Item 5: Fees and Compensation
As compensation for advisory services provided to the Esplanade Funds, Esplanade receives a
management fee from each Fund, payable as set forth in each Fund’s organization or offering documents.
In the event an investor makes a capital contribution to a Fund on a day other than as of the first day of a
fiscal quarter, the management fee will be prorated accordingly. The management fee is not negotiable,
although Esplanade retains the discretion to waive fees for one or more investors, in whole or in part,
without notification to other investors.
As compensation for advisory services provided to the sub-advised funds and the institutional separately
managed account, Esplanade receives an annual performance fee (incentive fee) pursuant to the terms
outlined within each respective investment management agreement. Esplanade negotiates fees for any
institutional or other separately managed account clients on a client-by-client basis depending upon various
factors including, but not limited to, complexity of the client’s needs, assets to be placed under
management, portfolio style, trading frequency and account composition.
Investors in the Esplanade Funds are also subject to performance fees as further described in Item 6 below.
Other Expenses - Esplanade Funds
In addition to the management fee, each investor in the Funds bears its allocable share of expenses
associated with the operations of the Funds. These expenses include, among others, brokerage and
transaction costs, clearing and settlement charges, interest and commitment fees on debit balances or
borrowings, borrowing charges on securities sold short, costs of any liability insurance obtained on behalf
of the Funds, custody fees, costs of any litigation or investigation involving Fund activities, costs of any
proxy contests, indemnification expenses, consulting expenses, research expenses, costs of news and
financial information relating to investment decisions or the purchase and sale of securities, travel expenses
related to investments, legal and other expenses in connection with conducting due diligence and
Esplanade Capital LLC
negotiating the terms of certain investments, the fees and expenses of professionals providing services to
the Funds including legal, audit, accounting, tax and administration, any issue or transfer taxes chargeable
in connection with any securities transactions, any entity level taxes, regulatory costs, filing and license
fees, the costs of reporting and providing information to investors and any extraordinary expenses.
Institutional or Other Separately Managed Account Clients
In addition to management and/or performance fees, separately managed account clients will also incur
certain charges imposed by other third parties such as custodial brokers, trust companies, banks, and other
financial institutions. These additional charges include, but are not limited to, securities brokerage
commissions, transaction fees, redemption fees, exchange and clearing fees, data fees, short term
transaction fees, custodial fees, charges imposed directly by a mutual fund or ETF, deferred sales charges,
wire transfer and electronic fund fees, technology fees and software fees.