Item 5 – Fees and Compensation
All fees are subject to negotiation at the Adviser’s discretion.
Management Fees
Diakrisis Fund LP: The Adviser charges a quarterly management fee, which varies by class of
interests, generally from 0.00% to 0.75% annualized, based on the opening capital account
balance of each Fund investor for a calendar quarter. Management fees are payable quarterly
in advance.
Diakrisis Offshore Fund Ltd.: The Adviser charges a quarterly management fee, which varies
by class of interests, generally from 0.00% to 0.75% annualized, based on the opening capital
account balance of each Fund investor for a calendar quarter. Management fees are payable
quarterly in advance.
Sagacia Fund LP: The Adviser charges a quarterly management fee, which varies by class of
interests, generally from 0.00% to 0.75% annualized, based on the opening capital account
balance of each Fund investor for a calendar quarter. Management fees are payable quarterly
in advance.
Sagacia Offshore Fund LP: The Adviser charges a quarterly management fee, which varies by
class of interests, generally from 0.00% to 0.75% annualized, based on the opening capital
account balance of each Fund investor for a calendar quarter. Management fees are payable
quarterly in advance.
Sabiduria Fund LP: The Adviser charges a quarterly management fee, which varies by class
of interests, generally from 0.00% to 0.75% annualized, based on the opening capital account
balance of each Fund investor for a calendar quarter. Management fees are payable quarterly
in advance.
SP Funds and SMAs: In general, for the SP Funds and SMAs, the Adviser charges a
management fee at a rate that is negotiated between the Client and the Adviser. The specific
way fees are charged by the Adviser is established in a Client’s Offering Documents. The
Adviser will generally bill its management fees on a monthly or quarterly basis, either in
advance or arrears. Investors may also elect to be billed directly for fees, or to authorize the
Adviser to directly debit fees from Client accounts.
For the Funds, management fees are prorated for each capital contribution and withdrawal
made during the applicable calendar quarter. SMAs initiated or terminated during a calendar
quarter are charged a prorated fee. Upon termination of any account, any prepaid and
unearned fees are promptly refunded, and any earned and unpaid fees will be due and
payable, subject to the conditions of a Client’s Offering Documents.
Termination and Withdrawal Fees
Termination/early-withdrawal fees and terms are negotiated with SP Funds and/or SMA
investors individually.
Performance Allocations and Fees
The Adviser charges performance allocations and fees to certain qualified investors. For
information regarding the performance allocations and fees charged, please see the relevant
Client Offering Documents.
Operating Expenses
Clients bear all operating expenses and other costs of their investment activities, including
(as applicable), but not limited to:
• accounting, bookkeeping, auditing, and tax preparation fees and expenses
• legal fees and expenses
• fees and disbursements of third parties performing work benefiting the Client
• insurance and bonding costs
• all trading expenses and transaction costs, including, but not limited to, brokerage
commissions and expenses relating to short sales, clearing and settlement charges,
interest on loans and debit balances, margin interest, broker service fees, and other
clearing and custodial expenses
• fees or assessments in connection with any regulatory registrations, qualifications
and/or approvals of the Client or the Adviser, and related compliance fees and
expenses, deemed appropriate by the Adviser
• such research and portfolio management expenses as the Adviser shall deem
appropriate, which may include, but are not limited to, expenses incurred in
connection with due diligence investigations or research as to investments or
potential investments, including travel, lodging, and other expenses incurred in
connection with visits to companies, meetings, research symposiums and
communications with company management, security holders, analysts and other
third parties, costs of research reports, consultants, data feeds and databases, news
wires and quotation services, periodical subscription fees, and costs of software
(including risk control and market analytic software) utilized by the Adviser in
connection with managing Client portfolios
• the cost of preparation and distribution of reports and statements
• all filing and recording fees
• all custodial fees and bank service fees
• all applicable federal, state, local, and foreign taxes
• extraordinary expenses.
The Adviser has no financial interest in any operating expenses borne by Clients, provided
that with respect to any “soft-dollar” arrangements established or entered into by the
Adviser with any brokerage firm, the Adviser obtains products or services that qualify as
“research and brokerage services” within the meaning of Section 28(e) of the Securities Act
of 1934, as amended.
Item 12 further describes the factors that the Adviser considers in selecting or
recommending broker-dealers for Client transactions and determining the reasonableness
of their compensation (e.g., commissions).
Item 6 – Performance-Based Allocations and Fees and Side-By-Side Management
In some cases, affiliates of the Adviser have entered into performance-based allocation and
fee arrangements with qualified investors. The Adviser structures any performance-based
allocation or fee arrangement subject to Section 205(a)(1) of the Investment Advisers Act of
1940 (the “Advisers Act”) in accordance with the available exemptions thereunder, including
the exemption set forth in Rule 205-3 adopted by the SEC pursuant to the Advisers Act. In
...