ITEM 5 – FEES AND COMPENSATION
Item 5.A Describe how you are compensated for your advisory services. Provide your
fee schedule. Disclose whether the fees are negotiable.
All clients of Stonerise are qualified purchasers as defined in section 2(a)(51)(A)
of the Investment Company Act (“Qualified Purchasers”). In addition, each
Investor in the Funds must meet certain eligibility provisions: interests/shares in
the Funds are generally offered to (A) U.S. Investors who are (i) accredited
investors within the meaning of Regulation D of the Securities Act (“Accredited
Investors”) and (ii) Qualified Purchasers; and (B) non-U.S. Investors. Investors
and prospective Investors should refer to the offering documents for the Funds for
a detailed description of the fee schedules applicable to an investment in the
Funds.
It should be noted that prior to making the investment the fees paid by Investors
are negotiable.
Item 5.B Describe whether you deduct fees from clients’ assets or bill clients for fees
incurred. If clients may select either method, disclose this fact. Explain how
often you bill clients or deduct your fees.
Stonerise deducts fees applicable to the Funds (and Investors) directly from the
Funds’ assets. Clients and Investors do not have the ability to choose to be billed
directly for fees incurred.
In general, Stonerise receives a management fee (the “Management Fee”) based
on a fixed percentage of each Fund’s net assets and a performance allocation. The
Management Fee is payable quarterly in advance and the performance allocation
is generally made on an annual basis. It should be noted that Management Fee
and/or performance allocation may and have been waived by Stonerise or the
Board of Directors, as applicable, in certain cases. In particular, affiliated persons
of Stonerise are not subject to such fees/allocations.
It is critical that Investors refer to the relevant confidential offering
memorandum or other Governing Documents for a complete understanding
of how fees are paid to Stonerise. The information contained herein is a
summary only and is qualified in its entirety by such documents.
Item 5.C Describe any other types of fees or expenses clients may pay in connection
with your advisory services, such as custodian fees or mutual fund expenses.
Disclose that clients will incur brokerage and other transaction costs, and
direct clients to the section(s) of your brochure that discuss brokerage.
Stonerise pays all of its overhead expenses including rent, employee
compensation, employee benefits, furnishings, and certain office expenses.
Each Fund pays all other expenses attributable to the activities of the Fund, or of
Stonerise on behalf of each Fund, including, without limitation: (1) expenses
incurred in connection with the acquisition, monitoring, or disposition of Fund
investments (whether or not consummated), including loan fees, private
placement fees, sales commissions, appraisal fees, taxes, research expenses,
brokerage fees, and other transaction expenses; underwriting commissions and
discounts; legal, accounting, investment banking, consulting, information
services, and professional fees; and travel, communications, and all other
expenses related to investments or proposed investments; (2) expenses incurred in
connection with the carrying or management of Fund investments, including
interest and related expenses as well as custodial, trustee, record keeping, and
other administrative fees and expenses; (3) expenses incurred in connection with
any indebtedness of the Funds, including, without limitation, the costs of
establishing such indebtedness, the costs of monitoring compliance therewith, and
the costs of any placement, commitment, trustee, underwriting, and legal fees and
expenses; (4) attorneys’ and accountants’ fees and disbursements; (5) taxes and
other governmental charges levied against the Funds; (6) insurance, regulatory, or
litigation expenses; (7) administration fees and related costs; (8) the Management
Fee; (9) expenses incurred in connection with the preparation and delivery of
reports of the fund and any meetings with Investors; (10) each Fund’s pro rata
share of the costs and expenses of the Master Fund; and (11) other similar
expenses related to each Fund, as Stonerise determines in its discretion. Please
see the disclosure in Item 12 below as it relates to Stonerise’s brokerage activities.
It is critical that Investors refer to the relevant confidential offering
memorandum and/or other Governing Documents for a complete
understanding of expenses they may pay through an investment in the Funds.
The information contained herein is a summary only and is qualified in its
entirety by such documents.
Item 5.D If your clients either may or must pay your fees in advance, disclose this fact.
Explain how a client may obtain a refund of a pre-paid fee if the advisory
contract is terminated before the end of the billing period. Explain how you
will determine the amount of the refund.
As described in item 5.B, Management Fees applicable to Investors are paid
quarterly in advance.
As Stonerise does impose a Management Fee which is payable in advance and
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