Fees and Compensation
The fees and compensation from the Funds are set forth in each Fund’s offering memorandum.
Signpost charges the Funds an asset-based investment management fee. In addition, each Fund
may pay a performance based allocation based on net capital appreciation (over the
management fee and where applicable, a “Hurdle Rate” as discussed below, and subject to a loss
carryforward mechanism).
Management Fee and Incentive Allocation – Signpost Capital Funds
The Signpost Capital Funds offer two fee arrangements to investors. Investors pay a
management fee generally in an amount equal to either 1.50% or 2.00% per annum of the net
assets of the Signpost Capital Funds. Signpost or its affiliate, Signpost Capital, LLC, may also
receive an annual performance-based incentive allocation from the Signpost Capital Funds
generally in an amount equal to 20% of capital gains on or capital appreciation of the assets of
the Signpost Capital Funds, subject to a loss carryforward provision. Investors are only
permitted to redeem shares on or after the one year anniversary of their investment.
Additionally, investors paying the 1.50% per annum management fee are subject to a quarterly
investor-level gate on redemptions occurring after the one-year anniversary.
The disclosed management fees and performance-based incentive allocation of the Signpost
Capital Funds apply to a typical Fund Investor that invested/invests in the Signpost Capital
Funds after November 30, 2012. Fund Investors that invested in the Signpost Capital Funds as
of August 1, 2012, but before November 30, 2012, are subject to a different management fee
and a lower performance-based incentive allocation.
Management Fee and Incentive Allocation – Signpost Capital Long Only Funds
The Signpost Capital Long Only Funds pay a management fee amount equal to 1.00% per annum
of the net assets of the Signpost Capital Long Only Funds.
If in any fiscal year the net return of an investment in the Signpost Capital Long Only Funds
(taking into account both realized and unrealized gains and losses but prior to any incentive
allocation) exceeds the "Hurdle Rate" (as defined below), Signpost or its affiliate, Signpost
Capital, LLC, will receive an incentive allocation at the end of such fiscal year in an amount
equal to 20% of such excess; provided, however, that no incentive allocation for a particular
investment will be made until the cumulative return for that investment from all prior fiscal
periods since an incentive allocation was last incurred, exceeds the cumulative Hurdle Rate for
such periods (the "Hurdle Carryforward"). For the avoidance of doubt, an investment may incur
an incentive allocation even when the performance of such investment is negative.
The "Hurdle Rate" means, with respect to a particular investment in the Signpost Capital Long
Only Funds during a calculation period, the amount that such investment would have earned or
lost had such investment achieved a return equal to that of the MSCI World Index (measured
with dividends reinvested net of withholding taxes) during such period.
Signpost does not accept any other compensation in connection with the sale of securities or
other investment products.
The management fee is charged each quarter in advance based on the value of the assets of
each Fund as of the first business day of the quarter. A pro rata portion of the management fee
will be paid in advance for Fund Investors investing in a Fund during a calendar quarter, based
on the actual number of days remaining in the quarter. A pro rata portion of the management
fee will be rebated to a Fund Investor that redeemed from a Fund during a calendar quarter,
based on the actual number of days remaining in the quarter. Signpost receives the
Management Fee each quarter by instructing each Fund’s custodian to deduct the applicable
management fee from the Fund’s account.
The management fees and incentive allocations described above may be waived for Fund
Investors that are members, employees or affiliates of Signpost or Signpost Capital, LLC,
relatives of such persons, and for certain large, strategic or other investors.
In addition to the management fee and incentive allocation described above, Fund Investors
will also be subject to additional fees and expenses such as legal, compliance (including
expenses relating to compliance or regulatory filings made with respect to the Funds’ assets,
and fees of third party compliance providers), administrator, audit (including custody audit)
and accounting expenses (including third party accounting services); shareholder proxy voting
services (if any); organizational expenses; portfolio advisory board expenses; investment
expenses such as commissions, research fees and expenses (including research related travel);
interest on margin accounts and other indebtedness; borrowing charges on securities sold
short (if any); custodial fees; bank services fees; Fund-related insurance costs (including D&O
and E&O insurance for Signpost, Signpost Capital, LLC and outside directorship liability, as
applicable); Fund-related state or local filing fees or taxes; directors’ fees and expenses (if any);
portfolio risk and performance analysis software (including related hardware licensed from
third-parties to host such software); and other expenses described in each Fund's offering
memorandum.
The Funds will reimburse Signpost for any expenses it pays on the Funds’ behalf. In addition,
certain common expenses between Signpost and the Funds, such as work performed by third
party compliance providers, may initially be billed to Signpost but will ultimately be allocated
between Signpost and the Funds in accordance with Signpost’s expense allocation policy
regarding common expenses.