Item 5 Fees and Compensation
Management Fees
The Fund(s) will pay Anavon (or “Investment Manager”) a fee for management services (the
“Management Fee”) for each month equal according to the schedule outlined in the PPM. As a
general matter, the fee calculation is dependent upon the investment amount, class capacity
and net asset value (or “NAV”) at time of the calculation. In addition to the Management Fee,
the Fund(s) will pay to the Investment Manager for an incentive fee (the “Incentive Fee”),
generally payable on an annual basis following the end of the fiscal year, as set out in the PPM.
The Incentive Fee (as explained in more detail in Item 6) will be paid only with respect to the
net realized and unrealized appreciation in the NAV adjusted for any redemption of Shares in
the series made during the year and any accruals (or “Adjusted NAV”). The following table
provides a more detail example of the Management Fee assessment:
Share Class Minimum Class Capacity Management Incentive Fee
Investment Fee Only over
benchmark
F-Founder $25 MM $100 MM 0.60% 0%
F2-Founder 2 $25 MM $100 MM 0.30% 5%
A $25 MM $1BN 1.00% 0%
B $500,000 $1 BN 0.00% 20%
C $25 MM $1 BN 0.60% 10%
D $5 MM $1 BN 1.25% 0%
E $5 MM $1 BN 0.75% 15%
The Management Fee is calculated according to the methodology detailed in the PPM. The
Management Fee will be calculated and paid in advance - typically within 10 days of the first
day of each month, or as soon as reasonably practicable thereafter. The Management Fee will
be prorated for any subscription or redemption by a Shareholder that is effective other than
as of the first day of a month. In the event of a redemption by a Shareholder other than as of
the last day of a month, the Investment Manager will pay to the Fund an amount equal to the
pro rata portion of the Management Fee, based on the actual number of days remaining in
such month, and the Fund will distribute such amount to the redeeming Shareholder. In the
sole discretion of the Board of Directors, the Management Fee may be waived, reduced or
Anavon Capital LLP
calculated differently with respect to certain Shareholders, including, without limitation,
Shareholders that are members, shareholders, partners, affiliates or employees of the
Investment Manager, members of the immediate families of such persons and trusts or other
entities for their benefit; provided, that, neither the method of calculation of the Management
Fee nor the dates upon which the Management Fee is payable will be altered or amended
without the consent of the Investment Manager. Anavon and its partners, members, directors,
and employees do not accept compensation, including sales charges or service fees, from any
person for the sale of securities or other investment products. Anavon, in consideration for
the Management Fee, will provide office space and utilities; certain administrative services;
and secretarial, clerical and other personnel to the Fund. The Investment Manager will bear
the costs of providing such good and services and all of their own overhead costs and
expenses, except to the extent such goods, services, costs and expenses are provided for
through soft dollars generated by the Fund as permitted (see Item 12 for more details).
Additionally, the Investment Manager may, in its sole discretion, pay a portion of the
Management Fee to intermediaries, placement agents or other third parties (see Item 14 for
more details).
Other Fees & Expenses
Avalon or its affiliates will bear the entire organizational costs of the Fund(s) and such costs
will not be borne by Limited Partners (or “Shareholders”). The Fund(s) will bear its own
expenses (the "Uncapped Expenses"). The Uncapped Expenses include the Management Fee;
the Incentive Fee; investment expenses (e.g., expenses that, in the Investment Manager's sole
discretion, are related to the investment of the Fund's assets, whether or not such investments
are consummated, such as brokerage commissions, expenses relating to short sales, clearing
and settlement charges, custodial fees, bank service fees and interest expenses);
administrative expenses (including fees and expenses of the Administrator); legal expenses;
external accounting and valuation expenses (including the cost of accounting software
packages); audit and tax preparation expenses; costs of printing and mailing reports and
notices; taxes; corporate licensing; regulatory expenses (including filing fees); the fees and
salaries of the Fund's directors and officers; expenses related to the organization and conduct
of directors' and Shareholders' meetings; expenses incurred in connection with the offering
and sale of the Shares and other similar expenses related to the Fund; indemnification
expenses; and extraordinary expenses.
Anavon manages Funds that are classified as a Master Fund or as a Feeder Fund. Anavon
charges the Feeder Funds management fees on the terms set forth below, subject to possible
negotiation by individual investors in the Feeder Funds and the more detailed provisions of
the Offering Memoranda of the respective Feeder Funds. The fee is calculated monthly and is
based on one twelfth of applicable fee rate of the net asset value of the shares calculated before
deduction of that month’s management fee as at the end of each month. The management fee
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