The Management fees charged by The Pabrai Funds are strictly performance-based. Simplistically, the first 6% of annual returns go to investors. The returns generated above 6% are split in a 3:1 ratio between investors and fund management (Dalal Street, LLC.). All fees are subject to high-water marks. That is, a given fund must be at an all time high for any fee to be payable.

Fund Expenses are mostly legal, administration, accounting and audit fees. As the assets under management scale, these expenses are expected to become a diminishing percent of total assets under management. Fund management is very focused on keeping fund expenses down to a minimum. Virtually all expenses outside of legal, accounting and audit are absorbed by the funds’ Managing Partner. Some of these expenses not charged to the Pabrai Investment Funds include:

• Rent for Facilities and Infrastructure.
• Postage, Copying and Office Supplies.
• Research Reports and Subscriptions.
• Annual meeting and Annual Dinner for Limited Partners.
• Communication Expenses (Internet Connection, Phone, Fax)
• Any expenses associated with asset gathering.
• Website Development and Maintenance.