Item 5: Fees & Compensation
Asset-Based Compensation
Marble Ridge receives fees for investment advisory services based on the amount of assets under
management (a “Management Fee”) as disclosed in each Fund’s offering documents and
investment management agreement. The Management Fee is payable quarterly in advance and
calculated based on the net assets of each Fund (without accrual of any performance-based
compensation), in an amount ranging from 1.5% to 1.75% for the Flagship Funds. Typically,
Management Fees are calculated by a third party administrator and deducted from each Fund’s
account. If additional contributions are made during the quarter, the Management Fee will be
prorated and charged at the time of such contribution. Further, the Management Fee will be
prorated for any period that is less than a full fiscal quarter. In the case of Funds structured as a
“master-feeder” fund, Marble Ridge will typically receive the Management Fee at the feeder fund
level. To the extent the Management Fee is paid to Marble Ridge at the feeder fund level, no
Management Fee will be paid at the master fund level. An affiliate of Marble Ridge also receives
an annual performance-based allocation from each Fund. (Refer to “Item 6 - Performance Based
Fees and Side-by-Side Management” below for additional information).
Marble Ridge has discretion to charge Management Fees that are different than what is disclosed
in this Brochure, the applicable Fund offering documents, and investment management
agreements, all of which may be payable on different terms. Marble Ridge has discretion to
waive, reduce or calculate the Management Fee differently with respect to the investment of one
or more Investors, including its affiliates, their respective members, partners and employees, and
certain large or strategic investors, without notifying the other Investors in the applicable Fund,
provided that no such waiver or reduction will adversely impact any other Investor or cause such
Investor to bear a higher portion of the Management Fee than it would bear absent such waiver,
reduction or calculation. In addition, investment vehicles that are established for co-investment
purposes are subject to different fees.
Expenses
In addition to the Performance Allocation (as described below), pursuant to the offering
documents, limited partnership agreements, and investment management agreements, the Funds
will bear their own expenses and their pro rata share of the expenses of any master fund and any
trading subsidiaries, including, without limitation, the following: (i) the Management Fee; (ii)
expenses related to the research, due diligence 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 related to obtaining research, analytics and market data (including,
without limitation, any information technology hardware, software 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-related travel expenses;
brokerage and prime brokerage fees, commissions and expenses; expenses relating to
reorganizations, restructurings and workouts; expenses relating to short sales; clearing and
settlement charges; custodial fees and expenses; bank service fees; interest expenses and fees
related to financings or refinancings (including the costs of negotiating, documenting and/or
amending agreements with prime brokers, ISDAs and other agreements with trading and
financing counterparties); fees and expenses of proxy research and voting services; broken deal
expenses; and fees and expenses of third-party professionals, including, without limitation,
consultants, investment bankers, attorneys and accountants; (iii) organizational expenses,
including, without limitation, the following: the preparation and amendment of the offering
documents, investment management agreements, limited partnership agreements, and the
subscription agreements of the Funds; and (iv) operational expenses, including, without
limitation, the following: fees and expenses relating to information technology hardware,
software or other technology (including, without limitation, costs of software licensing,
implementation, data management and recovery services and custom development) used to
research investments, evaluate and manage risk, facilitate valuations, facilitate accounting
functions, facilitate compliance with the rules of any self-regulatory organization or applicable
law (including, without limitation, reporting obligations) in connection with the activities of the
Funds, or any trading subsidiary, facilitate and manage the order execution of securities or
otherwise manage the Funds, or any trading subsidiary, such as Bloomberg terminals, portfolio
management systems, risk management systems and order management systems; fees and
expenses of third-party risk management products, models and services; third-party
administrative fees and expenses (including fees and expenses of the administrator and any
middle office and/or back office service provider); loan administration costs; fees and expenses
of third-party professionals, including, without limitation, consultants, valuation service
providers, attorneys and accountants; the costs of any litigation or investigation involving
activities of the Funds, or any trading subsidiary; third-party audit and tax preparation expenses;
insurance expenses, including, without limitation, allocable premiums for cybersecurity
insurance and liability insurance (including directors and officers liability insurance and errors
and omission insurance) covering the Funds, Marble Ridge, its affiliates and the members,
partners, officers, employees and agents of any of them, and each member of any advisory
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