FEES AND COMPENSATION
Compass Rose, Compass Rose Asset Management GP, LLC, and a Delaware limited liability
company that serve as the general partner of Compass Rose (“Compass Rose GP”) and/or the
general partner of a Fund, will receive management fees and performance fees or incentive
allocations from its Clients.
Compass Rose, its affiliates and equity owners, and certain of their respective professionals
and employees, may invest in or alongside the Funds. Fees assessed or profit allocations on
such investments may be substantially reduced or, as is more typical, waived altogether for
these investors.
Performance fees or carried interest profit allocations are subject to regulation under Rule 205-
3 under the Advisers Act. Therefore, Compass Rose seeks to ensure that Clients, including
investors in the Funds that are directly or indirectly assessed performance fees or are subject to
carried interest profit allocations satisfy the qualifications of Rule 205-3 under the Advisers
Act and have been advised of such fees or allocations and their risks. Accordingly, the fees
applicable to each Client will be set forth in detail in each Fund’s offering documents.
Similarly, the fees applicable to any separately managed accounts will be set forth in detail in
a managed account agreement entered into between Compass Rose, on the one hand, and the
separately managed account, on the other hand. A brief summary of such fees is provided
below.
1. Management Fee
Generally, each Client will pay Compass Rose a fee for investment advisory services (the
“Management Fee”) for each fiscal quarter ranging from 0% (0% per annum) to 0.4375%
(1.75% per annum) of the beginning net asset value of each investor’s capital account for
such fiscal quarter. The Management Fee will be calculated and paid at the beginning of
each quarter.
The Management Fee will be prorated for any period that is less than a full quarter and will
be adjusted for contributions made during the quarter. Compass Rose and/or the governing
body of the Funds may waive or modify the Management Fee with respect to certain
investors.
2. Performance Compensation
Incentive Allocation
Generally, at the end of each fiscal year, or such other period as may be specified in the
operative documents for a particular class of investors, the general partner of a Fund (each
a “Fund GP”), expects to be entitled to an incentive allocation (the “Incentive Allocation”)
in an amount equal to between 15% and 30% of the net capital appreciation (which includes
both realized gains and losses and unrealized appreciation and depreciation of securities
held in the Fund’s portfolio) allocated to an investor’s capital account for such fiscal year,
or such other period as may be specified in the operative documents for a particular class
of investors, after deducting the Management Fee debited to such investor’s capital account
for such fiscal year, subject to a loss carry-forward mechanism.
In the event that a Fund is terminated, or an investor withdraws from that Fund other than
at the end of a fiscal year or such other period as may be specified in the operative
documents for a particular class of investors, then for purposes of determining the Incentive
Allocation allocable at such time to that Funds GP, net capital appreciation will be
determined as if such dates were the end of the fiscal year or such other period as may be
specified in the operative documents for a particular class of investors, subject to certain
adjustments. The Funds GP may waive or modify the Incentive Allocation with respect to
certain investors.
Incentive Fee
Generally, at the end of each fiscal year, or such other period as may be specified in the
operative documents for a particular class of investors, Compass Rose expects to be entitled
to an incentive fee (the ”Incentive Fee”, and together with the Incentive Allocation, the
“Performance Compensation”) in an amount equal to between 15% and 30% of the net
realized and unrealized appreciation in the net asset value of each series of shares, adjusted
for any redemption of shares in the series made during the year and any accruals of the
Incentive Fee and subject to a loss carry-forward mechanism.
In the event that shares are redeemed other than at the end of a fiscal year, or such other
period as may be specified in the operative documents for a particular class of investors,
the Incentive Fee will be computed and paid as though the redemption date were the last
day of the fiscal year or such other period as may be specified in the operative documents
for a particular class of investors. The board of directors of both onshore and offshore
Funds, with the consent of Compass Rose, may waive or modify the Incentive Fee with
respect to certain investors.
The Funds will have the right to issue additional subclasses and tranches of shares with
differing fee terms.
3. Separately Managed Accounts
As of the date of this Brochure, Compass Rose is also providing investment management
services to one separately managed account, and may in the future directly advise additional
separately managed accounts.
Fees for separately managed accounts are negotiable and will not be based on a fixed fee
schedule. Such fees are expected to be based on factors specific to the applicable managed
account and the applicable client’s preferences, including without limitation, the investment
strategy to be utilized, the investment restrictions imposed, the perceived risk/return of the
instruments expected to be traded, the level of assets in the managed account, and the
required and/or anticipated term of the managed account arrangements. Fees for separately
managed accounts may include either management fees based on an agreed-upon
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