Item 5 - Fees and Compensation
The below describes how the Firm is generally compensated in connection with providing
advisory services to its Clients. However, the Adviser may enter into different fee arrangements
on a Client by Client basis. A potential investor in the Fund or any potential Client should review
any and all Offering Documents in their entirety before making any investment decisions.
A. Set forth below is a description of the fees and expenses paid by the Fund and Managed
Accounts, respectively:
The Fund
The Adviser is entitled to a management fee which is calculated based on the net asset value
of the Fund’s account quarterly in advance (the “Management Fee”), and such fees are
deducted by the Adviser from the Fund. The Management Fee is an amount equal one and
one-half percent (1.5%) per annum of the balance of each Investor’s capital account as of the
first day of the relevant fiscal quarter. The Management Fee may be waived, reduced or
discounted from time to time in the Adviser’s discretion with respect to one or more Investors
without consent of the other Investors.
The general partner of the Fund is entitled to a performance allocation from the Fund based
on a percentage of the capital appreciation/net gain of the client assets (the Performance
Allocation”) and upon withdrawals/redemptions by investors and such fees are generally
deducted by the Adviser from such account. The Performance Allocation is an amount equal
to twenty percent (20%) of the amount of net gain allocated to the capital account of each
Investor. Performance-based fees may be waived, reduced or discounted from time to time in
the Adviser’s discretion with respect to one or more investors without consent from the other
Investors.
Managed Accounts
The Adviser is compensated by each Managed Account through a pre-negotiated monthly
and quarterly compensation. Additionally, the Managed Accounts pay to North Fourth an
annual performance fee, equal to a set percentage of net appreciation of the assets held by
such accounts.
B. As stated above, the Fund pays a management fee, calculated based on the net asset value of
the Fund’s account, quarterly in advance, as compensation for the management services to be
performed by the Adviser. Such fees are generally deducted by the Adviser from the Fund.
The Adviser has the right to reduce, waive, assign, participate or otherwise share or modify
the management fee chargeable with respect to any Investor (including any affiliate of the
General Partner or the Adviser) without the consent of, or notice to, any other Investor.
Fees are not automatically deducted from the Managed Accounts. North Fourth bills the
applicable Managed Account for fees incurred. The Adviser is compensated pursuant to
advisory agreements that were individually negotiated with each Managed Account.
C. The Clients may incur brokerage and other transaction costs. Additionally, Clients may incur
expenses relating to the organization, maintenance and operation of the Client accounts
including, but not limited to, registered agent fees, costs related to compliance, regulatory
and AML matters, costs associated with gaining access to non-U.S. markets, all direct
trading expenses, including but not limited to, execution and clearing commissions,
transaction charges, ticket charges, fees and expenses incurred in the borrowing and lending
of securities, custodian and trustee fees, bank service fees, transfer taxes, withholding taxes,
administrative fees (including fees paid the Client’s administrator) accounting, tax
preparation and audit fees, fees paid to third-parties retained by the Client related to the
delivery of the trade file, and other fees and expenses related to the purchase, sale or other
disposition of assets. Please see the disclosures in Item 12 as it relates to North Fourth’s
brokerage activities.
The Fund may incur normal and customary expenses relating to its operations, and such
expenses are allocated among the Investors in the Fund pursuant to the terms of its Offering
Documents.
The Fund bears its own operating and other expenses including, but not limited to: (i)
expenses associated with all investments and transactions considered, evaluation and/or
consummated by the Fund, including, but not limited to, expenses associated with sourcing,
negotiating, investigating, researching, financing and structuring of investments and
potential investments, whether or not consummated (including third-party research, data,
analytics, modeling, structuring, pricing, execution and other third-party information
systems, software and service fees (including data feeds, subscriptions, reports and similar
items)); (ii) expenses associated with holding, financing, monitoring, hedging, maintaining
and disposing all investments of the Fund and all transaction and other costs associated
therewith; (iii) travel and related expenses associated with investments and potential
investments; (iv) professional fees associated with investments and potential investments,
including, but not limited to, consulting, investment banking, accounting, legal and other
advisory fees and expenses; (v) transaction fees, brokerage commissions, custodial fees,
clearing and settlement charges and similar fees and expenses associated with the
acquisition, disposition and settling of investments and potential investments; (vi) expenses
associated with legal and regulatory filings of the Fund (including, without limitation,
pursuant to Sections 13 and 16 of the Securities Exchange Act of 1940, as amended) and of
the Adviser or general partner related to the Fund; (vii) administrative, custodial, appraisal,
valuation, legal, consulting, advisory and similar fees and expenses associated with the
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