Item 5: Fees and Compensation Advisory Services and Fees
Sellaronda, either directly or indirectly through the General Partner, receives management fees and
incentive compensation in connection with the management of the Funds.
The fees and compensation applicable to the Funds are set forth in detail in the Funds’ Offering
Documents. A brief summary of the fees and compensation applicable to the Funds is provided
below.
Management Fee
Sellaronda is paid a quarterly asset-based management fee for its services (the “Management
Fee”) of between 1.5% to 2.0% per annum. The Management Fee is calculated by multiplying
each Investor’s applicable Management Fee rate by the balance of such Investor’s capital account
as of the beginning of each fiscal quarter (before taking into account the estimated accrued
Incentive Allocation, if any). The Funds calculate and pay the Management Fee in advance and
amortize the Management Fee monthly over the fiscal quarter for which such Management Fee is
paid. The Funds generally pay the Management Fee within 20 days of the first day of each fiscal
quarter. The Management Fee is prorated and payable as of the date of any capital contribution by
an Investor that is effective other than as of the first day of a fiscal quarter.
The Firm, in its sole discretion, may elect to reduce, waive, or modify the Management Fee for
any Investor, where applicable, including any member, manager, partner, director, officer,
employee and principal of Sellaronda (collectively, “Sellaronda-Related Investors”). Typically,
no Management Fee is paid by Sellaronda-Related Investors.
Incentive Allocation
At the end of each fiscal year, the Funds will reallocate from each Investor’s series capital account
(each a “Series Capital Account”) to the capital accounts of the General Partner and the Strategic
Investor an amount (the “Incentive Allocation”) equal to the applicable Incentive Allocation rate
(ranging from 17.5% to 20%) multiplied by the amount of the net capital appreciation allocated to
each Series Capital Account for such fiscal year. The Incentive Allocation is based on net realized
and unrealized gains for the year and subject to a traditional “high watermark” as set forth in the
Offering Documents.
The Incentive Allocation also will be made with respect to net capital appreciation attributable to
amounts withdrawn, amounts distributed, and amounts transferred (provided that such transfer
results in a change in the beneficial ownership of the interest transferred) and in connection with
the termination of the Funds.
The Firm, in its sole discretion, may elect to waive, reduce, or modify the Incentive Allocation for
any Investor, including any Sellaronda-Related Investors.
Other Fees and Expenses
Sellaronda is authorized to incur and pay in the name and on behalf of the Funds all expenses
which the Firm deems necessary or advisable.
In addition to the fees and compensation described above, the Funds generally bear their own
expenses, which include, without limitation, the following expenses incurred by or allocable to the
Funds:
• Organizational and offering expenses;
• Expenses associated with all investments and transactions considered, evaluated and/or
consummated by the Funds, or any such subsidiaries and special purpose vehicles, as well
as overall consideration and evaluation of such entities’ portfolio, including, without
limitation, those expenses incurred before the initial closing of the Funds, including,
without limitation, expenses associated with sourcing, negotiating, investigating,
researching, financing and structuring of investments and potential investments, whether
or not consummated, including, without limitation, data and research on-boarding,
ingestion, aggregation, and analysis, third-party research, data, analytics, modeling, risk,
structuring, pricing, execution and other third-party information, technology, hardware,
software or other technology systems, including, without limitation, installation and
maintenance, software and service fees (including, without limitation, the expenses with
respect to data, data feeds, subscriptions, expert networks, political intelligence providers
and reports);
• The costs of research-related computer hardware and software expenses, including, without
limitation, Bloomberg terminals and subscriptions and other market information systems,
as well as the costs of research management systems and corporate access tracking systems;
• The costs of the Firm’s portfolio management system and any other software used for
accounting and/or monitoring of the portfolio, including, without limitation, subscriptions
relating to, among other things, trading and order management systems and services;
• Expenses associated with holding, financing, monitoring, hedging, maintaining and
disposing of all investments and all transaction and other costs associated therewith,
including, without limitation, expenses associated with proxy research and voting services;
• Travel and related expenses associated with investments and potential investments;
• Professional fees associated with investments and potential investments, including, without
limitation, consulting, due diligence, accounting, valuation, financial, legal and other
advisory fees and expenses;
• Transaction fees, brokerage commissions, custodial fees, clearing and settlement charges
and similar fees and expenses associated with the acquisition, disposition and settling of
investments and potential investments, including, without limitation, fees, expenses and
commission paid in connection with outsourced trading;
• Expenses associated with legal and regulatory filings of the Funds, or such subsidiaries and
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