Item 5 – Fees and Compensation
INSTITUTIONAL SEPARATE ACCOUNTS:
We may provide investment advisory services to institutional separate accounts. Fees for
institutional separate accounts that utilize our equity strategies are negotiable and
generally are based upon a percentage of assets under management and performance. We
reserve the right to negotiate all fees. Some clients may pay more or less than others
depending on certain factors, including but not limited to, the type and size of the account.
The fees that we charge for investment advisory services are specified in written
agreements between the firm and our clients.
The fees we charge institutional separate accounts may vary by investment strategy or
account; Elbrook typically receives a fixed fee / base compensation and is eligible to
receive performance based fees in connection with certain of its institutional separate
accounts. The fees for institutional separate accounts are typically payable monthly or
quarterly in arrears and may be calculated based on the value of the assets in the account
at the end of each calendar month / quarter. Fees for partial periods may be pro‐rated.
LIMITED PARTNERSHIPS / PRIVATE INVESTMENT FUNDS:
Each limited partnership / private investment fund which we manage pays Elbrook or a
subsidiary a management fee and a performance‐based advisory fee as described below.
These fees are described in the fund’s investment management or limited partnership
agreement. (Item 6 provides more information about performance‐based fees, and Item 10
provides more information about our private investment funds).
The fees paid by investors in our private investment funds are not negotiable; provided,
however, that certain large or strategic investors, principals, affiliates, or relatives of such
persons may purchase or may have purchased interests in our funds which differ with
respect to administrative fees and/or performance allocations or fees.
Financial Stocks Capital Partners IV L.P. Management Fee: FSCP IV pays Finstocks
Capital Management IV, LLC, our subsidiary which serves as FSCP IV’s General Partner
(Finstocks IV), a quarterly management fee in advance calculated at a rate of 0.50% (i.e.,
2% per annum) of the aggregate capital commitments of all partners for the first four years
after the initial closing, and thereafter at a rate of 0.375% (i.e., 1.5% per annum) of the
aggregate capital commitments of all partners; provided, however, that the first
Elbrook Holdings, LLC
Form ADV Part 2A –Disclosure Brochure
management fee was paid in advance for the period following the first 12 months after the
initial closing and was calculated at an annual rate of 2.0%.
Performance Allocation: Profits and losses from portfolio investments are allocated to all
partners in proportion to their respective commitments, except that twenty percent (20%)
of the cumulative net profits otherwise allocable to all partners in proportion to their
respective commitments are allocated to an affiliate of Finstocks IV.
FSCP IV primarily invests in the non‐marketable or highly illiquid equity or equity‐linked
securities of financial services companies.
Financial Stocks Capital Partners V L.P. Management Fee: FSCP V pays Finstocks Capital
Management V, LLC (Finstocks V), its General Partner and a subsidiary of Elbrook, a
quarterly management fee in advance calculated at a rate of 0.50% (i.e., 2% per annum) of
the aggregate capital commitments of all partners for the first four years after the initial
closing, and thereafter at a rate of 0.375% (i.e., 1.5% per annum) of the aggregate capital
commitments of all partners; provided, however, that the first management fee was paid in
advance for the period following the first 12 months after the initial closing and was
calculated at an annual rate of 2.0%.
Performance Allocation: Net profits and net losses of FSCP V are allocated to all partners in
proportion to their respective capital commitments, except that 20% of the cumulative net
profits allocable to the limited partners will be reallocated to the “Special Limited Partner”
which is an affiliate of Finstocks V.
The purpose of FSCP V is to seek substantial capital appreciation primarily through
investment in equity and equity‐linked securities of financial services companies.
OTHER FEES AND EXPENSES:
In addition to management and advisory fees, investors in our private equity funds and our
institutional separate account clients may indirectly (or in the case of institutional separate
accounts utilizing our equity strategies, directly) bear additional expenses, including the
following:
Brokerage commissions;
Transaction fees;
Exchange fees;
SEC fees;
Custodial Fees;
Odd‐Lot differentials;
Transfer taxes;
Wire transfer and electronic fund processing fees;
Commissions or mark‐ups / mark‐downs on security transaction;
Among others that may be incurred.
Elbrook Holdings, LLC
Form ADV Part 2A –Disclosure Brochure