Item 5: Fees and Compensation
A. Fees Charged
Martorell Capital Partners charges a management fee of 2% annual fee of assets under management and
fees from profits from each account equal to 20% of the net appreciation of the investment of each account
at the end of every quarter to qualified investors. The fee may be negotiable at Martorell Capital Partners’
discretion. Lower fees for comparable services may be available from other sources.
Below are two illustrative examples of how fees are calculated:
• Example 1 – Standard Management Fee
A client with an account valued at $1,000,000 and a 2.00% annual management fee is billed quarterly in
arrears:
• $1,000,000 × 2.00% = $20,000 annual fee
• $20,000 ÷ 4 = $5,000 per quarter
• Example 2 – Performance-Based Fee
Performance-based fees are calculated and assessed on a quarterly basis.
The fee is determined as a percentage of the account’s net capital appreciation during the quarter,
measured against the account’s prior high-water mark. Performance fees are charged only on net new
gains above the client’s previous highest account value.
The calculation is as follows:
Performance Fee = Applicable Performance Fee % × (New Quarter-End Account Value – Prior High-
Water Mark)
If the quarter-end account value is below the high-water mark, no performance fee is charged for that
period.
Martorell Capital Partners utilizes a high-water mark in calculating all performance-based fees.
Specifically, performance fees are assessed only on net new appreciation above each client’s prior peak
value, ensuring that no fees are charged on previously realized losses or declines in account value.
Martorell Capital Partners does not currently employ a formal benchmark or hurdle rate in determining
performance-based compensation.
Martorell Capital Partners confirms that all performance-based fee arrangements are subject to a high-
water-mark provision.
Under this structure, performance fees are assessed only on net new appreciation above each client’s
previous highest account value. As a result, MCP does not charge performance fees on losses that have not
been recouped, nor does it receive fees twice on the same gains.
Accordingly, the use of a high-water mark eliminates the possibility of double charging or collecting
performance fees on recouped losses or unrealized declines.
B. Fee Payment
Investment advisory fees will generally be debited directly from each client’s account. The performance
and management fee is paid every quarter. Martorell Capital Partners will bill the client within 10 days
after the quarter.
C. Other Fees
In addition to paying performance based fees or allocations, Client accounts will also be subject to other
investment expenses, pro-rata, such as custodial charges, brokerage fees, commissions and related costs;
costs of research, pricing, data and similar services; costs of margin accounts and other borrowings;
borrowing charges on securities sold short; interest expense; taxes, duties and other governmental charges;
transfer and registration fees or similar expenses; costs associated with foreign exchange transactions; costs
of any outside appraisers, accountants, attorneys or other experts or consultants engaged in connection with
specific investments; any legal fees and costs arising in connection with any litigation or regulatory
investigation instituted against Martorell Capital Partners or any Client. There are no pre-paid fees and no
refunds.
D. Pro-rata Fees
You may terminate the Investment Advisory Agreement by providing written notice to Martorell Capital
Partners. If you terminate our relationship during a quarter, you will be billed the portion of the capital
management fee and/or appreciation fee for the current quarter.
E. Compensation for the Sale of Securities.
Neither Martorell Capital Partners nor any of its professionals receive any additional compensation
related to the sale of securities on behalf of the firm’s clients.