ITEM 5 – FEES AND COMPENSATION
The Adviser’s Basic Management or Advisory Fees
The specific manner in which fees are charged by SCHK is established in the relevant Fund’s PPM
(in SCOF Funds’ case, fees are only charged to the SCOF Funds by SCHK as the investment
manager) or each SMA Agreement, as applicable. Generally, and pursuant to the relevant PPM or
SMA Agreement, fees for the management or advisory of Funds and SMAs are based on a
percentage of the total assets in the portfolio (including margined assets).
However, certain investors in Funds may receive more favorable terms that are not afforded to
other investors in the same Fund, such as waived or reduced (i) thresholds of minimum initial
subscription amounts, minimum additional subscription amounts and minimum holding amounts,
(ii) subscription fee or redemption charge, (iii) management fee or performance-based fee with
respect to investments by SCHK, its affiliates, their respective employees, and any investors
considered strategically important. Details of fee terms, including the management or advisory
fees and other expenses are described in each Fund’s PPM.
Where SCHK provides direct investment advisory services for clients, SCHK’s actual fees,
minimum fees, and minimum account sizes may be subject to negotiation and may vary from the
fees described in this Brochure. A client may pay more or less fees than similar clients depending
on the particular circumstances of the client, size, additional or differing levels of services or as
otherwise agreed with specific clients. Clients that negotiate fees, including a flat fee, may end up
paying a higher fee than that as described in this Brochure as a result of fluctuations in the client’s
assets under management or advisement, and account performance.
Calculation and Deduction of Management or Advisory Fees
SCHK generally charges management or advisory fees on a monthly or quarterly basis in arrears,
depending on the agreement between SCHK and the client. However, for certain clients, SCHK
may charge fees on a quarterly basis in advance. SCHK charges its clients directly for advisory
and/or management fees, but is not authorized to withdraw such fees directly from clients’
accounts. Management or advisory fees will be prorated for each capital contribution and
withdrawal made during the applicable calendar period, and for accounts initiated or terminated
during a calendar period. Upon termination of any client relationship, any prepaid, unearned fees
will be refunded as soon as practicable, and any earned, unpaid fees will become due and payable.
Other Fees and Expenses
In addition to investment advisory, management and performance-based fees, investors in the
Funds and the SMAs bear certain other costs charged to the Funds or the SMAs. Such costs vary
and typically include, though are not limited to, setup expenses of the relevant Fund/SMA vehicle,
accounting and audit, legal, fund administration and custody fees, taxes and duties, government
charges, regulatory filings, insurance benefiting the relevant Fund and/or its investor(s), directors,
officers, agents and employees, and other costs. Furthermore, SCHK's fees are exclusive of
brokerage commissions, transaction fees, and other related costs and expenses that are incurred by
or on behalf of the client. Clients may incur charges imposed by custodians, brokers, clearing
houses and other third parties such as administrators, legal counsel and auditors, deferred sales
charges, odd-lot differentials, transfer and other taxes, wire transfer and banking charges, other
fees on brokerage accounts and securities transactions and governmental filing fees.
Such charges, fees and commissions are exclusive of and charged before SCHK’s fees, and
SCHK does not receive any portion of these commissions, fees, and costs.
Item 12 further describes the factors that SCHK considers in selecting or recommending broker-
dealers for client transactions and determining the reasonableness of their compensation (e.g.,
commissions), as well as the research and other benefits that SCHK may receive from broker-
dealers.
Prepaid Fees
Except as disclosed above, SCHK does not charge clients fees in advance, unless previously agreed
with the client.
Compensation for the Sale of Securities
Neither SCHK nor its supervised persons accept compensation for the sale of securities or other
investment products, including asset-based sales charges or service fees from the sale of
investment funds.