Item 5: Fees and Compensation
SCM does not have a standardized fee schedule and may charge management fees
based on AUM, fixed fees and/or performance-based compensation in accordance with the
terms of the offering and governing documents for the Funds. SCM typically charges a
management fee (“Management Fee”) consisting of 0.125% per month (or 1.5% per year),
payable to SCM in advance on the date of each such investor’s admission to the applicable
Fund and on the first business day of each calendar month thereafter. In addition, at the
end of each calendar year, SCM typically receives an annual aggregate profit allocation or
carried interest equal to 20% of the net profit allocated (“Profit Allocation”) to each capital
account of each investor in the Fund for that period (or shorter period until any withdrawal).
SCM may, from time-to-time in its sole discretion, negotiate, reduce or waive the
Management Fee or Profit Allocation in whole or in part for any individual investor in a
Fund. SCM also deducts Management Fees and Profit Allocations due from each
investor’s respective capital account in accordance with the terms of the Funds’ offering
and governing documents. If an investor is allowed or required to withdraw all or a portion
of its interest in a Fund other than at the end of a calendar month, a pro-rated portion of the
Management Fee paid by such investor will be refunded in accordance with the terms of
the applicable Fund’s offering documents.
Each Fund typically pays all costs and expenses incurred by or on behalf of the
Fund or by or on behalf of SCM as general partner or investment manager in connection
with the formation of the offer and sale of interests, and the management and operation of
the Fund, including brokerage costs, legal fees and other transaction costs. The Funds will
incur other investment-related fees such as brokerage commissions, transaction costs and
other related costs and expenses. The Funds also incur certain charges imposed by
custodians, brokers, custodial fees, deferred sales charges, odd-lot differentials, transfer
taxes, wire transfer and electronic fund fees, and other fees and taxes on brokerage accounts
and securities transactions. For additional information regarding fees, please see Item 12.
Net profit or loss of the applicable Fund is allocated at the end of each calendar
month (or at other times when a valuation is performed in accordance with the terms of a
Fund’s governing documents) among each investor’s capital accounts in proportion to the
relative values of such capital accounts.
For more detailed information regarding fee structures and other material
information with respect to the Funds, please see the offering documents for the applicable
Fund.
With respect to separately-managed accounts and sub-advisory relationships, SCM
will also receive management fees and profit allocations, although the exact amounts will
typically depend on the level of services provided, market practice, and the amount and
type of assets being managed.