Item 5 Fees and Compensation
A. Advisory Services
Leonard Capital does not provide investment advisory services to individual investors.
Rather, Leonard Capital’s investment services are limited to its management of the
affiliated private funds. As the investment adviser to each of the affiliated private funds,
Leonard Capital shall receive compensation in the form of a management/administrative
fee and/or incentive fees. Leonard Capital’s compensation for each of the affiliated
private funds shall be calculated as follows:
Leonard Capital shall receive, on an annual basis, fifteen percent (15%) of the Net Profits
(as defined in each affiliated private funds’ offering documents) of each affiliated private
fund as Inventive Compensation (See Item 6 Below). In addition, Leonard Capital shall
receive one-quarter of one percent (0.25%) of the Net Asset Value of each affiliated
private fund at the end of each fiscal quarter (1.00% per annum) as a
management/administrative fee.
Please Note: For further information pertaining to the calculation of Leonard Capital’s
management/administrative fee and/or any incentive fees please review the affiliated
private funds’ respective subscription documents.
B. The affiliated private funds allow for Leonard Capital to deduct its fees directly from the
affiliated private funds assets in compliance with regulatory procedures. In the limited
event that Leonard Capital bills the affiliated private funds directly, payment is due upon
receipt of Leonard Capital’s invoice. Leonard Capital shall deduct fees and/or bill the
affiliated private funds quarterly, in arrears, based upon the Net Asset Value of the
underlying assets, as described above in Item 5.A, on the last business day of the quarter.
In the event that the affiliated private funds do not have sufficient liquid assets to pay
Leonard Capital’s fee, the fee shall accrue until such time that the affiliated private funds
have sufficient liquid assets, at which time Leonard Capital shall collect the full amount
of its fee.
C. Leonard Capital does not provide investment supervisory services to individual
investors. Rather, Leonard Capital's investment supervisory services are limited to its
management of the affiliated private funds. As such, Leonard Capital does not select
and/or recommend broker-dealers to the affiliated private funds.
Leonard Capital shall utilize the services of a broker-dealer/custodian for trading and
custody of the affiliated private funds’ assets. It should be noted that broker-dealers
charge brokerage commissions and/or transaction fees for effecting certain securities
transactions. In addition to Leonard Capital’s investment management/administrative fee,
brokerage commissions and/or transaction fees, the affiliated private funds will also
incur, relative to all mutual fund and exchange traded fund purchases, charges imposed at
the fund level (e.g. management fees and other fund expenses).
D. Leonard Capital’s annual investment advisory fee shall be prorated and paid quarterly, in
arrears, based upon the Net Asset Value of the underlying assets, as described above in
Item 5.A, on the last business day of the quarter. The Investment Advisory Agreement
between Leonard Capital and the affiliated private funds will continue in effect until
terminated by either party by written notice in accordance with the terms of the
Investment Advisory Agreement. Upon termination, Leonard Capital shall debit the
account for the pro-rated portion of the unpaid advanced advisory fee based upon the
number of days that services were provided during the billing quarter.
E. Neither Leonard Capital, nor its representatives, accepts compensation from the sale of
securities or other investment products.