Terms & Conditions: Cutler Investment Fund, L.P.

Minimum Investment

$250,000 for new Limited Partners, additions accepted quarterly.

Management Fee

Annual management fee of 0.50% paid in quarterly installments equal to 0.125% of the end-of-quarter net asset value of each Limited Partner’s capital account.

Incentive Performance Fee

An annual incentive performance allocation is equal to 11% of the increase in the net asset value of the investor’s capital account at the end of the calendar year (with adjustments for deposits, withdrawals and trading costs) less quarterly management fees paid during the year. The increase in net asset value used to calculate the allocation includes realized and unrealized gains or losses, and interest and dividend income.

Limited Partners pay either the minimum management fee or the incentive performance fee, not both, for any calendar year. For example, at the end of each calendar year, if the annualized minimum management fees exceed the calculated incentive fee amount, only the minimum management fee is paid (for the final quarter) and no incentive performance fee will be earned. If the incentive performance fee exceeds the annualized minimum management fee, the incentive fee will be owed, minus the minimum management fees already paid during the year.

Investor Eligibility

Investors must be classified as a “Qualified Client,” as defined in Rule 205-3 of the Investment Advisers Act of 1940. A “Qualified Client” is an individual or company that immediately after entering into an investment contract has at least $1,000,000 under management with the advisory firm or an individual or a company with a net worth (or a joint net worth, in the case of an individual, with assets held jointly with a spouse) of more than $2,100,000 before entering into the investment contract. The term “net worth” means the fair market value of total assets minus total liabilities. For purposes of calculating a natural person’s net worth the following conditions apply:
  • The person’s primary residence will not be included as an asset;
  • Indebtedness that is secured by the person’s primary residence (e.g., a mortgage), up to the estimated fair market value of the primary residence at the time the advisory contract is entered into, will not be subtracted as a liability (except that if the amount of such indebtedness outstanding at the time of calculation exceeds the amount outstanding 60 days before such time, other than as a result of the acquisition of the primary residence, the amount of such excess will be subtracted as a liability); and
  • Indebtedness that is secured by the person’s primary residence in excess of the estimated fair market value of the primary residence at the time the advisory contract is entered into will be subtracted as a liability.

Professional Fees

Fees do not include the services of any co-fiduciaries, accountants, broker dealers, or attorneys. Professionals engaged by the General Partner for the benefit of the Limited Partners will be billed to the Partnership in accordance with services.

Trading Costs

Commissions and trading costs are passed along to the Partnership at net cost, as there is no mark-up by the General Partner. Trading costs are deducted before the management fee is calculated.

Liquidity

Funds are available to be withdrawn on a quarterly basis with ninety (90) days’ written notice, after a one-year lock-up period.

Account Administration

  • Cowen Prime Services LLC — Prime Broker
  • Goldman Sachs Execution & Clearing, L.P. — Custodian
  • Wolf & Company, L.P. — Auditor
  • Stone Coast Fund Services — Administrator
  • Moynihan Partners, LLC – Legal Counsel

Additional Terms & Conditions

The above Terms and Conditions are a summary of terms and conditions contained in the Cutler Investment Fund, L.P. Limited Partnership Agreement and Confidential Offering Memorandum (“Offering Documents”). Please refer to the Cutler Investment Fund, L.P. Offering Documents for a full explanation of the terms and conditions of an investment in the Cutler Investment Fund, L.P. as well as the risks involved in making such an investment. If there is any contradiction between these Terms and Conditions and those set forth in the Offering Documents, the terms and conditions in the Offering Documents shall control.