Item 5. Fees And Compensation
Bocage receives asset-based fees and performance-based compensation from Clients, as described
below. Bocage believes that its fees are competitive with fees charged by other investment advisers
for comparable services. Comparable services may be available, however, from other sources for
lower fees.
Bocage typically charges Clients an annual management fee of up to 2.0% of assets under
management, which amount is payable in monthly installments at the beginning or end (depending
on the provisions of the applicable Client Agreement) of each calendar month. The management
fee borne by an investor in a Fund is based on the value of the capital account attributable to such
Please note that this is not regulatory assets under management as reported on Bocage’s Form ADV Part 1A.
investor and the management fee for a Managed Account is based on the net market value of such
Managed Account, in each case on the date the fee accrues and becomes payable.
Bocage GP typically is allocated with respect to each investor in a Fund a performance or
outperformance allocation. For Funds that feature a performance allocation, such allocation is
equal to 20% of net profits (including both realized and unrealized gains and losses) otherwise
allocable to such investor. For certain other Funds, Bocage GP instead receives an outperformance
allocation based on each investor’s returns (including both realized and unrealized gains and
losses) compared to the returns of a benchmark index. Bocage typically receives from each
Managed Account client either a performance or outperformance fee. Performance and
outperformance allocations and fees are assessed in arrears on an annual basis (or typically on the
date of a redemption or withdrawal from a Fund or Managed Account, if earlier), and are only
applied to the portion of profits that exceed the cumulative losses previously allocated to or
incurred by clients, or, in the case of outperformance allocations, the amount by which an investor
underperformed the applicable benchmark index in prior periods). Bocage complies with Rule
205-3 under the Investment Advisers Act of 1940, to the extent required by applicable law.
Performance and outperformance allocations and fees may create an incentive for Bocage to make
more risky and speculative investments than it would otherwise make.
Fee schedules for a Fund generally are not negotiable. However, Bocage and its affiliates have
discretion to waive or reduce fees with respect to any investor in a Fund, and certain investors pay
reduced management and performance or outperformance fees or allocations. The management
fee and performance allocations described above are waived for Bocage employees and their
family members (and their respective family financial and estate planning vehicles) that are
invested in the Funds. In addition, Bocage and the Funds have the discretion to form additional
classes of shares or interests in the Funds, which classes may pay reduced fees due to a number of
factors, including the minimum investment amount, the liquidity of shares or interests (and
required notice period for withdrawals or redemptions) and length of initial commitments. Fee
schedules for a Managed Account are negotiated between Bocage and the owner of the Managed
Account. Bocage (or Bocage GP) typically deducts management fees and performance allocations
and fees directly from the Funds, while owners of Managed Accounts typically pay management
and performance fees to Bocage pursuant to the terms of the applicable Client Agreement.
In addition, investors in Funds that withdraw or redeem assets within a specified period following
admission or contribution to a Fund typically are charged a fee equal to a percentage of the amount
withdrawn or redeemed. The amount of the early withdrawal or redemption fee, and the period
during which such fee may be charged, varies based upon the class of shares or interests purchased
in the applicable Fund. Such amount is paid to the applicable Fund, will not be charged with
respect to certain withdrawals or redemptions and may be waived by Bocage or the Fund at their
discretion. Accounts that invest in mutual funds or other pooled vehicles also pay, indirectly,
investment advisory fees to the managers of those funds.
Investors in Funds generally may withdraw from such Fund periodically (typically on the last day
of any calendar month or weekly, depending on the terms of a given Fund), on specified prior
written notice (which typically may be waived by Bocage or the Fund). As mentioned above,
Bocage may, from time to time, create classes of shares or interests in a Fund with different
liquidity terms or may create additional Funds with different liquidity terms. Except as may be
otherwise negotiated in particular cases, the holder of a Managed Account may terminate the
account by giving written notice to Bocage.
Upon a redemption or withdrawal of an investor in a Fund (or upon the termination of or
withdrawal from a Managed Account) the investor or Managed Account is typically charged for
applicable expenses, the pro rata portion of the management fee and the performance allocation or
fee through such date. Typically, all prepaid but unearned management fees would be refunded
on termination of a Managed Account. Refunds for prepaid management fees typically do not
apply in the cases of the withdrawal or redemption of Fund investors, as for those Funds that
prepay management fees, these fees are charged at the beginning of a month and withdrawals or
redemptions generally are not permitted from such Funds except at the end of a month.
Each Fund and Managed Account generally is responsible for its own costs and expenses,
including trading costs and expenses (such as brokerage commissions, expenses related to short
sales, and clearing, settlement and custodial charges), and other expenses associated with the
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