Item 5. Fees and Compensation
We advise two clients that are private pooled investment limited partnerships.
Jeereddi I, LP – Fees
Jeereddi I, LP offers two classes of limited partner interests. We generally charge a
quarterly management fee in advance at an annual rate of 1.5% of each limited partner’s capital
account balance attributable to Class A Interests and 1.25% of each limited partner’s capital
account balance attributable to Class B Interests. The value of the account on which the
management fee is based is a limited partner’s capital account on the first day of the quarter.
Management fees are generally not refundable or negotiable and are deducted from each limited
partner’s capital account quarterly in advance. We have agreed in the past with respect to certain
related persons, and may in the future agree with respect to certain limited partners, to a waiver
or variation of the management fee in our sole discretion.
Jeereddi Partners, LLC, the general partner of Jeereddi I, LP and our affiliate, also
generally charges an annual performance-based profit allocation at the end of each year of 20%
of each limited partner’s allocable share of net profits for the fiscal year attributable to Class A
Interests and 16.5% of each limited partner’s allocable share of net profits for the fiscal year
attributable to Class B Interests. The performance allocation is only charged to the extent that
such profits exceed any losses carried forward from prior years, based on a “high water mark”
formula. The performance allocation is generally calculated and deducted from each limited
partner’s capital account at the end of each fiscal year. A performance allocation is also
calculated and charged (i) with respect to any limited partner permitted or required to withdraw
and (ii) with respect to a limited partner making a partial withdrawal of its capital account, as of
any time other than the close of a year on the basis of net profits allocated to the limited partner
through the withdrawal date (but only with respect to the amount withdrawn on a pro rata basis
in the event of a partial withdrawal). The performance allocation is generally not negotiable.The
general partner has agreed in the past with respect to certain related persons, and may in the
future agree with respect to certain limited partners,to a waiver or variation of the performance
allocation in its sole discretion. Lower fees for comparable services may be available from other
sources.
Jeereddi II, LP – Fees
We generally charge a quarterly management fee in advance at an annual rate of 2.5% of
each limited partner’s capital account balance. The value of the account on which the
management fee is based is a limited partner’s capital account on the first day of the quarter.
Management fees are generally not refundable or negotiable and are deducted from each limited
partner’s capital account quarterly in advance. We have agreed in the past with respect to certain
related persons, and may in the future agree with respect to certain limited partners, to a waiver
or variation of the management fee in our sole discretion.
Jeereddi Partners, LLC, the general partner of Jeereddi II, LP and our affiliate, also
generally charges an annual performance-based profit allocation at the end of each year of 20%
of each limited partner’s allocable share of net profits for the fiscal year, but only to the extent
that such profits exceed any losses carried forward from prior years, based on a “high water
mark” formula. The performance allocation is generally calculated and deducted from each
limited partner’s capital account at the end of each fiscal year. A performance allocation is also
calculated and charged (i) with respect to any limited partner permitted or required to withdraw
and (ii) with respect to a limited partner making a partial withdrawal of its capital account, as of
any time other than the close of a year on the basis of net profits allocated to the limited partner
through the withdrawal date (but only with respect to the amount withdrawn on a pro rata basis
in the event of a partial withdrawal).The performance allocation is generally not negotiable. The
general partner has agreed in the past with respect to certain related persons, and may in the
future agree with respect to certain limited partners, to a waiver or variation ofthe performance
allocation in its sole discretion.Lower fees for comparable services may be available from other
sources.
Jeereddi I, LP and Jeereddi II, LP – Expenses
Each client bears all costs and expenses directly related to its investment program,
including expenses related to researching and executing investment transactions and positions for
the client’s account (including any research-related travel), proxies, underwriting and private
placements, brokerage commissions, interest on debt balances or borrowings, custody fees and
any withholding or transfer taxes imposed on the client. For additional information regarding
brokerage costs, see Item 12: Brokerage Practices. Each client also bears all out-of-pocket costs
of its administration, including organizational expenses (if applicable), accounting, audit and
legal expenses, costs of any litigation or investigation involving the client’s activities, and costs
associated with reporting and providing information to existing and prospective limited partners.
Any mutual expenses incurred by the clients will be shared pro rata between the clients.
Neither our firm, the principal, nor employees receives any transaction-based
compensation for the sale of securities or other investment products.
This firm brochure is not an offer to invest in our clients.