Item 5: Fees and Compensation
Fees and compensation are described in the advisory contracts entered into with each Private
Fund, as well as in the applicable offering memorandum for each Private Fund. The below is
intended as a summary, and prospective Investors should refer to the offering documents for
the Private Fund or Private Funds in which they are considering investing for a more complete
description.
Phoenician generally charges each Private Fund (without duplication for Investors in a master-
feeder structure), a quarterly management fee at an annual rate of 1.0% of the net assets of the
Private Fund. Management fees are generally deducted from client accounts each quarter in
advance based on the total market value of the assets in the applicable Private Fund’s accounts
(including net unrealized appreciation or depreciation of investments and cash, cash equivalents
and accrued interest) on the first day of the quarter. The management fee will generally be
prorated for additions to and withdrawals from a Private Fund during a particular quarter. The
management fee accrues monthly. Affiliates of the Firm also generally charge each Private
Fund (without duplication for Investors in the master-feeder structure) performance
compensation equal to 20% of the increase in net asset value of the applicable Private Fund,
subject to a high water mark and a “hurdle rate” of 6%. This “hurdle rate” will not be applied
cumulatively, and any “hurdle rate” shortfall will not be carried forward to any future calendar
year.
Generally, such affiliates receive performance-based fees or allocations from client accounts
on an annual basis in arrears and upon redemptions by Investors with respect to such Investors.
The Firm’s fees and compensation with respect to the Private Funds are generally non-
negotiable but do vary amongst the Private Funds and within each Private Fund. Phoenician
retains the right to waive or reduce fees, or charge different fees, with respect to Investors.
Expenses
Phoenician’s clients will generally be obligated to pay certain fees and expenses of, and
pertaining to, the applicable Private Fund.
Without limiting the foregoing, the Private Funds shall bear their pro-rata expenses, including
operating expenses, expenses related to the offering of shares, filings, investor reporting costs,
administration and audit expenses, research subscription services (Bloomberg, Capital IQ, etc.),
travel-related research and due diligence, trading systems and software, risk management
systems and software, order management systems, interest on margin accounts, legal,
accounting and professional fees, fees of the client’s independent Directors (if any), expenses
of Advisory Committee members, consulting fees, insurance costs, borrowing charges on
securities sold short, custodial fees, trustees fees, brokerage commissions, bank service fees,
interest on loans and debit balances, any taxes applicable to the client’s on account of its
operations and/or investments, and any and all expenses related to the activist operation of the
client, as Phoenician shall determine in its discretion. Phoenician bears its own expenses,
including office rent and similar overhead expenses, in addition to the salaries and benefits of
its employees.
For further details on the Firm’s brokerage practices refer to Item 12 of this brochure.