Item 5 - Fees and Compensation
Management Fees
Each Investor should review the appropriate Governing Documents for the Clients in conjunction
with this brochure for more complete information on the applicable Management Fees.
The Advisor receives an annual management fee of 1.5% of assets under management. Management
fees are generally collected quarterly in advance. Founders class investors pay reduced fees, as
described in the Governing Documents of the Fund. The Advisor debits management fees directly
from the Clients’ accounts; the Investors are not invoiced for the Advisor’s services. The
management fees above are generally subject to waiver or reduction by Charles Lane in its sole
discretion with certain investors. The Governing Documents specify the fees applicable to each
client account.
Other Expenses
The Clients will bear all expenses relating to its ongoing structure and operation, including: (i) all
expenses incurred in connection with the ongoing offer and sale of limited partner interests, other
than placement agent fees, including, but not limited to, conference attendance expenses,
documentation of performance and the admission of Investors; (ii) all operating expenses such as
tax preparation fees, governmental fees and taxes, administrator, custodial and prime brokerage
fees and expenses, communications with Investors and ongoing legal, accounting, auditing,
administration, appraisal, bookkeeping, independent shadow accounting, consulting and other
professional fees and expenses, including for litigation, and preparation of the financial statements
and reports; (iii) all costs, expenses, and charges incurred in connection with the investment and
trading activities (e.g., brokerage commissions, mark-ups, margin interest, expenses related to
short sales, custodial fees, clearing and settlement charges, and other transaction costs to brokers);
(iv) professional and other advisory and consulting expenses, monitoring or the assertion of rights
or pursuit of remedies; (v) all fees and other expenses incurred in connection with the investigation,
prosecution, or defense of any claims; (vi) interest on, and fees and expenses arising out of, all
borrowings; (vii) the costs of any litigation and indemnification; (viii) expenses related to third party
research, publications, data and data services, including real time pricing and market information
Charles Lane Capital, LLC Form ADV Part 2A: Firm Brochure
and historical pricing and other data, order management system, portfolio management system and
risk management system and advisory; (ix) costs of compliance with applicable laws and regulations
of governmental and self-regulatory bodies, including costs incurred in complying with laws and
regulations; (x) directors’ fees, administrators’ fees; (xii) costs associated with regulatory filings,
and (xiii) all other reasonable expenses related to the management and operation. Notwithstanding
the foregoing, the Adviser may voluntarily elect to bear certain expenses in its discretion.
Generally:
To the extent that any of the foregoing expenses relate to the operations of one or more other
funds or accounts managed by the Advisor or any of their respective affiliates, Charles Lane will
attempt to allocate such expenses based on a good faith determination of the relative benefits of
such expenses to all such funds and accounts benefiting from such expenses. Any expense common
to any other Client managed by the Advisor or its affiliates generally will be paid pro rata by such
entities based on the approximate size of the relevant investment relating to such expense or
otherwise on assets under management, as appropriate (or in any other manner deemed fair and
equitable by Charles Lane, in its sole discretion).
The Adviser remains responsible for its overhead expenses of an ordinary and recurring nature,
such as rent, supplies, secretarial expenses, its direct compliance expenses, stationery, charges for
furniture and fixtures, salaries and bonuses of its employees, employee insurance, employee
benefits and payroll taxes.
The Adviser has adopted policies and procedures intended to address trade errors to ensure that
the Clients are treated fairly. Subject to any contractual limitations set forth in the relevant Clients’
governing documents, the Adviser has discretion to resolve a particular error in a manner that it
deems appropriate and consistent with the Adviser’s policies and procedures.
For information on the Adviser’s brokerage and transaction costs, please see “Item 12 – Brokerage
Practices.”
Item 6 - Performance Fees and Side-By-Side Management
The Clients’ general partner, Charles Lane GP, LLC (the “General Partner”) receives an annual
performance Incentive Allocation (the “Incentive Allocation”) that ranges from 10% to 15% of
net profits. Incentive Allocations are generally assessed annually and are subject to each investor’s
respective high water mark. The incentive Allocations are assessed directly against investors’ capital
account balances. The Incentive Allocation and other fees described above are generally subject to
waiver or reduction by Charles Lane in its sole discretion with certain investors. For example,
investors in the Clients who are associated with Charles Lane, such as its officers or employees
generally do not incur any performance fees. The performance fees may vary by Client Account.
The Governing Documents will specify the fees applicable to each Client Account.
Generally:
The Adviser has adopted policies and procedures intended to address conflicts of interest that may
arise relating to the management of multiple Client accounts, including accounts with different fee
arrangements and the allocation of investment opportunities. The Adviser reviews investment
decisions for the purpose of ensuring that all accounts with substantially similar investment objectives
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