Item 5 Fees and Compensation
The fees and compensation to Locust Wood are described in the advisory
contracts with its clients. All clients are “qualified purchasers” (as defined in
Section 2(a)(51) of the Investment Company Act of 1940, as amended (the “1940
Act”)).
Management fees to Locust Wood are generally paid quarterly in advance. Locust
Wood generally deducts management fees directly from Client Accounts.
Generally, the management fees will be pro-rated for subscriptions to the Funds
or investments in a Separate Account made other than the first day of a calendar
quarter. For certain Separate Accounts, managements fees may also be prorated if
the advisory contract is cancelled or capital is withdrawn prior to the end of a
calendar quarter.
Locust Wood generally receives performance-based compensation from the
Separate Accounts on an annual basis in arrears and upon withdrawals from the
Separate Accounts. Locust Wood Management or LW Ultra GP generally
receives performance-based compensation from the Funds on an annual basis in
arrears and/or upon complete or partial redemptions and withdrawals by investors
in the Funds.
Management fees, performance-based compensation and/or expenses may be
reduced, rebated, discounted or waived in certain circumstances, including,
without limitation, with respect to investments in the Funds by Locust Wood’s
personnel and/or other related persons. Separate Account have management fee
and performance-based compensation that differ in one or more respects from
those applicable to investors in the Funds since they are negotiated on a case by
case basis.
The Funds generally bear their own expenses including, without limitation,
without limitation: the fees payable to Locust Wood; legal (including the costs of
any litigation or investigation involving activities of the Funds, including amounts
paid in settlements thereof and attorneys’ fees, litigation expenses, the cost of
settlements and indemnification expenses (including advances thereof); and fees
and expenses incurred in connection with the reorganization, dissolution,
winding-up or termination of the Funds), audit and accounting expenses
(including third party accounting services and fees and expenses incurred in
connection with any tax audit by any U.S. federal, state or local authority,
including, without limitation, any related administrative settlement and judicial
review); organizational fees and expenses, including those incurred in connection
with the offering and sale of Fund interests, including, without limitation, the
following: the amendment of the governing and/or offering documents of the
Funds; the Funds’ regulatory expenses (such as blue sky fees and expenses and
expenses associated with complying with FATCA and CRS, any governmental,
regulatory, licensing, filing or registration fees or taxes (including, without
limitation, fees and expenses incurred in connection with the preparation and
Locust Wood Capital Advisers, LLC Form ADV: Part 2A Page 5
filing of Section 13 filings, Section 16 filings and other similar regulatory filings))
and expenses associated with the appointment of AML Officers; investment
expenses (whether or not such investments are consummated) such as
commissions (including clearing and settlement charges, custodial fees and
expenses and bank service fees), expenses related to the research, execution and
monitoring of actual and prospective investments (whether or not consummated)
and the consummation of investments, including, without limitation, the
following: third-party investment sourcing fees; consulting fees; expert fees; fees
and expenses of and related to obtaining research, analytics and market data
(including, without limitation, third-party data sources and any information
technology hardware, software and data subscriptions (such as Bloomberg and
FactSet) or other technology incorporated into the cost of obtaining such research
and market data); due diligence expenses including, without limitation, consulting
and appraisal fees; investment- and research-related travel expenses (consistent
with Locust Wood’s travel policy); interest on margin accounts and other
indebtedness; borrowing charges on securities sold short; custodial fees;
administrator fees and expenses; Fund-related insurance costs (including D&O
and cybersecurity insurance costs); directors’ fees and expenses; fees and
expenses associated with shareholder and director meetings (including, without
limitation, travel-related expenses); costs of preparing and distributing reports and
notices to investors; and any other expenses reasonably related to the purchase,
sale or transmittal of the Funds’ assets (including, without limitation, expenses
and bank service fees costs and expenses related to compliance with specific
jurisdictions’ securities’ offering laws, rules and regulations (e.g., AIFMD)).
(See Item 12 “Brokerage Practices” below.)
The expenses that are charged to Separate Accounts are determined on a case by
case basis, but generally include all commissions, custodian fees, charges, taxes
and other costs related to the investment activities of the accounts.
Locust Wood may allocate a portion of the capital of the Client Accounts to
exchange-traded funds or similar fee-bearing products that are managed by other
investment managers. In that case, such Client Accounts generally would be
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