Item 5: Fees and Compensation
Management Fee
The AKAZ Onshore Feeder and AKAZ Offshore Feeder a fee for its services (the “Management
Fee”) for each month equal to one twelfth of the result of the applicable Management Fee
rate multiplied by the balance of each investor’s capital account or share class (as applicable
for investors in the AKAZ Onshore Feeder and AKAZ Offshore Feeder, respectively) as of the
beginning of each month (before taking into account the estimated accrued Incentive
Allocation (as defined below), if any. The applicable Management Fee rate is 1.5% per annum.
The Funds will calculate and pay the Management Fee monthly in advance.
AKAZ may waive or modify the Management Fee for any Client or Fund investor, in its sole
discretion.
Incentive Allocation
Generally, at the end of each fiscal year, the Fund General Partner is entitled to receive an
incentive allocation (the “Incentive Allocation”) equal to the result of the applicable Incentive
Allocation Rate multiplied by the net realized and unrealized appreciation of the net asset
value of each series of the Master Fund’’ shares, which correlate to series of shares and capital
accounts held by investors in the AKAZ Offshore Feeder and AKAZ Onshore Feeder,
respectively, after such net asset value is adjusted for any redemption of the Master Fund’s
shares in the series and for any accruals of the Incentive Allocation for the relevant fiscal year
(the “Adjusted NAV”); provided, however, that an Incentive Allocation will be made only with
respect to the excess of the Adjusted NAV of a series of the Master Fund’s shares over its Prior
High NAV. The applicable Incentive Allocation Rate is 20%.
The Fund General Partner may waive or modify the Incentive Allocation for any Client or Fund
Investor, in its sole discretion.
Payment of Fees
Fees and compensation paid to AKAZ or its affiliates by the Funds are generally deducted from
the assets of such clients. As discussed above, Management Fees are generally deducted on a
monthly basis and the Incentive Allocation is generally deducted on an annual basis.
Expenses
The AKAZ Master Fund will be allocated its pro-rata share of all shared expenses (i.e.
investment expenses (e.g., expenses that, in AKAZ’s discretion, are related to the investment
of the Master Fund’s assets, whether or not such investments are consummated), investment-
related travel expenses (which are travel expenses related to the purchase, sale or transmittal
of the Master Fund’s investments incurred by AKAZ), expenses relating to software tools,
programs, other technology utilized in managing the Master Fund (including third-party
software licensing, implementation, data management and recovery services, custom
development costs, risk management systems and fees and expenses of third-party risk
management products, models and services), research and market data, external valuation
expenses (including the cost of accounting software packages), insurance expenses, including
cybersecurity insurance, errors and omissions insurance, and directors’ and officers’ liability
insurance, indemnification expenses, and fees and expenses incurred in connection with the
reorganization, dissolution, winding-up or termination of the Master Fund, and other
applicable shared expenses as disclosed in the Funds Private Placement Memorandum
(“PPM”). The AKAZ Master Fund will also bear its own direct expenses relating to the Fund as
disclosed in the Fund’s PPM.
The AKAZ Onshore Feeder and AKAZ Offshore Feeder will each bear their pro-rata share of their
respective master fund’s expenses, in addition to their own direct expenses, including the
Management Fee, professional fees (including expenses of consultants, legal fees,
accountants, director fees, etc.), administrative expenses, audit and tax preparation expenses,
custodial and bank service fees, taxes, regulatory expenses, organizational expenses, and
other expenses as disclosed in the applicable fund’s PPM.
Any expenses of the Funds and any other feeder fund(s) to the Master Fund (including
organizational expenses of the Master Fund and such other feeder fund(s), but excluding the
Management Fee, and Investor-Related Tax (if any) of the Funds and any equivalent fees or
taxes payable by any other feeder fund(s)), may be paid by the Master Fund and allocated to
its feeder fund(s) pro rata based upon their relative ownership of the Master Fund.
Certain expenses set forth herein are subject to an expense cap, as further detailed in the
applicable Funds’ PPMs.
Prepayment of Fees
The Management Fee (as defined above) is paid in advance on a monthly basis.
Additional Compensation and Conflicts of Interest
Neither AKAZ nor any of its supervised persons accepts compensation (e.g., brokerage
commissions) for the sale of securities or other investment products.