ITEM 5: FEES AND COMPENSATION
Management Fees & Performance Allocations
Fundamental Signal Absolute Alpha L/S LP generally pays to Systematic Portfolios, as of the first business day of
each calendar quarter (or the first business day after the applicable closing, with respect to a capital account established
for a new Investor or an additional capital contribution from an existing Investor on a day other than the first business
day of a calendar quarter) in advance, a management fee (the “Management Fee”) equal to 0.4375% (1.75% per
annum) of the balance of capital account as of such date, which fee is debited against that capital account. The
Management Fee is calculated and paid in advance but will be amortized monthly over the quarter for which the
Management Fee is paid. The Management Fee will be prorated with respect to any capital contribution effective other
than as of the first business day of a calendar quarter. In the event of a withdrawal by an Investor other than as of the
last day of a calendar quarter, a pro rata portion of the Management Fee, based upon the actual number of days
remaining in such quarter, will be repaid by Systematic Portfolios to the Fund for credit to the applicable capital
account(s). The Management Fee may be waived or reduced by the Systematic Portfolios with respect to any Investor
or capital account, and Systematic Portfolios may assign its right to receive the Management Fee, in whole or in part,
to any person, including an affiliate of Systematic Portfolios.
Subject to the terms, limitations and conditions set forth in the Fundamental Signal Absolute Alpha L/S LP limited
partnership agreement (including application of a “high water mark,” as summarized in that agreement), at the end of
each fiscal year (and at such other times set forth in the partnership agreement), a performance-based profit allocation
(collectively, the “Performance Allocations”) equal to 20% of the net profits allocated to each Investor capital account
for each fiscal year (or other applicable period) is reallocated from each capital account to the capital account of the
Fund’s general partner.
Certain Investors have negotiated or may negotiate fee reductions or other provisions as part of side letter terms and
provisions such as lower Management Fees and/or Performance Allocations, information/transparency rights not
afforded to other Investors, most favored nations status and/or other preferential rights or terms. Except as otherwise
agreed, Systematic Portfolios is not obligated to waive or reduce Management Fees for any other Investor when
offering waivers or reductions to a particular Investor. Systematic Portfolios generally is not required to notify any or
all of the Investors of any side letter or any of the rights and/or terms or provisions thereof, nor is it generally required
to offer those additional and/or different rights and/or terms to any or all of the other Investors.
Systematic Portfolios does not have a specified fee schedule for separate Client accounts. The Management Fee and
Performance Allocation for other Client accounts have been or will be separately negotiated.
Fund Expenses
Generally, the Systematic Fund will pay or otherwise bear all of the direct and indirect fees, costs, expenses and other
liabilities or obligations resulting from or arising in connection with the Fund’s operations (collectively, “Fund
Expenses”). To the extent that the general partner, the Systematic Portfolios, the Principal and/or any of their
respective affiliates pay or otherwise bear any Fund Expenses, they will be entitled to reimbursement by the Fund
(provided that any such party may voluntarily elect to bear and not be reimbursed for any Fund Expenses in its
discretion). The general partner generally expects to allocate Fund Expenses among Investors in proportion to their
Capital Account balances. Notwithstanding the foregoing, if the general partner determines that it is equitable to
specially allocate any Fund Expenses to an Investor or group of Investors, the general partner will have the authority
to make that allocation.
Fund Expenses include, among other items, the following:
• all organizational expenses;
• all expenses related to the operation or activity of the Fund such as tax preparation fees (including, without
limitation, any such fees related to the preparation of tax returns and Schedules K-1), governmental fees and
taxes (or any other governmental charges levied against the Fund), administrative, custodial and prime
brokerage fees and expenses, communications with Investors and ongoing legal, accounting, auditing,
administration, appraisal, bookkeeping, consulting and other professional fees and expenses, including for
litigation, and preparation of the Fund’s financial statements and reports;
• all Fund costs, expenses and charges incurred in connection with the investment and trading activities of the
Fund, including, without limitation, brokerage commissions, mark-ups, placement agent fees, custodial fees,
clearing and settlement charges and other transaction costs to brokers and breakup fees in connection with
any Fund investments and fees and expenses related to unconsummated co-investments;
• professional and other advisory and consulting expenses incurred in connection with investment due
diligence, monitoring or the assertion of rights or pursuit of remedies (including, without limitation, pursuant
to bankruptcy or other legal proceedings, or participation in informal committees of creditors or other security
holders of an issuer);
• travel expenses and other costs incurred in connection with the business and investment activities of the Fund
and the investment due diligence process (including, without limitation, transportation, meals, lodging,
international data and roaming, entertainment and incidentals);
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