Item 5: Fees and Compensation
The fees applicable to each of the Funds are set forth in detail in the corresponding Offering
Documents. A brief summary of such fees is provided below.
Management Fee
As compensation for investment management services rendered to the Funds, Sphera
Healthcare US is paid an investment management fee (“Management Fee”) per annum based
on the net asset value of the Funds. Management Fees are not paid in advance.
A complete list of share classes issued by the Funds since inception and the corresponding
fees for each class (including the manner and calculation of Management Fees) are detailed
in each Fund’s respective Offering Documents. The Management Fees and other fees
described herein are generally subject to modification, waiver or reduction by Sphera
Healthcare US in its sole discretion, both voluntarily and on a negotiated basis with selected
Investors, which may not be disclosed to other Investors in the same Fund. The fee structures
described herein may be modified from time to time. Fees may differ from one Fund to
another, as well as among Investors in the same Fund.
Certain investors in the Funds that are employees, business associates and other “friends and
family” of the Firm, its affiliates or their personnel (“Sphera Investors”) will not typically pay
Management Fees in connection with their investment in a Fund. Notwithstanding that
Sphera Healthcare US Inc. Form ADV Part 2A Brochure
Sphera Investors will generally not pay Management Fees, Sphera Investors will generally pay
for their pro rata share of certain Fund expenses.
Other Types of Fees or Expenses
The Firm is responsible for and shall pay, or cause to be paid, all of their own ordinary
administrative and overhead expenses, including, without limitation, all costs and expenses
related to rent, furniture, fixtures, office equipment, office supplies, clerical expenses and all
salaries, bonuses and benefits paid to, or on behalf of, personnel of the Firm to the extent set
forth in the Funds’ Offering Documents.
The Funds will pay for all reasonable expenses related to the Funds’ organization, including,
but not limited to, legal and accounting fees, government filing fees and printing and mailing
expenses, syndication expenses, costs and expenses of the preparation of the Funds’ legal
agreements, the Offering Documents, and other documents to be furnished by the Funds or
the Firm to prospective investors and other expenses of the initial offering of Units (as defined
in the Offering Documents) (“Organizational Expenses”).
In addition to the Organizational Expenses described above, the Funds will bear the ongoing
expenses relating to the operation of the Funds (or where necessary and appropriate, the Firm
or the Fund general partner shall be reimbursed by the Funds for any such costs and
expenses). Expenses include, but are not limited to, (i) expenses of the continuing offering of
Units or Interests or Shares (as defined in the Offering Documents) (including, for the
avoidance of doubt, fees and expenses in connection with printing and other expenses
associated with the admission of an Investor, any regulatory filings (such as blue sky filings
and the European Alternative Investment Fund Managers Directive related expenses), but not
including the Firm or Fund general partner’s travel and lodging expenses relating to marketing
the Units or Interests or Shares), (ii) all costs and expenses related to investment and
divestment transactions of the Funds, including costs of examination, sourcing and monitoring
of prospective investments, whether or not consummated (including legal expenses incurred
in connection with claims or disputes related to unconsummated investments and third-party
investment sourcing fees), (iii) any withholding, transfer or other taxes imposed on the Funds
or any of their partners, including without limitation expenses for tax return preparation and
reporting that are not allocated specifically by the Firm or the Fund general partner to and
paid for by a particular Investor, subject, in each case, to the terms of the Offering Documents,
(iv) any governmental and regulatory fees imposed on the Funds, (v) any financing,
commitment, interest and other borrowing costs payable by the Funds and/or other bank
service fees, and all costs and expenses related to the hedging transactions employed by the
Funds, including expenses relating to borrowing securities to be sold short, (vi) litigation and
indemnification expenses and any legal fees and costs (including settlement costs) arising in
connection with any litigation or regulatory investigation instituted against the Funds, the
Firm or the Fund general partner in its capacity as such, (vii) the cost of the audit of the Funds’
financial statements and the preparation of their tax returns and tax compliance, (viii) the fees
and expenses of the Funds’ counsel in connection with advice directly relating to the Funds’
legal affairs, (ix) the costs of “directors and officers” and professional liability insurance and
of professional liability insurance for the Funds, a Fund general partner and their respective
officers, employees, advisers and agents, members of the Advisory Board (as defined in the
Offering Documents) and members of the board of directors of Sphera Global Healthcare GP
Ltd (acting where relevant as the general partner of the general partner of the general partner
of a Fund), (x) fund administrator fees (such as portfolio and investor accounting, tax reporting
and investor servicing cost), and/or the fees of any transfer agent and registrar, (xi) costs
Sphera Healthcare US Inc. Form ADV Part 2A Brochure
incurred in respect of the preparation, audit and distribution of annual and other reports and
accounts, (xii) costs of any outside appraisers (including third-party valuation agents for
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