Item 5 - Fees and Compensation
We receive compensation consisting of (1) an annual fixed fee (the “Management Fee”);
and (2) an annual performance-based allocation (the “Performance Allocation”) which is
calculated based upon a percentage of the net capital appreciation of the Funds at the end of
each fiscal year.
Depending on the specific investor class and the specific Fund, Lucus’ current fee schedule for
the Funds is generally as follows:
Management Fee: 0% - 2% annually (dependent upon the specific series of investment by each
Investor).
Performance Allocation: 0% - 20% annually (dependent upon the specific series of investment
by each Investor).
The Management Fee is calculated and paid quarterly in advance. The Management Fee is
deducted from the Funds. We, in our sole discretion, may waive or reduce the Management
Fee to be paid by any Investor.
Fees to Portfolio Managers of Underlying Funds
The Coppice Fund is generally subject to fees charged by the underlying portfolio funds and
managers. These fees typically include a fixed management fee, which may range from 0% - 2%
on an annual basis, and in most cases a performance-based compensation arrangement, which
may range from 0% - 20% of the capital appreciation in the underlying portfolio fund. The
Coppice Fund does not charge a management fee or performance allocation with regards to
the capital invested in Red Alder L.P.
Expenses
We are responsible for our own administrative expenses, including, but not limited to, office
space, furniture and fixtures, telephone, certain compensation, certain employee insurance,
certain payroll taxes, and supplies.
The Funds will pay the costs of organizing the particular Fund, legal expenses, internal and
external accounting and regulatory compliance (including the costs of systems and software),
internal and external research fees and expenses (including research-related travel,
compensation, technology seminars, courses, data and publications), consulting fees (related
to research), audit and tax preparation expenses, any taxes, filing fees, fund-related insurance
costs (including D&O and E&O insurance), Directors’ fees and expenses, administrator and
custody fees and expenses, brokerage commissions, borrowing charges (including interest on
borrowings), and the purchase, sale or transmittal of assets, as Lucus determines in its
discretion.
Item 6 - Performance Allocation
Depending on the specific investor class and the specific Fund, at the end of each fiscal year,
Lucus (or an affiliated entity) will receive an annual Performance Allocation equal to 0% - 20%
of the net profits attributable to each Investor’s account, if any, subject to a loss carryforward
provision. Net profits are calculated net of management fees, but before the Performance
Lucus Advisors LLC Form ADV Part 2A
Allocation. The Performance Allocations are charged in compliance with Rule 205-3 of the
Investment Advisers Act of 1940, as amended (the “Advisers Act”).
Because all of the investments for each Fund are made in the respective Master Fund, where
applicable, there are currently no side-by-side conflict of interest issues, such as allocation
decisions which may be impacted by performance-based fee differentials.
Lucus may waive or modify the Performance Allocation as to certain Investors in the Funds
that are members, employees or affiliates of Lucus, relatives of such persons, and for certain
large or strategic investors.
For a more detailed discussion on Performance Allocations, please see the relevant Fund’s
offering memorandum.