Item 5: Fees and Compensation
The fees applicable to each Fund are set forth in detail in each Fund’s offering documents. A
brief summary of such fees is provided below.
Management Fee
Paqua is paid an investment management fee (the “Management Fee”), ranging from 1.25%
- 1.75% per annum of the net asset value of the applicable fund. The Management Fee is
normally charged on the first day of each quarter and is paid in advance based on the
applicable Fund’s net asset value on the first day of such quarter.
Paqua Capital Management L.P. Form ADV Part 2A
Generally, the Management Fee is not negotiable. However, Paqua in its sole discretion, may
waive, reduce or modify the Management Fee at any time, without notice to or consent from
any Fund (or underlying investor in such Fund).
Pursuant to the terms of the applicable investment advisory agreement, if the investment
advisory relationship is terminated (or funds are withdrawn or redeemed) as of any date other
than the last business day of the applicable payment period, we typically charge a prorated
Management Fee based on the ratio that the number of days for which investment advisory
services were rendered bears to the total number of days in that payment period, and we
return any unearned fees to the Client or underlying Investor.
Other Types of Fees or Expenses
Paqua and the Paqua General Partners are authorized to incur and pay in the name and on
behalf of the Funds all expenses which they deem necessary or advisable.
The Investment Manager will be responsible for and will pay all overhead expenses of an
ordinary and recurring nature such as rent, supplies, secretarial expenses, stationery, charges
for furniture and fixtures, its compliance expenses, utilities, employee insurance, payroll taxes
and compensation of employees.
The Funds will bear all expenses relating to its ongoing structure and operation (including
direct expenses of the Fund), including: (i) the Management Fee; (ii) all investment-related
costs and expenses (i.e., expenses that, in the Investment Manager’s sole discretion, are
related to the investment of the Fund’s assets, whether or not such investments are
consummated), including commissions and charges, clearing and settlement charges, option
premiums and custodial and service fees, research-related expenses (including research-
related travel expenses), expenses relating to consultants, attorneys, brokers or other
professionals or advisors who provide research, advice or due diligence services with regard
to investments; (iii) fees and expenses related to portfolio exposure and performance
management systems, risk management services and software related to trade reconciliation,
treasury, margin, financial and counterparty management, risk monitoring, performance
reporting, valuation quotation services (e.g., Bloomberg terminals, historical and live financial
data and other similar services and data feeds) and trade order management systems
(including systems that facilitate trade compliance, commission management, stock locates
and transaction cost analysis, and third party service providers used for implementation,
custom reporting, updates, consultations, support, maintenance, monitoring and data
extracts); (iv) the Fund’s legal, accounting, tax preparation and other tax-related expenses
(including preparation and mailing costs of financial statements, tax returns and other reports
to Members), auditing, consulting and other professional expenses; (v) third-party
administration costs, fees and expenses (including any costs, fees and expenses related to
investor communications, relations, reporting or other investor materials, tax preparation and
related reporting, performance information, data extraction and other types of reporting and
any audit or accounting services provided by a third-party administrator); (vi) all fees and
charges of custodians, clearing agencies and banks; (vii) compliance and reporting expenses
and expenses attributable to regulatory filings that are made with respect to the Firm or assets
of the Firm (including Section 13, Section 16, Form D, Form PF, FATCA, anti-money laundering
compliance, state security filings, general regulatory compliance and non-U.S. position
reporting filings, if applicable, and non-U.S. filings, if any); (viii) the Fund’s pro rata share of
Firm -related insurance costs (including the Fund’s pro rata portion of director’s and officer’s
insurance, errors and omissions insurance, fidelity insurance and other similar policies
Paqua Capital Management L.P. Form ADV Part 2A
covering the General Partner and/or the Investment Manager); (ix) any taxes (including but
not limited to any withholding taxes, transfer taxes, stamp duties and other governmental or
self-regulatory agency-related charges or duties); (x) all costs and expenses incurred in
attempting to protect and enhance the value of a Fund investment (including any fees and
expenses associated with any pending or threatened litigation, audit, investigation,
administrative or other proceeding, as well as any settlement costs); (xi) any fees and
expenses related to the Fund’s liquidation, if applicable; (xii) fees paid to proxy and securities
class action advisory firms; (xiii) expenses relating to the offer and sale of Interests and
withdrawals and transfers thereof; (xiv) other reasonable expenses related to the purchase,
sale, preservation or transmittal of the Firm’s assets; (xv) any extraordinary expenses (e.g.,
indemnification expenses); and (xvi) the Firm’s pro rata portion of the Master Fund’s expenses
(collectively, the “Fund Expenses”).
The Funds will bear all costs and expenses relating to the organization of the Fund and to the
offering of Interests (including government filing fees, stamp duties or other taxes, legal and
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