Item 5 Fees and Compensation
THE PARTNERSHIPS - INCENTIVE ALLOCATION AND MANAGEMENT FEE
With respect to each Partnership, for each fiscal year (including a partial year)
the Advisor is entitled to receive an Incentive Allocation from the limited partner’s
account equal to five percent (5%) of the total amount of net profits allocated to such
limited partner for such year. In the case of withdrawals during a fiscal year, an
Incentive Allocation may be made with respect to the capital withdrawn as if the
withdrawal date were the end of a fiscal year. All Incentive Allocations are subject to a
“high-water mark” provision, whereby any prior losses allocated to the partner must be
recouped before the Advisor may receive an additional Incentive Allocation from the
partner. The Incentive Allocation is typically accrued monthly, however the Incentive
Allocation is not finalized until after fiscal year-end, or if a redemption occurs at any time
other than at the end of a fiscal year, the redeeming investor will be responsible for the
Incentive Allocation accrued at the time of the redemption.
As compensation for its services, the Advisor also receives a quarterly
Management Fee from each limited partner’s account at a rate of 1.25% of its net
assets per year. Such fee will be payable quarterly in arrears at the end of each
calendar quarter and will be computed on the basis of the amount of each limited
partner’s capital account as of the last business day of each month during the quarter.
The Advisor has the right, as it deems appropriate, to reduce, waive or eliminate
all or any part of the Incentive Allocation or Management Fee chargeable to a partner,
provided doing so will not increase fees to any other partner.
THE OFFSHORE FUNDS - INCENTIVE FEE AND MANAGEMENT FEE
For each fiscal year (including a partial year) with respect to all shares, the
Advisor is entitled to receive an Incentive Fee from each Offshore Fund (except Collins
Capital Liquid Trading Fund, Ltd. (“LTF Ltd.”), discussed below) in an amount equal to
five percent (5%) of the amount, if any, by which the net asset value attributed to each
such share at the end of the year or on the date of redemption exceeded the highest net
asset value of such share (the “Prior High NAV”) as of the following dates: (i) the
beginning of the fiscal year; (ii) the beginning of any preceding fiscal year at which such
share was issued and outstanding; or (iii) the subscription date for such share. The use
of a Prior High NAV is intended to effectively require the recovery of any depreciation in
net asset value as to an investor’s shares in any and all prior years before an Incentive
Fee may be earned on such shares for a particular year. The Incentive Fee will be
calculated separately with respect to each outstanding share series and will be
determined as of the last business day of each fiscal year and, in the case of interim
redemptions, as of the effective redemption date. The Advisor will be paid 90% of the
estimated Incentive Fee within 30 days after the end of each fiscal year and the balance
within 30 days following the completion of the Fund’s financial statements for the year.
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In addition, if shares are redeemed during a fiscal year, the Incentive Fee charged such
shares at the time of redemption will be paid to the Advisor within 30 days following the
redemption date.
In addition to the Incentive Fee described above, the Advisor is entitled to receive
a Management Fee from each Offshore Fund (except LTF Ltd., discussed below) at the
rate of 1.25% per year of the Fund’s net assets. The Management Fee is payable
monthly in advance on or before the tenth day of each month in an amount based upon
the net asset value of the Fund as of the first business day of the month, after any
purchases or redemptions of shares as of or prior to such day.
LTF Ltd. does not pay any fees directly to the Advisor. As a limited partner of
Collins Capital Liquid Trading Fund LP, LTF Ltd. assumes indirectly its relative share of
fees to the Advisor in its capacity as the general partner of Collins Capital Liquid
Trading Fund LP.
The Advisor has the right as it deems appropriate, to reduce, waive or eliminate
all or any part of the Incentive Fee or Management Fee chargeable to a shareholder,
provided doing so will not increase fees to any other shareholder.
THE MASTER FUNDS - ADMINISTRATION FEE
The Advisor is entitled to receive a monthly administration fee from the Master
Funds at a rate per annum of 0.25% of their net assets. Such administration fee is
intended to compensate the Advisor for paying the fees and expenses of an
independent administrator, as well as for providing various additional administrative
services to the Funds and the Master Funds.
The Master Funds do not charge the Funds an Incentive Allocation or
Management Fee.
OPERATING COSTS
In addition to the above, each Fund bears all of its own operating costs,
including, but not limited to, audit, legal, tax preparation, registration, custodial and other
third party professional services, administrative fees and expenses, any applicable
taxes, as well as a ratable share of similar charges incurred by the Master Fund
including interest expense, if any.
The Fund also bears its ratable share of the expenses of the Portfolio Funds,
including, but not limited to, all management and incentive fees/allocations, all trading
expenses and transaction costs and any other fees and charges of the Managers.
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ADDITIONAL DISCLOSURE
Prospective investors in each Fund are advised to review in full the Private
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