Item 5 – Fees and Compensation
A. Describe how you are compensated for your advisory services. Provide your fee schedule.
Disclose whether the fees are negotiable.
Fund Clients generally pay an asset-based management fee, which ranges from 1.0% to 1.75% per annum
of the net assets of the Fund Client. Management fees are typically charged and paid, in advance or
arrears, as described in the investment management agreement between such Advisory Client and
Boundary Creek, on (i) a monthly basis for open-ended Fund Clients and (ii) a quarterly basis for closed-
ended Fund Clients. Management fees are applied pro rata to each investor’s interests in the respective
Fund Client. For those Fund Clients that are part of a master-feeder structure, the management fee is
typically paid to Boundary Creek by the respective master fund on behalf of the feeder funds.
In addition, Boundary Creek (or affiliates of Boundary Creek acting as special limited partners, general
partners or managing members of the Fund Clients) receives performance compensation in the form of
incentive allocations or carried interest from Fund Clients. With respect to open-ended Fund Clients,
performance compensation generally ranges from 15%-30% of net profits allocated to each investor on
an annual basis and is payable at the end of each year or upon a redemption by an investor; provided that
with respect to certain Fund Clients, performance compensation is payable only if and to the extent that a
certain minimum rate of return (a “hurdle”) is exceeded. In certain cases, performance compensation is
reduced by the amount of management fees paid over a specified period. Performance compensation is
generally subject to a “high water mark” or loss carry forward provisions.
With respect to closed-ended Fund Clients, performance compensation is payable after Fund Clients have
made distributions to an investor in the fund that exceed the capital contributed by such investor and a
hurdle rate of return on unreturned capital contributions. Boundary Creek (or affiliates of Boundary
Creek acting as special limited partners, general partners or managing members of the Fund Clients)
generally receive performance compensation equal to 20% of any additional distributions. See Item 6 for
further information with respect to performance compensation.
Depending on the characteristics of the Advisory Client, fees may be higher or lower and may be subject
to various reductions and offsets, in each case, as set forth in each Advisory Client’s offering documents.
Boundary Creek, reserves the right to waive, reduce or calculate differently management fees and/or
performance compensation payable by certain investors in Advisory Clients, including any employee or
affiliate of Boundary Creek, any family member thereof, or trusts, estate planning and other investment
accounts and/or vehicles established by or for the benefit of such persons. As explained above in Item 4,
Boundary Creek enters into Side Letters with certain investors in Fund Clients, typically those with the
largest aggregate investments in Fund Clients, whereby such investors are granted favorable rights not
granted to other investors in the Fund Client including, among other things, rights to receive reduced or
different rates of management fees and/or performance compensation.
Except as described in the preceding paragraph, the management fee and performance compensation
for Fund Clients are generally not negotiable.
To calculate advisory fees, Boundary Creek generally relies on prices provided by third parties (whether
third-party data feeds or dealer quotes) for purposes of valuing portfolio securities held by Advisory
Clients. Advisory Clients’ third-party administrator (the “Administrator”) verifies the third-party values
that Boundary Creek receives. In the event of a disagreement between Boundary Creek and the
Administrator, Boundary Creek works with the Administrator to investigate and resolve any differences.
Although it is extremely rare for discrepancies to persist after an investigation by Boundary Creek and the
Administrator, in the event that Boundary Creek and the Administrator ultimately disagree on the
valuation of a position, the Administrator can withhold approval of the net asset value if it is unsatisfied
with the valuation. Boundary Creek maintains policies and procedures relating to the pricing process.
Except to the extent that better performance increases assets under management and thus the amount of
the management fee (in cases where the management fee is calculated with respect to assets under
management), management fees are payable without regard to the overall success or income earned by
Advisory Clients and therefore may create an incentive on the part of Boundary Creek to increase assets
under management to a higher level than would be the case if Boundary Creek were receiving a lower
or no management fee.
Boundary Creek and its affiliates have entered into an agreement with a strategic investor who has made
substantial investments in Advisory Clients. The terms of the agreement provide for reduced
management fee and performance compensation rates and for the right for the strategic investor to
receive special allocations based on a percentage of the management fees and performance
compensation allocable to Boundary Creek and its affiliates.
Other fees payable by investors in Advisory Clients are described below.
Advisory Client investors and prospective investors in Advisory Clients should refer to the offering
documents or governing documents of the respective Advisory Client for detailed information with respect
to the fees associated with such Advisory Client. The information contained herein is a summary only and
is qualified in its entirety by such documents.
B. Describe whether you deduct fees from clients’ assets or bill clients for fees incurred. If clients
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