Item 5: Fees and Compensation
Gallo Partners is entitled to receive asset-based management fees from the Funds and SMAs. In addition,
the General Partner is entitled to receive performance-based compensation (if any) with respect to the
Funds and the SMAs.
The fees applicable to the Funds are set forth in detail in the Funds’ Governing Documents.
The fees applicable to an SMA are set forth in detail in the investment management agreement for an
SMA.
A brief summary of such fees, expenses and compensation (all of which is qualified by and subject to the
language of a Fund’s Offering Document) is provided below.
There are currently two classes of limited partners interests (the “Interests”) in the Funds, each of which
are subject to a Management Fee at an annual rate of: (i) 1.25% (0.3125% per quarter) - Founders Share
Interests, and (ii) 1.75% (0.4375% per quarter) - Class B Interests - of the net asset value of each capital
account attributable to such interests.
The Funds will pay Gallo Partners a management fee, from the applicable capital accounts of the Funds
attributable to each class of Interest, quarterly in advance on the first day of each calendar quarter, equal
to the applicable management fee percentage of the net asset value of each capital account or each Investor
as of such date.
Management fees are generally pro-rated for partial periods (i.e., less than a quarter). Capital contributions
made on dates other than the first day of a calendar quarter will be assessed a pro rata management fee
at the time such capital contributions are made. Once paid, the management fee is non-refundable
(notwithstanding, for the avoidance of doubt, a subsequent withdrawal). Notwithstanding the foregoing,
in the case of a mid-quarter compulsory withdrawal or a mid-quarter liquidation of the Funds, Gallo
Partners will refund a pro rata portion of the management fee at the time of such compulsory withdrawal
or liquidation, as applicable.
Gallo Partners or the General Partner may reduce, waive or calculate differently the management fee for
certain Investors, including but not limited to, members, employees, and affiliates of Gallo Partners,
without notice to, or consent from, the other Investors.
Gallo Partners, LP Form ADV Part 2A
Other Fees and Expenses
The Funds will bear, or reimburse Gallo Partners and/or the General Partner for advancing, the Funds’
expenses, including, without limitation, the following: (i) expenses related to the research, execution and
monitoring of actual and prospective investments (whether or not consummated) and the consummation
of investments, including, without limitation, the following: third-party investment sourcing fees; consulting
fees; expert fees; fees and expenses of and related to obtaining research, analytics and market data
(including, without limitation, third-party data sources and any information technology hardware, software
and data subscriptions (such as Bloomberg and FactSet) or other technology incorporated into the cost
of obtaining such research and market data); due diligence expenses including, without limitation,
consulting and appraisal fees; investment- and research-related travel expenses (consistent with Gallo
Partners’ travel policy); any outsourced trading provider fees; brokerage and prime brokerage fees,
commissions and expenses (including the costs of negotiating, documenting and/or amending agreements
with prime brokers, ISDAs and other agreements with trading and financing counterparties); expenses
relating to borrowing securities to be sold short; clearing and settlement charges; custodial fees and
expenses; bank service fees; interest expenses and other borrowing costs; fees and expenses of proxy
research and voting services; broken deal expenses; fees and expenses of third-party professionals,
including, without limitation, consultants, investment bankers, attorneys, accountants and service
providers who, in each case, provide services to the Funds or provide services to Gallo Partners, the
General Partner or the Principal (on matters that would not have arisen but for their respective advisory
relationships with the Funds); and expenses relating to engagement with a company irrespective of the
outcome of such engagement, such as shareholder and management communication, soliciting proxies,
hiring proxy advisory consultants, hosting shareholder forums, hiring public relations consultants and
proposing or nominating directors or executives, including sourcing, recruiting, standby and
indemnification and other expenses, regardless of whether the nomination is successful; (ii) organizational
fees and expenses and fees and expenses incurred in connection with the offering and sale of the Interests,
including, without limitation, the following: the preparation and amendment of this Memorandum, the
Limited Fund Agreement, the Investment Management Agreement and a Fund’s subscription agreement;
and fees and expenses of Gallo Partners incurred in connection with “world sky” matters and private
placement regimes, including the European Alternative Investment Fund Managers Directive, and Form D
and blue sky and similar fees and expenses; (iii) operational expenses, including, without limitation, the
following: fees and expenses relating to information technology hardware, software or other technology
(including, without limitation, costs of software licensing, implementation, data management and recovery
services and custom development) used to research investments, evaluate and manage risk, facilitate
valuations, facilitate accounting functions, facilitate compliance with the rules of any self-regulatory
organization or applicable law (including, without limitation, reporting obligations) in connection with the
activities of the Funds, and facilitate and manage the order execution of securities or otherwise manage
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