Item 5. Fees and Compensation
As compensation for its investment advisory services, the Adviser and its affiliates generally receive
investment management fees, performance-based compensation and other investment expenses as fully
set forth in the Adviser’s governing documents. The Adviser, in its sole discretion, may waive or modify the
management fee for fund investors that are members, principals, employees or affiliates of the Adviser or
the General Partner, relatives of such persons, and for certain large or strategic investors.
Payment of Fees
The Adviser deducts the investment management fee from the Flagship Funds on a monthly basis in
advance by instructing the Flagship Funds’ custodian. The clients pay incentive allocations as of the end
of each fiscal year subject to a loss carryforward as described in the governing documents of the relevant
client as set forth in Item 6 below. The Adviser does not deduct the investment management fee from the
account. Rather, the Adviser bills the account.
Expenses
Subject to the language of each client’s governing documents with the Adviser, clients will be responsible
to pay the expenses described below.
In addition to paying investment management fees and performance-based compensation, fund clients will
also be subject to other investment expenses such as the fund’s legal, compliance (including consultants’
fees), risk management expenses (including software licensing and consultants’ fees), administrator
(including, but not limited to, middle and back office services and software necessary for trade capture and
portfolio management), audit and tax preparation (including third-party tax preparation) and accounting
expenses (including third party accounting services and accounting software); organizational expenses of the
fund; execution and order management system fees and expenses; investment expenses such as
commissions, research fees and expenses (including Bloomberg and similar subscriptions and data services
and research-related travel (including meals and lodging); interest on margin accounts and other
indebtedness; borrowing charges on securities sold short; custodial fees; bank service fees; fund-related
insurance costs (including D&O and E&O insurance for the Adviser and the general partner (if any) and
members of the governance committee of the fund); independent governance committee members’ fees
and expenses; expenses of regulatory compliance (including compliance with AIFMD, if any, and AEOI),
filings and reporting (including but not limited to Section 13, Section 16 and Form PF filings); pricing service
fees; portfolio valuation expenses (including data feeds and third-party valuation agents); and any other
expenses related to the purchase, sale or transmittal of assets of the fund. The assets of certain funds will
be invested in a master-feeder structure. Feeder funds will bear a pro rata share of the expenses
associated with the related master fund.
The account is subject to fees and expenses set forth in the management agreement of the account.
In addition, clients will incur brokerage and other transaction costs. Please refer to Item 12 of this Firm
Brochure for a discussion of the Adviser’s brokerage practices.
The allocation of expenses by the Adviser between it and a client and among clients represents a conflict
of interest for the Adviser. The Adviser has adopted an expense allocation policy that is designed to
address this conflict. The Adviser allocates expenses to each client in accordance with the relevant
governing documents of the relevant client. The Adviser seeks to allocate any shared expenses for
products and services benefitting multiple clients or both the Adviser and a client, and not covered in the
relevant governing documents of the client, in a fair and reasonable manner.
Prepayment of Fees
Pre-paid monthly investment management fees charged to the Flagship Funds will be refunded based on
the number of days remaining in the month for any period that is less than a full month.
Compensation for the Sale of Securities
Neither the Adviser nor any of its supervised persons accepts compensation for the sale of securities or
other investment products.