Item 5: Fees and Compensation
The fees applicable to each Fund are set forth in detail in each Fund’s offering documents. A
brief summary of such fees is provided below.
Management Fee
Duane Park is paid an investment management fee (“Management Fee”) ranging from 1.25%
to 1.75% per annum of the net asset value of the Funds. The Management Fee is charged each
quarter in advance based on the Fund’s net asset value on the first day of the quarter. If a new
Investor account is established during a quarter, or an Investor makes an addition to its account
during a quarter, the Management Fee will be prorated.
Duane Park Capital Management LP Form ADV Part 2A
As part of the Management Fee, a Fixed Fee, (“Fixed Fee”) will be distributed to the Strategic
Investor (“Strategic Investor”), in an amount agreed to by the applicable parties in the Seed
Investor Agreement (“Seed Investor Agreement”), as a guaranteed payment for the use of
capital (the “Guaranteed Payment”). Unless otherwise determined by the General Partner, the
Fixed Fee is calculated at the Partnership level on an Interest-by-Interest basis, paid at the
Master Fund level.
If a new Investor is admitted at any time other than the first day of a quarterly period, or an
existing Investor makes an additional capital contribution at any time other than the first day of
a quarterly period, the portion of the Fixed Fee payable will be prorated based on the number
of days remaining in such quarterly period. For the avoidance of doubt, there will be no
adjustment to the Fixed Fee paid with respect to any other Shareholder to reflect such additional
contribution until the start of the following quarterly period.
Duane Park, in its sole discretion, may waive or modify the Management Fee for any Investor.
Incentive Allocation
The Master Fund’s General Partner, Duane Park GP I LP, (the “General Partner”) will be
entitled to an annual Incentive Allocation (“Incentive Allocation”) subject to a Loss Recovery
Account procedure. The Incentive Allocation will be allocated at the Master Fund level, but
will be calculated with respect to each limited partnership interest in the Onshore Fund and
class and series of shares in the Offshore Fund (“Interest”) such that any feeder-fund level
income and expenses will be taken into account for purposes of calculating such Incentive
Allocation.
The General Partner may reduce, waive, assign, grant participation in or otherwise share,
reallocate or modify the Incentive Allocation allocable with respect to any Investor (including
for any affiliate of the General Partner or Firm) without the consent of or notice to any
Investor.
In the event that a Fund is terminated, or an Investor withdraws other than at the end of a
fiscal year, then for purposes of determining the Incentive Allocation allocable at such time to
the General Partner, net capital appreciation will be determined as if such dates on the first
day of each fiscal year, or portion thereof (in the event of a mid-year withdrawal or
distribution), subject to certain adjustments.
Other Types of Fees or Expenses
In addition to the Fixed Fee and Incentive Allocation, a Fund will bear all of its organizational
and offering expenses (including its pro rata share of the organizational and offering expenses
of the Master Fund) and will reimburse the General Partner, the Firm and/or the Principals, as
applicable, to the extent that any of them bears organizational and offering expenses on
behalf of a Fund. Organizational and offering expenses may include expenses incurred at or
prior to the formation of the Funds, and prior to the initial closing of the Funds.
In general, the Fund will bear all of its “Expenses” as described in the applicable limited
partnership agreement (the “LPA”) including its pro rata portion of the Master Fund’s
operating expenses), which expenses will include, without limitation, all costs and expenses
relating to the Funds’ pro rata share of the activities and operations (to the extent not
reimbursed in connection with an investment), including, without limitation, all fees, costs
Duane Park Capital Management LP Form ADV Part 2A
and expenses associated (directly or indirectly) with the negotiation, financing, sourcing,
acquiring, holding, monitoring, hedging, settling and disposing of investments or proposed
investments; other transaction costs, including, without limitation, transaction fees, custodial
fees, brokerage fees, commissions, consulting, advisory, due diligence, investment banking,
legal, financial, auditing, accounting, research, third-party consulting and other professional
fees and expenses related to investments and proposed investments, as well as all fees,
expenses, interest payments and principal payments due to any lenders, investment banks
and/or other financing sources in connection with the financing, sourcing, acquiring, holding,
monitoring, hedging and disposing of investments or proposed investments; custodial fees,
appraisal fees and expenses; all investment-related travel expenses (including industry
conferences) and travel expenses related to the purchase, sale or transmittal of Fund assets;
all entity-level taxes, fees and other governmental charges; the costs of any insurance
(including, without limitation, general partner liability insurance, errors and omissions
insurance, directors and officers insurance, if any, and other insurance policies with respect
to the Funds’ business and affairs); expenses incurred in the collection of monies owed to the
Funds; Fixed Fees; research related computer hardware and software expenses, including
Bloomberg terminals and subscriptions relating to, among other things, trading, order
management and other technology and services; legal, regulatory, compliance, auditing,
research and accounting fees and expenses (including, without limitation, fees and expenses
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