Item 5. Fees and Compensation
Asset-Based Compensation
As explained more fully in the relevant Governing Document, the Adviser is paid an investment
management fee (if any) ranging from 0.75% to 1.5% (depending on the class or series) per annum of the
value of each investor’s investment in the applicable Fund. Investment management fees are charged
each quarter in advance based on the value of each investor’s investment in the applicable Fund on the
first day of the quarter. If a new investment in a Fund is made during a quarter, the investment
management fee will be adjusted to account for any capital contribution or withdrawal.
Performance-Based Compensation
An affiliate of the Adviser will be entitled to receive performance-based compensation, which is a portion
of the realized or unrealized net profits of the Fund assets.
The performance-based compensation for the Funds ranges from 12.5% to 17.5% (depending on the class
or series) of net profits, if any, and is subject to a loss carryforward. If an investor has any prior net losses
allocated to it for any previous fiscal year(s), (a) in certain circumstances, an affiliate of the Adviser is
entitled to receive 50% of net profits allocated to that investor until the allocations of net profits in
subsequent periods (including the current year) exceed and offset 225% of the prior net losses allocated
to that investor and (b) in other circumstances, that same affiliate is only entitled to receive an allocation
of net profits if the total allocations of net profits in subsequent periods (including the current year)
exceed and offset such prior net losses (each, a “Loss Carryforward”). If an investor withdraws capital
from a Fund, the Loss Carryforward is reduced in proportion to the withdrawal. In the event of any capital
withdrawal by an investor during a fiscal year, an affiliate of the Adviser is entitled to receive an incentive
allocation from such investor as if that withdrawal date was the end of a fiscal year.
The Adviser may waive or modify its investment management fees and performance-based compensation
in its discretion.
Investment management fees are deducted and paid to the Adviser or its affiliates from the applicable
Fund’s assets attributable to that investor. Performance-based compensation is reallocated to affiliates
of the Adviser from the applicable Fund’s assets attributable to that investor. The terms of each SMA are
negotiated among the parties.
Funds advised by the Adviser may incur expenses in connection with, among other things, brokerage
services discussed in Item 12; legal, administrator, audit and accounting expenses (including third-party
accounting services and accounting software); compliance expenses attributable to the Adviser (including
expenses relating to compliance or regulatory filings, including Form PF, Section 13 and Section 16 filings
made with respect to the applicable Fund’s assets and expenses related to registration, filing, and/or
reporting requirements in any jurisdiction in which the Fund’s interests are offered or sold), organizational
expenses; investment expenses such as commissions, research fees and expenses (including research-
related travel); trading-related technology software costs deemed by the Adviser to benefit the Fund such
as portfolio, order and risk management systems; interest on margin accounts and other indebtedness;
borrowing charges on securities sold short; custodial fees; bank service fees; Partnership-related insurance
costs (including each Fund’s allocable share of D&O and E&O costs for the Adviser and its affiliates); and
other expenses related to the purchase, sale, or transmittal of the Fund’s assets.
Client assets may be invested in money market mutual funds, exchange-traded products and exchange-
traded funds (“ETFs”) or other registered investment companies. In these cases, the client will bear its
pro rata share of the investment management fee and other fees of such investments, which are in
addition to the investment management fee paid to the Adviser.
The Adviser and its affiliates may in the future enter into, agreements, or “side letters,” with certain
prospective or existing investors whereby such investors may be subject to terms and conditions that are
more advantageous than those set forth in the Governing Document. Such terms and conditions may
provide for special rights to make future investments; special redemption rights, relating to frequency or
notice; a waiver or rebate in fees or redemption penalties to be paid by the investor and/or other terms;
rights to receive reports on a more frequent basis or that include information not provided to other
investors (including, without limitation, more detailed information regarding portfolio positions) and such
other rights as may be negotiated by the Adviser and such investor. The modifications are solely at the
discretion of the Adviser.
Neither the Adviser nor its supervised persons accepts compensation for the sale of securities or other
investment products, including asset-based sales charges or service fees.
Item 6. Performance-Based Compensation and Side-by-Side Management
As noted in Item 5, the Adviser charges performance-based compensation. This performance-based
compensation may create an incentive for the Adviser to make investments that are riskier or more
speculative than would be the case in the absence of such performance-based compensation
arrangements.
The Adviser provides investment advisory services to multiple clients. In allocating investment
opportunities among different investment advisory clients, the Adviser needs to act in the best interests
of each Client. The Adviser is a fiduciary to each of its Clients; thus, it must allocate investment
opportunities fairly across clients. A “fair” allocation of opportunities generally includes a consideration
of factors such as each client’s individual investment objectives, strategies, risk tolerance and guidelines.
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