138161 Stratcap Comp

Yr 1-$250 Yr 2-$250

Average Capital/AUMmid-year convention $125,000,000 $250,000,000

Gross PnL 15% GROSS $18,750,000 $37,500,000

Management Co (48,077) 2,067,900

Profits Co 2,269,515 5,316,916

12.5

Investment team Bonus 1,577,085$ 3,312,411$

Available for distribution to equity holders 1,194,353$ 4,572,406$

40%



50% Incent



gave GF another 5% 48.58% 7.25% 0.00% 3.63%

23.45% 3.50% 0.00% 1.75%

Shea George Don STRATFOR

Management 49.30% 11.11% 3.86% 1.45%

Profits 23.80% 5.36% 1.86% 0.70%

Management (23,701.88) (5,339.89) (1,854.32) (697.11)

Profits 540,144.64 121,691.41 42,258.37 15,886.61

2012 - TOTAL 516,442.76 116,351.52 40,404.05 15,189.49

Management 1,019,474.82 229,681.68 79,758.91 29,984.55

Profits 1,265,426.01 285,093.04 99,000.98 37,218.41

2013 - TOTAL 2,284,900.83 514,774.72 178,759.89 67,202.97

Management 1,950,115.41 439,349.53 152,567.85 57,356.34

Profits 2,069,557.56 466,259.14 161,912.44 60,869.34

2014 - TOTAL 4,019,672.97 905,608.67 314,480.30 118,225.68

Management 4,140,681.07 932,871.09 323,947.40 121,784.74

Profits 3,601,085.97 811,303.49 281,732.02 105,914.29

2015 TOTAL 7,741,767.05 1,744,174.58 605,679.42 227,699.03

32.90% 7.41% 2.57% 0.97%

Yr 3-$500 Yr 4-$750

$375,000,000 $625,000,000

$56,250,000 $93,750,000 founder $20,000,000 $22,224,910

return $2,180,000.000 $2,422,515.140

3,955,609 8,398,947 Fee 44,909.54 127,017.32

8,695,620 15,130,613 $22,224,910 $24,774,442

4,900,298$ 8,152,173$ 1/2 D10 ########## 1,656,205.25$ 2,450,148.75$

8,250,932$ 15,877,387$ D10 - $1mm 577,085$ 2,312,411$ 3,900,298$

5,260,492$ 9,611,824$

7,890,738$ 14,417,736$

4,597,810$ 7,815,307$

8,553,419$ 16,214,254$

13.05%

6.30%

Holdings CIO PM Trader COO CRO

6.79% 5.00% 0.00% 0.00% 10.00% 5.00%

3.28% 30.00% 15.00% 5.00% 0.00% 5.00%

(3,262.49) (2,403.84) - - (4,807.68) (2,403.84)

74,349.32 680,854.58 340,427.29 113,475.76 - 113,475.76

71,086.83 678,450.74 340,427.29 113,475.76 (4,807.68) 111,071.92

30.54%

140,327.71 103,395.01 - - 206,790.03 103,395.01

174,182.17 1,595,074.80 797,537.40 265,845.80 - 265,845.80

314,509.88 1,698,469.81 797,537.40 265,845.80 206,790.03 369,240.81

23.00%

268,427.65 197,780.47 - - 395,560.93 197,780.47

284,868.51 2,608,686.00 1,304,343.00 434,781.00 - 434,781.00

553,296.16 2,806,466.47 1,304,343.00 434,781.00 395,560.93 632,561.47

22.18%

569,952.57 419,947.37 - - 839,894.74 419,947.37

495,678.89 4,539,184.00 2,269,592.00 756,530.67 - 756,530.67

1,065,631.46 4,959,131.37 2,269,592.00 756,530.67 839,894.74 1,176,478.04

4.53% 21.08% 9.65% 3.22% 3.57% 5.00%

$24,774,442 $27,688,325

$2,700,414.178 $3,018,027.389

213,468.49 302,612.27

$27,688,325 $31,008,964

38.44%

4,076,086.67$

7,152,173$

Founders Hope Invest Team GP

5.00% 2.50% 27.50% 72.50% 100.00%

10.00% 0.00% 65.00% 35.00% 100.00%

(2,403.84) (1,201.92) (48,076.83)

226,951.53 - 2,269,515.28 -

224,547.69 (1,201.92) 2,221,438.45

103,395.01 51,697.51 2,067,900.25

531,691.60 - 5,316,916.00 -

635,086.61 51,697.51 7,384,816.25

197,780.47 98,890.23 3,955,609.34

869,562.00 - 8,695,620.00

1,067,342.47 98,890.23 12,651,229.34

419,947.37 209,973.69 8,398,947.41

1,513,061.33 - 15,130,613.33

1,933,008.70 209,973.69 23,529,560.74

8.22% 0.89%

Strat4

Date 11/25/2011 DRAFT

Assumptions

Revenue 2012 2013 2014 2015

AUM - Founding (ending in Billion) $ 100,000,000 100,000,000 100,000,000 100,000,000

AUM - Non-founding (ending in Billion) $ 150,000,000 150,000,000 400,000,000 650,000,000

Mgt fee - Founding (%) % 1.50% 1.50% 1.50% 1.50%

Mgt Fee - Non-founding (%) % 2.00% 2.00% 2.00% 2.00%

Incentive - Founding (%) % 15.00% 15.00% 15.00% 15.00%

Incentive - Non-Founding (%) % 20.00% 20.00% 20.00% 20.00%

Gross Performance (before incentive fees) 15% 15% 15% 15%

Cost Structure

Head count (avg) 5.5 7 9.5 11.5

Benefits Rate v base salary % 17% 17% 17% 17%

Annual base compensation increase % 7.5% 7.5% 7.5%

Investment team bonus payout payout % of fund net performance 12.5% 12.5% 12.5% 12.5%

Office Space (sqft) 5500 5500 5500 5500

utilized management assumptions - this would be NY

cost

Cost per sqft $ 65.00 65.00 65.00 65.00

Capital costs (Furniture+IT hardware install) $ 62,300 - - -

Equity

Equity contribution ($) $

Hedge Fund Performance

Average Capital/AUM mid-year convention 125,000,000 250,000,000 375,000,000 625,000,000

Gross PnL 15% GROSS 18,750,000 37,500,000 56,250,000 93,750,000

Less: Direct expenses

Mgt fee (2,250,000) (4,500,000) (7,000,000) (12,000,000)

Audit (100,000) (100,000) (150,000) (200,000)

Tax and Fund legal and other professional costs (375,000) (100,000) (175,000) (175,000) Includes set up fund costs

Research contract w Strat4

Other research - bloomberg etc (64,800) (64,800) (108,000) (108,000)

Risk System (150,000) (150,000) (150,000) (150,000) TBD

Order mgt/Portfolio Accounting System (144,000) (144,000) (144,000) (144,000)

Probably unnecessary depending on administrator

choice

Administrator fees (125,000) (125,000) (125,000) (125,000)

Administrators normally charge a fixed fee or minimum

below a certain AUM

Insurance (80,004) (88,004) (96,805) (117,134)

Investment related travel/other research (75,000) (75,000) (150,000) (150,000)

Total Expenses (3,363,804) (5,183,800) (7,852,000) (12,902,000)

Net Income 15,386,196 32,316,200 48,398,000 80,848,000

Incentive fees/allocation weighted f/non-f (2,769,515) (5,816,916) (9,195,620) (15,630,613)

Net Performance $ 12,616,681 26,499,284 39,202,380 65,217,387

Net Performance NET % 10.09% 10.60% 10.45% 10.43%

Income Statement - Management and GP companies

RevenueMgt fee- founding mid-year convention 750,000 1,500,000 1,500,000 1,500,000

Mgt fee-non-founding 1,500,000 3,000,000 5,500,000 10,500,000

Total Revenue 2,250,000 4,500,000 7,000,000 12,000,000

CostsCompensation #REF! #REF! #REF! #REF!

Base Salary (902,917) (1,102,500) (1,403,409) (1,653,125)

Target Bonus - non trading (151,250) (341,250) (509,545) (589,375)

Annual Base Compensation increases (108,281) (251,753) (419,940)

Employer Taxes (FUTA, SUTA, SS and Medicare) 5% (52,708) (72,188) (95,648) (112,125)

Benefits (153,496) (187,425) (238,580) (281,031)

Total Compensation (1,260,371) (1,811,644) (2,498,935) (3,055,597)

Non-compensation Costs

Professional Fees - legal,tax (100,000) (100,000) (25,000) (25,000)

Recruiting (400,000) - - -

Office Space and Infrastructure (including off services) (342,996) (342,996) (342,996) (342,996)

This looks high even for NYC standards but was what

was in mgt model ( it equates to 5000 sqf at $65 which is

madison ave mid town cost)

Travel & Entertainment - mkting related (100,000) (100,000) (100,000) (100,000)

Hardware lease costs, setup and peripherals (47,250) (30,000) (30,000) (30,000)

Software license fees (primarily windows, backstop, intralinks etc) (25,000) (25,000) (25,000) (25,000)

Other mkting related (publications, conf, memberships) (10,000) (10,000) (10,000) (10,000)

Non-compensation costs (1,025,246) (607,996) (532,996) (532,996)

Total Costs (2,285,617) (2,419,640) (3,031,931) (3,588,593)

EBITDA (35,617) 2,080,360 3,968,069 8,411,407

Depreciation 20% (12,460) (12,460) (12,460) (12,460)

EBIT (48,077) 2,067,900 3,955,609 8,398,947

Interest 0 0 0 0

Tax - UBTI 0% - - - -

Net Income (48,077) 2,067,900 3,955,609 8,398,947

Available for distribution to equity holders (48,077) 2,067,900 3,955,609 8,398,947

Strat4


Assumptions

Revenue 2012 2013 2014 2015



Mgt fee - Founding (%) % 1.50% 1.50% 1.50% 1.50%





Cost Structure

Head count (avg) 5.5 7 9.5 11.5






cost

Cost per sqft $ 65.00 65.00 65.00 65.00


Equity




Gross PnL 15% GROSS 18,750,000 37,500,000 56,250,000 93,750,000


Mgt fee (2,250,000) (4,500,000) (7,000,000) (12,000,000)

Audit (100,000) (100,000) (150,000) (200,000)




Risk System (150,000) (150,000) (150,000) (150,000) TBD



choice



below a certain AUM

Insurance (80,004) (88,004) (96,805) (117,134)


Total Expenses (3,363,804) (5,183,800) (7,852,000) (12,902,000)

Net Income 15,386,196 32,316,200 48,398,000 80,848,000


Net Performance $ 12,616,681 26,499,284 39,202,380 65,217,387





Incentive fee - weighted founder/non-founders 2,769,515 5,816,916 9,195,620 15,630,613

Note: typically there is some limitation on withdrawing

incentive allocations but this can be negotiated if used

to cover taxes and compensate employees

Total Revenue 2,769,515 5,816,916 9,195,620 15,630,613

CostsOther (project related) (500,000) (500,000) (500,000) (500,000)

Non-compensation costs (500,000) (500,000) (500,000) (500,000)

Total Costs (500,000) (500,000) (500,000) (500,000)

EBITDA 2,269,515 5,316,916 8,695,620 15,130,613

Net Income 2,269,515 5,316,916 8,695,620 15,130,613

Available for distribution to equity holders 2,269,515 5,316,916 8,695,620 15,130,613

Strat4


Assumptions

Revenue 2012 2013 2014 2015



Mgt fee - Founding (%) % 1.50% 1.50% 1.50% 1.50%





Cost Structure

Head count (avg) 5.5 7 9.5 11.5






cost

Cost per sqft $ 65.00 65.00 65.00 65.00


Equity




Gross PnL 15% GROSS 18,750,000 37,500,000 56,250,000 93,750,000


Mgt fee (2,250,000) (4,500,000) (7,000,000) (12,000,000)

Audit (100,000) (100,000) (150,000) (200,000)




Risk System (150,000) (150,000) (150,000) (150,000) TBD



choice



below a certain AUM

Insurance (80,004) (88,004) (96,805) (117,134)


Total Expenses (3,363,804) (5,183,800) (7,852,000) (12,902,000)

Net Income 15,386,196 32,316,200 48,398,000 80,848,000


Net Performance $ 12,616,681 26,499,284 39,202,380 65,217,387









Total Revenue 5,019,515 10,316,916 16,195,620 27,630,613

CostsCompensation 0.569444444 0.569444444 0.532895 0.521552

Base Salary (902,917) (1,102,500) (1,403,409) (1,653,125)


Investment team Bonus (1,577,085) (3,312,411) (4,900,298) (8,152,173)

Note: typically a portion of team bonus is deferred

reducing run rate costs



Benefits (153,496) (187,425) (238,580) (281,031)




Recruiting (350,000) - - -



was in mgt model ( it equates to 5000 sqf at $65 which

is madison ave mid town cost)






Total Costs (3,812,702) (5,732,050) (7,932,228) (11,740,766)

EBITDA 1,206,813 4,584,866 8,263,392 15,889,847

Depreciation 20% (12,460) (12,460) (12,460) (12,460)

EBIT 1,194,353 4,572,406 8,250,932 15,877,387

Interest 0 0 0 0

Tax - UBTI 0% - - - -

Net Income 1,194,353 4,572,406 8,250,932 15,877,387


Balance Sheet (Cash Basis Accounting)- management company only

Cash 1,144,513 5,729,379 13,992,771 29,882,618

Fixed Assets Cost 62,300 62,300 62,300 62,300

Acc Depn (12,460) (24,920) (37,380) (49,840)

Net 49,840 37,380 24,920 12,460

Total assets 1,194,353 5,766,759 14,017,691 29,895,078

Partners Capital 1,194,353 5,766,759 14,017,691 29,895,078

Cashflow - Management company only

Net Income 1,194,353 4,572,406 8,250,932 15,877,387

Depreciation 12,460 12,460 12,460 12,460

Operating Cash flow 1,206,813 4,584,866 8,263,392 15,889,847

Fixed Asset Purchases (62,300) - - -

Cash flow from investing (62,300) - - -

Equity Raise - - - -

Cash from financing - - - -

Opening Cash 1,144,513 5,729,379 13,992,771

Closing Cash 1,144,513 5,729,379 13,992,771 29,882,618

Strat4


Assumptions

Revenue 2012 2013 2014 2015



Mgt fee - Founding (%) % 1.50% 1.50% 1.50% 1.50%





Cost Structure

Head count (avg) 5.5 7 9.5 11.5



Investment team bonus payout payout % of firm net perfomance 40% 40% 40% 40%



cost

Cost per sqft $ 65.00 65.00 65.00 65.00


Equity




Gross PnL 15% GROSS 18,750,000 37,500,000 56,250,000 93,750,000


Mgt fee (2,250,000) (4,500,000) (7,000,000) (12,000,000)

Audit (100,000) (100,000) (150,000) (200,000)




Risk System (150,000) (150,000) (150,000) (150,000) TBD



choice



below a certain AUM

Insurance (80,004) (88,004) (96,805) (117,134)


Total Expenses (3,363,804) (5,183,800) (7,852,000) (12,902,000)

Net Income 15,386,196 32,316,200 48,398,000 80,848,000


Net Performance $ 12,616,681 26,499,284 39,202,380 65,217,387









Total Revenue 5,019,515 10,316,916 16,195,620 27,630,613

CostsCompensation

Base Salary (902,917) (1,102,500) (1,403,409) (1,653,125)




Benefits (153,496) (187,425) (238,580) (281,031)




Recruiting (350,000) - - -










Total Costs (2,235,617) (2,419,640) (3,031,931) (3,588,593)

EBITDA 2,783,898 7,897,276 13,163,689 24,042,021

Depreciation 20% (12,460) (12,460) (12,460) (12,460)

EBIT 2,771,438 7,884,816 13,151,229 24,029,561

Interest 0 0 0 0

Tax - UBTI 0% - - - -

Net Income 2,771,438 7,884,816 13,151,229 24,029,561

Investment team Bonus (1,108,575.38) (3,153,926.50) (5,260,491.74) (9,611,824.30)





Cash 2,721,598 10,618,875 23,782,564 47,824,585


Acc Depn (12,460) (24,920) (37,380) (49,840)

Net 49,840 37,380 24,920 12,460

Total assets 2,771,438 10,656,255 23,807,484 47,837,045



Net Income 2,771,438 7,884,816 13,151,229 24,029,561

Depreciation 12,460 12,460 12,460 12,460






Opening Cash 2,721,598 10,618,875 23,782,564

Closing Cash 2,721,598 10,618,875 23,782,564 47,824,585

Strat4


Assumptions

Revenue 2012 2013 2014 2015



Mgt fee - Founding (%) % 1.50% 1.50% 1.50% 1.50%





Cost Structure

Head count (avg) 5.5 7 9.5 11.5



Investment team bonus payout payout % of incentive fee 50% 50% 50% 50%



cost

Cost per sqft $ 65.00 65.00 65.00 65.00


Equity




Gross PnL 15% GROSS 18,750,000 37,500,000 56,250,000 93,750,000


Mgt fee (2,250,000) (4,500,000) (7,000,000) (12,000,000)

Audit (100,000) (100,000) (150,000) (200,000)




Risk System (150,000) (150,000) (150,000) (150,000) TBD



choice



below a certain AUM

Insurance (80,004) (88,004) (96,805) (117,134)


Total Expenses (3,363,804) (5,183,800) (7,852,000) (12,902,000)

Net Income 15,386,196 32,316,200 48,398,000 80,848,000


Net Performance $ 12,616,681 26,499,284 39,202,380 65,217,387









Total Revenue 5,019,515 10,316,916 16,195,620 27,630,613

CostsCompensation

Base Salary (902,917) (1,102,500) (1,403,409) (1,653,125)


Investment team Bonus (1,384,757.64) (2,908,458.00) (4,597,810.00) (7,815,306.67)





Benefits (153,496) (187,425) (238,580) (281,031)




Recruiting (350,000) - - -










Total Costs (3,620,374) (5,328,098) (7,629,741) (11,403,899)

EBITDA 1,399,141 4,988,818 8,565,879 16,226,714

Depreciation 20% (12,460) (12,460) (12,460) (12,460)

EBIT 1,386,681 4,976,358 8,553,419 16,214,254

Interest 0 0 0 0

Tax - UBTI 0% - - - -

Net Income 1,386,681 4,976,358 8,553,419 16,214,254



Cash 1,336,841 6,325,659 14,891,538 31,118,252


Acc Depn (12,460) (24,920) (37,380) (49,840)

Net 49,840 37,380 24,920 12,460

Total assets 1,386,681 6,363,039 14,916,458 31,130,712



Net Income 1,386,681 4,976,358 8,553,419 16,214,254

Depreciation 12,460 12,460 12,460 12,460






Opening Cash 1,336,841 6,325,659 14,891,538

Closing Cash 1,336,841 6,325,659 14,891,538 31,118,252

Last Name First Name Title

Senior ManagementCIO

Analysts/Tech/Risk/ExecutionSenior

Senior

Junior

Accounting, Risk Reporting and Operations

Controller

Accounting associate

Marketing/IR

Inv Relations/Marketing

IR sen Assoc

Tax

Tax Director

Admin

Office Mgr

EA/Reception

Legal and Compliance

Sen Assoc Fund

Compliance

Information Technology

IT Senior Assoc infrastructure

Documents

138161 Stratcap Comp