ITEM 5: FEES AND COMPENSATION
Description
We generally charge both an asset-based management fee and a performance-based
incentive fee for investment management of our portfolios. Performance-based fees are
charged in compliance with Rule 205-3 of the Investment Advisers Act of 1940, as
amended (the “Advisers Act”). Our current standard fee structure for our Funds is an
annual management fee from a Fund equal to 1% of the net asset value of the Fund as
disclosed in the Fund’s offering and organizational documents and a 20% performance
fee based on gains in excess of a prior “high-water” mark.
The management fee is paid in advance and is calculated at the opening of business on
the first day of each calendar month and is equal to one twelfth of 1% of the net asset value
of the Fund after deduction of any accrued but unpaid fees and expenses of the Fund other
than the management fees. The performance fee is paid as an allocation to a special
limited partner in the Fund, which entity is an affiliate of Greenwood Investments.
The Managed Account also pays a management fee and incentive fee to Greenwood, each
calculated in the same manner as for the Funds.
Fees are negotiable and may be waived or reduced at our discretion.
Fee Billing
Asset management fees are paid directly by the Funds on a monthly basis and deducted
from capital accounts of the relevant investors in the Funds. If we cease to provide services
to a Fund, the unearned portion of the management fee (computed on the basis of the
number of days elapsed) will be refunded to the Fund. Performance fees are calculated
and charged annually in arrears or upon a withdrawal of capital by an investor in the
Fund if such redemption or withdrawal occurs other than at year end. As noted above,
the allocation is made to a special limited partner in the Fund, which entity is an affiliate
of Greenwood Investments.
Payment of fees by the Managed Account occurs on payment schedule agreed between
the client and Greenwood.
Other Fees or Expenses
As described more fully in the organizational and offering documents of each Fund, each
Fund pays its own expenses, including, but not limited to taxes, accounting and financial
reporting, audit and legal expenses, investment expenses such as brokerage commissions,
research fees and expenses, direct fees and expenses such as travel and due diligence
expense related to analysis, purchase or sale of investments, whether or not a particular
investment is consummated, consulting fees and expenses where the services provided
Firm Brochure –Part 2A of Form ADV 6 March 29, 2016
B3976987.v3
are directly related to business of the Fund, expenses related to the sale of interests in the
Fund, interest on margin accounts and other indebtedness, borrowing charges on
securities sold short, custodial and prime brokerage fees, and any other expenses
reasonably related to the purchase, sale or transmittal of Fund assets.
For more information regarding our brokerage arrangements see Item 12 below.
Participation or Interest in Client Transactions
Neither we nor any of our supervised persons accepts compensation for the sale of
securities or other investment products, including asset-based sales charges or service
fees from the sale of mutual funds.