ITEM 5. FEES AND COMPENSATION
MANAGEMENT FEE
For its services to the Funds, the Investment Manager is entitled to management fees (“Management
Fees”).
Long Short Funds Founders Class
So long as the aggregate net assets of the Funds are less than $300,000,000, the Management Fee will
be charged at an annual rate of 1.50% of each limited partner’s capital account balance. Thereafter,
the Management Fee will be charged at an annual rate of 1.25% of each limited partner’s capital
account balance (the “Long Short Founders Class Management Fee Initial Step Down”). Once the
aggregate net assets of the Funds are equal to or greater than $600,000,000, the Management Fee
will be charged at an annual rate of 1.00% of each limited partner’s capital account balance (the
“Long Short Founders Class Management Fee Second Step Down” and collectively with the
Founders Class Management Fee Initial Step Down, the “Long Short Founders Class Management
Fee Step Downs”). The Management Fee is calculated and paid each calendar month, in advance, and
is deducted from each limited partner’s capital account.
Long Short Funds General Class
The Management Fee is charged at an annual rate of 1.50% of each limited partner’s capital account
balance (the “Long Short General Class Management Fee”). The Management Fee is calculated and
paid each calendar month, in advance, and is deducted from each limited partner’s capital account.
Long Only Funds Founders Class
The Management Fee is charged at an annual rate of 1.00% of each capital account balance (the “Long
Only Founders Class Management Fee”). The Management Fee is calculated and paid each calendar
month, in advance, and is deducted from each limited partner’s capital account. Founders Class is
closed to new investors.
Long Only Funds Class A
The Management Fee is charged at an annual rate of 1.00% of each capital account balance (the “Long
Only Class A Management Fee”). The Management Fee is calculated and paid each calendar month,
in advance, and is deducted from each limited partner’s capital account.
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Long Only Funds Founders II Class
The Management Fee charged is a tiered fee (annual rate of 1.5% to 0.375%, “Long Only Founders
II Class Management Fee”) based on the capital account balance of each of the Founders Class II
limited partners. Founders II Class is closed to new investors.
OTHER FUND FEES
As further outlined in the private offering documents, each Fund bears its share of the expenses of
the organization of the Funds and the offering of the interests. Organizational expenses of the Funds
are reasonably allocated among them based on net asset balances. Each Fund also bears its pro-rata
share of all costs and expenses related to the investment program and administration (including legal
and accounting fees, research expenses, travel, “blue sky” filing fees, and out-of-pocket expenses) as
further disclosed in the Funds’ private offering documents.
WITHDRAWAL OF CAPITAL
Long Short Funds
Following an initial 12-month lock-up period, a limited partner may initiate a request for a complete
or partial withdrawal of its capital account balance on the last day of any calendar quarter. Such
request must be submitted, in writing, 45 calendar days prior to the requested withdrawal date. A
limited partner may make a withdrawal during the lock-up period subject to certain withdrawal
restrictions, as outlined in the offering documents, and an early withdrawal fee equal to 5% of the
capital being withdrawn, payable to the Fund. Each capital contribution made by a limited partner is
subject to a separate lock-up period lasting 12 calendar months following the date of such capital
contribution.
As further outlined in the Funds’ offering documents, limited partner redemption requests are
subject to a withdrawal limitation. This limitation restricts the amount that may be withdrawn from
a limited partner’s capital account each quarter, such that full redemption requests will be
accomplished over a minimum of four consecutive quarters. Withdrawal requests exceeding 25% of
a limited partner’s capital account shall be distributed as follows: 1) 25% of the capital account
balance as of the requested withdrawal date; 2) up to one-third of the capital account balance as of
the close of the following calendar quarter; 3) up to one-half of the capital account balance at the
close of the second fiscal quarter following the withdrawal request; and 4) any remaining amount of
the withdrawal request as of the close of the third fiscal quarter following the requested withdrawal
date, such that the full balance is redeemed over four quarters.
Long Only Funds
Subject to certain withdrawal restrictions, with 45 calendar days’ notice, a Founders Class or Class A
Limited Partner may withdraw all or a portion of the balance of its capital account as of the last day
of each calendar month. A Founders II Class Limited Partners may, with 45 calendar days’ notice,
withdraw all or a portion of the balance of its capital account as of the last day of each calendar
quarter.
All Funds
Withdrawal requests may be subject to reserves for contingencies, a hold-back amount pending audit
completion, liquidity restrictions, and suspension restrictions as discussed further in the private
offering documents. The general partner may, in its sole discretion, waive any such notice
requirements and/or restrictions.
HUDSON WAY CAPITAL MANAGEMENT, LLC | FORM ADV PART 2A: FIRM BROCHURE
The general partner and/or the Investment Manager (as applicable) may agree with certain limited
partners to a variation of the terms set forth in the private offering documents or establish additional
classes of interests with terms that differ from those described in the offering documents, including
different management fees, performance-based profit allocations and withdrawal rights.
I NITIAL S TRATEGIC I NVESTORS
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