Item 5. Fees and Compensation
The Adviser generally receives management fees and performance fees (or allocations) in
connection with the investment advisory services it provides to the Funds. Management fees and
performance fees payable to the Adviser by a Fund are established by the Adviser at the time of
the establishment of a Fund and may vary among each Fund or classes within a Fund. Specific
details of such compensation and its method of calculation are set out in the investment
management agreements and/or underlying governing documents (including offering materials) of
the relevant Fund.
Management fees generally are calculated and payable monthly in advance based on the balance
of Partners’ Capital Accounts on the first business day of such month, typically equal to a
percentage of up to 2% per annum of the applicable Fund’s net asset value. The Adviser also
typically receives a carried interest (“Performance Compensation”) equal to a percentage of up to
20% of net gains. In certain circumstances, Performance Compensation is subject to up to a 10%
performance hurdle.
Management fees and performance fees are deducted from each Fund’s assets and are not billed
separately. The amount and method of the calculation of a performance fee or allocation, and of a
management fee, may be changed by the Adviser, or the applicable board of directors or general
partner(s) of a Fund, at any time with the consent of the Fund’s investors or limited partners. The
Adviser, or the applicable board of directors or general partner(s) of a Fund, may waive, reduce or
calculate differently the management fee or performance fee or allocation applicable to any
investor without the consent of, or notice to, any other investor.
If a client or investor terminates in the middle of a billing period, the Adviser will re-calculate the
fee pro-rated for the partial period and any fees overpaid will be refunded to the client or investor.
The Adviser has waived or negotiated different fee arrangements for certain clients or investors,
such as “friends and family” of the Adviser.
The Funds will incur brokerage and other transaction costs, see Section 12 of this brochure which
discusses brokerage.
In addition to the management fees and Performance Compensation, each Fund will bear the costs,
expenses and liabilities that in the good faith judgment of the general partner of a Fund are incurred
by or arise out of the operation and activities of the Fund (“Fund Expenses”), including, without
limitation:
Garden Investments
(a) out-of-pocket fees and expenses relating to consummated investments, including, (i) the
sourcing, bidding, evaluating, purchasing, trading, settling, maintaining custody,
monitoring, acquisition, holding and sale of thereof, (ii) fees and expenses related to the
organization or maintenance of any intermediate entity used to acquire, hold or dispose of
any investment or otherwise facilitating the Fund’s investment activities, including without
limitation any overhead expenses related to such entity, (iii) travel, meal and lodging
expenses incurred in connection with the preliminary investigation of potential investment
opportunities and (iv) travel, meal, lodging and other ordinary course of business expenses
of monitoring of investments;
(b) out-of-pocket fees and expenses (including travel and lodging expenses) associated with
non-passive campaigns such as fees and expenses related to event hosting and production,
public presentations, creating and maintaining informational websites, public relations,
public affairs and government relations, forensic and other analyses and investigations,
proxy contests, solicitations and tender offers, and compensation, indemnification, and
other fees and expenses of any nominees proposed by the Adviser as directors or executives
of the portfolio company and/or fees and expenses (including travel and lodging expenses)
relating to unaffiliated advisers, consultants, and finders and/or introducers;
(c) an amount equal to 100% of all premiums for insurance protecting the Fund and any
indemnified persons from liabilities to third persons in connection with Fund affairs to the
extent such premiums cover liabilities with respect to actions or omissions of the Fund or
of any indemnified person that would otherwise be subject to indemnification by the Fund;
(d) (i) out-of-pocket legal, Fund-related public relations, custodial and accounting expenses of
third-party service providers, experts, advisors, consultants, engineers and other
professionals and service providers, including fees, costs and expenses associated with the
preparation of amendments of a Fund’s underlying documents and the solicitation of
consent to such amendments, preparation, printing and distribution of the Fund’s financial
statements, tax returns and Schedule K-1s, (ii) any costs and expenses of all legal and
regulatory compliance obligations under U.S. federal, state, local, non-U.S. or other laws
and regulations directly related to the making, holding or disposing of investments by the
Fund (whether such compliance obligations are imposed on the Adviser, the general
partner, their affiliates or the Fund), including, without limitation, the preparation and filing
of (a) Form PF under the Investment Advisers Act of 1940, as amended (the “Advisers
Act”) (b) Form 13F, Form 13H, Section 16 filings, Schedule 13D filings, Schedule 13G
filings and other filings, in each case under the Exchange Act, (c) TIC Form SLT filings,
(d) materials required under FATCA and FinCEN reporting requirements applicable to the
Fund, (e) CFTC Rule 4.13(a)(3) notice of claim, Form CPO-PQR, Form CTA PR and NFA
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