Item 5. Fees and Compensation
As noted in Item 7, below, our clients are non-U.S. listed funds, private funds and institutions with
SMAs.
For SMAs, SAM HK is compensated for its investment management services based on a per cent of
assets under management (“Fee”). We will not charge U.S. clients a performance fee but, as
discussed below, we do this for non-U.S. clients.
Fees are negotiable, depending upon the type of client and the assets involved.
For funds, investors pay a fee based upon the fee schedule for that fund, as disclosed in that fund’s
constitutional and offering documents. This may or may not include a performance fee, particular to
that fund’s fee schedule.
The administrator of each fund values securities and investments and calculates Fees. The custodian
for each SMA values securities and investments and calculates Fees. We perform a reconciliation of
all valuations and Fee calculations. External auditors audit our calculations and methodologies.
Fees are payable monthly or quarterly in arrears, as set forth in the IMA or the fund’s constitutional
and offering documents.
We do not deduct a fee from a client’s account or have the authority to do so. The administrator or
custodian, acting as the agent of the client, pays our fee against an invoice issued by SAM HK. Clients
should review the invoice to verify the fee calculation and corresponding debit as reflected in the
account statement provided by their custodian.
Clients pay charges imposed by custodians, brokers and other third-party service providers. Such
fees include, but are not limited to, brokerage commissions, transaction fees, custodian fees,
deferred sales charges, odd-lot differentials, transfer taxes, wire transfer and electronic fund fees,
management fees and other fees and taxes on brokerage accounts and securities transactions.
Where SAM HK exercises discretion and causes a client to invest in a fund, futures ETF or other
private fund, a client would pay charges such as commissions, management fees or expenses. SAM
HK does not receive any portion of these commissions, fees or expenses.
SAM HK will not invest U.S. client assets in a SAMC or Samsung fund.
IMAs are terminable at will by either party. In the case of any termination, fees will be calculated on
a pro rata basis through the date of termination.
SAM HK does not receive compensation for the sale of securities or other investment products,
including asset-based sales charges or service fees.