Item 5: Fees and Compensation
HGI Capital generally charges Clients an asset-based advisory fee (the “Management Fee”) and a
performance-based fee (the “Performance Allocation”), subject to certain thresholds, as applicable.
Management Fee
The Funds. HGI Capital receives a quarterly Management Fee, calculated, accrued, and payable in
advance at the beginning of each quarter, equal to 0.3125% of the value of an Investor’s investment
in the Fund (approximately 1.25% annually). The Management Fee is paid by the Onshore Fund
and the Master Fund. Investors in the Onshore Fund and the Offshore Feeder Funds are charged
their allocable share of the Management Fee, which is prorated based on each Investor’s individual
capital contributions and withdrawals during any calendar quarter. With respect to any withdrawals,
a prorated amount of the Management Fee will be refunded by HGI Capital to the Client for the
ultimate benefit of the withdrawing Limited Partner).
The Accounts. HGI Capital generally receives a Management Fee with respect to certain Separate
Account Clients, paid in accordance with the terms of the respective Investment Management
Agreement between HGI Capital and each Separate Account Client.
HGI Capital does not charge certain Separate Account Clients a Management Fee; however, it is
entitled to Performance Allocations as described below.
Form ADV Part 2A Firm Brochure | HGI Capital Management, LLC March 2026
Performance Allocation
The Funds. Subject to a loss carryforward as described below, HGI Capital and/or its affiliates is
entitled to receive an annual Performance Allocation equal to fifteen percent (15%) of the net capital
appreciation of an Investor’s investment in the Funds, if any. The Performance Allocation is
generally calculated and allocated at the end of each fiscal year and is made by the Onshore Fund
and the Master Fund. Investors in the Onshore Fund and the Offshore Feeder Funds are charged
their allocable share of the Performance Allocation, which is prorated based on each Investor’s
individual capital contributions and withdrawals during any calendar quarter.
The Performance Allocation is calculated subject to a loss carryforward whereby an Investor will
not be subject to a Performance Allocation on an investment in a Fund, unless the value of such
investment (net of any losses, for all years since admission) exceeds the higher of the following
amounts: (i) the highest value of such investment as of the close of any year since admission; and
(ii) the value of such Investor’s investment on the date of admission. A Performance Allocation is
not made with respect to any period in which an Investor’s investment in a Fund decreases in value.
The Accounts. HGI Capital is entitled to a Performance Allocation with respect to each Separate
Account Client. The Performance Allocation is calculated and paid in accordance with the terms of
the respective Investment Management Agreement between HGI Capital and each Separate
Account Client.
HGI Capital has the ability to provide investment advisory services to additional clients in the
future. Future clients could have similar or different fees than those of the Clients. HGI Capital
may waive, reduce, or rebate the Management Fee and/or Performance Allocation attributable to
any investor, including, without limitation, any employee, agent, or affiliate of HGI Capital, which,
to the extent permitted by applicable law, will generally not be disclosed to other Investors in the
same Client. HGI Capital may also pay and/or allocate a portion of the Management Fee and/or
Performance Allocation to certain investors, affiliates and/or other third parties.
Other Fees and Expenses
The Clients bear all of their investment and operating expenses. HGI Capital bore the organizational
expenses of the Clients in connection with their organization and the initial offering of their interests
or shares, as applicable. “Investment Expenses” means the expenses associated with the investment
program of the Clients, which includes, without limitation, brokerage expenses, commissions,
dealing and spread costs (which vary depending on a number of factors, including, without
limitation, the bank, broker or dealing counterparty utilized for the transaction, the particular
instrument traded and the volume and size of the transaction), execution, give-up, exchange,
clearing and settlement charges, delivery, custodial fees, escrow expenses, insurance costs, third
party research, interest and borrowing charges on margin accounts and other indebtedness
(including the costs and expenses incurred in obtaining, negotiating, entering into, effecting,
maintaining, varying, refinancing or terminating such borrowings and commitments and interest
arising therefrom), bank, broker and dealer service fees, interest expenses and consulting, advisory,
investment banking and other professional fees relating to particular investments or contemplated
Form ADV Part 2A Firm Brochure | HGI Capital Management, LLC March 2026
investments and all other research expenses (including, without limitation, travel expenses related
to research) and all other expenses directly or indirectly related to the Clients’ investment programs.
“Operating Expenses” means the Clients’ operating expenses, including, without limitation,
administrative expenses (including maintaining the books and records of the Clients or any external
costs for a third-party administrator to maintain and oversee the Clients’ books and records, even if
there is some overlap in services performed by any third-party administrator and HGI Capital
personnel, and those fees paid to another registered investment adviser for administrative, advisory
or other similar services), expenses related to meeting with one or more investors and/or prospective
investors, costs incurred in connection with complying with the provisions of side letter
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