Item 5 - Fees and Compensation
Our fees and compensation are described in the advisory contracts we enter into with our clients.
Lorem Ipsum Onshore Fund, LP and Lorem Ipsum Offshore Fund, Ltd. currently offer the
investment options as are summarized in the chart below.
Class A Class B Class C Class D
Management NAV of Master Fee approximately approximately approximately
Fee Fund (mm) (annually) 0.3125% per 0.4375% per 0.5% per quarter
$0 to $150 1.75% quarter quarter (2.0% annually)
$151 to $250 1.50% (1.25% annually) (1.75% annually)
$251 to $350 1.00%
$351 to $450 0.50%
$450+ 0.00%
Incentive 15% per annum 17.5% per 17.5% per annum 20% per annum
Allocation annum
We generally deduct our management fees from client accounts quarterly in advance. Generally,
we or our affiliates receive performance-based fees or allocations from client accounts on an
annual basis in arrears and upon redemptions by investors in a Fund.
Each Fund generally bears its operating and other expenses, including, but not limited to, (i) fees
to its administrator and any other expenses or fees related to third party providers of middle-
office or back-office services; (ii) directors’ fees (if any); (iii) investment expenses (e.g., expenses
which the Advisor reasonably determines to be related to the investment of the Fund’s assets,
including, without limitation, brokerage commissions (See Item 12 “Brokerage Practices”
below), expenses relating to short sales, clearing and settlement charges, custodial fees, bank
service fees and interest expenses); (iv) the cost of: trade execution and management systems,
compliance, risk and portfolio systems and reports, integration and data transfer connectivity
costs to and from third party systems, and pricing and quotation services; (v) professional fees
(including, without limitation, expenses of consultants and experts) relating to compliance by the
Advisor and Lorem Ipsum Partners with securities and investment advisory laws and regulations;
(vi) legal expenses, accounting expenses, auditing and tax preparation expenses and the expenses
associated with regulatory and statutory filings, including but not limited to Form PF; (vii)
directors’ and officers’ insurance for the Advisor and Lorem Ipsum Partners; (viii) organizational
expenses and expenses relating to the offer and sale of the interests in the applicable Fund; (ix)
other similar expenses related to the Fund; and (x) extraordinary expenses.
The Funds will also bear expenses related to research concerning their investments or potential
investments including, but not limited to, (i) the cost of investigating actual or potential
investments (including, without limitation, travel expenses arising from such investigations and
third party investigative work), and (ii) the costs of obtaining third party research products and
services (including, without limitation, the cost of research reports and subscriptions or
subscriptions relating to securities, issuers, market segments or geographic regions, the costs of
portfolio modeling and analyses and the costs of computerized financial databases, e.g.,
Bloomberg and Factset).
We may also allocate a portion of certain clients’ capital to money market funds or exchange-
traded funds. In addition to the fees and expenses discussed above, investors will indirectly incur
similar fees and expenses if we invest client’s capital in such money market funds or exchange
traded funds, as these funds in turn pay similar fees to their investment managers and other
service providers.
Management fees are generally paid quarterly in advance, and are not refundable if the advisory
contract is cancelled prior to the end of a payment period.