Aduro Advisors Controller Case Study

School: University of California, Irvine - Course: PH 2 - Subject: Accounting

ADURO ADVISORS CASE STUDY - CONTROLLER At Aduro we support a dynamic and diverse portfolio of fund managers with unique personalities, preferences, and technical needs; our work can be fast-paced and ever-changing. An Aduro Controller should thrive in this environment and deftly balance between operational practicality and technical excellence while providing thoughtful and professional service to our clients. Below are some scenarios indicative of the type of work associated with the Controller role. Please follow the prompts to work through each exercise. Beyond a 'right' answer, we are also interested in your thought process and how you would approach each item. 1.Below is an excerpt of the expense section of a client's fund Limited Partnership Agreement. Based on this excerpt, how would you classify each expense below (fund expense, management company expense, organization cost)? a.Aduro's fund administration expense related to the fund b.Legal invoice pertaining to a dispute with a former employee c.Invoice related to the fund's 2018 annual audit d.Legal invoice pertaining to due diligence on a potential investment e.Invoice related to the management company's 2018 tax returns f.Travel costs related to investment diligence g.Legal invoice to form the fund entity and create legal documents including the Fund Limited Partnership Agreement h.Investment Associate's wages and benefits Expenses. (a)From the management fee, the Management Company shall bear the following normal overhead and administrative expenses incurred by the Management Company or its Affiliates in connection with the management of the Partnership:(i) salaries and wages of the employees of the Partnership, the General Partner, the Management Company and their respective Affiliates; (ii) rentals payable for space used by the Management Company or the Partnership; and (iii) expenditures for equipment used by the Management Company or the Partnership. (b)The Partnership shall bear all costs and expenses incurred by the Partnership, the General Partner, the Management Company and their respective Affiliates on behalf of the Partnership (except for those expenses borne by the Management Company to the extent set forth in Section 5.2(a)), including all costs and expenses incurred in respect of:the purchase, holding or Sale or Exchange or other disposition of Securities, including reasonable private placement and finder's fees in contemplation of an investment

by the Partnership paid to persons other than the General Partner or members of the General Partner or any of their Affiliates; real property or personal property taxes on investments; brokerage fees; taxes applicable to the Partnership on account of its operations; fees incurred in connection with the maintenance of bank or custodian accounts; legal, audit, and other expenses incurred in connection with the registration of the Partnership's Portfolio Securities under the Securities Act; legal and accounting fees and expenses incurred in connection with the purchase or Sale or Exchange or other disposition of Securities (whether or not such purchase, Sale or Exchange or other disposition is ultimately consummated); and fees and expenses of investment advisers and independent consultants incurred in investigating and evaluating investment opportunities. The Partnership shall also bear the fees of the independent certified public accountant referred to in Section 9.1 incurred in connection with the annual audit of the Partnership's books and the preparation of the Partnership's annual tax return, costs of independent appraisers, legal expenses of the Partnership, accounting expenses paid to third parties for the maintenance of the Partnership's books and records and preparation of reports, premiums associated with insurance, if any, to insure against any claims that could be made directly against the Partnership, the General Partner, the Management Company or any Indemnified Persons or that could give rise to a Partnership liability pursuant to Section 10.14 (the purchase of such insurance, if any, shall be at the discretion of the General Partner), preparation and other expenses associated with annual and other reports to the Partners, costs associated with any Partnership information meetings, expenses of the Advisory Board meetings and reimbursement of reasonable out-of-pocket costs for the Advisory Board members and the General Partner to attend such meetings, and all expenses that are not normal administrative and overhead expenses provided for under Section 5.2(a), including all legal fees and expenses incurred in prosecuting or defending administrative or legal proceedings relating to the Partnership brought by or against the Partnership, the Management Company or the General Partner, or the members, partners, employees or agents or former members, partners, employees or agents of any of the foregoing, including all costs and expenses arising out of or resulting from the Partnership's indemnification pursuant to Section 10.14 and subject to the limitations imposed therein.