Item 5 - Fees and Compensation
Banbury’s fees and compensation are described in the advisory contracts with its Clients. All
of Banbury’s Clients are “qualified purchasers” (as defined in Section 2(a)(51) of the Investment
Company Act of 1940, as amended (the “1940 Act”)).
Management fees are generally paid by the Funds monthly in advance, and are refundable if the
advisory contract is cancelled prior to the end of a payment period. Management fees for the
Managed Accounts are deducted at times agreed upon with such Clients and may be refunded if
the advisory contract is cancelled prior to the end of a payment period, depending upon the terms
of the agreement with each such Client.
Generally, Banbury or its affiliates receive performance-based fees or allocations from Client
accounts on an annual basis in arrears and upon redemptions by investors.
Banbury will render its services to the Funds at its own expense, including all of its ordinary office
overhead expenses, which include rent, supplies, secretarial/internal administrative expenses,
stationery, charges for furniture and fixtures, salaries and bonuses, employee insurance and payroll
taxes.
All other expenses will be borne by the Funds, including Fund organizational expenses, the fees paid
to Banbury, fees and expenses of Fund directors (as applicable), fees paid to any proxy agent, legal,
accounting, auditing and other professional expenses, Fund-related insurance costs (including the
majority of Banbury’s Directors’ and Officers’ liability insurance), administration expenses and fees,
research expenses (including research-related travel expenses for personnel other than the Managing
Members), investment expenses (such as commissions (see Item 12 “Brokerage Practices” below),
expenses attributable to regulatory filings which are made with respect to the Funds or assets of the
Funds (including Form PF filings, Section 13 and Section 16 filings), interest on margin accounts and
other indebtedness), custodial fees, bank service fees, expenses related to obtaining and maintaining
Banbury Partners LLC Form ADV Part 2A
order management and similar systems and other expenses related to the purchase, holding, sale
or transmittal of the Funds’ assets.
The expenses that are charged to the Managed Accounts are determined on a case-by-case basis.
Banbury may also allocate a portion of certain Clients’ capital to money market funds or exchange-
traded funds. In addition to the fees and expenses discussed above, Clients will indirectly incur
similar fees and expenses if Banbury invests their capital in such funds, as these funds in turn pay
similar fees and expenses to their investment managers and other service providers.
Item 6 - Performance Fees and Side-by-Side Management
Banbury or its affiliates receive performance-based compensation from Clients, which will be
based on a percentage of capital appreciation of their assets.
The terms of the performance-based compensation can differ among the Clients. This may result
in a conflict of interest when allocating opportunities among Clients, as Banbury may have an
incentive to favor Clients that have higher performance-based compensation. To avoid such a
conflict of interest, Banbury will generally follow documented procedures for allocating
opportunities among Clients, which will not take into account the performance-based
compensation to which such accounts are subject (see below).
As management fees and performance-based compensation will be based directly on Clients’
net asset values, Banbury may have a conflict of interest in valuing the assets held in Client
accounts. Banbury will follow documented valuation policies and consult with each Client’s
third-party administrator, as applicable, in order to mitigate this risk.
Banbury has the ability to buy or sell securities for one Client account at the same time that Banbury
buys or sells the same security for one or more other Client accounts. This will typically happen
when more than one Client account is capable of purchasing or selling a particular security based on
investment objectives, available cash and other factors. This may create a conflict of interest if one
account may benefit from making the trade before or after the other account.
It is Banbury’s general policy to trade the portfolios of all Clients on a pari passu basis based on
relative capital and account specific leverage. However, allocations may be made on a basis other
than pro rata for a number of reasons, including, but not limited to, a Client’s investment guidelines
and restrictions, portfolio rebalancing, capital activity, changes in targeted leverage, available cash,
liquidity requirements, tax or legal reasons, to avoid odd lots, or in cases in which such an allocation
would result in a de minimis allocation to a Client. Banbury is not obligated to purchase or sell for
each Client every security which Banbury may purchase or sell for other Clients if such a transaction
or investment appears unsuitable, impractical or undesirable for a Client; provided that Banbury, to
the extent within its control, may not favor itself in any way to a Client’s detriment and will act in
a manner that over the long term is fair and equitable to all of its Clients.
New issues (as defined by Rule 5130 of the Financial Industry Regulatory Authority, Inc.) are
allocated to Client accounts in accordance with the criteria set forth above.
Banbury Partners LLC Form ADV Part 2A