Fees and Compensation
Compensation and Fee Schedules
All investors should review the Governing Documents for each Valens Fund in
conjunction with this brochure for more complete information on the fees and
compensation payable with respect to a particular Valens Fund.
Valens or an affiliate of Valens ordinarily receives an annual management fee equal to a
percentage (generally 1.5% to 2%) of the balance of each Valens Fund investor’s capital
account. The management fee is generally payable monthly in advance. In addition,
Valens or an affiliate of Valens ordinarily receives an annual performance allocation
payable after the end of each year equal to a percentage of net realized profits with
respect to such year (generally 20% to 30%), subject to a loss carryforward or high water
mark provision.
Any performance-based fees or allocations will only be charged to qualified clients as
defined under Rule 205-3 of the Investment Advisers Act of 1940, as amended (the
“Advisers Act”).
Valens and its affiliates provide investment advisory services to certain subsidiaries of
the Valens Funds. Investors in the Valens Funds do not pay additional fees with respect
to assets held by or invested through such subsidiaries.
Other than as stated above, all fees are generally non-refundable (that is, once the
management fee is paid and the performance allocation is allocated, such amounts will
not be refunded to investors). In addition, in certain circumstances, fees may be
negotiable.
In certain circumstances, the advisory fees payable to Valens or its affiliates by individual
clients or investors in each Valens Fund may be negotiable. Investors and prospective
investors in each Valens Fund should refer to the Governing Documents of the applicable
Valens Fund for more complete information on the advisory fees charged by Valens.
Deduction of Fees
Valens is authorized under the Governing Documents of each Valens Fund to charge and
deduct advisory fees directly from the assets of the Valens Funds, at the times and in the
amounts described above.
Other Fees and Expenses
In evaluating and entering into transactions on behalf of its clients, Valens bears certain
expenses including, but not limited to certain overhead expenses of its clients, as well as
investment research expenses; and costs of any outside appraisers, accountants, attorneys
or other experts or consultants engaged by Valens in connection with specific
investments (including transactions that fail to close). The clients of Valens are
responsible for all costs and expenses incurred after closing of transactions including but
not limited to investment research expenses; costs of any outside appraisers, accountants,
attorneys or other experts or consultants engaged by Valens in connection with specific
investments, clearing fees; interest and other costs in connection with margin accounts or
other borrowings; borrowing charges on securities sold short; custodial fees; bank service
fees; and any legal fees and costs arising in connection with any litigation or regulatory
investigation instituted against Valens or any client. The clients of Valens also pay all of
their operating costs, including administrative, legal, accounting, auditing and insurance
costs and expenses, as described in greater detail in the Governing Documents for each
Feeder Fund.
Client of Valens will incur brokerage expenses as described below under “Brokerage
Practices”.
Timing of Payments
Please see “Fees and Compensation” above.
Transaction-Based Compensation
An affiliate of Valens may receive a structuring fee for arranging and monitoring an
investment by a client of Valens. An affiliate of Valens may also receive from time to
time a payment from the companies in which the clients may invest in. However, these
fees are no longer relevant to the Valens Funds as they are no longer making new
investments (except for certain follow-on investments to existing positions).
Performance-Based Fees and Side-by-Side Management