Item 5: Fees and Compensation
Consector receives fees for investment management services based on the net assets of the
Fund, as disclosed in the Fund’s offering memorandum. Consector generally charges the
Fund a quarterly “Management Fee” at an annual rate of 1.5% of the net assets of the
Fund. The Management Fee may be waived, reduced or calculated differently with respect
to certain investors, including Consector’s employees and affiliates.
The General Partner generally receives an annual performance allocation of 20.0%, subject
to a high water mark, with respect to the investors in the Fund that is calculated based on all
net profits and net losses (including realized and unrealized gains and losses) of the Fund (the
“Performance Allocation”). The Performance Allocation is charged in compliance with
Rule 205-3 of the Investment Advisers Act of 1940 (the “Advisers Act”). Rule 205-3
provides an exemption to the Advisers Act’s prohibition against registered investment
advisers receiving compensation from a client on the basis of a share of the capital gains or
appreciation of the client’s assets under management. The Performance Allocation may be
waived, reduced or calculated differently with respect to certain investors, including
Consector’s employees and affiliates.
Consector Capital, LP Form ADV Part 2A
The Subadvised Funds and any separately managed accounts that Consector may manage will
be charged fees on a case-by-case basis, which may include management fees and/or
performance-based compensation.
Consector does not accept compensation, including sales charges or service fees, from any
person for the sale of securities or other investment products.
Expenses
Consector and the General Partner will pay for their own general operating and overhead
expenses associated with providing the management and investment management services to
the Fund. These expenses include all expenses incurred by Consector and the General
Partner in providing for their normal operating overhead, including, but not limited to, the
cost of providing relevant support and administrative services (e.g., employee compensation
and benefits, rent, office equipment, insurance, utilities, telephone, secretarial, clerical and
bookkeeping services, etc.).
The Fund shall pay or reimburse Consector, the General Partner, and their respective
affiliates for (i) all expenses incurred in connection with the ongoing offer and sale of
interests, including, but not limited to, printing of its offering documents and exhibits and
documentation of performance and the admission of limited partners, (ii) all operating
expenses of the Fund, such as tax preparation fees, governmental fees and taxes,
Administrator fees, costs of communications with limited partners, and ongoing legal,
accounting, auditing, bookkeeping, consulting, insurance and other professional fees and
expenses, (iii) all Fund research, trading and investment related costs and expenses (e.g.,
research reports, due diligence on portfolio companies, brokerage commissions, margin
interest, expenses related to short sales, custodial fees, and clearing and settlement charges),
and (iv) all fees and other expenses incurred in connection with the investigation,
prosecution or defense of any claims, assertion of rights or pursuit of remedies, by or against
the Fund, including, without limitation, professional and other advisory and consulting
expenses and travel expenses, and whether or not pursuant to bankruptcy or other legal
proceedings, or participation in informal committees of creditors or other security holders
of an issuer.
The expenses that are charged to the Subadvised Funds and any separately managed
accounts that Consector may manage are negotiated on a case-by-case basis.