Item 5: Fees and Compensation
The fees and compensation applicable to each client are set forth in detail in that client’s offering
documents if the client is a Fund or 1940 Act Fund or investment management agreement if it is a managed
account, and are summarized below.
Management and other Fees
While specific to each client, as compensation for investment advisory services rendered, Axonic charges
a management fee calculated at the annual rate of up to 2.00% of the client’s or Investor’s net assets,
invested capital, capital commitment or the outstanding principal balance of the relevant underlying debt
instrument, as applicable (the “Management Fee”). The Management Fee (if any) is generally paid
monthly, quarterly or semi-annually, in advance or arrears, as applicable, as of the first or last day of the
relevant calendar month or quarter or semi-annual period (subject to adjustment, where required, for
contributions or commitments made during the relevant period). The Management Fees are negotiable
and we have and may continue to waive or reduce the Management Fees for Investors that are members,
principals, employees or affiliates of Axonic, relatives of those persons, trusts formed by or for the benefit
of those persons and their relatives, and for certain large or strategic Investors. Axonic and its affiliates
may receive origination or other fees from borrowers, counterparties or clients in respect of certain loans
originated by or on behalf of clients or in connection with certain other transactions.
Axonic Capital LLC Form ADV Part 2A
Performance Fees and Allocations
While specific to each client, Axonic or an affiliate may receive an annual performance fee or allocation
of up to 20.0% of each Investor’s annual net profits (the "Annual Performance Fee or Allocation"), if
any, subject, in general, to a "loss carry forward" provision and, in certain cases, to Investor’s receiving a
return of and/or a certain return on, their invested capital (the “Performance Fees or Allocations”).
Performance Fees or Allocations may also be required to be paid on a withdrawal or redemption by an
Investor.
The Performance Fees or Allocations are negotiable for Investors and we have and may continue to waive
or reduce the Performance Fees or Allocation for Investors that are members, principals, employees or
affiliates of Axonic, relatives of those persons, trusts formed by or for the benefit of those persons and
their relatives, and for certain large or strategic Investors. Any Performance Fee or Allocation
arrangement could create a conflict of interest and/or an incentive for Axonic to make investments that
are riskier or more speculative than would be the case in the absence of the arrangement.
Withdrawal Fee
While specific to each client, Investors in certain Funds may pay withdrawal fees of 5% to 10% for certain
capital withdrawals. Withdrawal fees are generally deducted from amounts to be distributed to Investors
upon redemption, and may be retained by the relevant Fund or paid to us. The withdrawal fees are
negotiable for Investors and we may waive or reduce the withdrawal fees for Investors that are members,
principals, employees or affiliates of Axonic, relatives of those persons, and for certain other Investors.
Expenses
In addition to the Management Fees, Performance Fees and Allocations and withdrawal fees, in general,
each client generally will be subject to expenses, including but not limited to (i) investment-related
expenses (whether related to transactions that are consummated or unconsummated), such as brokerage
commissions and fees, research, due diligence, acquisition and surveillance expenses (including data and
software fees, conferences, related travel and lodging expenses, legal fees and expenses, and appraisal
fees and expenses), interest on margin accounts and other indebtedness, clearing and settlement charges,
custodial fees, bank service fees and other expenses related to the purchase, sale, financing or transmittal
of such client’s assets and (ii) other expenses related to the operation and administration of such client,
including, where relevant, fund administrator fees and expenses, directors’ and advisors’ fees and
expenses, fees and expenses for legal, client compliance (including expenses related to various filings (or
portions thereof) that Axonic is required to make as a result of managing a client’s portfolio, including
Form PF and Annex IV under AIFMD, tax and withholding tax compliance that Axonic or a client
undertakes, including under Common Reporting Standard (CRS), the Foreign Account Tax Compliance
Act (FATCA), and anti-money laundering / know-your customer compliance that Axonic or a client
undertakes), accounting, auditing, tax and other professionals, insurance premiums (including for E&O
and D&O insurance and fidelity bonds), organizational and offering expenses (in certain cases), third-
party valuation agent fees, licensing and filing fees, taxes and other governmental charges, and litigation
and indemnification expenses. In general, the feeder Funds will indirectly share the administrative and
other expenses of the related master Funds pro rata based upon their interests in the related master Fund.
Axonic (or an affiliate) has formed and owns, and may in the future form and own, one or more affiliates
to hold licenses to enable the clients to originate, hold, finance and/or securitize loans. Each participating
client will be responsible for its allocable portion of the expenses related to forming and maintaining these
Axonic Capital LLC Form ADV Part 2A
entities and obtaining and maintaining these licenses. The Structured Credit clients that own interests in
real property will also incur expenses related to its real estate investments (whether related to transactions
...