Fees and Compensation
Divisar Partners, LP
We receive both an asset-based fee and an incentive allocation. The asset-based fee is 1.5% per year,
billed in monthly installments. This fee is billed monthly in advance, based on the value of the assets
under management as of the first day of the month.
The incentive allocation is calculated as of December 31 each year. When profits for the current period
exceed the accumulated unrecouped net losses for prior periods, we will receive an incentive allocation of
20% of the profits generated. Solely for purposes of computing this fee, net profits and net losses include
unrealized gains and losses. If you withdraw capital from the Fund the incentive allocation for the
amount withdrawn will be calculated as of the withdrawal date.
For investors who do not meet the minimum requirements to pay an incentive allocation, we will charge
an asset-based fee of 1.5%, with no incentive allocation. This asset-based fee will be billed on the same
schedule as disclosed above.
With respect to both the asset-based fee and the incentive allocation, Divisar may waive, rebate or
otherwise vary the rate charged to an investor.
Investors may make withdrawals as of the last day of any calendar quarter by providing 55 days written
notice.
Divisar Partners QP, LP
We receive both an asset-based fee and an incentive allocation. The asset-based fee is 1.5% per year,
billed in monthly installments. This fee is billed monthly in advance, based on the value of the assets
under management as of the first day of the month.
The incentive allocation is calculated as of December 31 each year. When profits for the current period
exceed the accumulated unrecouped net losses for prior periods, we will receive an incentive allocation of
20% of the profits generated. Solely for purposes of computing this fee, net profits and net losses include
unrealized gains and losses. If you withdraw capital from the Fund the incentive allocation for the
amount withdrawn will be calculated as of the withdrawal date.
With respect to both the asset-based fee and the incentive allocation, Divisar may waive, rebate or
otherwise vary the rate charged to an investor.
Investors may make withdrawals as of the last day of any calendar quarter by providing 55 days written
notice.
Other Costs Involved
In addition to our advisory fees shown above, expenses associated with making investments on behalf of
the Funds and other clients will also be incurred. These fees include:
• management fees for ETFs and mutual funds. These are fees charged by the managers of the ETF
or mutual fund and are a portion of the expenses of the ETF or mutual fund.
• brokerage costs and transaction fees for any securities or fixed income trades. These are
generally charged by your custodian and/or executing broker.
• Audit, tax preparation services, bookkeeping, other professional fees and legal fees associated
with the Funds.
• Governmental fees, taxes, license and registration fees, and costs associated with the ongoing
offering and sales of interests in the Funds.
Additional information about brokerage costs and services is provided in “Item 12: Brokerage Practices.”
General Disclosures
In order to pay an incentive allocation, you must meet certain requirements.
• You have a net worth (or together with your spouse have a net worth) of at least $2.2 million,
excluding your primary residence OR
• You have at least $1,100,000 invested with us.
Investors with initial contributions prior to September 19, 2011, may continue to rely on the exemption
available at the time of initial investment.
The subscription documents for the Funds provide additional qualifications standards. All incentive
allocations will be made in a manner that complies with applicable rules and regulations.
Incentive allocation arrangements could create an incentive for us to make investments that are riskier or
more speculative than would be the case in the absence of the arrangement. In some circumstances, we
may receive increased compensation as a result of unrealized appreciation as well as realized gains.
Because the clients may have different fee structures, a conflict of interest exists where the Firm must
allocate any limited investment opportunities among the clients, and may have an incentive to allocate to
(a) a client with a performance-based fee structure over clients that are not charged a performance-based
fee, and (b) clients from which the Firm will receive a greater performance-based fee over clients with a
less performance-based fee.
The Firm generally addresses the foregoing conflicts by allocating investment opportunities across the
Funds pari passu. The clerical splitting of trades is performed at the end of the day and based on
mechanical calculations that do not involve discretionary allocations. Although the Funds run pari passu,
some variations may occur, such as to minimize prospective tracking error or transaction costs for de
minimis projected allocations. Additional details are available.
It is critical that investors refer to the relevant confidential private placement memorandum and other
governing documents for a complete understanding of how fees are deducted from their assets. The
information contained herein is a summary only and is qualified in its entirety by such documents.