Item 5. Fees and Compensation
Our fees and compensation are described in the advisory contracts we enter into with the Funds, as well
as in the Funds’ offering documents. All of our clients are “qualified purchasers” (as defined in Section
2(a)(51) of the Investment Company Act of 1940, as amended).
We are paid management fees from the Funds quarterly in advance. We deduct such management fees
from the Funds. Management fees will be prorated in the case of a partial calendar quarter. We have
waived or reduced, and may in the future waive or reduce, all or a portion of the management fee payable
with respect to any investor, including internal capital.
The Masterton GP is entitled to receive performance-based allocations from the Funds, as further
described in Item 6 – Performance-Based Fees and Side-By-Side Management.
The Funds will bear their own organizational and operational expenses. Such operational expenses will
include the following: (i) all fees and reimbursable expenses payable to the Funds’ administrator (the
“Administrator”) (including for communications systems provided by the Administrator), (ii) accounting,
auditing, valuation, tax preparation and tax planning services, including outsourced “shadow”
administrative services, third-party accounting or middle office services, and accounting software
(including all implementation costs), (iii) expenses associated with third-party research, industry
subscriptions, expert networks and political intelligence providers, (iv) all expenses related to Bloomberg,
Masterton Capital Management, LP Form ADV Part 2A
Factset or similar data providers, research and pricing services, as well as expenses related to news,
quotations, modeling, statistics, market data, databases, order management systems, portfolio
management systems, risk management systems and other technical and telecommunications services
and equipment used in the investment management process (including both hardware and software),
including implementation costs, (v) all expenses related to the investment process, including all expenses
associated with sourcing, investigating, researching, and structuring of investments and potential
investments, whether or not consummated, (vi) the costs of consultants, lawyers, due diligence providers,
valuation agents, accountants, investment bankers, advisors and other professional experts (including
expenses of public relations advice as it relates to particular investments) utilized by us in connection with
the Funds’ investments, (vii) all reasonable travel expenses incurred in evaluating, diligencing, researching
and monitoring potential or actual investments, (viii) all expenses related to trade execution, including
outsourced trading expenses, (ix) the costs and expenses of any errors and omissions insurance, directors
and officers liability insurance, professional liability or cybersecurity insurance obtained on behalf of the
Funds, us, the Masterton GP or the Offshore Funds’ directors (including in their roles as members of the
Master Fund’s governance committee), (x) the fees of, and expenses incurred by or on behalf of, members
of a Fund’s governance committee (as applicable) or the directors of the Offshore Fund (as applicable)
(including in their roles as members of any such governing committee), (xi) legal expenses specifically
related to the Funds and their respective operations, including the cost of producing and updating offering
memoranda (including, as applicable, supplements thereto) and other marketing materials, the costs of
negotiating side letters or amending each Fund’s governing documents and the costs of any investor
consent processes, (xii) all costs and expenses associated with any meetings of the Funds’ investors, (xiii)
all regulatory and compliance expenses directly related to the Funds, including costs incurred in complying
with anti-money laundering laws and regulations and each Fund’s share of our reporting obligations
related to the Funds (such as Section 13 or Section 16 filings, Form 13F, Form N-PX, Form 13H, Form PF,
Foreign Account Tax Compliance Act filings and any other similar filing in any other U.S. or non-U.S.
jurisdiction) and the fees and expenses of each Fund’s AML officers, (xiv) all expenses incurred in
connection with responding to requests or inquiries from any U.S. federal, state, local or non-U.S.
governmental entity or authority, regulatory body or self-regulatory organization, (xv) filing and
registration fees and expenses, registered office fees and expenses, custodial fees and bank services fees
relating to the operation of the Funds and the offering of the interests or shares therein, (xvi) any
government fees or taxes imposed on the Funds, in each case, as determined by us, (xvii) expenses
associated with participating in class actions and securing other claims and any proxy voting services,
(xviii) the costs of producing and distributing periodic and annual reports, investor communications and
investor statements, risk reporting systems or responding to other investor requests, (xix) extraordinary
expenses (e.g., litigation costs and indemnification obligations, costs and expenses of the “partnership
representative” of a Fund) that the Funds may incur, (xx) any similar expenses of any acquisition vehicle
formed by the Funds, (xxi) all expenses associated with the liquidation and winding-up of the Funds,
including the formation and operation of any liquidating trusts or accounts, and (xxii) any other expenses
related to the Funds’ operations. Such operational expenses will generally be paid at the Master Fund
level and the Feeder Funds will generally bear their pro rata share of the aggregate operational expenses
of the Funds based on their respective net asset values for the relevant time period.
The Funds will also bear transaction fees and costs in connection with investing and trading, including
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