Item 5. Fees and Compensation
U.S. Fund
The U.S. Fund will pay to BLS Capital, with respect to investors in the U.S. Fund, a monthly
management fee equal to:
• 1/12th of 0.95% of the first $10 million of such investor’s capital account balance as of the
close of business on the last business day of each month;
• 1/12th of 0.80% of the next $15 million of such investor’s capital account balance as of the
close of business on the last business day of each month; and
• 1/12th of 0.75% of the balance of such investor’s capital account in excess of $25 million as
of the close of business on the last business day of each month.
The management fee that is payable by an investor in the U.S. Fund is paid monthly in arrears. Fees
are deducted directly from the investor’s capital account.
We may on a discretionary basis agree to different terms and conditions with any individual investor
to establish rights, alter, or supplement the fee terms set out above.
Dilution Levies
We have the right to impose a charge (i.e., a dilution levy, or its equivalent) on investors in the U.S.
Fund wishing to subscribe for or redeem shares in certain circumstances. The purpose of the dilution
levy is to seek to ensure that continuing investors in the U.S. Fund are not materially prejudiced by
the costs which are involved in accommodating new subscriptions or redemptions, including, for
example, costs incurred in realizing investments for the purposes of paying out redemption monies.
The calculation of such charges is at our absolute discretion, subject to any restrictions in the U.S.
Fund’s private placement memorandum or limited liability company agreement. Any dilution levy will
be added to amounts payable by an investor in the U.S. Fund (if charged in connection with such
investor’s investment) and will be deducted from amounts payable to that investor (if charged in
connection with that investor’s redemption), as appropriate.
Segregated Accounts
The fees paid to BLS Capital by any Segregated Account client will be negotiable and may include
management fees and/or performance-based fees as described in each client’s respective
investment management agreement. If we charge a Segregated Account client a performance fee,
such fee will generally equal a percentage of the net gain earned in the client’s Segregated Account,
subject to a “high water mark.”. Each Segregated Account will bear the actual transaction costs
associated with its investments, such as brokerage commissions and transaction taxes. We do not
provide custody services. Therefore, custody services and the associated costs will be governed by
the Segregated Account’s separate agreement with a custodian.
The management fee will be payable in arrears and in accordance with the terms specified within
each Segregated Account client’s investment management agreement. Clients are sent an invoice
for their management fee.
General
Fees
Certain clients and investors in the U.S Fund have negotiated management fees through Side
Letters that are less than what is disclosed in the fund offering documents, and which are payable
on different terms. BLS Capital has discretion to waive or reduce the management fee with respect
to the capital accounts of one or more investors without notifying the other investors and without
reducing the management fee with respect to the capital accounts of the other investors.
We have the right to revise management fees from time to time in our discretion, subject to
restrictions set forth in the U.S. Fund’s governing documents or any separate agreement, as
applicable. Investors in the U.S. Fund and Segregated Account clients will be notified of fee revisions
in accordance with the U.S. Fund’s limited liability company agreement or Segregated Account
agreement, as the case may be. Furthermore, as fees are revised, fee schedules may be
“grandfathered” at their prevailing fee schedule in our discretion. These fees may be greater or lower
than a client’s current fee schedule. We reserve the right to waive or rebate the payment of all or
part of the management fee or other fee payable with respect to any account for any period(s) that
we determine is appropriate in our sole discretion.
Personal Investments in the U.S. Fund and/or the Danish Fund
Our officers and other employees have invested, or are permitted to invest, a portion of their personal
investable assets in the Danish Fund or the U.S. Fund, if qualified. All personnel, including the
partners and portfolio managers, pay the same fees as any other investor in the applicable fund.
Other Fees and Expenses
The U.S. Fund
Trading Expenses. The U.S. Fund will pay out of its assets all of its direct trading expenses, clearing
fees, and other exchange fees and charges. Direct trading expenses include brokerage
commissions, bid-ask’’ spreads, mark ups, registration and transfer fees, regulatory and
governmental charges and duties, and other fees and expenses relating to its investments.
Operating Expenses. The U.S. Fund will bear all operating expenses (exclusive of the management
fee) up to an amount which, when excluding the management fee, equals 0.20% of the U.S. Fund’s
assets. BLS Capital will bear the cost of operating expenses where they exceed the aforementioned
amount.
Under the LLC Agreement, the U.S. Fund will bear all ordinary expenses incurred in connection with
the U.S. Fund’s ongoing operations, including, without limitation, custody fees, administrative fees,
legal, audit and accounting fees, and other costs associated with preparing U.S. Fund documents
and reports. In addition, under the LLC Agreement, costs of litigation or other “extraordinary” events
may be borne by the U.S. Fund, including reimbursement of BLS Capital of such costs advanced
on the U.S. Fund’s behalf.
Segregated Accounts
In addition to fees paid to us, clients will also be responsible for the fees and expenses charged by
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