Item 5: Fees and Compensation
A. Fees and Compensation
Management Fees
Management fees payable to Hitchwood are established pursuant to the Hitchwood Funds’ respective
constituent documents. Management fees charged are calculated prior to taking into account any incentive
allocation, as described below. Management fees generally range from 1.1% to 1.5% per annum. Hitchwood,
in its sole discretion, may waive and has waived all or part of the management fee otherwise due with respect
to certain Hitchwood Fund investors, including with respect to certain investors affiliated with Hitchwood or
such person’s immediate family members, without notifying other investors.
Incentive Allocation
Investors in the Funds also bear an incentive allocation, which generally ranges from 17.5% to 20% of the
capital appreciation during each year, subject to a high-water mark. The general partner for the respective
Hitchwood Fund may waive and has waived the incentive allocation with respect to certain investors in the
Hitchwood Funds, including with respect to investors affiliated with Hitchwood or such person’s immediate
family members.
Incentive allocations, if any, are made annually on December 31 each year for the Funds and also as of the
effective date of any withdrawal from such Funds with respect to the amount withdrawn.
Payment of Fees
The Funds pay Hitchwood a quarterly management fee on the first day of each calendar quarter or on such
other day as Hitchwood may determine in its discretion. Management fees are expensed to the investor level
accounts daily throughout the quarter. Management fees are prorated for periods of less than a full quarter
based on the actual number of days in any quarter. An example of a partial period includes a subscription
initiating on the second month of the quarter. In the case of a withdrawal or redemption by an investor other
than as of the last day of a fiscal quarter, daily expensing of the management fees would cease as of the
redemption date and the remaining portion of any advance payment of the management fee for such quarter
would be repaid to the applicable Fund.
B. Additional Fees and Expenses
The Hitchwood Funds pay their own brokerage commissions and other transaction costs. Neither Hitchwood,
nor any of its affiliates, will receive any commissions generated by the Hitchwood Funds trading and investing
activities; however, Hitchwood and its affiliates, including Hitchwood Funds other than those generating such
payments, may benefit indirectly from payments made by other Hitchwood Funds (including payments by
way of “soft dollars”) as described in greater detail in Item 12 of this brochure.
To the fullest extent permitted by law (including the Employee Retirement Income Security Act or “ERISA” in
the case of the Master Fund) and to the extent permitted under the specific Hitchwood Fund’s constituent
and offering documents, the Hitchwood Funds are also obligated to pay for the following expenses to the
extent applicable and set forth in their governing and/or offering documents:
• organizational and offering expenses, other than placement fees (if any) and including expenses
attributable to compliance with the Alternative Investment Fund Managers Directive (“AIFMD”) and
other private placement, lobbying law, and distribution rules in the U.S. and other foreign jurisdictions;
• compliance with anti-money laundering laws and know-your-customer requirements, including the
costs associated with the appointment of any Anti-Money Laundering Compliance Officer, Money
Laundering Reporting Officer and Deputy Money Laundering Reporting Officer of any Hitchwood
Fund required pursuant to the anti-money laundering regulations of the Cayman Islands;
• expenses incurred by any Hitchwood Fund, or by the General Partner, Hitchwood or their affiliates,
in connection with the investments of such Hitchwood Fund, including:
o brokerage commissions;
o transaction costs;
o ticket charges;
o expenses related to short sales;
o clearing and settlement charges;
o custodial fees;
o interest expenses and other financing charges (including initial and variation margin);
o broken deal expenses;
o consulting, investment banking and other professional fees relating to particular investments
or contemplated investments;
o expenses related to the formation and operation of the Hitchwood Funds and any vehicle
through which such Fund may hold investments, including any expenses that may otherwise
qualify as eligible brokerage expenses under Section 28(e) of the U.S. Securities Exchange
Act of 1934 (“Section 28(e)”);
o research-related expenses (including fees for news and quotation equipment and
connectivity costs and services, market and other research-related data products and
services (including among others, those often referred to as “alternative data” and
environmental, social and governance (“ESG”) data with respect to issues of pecuniary
materiality) and other fees paid to third-party providers of research products and services,
including those that would otherwise constitute eligible research under Section 28(e) such
as those described in Item 12 below and software for managing and monitoring research
and trading);
o fees for portfolio risk management services (including the costs of risk management software
or database packages and related connectivity costs);
o fees for market information systems and related connectivity costs; and
o investment-, operations-, portfolio-, and trading-related software, including trade order
management software (i.e., software used to route trade orders) and related connectivity
costs;
...