ITEM 5. FEES AND COMPENSATION
Malachite charges an investment management fee based on the value of assets under
management of each investor in the Funds.
With respect to MCPs, the range of investment management fees generally is between 0% to
2.0% per annum, depending on the date of an investor’s investment and the amount of assets
under management of the MCPs. With respect to MRPU the range of investment management
fees generally is between 0.55% and 1.25% depending on the date of an investor’s investment
and the amount of assets under management in MRPU.
Management fees are charged quarterly in advance based upon the value of investors’ net
assets in the Funds as of the first business day of each calendar quarter. Investments in the
Funds made at times other than the first business day of a calendar quarter are charged a
prorated fee based on the effective date of the investment and the number of days remaining
in the quarter. To the extent investors in the Funds are required to withdraw during a calendar
quarter in the case of MCPs, or month in the case of MRPU, a pro rata portion of the
management fee paid in advance will be refunded, based on the number of days remaining in
the quarter or month, respectively.
Management fees may be modified or waived for investors in the Funds that are members,
employees or affiliates of Malachite or Malachite Capital GP LLC, relatives of such persons and
for certain large or strategic investors.
Management fees are deducted from the Funds by the Funds’ administrator pursuant to
instructions from Malachite.
With respect to MCPs, Malachite or its affiliate, Malachite Capital GP LLC, is entitled to receive
annual performance‐based compensation, which is compensation that is based on a share of
net capital appreciation of the assets of a client. The range of performance‐based
compensation generally is between 10% and 20% of the net capital appreciation (which may be
subject to a non‐cumulative “hurdle rate” of 2% per annum) and will be subject to a loss
carryforward. The level of performance‐based compensation will depend on the date of
investors’ investments in MCPs and the amount of assets under management of the MCPs.
Performance‐based compensation generally will be allocated as of the end of each fiscal year
and upon an intra‐year withdrawal by investors in the MCPs. Malachite’s performance‐based
compensation is calculated taking into account both realized and unrealized gains.
The MRPU is not presently charged a performance‐based fee.
The performance‐based compensation may be reduced or waived for investors in the MCPs
that are members, employees or affiliates of Malachite or Malachite Capital GP LLC, relatives of
such persons and for certain large or strategic investors.
More detailed information about the fees and allocations paid by investors in the MCPs may be
found in the MCPs’ offering documents.
In addition to paying investment management fees and, if applicable, performance‐based
compensation, client accounts will also be subject to other expenses such as legal, compliance,
administrator, audit, accounting and other professional expenses; organizational expenses;
investment expenses such as commissions, research fees and expenses; interest on margin
accounts and other indebtedness; borrowing charges on securities sold short; custodial fees;
bank service fees; insurance costs; expenses of regulatory compliance, filings and reporting
(including but not limited to Form PF); and any other expenses reasonably associated with
products or services that may be necessary or incidental to such investments or accounts.
Client assets may be invested in ETFs or other registered investment companies. In these cases,
the client will bear its pro rata share of the investment management fee and other fees of such
funds, which are in addition to the investment management fee paid to Malachite.
Please refer to Item 12 of this Brochure for a discussion of Malachite’s brokerage practices.