Item 5 – FEES AND COMPENSATION
BPIM does not receive any management fees related to assets under management. Instead, an
affiliate, Brant Point Capital Management LLC (“BPCM”) receives a management fee at an
annualized rate of 1.5% per annum of assets under management.
BPIM receives performance-based compensation from Private Fund Clients of 20% of the increase
in net asset value of each Private Fund investor’s account above a “high water mark” (i.e., the
previous highest net asset value at which performance-based compensation was paid).
Performance-based compensation generally is charged in arrears at year-end and upon an
intra-year redemption by an investor in a Private Fund. BPIM’s performance-based compensation
is calculated taking into account both realized and unrealized gains.
The management fee paid to BPCM is calculated and paid monthly in advance at the beginning of
each month based on the net asset value of the Private Fund in question on the last day of the
previous month. The Funds’ administrator calculates the management fee. Once approved by
BPIM, BPIM instructs the Funds’ prime broker to deduct the management fees from the Funds’
prime brokerage accounts. The Funds’ administrator also calculates the performance-based
compensation. Once BPIM approves the administrator’s performance-based compensation
calculation, the administrator allocates the performance compensation to a Fund account of BPIM
or its affiliate. Fees may be reduced or waived in certain circumstances or with respect to certain
investors (e.g., principals and employees of BPIM). BPIM fees charged with respect to an
investment in a Private Fund advised by BPIM are described more fully in such Private Fund’s
Memorandum.
Private Fund Clients may terminate BPIM’s advisory services at any time without penalty
generally upon thirty days’ prior written notice. Upon termination of any Client account, any
prepaid, unearned fees will be promptly refunded and any earned, unpaid fees will be due and
payable.
Redemptions by investors in a Private Fund can be made on the terms described in the Private
Fund’s Memorandum.
Each Private Fund is responsible for its own expenses including (i) routine legal, accounting,
auditing, and related expenses; (ii) the administrator’s fees and related expenses, (e.g., clerical,
courier, postage, telephone, facsimile, duplication and other expenses), and any directors’ fees and
expenses; (iii) all other operational and overhead expenses; and (iv) extraordinary expenses (e.g.
litigation costs and indemnification obligations), if any. In addition, each Private Fund is
responsible for its transaction costs (including brokerage, research, clearing, margin interest (if
any), custodial expenses, and due diligence costs).
Each Private Fund is responsible for its own expenses and, generally, BPIM does not expect that
there will be expenses that will be shared by the Private Funds. However, if there is an expense
that is shared by more than one Private Fund, BPIM allocates such shared expenses among the
applicable Private Funds (i) pro-rata based on each Private Fund’s capital; (ii) in proportion to the
size of the investment made by each Private Fund to which the expense relates; or (iii) in such
other manner as BPIM considers fair and reasonable.
BPIM’s fees do not include brokerage or custody fees, costs and charges, and other related costs
and expenses that will be incurred by Clients in connection with the trading and maintenance of
Client accounts. Clients incur certain charges imposed by custodians, brokers and other third
parties, such as commissions, custodial fees, and other fees and taxes on brokerage accounts and
securities transactions, in addition to BPIM’s fees. BPIM does not receive any portion of such
commissions, fees, and costs.
Item 12 describes the factors that BPIM considers in selecting broker-dealers for Client
transactions and determining the reasonableness of their compensation (e.g., commissions).