FEES AND COMPENSATION
Advisory Fees and Compensation.
Act II provides investment management services on a fee basis, which
includes fees based upon the net asset value of the assets under management by Act II
(“Management Fees”), as well as fees or allocations based on performance of the Funds
(“Performance Compensation”). The fees applicable to each Fund are set forth in detail in
each of the Fund’s respective Offering Documents. A brief summary of those fees is
provided below. Investors should refer to the relevant Offering Documents for a complete
understanding of how Act II is compensated for its advisory services.
Management Fees.
Management Fees are charged at an annual rate generally ranging from 1% to
2% of net assets. The Management Fees are calculated and payable in arrears on a quarterly
basis.
Management Fees are prorated for any partial quarter period, as applicable,
based on the actual number of days in such period. In Act II’s sole discretion, the
Management Fee may be waived, reduced or calculated differently with respect to any
investor in the Funds.
Performance Compensation.
Performance Compensation with respect to the Funds is generally equal to
20% of net realized and unrealized capital appreciation for each year, after making up any
losses carried forward from prior calculation periods.
In the event that a Fund is terminated or an investor withdraws other than at
the end of a calculation period, then for purposes of determining the Performance
Compensation, net capital appreciation will be determined as if such dates were the end of the
calculation period, subject to certain adjustments.
In Act II’s sole discretion, the Performance Compensation may be waived,
reduced or calculated differently with respect to certain investors in the Funds.
Payment of Fees.
Fees and compensation paid to Act II by the Funds are generally deducted
from the capital accounts. Management Fees are deducted on a quarterly basis by the Funds.
Performance Compensation is generally deducted by the Funds on an annual basis.
Additional Fees and Expenses.
An investor may bear some or all of the following expenses:
Each investor bears its own expenses relating to its operations, including,
without limitation, fees and expenses of its administrator and of the members of its Board of
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Directors; investment-related expenses (e.g., expenses related to the investment of the client’s
assets, including, without limitation, brokerage commissions, prime broker fees, interest on
margin accounts and other indebtedness, custodial fees, bank service fees and interest
expenses); investment-related travel expenses; legal expenses; professional fees (including,
without limitation, expenses of consultants and experts); external accounting and valuation
expenses; research and market data (including research software, programs and other
technology); audit and tax preparation expenses; costs of printing and making reports and
notices; entity-level taxes; corporate licensing fees; regulatory expenses (including filing
fees), a portion of the premiums for liability insurance covering the General Partner, the
Investment Manager and the members, partners, officers, employees and agents of any of
them to the extent permitted under Section 410 of ERISA, if applicable, other expenses
associated with the operation of the client; offering expenses; and any extraordinary
expenses.
Additional Compensation and Conflicts of Interest.
Neither Act II nor any of their supervised persons accepts compensation (e.g.,
brokerage commissions) for the sale of securities or other investment products.
Wall Street Access (“WSA”), a registered broker-dealer, is an investor in the
Domestic Fund. Cowen Prime Services LLC (“Cowen”), a registered broker-dealer conducts
trade execution and provide other services on behalf of Act II. Such investment and
arrangement may provide Act II with financial and other incentives to select WSA and
Cowen to effect securities transactions for clients. Nonetheless, Act II is committed to the
appropriate selection of broker-dealers to effect securities transactions for clients in
accordance with the procedures set forth in Item 12.
It is critical that investors refer to their respective Offering Documents
for a complete understanding of how Act II is compensated for its advisory services.
The information contained herein is a summary only and is qualified in its entirety by
the relevant governing documents.
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