Item 5. Fees and Compensation
Advisory Fees and Compensation
The Adviser charges investment management fees based on the value of the relevant Feeder Fund’s
net asset value (the “Management Fee”), and the General Partner is entitled to receive performance-
based incentive allocations, which is compensation that is based on a share of capital gains on, or
capital appreciation of, the Master Fund’s assets regarding each Investor’s Master Fund Sub-
Account2 (the “Incentive Allocation”).
The Adviser’s fee schedule is omitted because this brochure is being delivered only to “qualified
purchasers,” as defined in section 2(a)(51)(A) of the Investment Company Act of 1940 (the
“Investment Company Act”).
Under certain circumstances, the General Partner or Adviser, as applicable, has elected, and may in
the future elect, in its sole discretion, to reduce, waive or calculate differently the Management Fee
or Incentive Allocation in respect of any Investor, including, without limitation, the CIO and the
Jafra Investors,3 in each case without notice to, or the consent of, other Investors and without
offering the same opportunity to other Investors. For example, in consideration of certain strategic
An account established in the Master Fund for each Investor in a Feeder Fund.
benefits the Adviser believes certain early Investors brought to the Fund and the Adviser, the
Adviser and/or General Partner, as applicable, in its sole discretion, reduced the Management Fee
and Incentive Allocation with respect to certain of such Investors.
Additionally, the General Partner’s capital account is not subject to any Management Fee or
Incentive Allocation.
The payment of fees and expenses regarding any separately managed account is negotiated on an
account-by-account basis and set forth in the applicable investment management agreement.
Payment of Fees
The Adviser instructs the applicable custodian and administrator to deduct the Management Fee
from the each Investor’s Master Fund Sub-Account quarterly in advance. Although the Feeder
Funds’ offering documents do not generally permit the Investors to redeem or withdraw from the
Funds except as of each calendar quarter-end, a pro rata portion of the Management Fee would be
returned to any Investor redeeming/withdrawing intra-period if such redemptions/withdrawals are
approved by the General Partner or Adviser, as applicable. In addition, an Incentive Allocation, if
any, will be deducted annually subject to a standard high-water mark. A separate memorandum
account will be established for each Investor’s investment in a Feeder Fund to track any losses
allocable to such investment. Any allocable profits will first be applied to reduce the loss
carryforward balance to zero, before any Incentive Allocation will be made.
As previously noted, the payment of fees and expenses regarding a separately managed account,
including whether fees are paid in advance or in arrears, is negotiated on an account-by-account
basis and set forth in the applicable investment management agreement. If a separately managed
account pays fees in advance, upon termination of the account, such fees will be refunded as
negotiated and set forth in the applicable investment management agreement.
Additional Fees and Expenses
In addition to paying Management Fees and, if applicable, Incentive Allocations, Investors 3 will
also be subject to the organizational and initial offering expenses of the pertinent Feeder Fund, the
Feeder Fund’s pro rata share of the Master Fund’s organizational and offering expenses over a
period of up to 60 months and, to the extent the Master Fund utilizes any acquisition vehicles, the
pro rata share of the organizational and operational expenses of such acquisition vehicles. Also,
Investors are subject to other ongoing Fund expenses, which typically include, but are not limited
to: fees payable to the administrator; legal, accounting (including third-party accounting services
and software), valuation, administrative, auditing, tax preparation and other professional expenses;
costs and expenses of any directors and officers liability insurance and professional liability
insurance obtained on behalf of the Fund, the Board of Directors, General Partner and the Adviser,
as applicable; costs and expenses related to the Funds’ investment program (as implemented
through the Master Fund), including expenses related to research and due diligence (including
expenses related to news, quotation, statistics and pricing services, hardware, software, databases
and other technical and telecommunications services and equipment used in the investment
management process, fees and travel expenses in connection with investigating and monitoring
Jafra Investors are defined to include officers, investment professionals and employees (including their estate
planning vehicles and other affiliates of such persons) of the Adviser and/or their respective estate planning or other
vehicles.
potential and existing investments and fees and expenses related to third-party research and
consulting services), order management, portfolio management, risk management and treasury
management systems expenses and other expenses related to the investment decision and
monitoring process, brokerage commissions, currency and other hedging costs, spreads, mark-ups
on securities, swaps and forwards, exchange fees and other transaction-related costs and interest,
commitment and other fees and expenses in connection with borrowings; filing fees and expenses,
custodial fees and bank services fees; expenses in connection with the ongoing offering of the
interests or shares, as applicable, including the cost of producing, updating and distributing offering
memoranda and other marketing materials; costs of printing and distributing periodic and annual
reports and statements; regulatory and compliance expenses directly related to the Fund (including
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