Item 5: Fees and Compensation
The fees applicable to each of the Clients are set forth in detail in the corresponding Offering
Documents. A brief summary of such fees is provided below.
Ishara Fund
Management Fee
The Firm receives a management fee (the “Management Fee”) from the Ishara Fund as of the first day
of each calendar quarter in advance equal to a range of 0.3125% to 0 0.4375% (up to approximately
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1.75% on an annual basis) of each Investor’s total capital account balance in the Fund as of the first day
of such quarter. The Management Fee is prorated for Interests held for less than a full calendar quarter.
Ishara, in its discretion, may reduce or modify the Management Fee to be borne by an Investor for any
reason, including to reflect matters such as the amount of the Investors’ investment and its commitment
to maintain its investment in the Ishara Fund.
Performance Allocation
Annually the Ishara Fund allocates to the General Partner a performance-based allocation (the
“Performance Allocation”) with respect to each Investor equal to a range of 17.5% to 20% of the
appreciation in each Investor’s capital account during the year. The Performance Allocation is made
only if, and to the extent that, the net capital appreciation of an Investor’s capital account for the year
exceeds any net capital depreciation in the capital account (reduced pro rata for any withdrawals)
accumulated in prior years (i.e., a “high water mark”). The General Partner may be allocated
Performance Allocations with regard to unrealized appreciation as well as realized gains in the
Investors’ capital accounts.
Ishara, in its discretion, may reduce or modify the Performance Allocation to be borne by an Investor
for any reason, including to reflect matters such as the amount of the Investors’ investment and its
commitment to maintain its investment in the Ishara Fund.
Other Expenses
The Ishara Fund bears all expenses of its organization (which, for accounting purposes, will be
amortized over a period of 60 months or such other time period as the Firm determines to be fair and
equitable in its sole discretion, whether or not in accordance with GAAP) and operation, as determined
by the General Partner. The Ishara Fund expenses are any fees, costs or expenses the Ishara Fund, the
General Partner or its affiliates reasonably incur in connection with the operation of the business and
maintenance of the Ishara Fund. These expenses include but are not limited to:
• brokerage and execution charges, commissions, custodial charges, and fees for quotation and
other data services;
• fees related to accounting, trading, portfolio management and risk management systems;
• research subscriptions and expenses;
• travel, legal and consulting fees related to investment research and due diligence;
• broken trade and broken deal fees;
• expenses relating to marketing the Ishara Fund to prospective Investors (including travel costs);
• expenses to register securities and transfer taxes;
• costs and expenses incurred for the purpose of protecting and enhancing the value of the assets
of the Ishara Fund (including the costs of instituting and defending litigation);
• U.S. federal, state and local taxes, filing and registration fees of the Ishara Fund, the General
Partner, the Firm and its affiliates, including audits associated with such taxes and filings (other
than taxes on the income of the General Partner, the Firm and its affiliates);
• all costs, fees and expenses relating to investor communications, relations, bookkeeping,
accounting and the preparation and mailing of financial, tax and performance information to
Investors, including an allocable share of the General Partner’s or Firm’s costs, fees and
expenses relating to internal accounting and tax preparation functions should the Ishara Fund
determine not to use third party providers for such services;
• fees, costs and expenses incurred in connection with borrowings;
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• administration fees, costs and expenses;
• premiums and other costs of D&O/E&O and other insurance;
• all regulatory and tax compliance fees, costs, and expenses incurred in complying with
regulatory and tax requirements that directly result from management of the Ishara Fund
(including expenses incurred in complying with FATCA and Form PF), including an allocable
share of the General Partner’s or Firm’s costs, fees and expenses relating to internal regulatory
and compliance functions should the Ishara Fund determine not to use third party providers for
such services; and
• fees for attorneys, accountants, consultants and other professionals or experts (including the
fees and expenses for counsel to the General Partner, the Firm or one or more of their respective
officers or managers) arising in connection with the Ishara Fund’s business.
Sub-Advised Funds
Ishara does not receive a management fee from one of the Sub-Advised Funds, however Ishara receives
a monthly expense reimbursement for research and operational expenses incurred by Ishara that are
either specific or allocated to the Sub-Advised Funds.
Ishara will be paid a management fee, for one of the Sub-Advised Funds, on a sliding scale, which is
currently paid at 1.00%.
If any of the expenses listed above are incurred jointly for the account of more than one Client, such
expenses will be allocated among such Clients in proportion to each Client’s net assets or the size of
the investment made by each to which such expense relates, or in such other manner as Ishara considers
fair and equitable.
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