ITEM 5 – FEES AND COMPENSATION
Item 5.A Describe how you are compensated for your advisory services. Provide your fee
schedule. Disclose whether the fees are negotiable.
The Funds offer interests/shares only to certain qualified investors and admission
to the Funds is not open to the general public. Limited partnership interests of the
Domestic Feeders and shares of the Offshore Feeders are sold only to qualified
investors who are “accredited investors” under Rule 501 of Regulation D of the
Securities Act of 1933, as amended, and “qualified purchasers” as such term is
defined in Section 2(a)(51) of the Investment Company Act of 1940, as amended.
Please refer to the offering documents for the Funds for a detailed description of
the fee schedule.
Investors in the Middle East Funds are typically charged a Management Fee equal
to 1.75% per annum of the amount invested in a particular Middle East Fund,
payable monthly in advance. Investors in the Africa Funds are typically charged a
Management Fee equal to 1.75% per annum of the amount invested in a particular
Africa Fund, payable monthly in advance. As described in each Fund’s offering
documents, Management Fees may be reduced to 1.50% upon the Fund reaching a
certain asset threshold.
At the end of each fiscal year (or upon withdrawal if not at a fiscal year-end),
Investors in the Funds are also typically charged a Performance Allocation/Fee on
a high watermark basis and subject to the applicable hurdle rate. The Fund will
determine the Performance Allocation/Fee applicable to the amount invested in a
particular Fund by applying the following Performance Allocation/Fee
percentages to the following levels:
Net Profit/Increase in NAV Performance Allocation/Fee
Percentage
Amounts up to 10% 0%
Amounts greater than 10% and up to
10%
and including 20%
Amount greater than 20% 20%
SQM does not charge a Management Fee or Performance Allocation/Fee to
Investors that are members, employees or affiliates of SQM or the General Partner
(including certain consultants).
It is critical that Investors refer to the relevant Fund’s offering documents
for a complete understanding of how SQM is compensated for its advisory
services.
Item 5.B Describe whether you deduct fees from clients’ assets or bill clients for fees
incurred. If clients may select either method, disclose this fact. Explain how often
you bill clients or deduct your fees.
As described above, SQM and its affiliates deduct fees from the Funds’ assets in
the form of a Management Fee and a Performance Allocation/Fee.
Investors in the Funds are typically charged a Management Fee that is calculated
and payable monthly in advance. To the extent a capital contribution or
withdrawal/redemption is made as of any day that is not the first day of a fiscal
month, the Management Fee is prorated.
At the end of each fiscal year (or upon withdrawal if not at a fiscal year-end),
Investors in the Funds are also typically charged a Performance Allocation/Fee on
a high watermark basis and subject to the applicable hurdle rate.
SQM has, and may in the future, in its sole and absolute discretion and from time
to time, elect to waive or not charge, in whole or in part, any applicable
Performance Allocation/Fee with respect to any amount invested in a particular
Fund or, with the consent of the affected Investor, charge a Performance
Allocation/Fee on different terms (including without limitation at different
Performance Allocation/Fee percentages), all without the consent or approval of,
or notice to, any unaffected Investor.
It is critical that investors refer to the relevant Fund’s offering documents for
a complete understanding of how SQM is compensated for its advisory
services. The information contained in this Item 5 is a summary only and is
qualified in its entirety by the relevant Fund’s offering documents.
Item 5.C Describe any other types of fees or expenses clients may pay in connection with
your advisory services, such as custodian fees or mutual fund expenses. Disclose
that clients will incur brokerage and other transaction costs, and direct clients to
the section(s) of your brochure that discuss brokerage.
In addition to fees payable to SQM (or the General Partner), Investors will be
responsible for Feeder Fund expenses, including:
The Feeder Funds’ pro rata share of the expenses of the Master Fund;
expenses of the continuous offering of interests, including the cost of
producing and distributing offering memoranda and other marketing and
subscription materials;
printing and mailing costs;
filing fees and expenses;
pricing and valuation fees and expenses;
accounting, administrative, legal, audit, bookkeeping and tax preparation
fees and expenses (including fees and expenses of the Administrator);
the Feeder Funds’ applicable share of the Management Fee;
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