Item 5 Fees and Compensation
ADVISORY FEES AND BILLING
Greenlea Lane earns its fees and compensation by providing advice and investment
management services to the Partnership, Cassini, and the Accounts. Greenlea Lane’s
compensation occurs in the form of a fixed asset management fee (in each case, an
“Advisory Fee” for the Partnership and the Accounts, and a “Management Fee” for
Cassini, collectively referred to as the “Advisory Fees”) and performance-based
compensation (in each case the “Performance Allocation” for the Partnership and the
Accounts, with a similar but specified arrangement for Cassini, collectively, the
“Performance Allocations”), assessed as provided below.
Advisory Fees
• For the Partnership: Greenlea Lane receives an Advisory Fee payable quarterly in
advance based on each Limited Partner’s beginning capital account balance as of
the first day of each quarter.
• For Cassini: Greenlea Lane receives a Management Fee from Cassini, payable
quarterly in advance based on each Limited Partner’s beginning capital account
balance as of the first day of each quarter.
• For separate Accounts: Greenlea Lane receives an Advisory Fee payable quarterly
in advance based on the beginning Account value as of the first day of each quarter.
In each case for the Partnership and Cassini, as well as the separate Accounts, the
rate used to compute the Advisory Fee (for the Partnership and the Accounts) or the
Management Fee (for Cassini) for each quarter is determined based on the assets
under management attributable to Greenlea Lane and its related affiliates (the “Related
AUM”) as of the first day of the year encompassing such quarter and shall be equal to:
(i) 0.50% (2% per annum) for each quarter for which the Related AUM as of the
beginning the year is less than or equal to seventy-five million ($75,000,000) dollars;
or (ii) $375,000 ($1,500,000 per annum), with such amount being increased as of the
first day of the year pro rata in accordance with any upward change in the United States
Consumer Price Index, for each quarter for which the Related AUM as of the beginning
of the year is greater than seventy-five million ($75,000,000) dollars.
For separate Accounts and Cassini, the Advisory Fee and Management Fee,
respectively, are prorated for withdrawals, distributions, and partial periods to ensure
fair billing practices.
Performance Allocations
With respect to separate Accounts, Greenlea Lane receives an annual Performance
Allocation in an amount equal to a percentage of the New Net Profits earned in each
Account during each year in excess of the Hurdle applicable to such Account. New
Net Profits are computed using the formula: (1) the net realized profit and loss over
the year, plus (2) the change in unrealized profit and loss on open positions over the
year, minus (a) all brokerage commissions, transaction fees, exchange and regulatory
fees, data fees, and other Account expenses incurred over the year, (b) the Advisory
Fee, and the cumulative net loss, if any, carried over from previous years (the
“Carryforward Loss”). “Hurdle” means, with respect to each Account, an amount
equal to the sum of the Prior High Value (as defined below) of such Account, plus
(B) an amount equal to a cumulative (annually compounded) rate of return equal to
seven percent (7%) per annum as applied to the Prior High Value (as defined below)
of such Account and calculated for the period beginning on the date such Prior High
Value was established and ending on the last day of the applicable performance
measurement period. The interest rate used in calculating the Hurdle shall be
compounded one time per year as of December 31st of each year.
In the case of a withdrawal from a separate Account on a day other than the last day
of a year, the Performance Allocation shall be charged against the New Net Profits in
respect of the amount to be withdrawn as of the effective date of such withdrawal.
With respect to the Partnership, an affiliate of Greenlea Lane, Greenlea Lane Capital
GP, LLC (the “General Partner”), which serves as the general partner of the
Partnership, receives an annual Performance Allocation in an amount equal to a
percentage of the net profit for each year allocated to each capital account held by a
Limited Partner in excess of the Hurdle applicable to such capital account. “Hurdle”
means, with respect to each capital account held by a Limited Partner, an amount
equal to the sum of (A) the Prior High Value (as defined below) of such capital
account, plus (B) an amount equal to a cumulative (annually compounded) rate of
return equal to seven percent (7%) per annum as applied to the Prior High Value (as
defined below) of such capital account and calculated for the period beginning on the
date such Prior High Value was established and ending on the last day of
the applicable Performance Allocation Period. The interest rate used in calculating
the Hurdle shall be compounded one time per year as of December 31st of each year.
With respect to the Partnership, the Performance Allocation is also subject to a loss
carry-forward provision, also known as a “high water mark,” so that the Performance
Allocation will only be deducted from a Limited Partner’s capital account to the extent
that such Limited Partner’s pro rata share of such profit causes its capital account
balance, measured on a cumulative basis and net of any losses, to exceed such
Limited Partner’s highest historical capital account balance as of the end of any prior
year or, if higher, such Limited Partner’s capital account immediately following its
admission to the Partnership (as adjusted for any withdrawals at a time when a Limited
Partner’s capital account balance is below the applicable “high water mark”). The
Performance Allocation will generally be computed as of the applicable withdrawal
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