Item 5: Fees and Compensation
Compensation
Cipher typically charges a management fee, and an affiliate of Cipher typically is entitled to a performance
allocation, in each case as described in the governing documents and/or investment management
agreement of the applicable Fund. The fees and other compensation payable to Cipher and its affiliates
by a Fund may vary among Funds and may vary among investors in the same Fund. Funds (feeder funds)
that invest all of their investable assets in other Funds (master funds) bear their share of master fund
management fees but are not charged stacked fees. In certain circumstances, the fees and other
compensation payable to Cipher and its affiliates may be negotiated and set forth in subscription
documentation in respect of a particular Fund investor and/or waived in whole or in part. Cipher generally
intends to waive the management fee and performance allocation for investments by Cipher, its affiliates,
and its principals and employees, including estate planning vehicles of such persons and certain other
persons or entities associated with such persons. Investors should review the governing documents and
offering documents of the applicable Fund in conjunction with this brochure for complete information on
the fees and compensation payable with respect to such Fund. All Fund investors are “qualified
purchasers” as defined in section 2(a)(51) of the Company Act; accordingly, no specific fee information is
disclosed in this brochure.
Deduction of Fees; Timing of Payments; Termination
Cipher is authorized under the governing documents and investment management agreements of the
Funds to charge and deduct management fees and performance allocations from the assets of the Funds
for its services. The Funds typically pay management fees in advance. If the investment management
agreement is terminated before the end of the billing period, Cipher refunds a pro rata portion of the pre-
paid management fee to the applicable Fund’s account. Investor redemptions typically are not permitted
intra-quarter, and any such redemptions (and any associated pro rata refund of prepaid management fee
borne by such investor) would be in the discretion of the applicable Fund’s directors or general partner.
Performance allocations are deducted and paid as of the end of each calculation period (typically each
calendar year, but may also include certain withdrawals or redemptions, the realization of certain
investments, or other applicable events).
Other Expenses
In addition to the management fees and performance allocations disclosed above, each Fund investor also
bears its allocable share of such Fund’s organizational and offering expenses (including without limitation
legal fees, accounting fees, printing costs, prospective investor reporting expenses, travel costs (including
meals, entertainment, and lodging, and including air travel in any class or on non-commercial aircraft on
a time-share basis), regulatory filing fees and expenses, the costs of legal and regulatory compliance, and
out of pocket expenses); costs, fees, and expenses directly related to Fund investments and prospective
investments, whether or not consummated (including without limitation expenses related to initial and
ongoing specialized research and due diligence, monitoring-related expenses, underwriting and private
placement expenses, brokerage commissions, execution fees and other transaction costs (including
certain trade errors), interest on and any commitment fees or other expenses related to debt balances or
borrowings, exchange, clearing, and settlement charges, expenses of third-party registered office, back
office and middle office services, bank service fees, borrowing charges on short sales, investment related
travel expenses (including meals, entertainment, and lodging, and including air travel in any class or on
Cipher Technologies Management LP
non-commercial aircraft on a time-share basis), including without limitation to attend board meetings of
special purpose vehicles managed by Cipher or its affiliates, costs, fees, and expenses of any appraisers,
accountants, service providers, or other experts engaged by Cipher, and custody fees; withholding,
transfer or other taxes imposed or assessed on, or payable by, the Funds (including any interest and
penalties); financial and tax accounting, bookkeeping and reporting services, third party administrative
services, audit and legal expenses (including costs of third party compliance, regulatory, filing or
regulatory inquiry and other expenses incurred for the Funds, the Fund directors, the Fund general
partner, or Cipher to comply with applicable laws, rules, or regulations); any fees of the Funds’
administrator; costs, fees, and expenses of any litigation or investigation involving the Funds’ activities;
costs, fees and expenses of any appraisers, accountants, service providers, or other experts engaged by
the Funds, the Fund directors, the Fund general partner, or Cipher in connection with the Funds’ activities;
costs of hardware required to generate private key material, fees and other expenses associated with
storing private key backup material in secure facilities, and travel costs (including meals, entertainment,
and lodging, and including air travel in any class or on non-commercial aircraft on a time-share basis) to
the vaults (wherever they may be located) containing the cryptographic media containing such keys and
any other associated costs and expenses, whether incurred at the request of Fund counterparties or
investors or on the initiative of the Funds’ general partner or directors; expenses incurred in maintaining
research or other information and performing systems, including information service subscriptions,
software tools, programs or other technology utilized in managing the Funds’ investments (including third-
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