ITEM 5. FEES AND COMPENSATION
The compensation each Fund pays Garda is set forth in each Fund’s respective Offering
Documents.
Garda is paid a management fee (the “Management Fee”) calculated and payable monthly in
arrears. Garda deducts this fee directly from such Fund’s assets each month based on the
calculated net asset value (“NAV”). The Management Fee is generally calculated on the value
of that Fund’s assets minus liabilities, which include the applicable expenses summarized in the
Garda Funds Operating Expenses section below.
Additionally, Garda may receive performance-based compensation (the “Performance Fee”)
based on the specific terms of each Fund’s Offering Documents. Please see Item 6 –
Performance-Based Fees and Side-by-Side Management for details on the Performance Fees
paid by the Funds. Garda and certain current and former executives and other personnel related
to Garda are permitted to invest in a Fund without being subject to the Management Fee or
Performance Fee.
The fees and expenses associated with an investment in the Funds can vary depending on the
Fund and are described in detail in each Fund’s Offering Documents. At our discretion, we may
manage Funds with substantially similar or the same investment strategy with higher or lower
fees, different fee structures, and different expense payment arrangements.
Garda Funds Operating Expenses
Each Fund is typically responsible, pursuant to the terms of its Offering Documents, for its
ongoing direct, administrative, operating, and other operational and transactional expenses
(collectively “Operating Expenses”). These Operating Expenses may be incurred directly by the
Fund, or in some instances, Garda will incur the expense and obtain reimbursement from the
Fund. Operating Expenses generally paid by the Funds, either directly or by reimbursement to
Garda, include, but are not limited to:
• Organizational and initial offering expenses (if applicable based on age of Fund);
• Government fees, jurisdictional filing fees, regulatory reporting expenses;
• Bank and wire transfer fees (including fees of custodians providing services required
under the European Union Directive on Alternative Investment Fund Managers or other
regulations);
• Professional fees and expenses related to the Funds, including for such services as audit,
accounting, consulting, outside directors, board reporting, outside anti-money
laundering officer, and tax preparation;
• Legal fees incurred in connection with revisions of the Funds’ Offering Documents, side
letters, or other Fund-related legal documents, as well as legal advice related to the
Funds;
• Directors’ and Officers’ insurance premiums of the Funds as well as all expenses incurred
as a result of a Fund’s obligation to indemnify Garda, the Directors, the Administrator,
and any other parties to which a Fund has indemnity obligations;
• Fees and expenses associated with market data or other data pertaining to trading and
investment activity of the Funds, research, data feeds, valuation or quotation services,
software platforms that distribute data, and related costs of connectivity (e.g., software
platforms that provide data, including Bloomberg™ costs and associated required
hardware expenses, inclusive of back-office employee use to support the activities of
the Funds);
• Systems used to manage the Funds (e.g., analytics, portfolio management, order
management, data and research management, and risk management systems);
• Fees and expenses related to third-party research or other financial services incurred in
connection with evaluating prospective investment opportunities or that support trading
and/or investment decisions;
• Administrator, registrar, transfer agent, corporate secretary, valuation, and risk
aggregator fees and expenses;
• Computer software and/or technology specific to the management or reporting
obligations of the Funds;
• Certain printing, mailing, and communications fees;
• Taxes and duties payable by the Funds, together with tax-related expenses, such as
professional services for filings required to be made under the Foreign Account Tax
Compliance Act or the Common Reporting Standard or taxes, fees, or penalties resulting
from any audit adjustments;
• Costs of regulatory and self-regulatory filings, and in certain cases ongoing monitoring
in support of such filings, relating to the Funds and their trading activities, including
Forms PF, N-PX, PQR, 13F, SHO and Annex IV, as well as any costs required by the
European Union Directive on Alternative Investment Fund Managers, MAS Regulations,
and other U.S. and non-U.S. regulatory reporting forms relating to the offering of the
Shares or activities of the Funds or Garda with respect to the Funds;
• Other operating expenses incurred in connection with a Fund’s operations, such as bank
or custodian fees (including fees of custodians providing services required under AIFMD
or other regulations);
• Fees and expenses related to Garda and its Advisory Affiliates personnel hiring and
retention, including recruitment fees, signing bonuses, buy-out, retention, and similar
payments and related expenses, but for the avoidance of any doubt excluding salaries
and benefits; and
• Other expenses and liabilities incurred in connection with or arising out of a Fund’s
operations, including extraordinary or non-recurring charges such as litigation expenses.
Garda Funds Transaction Costs
Each Fund also bears all the transaction costs and expenses incurred in connection with its
trading and investment activities, which can be significant. Garda’s strategies involve a high
degree of portfolio turnover, leverage, complex instruments, and settlement processes. As a
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