Item 5: Fees and Compensation
DESCRIPTION OF COMPENSATION AND BASIC FEE SCHEDULE
In consideration of our advisory services, we generally receive management fees and performance allocations with
respect to the Fund. While our fees are described in detail in the Fund’s governing and offering documents, a brief
summary of our advisory fees is set forth below.
We generally are entitled to receive from the Fund an annual management fee, as of the beginning of each calendar
quarter in advance, equal to 0.375% (1.5% per annum) of the capital account balance of each applicable limited partner
of such Fund as of the beginning of such calendar quarter. Management fees are deducted directly from the capital
account of each applicable limited partner of the Fund.
In addition, we generally are entitled to receive an annual performance allocation equal to twenty percent (20%) of
the net profits (subject to certain adjustments and limitations) allocated to the capital account of each applicable limited
partner in the Fund during the applicable fiscal year (or such other applicable performance period). Performance
allocations are allocated directly from the capital account of each applicable limited partner of the Fund to our capital
account or the capital account of an affiliate. Performance allocations are subject to a “high water mark” limitation
with respect to each applicable limited partner in the Fund. As a result, after the first year in which a performance
allocation is earned, the performance allocation for later years applies only to the extent that a limited partner’s pro
rata share of net profits, measured on a cumulative basis, for all years since admission to the applicable Fund exceeds
the highest level of cumulative net profits achieved through the close of any prior year since admission.
Our advisory fees with respect to each limited partner in the Fund generally are not negotiable. However, we have
entered into, and may in the future enter into, side letters or similar arrangements with certain investors that grant
different terms (including lower fees) to such investors than the terms generally applicable to other limited partners in
the Fund.
Each investor in the LP Fund generally must be, among other things (i) an “accredited investor,” as such term is
defined in Rule 501(a) of Regulation D under the Securities Act, and (ii) a “qualified client,” as such term is defined
in Rule 205-3 under the Advisers Act.
OTHER FEES AND EXPENSES
The Fund bears the expenses of the organization of the Fund and the offering of Interests (including legal and
accounting fees, printing costs, travel, “blue sky” filing fees and expenses and out-of-pocket expenses). In general,
the Fund’s financial statements will be prepared in accordance with accounting principles generally accepted in the
United States (“GAAP”). However, the Fund intends to amortize its organizational expenses over a period of 60
calendar months from the date the Fund commences operations because it believes such treatment is more equitable
than expensing the entire amount of the organizational expenses in the Fund’s first year of operation, as is required by
GAAP. The General Partner may, however, limit the amount of start-up and organizational expenses that the Fund
amortizes so that the audit opinion issued with respect to the Fund’s financial statements will not be qualified.
The Fund bears all costs and expenses related to its investment program, including expenses related to proxies,
underwriting and private placements, Bloomberg terminals, research, trade publications, brokerage commissions,
interest on debit balances or borrowings, custody fees and any withholding or transfer taxes imposed on the Fund. The
Fund also bears all out-of-pocket costs of the administration of the Fund, including accounting, audit and legal
expenses, costs of any litigation or investigation involving the Fund’s activities and costs associated with reporting
and providing information to existing and prospective Limited Partners. However, the General Partner may, in its sole
discretion, choose to absorb any such expenses incurred on behalf of the Fund.
The Fund does not have its own separate employees or office, and it does not reimburse the General Partner or
Sabrepoint for salaries, office rent and other general overhead costs of the General Partner or Sabrepoint. The General
Partner and Sabrepoint generally pay all of their own operating and overhead expenses including salaries, office rent
and other general overhead costs. A portion of the commissions generated on the Fund’s brokerage transactions may
generate “soft dollar” credits that the General Partner and Sabrepoint are authorized to use to pay brokers and other
providers for research and other research related services and products used by the General Partner and Sabrepoint. It
is our current policy to limit such use of soft dollars to fall within the safe harbor of Section 28(e) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise reasonably related to the investment decision
making process. See “Item 12: Brokerage Practices.”
As noted above, the Fund is generally responsible for and pays all brokerage commissions and other transaction costs.
See “Item 12: Brokerage Practices.”
COMPENSATION FOR THE SALE OF SECURITIES OR OTHER INVESTMENT PRODUCTS
Neither we nor any of our supervised persons accept compensation for the sale of securities or other investment
products.