Item 5-Fees and Compensation
Item 5.A and Item 5.B: Description of Compensation Arrangements and Manner of
Fee Payment
How We Are Paid
Pursuant to the Investment Management Agreements, the Investment Managers are entitled to
receive from the Fund, as compensation for their services, a management fee, calculated at an
annual rate of 1.5% (0.125% per month) (the “Management Fee”) of the Capital Account balance
of each Limited Partner.
The Management Fee will be paid monthly in advance, on the first day of the current Fiscal Month,
based on the Capital Account balances of Limited Partners as of the beginning of such Fiscal
Month. The Investment Managers may elect to reduce or eliminate the Management Fee with
respect to any Limited Partner.
If capital contributions are made at any time other than at the beginning of a Fiscal Month, a pro
rata portion of the Management Fee will be paid to the Adviser in respect of such capital
contribution (based on the actual number of days remaining in such partial month). If a Limited
Partner makes a withdrawal at any time other than at the end of a calendar month, the full monthly
Management Fee will be paid to the Investment Manager for such partial month.
Pursuant to the Investment Management Agreements, the Investment Manager will also be eligible
to receive a performance fee (the “Performance Fee”) with respect to any Limited Partner, equal
to 20% of the amount, determined as of the close of each Performance Period with respect to each
Limited Partner’s Capital Account, by which (i) such Limited Partner’s Positive Performance
Change for such Performance Period, if any, exceeds (ii) any positive balance in such Limited
Partner’s Carryforward Account as of the most recent prior date as of which any adjustment has
been made thereto.
Investment Managers are eligible to receive a Performance Fee only to the extent a Limited
Partner’s share of net profit exceeds its previously allocated but unrecouped losses (subject to
adjustment for partial withdrawals). The Investment Manager may waive or alter the Performance
Fee with respect to any Limited Partner. The Investment Manager may at any time, in their sole
discretion, assign their right to receive the Performance Fee to the General Partner, in which event
the Performance Fee will be made as an allocation to the General Partner.
Clients are also responsible for various expenses associated with portfolio management, trading,
research and ongoing monitoring of investments, including commissions and charges of prime
brokers, brokers, dealers, counterparties and banks, tax, audit, consultants, and research, and
certain extraordinary expenses related to either the operation of the Client account or the
implementation, execution and maintenance of the investment program. Certain anchor investors
may also be responsible for certain overhead expenses. Clients will be responsible for all expenses
related to the investment and trading of its assets and all other expenses of the Fund, as described
in the Offering Memorandum. The Fund will reimburse the Investment Manager for any of such
expenses paid for by the Investment Manager.
As alluded to herein, certain investors and Limited Partners may have fee arrangements that differ
Ground Swell Capital, LLC
from the Management Fee and Performance Fee described above. For example, certain investors
and Limited Partners may be responsible for a pro rata share of the Investment Managers’ overhead
rather than the Management Fee described above. In such cases, Investment Managers may make
budgets available to investors and Limited Partners for review of the anticipated overhead.
Likewise, certain investors and Limited Partners may be subject to a separately negotiated
performance fee rather than the Performance Fee described above. In such cases, the investors
and Limited Partners will continue to be responsible for expenses as described above. In all such
cases, the nature of the fees and expenses will be expressly disclosed in clear terms to all investors
and Limited partners.
The Investment Manager shall ensure that the assessment and allocation of fees and expenses are
fair and reasonable in accordance with all applicable laws, rules and regulations, including those
with respect to the Investment Managers’ fiduciary duties to make appropriate disclosures, avoid
conflicts of interest and not misappropriate Client funds.
Greater detail regarding fees and expenses are available in Client Investment Management
Agreements.
Item 5.C: Other Fees Clients May Be Charged
The Fund bears its own expenses (“Fund Expenses”), including, but not limited to, all costs and
expenses directly related to portfolio investments or prospective investments of the Fund,
including brokerage commissions and other transaction costs, expenses related to proxies,
underwriting and private placements, interest and commitment fees on debit balances or
borrowings, borrowing charges on securities sold short, custody fees and fees of professional
advisors and consultants relating to investments or prospective investments; any withholding or
transfer taxes imposed on the Fund or any of its partners; any governmental, regulatory, licensing,
filing or registration fees (including “blue sky” filing fees) incurred in compliance with the rules
of any self-regulatory organization or any federal, state or local laws; any interest due to Partners
in connection with capital withdrawals; any legal fees and costs (including settlement
costs) arising in connection with any litigation or regulatory investigation instituted against the
Fund, the Investment Managers or the General Partner in its capacity as such; the cost of the audit
of the Fund’s financial statements and the preparation of its tax returns; the fees and expenses of
the Fund’s accountants in connection with accounting advice relating to the Fund’s day-to-day
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