Item 5: Fees and Compensation
DESCRIPTION OF COMPENSATION AND FEE SCHEDULE
In consideration of our advisory services, we generally are entitled to receive management fees and performance
allocations with respect to Centaur Value Fund and management fees with respect to the Centaur Total Return Fund.
The fees and expenses applicable to each of our clients are set forth in detail in the applicable offering memorandum
or investment advisory agreement. A brief summary of such fees and expenses is set forth below.
Centaur Value Fund
We generally are entitled to receive a management fee, payable quarterly in arrears, equal to one quarter of one
percent (1% per annum) of the capital account balance of each limited partner in Centaur Value Fund.
Subject to the terms and conditions set forth in the partnership agreement, we generally are also entitled to receive
an annual performance allocation equal to fifteen percent (15%) of each limited partner’s share of net profits for the
applicable performance period. Performance allocations are subject to a “high water mark” limitation. As a result,
after the first year in which a performance allocation is earned, the performance allocation for later years applies
only to the extent that an investor’s pro rata share of net profits, measured on a cumulative basis, for all years since
admission exceeds the highest level of cumulative net profits achieved through the close of any prior year since
admission.
Only investors who are “qualified clients,” as such term is defined in Rule 205-3(d) under the Investment Advisers
Act of 1940, as amended (the “Advisers Act”), are subject to performance allocations. The definition of “qualified
client” in Rule 205-3(d) under the Advisers Act has changed since the inception of Centaur Value Fund. In
accordance with Rule 205-3 under the Advisers Act, it is our policy to determine whether an investor is a “qualified
client,” using the applicable standard, at the time of the investor’s original investment or additional investment in
Centaur Value Fund. Nevertheless, we will alter an investor’s status if and when such investor notifies us of a
change in its status.
Our fees with respect to Centaur Value Fund and each investor therein generally are not negotiable. However, we
have entered into, and may enter into in the future, side letters or similar arrangements with certain investors that
grant different terms (including lower fees) to such investors than the terms generally applicable to other investors.
Such side letters typically involve commitments on the part of the investor to extend the applicable lock-up period
well beyond the standard liquidity terms offered to other investors.
Centaur Total Return Fund
As compensation for our investment advisory services, the Centaur Total Return Fund pays us an investment
advisory fee, payable monthly in arrears, equal to an annualized rate of 1.50% of the average daily net assets of the
Centaur Total Return Fund. We are not entitled to receive any performance-based fees or allocations with respect to
the Centaur Total Return Fund.
PAYMENT OF FEES
Centaur Value Fund
Management fees are payable by investors quarterly, in arrears, as of the last business day of each calendar quarter.
Investors who are admitted during a calendar quarter are charged a pro rata portion of the management fee.
Management fees are deducted directly from the capital account of each investor on the last business day of each
calendar quarter.
Performance allocations are calculated and allocated as of the last business day of each fiscal year (and at such other
times as set forth in the partnership agreement). Performance allocations are allocated directly from the capital
account of each applicable investor on the last business day of each fiscal year (and as set forth in the partnership
agreement).
Centaur Total Return Fund
The investment advisory fees with respect to the Centaur Total Return Fund will be calculated as of the last business
day of each month based upon the average daily net assets of the Centaur Total Return Fund determined in the
manner set forth in the prospectus and/or statement of additional information. The advisory fees with respect to the
Centaur Total Return Fund will be paid within 15 days after the end of each calendar month.
OTHER FEES AND EXPENSES
In addition to the fees set forth above, each client generally bears all costs and expenses relating to its activities,
including the legal, auditing and accounting expenses (including the maintenance of books and records), costs for
the preparation of financial statements, tax returns, and Internal Revenue Service Schedule K-1, expenses of the
meetings of the limited partners, if any, and other expenses associated with the acquisition, holding and disposition
of investments, as well as extraordinary expenses, such as litigation. With respect to the Centaur Total Return Fund,
we have agreed to allow the Centaur Total Return Fund to withhold from our advisory fees certain expenses under
the “expense limitation agreement.” Clients generally are responsible for and pay all brokerage fees. See Item 12
below.
TERMINATION OF ADVISORY SERVICES
Centaur Total Return Fund
We generally may terminate the advisory agreement with the Centaur Total Return Fund at any time upon 60 days’
prior written notice to the Trust and the Centaur Total Return Fund. In addition, the advisory agreement may be
terminated at any time by (i) a vote of the board of trustees of the Trust or (ii) a vote of a majority of the outstanding
voting securities of the Centaur Total Return Fund upon 60 days’ prior written notice to us.
WITHDRAWALS
Centaur Value Fund
As described more fully in Centaur Value Fund’s offering memorandum, each investor in Centaur Value Fund that
has held its limited partner interest for at least three complete months generally is permitted to make complete or
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