Item 5. Fees and Compensation
Management Fee
With respect to the Fund, the Adviser is paid an asset-based investment management fee ranging from
1.0% to 1.5% per annum of the aggregate Gross Asset Value of the Fund. “Gross Asset Value” means
the Fund’s net asset value (including any designated investments) prior to reduction for (A) any accrued
management fees and (B) any performance-based compensation not yet paid. For purposes of
determining the management fee, designated investments will be valued at fair value, unless the Adviser
(or its affiliate) determines a different valuation is more appropriate.
Management fees for investors in the Fund are charged each quarter in advance based on the Gross
Asset Value of the Fund as of the first day of the quarter. If an investor invests in a Fund during a quarter
or makes an additional subscription during a quarter, the management fee will be charged as of the
effective date of the subscription based on the subscription amount as of the applicable date and will be
prorated for the number of days remaining in the quarter. If an investor withdraws during a calendar
quarter, the Adviser will rebate a pro rata amount of the management fee paid as of the beginning of such
quarter.
The management fee may be waived or reduced for friends and family of the Cowbird Parties and other
strategic investors. For purposes of this ADV, “Cowbird Parties” means the Adviser, its affiliates, and
each of their respective principals, members, directors, officers and employees.
Performance-Based Compensation
With respect to the Fund, Cowbird Capital LLC, an affiliate of the Adviser, is entitled to receive annual
performance-based compensation, which is compensation that is based on Appreciation (as defined
below) that causes the net asset value of an investor’s capital account or common share to exceed the
applicable high water mark. “Appreciation” is the increase in the net asset value of a capital account or
common share (calculated after reduction for all accrued management fees and expenses, but prior to
reduction for any performance-based compensation not yet paid). For purposes of calculating the
performance compensation, net profits or losses from the liquidation, realization or deemed realization of
designated investments during the applicable period will be included when calculating Appreciation.
Performance-based compensation ranges from 15% to 20%.
The performance-based compensation may be waived or reduced for friends and family of the Cowbird
Parties and other strategic investors.
To the extent any Cowbird Party is invested in a Fund, such person or entity is not subject to the
management fee or performance-based compensation in relation to such investment.
More detailed information about the fees paid by investors in the Funds is included in each Fund’s
governing documents, including how fees are calculated with respect to designated investments.
Additionally, the fee arrangements applicable to other accounts managed by Cowbird are set forth in the
applicable account’s investment management agreement or other governing document.
With respect to a Fund, the management fee and the amount of any performance-based compensation is
calculated (subject to review and oversight by Cowbird) and deducted from the Fund (which in the case of
performance-based compensation is structured as a reallocation of profits) by the Fund’s administrator.
Other client accounts are sent an invoice for the management fee and performance-based compensation,
based on information provided by the account’s third-party administrator.
Expenses
In addition to paying management fees and performance-based compensation, certain client accounts
may also be subject to other expenses such as: (i) investment expenses (whether or not such
investments are consummated) and all other expenses (including, without limitation, all commissions,
clearing fees, valuation and portfolio pricing, interest charges, financing charges and applicable
withholding and other taxes) related to the purchase, sale, transmittal or custody of trading assets and
related items; (ii) research-related expenses (including, without limitation, research-related travel and
news and quotation equipment and services); (iii) the costs of trading and order management systems,
research and/or data screens, as well as risk management and data services and systems (including,
without limitation, the costs of utilizing and/or supporting risk-reporting technology required by consultants
retained by or on behalf of institutional investors); (iv) any taxes and duties payable in any jurisdiction in
connection with a Fund’s trading and operations; (v) custody fees and expenses; (vi) insurance premiums
(including, without limitation, cyber insurance and Errors & Omissions and Directors & Officers insurance,
including up to 80% of the cost of such insurance for the Cowbird Parties); (vii) third-party legal,
accounting, auditing, tax and other professional fees and expenses, including, without limitation, the costs
of negotiating side letters as well as trade-related and account-specific counter-party documentation, and
risk, intellectual property-related and other consulting fees that are related to a Fund and its operations;
(viii) administrative costs (including, without limitation, the fees and out-of-pocket expenses of a Fund’s
administrator and its agents as well as any other third-party administrator which the Adviser may select
for a Fund and the cost and fees associated with the roles of tax matters partner and partnership
representative for a Fund) and the costs of middle-office and back-office support as provided by the
Administrator or other third parties; (ix) the costs and fees attributable to any third-party proxy voting or
class action service or consultant; (x) any costs, fees or expenses attributable to third-party consultants or
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