Item 5 – Fees and Compensation
Compensation and Fee Schedules
All investors, and prospective investors, should review the Clients’ Governing Documents
in conjunction with this brochure for more complete information on the fees and
compensation payable with respect to each Client.
Fortinbras generally receives an asset-based management fee of up to 2% per annum (0.5%
per calendar quarter) of the committed capital of the Clients. Fortinbras is also eligible to
a performance-based fee or allocation as outlined in the Funds’ Governing Documents.
Future Funds and Managed Accounts are expected to utilize similar fee structures
(management fee and performance-based fee), but could be subject to a different
calculation in accordance with their respective Governing Documents.
In certain circumstances, the management fees and/or performance-based fees or
allocations payable to Fortinbras by Fund investors or the Managed Accounts may, in the
discretion of the general partner or the Firm, be waived in whole or in part, or reduced or
calculated differently (including any limited partner that is affiliated with the Firm) as a
result of side letters or other similar agreements, supplements to offering documents, etc..
Deduction of Fees
Fortinbras is authorized to charge and deduct the management fee directly from the assets
of each Client in accordance with the respective Governing Documents.
Other Fees and Expenses
Subject to any caps or exceptions outlined in the Governing Documents, the Funds will
reimburse the general partner and/or the Firm for the Funds’ and its affiliated entities’
organizational and startup expenses (as further set forth in the partnership agreement),
including travel, printing, legal, capital raising, accounting, regulatory compliance, any
administrative or other filings and other organizational expenses. The general partner or an
affiliate thereof will bear the cost (through an offset against the management fee or
otherwise) of all organizational expenses in excess of any caps, if any. Any fees of
placement agents will be paid in accordance with the applicable Client’s Governing
Documents.
In addition to the management fee and subject to the provisions set forth in the applicable
Governing Documents, the Funds will pay all other costs and expenses relating to the
Funds’ activities, investments and business, including: (i) all fees, costs, expenses,
liabilities and obligations attributable to structuring, organizing, acquiring, managing,
operating, holding, valuing, winding up, liquidating, dissolving and disposing of the
investments (including interest on money borrowed by the Funds or the Firm or the general
partner on behalf of the Funds, expenses incurred in connection with the incurrence or
repayment of credit facilities, expenses incurred in connection with guaranteeing the
obligations of any portfolio companies or their affiliates, expenses of portfolio tracking
facilities, debt service fees, origination fees, registration fees and expenses and related
expenses and brokerage, finders’, custodial and other fees and expenses); (ii) legal,
accounting, auditing, administration, loan agency, valuation, custodian, depositary,
insurance (including directors and officers, errors and omissions and representation and
warranty liability insurance, and all premiums and charges in connection with the
maintenance thereof), travel, litigation and indemnification costs and expenses, judgments
and settlements, consulting (including consulting and retainer fees paid to consultants
performing investment initiatives and other similar consultants), costs and expenses of
computer software specific to the affairs of the Funds and research-related and market data
expenses, including, without limitation, trade order management systems and news and
quotation equipment, software and services; broker, finders’, financing, appraisal, filing
and other fees and expenses (including fees, costs and expenses associated with the
preparation or distribution of the Funds’ financial statements, tax returns and Schedule K-
1s or any other administrative, regulatory or other Fund-related reporting or filing (other
than expenses and costs of the initial notifications, filings and compliance which fall within
organizational expenses) or any other similar law, rule or regulation (including any
implementing law, rule or regulation relating thereto)); (iii) fees, costs and expenses of the
LP Advisory Committee; (iv) all fees, costs, expenses, liabilities and obligations incurred
by the Funds, the general partner or the Firm relating to investment and disposition
opportunities for the Funds not consummated (including legal, accounting, auditing,
insurance, travel, consulting, finders’, financing, appraisal (including, without limitation,
the costs of any third-party valuation agents or pricing services), filing, printing, real estate
title, survey, litigation, indemnification, judgments and settlements, if any, and other fees
and expenses); (v) all out-of-pocket fees, costs and expenses incurred by the Funds, the
general partner or the Firm in connection with the annual and other periodic (if any)
meetings of the limited partners and any other conference or meeting with any limited
partner(s); (vi) any taxes, fees and other governmental charges levied against (or imposed
on amounts payable to) the Funds or any entity utilized by the Funds to hold an investment
(except to the extent such amounts are reimbursed by a Partner or treated as distributed to
a Partner pursuant to the Partnership Agreement); (vii) placement agent fees; (viii) fees,
costs and expenses that are classified as extraordinary expenses under GAAP (such as
litigation, indemnification, judgments and settlements, if any); (ix) all fees, costs and
expenses incurred in connection with the organization, management, operation and
dissolution, liquidation and final winding-up of any alternative investment vehicles;
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