5.1.1 Advisory Fees and Compensation
Detailed below is a brief summary of certain fees and expenses paid by the Funds, which may
include fees based on performance of the Funds. Investors and prospective investors are advised
to review a relevant Fund’s offering materials and other constituent documents for a more
comprehensive discussion of fees and expenses.
The Adviser and its affiliates do not receive a management Fee for its services (the “Management
Fee”), which is typically paid either monthly or quarterly, usually in advance, based on the net
asset value of a fund at the end of each preceding month or quarter.
Generally, at the end of each fiscal year, the Adviser or one of its affiliates will receive an incentive
fee or incentive allocation (the “Incentive Allocation”), an amount ranging from 15%-40%
(subject to certain conditions) of the realized and unrealized net capital appreciation in the Funds,
subject to a modified high-water mark mechanism. The Incentive Allocation is in addition to
organizational and operational expenses and other expenses paid by the Funds, as described more
fully in the offering documents of the particular Fund, as permitted by 17 C.F.R. 275.205 and/or
section 205 of the Advisers Act.
In the sole discretion of the Adviser or its affiliates, the fees above may be waived, reduced or
calculated differently with respect to certain interests in a particular Fund.
In some cases, the Adviser or its affiliates receive administrative servicing fees and/or re-
imbursement of certain expenses from the Funds, as described in the offering documents and
periodic reports of those Funds. These reimbursements are for expenses deemed by HRP in its
discretion to be beneficial services to the Funds.
Different share classes within the Funds may have materially different terms, including terms
regarding fees charged, minimum subscription, withdrawal or redemption rights, certain reporting
and transparency right, and investment options. Pursuant to the Fund’s offering documents, the
Adviser or an affiliate, is generally permitted to open new share classes, grant requests from
existing investors to transfer their interest to new share classes and on occasion also grant interests
in new share classes to persons or entities with whom it is affiliated or otherwise associated with
HRP.
It is not anticipated at this time, however, the Adviser and/or any of its affiliates, or the Funds are
permitted to pay placement fees, certain expenses, and servicing fees to broker-dealers acting as
placement agent that place investors for the Funds, as described in the offering documents of the
relevant Funds, that may be based on a percentage of the assets initially invested, or assets
remaining invested over time, from the investor, or based upon fees received by Adviser, in respect
of the investors placed by that placement agent.
5.1.2 Additional Fees and Expenses
The Funds will bear their own expenses and their pro rata share of the expenses of the Master Fund
and each CIV, including, but not limited to, the following expenses:
a) expenses related to the research, due diligence and monitoring of actual and
prospective investments (whether or not consummated) and the consummation of investments,
fees and expenses related to obtaining research and market data, including information technology
hardware, software or other technology (including telecommunications, costs of software
licensing, implementation, data management and recovery services and custom development) used
to research investments, evaluate and manage risk, facilitate valuations, facilitate accounting
functions, facilitate compliance with the rules of any self-regulatory organization or applicable law
(including reporting obligations), facilitate and manage the order execution of securities or
otherwise manage the HRP Funds, including, but not limited to, Bloomberg terminals, portfolio
management systems, risk management systems and order management systems; fees and
expenses of third-party risk management products, models and services;
b) organizational and reorganizational expenses of the Master Fund and each CIV;
c) operational expenses, including the following: fees and expenses relating to
brokerage, prime brokerage and futures commission merchant fees, commissions and expenses
incurred for transactions in the HRP Funds; custodial fees and expenses; bank service fees; third-
party administrative fees and expenses, and fees and expenses of third-party professionals,
including consultants, investment bankers, attorneys and accountants; loan administration costs on
loans made by the HRP Funds; the costs of any litigation or investigation involving activities of
the HRP Funds; unless such costs would not be an indemnifiable expense, third-party audit and
tax preparation expenses; insurance expenses, including all of the premiums for cybersecurity
insurance and liability insurance covering the Adviser and its affiliates, the HRP Funds and the
members, partners, directors, managers, shareholders, officers, employees and agents of the
Adviser and its affiliates; costs of preparing and distributing reports and notices; taxes; expenses
incurred in connection with negotiating and complying with provisions of any Side Letter
Agreement; fees and expenses related to compliance with the rules of any law, rule or regulation
(including those from self-regulatory organization) in connection with the activities of the HRP
Funds, including any governmental, regulatory, licensing, filing or registration fees or taxes
(including fees and expenses incurred in connection with the preparation and filing of all necessary
regulatory forms for the various regulated entities, including fees relating to access to regulators
online filing systems); expenses incurred in connection with the offering and sale of the Interests
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