Item 5 – Fees & Compensation
The specific manner in which SCM charges fees is established in an Advisory Client’s investment
management agreement/investment sub-advisory agreement (as applicable) with SCM.
Fund
The Fund pays a management fee to SCM in advance on the first business day of each month. For Fund II,
the management fee equals (i) 0.104% (1.25% per annum) of the net asset value attributable to the Fund’s
Class A interests and (ii) 0.125% (1.50% per annum) of the net asset value attributable to the Fund’s Class
C interests. In addition, as discussed in Item 6, the General Partner of each Fund, affiliates of SCM, are
entitled to an incentive allocation. For Fund II, it equals (i) 15% of the net increase in each Class A limited
partner’s capital account and (ii) 20% of the net increase in each Class C limited partner’s capital account,
subject to a high water mark. Currently, Fund II has issued only Class A interests. The General Partners of
the Fund reserve the right to adjust or waive either management fees or incentive allocation for current
or prospective limited partners. The management fee and the incentive allocation are deducted and
allocated by the Fund’s administrator.
On a monthly basis, the Fund also pays the costs and expenses related to its investments and its operations
including, without limitation, investment and research related travel costs, brokerage commissions,
trading costs and investment related costs, research expenses, costs associated with market data services,
legal and auditing expenses, accounting, fund administration, investment related consultants and other
service provider expenses, custody fees and expenses, insurance premiums of the Fund, the General
Partner and/or SCM (including insurance premiums with respect to any of their principals, partners and
officers), expenses incurred with respect to the preparation of annual reports and other financial
information, and expenses incurred with regard to sub-accounts (if any). See Item 12 for a discussion of
SCM’s brokerage practices.
Sub-Advised Fund
SCM is paid a performance fee in an amount equal to a percentage of the gains in the accounts of the Sub-
Advised Fund, subject to reduction in certain circumstances as more fully described in the relevant sub-
advisory agreement between the Sub-Advised Fund, SCM, and other relevant parties when necessary.
The performance fee is paid monthly in arrears and is not deducted by SCM directly from the Sub-Advised
Fund’s accounts.
On a monthly basis, the Sub-Advised Fund reimburses SCM for its share of certain investment related
costs, research expenses, and costs associated with market data services.
Additionally, for certain of the Sub-Advised Fund’s accounts, SCM may receive a monthly management
fee as defined more fully in the relevant sub-advisory agreement.
SMA
The SMA pays a management fee to SCM in advance on the first business day of each month. Additionally,
SCM is entitled to a performance fee.