ITEM 5 – FEES AND COMPENSATION
Item 5.A Describe how you are compensated for your advisory services. Provide your
fee schedule. Disclose whether the fees are negotiable.
The Funds offer interests or shares (as applicable) only to certain qualified
investors and admission in the Funds is not open to the general public. Interests
or shares (as applicable) are sold only to qualified investors who are “accredited
investors” per Regulation D of the Securities Act of 1933, as amended, and
“qualified purchasers” as such term is defined under the Investment Company Act
of 1940, as amended. Each Fund’s offering documents contain a detailed
description of the applicable Fund’s fee schedule.
A management fee based on net assets is generally deducted quarterly in advance
(the “Management Fee”), It should be noted that the Management Fee may be
calculated differently with respect to the type of interests held by Investors in each
Fund.
It is critical that Investors refer to the relevant Fund’s governing documents
for a complete understanding of how Argonaut is compensated for its
advisory services.
Item 5.B Describe whether you deduct fees from clients’ assets or bill clients for fees
incurred. If clients may select either method, disclose this fact. Explain how
often you bill clients or deduct your fees.
Argonaut deducts fees from each Fund’s assets. With respect to the Funds,
Argonaut generally deducts a management fee based on the net assets of each
Fund, quarterly in advance, of 2% per annum (the “Management Fee”), subject
to adjustment for any subsequent intra-quarter additions or distributions. It should
be noted that the Management Fee may be calculated differently with respect to
the type of interests held by Investors in each Fund.
Argonaut also charges performance-based compensation in the form of a
performance allocation of 20% (the “Performance Allocation”). The
Performance Allocation is generally calculated and charged as of the last day of
each Fund’s fiscal year. The Performance Allocation is subject to a high water-
mark provision, such that generally an Investor will not be charged a Performance
Allocation until any net loss previously allocated to such Investor has been offset
by subsequent net profits. It should be noted that the Performance Allocation may
be calculated differently with respect to the type of interests held by Investors in
each Fund.
As applicable, the Management Fee/Performance Allocation will not be assessed
for investments attributable to designated or special investments made by the
relevant Fund until such designated or special investments are realized or deemed
realized.
Argonaut may, in effect, waive, reduce or rebate the Management Fee or
Performance Allocation for certain Investors.
It is critical that Investors refer to their respective Fund’s governing
documents for a complete understanding of how fees are deducted from their
assets. This is particularly true with respect to the description of
performance-based compensation above. The information contained herein is
a summary only and is qualified in its entirety by the relevant Fund’s
governing documents.
Item 5.C Describe any other types of fees or expenses clients may pay in connection
with your advisory services, such as custodian fees or mutual fund expenses.
Disclose that clients will incur brokerage and other transaction costs, and
direct clients to the section(s) of your brochure that discuss brokerage.
The Funds managed by Argonaut incur a variety of fund related expenses, for
example: audit, legal, tax, administrator, custodian, are some but not all expenses
that the funds may incur. In addition to fees payable to Argonaut, the Funds will
incur certain expenses including the following:
Organizational and offering costs (including any start-up expenses
advanced by Argonaut/ the Managing Member);
Expenses in connection with investment activities, including brokerage,
margin interest, banking, clearing and custody charges, research and
research related costs, interest, taxes, filing and reporting;
Legal, bookkeeping, accounting, auditing, consulting, tax preparation and
related charges;
Expenses associated with the continued offering of Interests; and
Fees to the administrator.
Argonaut Global Macro Fund Ltd. will also be responsible for:
Director’s and Officers’ liability insurance;
Director’s fees and expenses; and
Cayman Islands government fees and related expenses.
It is critical that Investors refer to the relevant governing documents for a
complete understanding of fees and expenses they may pay. The information
contained herein is a summary only and is qualified in its entirety by such
documents.
Item 5.D If your clients either may or must pay your fees in advance, disclose this fact.
Explain how a client may obtain a refund of a pre-paid fee if the advisory
contract is terminated before the end of the billing period. Explain how you
will determine the amount of the refund.
As noted in Item 5.B. above, with respect to the Funds, Argonaut accrues fees
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