Item 5: Fees and Compensation
The fees applicable to each of the Funds are set forth in detail in the corresponding Offering
Documents. A brief summary of such fees is provided below.
Management Fee
Estuary is paid an investment management fee (“Management Fee”) of 1 – 1.50% (annualized)
of the of the net asset value of each Shareholder’s common shares of the Offshore Fund or
Limited Partner’s interests in the Onshore Fund, as of the first Business Day of each month.
For the avoidance of doubt, the Management Fee will be calculated without accrual of the
Incentive Allocation (as defined below), if any. The Management Fee will be adjusted for any
subscriptions and redemptions or withdrawals made during the month. The Master Fund will
pay the Management Fee in U.S. dollars within 10 days after the first Business Day of each
month. For subscriptions made at times other than the beginning of a month, the
Management Fee will be paid on the date the subscription is made. Since the Management
Fee is paid at the Master Fund level, no management fee will be paid at the Onshore Fund or
Offshore Fund level. A “Business Day” means any day on which banks are open in New York,
New York, U.S.A.
The Investment Manager may, in its sole discretion, modify the Management Fee for Investors
that are members, principals, employees or affiliates of the Investment Manager or the
General Partner or their affiliates, relatives of such persons, or entities, accounts or trusts
beneficially owned by any of the foregoing.
The Investment Manager may, in its sole discretion, reduce or waive any Management Fees
at any time, including in particular during any wind-down of the Fund’s business.
Incentive Allocation
The General Partner is entitled to receive annual performance-based compensation
(“Incentive Allocation”) equal to 17.5—20% of the net profits (including realized and
unrealized gains and losses), if any, attributable to certain sub-classes of common shares of
the Offshore Fund and interests in the Onshore Fund.
The General Partner may, in its sole discretion, modify the Incentive Allocation charged to
Investors that are members, principals, employees or affiliates of the General Partner, the
Investment Manager or their affiliates, relatives of such persons, or entities, accounts or trusts
beneficially owned by any of the foregoing.
Other Types of Fees or Expenses
All expenses relating to the ongoing structure and operations of the Funds will be borne by the
Onshore Fund and Offshore Fund (or by the Master Fund and allocated to the Onshore Fund
and Offshore Fund), including: the Management Fee; all investment-related costs and
expenses (i.e., expenses that, in the Investment Manager’s sole discretion, are related to the
investment of the Funds’ assets, whether or not such investments are consummated),
including commissions and charges, interest on margin accounts and other indebtedness,
expenses relating to short sales, clearing and settlement charges, option premiums and
custodial and service fees, research-related expenses (including research-related travel
expenses), expenses relating to consultants (including expert network compliance consultants
that, among other things, monitor certain expert network calls, and Fund compliance
consultant expenses), attorneys, brokers or other professionals or advisors who provide
research, advice or due diligence services with regard to investments; fees and expenses
related to portfolio exposure and performance management systems, risk management
services and software related to trade reconciliation, treasury, margin, financial and
counterparty management, risk monitoring, performance reporting, valuation quotation
services (e.g., Bloomberg terminals, historical and live financial data and other similar services
and data feeds) and trade order management systems (including systems that facilitate trade
compliance, commission management, stock locates and transaction cost analysis, and third
party service providers used for implementation, custom reporting, updates, consultations,
support, maintenance, monitoring and data extracts); the Funds’ legal, accounting, tax
preparation and other tax-related expenses (including preparation and mailing costs of
financial statements, tax returns and other reports to Investors), auditing, consulting and other
professional expenses; third-party administration costs, fees and expenses (including any
costs, fees and expenses related to investor communications, relations, reporting or other
investor materials, tax preparation and related reporting performance information, data
extraction and other types of reporting and any audit or accounting services provided by a
third-party administrator); all fees and charges of custodians, clearing agencies and banks;
compliance and reporting expenses and expenses attributable to regulatory filings that are
made with respect to the Funds or their respective assets (including Section 13, Section 16,
Form D, Form PF, the U.S. Foreign Account Tax Compliance Act, anti-money laundering
compliance (including, without limitation, fees and expenses of the AML officers, state security
filings, general regulatory compliance and non-U.S. position reporting filings, if applicable, and
any other non-U.S. filings); the Funds’ pro rata share of Fund-related insurance costs (including
the Funds’ pro rata portion of director’s and officer’s insurance, errors and omissions
insurance, fidelity insurance and other similar policies covering the General Partner, the
Investment Manager and/or the members of the governance committee of any Fund); any
taxes (including, without limitation, any withholding taxes, transfer taxes, stamp duties and
other governmental or self-regulatory agency-related charges or duties); all costs and
expenses incurred in attempting to protect and enhance the value of a Fund investment
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