Item 5: Fees and Compensation
Spruce charges most of its clients an annual investment management fee based on the following
schedule:
Option 1: Diversified Portfolio with Management Fee Only*
First $50 million: 0.75% per annum
Next $50 million: 0.40% per annum
Next $100 million: 0.20% per annum
Above $200 million: Negotiable
* Subject to minimum annual fee of $75,000
Spruce imposes a minimum annual fee of $100,000, which may be waived or reduced at the General
Partners discretion.
Spruce charges fees monthly and/or quarterly in arrears based on the account value at the end of the
prior month/quarter. Most clients authorize Spruce to deduct fees automatically from their custodial
accounts, but clients may request that Spruce send monthly invoices to be paid by check. All fees
are negotiable. Clients may also elect to have their fees calculated based upon the market values
calculated by their custodian or by Spruce. Accounts initiated or terminated during a billing period
will be charged a prorated fee based on the time Spruce managed the account.
Management fees charged by Spruce are separate and distinct from, and in addition to, any fees and
expenses charged by investment managers recommended to clients by Spruce and fees charged in
connection with an investment in a third-party pooled investment vehicle, including mutual funds
and private investment funds, and other similar investment products (e.g., exchange–traded funds),
which may be recommended to clients. A description of these and other expenses are available
from the investment manager, in each mutual fund’s prospectus, or the applicable fund governing
documents. In addition, clients bear custodial fees, brokerage and other transaction costs. Please
refer to the Brokerage Practices section of this Brochure for details on Spruce’s brokerage
arrangements.
The Funds will also bear all of their operating costs which often includes a pro rata share of the
respective Master Fund's expenses, including investment expenses, including, without limitation,
the Management Fee, fees and expenses related to the purchase and sale of securities (such as
brokerage commissions; expenses relating to short sales; clearing and settlement charges; custodial
fees; bank service fees and interest expenses; borrowing costs and investment-related travel
expenses); due diligence costs, investment banking fees, sourcing or finder's fees (which may
include a management fee component and/or a performance fee component); legal expenses;
professional fees (including, without limitation, expenses of consultants and experts) relating to
investments; research expenses (including, without limitation, fees and expenses related to software,
hardware and data related to risk assessment, risk monitoring and other investment research and
monitoring and fees and expenses of consultants and experts hired by Spruce to provide advice or
services related to risk assessment, risk monitoring and other investment research and monitoring,
investment-related travel and lodging expenses;); professional fees (including, without limitation,
expenses of consultants, valuation firms and other experts); the costs of organizing and maintaining
any Alternative Investment Vehicles; the costs and expenses incurred in connection with any
indebtedness of the Fund and its subsidiaries, including, without limitation, the costs of establishing
such indebtedness; accounting expenses (including the cost of accounting software or hardware
packages); auditing and tax preparation expenses; costs of printing and mailing reports and notices;
taxes; corporate licensing; expenses related to preparing and making regulatory and compliance
filings associated with the Fund’s investment activities (including, without limitation, filing
preparation and fees, software and systems in connection with such filings and expenses of service
providers such as consultants and advisers) including Form PF; organizational expenses; fees to the
Administrator; market data costs; costs of printing and mailing reports and notices; expenses
relating to the offer and sale of Interests; liability insurance and related insurance for the benefit of
the General Partner, Spruce or their Affiliates (including the Fund's pro rata portion of any
applicable insurance premiums); indemnification expenses; corporate licensing fees and other
professional fees; bank service fees; withholding and transfer fees; entity-level taxes; other expenses
related to the purchase, monitoring, sale, settlement, custody or transmittal of Portfolio Investments;
loan administration costs; extraordinary expenses; and other similar expenses related to the Funds.
The fees and expenses applicable to each Fund are set forth in detail in each of the Fund's Governing
Documents. If a Fund and one or more other Funds, or other clients of Spruce or its affiliates
manage, may be responsible for some or all of a particular cost, Spruce or an affiliate may allocate
the cost among all those entities, clients, and Funds in its discretion. The Funds may amortize
organizational costs over the first 60 months.
In the case of a Managed Account, fees and expenses are defined and detailed in the investment
management agreement and are subject to negotiation. The fees charged to any given Client may
be higher than fees charged to other Clients for advisory services to accounts of comparable size
and investment objectives.
Spruce Direct Investment Fund I LP has an imbedded 1.00 % annualized management fee as per
the terms of its organizational documents that is assessed on the amount of an investor’s contributed
capital. A Spruce Direct Investment Fund I LP investor’s contributed capital balances are excluded
from Spruce Advisory Fees for investors who have an Investment Management Agreement with
Spruce. As previously mentioned, in conjunction with the launch of SDIF and a related transaction
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