Item 5 – Fees and Compensation
A. Fee Schedule
The fees and compensation payable to Wolfe are negotiable and vary among its Clients. However,
the range of compensation is generally as follows:
1. Management Fee
Wolfe typically receives a quarterly asset-based management fee calculated as a percentage of each
Investor’s capital account, payable quarterly in advance. The management fee varies among Clients
and among different investors in the Clients as described in the Client’s Constituent Documents, but
the range is generally between 1% and 1.5% per annum. Wolfe may, in its sole discretion, reduce,
waive or calculate differently the management fee with respect to any Investor.
Investors who are not “qualified clients” as defined in Rule 205-3 of the Investment Advisers Act of
1940 (“Advisers Act”) may be charged a higher management fee in lieu of the incentive allocation
(described below), pursuant to the terms of a different class of Interests offered by Clients to such
non-qualified clients. The management fee payable by such non-qualified clients is generally up to
0.5% (a 2.0% annual rate).
2. Incentive Allocation
Wolfe receives an incentive allocation from certain Clients equal to a percentage of the net income
allocated to each Investor for the year, but only to the extent net income allocated to that Investor
exceeds any cumulative losses that were allocated to that Investor for earlier periods and that have
not been recovered (a “high water mark”). This incentive allocation varies among Clients and among
different investors in the Clients as described in the Client’s Constituent Documents, but the range is
generally between 10% and 17.5% per annum and is typically made at the end of each calendar year.
Third Coast does not pay an incentive allocation.
The incentive allocation only be charged to accounts of those Investors who are “qualified clients” as
defined in Rule 205-3 of the Advisers Act.
3. Fee Comparison
The expenses of the Client, including the management fee and incentive allocation may constitute a
higher percentage of average net assets than would be found in other investment vehicles or with
other investment advisers.
B. Payment of Fees
Management fees, incentive allocations and third-party fees (discussed below) are deducted from
Client assets. Management fees, which are paid in advance, are withdrawn at the beginning of the
quarter. Incentive allocations are allocated as of the last business day of the calendar year and as of
any date on which an Investor makes a withdrawal or receives a distribution from such Investor’s
capital account(s).
Part 2A of ADV:
Wolfe Advisors, LP Brochure
C. Third-Party Fees
The Client shall pay such costs and expenses as Wolfe shall reasonably determine to be necessary,
appropriate, advisable or convenient to realize the Client’s investment objective, including but not
limited to: (i) management fees; (ii) all general investment expenses; (iii) all operating and
administration expenses, including but not limited to, all custodial fees, accounting, brokerage
commissions, clearing fees, borrowing charges, interest on margin and other borrowings, and taxes
incurred in connection with the Client’s account; and (iv) such other expenses as may be set forth in
the Constituent Documents.
Wolfe’s fees are exclusive of brokerage commissions, transaction fees, and other related costs and
expenses which shall be incurred by the Clients. Such charges, fees and commissions are exclusive
of and in addition to Wolfe’s management fee, and Wolfe shall not receive any portion of these
commissions, fees, and costs.
Please see Item 12 of this Brochure regarding brokerage.
D. Prepayment of Fees
Wolfe does not expect Clients to prepay fees. Wolfe will pro rate the management fee for Interests
held for less than a full quarter.
E. Outside Compensation for the Sale of Securities
Neither Wolfe nor its supervised persons accepts compensation for the sale of securities or other
investment products outside of its association with Wolfe.
The foregoing discussion in Item 5 represents Wolfe’s basic compensation arrangements. The
management fees and incentive allocations described above are structured to comply with
Rule 205-3 under the Advisers Act. Fees and other compensation are negotiable in certain
circumstances and arrangements with any particular Investor may vary. Although Wolfe
believes its fees are competitive, lower fees for comparable services may be available from
other investment advisers.