Strategic Investment Management LLC

Fees and Compensation
Strategic provides its clients full service discretionary investment planning, implementation and
management of actively managed global portfolios. Strategic’s investment advisory fees are negotiable
under certain circumstances. The percentages upon which annual basic fees are charged may vary,
according to the client’s investment objectives, the extent of the services desired, the types of assets to be
managed and various competitive factors. Strategic may also charge performance fees in compliance with
SEC Rule 205-3 under the Advisers Act (Please see Performance Fees and Side-by-Side Management for
additional information).

Strategic offers the following specific investment advisory services for which special fee arrangements
apply:

Full Global Discretionary Management Services
Strategic’s basic fee schedule for full global discretionary management services for accounts of $100 million
or less is generally 0.50% per annum on the first $100 million of assets under management. Fees are
negotiable for global discretionary management services for accounts of greater than $100 million, and in
certain other circumstances.

Other Services
Fees for services other than those described above, such as management of individual asset classes or
groups of asset classes, investment policy research, specific country management, etc., or consulting or
financial planning services to assist with asset allocation and manager selection are negotiable based upon
client needs and circumstances and other considerations.

Investment Funds
Strategic acts as investment adviser to several investment funds. The fee structure for the investment funds
generally provides for an asset-based fee or an asset-based fee plus an annual performance-based fee
which is based on a percentage of either the appreciation of fund assets or on the value added over and
above a specified benchmark. In addition, as managing member or general partners to certain private equity
funds for which Strategic is the investment adviser, Strategic, as managing member, and certain General
Partners may be entitled to performance-based compensation in the form of carried interest. A detailed
description of the carried interest calculation methodology applicable to a private equity fund can be found
in the relevant fund’s organizational and offering documents.

Client accounts that Strategic manages may be invested in funds managed by Strategic or its affiliates.
When Strategic invests client account assets in funds-of-funds managed by Strategic, the client may be
charged fees both at the overall account level and at the fund-of-funds level. In addition, assets of Strategic
clients (which may include such funds-of-funds) may be invested in specialty products managed by
Strategic that represent a subcomponent of a broader asset allocation strategy, as well as in investment
funds managed by Strategic’s affiliates. In such instances, the client may be charged a fee at the specialty
product level as well. The exact nature of such fees may be negotiable under certain circumstances. There
may be a risk that Strategic would have a financial incentive to invest a client’s assets in such affiliated
funds and products. Nevertheless, Strategic will invest client assets only in securities and strategies that it
deems appropriate for such client.

General
Advisory fees are payable quarterly in arrears, according to the terms and conditions set forth in the
investment management agreement with the client. Clients may be billed directly or authorize Strategic to
directly debit fees from their account. An advisory client generally may terminate its investment advisory
contract upon providing no more than 90 days’ prior written notice. If an account is terminated before the
end of a quarter, the fees charged to the client will be prorated accordingly.

Fee structures, including those noted above, may be modified where a new account is expected to grow
rapidly, where a relationship already exists with a current client, where the client retains Strategic to provide
services with respect to multiple investment mandates or for various other competitive factors.

The differing levels of basic fees among client categories indicated above take into account such factors as
the degree of investment management activity and supervision required, the nature of discretionary or non-
discretionary service provided and the types of investment guidelines and restrictions imposed upon the
management of the accounts.

Strategic may charge different fees for management of different asset classes. For global discretionary
accounts and other accounts, which combine multiple asset classes, Strategic typically has discretionary
authority to determine a client’s allocation to each asset class. Therefore, Strategic may have a financial
incentive to allocate a client’s assets to those asset classes for which Strategic receives a higher fee.
Nevertheless, Strategic will make decisions with respect to asset allocation in a manner that Strategic
deems appropriate for the client.

In addition to the foregoing, there may be specialized investment strategies with individualized fee
arrangements in place as well as historical fee schedules with long-standing clients that may differ from
those applicable to new client relationships.

Strategic does not provide brokerage or custody services and our fees are exclusive of additional fees and
expenses which will be incurred by clients separately for external providers such as sub-advisers, legal
counsel, and custodians, including, but not limited to, brokerage commissions, transactions costs, clearing
fees and other administrative fees and costs. Please refer to the “Brokerage Practices” section of this
Brochure for information regarding the factors that Strategic considers in selecting or recommending broker-
dealers for client transactions.

Performance-Based Fees & Side-by-
Side Management
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Types of Clients
Description
Strategic’s clients may include U.S. and non-U.S.:

       individuals
       trusts and estates
       pension and profit-sharing plans
       pooled investment vehicles
       charitable organizations
       state or municipal government entities
       multinational organizations
       corporations or other businesses
       government investment funds
       family offices

Account Minimums
Strategic generally will only manage accounts on a discretionary basis and generally will not accept
separate accounts less than $100 million; however, under certain circumstances this minimum investment
may be waived. Investment funds managed by Strategic typically have lower minimums.

Methods of Analysis, Investment
Strategies and Risk of Loss
Strategic tailors its investment advisory services in accordance with particular client objectives and
investment strategies therefore vary. For full global discretionary separate accounts, Strategic’s investment
process generally follows the following five steps. For specialized strategies and investment funds, Strategic
may follow a subset of the steps set forth below, or may employ other methods of analysis as discussed
with the client or as described in the relevant fund’s offering documents.

Policy Setting
Typically at the outset of a relationship, one of Strategic’s relationship management professionals work with
the client and senior investment staff to set an investment policy that defines financial objectives, considers
constraints and provides a framework for achieving those objectives. The policy includes a passive,
investable asset allocation that serves as a benchmark against which actual portfolio performance is
measured. It represents a long-term investment strategy that should achieve the objectives of the portfolio,
provided markets deliver equilibrium returns consistent with normal economic growth. The policy also
includes risk control ranges that ensure portfolio diversification, define the permissible magnitude of active
asset allocation, and constrain both absolute and relative risk. Ranges are constructed considering
tolerance for both volatility and liquidity. Typically, Strategic is authorized to tactically manage client
portfolios within these risk control ranges.

Asset Allocation
We find that the optimal asset mix evolves through time in response to changing economic circumstances
and volatile market prices. In response to and in anticipation of these changing circumstances Strategic
actively manages portfolio asset allocation within the ranges defined during the policy setting process.
Strategic’s active asset allocation process is informed by our assessment of the degree to which market
prices diverge from fair value. Strategic considers these quantitative assessments of relative valuation in
the context of Strategic’s fundamental research into market dynamics and economic relationships.

Asset Class Structuring
By structuring, Strategic means decisions regarding large versus small capitalization, value versus growth,
active or passive management, developed versus emerging markets, quantitative or fundamental research,
etc. Structuring decisions are a key determinant of returns within asset classes. Strategic actively manages
the structure of each asset class in coordination with Strategic’s active asset allocation and manager
selection processes.

Manager Selection
Strategic observes that markets are not perfectly efficient; ample opportunity exists for skillful managers to
exploit persistent mispricings at the security level. Strategic uses an open architecture approach to security
selection. Strategic retains specialist managers to execute security selection strategies within the carefully
constructed bounds of Strategic’s asset allocation and structuring efforts.

Risk Management
Investing in securities involves risk of loss that clients should be prepared to bear. Strategic quantifies,
evaluates and controls risk using Strategic’s proprietary risk management system. Strategic’s risk

management system combines the macro-level risks that arise from asset allocation and structuring
decisions with the security-specific risks produced by the active management activities of specialist
investment managers. Strategic budgets, allocates, and monitors both absolute (standard deviation) and
relative (tracking error) portfolio risk. Strategic’s system calculates forward-looking risk estimates at the
total portfolio level, along with the contribution to risk from each asset class, sector, and manager. Strategic
prepares and analyzes detailed risk reports monthly and provides summary reports to clients quarterly, or
more frequently as desired.

In addition to local and international publications on finance, business and the economy, Strategic
subscribes to several data vendors that provide key financial data on both a real-time and historical basis.
Information is also obtained from various research organizations, exchanges and brokers.

Types of Investments
Strategic may offer advice on a broad range of traditional and alternative investments including long and
short positions in U.S. and non-U.S. equities (including preferred and common stock), private equities,
hedge funds, real estate, commodities, U.S. and non-U.S. fixed income investments (which may be rated
or unrated, and which may include convertible securities, bank loans, and other public or private debt
instruments), futures, swaps, options, forward contracts, other derivative instruments, cash and cash-
equivalent instruments, however, actual investments as to which advice may be provided are subject to
change based on market conditions, business plans and other factors. Strategic may also offer advice on
a variety of implementation vehicles including investment funds (including those managed by Strategic or
its affiliates) that invest in any of the instruments described above.
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