Item 5 - Fees and Compensation
The extent to and specific manner in which our clients pay management fees and/or
performance-based compensation are set forth in each client’s applicable written
agreement with us (and, with respect to each Feeder Fund, in its offering documents). We
generally deduct our management fees from the accounts of the Funds quarterly in advance.
Generally, we receive performance-based fees or allocations from client accounts on an
annual basis in arrears and upon redemptions by investors in the Funds. Management fees
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and performance-based fees or allocations are generally not refundable, including upon the
termination of the advisory contract. The Subadvised Funds and any separately managed
accounts that we may manage will be charged fees on a case-by-case basis, which may
include management fees and/or performance-based compensation.
In addition to the fees and compensation described above, the expenses that are charged to
each client are determined according to the specific terms of the client’s applicable written
agreement with us (and, with respect to the Funds, as described in the Funds’ applicable
governing or offering documents). In some cases, a client will agree to pay or reimburse
some or all of our overhead expenses. The expenses that are charged to the Subadvised
Funds and any separately managed accounts that we may manage are negotiated on a case-
by-case basis.
Generally, the Funds are currently obligated to pay, or reimburse Centenus or its affiliates
for advancing, the Funds’ expenses, including, without limitation, the following: (i)
expenses related to the research, execution and monitoring of actual and prospective
investments (whether or not consummated) and the consummation of investments,
including, without limitation, the following: third-party investment sourcing fees;
consulting fees; expert fees; fees and expenses of and related to obtaining research,
analytics and market data (including, without limitation, any information technology
hardware, software and data subscriptions (such as Bloomberg and FactSet) or other
technology incorporated into the cost of obtaining such research and market data); due
diligence expenses including, without limitation, consulting and appraisal fees;
investment- and research-related travel expenses; any outsourced trading provider fees;
brokerage and prime brokerage fees, commissions and expenses; expenses relating to
borrowing securities to be sold short; clearing and settlement charges; custodial fees and
expenses; bank service fees; interest expenses and other borrowing costs; fees and expenses
of proxy research and voting services; broken deal expenses; and fees and expenses of
third-party professionals, including, without limitation, consultants, investment bankers,
attorneys and accountants; (ii) organizational expenses and expenses incurred in
connection with the offering and sale of Fund interests or shares, as applicable, including,
without limitation, the preparation of the Funds’ organizational documents and offering
documents; fees and expenses of Centenus incurred in connection with “world sky” matters
and private placement regimes, including the European Alternative Investment Fund
Managers Directive, and Form D and blue sky and similar fees and expenses; (iii)
operational expenses, including, without limitation, the following: fees and expenses
relating to information technology hardware, software or other technology (including,
without limitation, costs of software licensing, implementation, data management and
recovery services and custom development) used to research investments, evaluate and
manage risk, facilitate valuations, facilitate accounting functions, facilitate compliance
with the rules of any self-regulatory organization or applicable law (including, without
limitation, reporting obligations) in connection with the activities of the Funds, facilitate
and manage the order execution of securities or otherwise manage the Funds (such as
portfolio management systems and order management systems); fees and expenses of third-
party risk management products, models and services; third-party administrative fees and
expenses, including fees and expenses of the Funds’ administrator and any middle or back
office service provider; fees and expenses of third-party professionals, including, without
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limitation, consultants, valuation service providers, attorneys, accountants and tax
preparers; the costs of any litigation or investigation involving activities of the Funds,
including amounts paid in settlements thereof and attorneys’ fees; third-party audit and tax
preparation expenses; insurance expenses, including, without limitation, directors and
officers liability insurance, errors and omission insurance, and cybersecurity insurance and
liability insurance covering the Funds, Centenus and the members, partners, officers,
employees and agents of any of them, and the Fund directors (in each case, even if such
insurance covers conduct for which indemnity would not be available from the Funds);
fees and expenses associated with investor and director meetings, including, without
limitation, expenses related to the organization and conduct of director and investor
meetings (including, without limitation, travel, lodging and meal expenses), and director
fees (including registration fees); costs of preparing and distributing reports and notices to
investors (including the development, implementation and maintenance of an investor
electronic delivery site and/or system); entity-level taxes; fees and expenses related to
compliance with applicable law and regulations in connection with the activities of the
Funds, including, without limitation, any governmental, regulatory, licensing, filing,
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