Item 5 – Fees and Compensation
Management Fees
The fees and compensation payable to Gratia Capital are negotiable. Gratia Capital typically
receives a quarterly management fee (“Management Fee”) from the Fund to be paid in advance,
calculated at the rate at a maximum of 0.375% (i.e. 1.50% annum) of the value of each Investor’s
capital account as of the first business day of each calendar quarter.
The Management Fee is paid quarterly in advance and together with other fees described below
is deducted from the Fund’ assets. In the event the Fund is not in existence for an entire calendar
quarter, the Management Fee for such calendar quarter will be prorated. The Management Fee
will be prorated for any capital contributions or withdrawals occurring that is less than a full
quarter and will be deducted in calculating the net profit or net loss of the Fund.
Gratia Capital, in its sole discretion, may waive or reduce the Management Fee for Investors that
are principals, employees of Gratia Capital and/or its affiliates, relatives of such persons, and for
certain large or strategic Investors. At Gratia Capital’s discretion, the Management Fee may be
waived.
Fees with respect to the Sub-Advisory Clients
Sub-Advisory Clients may pay Gratia Capital an annualized management fee of up to 1.00% (0.25%
per quarter), as detailed in the investment advisory agreements with such Clients (the “Sub-
Advisory Management Fee”). The Sub-Advisory Management Fee is subject to negotiation with
the Client, and a Client may, therefore, pay more or less than other Clients for the same or similar
management services. The Sub-Advisory Management Fee may be paid quarterly in advance.
Generally, the Sub-Advisory Management Fee is based on the aggregate invested capital
attributable to the Sub-Advisory Client. However, any Sub-Advisory Management Fee will be
dependent on the individual investment advisory agreement negotiated between the Client and
Gratia Capital.
In addition, the Sub-Advisory Clients may also be responsible for certain operating expenses
including, without limitation, legal, compliance, accounting (including third-party accounting
services), tax, auditing, and administrative fees, as outlined in its investment advisory agreement
with the Client. The Sub-Advisory Clients will also generally be responsible for brokerage
commissions and custodial fees paid to third parties. Sub-Advisory agreements may vary between
separately managed accounts and fund of one accounts.
In the event of a termination of a Sub-Advisory Client’s investment advisory agreement, fees will
be prorated. Any paid but unearned fees will be promptly refunded to the Sub-Advisory Client,
Gratia Capital, LLC March 2026
Form ADV Part 2A
and any fees due to Gratia Capital from the Sub-Advisory Client will be invoiced or deducted from
the Sub-Advisory Client prior to termination. Notwithstanding the foregoing, Gratia Capital may
negotiate or set a management fee different from the foregoing with respect to the Fund, Sub-
Advisory Clients or any other Client Gratia Capital manages in the future.
The Adviser and its supervised persons do not receive a brokerage commission or any other
compensation attributable to the sale of securities or investment products.
Performance Fees
With respect to certain clients, Gratia Capital may receive an incentive allocation or incentive fee
based on net profits. Details regarding any incentive allocation or other incentives are set forth in
the next section entitled, “Item 6. Performance-Base Fees and Side-By-Side Management.”
Expenses
Fees paid to Gratia Capital are exclusive of all custodial and transaction costs paid to the client’s
custodian, brokers or other third-party consultants. Please see Item 12 – Brokerage Practices for
additional information. If Gratia Capital were to invest in the following products, then fees paid
to Gratia Capital would be separate and distinct from the fees and expenses charged by mutual
Fund, exchange traded funds, (“ETFs”) or other investment pools to their shareholders (generally
including a management fee and fund expenses, as described in each fund). Each client (and each
Investor) should review all fees charged by the Fund, brokers, Gratia Capital and others to fully
understand the total amount of fees paid by the client (and each Investor) for investment and
financial-related services. Gratia Capital may, at its discretion, make exceptions to the foregoing
or negotiate special fee arrangements where Gratia Capital deems it appropriate under the
circumstances.
Either Gratia Capital or the client may terminate their investment advisory agreement at any time,
subject to any written notice requirements in such agreement. In the event of termination in
accordance with its terms, any paid but unearned fees will be promptly refunded to the client
based on the number of days that the account was managed, and any fees due to Gratia Capital
from the client will generally be invoiced or deducted from the client’s account prior to
termination.
Compensation for Sale of Securities or Other Investment Products
Gratia Capital does not receive compensation for securities transactions or services related to any
client account or any other fees other than the management fee and performance fees charged
for its advisory services.
Gratia Capital, LLC March 2026
Form ADV Part 2A