Item 5 – Fees and Compensation
A. Old Well generally receives a management fee, a performance fee, or both, from each
Fund, subject to the terms of the applicable governing documents. Fees may vary among
the Funds and among a Fund’s share classes. Should Old Well begin providing advisory
services to SMAs, fees for such services will be individually negotiated with each Client
and documented in the terms of each investment management agreement.
B. Typically, management fees for each Fund, are paid quarterly in advance based on the
value of an Investor’s capital account as of the first day of each calendar quarter, or on
the date of a contribution if, where applicable, other than the beginning of a quarter.
Methods of collecting fees may, however, vary among the Funds and among share
classes within a Fund, and are more fully described in the CPOM for each Fund.
Old Well in its sole discretion may also waive or modify the management fee for Investors
that are members, partners, affiliates, or employees of Old Well or a Fund’s general
partner (“General Partner”), relatives of such persons, and trusts or other entities for their
respective benefits.
Subject to the applicable terms, we typically receive an incentive fee in connection with
the services we provide the relevant Fund. These incentive fees are generally charged at
the end of each calendar year via a reallocation from the capital account of each Investor
to the capital account of Old Well. As a general matter, the manner in which incentive fees
are calculated often vary among Funds or share classes within a Fund. Depending on the
Fund’s governing documents, the incentive fee may be calculated at an amount typically
equal to 20% or 25% of each Investor’s share of net profits (incentive fee may differ from
the rates listed here based on share class and fund as applicable); based on a Fund’s
outperformance of a metric outlined in the Fund’s governing documents; or based on a
certain percentage of the Fund’s profits upon divesting a specific holding. Incentive
allocations for select funds and share classes are subject to hurdle provisions as
described in each Fund’s governing documents.
Both the management fee and incentive allocation, as well as other terms, are more fully
described in the CPOM, or respective governing documents, for each Fund.
Should Old Well accept Clients in the future for which it manages an account rather than
a Fund, such as SMAs, such Clients may be subject to fees that are more fully described
in their respective investment management agreements (“IMAs”).
C. In general, each Fund shall bear all of their operating expenses and the feeder funds will
bear a pro rata share of the operating expenses of their respective Master Fund
(collectively, “Partnership Expenses”). These expenses will include, without limitation, all
costs and expenses relating to the relevant Fund (and the Fund’s pro rata share of the
relevant Master Fund’s) activities and operations (to the extent not reimbursed in
connection with an investment), including, without limitation, all fees, costs and expenses
associated (directly or indirectly) with the negotiation, financing, sourcing, acquiring,
holding, monitoring, hedging, settling and disposing of investments or proposed
investments; other transaction costs, including, without limitation, transaction fees,
custodial fees, brokerage fees (See Section 12 for Brokerage Discussion), commissions,
consulting, advisory, due diligence, investment banking, legal, financial, auditing,
accounting, research, third-party consulting and other professional fees and expenses
related to investments and proposed investments, as well as all fees, expenses, interest
payments and principal payments due to any lenders, investment banks and/or other
financing sources in connection with the financing, sourcing, acquiring, holding,
monitoring, hedging and disposing of investments or proposed investments; custodial
fees, appraisal fees and expenses; all investment-related travel expenses (including
industry conferences) and reasonable travel expenses related to the purchase, sale or
transmittal of feeder fund and/or relevant Master Fund’s assets; all entity-level taxes, fees
and other governmental charges; the costs of any insurance (including, without limitation,
General Partner liability insurance, errors and omissions insurance, directors and officers
insurance, if any, and other insurance policies with respect to a Fund’s business and
affairs); directors’ fees; expenses incurred in the collection of monies owed to a Fund (or
to the relevant Master Fund as applicable); management fees; research related computer
hardware and software expenses, including Bloomberg terminals and subscriptions
relating to, among other things, trading, order management and other technology and
services; legal, regulatory, compliance, auditing, research and accounting fees and
expenses (including, without limitation, fees and expenses of any administrator of a Fund
and the relevant Master Fund; expenses associated with the preparation and delivery of
financial statements, tax returns and Schedules K-1, if any; extraordinary expenses
(including, without limitation, litigation-related and indemnification expenses, whether
payable in connection with a proceeding involving the relevant Fund or otherwise, and
including the amount of any judgment or settlement paid in connection therewith); the
costs of any reporting to Investors; reasonable expenses incurred in connection with any
meetings of Investors and reasonable expenses of the members and meetings of any
committee of a Fund; expenses incurred in connection with the dissolution, liquidation,
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