Item 5. Fees and Compensation
Advisory Fees and Compensation
Clients are charged up to a 2% per annum management fee, as well as a performance (incentive) allocation of
up to 20% of net profits (including unrealized gains), subject to a loss carryforward provision. The management
fees applicable to certain Clients may be paid quarterly in advance or in arrears depending on the Offering
Documents of the applicable Client. The Adviser, in its sole discretion, may waive, reduce or require higher
management fees or performance allocations to be paid to it by certain Investors in the Clients who are principals,
employees or affiliates of the Adviser, or relatives of such persons, and for certain large or other investors.
Fees and expenses may vary between the Clients and Fund Investors and each investor and potential investor must
review the Offering Documents of the applicable Client to review the specific fees and expenses applicable to
their investment or prospective investment.
In addition, other fees are charged as described in this Item 5.
Payment of Fees
Fees charged may be deducted from the Clients’ assets. Management fees are paid to the Adviser quarterly in
advance or in arrears as agreed to in the Offering Documents of the applicable Client. A prorated management
fee will be charged to Investors on any amounts invested in the midst of any quarter.
Performance allocations for Clients are allocated annually if the Client has achieved a net profit (including net
unrealized gains), subject to a loss carryforward provision. See Item 6 for additional information.
An Investor’s monthly account statement shows an Investor’s holdings in the Funds net of all fees and expenses.
Other Fees and Expenses
The Adviser is responsible for and shall pay, or cause to be paid, all its ordinary office overhead expenses, which
include rent, supplies, secretarial expenses, stationery, charges for furniture and fixtures and compensation of
analysts and administrative personnel. All other expenses are borne by the Clients, including the fees paid to the
Adviser or its affiliate (as described in Item 5A and 5B) and to an administrator, directors’ fees, legal, accounting,
auditing and other professional expenses, research expenses (including research-related travel expenses (such as
lodging, airfare, meals and conference costs), communications equipment (including phones and portable
electronic devices) and equipment (including computer hardware and software) utilized in the investment
management process (including updates, modifications, improvements, product testing, maintenance, offsite or
onsite backup, repairs and replacements)) and investment expenses such as commissions, interest on margin
accounts and other indebtedness, custodial fees, bank service fees and other reasonable expenses related to the
purchase, sale or transmittal of a Clients’ assets. Employees of the Adviser or its affiliates sometimes travel on an
airplane that is partially owned by an entity under common control with the Adviser. When such travel is deemed
to be a Fund expense, the Fund is charged for such travel based upon an allocation of the costs of owning and
operating the airplane. The Adviser believes that this cost is justified by the greater efficiency and security
provided by the use of the airplane.
As noted above, Investors in the Funds also incur brokerage and other transaction costs. Each Offering
Memorandum for the Funds discusses these brokerage and transaction costs, including factors related to how
brokers are selected, under the section entitled “Brokerage Practices”. Item 12 also further describes the factors
that the Adviser considers in selecting or recommending broker-dealers for transactions and determining the
reasonableness of their compensation (e.g., commissions).
Prepayment of Fees
As noted above, the management fee charged to certain Clients is paid quarterly in advance. Management fees
are prorated for subscription and redemption activity occurring during an accounting period.
Additional Compensation and Conflicts of Interest
No supervised person of the Adviser accepts compensation for the sale of securities or other investment products.
The Principal of the Adviser may receive fees in connection with serving in an advisory capacity, on the board of
directors, or in other capacities to public and/or private companies which may include portfolio companies.