees and expenses of the Administrator and
fees and out-of-pocket expenses of any service company retained to provide fund accounting, bookkeeping
and administrative services and extraordinary and nonrecurring expenses. Organizational expenses may
be amortized over a period of up to five years.
Item 5.D.
The Advisory Clients must pay fees quarterly in advance. Management fee will be prorated for any capital
withdrawal by an investor that is effective other than as of the first day of a quarter.
Item 5.E.
No one under Salzman’s supervision or control is compensated for the sale of interests in the Advisory
Clients.