Item 5 – Fees and Compensation
It is critical that Investors refer to a Fund’s confidential offering memorandum and other
governing documents for a complete understanding of (i) how Hoplite is compensated from that Fund
for its advisory services, (ii) the fees and expenses Investors may pay and how those fees and expenses
are deducted from Investors’ assets, and (iii) Investors’ withdrawal and redemption rights. The
information contained in this Brochure is only a summary and is qualified in its entirety by the
aforementioned documents.
Management Fees and Incentive Allocation
Fees for the Funds generally are not negotiable. Hoplite has broad discretion to waive or reduce
fees for Investors, but has only waived fees for Investors who are principals, employees or affiliates of
Hoplite or relatives or affiliates of such persons.
Each LS Fund has several series or sub-classes (collectively, “Series”) of securities that are subject
to different management fees and/or Incentive Allocation rates, depending upon the length of the lock-up
to which the securities are subject (i.e., an Investor can agree to subject the securities to a longer lock-up in
return for paying lower management and/or performance-based fees), the tenure of an Investor’s investment
in such securities and/or the amount of capital invested (including where an investment was made through
a “Consultant”4 relationship). Hoplite receives a management fee based on a fixed percentage of each LS
Fund’s net assets.
Each Long Fund has several Series of securities that are subject to different Incentive Allocation
and management fee rates. An Investor can elect to have their Series of securities subject to lower
management fee rates in return for paying a higher percentage of the amount by which the “performance
return” of each Series exceeds the “Benchmark Return” (as described in the Fund Documents) as an
incentive allocation, and vice versa.
The management fee is payable monthly in advance, promptly after the first day of each month,
based on the value of the Fund’s net assets as of the first day of such month, without regard to any “accrued”
Incentive Allocation payable to the LS General Partner or Long GP, if any. Hoplite deducts the
management fee directly from each Investor’s account.
The LS General Partner and the Long GP (together, the “General Partners”) generally receive an
Incentive Allocation from Investors in the LS Funds and Long Funds, respectively, on each separate
investment tranche in the Fund, reflecting a percentage of (x) for Investors in the LS Funds, net profits (if
any) and (y) for Investors in certain Series of the Long Funds, the outperformance of a certain Benchmark
Return (if any) attributable to that particular tranche during the Fund’s fiscal year. Hoplite or the General
Partners will deduct the Incentive Allocation directly from an Investor’s capital account as of the end of the
Fund’s fiscal year. Pursuant to a loss carryforward or underperformance recovery provision (generally
referred to as a “high water mark”), no Incentive Allocation will be payable on any particular investment
tranche in a (x) LS Fund until any net loss previously allocated to that tranche has been offset by subsequent
net profits or (y) Long Fund until the performance return for the applicable tranche exceeds the Benchmark
Return by an amount in excess of any underperformance recovery account for such tranche. If an Investor
redeems capital or transfers his or her capital to a Series with a different Incentive Allocation rate, the
Incentive Allocation on that capital will be “crystallized,” meaning that it will be deducted from the
“Consultant” means an investment adviser, broker-dealer or consultancy firm where such investment adviser, broker-dealer or consultancy firm
has directed investments and/or provided discretionary or non-discretionary investment advisory or similar services with respect to investors that
have made capital contributions in the LS Funds.
Investor’s account and reallocated to the relevant General Partner as if the redemption (or transfer) date
were the last day of the fiscal year or, in the case of a loss carryforward/underperformance recovery account,
the loss carryforward/underperformance recovery account will be subject to reduction on a pro rata basis.
To the extent the General Partners receive an Incentive Allocation from the LS Offshore Master
Fund and/or the Long Master Fund, to avoid double fees, the Incentive Allocation will not be separately
charged to their respective feeder funds. When calculating the Incentive Allocation for the LS Offshore
Master Fund and/or the Long Master Fund, all items of income, loss, profit and expense incurred by their
respective feeder funds will be taken into account.
Because this Brochure will only be delivered to “qualified purchasers” as defined in the U.S.
Investment Company Act of 1940, Hoplite’s fee schedule has not been included in this Brochure.
Expenses
Each of the Funds pays its own expenses, including the management fee; legal, accounting, tax
preparation and other tax-related expenses (including preparation costs of financial statements, tax returns
and reports to Investors), auditing, consulting and other professional expenses; administration expenses
(including administrator fees and expenses); directors’ fees (in the case of the Offshore Master Fund and the
Offshore Fund); Fund-related insurance costs (including directors’ and officers’ insurance, errors and
omissions insurance, fidelity insurance, cyber insurance and other similar policies); research-related
expenses (including, without limitation, news and quotation equipment and services); investment-related
expenses (i.e., expenses that, in the Investment Adviser’s or General Partners’ discretion, are related to the
...