Item 5 Fees and Compensation
A. Advisory Fees and Compensation
The Adviser, either directly or indirectly through an affiliated entity, is compensated through the
payment of a management fee by each of the Funds and may be compensated through the payment
of a management fee by SMAs, as described below.
In addition, the Adviser or the general partner of each of the Funds may receive, subject to certain
restrictions, a performance fee or performance allocation based on the net appreciation of the assets
of each client, as described below.
Funds: Management Fees
The Adviser generally is entitled to receive management fees at a quarterly rate which ranges from
0.125% (0.50% per annum) to 0.375% (1.5% per annum) of the net asset value of the capital account
balance of each limited partner of a domestic fund organized in limited partnership form or of the net
asset value of the outstanding shares of an offshore fund organized in corporate form.
The timing of the payment of management fees differs between Funds. With respect to SpringOwl
Special Opportunities Fund LP, SpringOwl Special Opportunities Fund (Offshore) SPC, and Doha
Partners I LP, management fees are calculated and payable quarterly in advance as of the beginning
of each calendar quarter. With respect to the Cumberland Partnerships, management fees are
calculated and payable quarterly in arrears. Fees are deducted from the assets of each Fund. Capital
contributions accepted after the commencement of a calendar quarter will be subject to a pro-rated
management fee reflecting the time remaining during the quarter. Investors who withdraw from the
Funds do not receive refunds of any fees paid in advance, if any.
Funds: Performance Allocations and Fees
With respect to the Funds, the general partner of each Fund receives a performance-based allocation
calculated on a percentage, ranging from 10% to 25%, of either (i) the net capital appreciation
allocated to the capital accounts of limited partners in each Fund that is a limited partnership
(excluding, in some cases, special limited partners) or (ii) the net income attributable to each share
of each class and series in each Fund that is a Cayman Islands exempted company registered as a
segregated portfolio company, for each calendar year, payable at the end of each year, which in some
cases must exceed an annual hurdle amount and which may be subject to a high water mark or loss
carry forward. Net capital appreciation generally includes both realized gains and losses and
unrealized appreciation and depreciation of securities held in a Fund portfolio. The performance fee
or allocation is also payable with respect to any amount that is withdrawn from a Fund effective as
of the date of withdrawal.
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Under certain circumstances, a fund managed by the Adviser may invest in another fund managed
by the Adviser, or an SMA may invest in a fund managed by the Adviser. In order to avoid any
double payment of fees, the recipient fund will not charge any management fee or incentive allocation
on the investing fund’s investment. Any withdrawal or transfer by the investing fund from the
recipient fund generally will be permitted on the same terms as other limited partners and will be
subject to the same limitations applicable to withdrawals (e.g., notice, suspension of withdrawals,
etc.).
In the sole discretion of the Adviser, the performance-based allocation or fee may be waived, reduced
or calculated differently with respect to certain investors.
Funds: Side Letters
The Adviser may from time to time enter into letter agreements or other similar agreements
(collectively, “Side Letters”) with one or more investors or shareholders of a Fund that provide such
investor or shareholder(s) with additional and/or different rights (including, without limitation, with
respect to management fees, the performance allocations, withdrawals, access to information,
minimum investment amounts and liquidity terms) than such shareholder(s) or investors have
pursuant to general terms of such Fund. The Adviser will not be required to notify any or all of the
other investors or shareholders of any such written agreements or any of the rights and/or terms or
provisions thereof, nor will the Adviser be required to offer such additional and/or different rights
and/or terms to any or all of the other investors or shareholders.
SMAs: Management and Performance-Based Fees
Management and performance-based fees for SMAs are subject to negotiation and established
pursuant to each SMA’s investment management agreement. Generally, the investment management
agreements are terminable upon receipt by either party from the other of prior written notice of
termination. Certain SMAs may be charged no or differently calculated management fees and
performance-based fees. SMAs are invoiced pursuant to each SMA’s investment management
agreement and fees are payable, quarterly or as otherwise specified, in arrears, pursuant to each
SMA’s investment management agreement.
Sidecar Vehicles
The Adviser may receive carried interest distributions from sidecar vehicles upon the complete
distribution of the respective portfolio holdings as described in the respective investment
management agreements.
B. Additional Fees and Expenses
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Funds
In addition to advisory (management and performance) fees, the Funds are responsible for additional
fees and expenses. These are comprised of i) fees and expenses incurred as part of the Funds’
respective investment programs, including brokerage commissions; clearing fees; fees, interest and
other costs in connection with margin accounts or other borrowings; borrowing charges on securities
sold short; custodial fees; bank service fees; costs of any outside appraisers, accountants, attorneys
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