Item 5. Fees and Compensation
Advisory Fees and Compensation.
Shares or interests of each Private Fund and UCITS shall be offered by means of Governing
Documents or a written prospectus which set forth the details of the advisory fees and operating
expenses. Similarly, the advisory fees and expenses paid by an investor in a SMA are set forth in
the relevant Investment Management Agreement or similar agreement (the “SMA Agreement”).
The Adviser or its affiliates may enter into additional agreements, or “side letters,” with certain
prospective or existing investors whereby such investors may be subject to terms and conditions
that are more advantageous than those set forth in the offering memorandum of a Fund.
Private Funds
Generally, the Private Funds issue limited partnership interests in different series subject to
different terms and conditions (each, a “Series”). Each Series’ fee structure includes a management
fee and either an annual performance fee/allocation or back-ended “waterfall” of carried interest
distributions. Management fees are up to 1.65% per annum of net assets, paid quarterly in advance.
Annual performance fees/allocations are up to 30% of performance or outperformance in excess
of the benchmark index or hurdle rate, per annum, as applicable. “Waterfall” carried interest
distributions are up to 20% of the realized profits of a fund’s aggregate investments after such fund
first distributes all contributed capital plus a preferred return to its investors. Aperture may at any
time in its discretion waive or reduce all or a portion of the management fee or performance
fee/allocation with respect to any investor, including investors which are employees or officers of
Aperture.
For the avoidance of doubt, in the case of fees charged on performance relative to a benchmark
index rather than absolute performance, the Adviser may receive a performance fee from a Private
Fund even in the case of negative performance as long as the performance of such Series is greater
than the performance of the benchmark index or hurdle rate.
UCITS
For each UCITS managed by Aperture UK, the UCITS pays to Aperture UK a variable
management fee (the “VMF”) calculated based on the performance of each variable share class
relative to that of a specified benchmark, as described in the UCITS prospectus. Unless otherwise
provided in the UCITS prospectus for a specific sub-fund, the VMF is payable in arrears as at the
end of the performance period, as described in the UCITS prospectus. In the event there is a VMF
minimum amount (the “VMF Minimum”) specified in the UCITS prospectus for a sub-fund, the
VMF Minimum is payable quarterly through the performance period and the rest of the VMF
amount is payable in arrears at the end of the performance period.
For the avoidance of doubt, Aperture UK may also receive a VMF from a UCITS above the
applicable VMF Minimum even in the case of negative performance of a particular share class as
long as the performance of such share class is greater than the performance of the performance fee
benchmark.
SMA
Management fees for SMAs depend on a variety of factors including the nature and size of the
account and services to be provided. SMA fees typically include a management fee of up to 2.0%
and an incentive fee of up to 20.0%.
Other Fees and Expenses
In addition to paying investment management fees, and for certain Funds, performance fees, the
Funds or investors in such Funds will also be subject to other investment and operating expenses
as set forth in the Governing Documents, SMA Agreement or prospectus of each Fund.
Further, the Private Funds are responsible for their operating expenses, which generally include,
or in the future may include, but are not limited to, all fees and expenses payable to the
administrator (including for communications systems provided by the administrator); accounting,
auditing, valuation, operational, tax preparation and tax planning services, including outsourced
“shadow” administrative services, third-party accounting or middle office services, and accounting
software (including all implementation costs); expenses associated with third-party research,
industry subscriptions, expert networks, political intelligence providers; internal operational,
accounting, legal, compliance administrative and research expenses provided by certain employees
of the Adviser attributable to a Fund; all expenses related to Bloomberg, Factset, Intex, CoStar,
dv01 or other providers of data, research and pricing services, as well as expenses related to news,
quotations, modeling, statistics, market data, databases, order management systems, portfolio
management systems, risk management systems and other technical and telecommunications
services and equipment used in the investment management process (including both hardware and
software), including implementation costs; benchmark and index license fees; arranging fees,
syndication fees, underwriting fees, structuring fees or administration fees relating to investment
financing arrangements; the cost of servicers, if any, engaged by the Adviser or a Fund to provide
services in respect of a Fund’s investments (including fees paid to the Adviser or its affiliates for
asset servicing or similar services that a General Partner determines in good faith are not greater
than what would be paid to an unaffiliated third party for substantially similar services), whether
or not any such investment is consummated; technology costs; transaction and investment
expenses such as commissions and “bid-ask” spreads; bond surveillance fees; all expenses relating
to originating, identifying and sourcing of investment opportunities, including attending and
sponsoring industry conferences and events, meals and entertainment and transportation, buy-side
and sell-side finders’ fees and similar deal sourcing payments, meeting with consultants, finders,
...