Item 5: Fees and Compensation
A. Advisory Fees and Compensation.
As described below, Venn Macro charges each Client an annual management fee equal to a
percentage of the assets managed by Venn Macro, and each Client pays a performance-based fee,
as applicable, equal to a percentage of its net appreciation, subject to certain limitations further
described below. Performance-based fees are calculated after deducting certain expenses, including,
without limitation, brokerage commissions, management fee, and research costs (as more fully
described below).
Generally speaking, Venn Macro is expected to receive a quarterly management fee (the
“Management Fee”) from each Client at a rate of between 0.25% (1.0% per annum) and 0.5% (2.0%
per annum) of the net asset value of assets under its management attributable to such Client.
Venn Macro is expected to receive an annual performance-based compensation from each Client,
equal to between 10% and 20% of the net capital appreciation attributable to such Client’s account
for the preceding fiscal year. See Item 6 for a further discussion of the performance-based
compensation.
There may be different or negotiated fee schedules and other terms negotiated between Venn Macro
and a Client. In addition, affiliates of Venn Macro, partners and employees (and former partners
and former employees) of Venn Macro, immediate family members of such persons, trusts or other
entities primarily for such persons’ benefit or for charitable purposes, friends and strategic investors
may be granted a waiver with respect to the management fees and the performance-based fees, at
the discretion of Venn Macro.
B. Deduction of Fees
Fees payable by a Client to Venn Macro are billed to the Client.
C. Expenses.
In addition to the fees and compensation described above, each Client bears the expenses incurred
in connection with its Account as more fully described in the Advisory Agreement with Venn
Macro. The expenses that may be borne by the Accounts may include, but are not limited to:
investment-related expenses (e.g., investment banking, valuation, broken deal expenses and other
transactional charges, fees or costs, research-related expenses, including, without limitation, news
and quotation equipment and services, market data services (e.g., Reuters) and/or portfolio risk
management services); brokerage commissions; clearing and settlement charges; custodial fees;
interests expenses; fees of pricing, data and exchange services; valuation firms and financial
modeling services; accounting and tax advice and preparation expenses; market information
systems and computer software and information expenses; the Management Fee and Performance
Fee; any extraordinary expenses (including indemnification costs and expenses); any and all taxes
(including entity-level taxes) and governmental fees or other charges payable by or with respect to
or levied against the Account, its investments or the Client, or to Federal, state or other
governmental agencies, domestic or foreign; and other similar expenses. For the avoidance of doubt,
“similar expenses” refers to any expenses that are similar in type and nature to the expenses
described in the previous sentence. All or a portion of any of any soft dollar items may be paid for
using soft dollars generated by each Account as discussed in Item 12.
If any of the above expenses are incurred by more than one Client, such expenses will be allocated
among the Accounts in proportion to the size of the investment made by each in the activity or entity
to which the expense relates, or in such other manner as Venn Macro considers fair and reasonable.
We may, in our sole and absolute discretion, bear any of the expenses described above; provided
that, if we bear any such expenses, we will not be required to continue to bear such expenses and
may thereafter cause the Account to bear such expenses, in the manner described above.
See Item 12 for more detail on Venn Macro’s brokerage practices.
Existing and prospective Clients should refer to their respective advisory agreements for detailed
information with respect to the fees and expenses associated with the Account. The information
contained here is a summary only and is qualified in its entirety by such documents.
C. Prepayment of Fees.
In the majority of instances, the Management Fees are expected to be paid quarterly in advance and
in an instance of the advisory agreement being terminated, or a client withdrawal mid-quarter, the
pro rata portion of the Management Fee will be refunded to the Client. In some instances, and only
where specified in the underlying investment management agreement, fees may be paid quarterly
in arrears.
D. Additional Compensation and Conflicts of Interest.
Neither Venn Macro nor any of its officers, employees, or other affiliates accept compensation for
the sale of securities or other investment products.