Item 5: Fees and Compensation
Management Fee
Investors in the Feeder Funds are charged a fee for investment management services based on
assets under management (the “Management Fee”), which is set forth in the Feeder Funds’
Governing Documents. Fourth Sail receives an annual management fee of 1.5% to 2% per
annum in respect of the net asset value (“NAV”) of the relevant class of shares or interests
attributable to each Investor’s investment in the Master Fund. The Management Fee is payable
monthly in arrears as soon as practicable after the end of each calendar month. Fourth Sail
may, in its sole discretion, waive, rebate, or decrease the Management Fee that is payable in
whole or in part, in respect of certain Investors. The Feeder Funds may from time to time
enter into Side Letters providing for changes in management fees.
In addition, the Feeder Funds pay, on behalf of the SPV, a Management Fee of 1% per annum
in respect of the NAV of each Investor's interest in the SPV, payable monthly in arrears,
pursuant to the Governing Documents of the SPV.
Performance Based Compensation
In addition to the Management Fee, Fourth Sail receives performance-based compensation in
the form of a performance fee or performance allocation (the “Performance Fee”) which
is set forth in the Feeder Funds’ Governing Documents. The Performance Fee will accrue
monthly as at the close of business on each valuation day and will be paid annually in arrears.
Investors redeeming as of a date that is not the fiscal year end for the Funds will be assessed
a Performance Fee calculated on a “crystallized” basis. Fourth Sail in its sole discretion, may
reduce, waive, rebate, or modify the Performance Fee with respect to certain investors.
The Feeder Funds may also be subject to pay, on behalf of the SPV, a carried interest of 10%
of realized gains over the original cost and related expenses of the SPV investment, calculated
and payable upon the sale or other disposition of the SPV investment, with respect to each
Investor holding an interest in the SPV, pursuant to the Governing Documents of the SPV.
Such carried interest is calculated on a realized basis only and is not netted against the
Performance Fee applicable to the appropriate Master Fund.
Other Costs and Expenses
The Funds bears all costs and expenses related to their investments and operations, including,
without limitation, brokerage and other 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 or the
Advisory Board, custody fees, costs of any litigation or investigation involving the Funds
activities, indemnification expenses, research and investment consultancy expenses, the
Management Fee, remuneration of independent advisors of the Funds, out of pocket expenses
incurred by the Advisory Board of the Funds, the Performance Fee, the fees and expenses of
professionals providing services to the Funds, including legal, audit, accounting, tax,
administration, fees and expenses of the members of the Advisory Board, regulatory costs,
any issue or transfer taxes chargeable in connection with any securities transactions, any entity
level taxes, corporate fees payable to governments or agencies, regulatory filing and license
fees, all fees payable to third party service providers in connection with trade confirmation,
holdings and order reconciliation, communication or information expenses with respect to
Investor services, expenses of meetings of Investors and of preparing, printing and distributing
financial and other reports, proxy forms, offering memoranda and similar documents, the cost
of obtaining and maintaining any future listing of the Funds’ shares or interests on any stock
Fourth Sail Capital US LP Form ADV Part 2A
exchange and any extraordinary fees and expenses incurred by Fourth Sail on behalf of the
Funds. Such expenses are generally shared by all of the Investors; provided, however, that
certain expenses related to a particular series or class of shares or interests will only be applied
to such series or class.
The SPV does not maintain independent cash balances sufficient to pay advisory fees and
expenses. As a result, fees and expenses attributable to the SPV are paid directly by the Feeder
Funds on behalf of the SPV.
Sales Compensation
Fourth Sail and its Employees do not receive (directly or indirectly) any compensation from
the purchase or sale of securities or investments for the Funds. Fourth Sail and its Employees
do not receive (directly or indirectly) sales commissions in connection with sales of interests
in the Funds.
Fourth Sail Capital US LP Form ADV Part 2A