Item 5: Fees and Compensation
Item 5.A
Management Fees:
The Management Fees are payable quarterly in advance and are calculated based on a declining
fee schedule that more closely aligns costs with related revenues. Management fees will be 1.5%
per annum of combined net assets of the Funds up to $750 million. Such fees will decline to 0.90%
as net assets under management increase according to the following table:
Management Fee 1.50% 1.40% 1.30% 1.20% 1.10% 1.00% 0.95% 0.90%
AUM ($mm)
Greater than – 750 850 950 1,050 1,150 1,300 1,500
Less than or equal to 750 850 950 1,050 1,150 1,300 1,500
Subscriptions accepted after the commencement of a calendar quarter will be subject to a pro-rated
Management Fee. In general, fees are not negotiable, however Marlowe Partners, at its sole
discretion, may elect to reduce, waive or calculate differently the Management Fee with respect to
any person.
Incentive Fees:
An incentive allocation is made at the end of each calendar year, and is calculated and charged
separately with respect to each investor at a rate equal to 18% of the net appreciation in the
investor’s account, in excess of the loss recovery balance, if any.
In the case of a partial withdrawal, the Incentive Allocation will only be charged with respect to
the net appreciation of the investor’s account attributable to the amount being withdrawn, in excess
of the investor’s loss recovery balance, if any.
From time to time, Marlowe Partners may hold an investment that is not readily marketable due to
a lack of pricing information and/or restrictions relating to its ownership. Such an investment will
be designated a “Limited Liquidity Investment”. The portion of the Incentive Allocation
attributable to any unrealized appreciation in the value of any Limited Liquidity Investment will
accrue, but remain unpaid until such Limited Liquidity Investment is realized or deemed realized,
or ceases to be designated as a Limited Liquidity Investment. Currently, the Funds do not hold
any Limited Liquidity Investments.
Item 5.B
All management fees are deducted from the Funds’ assets, quarterly in advance based on the net
asset value of the Funds as of the first day of each calendar quarter.
Item 5.C
Marlowe Partners is responsible for all of its office overhead expenses including rent, supplies,
secretarial expenses, stationary, furniture, employee insurance, payroll taxes and employee
compensation. In addition, prior to the opening of the Funds in April 2014, Marlowe Partners paid
for the Funds’ organizational expenses.
Operational Expenses
Subject to the following paragraph, payment of operational expenses for each fiscal year will be
subject to the limitation that the amount of any such expenses will not exceed 50 basis points of
the net asset value of the Fund on an annualized basis. The Funds will pay, or reimburse Marlowe
Partners, for all operating fees and expenses or out-of-pocket costs of the administration and
operation of the Funds, including, but not limited to:
ongoing offering fees and expenses and accounting expenses (including expenses
associated with the preparation of the Fund’s financial statements and tax returns, and any
other tax information relating to the Fund),
audit, administration (including fees and reimbursable expenses of the Fund’s
administrator), compliance and legal expenses,
costs of any litigation or investigation involving Fund activities, and indemnification
payments,
costs associated with meetings of investors, reporting, providing and mailing information
to existing and prospective investors as well as fees and expenses of the Board of Directors,
costs associated with maintaining insurance to protect the Fund, Marlowe Partners or any
other covered person (as described in the applicable Memorandum) from liabilities to third
persons in connection with the Fund’s affairs (including liability premiums),
taxes and other governmental charges, fees and duties payable by the Fund,
damages incurred by the Fund or any covered person, and
extraordinary fees and expenses, if any, and costs of winding up and liquidating the Fund.
Such costs will include the Fund’s allocable share of the fees and expenses of any third party
providers of “back office” and “middle office” services relating to trade settlement, and accounting
and related operations for the Funds.
As noted above, payment (or reimbursement of Marlowe Partners) of operational expenses for
each fiscal year will be subject to the limitation that the amount of any such expenses will not
exceed 50 basis points of the net asset value of the Fund on an annualized basis; provided that
extraordinary expenses, as determined in the sole discretion of Marlowe Partners, including but
not limited to, regulatory examinations, expenses associated with unanticipated litigation, and
indemnification expenses will not be subject to the expense cap.
Investment-Related Expenses
The Funds will pay, or reimburse Marlowe Partners, for all costs, fees and expenses related to
portfolio investments or prospective investments (whether or not consummated) of the Funds,
including, but not limited to:
the research, evaluation, acquisition, holding and disposition thereof and all third-party
expenses in connection therewith (including, without limitation, expenses relating to
proxies, underwriting and private placements, brokerage commissions (including the cost
of an outsourced trading firm), price validation, dealer spreads, interest on, and fees and
expenses arising out of, debit balances or borrowings, dividends payable with respect to
securities sold short, exchange, clearing, give-up and intermediation fees, clearing and
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