ITEM 5 - FEES AND COMPENSATION
It is critical that investors refer to a Client Fund’s confidential private offering memorandum and/or other
offering documents (collectively, “offering materials”) for a complete understanding of (i) how BCM is
compensated from the Client Funds for its advisory services, (ii) the fees and expenses Investors will be
obligated to pay and how those fees are deducted from the Investors’ assets, and (iii) Investors’ withdrawal and
redemption rights.
Management Fees and Performance-Based Compensation
BCM receives a management fee based on a fixed percentage of each investor’s capital account balance. The
management fee is payable monthly in advance, as of the start of the first calendar day of each month. The
management fee will be adjusted for contributions and withdrawals made during a calendar month and
calculated without accrual of the Incentive Allocation (defined below), if any. BCM deducts the management
fee directly from each Investor’s account. The management fees of each investor’s capital account balance range
from 1.0% to 1.25% per annum.
The Fund GP, which is an affiliate of BCM, receives performance-based compensation reflecting a percentage
of net profits, if any, in excess of a non-cumulative hurdle attributable to each Investor’s capital account as of
the end of the Client Fund’s fiscal year (an “Incentive Allocation”). Subject to a loss carryforward provision
(generally referred to as a “high water mark”), no performance-based compensation will be re-allocated from
an investor’s capital account until any net loss previously attributable to that capital account has been offset by
subsequent net profits in excess of the non-cumulative hurdle. If an Investor withdraws capital, the
performance-based compensation on that capital will be deducted from the Investor’s account and reallocated
to the Fund GP as if the withdrawal date were the last day of the fiscal year or, in the case of a loss carryforward,
the loss carryforward will be subject to reduction on a pro rata basis. The performance-based compensation
for each investor’s capital account generally ranges from 15% to 20% of the net profits in excess of a 5% non-
cumulative hurdle per annum.
BCM offers, or has offered in the past, classes of interests not offered to other Investors which pay reduced to
no management fees and/or reduced to no performance-based compensation, including to BCM’s affiliates,
principals, and employees.
Expenses
The Firm is responsible for its overhead expenses of an ordinary and recurring nature, such as rent, supplies,
secretarial expenses, its direct compliance expenses, stationery, charges for furniture and fixtures, salaries and
bonuses of its employees, employee insurance, employee benefits and payroll taxes.
The Client Funds will bear all other expenses (or the Master Fund will bear such expenses and allocate expenses
to the Onshore Fund and Offshore Fund, as applicable), as set forth in the Client Fund’s offering materials or
investment management agreement, including the management fee, organizational expenses, Offshore Fund
director’s fees and expenses, legal, accounting (including third party accounting services), auditing, consulting
and other professional expenses, investment-related expenses, research-related expenses, portfolio exposure
and performance management systems and their associated expenses, risk management services and systems,
trade reconciliation and similar services and systems, trade order management systems, financial statement and
tax return preparation and other related expenses, administration expenses, Client Fund-related insurance costs,
certain compliance and reporting expenses and expenses attributable to regulatory filings, 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), expenses relating to the registration, offer and sale of interests or common
shares in any jurisdiction in which interests or common shares are offered or sold, expenses related to
withdrawals/redemptions of interests or common shares and transfers thereof, all costs and expenses incurred
in attempting to protect and enhance the value of a Client Fund investment, any extraordinary expenses (e.g.,
litigation and indemnification expenses), any fees and expenses related to any Client Fund’s liquidation, if
applicable, and other expenses related to the purchase, sale, preservation or transmittal of the Client Funds’
assets. The Onshore Fund and the Offshore Fund shall also bear their pro rata portion of the Master Fund’s
expenses. Refer to Item 12 – Brokerage Practices for further information relating to trading and investment
related costs and expenses.
The Client Funds will bear all costs and expenses relating to their organization and to the offering of interests
and common shares (including government filing fees, stamp duties or other taxes, legal and accounting fees,
printing and mailing expenses, and any other organizational costs, if any) (the “Organizational Expenses”). To
the extent that BCM advances organizational expenses that should be borne by the Client Funds and does not
waive reimbursement of such expenses, then BCM will be reimbursed by the Client Funds. Organizational
expenses of a Client Fund may be amortized over a period of up to 60 months from the date the applicable
Client Fund commences operations.
Neither BCM nor any of its supervised persons accepts compensation for the sale of interests in the Client
Funds.