Item 5. Fees and Compensation
General
The Firm or its affiliates receive compensation from Clients based on a percentage of assets under
management (“Management Fee”) and based on the performance of a Client’s portfolio (“Incentive
Allocation”) as described in Item 6 below. For a complete description of specific compensation
arrangements, Clients should carefully review their Governing Documents.
All the Firm’s domestic investors are expected to be “qualified purchasers” (as defined in Section 2(a)(51)
of the Investment Company Act of 1940).
Private Fund Fees and Expenses
The Firm deducts Management Fees from the Funds quarterly in arrears. The Firm may waive or modify
the Management Fee payable with respect to any investor, including for employees and affiliates of the
Firm.
Entities related to the Firm serve as general partners (the “General Partners”, each a “General Partner”)
to certain Funds. The General Partner is entitled to receive an Incentive Allocation from the Funds on an
annual basis and upon withdrawals by investors. The Incentive Allocation is calculated as of the last day
of each fiscal year and is based on the net trading profits of the account, including realized and unrealized
gains and losses. The Firm or its affiliates have the right to waive or modify the Incentive Allocation with
respect to any investor.
The Funds will bear their own organizational and operating expenses, including but not limited to
expenses attributable to: (i) the Management Fee; (ii) the Fund’s legal, accounting, tax preparation and
other tax-related expenses (including preparation and mailing costs of financial statements, tax returns
and other reports to shareholders), auditing, consulting and other professional expenses; (iii) third-party
administration costs, fees and expenses (including any costs, fees and expenses related to investor
communications, relations, reporting or other investor materials, tax preparation and related reporting,
performance information, data extraction and other types of reporting and any audit or accounting
Balance Capital Partners, L.P. Form ADV Part 2A
services provided by a third-party administrator) and fees of any third-party shareholder proxy voting
firms; (iv) all fees and charges of custodians, clearing agencies and banks; (v) all investment-related costs
and expenses (i.e., expenses that, in the Firm’s sole discretion, are related to the investment of the Fund’s
assets, whether or not such investments are consummated), including commissions and charges, clearing
and settlement charges, option premiums and custodial and service fees, research-related expenses
(including research-related travel expenses), expenses relating to consultants, attorneys, brokers or other
professionals or advisors who provide research, advice or due diligence services with regard to
investments; (vi) compliance and reporting expenses and expenses attributable to regulatory filings that
are made with respect to the Fund or assets of the Fund (including Section 13, Section 16, Form D, Form
PF, FATCA, anti-money laundering compliance (including, without limitation, fees and expenses of the
AML Officers (as defined herein), state security filings, general regulatory compliance and non-U.S.
position reporting filings, if applicable, and non-U.S. filings, if any) and all compliance costs and expenses
associated with the Fund in complying with the rules related to private fund advisers under the Advisers
Act; (vii) Fund-related insurance costs (including cyber insurance, director’s and officer’s insurance, errors
and omissions insurance, fidelity insurance and other similar policies covering the General Partner and/or
the Firm); (viii) any taxes (including but not limited to any withholding taxes, transfer taxes, stamp duties
and other governmental or self-regulatory agency-related charges or duties); (ix) fees and expenses
related to portfolio exposure and performance management systems, risk management services and
software related to trade reconciliation, treasury, margin, financial and counterparty management, risk
monitoring, performance reporting, valuation quotation services (e.g., Bloomberg terminals, historical
and live financial data and other similar services and data feeds) and trade order management systems
(including systems that facilitate trade compliance, commission management, stock locates and
transaction cost analysis, and third party service providers used for implementation, custom reporting,
updates, consultations, support, maintenance, monitoring and data extracts); (x) all costs and expenses
incurred in attempting to protect and enhance the value of a Fund investment (including any fees and
expenses associated with any pending or threatened litigation, audit, investigation, administrative or
other proceeding, as well as any settlement costs); (xi) any fees and expenses related to the Fund’s
liquidation, if applicable; (xii) fees paid to proxy and securities class action advisory firms; (xiii) expenses
relating to the offer and sale of Common Shares, including but not limited to, fees and expenses related
to negotiating agreements with investors, including side letters, and withdrawals and transfers thereof;
(xiv) fees and expenses of any independent governance committee; (xv) Directors’ fees and expenses; fees
and expenses related to the cost of maintaining a registered office in the Cayman Islands; (xvi) other
reasonable expenses related to the purchase, sale, preservation or transmittal of the Fund’s assets; and
(xvii) any extraordinary expenses (e.g., indemnification expenses).
Investors should carefully review the relevant Governing Documents for a complete description of
expenses.