Item 5 - Fees and Compensation
The extent to and specific manner in which our clients pay management fees and/or
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performance-based compensation are set forth in each client’s applicable written
agreement with us (and, with respect to the Onshore Fund, in its offering documents).
We generally deduct our management fees from the accounts of the Funds monthly in
advance. Generally, we receive performance-based fees or allocations from client
accounts on an annual basis in arrears and upon redemptions by investors in the Funds.
Management fees and performance-based fees or allocations are generally not refundable,
including upon the termination of the advisory contract. Any separately managed
accounts that we may manage will be charged fees on a case-by-case basis, which may
include management fees and/or performance-based compensation.
In addition to those fees and charges described above, the expenses that are charged to
each client are determined according to the specific terms of the client’s applicable
written agreement with us (and, with respect to the Onshore Fund, as described in its
offering documents). The expenses that are charged to any separately managed accounts
that we may manage are negotiated on a case-by-case basis.
Generally, the Funds are currently obligated to pay, or reimburse Aston or its affiliates
for advancing, the Funds’ expenses, including expenses directly related to transactions
and positions for the Funds’ account, interest expenses, brokerage and prime brokerage
fees, commissions and trading fees, custodial fees, taxes, blue sky fees, costs of
borrowing instruments to be sold short, fees and expenses of and related to obtaining
research, analytics and market data (including, without limitation, any information
technology hardware, software and data subscriptions (such as Bloomberg) or other
technology incorporated into the cost of obtaining such research and market data),
expenses associated with regulatory and statutory filings of the Funds, expenses
associated with investment sourcing investor reporting costs, insurance expenses
(including, without limitation, directors and officers liability insurance, errors and
omission insurance, and cybersecurity insurance and liability insurance covering the
Funds, the Fund General Partner, Aston and the members, partners, officers, employees
and agents of any of them (in each case, even if such insurance covers conduct for which
indemnity would not be available from the Funds)), withholding or transfer taxes,
consulting fees and expenses, professional fees and expenses, expenses or fees related to
third party providers (including, without limitation, fees and expenses in connection with
services provided by attorneys, consultants, administrators, compliance services,
accountants, auditors, proxy research and voting services, middle-office or back-office
services, outsourced risk analytics and advisory services, software and advisory services,
market data services, and other similar fees and expenses). The Funds will also be
responsible for extraordinary expenses, including, without limitation, the following:
litigation expenses; the cost of settlements and indemnification expenses (including
advances thereof); fees and expenses incurred in connection with any tax audit by any
U.S. federal, state or local authority, including, without limitation, any related
administrative settlement and judicial review; and fees and expenses incurred in
connection with the reorganization, dissolution, winding-up or termination of any of the
Funds. In addition, the Funds will also bear fees and expenses relating to information
technology hardware, software or other technology (including, without limitation, costs
of software licensing, implementation, data management and recovery services and
custom development) used to research investments, evaluate and manage risk, facilitate
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valuations, facilitate accounting functions, facilitate compliance with the rules of any
self-regulatory organization or applicable law (including, without limitation, reporting
obligations) in connection with the activities of the Funds, facilitate and manage the order
execution of instruments or otherwise manage the Funds (such as portfolio management
systems and order management systems). The Funds will also pay, or reimburse Aston or
its affiliates for, the Funds’ initial and ongoing offering expenses as well as its
organizational fees and expenses.
Management fees and/or performance-based compensation may be reduced or waived in
certain circumstances, including with respect to investments by Aston personnel and/or
other related persons of Aston in the Funds.
Clients other than the Funds, or any separately managed accounts that we may manage,
may have management fees, performance-based compensation and/or expense
arrangements that differ in one or more respects from those applicable to the Funds.
To the extent we incur any expenses for the benefit of one or more private investment
funds and/or separately managed accounts, we generally will allocate such expenses in a
reasonable manner among such private investment funds and/or separately managed
accounts.
We may allocate a portion of certain clients’ capital to money market funds, exchange-
traded funds or similar fee-bearing products or private investment funds and accounts that
are managed by other investment managers. In that case, such client accounts generally
would be responsible for paying the fees and expenses associated with such products,
which would be in addition to the fees and expenses discussed above.
For a summary of our brokerage practices, please see Item 12 below.