Item 5: Fees and Compensation
Advisory Fees
Asset-Based Advisory Fee – Fund Management
The Investment Advisor charges the Fund a calendar quarterly asset-based advisory fee (the “Asset-Based
Fee”) of 1/4 of 1.0% of the beginning capital account value of each limited partner for each calendar quarter
(1.0% annualized). Such Asset-Based Fee will be paid quarterly in advance and calculated based on the
value of the account on the last business day of the prior quarter. A pro rata portion of the management fee
will be paid out of any initial or additional capital contributions to the partnership on any date that does not
fall on the first day of a quarter, based on the number of days remaining in such partial quarter. No portion
of the management fee will be refunded in connection with any withdrawals from a limited partner’s capital
account during a quarter.
Assets of the Partnership that are determined by the General Partner to be Hard-to-Value Investments shall
be excluded from the Capital Account balance of each Limited Partner for the purposes of determining the
Management Fee applicable to the Limited Partners until such time as a such assets are sold, exchanged, or
are otherwise realized such that a value can be reasonably determined, at which time the Investment
Manager shall be paid a Management Fee on such assets based on the realized value of such assets for the
period beginning on the date that such assets were determined to be Hard-to-Value Investments and ending
on the date of the realization event applicable to such assets. Please see the private placement memorandum
for additional details.
Asset-Based Advisory Fee – Separately Managed Accounts
The Investment Advisor charges each SMA client a calendar quarterly asset-based advisory fee of 1/4 of
1.0% of the value of the client’s account for each calendar quarter (1.0% annualized). Such Asset-Based
Fee will be calculated and paid in arrears on the last business day of such calendar quarter and will be
prorated for partial calendar quarters.
Performance-Based Advisory Fee
The Investment Advisor charges an additional performance-based advisory fee (the “Performance Fee”) in
an amount equal to twenty percent (20%) of the “New Net Profits” earned in Client’s Account. Additionally,
Limited Partners in the Fund are subject to a Performance Allocation. New Net Profits are computed as
follows: (1) the net realized profit and loss during the period, plus (2) the change in unrealized profit and
loss on open positions during the period, minus (a) all brokerage commissions, transaction fees,
management fees and other charges incurred during the period and (b) cumulative net loss, if any, carried
over from previous periods. The carryover of previous loss makes certain that the Performance Fee is paid
only on the cumulative increases in the net gains of a Client’s account and/or the Fund’s account. It should
be noted that the full loss is not carried over to the next period in an instance where there has been a partial
withdrawal of funds. In such a case, the portion of the loss attributable to the withdrawn amount is first
subtracted from the carryover loss. For example, if funds representing 10% of the account’s value are
withdrawn, then 10% is subtracted from the carryover loss.
• Performance fees will be assessed at the end of each calendar year. If an account does not generate
New Net Profits as of the end of the calendar year, no Performance Fee will be due to the Investment
Advisor unless the account experiences New Net Profits in a subsequent period. The amount of the
Performance Fee due to the Investment Advisor, if any, will be determined at the end of each
calendar year. In the event there is a loss in a subsequent year, the prior performance fee will not
be returned. No further fee will be payable until any carry-forward loss has been recovered.
Accounts that are established during the year will be subject to the performance fee for net gains as
of December 31 of the year in which the account was established.
The Performance Fee will be calculated and paid in arrears at the end of each calendar year. Performance
based fees will only be charged to clients that are “Qualified Clients” under Rule 205-3under the Investment
Advisers Act of 1940, as amended, subject to the allowed transition exclusions per Rule 205-3 for clients
of the Investment Advisor prior to its registration.
Pursuant to a written agreement, all fees will be deducted by the Investment Advisor directly from the
Client’s account(s),and will be paid from the amount on deposit in such account(s). Please see “Item 15:
Custody” for additional information regarding fee deduction.
The Investment Advisor retains the authority to, in its sole discretion; negotiate its fees with clients on a
case-by-case basis.
With respect to the Contribution Client, BCA receives compensation based on a variety of factors, including
the fees generated by such third-party investment manager and performance of positions for which BCA
provided information.
Additional Client Fees
Each client will bear their own transactional expenses, including mutual fund fees, brokerage
commissions, and any similar fees associated with the trading activity in their accounts. Clients will
also be responsible for any other fees charged by the custodian at which their accounts are held, such
as custodial fees and the like. These fees are not paid to the Investment Advisor and the Investment
Advisor does not benefit in any way from these fees.
Repayment of Client Fees
No portion of the Management Fee will be refunded in connection with any withdrawals from a Limited
Partner’s Capital Account during a quarter.
Compensation to the Investment Advisor and its Personnel for the Sale of Securities
Neither the Investment Advisor nor any of its personnel receive compensation for the sale of any securities.
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