ITEM 5 – FEES AND COMPENSATION
Advisory Fees and Compensation
Set forth below are summaries of how the Adviser is compensated for its advisory services to the Funds.
It should be noted that detailed disclosure about the fees and other expenses applicable to an investment
in the Funds is provided in the relevant Fund’s confidential memorandum or confidential explanatory
memorandum as applicable, including any supplements, which are provided to prospective Fund
investors. Those operative documents should be carefully reviewed prior to making an investment in the
Funds.
Asset Based Compensation: Management Fees
The Adviser is entitled to a quarterly management fee. The Management Fee ranges from 1.50% to
1.75% per annum of a Fund’s net asset value, calculated as of the first day of each quarter, before any
accrued Incentive Allocation (as defined below). The Management Fee is calculated and paid quarterly in
advance. The Management Fee will generally be paid within ten days after the first day of such quarter.
The Management Fee will be adjusted for any contributions and withdrawals/redemptions made during
the quarter.
Performance-Based Compensation: Incentive Allocation
Each Fund is charged an annual performance-based incentive allocation (the “Incentive Allocation”),
which ranges from 15% to 20% of the applicable Fund’s net profits as of the end of the Fund’s fiscal year,
subject to a standard loss carryforward (or “high water mark”) provision. Under the high water mark
provision, generally no Incentive Allocation will be paid by an investor until any net loss previously
allocated to such investor’s capital account or shares, as applicable, has been offset by subsequent net
profits. The Incentive Allocation will also be charged in the event of an investor withdrawal/redemption,
but only with respect to the withdrawn/redeemed amount.
The Adviser or its affiliates, in their sole discretion, may waive or reduce the Management Fee and/or the
Incentive Allocation with respect to investors who are members or affiliates of the Adviser, or relatives of
such persons, and for certain large or strategic investors.
The Funds have entered into and may enter into other agreements in the future ("Side Letters") with
certain investors in the Funds whereby such investors, including principals, employees or affiliates of the
Adviser, relatives of such persons, or certain strategic investors, will be subject to terms and conditions
that may be more advantageous to such investors than those set forth in each Fund’s respective offering
memorandum. For example, such terms and conditions may provide for a reduction in fees or
withdrawal/redemption penalties to be paid, or certain other requirements of liquidity and reporting
transparency.
Payment of Fees
The Adviser deducts fees from client accounts quarterly in advance.
Other Fees and Expenses
In addition to the fees described above, clients may also bear additional expenses as provided by each
client’s governing documents. Those may include fund legal expenses, audit and accounting expenses
(including third party accounting services); organizational expenses; administrator fees and expenses;
investment expenses such as commissions, research fees and expenses (including Bloomberg and similar
subscriptions and data services) as well as other analytical systems; 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 insurance costs); and any other expenses related to the purchase, sale or
transmittal of fund assets.
Client assets are invested in a master-feeder structure. The feeder funds indirectly bear the expenses of
the master fund pro rata based on their respective interest in the master fund. With the exception of the
Management Fee and feeder specific annual registration and other regulatory fees, it is anticipated that
virtually all expenses will be incurred at the master fund level.
Clients will also be responsible for the costs and expenses resulting from trade errors, except for any trade
error caused by the Adviser or its affiliates as a result of gross negligence, willful misconduct or as
otherwise provided by federal securities laws. Refer to Item 16 for further information. Clients will also
incur brokerage and other transaction costs and may be deemed to be paying for research and other
services with “soft” or commission dollars. Refer to Item 12 for further information.
Prepayment of Fees and Refunds
As noted above, the Management Fee is generally charged quarterly in advance as of the first day of the
quarter.
Please refer to the relevant confidential explanatory memorandum or confidential memorandum and other
governing documents for a complete understanding of each Fund’s terms, fees and expenses.