Item 5. Fees and Compensation
Appian Way is compensated with an asset-based investment management fee (the “Management Fee”)
based on the value of net assets under management and/or a performance-based fee that is based on the
capital gains on or capital appreciation of a Client’s assets (“Performance Fee”).
Depending on the Client, the Management Fee is generally payable either monthly or quarterly in arrears
or monthly or quarterly in advance and is generally at an annual rate of up to 1.5%. The Management Fee
will generally be prorated for any period that is less than a full fiscal month or quarter. Depending on the
Client, the Adviser instructs the Client’s custodian to deduct the Management Fee from the Client’s account
or bills the Client for fees incurred.
The Performance Fee charged to certain Clients is generally equivalent to 20% to 25% of a Client’s net
profits (including any realized and unrealized gains and losses) and is typically subject to a high water mark.
The Performance Fee, if any, will be reallocated to the Adviser or its affiliate at the end of each fiscal year,
or at the time of full or partial withdrawal from a Client, if other than year end. The Performance Fee, if
any, will be billed to other Clients at the end of each fiscal year or at the time of a full or partial withdrawal
from a Client, if other than year end.
For certain Clients, the Client pays Appian Way a fixed amount of expenses as disclosed and agreed to in
the applicable relevant offering documents, such as the confidential private offering memorandum,
subscription agreements, investment management agreements or otherwise (the “Offering Documents”). In
such instances, the Client is billed monthly in advance and payment is divided into twelve equal monthly
installments and is prorated for any partial month or period. In addition to the agreed upon expenses,
Appian Way may request such Clients to reimburse Appian Way for certain expenses incurred that are not
set forth in the applicable Offering Documents.
In other instances, certain Clients will bear all expenses incurred with the formation and operation of such
Client. Such expenses, without limitation, include (i) expenses incurred in connection with the organization
of the Company and offering of Interests; (ii) expenses incurred in connection with investments; (iii)
expenses incurred in connection with carrying or managing the Client’s portfolio; (iv) expenses incurred in
connection with preparing the Client’s financial statements, tax returns, Schedule K-1s; (v) attorneys’ and
accountants’ fees and disbursements; (vi) taxes; (vii) insurance, regulatory compliance or litigation
expenses and damages, including indemnification expenses; (viii) expenses incurred in connection with the
winding up or liquidation of the Client. See additional detail in Item 12: Brokerage Practices.
It is critical that investors in the Clients refer to the relevant Offering Documents for a complete
understanding of applicable terms, fees, and expenses. The information contained in this Item 5 is only a
summary and is qualified in its entirety by the relevant Offering Documents.
While the fees described above are generally non-negotiable, the fees may be increased or decreased at the
sole discretion of the Adviser.