ITEM 5 – FEES AND COMPENSATION
Harbor Spring generally charges each applicable Fund investor an asset-based investment management
fee based on the value of that Fund investor’s capital account which ranges from 1.25% - 1.5% at an
annual rate. In addition, certain Fund investors also pay Harbor Spring an incentive allocation. The
incentive allocations are compensation to Harbor Spring that is based on a share of capital gains on or
capital appreciation of the assets of the respective Fund investor. The performance-based compensation
is paid to the General Partner (instead of Harbor Spring). Fund investors generally are subject to these
management fees and/or incentive allocations, as applicable, indirectly through their investment in a
particular Fund.
The Management Fee is payable monthly in advance within 10 days after the first day of each month.
Harbor Spring’s fees are deducted from each Fund by the respective Fund’s custodian/administrator upon
Harbor Spring’s instructions and administrator approval.
Harbor Spring generally charges an incentive allocation to the Funds in an amount which ranges from
15% - 20% of the net profits (including realized and unrealized gains and losses) on an annual basis or in
limited circumstances for certain Funds when investments are realized. A clawback and/or other factors
apply to the calculation of the incentive allocation.
Harbor Spring has waived or modified fees (and may continue to do so) for Fund investors that are
principals, employees or affiliates of Harbor Spring and relatives of such persons and certain early, large
or strategic investors.
See Item 6 for discussion of potential conflicts of interest associated with the incentive allocation received
by the General Partner, which is a related person of Harbor Spring.
Other Fees and Expenses
Harbor Spring is responsible for and pays all overhead expenses of an ordinary and recurring nature such
as rent, supplies, secretarial expenses, stationery, charges for furniture and fixtures, employee insurance,
payroll taxes and compensation of employees.
The Funds bear all other expenses, including legal, audit, other professional fees and expenses,
organizational expenses, research expenses (including research-related travel), investment expenses such
as commissions, custodial fees, bank service fees, fees and expenses of the Fund administrator, directors’
fees and expenses (in the case of non-U.S. domiciled funds), compliance expenses of the Funds, including
expenses associated with any regulatory filings attributable to the assets of the Funds (e.g., Form PF), and
other expenses related to the purchase, sale, preservation or transmittal of the Funds’ assets. In addition,
the Funds bear expenses of accounting (including accounting software and third-party accounting
services, insurance costs (including D&O and E&O insurance for Harbor Spring), and expenses
associated with portfolio analytics, trade order management and execution software, technology, and
systems.
Any expenses attributable to a particular Designated Security as determined by Harbor Spring, in its sole
discretion, will be charged solely to the applicable series of Designated Class Interests/Shares.
As noted above, the Onshore Fund and the Offshore Fund invest their assets in the Master Fund. Each
investment entity that invests in the Master Fund indirectly bears the expenses of the Master Fund pro rata
based on its interest in the Master Fund.
Investors are deemed to be paying for research and other services with “soft” or commission dollars.
Please refer to Item 12 below for further information regarding Harbor Spring’s brokerage and soft dollar
practices.
Harbor Spring has a fiduciary duty to its Fund investors, owing them an affirmative duty of utmost good
faith and full and fair disclosure of all material facts. Accordingly, Harbor Spring will seek to ensure that
each Fund investor only bears expenses that are permissible under the relevant Fund investor’s
organizational documents and/or disclosure documents, and that shared expenses are allocated among
Fund investors in a fair and reasonable manner.
It is critical that the Fund investors and prospective investors refer to the respective Fund’s
governing documents for a complete understanding of how Harbor Spring is compensated for its
advisory services.