Item 5: Fees and Compensation
In general, as compensation for investment supervisory services rendered to the Funds, Sandglass is paid a
monthly management fee (“Management Fee”). In addition, Sandglass Opportunity General Partner Ltd., an
affiliated entity that acts as general partner (the “SOF General Partner”) to the Sandglass Opportunity Fund,
L.P. (the “SOF”) and Sandglass Petrus General Partner Ltd, an affiliated entity that acts as general partner
(the “Petrus General Partner” and together with the SOF General Partner, the “General Partners”) to the
Sandglass Petrus Fund, L.P. (the “Petrus Fund”) each receives an annual incentive allocation (“Incentive
Allocation”) from investors in a Fund to which they are the General Partner. Directly or indirectly, a Fund
also bears additional expenses and fees attributable to the activities of the Fund or Sandglass and its affiliates
incurred for the benefit of the Fund, including the costs of formation and ongoing operational and legal
expenses, as set forth in the applicable Governing Documents. Investors should review the Governing
Documents for details regarding fees, some of which are summarized below.
Management Fees
With respect to the SOF, the Management Fee annual rate is 1.75% of the SOF net assets and is paid monthly
in arrears, while the Management Fee annual rate for the Petrus Fund is 1.5% of the Petrus Fund net assets
and is paid monthly in arrears. The Governing Documents allow the Firm or the respective General Partner
to waive or agree to reduce the Management Fee for one or more investors without waiving or reducing it for
all investors.
Incentive Allocations
Form ADV Part 2A 3
Sandglass Capital Management Limited
The SOF General Partner is entitled to receive an annual Incentive Allocation of 20.0% of the SOF net profits,
calculated and paid annually following the SOF’s fiscal year-end, while the Petrus General Partner is entitled
to receive an annual Incentive Allocation of 17.5% of the Petrus Fund net profits, calculated and paid annually
following the Petrus Fund’s fiscal year-end. Such potential Incentive Allocation is subject to a high-water
mark, as outlined in the Governing Documents. The Incentive Allocation payable for any period other than
a full fiscal year, in conjunction with investor subscriptions and redemptions that take place throughout the
year, may be proportionately adjusted to the extent provided for in the Governing Documents.
Payment of Fees
The Funds’ administrator, through a written agreement outlining the services provided to each Fund, deducts
the Management Fees monthly and the Incentive Allocation annually and otherwise, all in arrears, from each
Fund investor account as applicable. The administrator wires the proceeds of the Management Fee to the
Firm and the proceeds of the Incentive Allocation to the respective General Partner.
Sandglass does not act in any capacity as a broker‐ dealer, and accordingly, does not receive any
compensation for acting as a broker‐ dealer. In addition, neither Sandglass nor any of its employees accepts
compensation for the sale of securities or other investment products, including asset‐ based sales charges or
service fees from the sale of pooled investment vehicles. None of Sandglass, the General Partners, or any of
their employees receives any compensation from the Funds other than the Management Fee and the Incentive
Allocation.
Each Client will bear its own expenses, as set forth in its respective investment management or other
agreement with the Adviser or its affiliate. Expenses borne by each Client may differ from the expenses
borne by other Clients. In certain instances, a Client may bear expenses that the Adviser has agreed to bear
for one or more other Clients.
Common expenses frequently will be incurred on behalf of more than one Client. Sandglass seeks to allocate
those common expenses among the Clients in a manner that is fair and reasonable over time. However,
expense allocation decisions may involve potential conflicts of interest (e.g., an incentive to favor accounts
that pay higher incentive fees, or conflicts relating to different expense arrangements with certain
clients). Sandglass may use various methods to allocate particular expenses among the Clients depending on
the circumstances (e.g., pro rata based on assets under management, relative participation in the transaction
related to the expense, general amount of trading activity etc.). The determination as to the method or
methods used may be based on relative use of the product or service, the nature or source of the product or
service, the relative benefits derived by the Clients from the product or service, or other relevant factors.
Nonetheless, investors should note that the portion of a common expense that Sandglass allocates to a Client
for a particular product or service, may not reflect the relative benefit derived by that Client from that product
or service in any particular instance. Sandglass’ expense allocations often depend on inherently subjective
determinations and, accordingly, expense allocations made by the Adviser in good faith will be final and
binding on the Clients.
For more information on brokerage activity, see Item 12.