Item 5 - Fees and Compensation
All investors and prospective investors should review the governing documents and
advisory agreements of each Fund in conjunction with this brochure for complete
information on the fees and compensation or expenses related to a particular Fund and the
below is subject in its entirety to the information provided in such governing documents.
Different Funds may be subject to different management fees and performance-based
compensation arrangements. In addition, Development Capital negotiates alternative fees
or incentive allocations on a client-by-client basis with other funds or separate account
clients.
Management Fee:
A quarterly management fee (the “Management Fee”), calculated and payable in advance
based on the net asset value of each Fund investor’s capital account (each a “Capital
Account”), is debited against each Fund investor’s Capital Accounts and paid to
Development Capital for its services, pursuant to the terms of the advisory agreement. In
the case of a Fund investor admitted to the Fund after the first business day of the relevant
calendar quarter, the Management Fee will be pro-rated based on the relevant admission
date. Development Capital may, in its sole discretion, reduce or waive the Management Fee
with respect to any Fund investor, and generally intends to waive the Management Fee for
investments in the Funds by employees, partners or affiliates of Development Capital or
their related persons, including estate planning vehicles set up for the benefit of such
persons (collectively, “Related Persons”).
Performance Allocation:
Generally, for each fiscal year, the General Partner will be entitled to a performance
allocation (the “Performance Allocation”) from the Onshore Feeder and the Master Fund,
based on any net profit allocable to each Fund investor for such fiscal year exceeding a
certain “hurdle rate” and in excess of any loss recovery with respect to such Fund investor’s
Capital Account, as described below, adjusted for contributions, withdrawals and
distributions. The General Partner may, in its sole discretion, reduce or waive the
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Performance Allocation with respect to any Fund investor and generally intends to waive
the Performance for Related Persons.
Development Capital’s fees are exclusive of investment expenses such as commissions,
transaction fees, margin interest and other related costs and expenses which are incurred
by the Client. Clients may incur certain charges imposed by custodians, brokers and other
third parties, custodial fees, transfer taxes, wire transfer and electronic fund fees, and other
fees and taxes on brokerage accounts and securities transactions. Such charges, fees and
commissions are exclusive of and in addition to Development Capital’s fee. Item 12 further
describes the factors considered in selecting or recommending broker-dealers for Client
transactions and determining the reasonableness of their compensation (e.g.,
commissions).
Development Capital and its supervised persons do not accept compensation or
commissions for the sale of securities or other investment products.