Item 5: Fees and Compensation
The fees and compensation applicable to each of the Funds will be set forth in detail in the
corresponding Offering Documents. A brief summary of such anticipated fees is provided
below.
Management Fee
The Funds will pay the Investment Manager an investment management fee (“Management
Fee”) based upon the value of each investor’s capital account as of the first day of each
calendar quarter or on the date of a contribution if other than the beginning of a quarter.
The Management Fee will be paid quarterly in advance, prorated for subscriptions into or
withdrawals and/or redemptions from the Funds as applicable.
The Investment Manager, in its sole discretion, may waive or modify the Management Fee for
Investors that are members, principals, employees or affiliates of the Investment Manager or
the General Partner, relatives of such persons, and for certain large or strategic investors.
Performance-Based Compensation
The Investment Manager, or an affiliate of the Investment Manager, will be entitled to receive
performance-based compensation in the form of an Incentive Allocation, which is
compensation that is based on a share of the net profits attributable to an Investor’s capital
account. The Incentive Allocation is subject to a loss carryforward provision and such other
terms as described in each Client’s Offering Documents.
The General Partner may waive or modify the Incentive Allocation for Investors that are
members, principals, employees or affiliates of the General Partner or the Investment
Manager, relatives of such persons, and for certain large or strategic investors.
Other Types of Fees and Expenses
Haraka will be authorized to incur and pay in the name and on behalf of the Funds all expenses
which they deem necessary or advisable.
The Firm will render its services to the Funds at its own expense and will be responsible for its
overhead expenses including: office rent; furniture and fixtures; stationery;
secretarial/internal administrative services; salaries and bonuses; entertainment expenses;
employee insurance and payroll taxes.
All other expenses will be paid by the Funds and shall include, but are not limited to: the
Management Fee; Fund legal, compliance (including consultants’ fees), risk management
expenses (including software licensing and consultants’ fees), administrator (including, but
not limited to, middle and back office services and software necessary for trade capture and
portfolio management), audit and tax preparation (including third-party tax preparation) and
accounting expenses (including third party accounting services and accounting software);
Organizational Expenses (as defined below); execution and order management system fees
and expenses; investment expenses such as commissions, research fees and expenses
(including expenses of Bloomberg and similar subscriptions, data services, alternative data
sources and research-related travel (including meals and lodging)); interest on margin
accounts and other indebtedness; borrowing charges on securities sold short; custodial fees;
bank service fees; Fund-related insurance costs (including D&O and E&O insurance for the
Investment Manager and the General Partner and members of the Governance Committee
and cybersecurity insurance); independent master fund Governance Committee members’
fees and expenses; expenses of regulatory compliance (including compliance with AIFMD and
AEOI, if applicable), filings and reporting (including but not limited to Section 13, Section 16
and Form PF filings); directors’ fees; pricing service fees; portfolio valuation expenses
(including data feeds and third-party valuation agents); and any other expenses related to the
purchase, sale or transmittal of Fund assets. Except as provided in the Offering Documents,
any expenses directly attributable to a particular Designated Investment as reasonably
determined by the General Partner will be paid by the Basic Capital Accounts of those
Investors participating in the Designated Investment and at the discretion of the General
Partner, applied to the capital contribution(s) that funded the Designated Investment. For the
avoidance of doubt, any expenses related to the analysis, purchase or sale of Designated
Investments, whether or not such Designated investment is consummated (e.g., broken-deal
fees and expenses), will be borne by those Investors that would have participated in the
Designated Investment if such investment had been consummated.
The organizational expenses of the Funds (including expenses of the initial offer and sale of
Fund interests) (the “Organizational Expenses”) will be paid by the Fund.