Item 5. Fees and Compensation
Investment management fees in amounts equal to (i) 1.0% per annum with respect to Investors who
invested with the Adviser prior to February 1, 2006 and (ii) 1.5% per annum with respect to other
Investors are charged to certain Funds each quarter in arrears based on the total market value of the
assets in such Funds (including net unrealized appreciation or depreciation of investments and cash,
cash equivalents and accrued interest) on the last day of the quarter. An investment management fee is
also charged to each Account each quarter in arrears based on the total market value of the assets in the
Account (including net unrealized appreciation or depreciation of investments and cash, cash equivalents
and accrued interest) on the last day of the quarter as set forth in the investment management agreement
between the Adviser and the Account client. If an Investor or Account client makes an addition to its
account during a quarter, the investment management fee will be prorated for the number of days
remaining in the quarter. If the investment management agreement is terminated or a withdrawal is made
from a Fund or an Account during a quarter, the fee payable to the Adviser will be calculated based on
the value of the assets on the termination date or withdrawal date and prorated for the number of days
during the quarter in which the investment management agreement was in effect or such amount was
invested in the Fund or Account.
The Adviser receives the investment management fee from the Funds by instructing the Funds' custodian
to deduct the investment management fee from the Funds' accounts. The Adviser bills each Account
client for the investment management fee.
Certain clients may also pay or allocate to the Adviser or its affiliate annual performance-based
compensation, which is compensation that is based on a share of capital gains on or capital appreciation
of the assets of the client. With respect to the Funds, this compensation is 20% and is subject to a loss
carryforward provision. With respect to the Sub-Advisory Fund, this compensation is 50% and is subject
to a loss carryforward provision.
The Adviser or its affiliate may reduce or waive the investment management fee and/or performance-
based compensation for certain Investors or clients with separately managed accounts.
In addition to investment management fees and, if applicable, performance-based compensation, the
Funds and each Account are also subject to other expenses such as legal, compliance, audit,
administration and accounting expenses (including third party administration and accounting services);
investment expenses such as commissions, research fees and expenses (including research-related
testing, travel, meal and lodging expenses); interest on margin accounts and other indebtedness;
borrowing charges on securities sold short; custodial fees; administrator fees and expenses; fund-related
insurance costs; directors' fees, if applicable; issue and transfer taxes; bank service fees; and any other
expenses reasonably related to the purchase, sale or transmittal of assets. The Funds and Accounts
may also invest in money market mutual funds, ETFs or other registered investment companies. In these
cases, the Funds and Accounts will bear their pro rata share of the investment management fee and
other fees of the underlying fund, which are in addition to the investment management fee paid to the
Adviser. In addition, the Funds and Accounts will incur brokerage and other transaction costs. Please
refer to Item 12 of this Firm Brochure for a discussion of the Adviser’s brokerage practices.