ITEM 5: FEES AND COMPENSATION
17B
Alight Capital Compensation
Alight Capital’s compensation for the investment advisory services it provides to the Funds
is comprised of an asset-based management fee (which is generally paid quarterly in advance) and
an incentive allocation (which is allocated annually and upon withdrawals) based on the
performance achieved for the account of each investor relative to the high water mark attributable
to such investor. In the event that a withdrawal or distribution is made during a calendar quarter,
a pro rata rebate of the management fees paid as of the beginning of the current calendar quarter
will be made to the affected investor. Management fees and incentive allocations are generally
paid/made by the Master Fund, not by the Feeder Funds directly.
Alight Capital’s compensation is negotiable and Alight Capital may, in its sole discretion,
elect to waive or modify any compensation with respect to any investor, without entitling any other
investor to a waiver or modification. Alight Capital’s fee schedule is omitted because this brochure
is only being delivered to qualified purchasers as defined in the Investment Company Act of 1940,
as amended (the “Investment Company Act”). The SMA is also charged a management fee each
quarter and an annual incentive fee as described in the relevant Governing Document.
Fund Expenses
In addition to the asset-based and performance-based compensation described above, each
Feeder Fund typically bears all costs directly related to its organization, trading and operations,
including, without limitation:
(1) The organizational and initial offering costs of the Funds.
(2) The Fund’s operating expenses, directly and through its investment in the Master Fund,
include, without limitation: (i) brokerage commissions and other costs of executing transactions,
including externally incurred costs of establishing computer and systems connections with the
Fund’s brokers and counterparties; (ii) investment expenses and all other expenses (including,
without limitation, all commissions, clearing fees, valuation and portfolio pricing, interest charges,
custodial charges, financing charges and applicable withholding and other taxes) related to the
purchase, sale, transmittal or custody of trading assets and related items, as well as costs and
expenses associated with obtaining and maintaining regulatory licenses, exchange memberships
and credit ratings; (iii) the costs of trading, research (and the costs of travel for such research)
and/or data screens, as well as risk management and data services and systems (including order
management systems); (iv) legal, financial and tax accounting, auditing and other professional fees
and expenses, including consulting and appraisal fees and expenses pertaining to the Fund; (v) tax
preparation and “tax matters partner” and “partnership representative” fees and expenses, if
applicable; (vi) any taxes and duties payable in any jurisdiction in connection with the Fund’s
operations; (vii) fees in connection with the custody of the Fund’s assets; (viii) insurance costs
(including Errors & Omissions, Directors & Officers and general liability insurance, including for
the principals, partners/members, directors, officers and employees of Alight Capital and its
affiliates (“Alight Capital Parties”)); (ix) external administrative costs (including the fees and out-
of-pocket expenses of the administrator and its agents as well as any other third-party administrator
which Alight Capital may select for the Fund), establishing computer and systems connectivity
with the administrator and other third-party service providers, paying agency, transfer agency,
accounting verification (if any) and/or investor registrar services and the costs of middle-office
and back-office support as provided by the administrator; (x) any other operating or administrative
expenses related to accounting, research, third-party consultants, “expert networks” and reporting;
(xi) all other costs related to the Fund’s investment in the Master Fund; (xii) legal, compliance,
tax, accounting and audit costs, fees and expenses relating to the Fund’s, the Master Fund’s and
the Alight Capital Parties’ regulatory and self-regulatory filings, reporting (including but not
limited to expenses incurred in connection with complying with applicable U.S. and non-U.S.
reporting obligations, including those required by the SEC and the Commodity Futures Trading
Commission (the “CFTC”)), costs associated with fulfilling the bonding requirements under the
Employee Retirement Income Security Act of 1974, as amended, if applicable, as well as out-of-
pocket costs of preparing regulatory filings related to the Fund, the Master Fund or Alight Capital
with respect to the Fund and/or the Master Fund, including but not limited to Form PF, registrations
and memberships, compliance, including, without limitation, costs of compliance programs, third-
party compliance consultation, actual and “mock” examinations, regulatory and governmental
inquiries, subpoenas and proceedings (in each case, whether involving the Fund, the Master Fund
or Alight Capital in its capacity as investment manager of the Fund or the Master Fund and general
partner of the Onshore Fund); (xiii) due diligence expenses; (xiv) the Fund’s pro rata share of the
annual fees and expenses of the directors of the Master Fund and the Offshore Fund (if applicable);
(xv) costs associated with possible reorganizations or restructurings of the Fund, the Master Fund
and/or related entities; (xvi) costs resulting from any entities used in the course of the Fund’s
investing and trading (e.g., a “blocker” corporation); (xvii) costs associated with the sale of the
interests or shares; (xviii) any indemnification payments; and (xix) the costs and fees attributable
to any third-party proxy voting service or consultant. The Funds will not bear any portion of the
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