Item 5: Fees and Compensation
The fees applicable to a Fund are set forth in detail in its respective Offering
Documents. A brief summary of such fees is provided below.
Management Fee
The Quarry is paid an investment management fee (“Management Fee”) calculated
as a percentage of the net asset value of each series or capital account of a Fund.
The Management Fee is prorated and payable as of the Subscription Date (see
Offering Documents) for any subscription by an Investor that is effective other than
as of the first day of a fiscal quarter. In the event of a redemption by an Investor
other than as of the last day of a fiscal quarter, the Investment Manager will return
overpaid fees to the Master Fund, and the Master Fund will pay to the Fund for
payment to, or credit to the interest of the relevant Fund, the redeeming Investor,
an amount equal to the pro rata portion of the Management Fee, based on the
actual number of days remaining in such fiscal quarter.
In the sole discretion of the Investment Manager, the Management Fee may be
waived, reduced or calculated differently with respect to the interest of any Investor,
including any Investment Manager-Related Investor.
Other Types of Fees or Expenses
The Funds is responsible for its allocable portion of a significant portion of (i) the
Investment Manager’s (and its affiliates’) expenses, including employee
compensation and start-up expenses incurred by the Investment Manager and its
affiliates prior to the launch of the Fund and (ii) the expenses of each Third-Party
Sub-Advisor (as disclosed and defined in the relevant Offering Documents), subject
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to the terms of and limitations in any relevant agreement with a Third-Party Sub-
Advisor.
Investors and prospective Investors should note that it would be impractical to list
every type of expense that is incurred or will be incurred over time, so the following
disclosure is intended to illustrate the nature of the expense pass-through structure.
The Fund bears its own expenses and its pro rata share of the Intermediate Fund’s
expenses, the Master Fund’s expenses and any trading vehicle’s expenses, including
the following: (i) the Management Fee; (ii) performance-based compensation paid
or allocated or reimbursed to Portfolio Managers (as disclosed and defined in the
relevant Offering Documents); fees and expenses related to obtaining research
(including any information technology hardware, software or other technology
incorporated into the cost of obtaining such research); brokerage and prime
brokerage fees, commissions and expenses; expenses relating to short sales;
clearing and settlement charges; custodial fees and expenses; bank service fees;
interest expenses and fees related to financings or refinancings; fees and expenses
of proxy research and voting services; and fees and expenses of third-party Portfolio
Managers, third-party investment professionals, including investment consultants
and investment bankers; (iii) organizational and reorganizational expenses; (iv)
operational expenses, including the following: fees and expenses related to
obtaining market data (including any information technology hardware, software or
other technology incorporated into the cost of obtaining such market data); due
diligence expenses including consulting and appraisal fees; travel expenses; fees and
expenses of third-party attorneys and accountants; fees and expenses relating to
information technology hardware, software or other technology (including costs of
software licensing, implementation, data management and recovery services and
custom development) used to research investments, evaluate and manage risk,
facilitate valuations, facilitate accounting functions, facilitate compliance with the
rules of any self-regulatory organization or applicable law (including reporting
obligations), facilitate and manage the order execution of Securities or otherwise
manage the Funds or any trading vehicle, such as Bloomberg terminals, portfolio
management systems, risk management systems and order management systems,
including expenses related to computers, equipment and technology;
communications expenses, including telephone/internet equipment and lines, cable
TV equipment and services, cellular equipment (i.e., smartphones), and any service
plans, associated repairs, parts and maintenance; fees and expenses of third-party
risk management products, models and services; (v) third-party administrative fees
and expenses; fees charged by the Investment Manager or its affiliates to provide
administration services to the Funds or any trading vehicle, and expenses incurred
directly by the Funds or any trading vehicle or the Investment Manager or its
affiliates in connection with the provision of administration services, including out-
of- pocket expenses (including travel, travel-related lodging and meal expenses); (vi)
overhead of the Investment Manager (including expenses such as rent (except for
rent paid for the New York City based firm headquarters), utilities, supplies,
secretarial expenses, stationery, charges for furniture, fixtures and equipment);
expenses, salaries, payroll taxes, fringe benefits (including 401(k) plans or other
similar retirement-related benefits), bonuses, expenses and fees paid or reimbursed
to all employees, including, without limitation, members of management (excluding
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the salary and bonus of the Key Person), consultants, subcontractors and agents,
and investment advisers engaged directly by the Fund and its affiliates, and expenses
relating to recruiting, retaining and supporting investment and non-investment
personnel, including, without limitation, salaries, fringe benefits and bonuses; (vii)
expenses related to the research, due diligence and monitoring of actual and
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