Item 5: Fees and Compensation
A. Fees and Compensation.
North Shield receives compensation from each of our clients based upon their assets under
management and on the performance achieved for each client’s account.
Investments in our private fund is only offered to “qualified purchasers” as defined in the
Investment Company Act of 1940, as amended (the “Investment Company Act”), and all our
managed accounts are “qualified purchasers,” this brochure does not contain our advisory service
fee schedule. These fees are fully disclosed in the private fund’s governing documents and each
managed account’s investment management agreement.
The management fees are generally non-negotiable; however, North Shield is permitted to charge
investors in the private fund a management fee that is lower than the rates in the Private Placement
Memorandum (“PPM”) or waive the management fee for particular investors. The fund may enter
into agreements, commonly referred to as “side letters,” with certain prospective or existing
investors whereby we, in our sole discretion, have authority to reduce or rebate fees to be paid by
the investor and/or other terms.
Separately managed accounts may negotiate asset-based fees and performance-based
compensation based on various factors and strategies.
B. Payment of Fees.
Fees and other compensation paid to North Shield are generally deducted from the assets of the
fund. Management fees are generally deducted on a monthly basis. Depending on the share class,
performance compensation is deducted on an annual basis or over a three (3) year period.
The performance-based compensation received by North Shield, to the extent subject to the
requirements of Section 205 of U.S. Investment Advisers Act of 1940, as amended (the “Advisers
Act”), will be paid in compliance with Rule 205-3 under the Advisers Act.
C. Other Fees and Expenses
Costs and expenses relating to the organization of the private fund will be paid by the private fund
and will be capitalized and amortized over a period of up to 60 months from the date of
commencement of the private fund’s operations.
The Fund’s operating expenses will include investment expenses such as brokerage commissions,
clearing and settlement charges, bank service fees, interest expenses, custodial fees, expenses
relating to consultants, attorneys, brokers or other professionals or advisors who provide research
advice or due diligence services with regard to investments, appraisal fees and expenses, and
investment banking expenses), legal expenses, internal and external accounting expenses, auditing
and tax preparation expenses, valuation expenses, custodial and brokerage expenses, fees and
expenses of the Administrator and fees and out-of-pocket expenses of any service provider retained
to provide fund accounting and administrative services; tax compliance and filings related costs
research expenses; costs and expenses associated with engaging expert networks and consultants;
order management systems; offering expenses, management fee, administration fees and related
costs; regulatory reporting filing fees such as blue sky filings, Form ADV, Schedule 13D, 13F,
13G, Form 13H , Form PF, EDGAR; and extraordinary expenses and other similar expenses
related to the Fund as the Investment Manager determines in its sole discretion. To the extent that
expenses to be borne by the Fund are paid by the General Partner or by the Investment Manager,
the Fund shall reimburse such party for such expenses. The Investment Manager may elect to pay
some or all of the Fund’s operating expenses at its discretion.
Our managed accounts pay for all of their own operating expenses. This includes all custodial
fees, brokerage commissions, clearing fees, investment expenses, and interest, withholding or
transfer taxes and all costs of administration of the managed account, including accounting, audit
and legal expenses and costs associated with reporting and providing information pursuant to the
investment management agreement incurred in connection with trading for the managed account.
While the expenses listed above are detailed, they do not contemplate every possible expense a
client may incur. Investors in our private funds should review the governing documents for the
fund which may discuss additional costs, fees and expenses not discussed in this brochure.
For more information on brokerage transactions and costs, please see Item 12: Brokerage Practices.
D. Compensation for Sale of Securities and Other Investment Products
Neither our firm nor any of our principals or employees receives any compensation for the sale
of securities or other investment products.