Nephila Capital Ltd

Item 5 – Fees and Compensation
A. The Adviser’s Fees and Compensation. Each of the Funds may be charged an asset-based
management fee (“management fees”) and a performance-based incentive allocation or fee
("incentive allocations" and collectively with the management fees, the “advisory fees”), as explained
below. Advisory fees may be subject to negotiation in the Adviser’s sole discretion.

The specific advisory fee rates and method of calculation and payment are set forth in the applicable
Fund’s Memorandum and other applicable governing documents.

Management Fee: The Adviser generally receives a monthly management fee from each Master Fund
and Offshore Fund equal to a percentage of the Master Fund's or Offshore Fund's net assets, as
applicable, payable as of the last business day of each calendar month. The annual rates vary from
0% up to 2.25% of net assets, and from 0% up to 10% of gross written premiums.

Incentive Allocation: The Adviser generally is entitled to receive an incentive allocation from each
limited partner's capital account in each Master Fund (or each shareholder’s series of shares in each
Offshore Fund, as applicable) at the end of each calendar year, generally equal to a percentage of “new
net profits” experienced with respect to each limited partner's capital account (or

                                                                                        Nephila Capital Ltd.
                                                                              SEC File Number: 801-63514
                                                                            Brochure Date: March 20, 2026

shareholder’s series of shares in each Offshore Fund, as applicable) for such year. The annual rates
vary from 0% to 20% of “net new profits” and may or may not include a “hurdle rate amount”.

B. Deductions. Advisory fees are charged as earned according to the general schedule described
above and are automatically deducted from the assets of the Client account.

C. Expenses. The Adviser’s advisory fees are exclusive of investment, administrative and operating
expenses which shall be incurred by the Client account. Applicable expenses are described in more
detail in the applicable Fund’s Memorandum or other applicable governing documents. Each
transaction is different but in general, standard brokerage expenses are 5-10% of the premium for
over-the-counter transactions. The remaining expenses of a typical Fund are estimated to be
approximately 0.25% of the Fund’s net asset value with the administrator’s costs accounting for
approximately 50% of this amount, although actual expenses may be higher or lower. Other
expenses include, but are not limited to interest expenses, administrative expenses (e.g., share
registration and transfer fees, governmental charges and duties, costs of maintaining accounts and
of preparing and distributing reports, administrative, legal, accounting, auditing and other
expenses), registration, regulatory and self-regulatory fees, custodial fees, withholding or other
taxes, and extraordinary expenses (e.g., the expenses of litigation), if any. The foregoing expenses
are exclusive of and in addition to the Adviser’s advisory fees, and the Adviser does not receive any
portion of the foregoing expenses. However, certain affiliates of the Adviser may receive fees in
connection with the activities of a Fund, as described elsewhere in this Brochure.

Investors should be aware that, through its investment in its respective Master Fund, a Feeder Fund
will share all costs and expenses of the Master Fund in proportion to its investment in the Master
Fund, including the management fee and incentive allocation which typically are payable at the
Master Fund level. Also, a Feeder Fund will indirectly share in its respective portion of the costs and
expenses associated with the Master Fund, including without limitation, all investment, brokerage
commissions and transactional costs and expenses, legal, accounting and administrative expenses,
as well as third party legal, accounting and administrative expenses of the Transformers and/or the
Syndicate. The Adviser is under no obligation to deal with any particular broker, dealer or institution
and orders for investments may be placed with a number of brokers, dealers and institutions.

The Funds will bear their applicable portion of fees payable to primary insurance fronting
relationships. These relationships include a propriety entity, Nephila Syndicate 2357 and
subsidiaries of Markel, State National Companies Inc. and its subsidiaries (“State National”), and
Markel Bermuda Limited (“Markel Bermuda”). A significant portion of the Fund’s transactions have
been and are expected to continue to be fronted by these and potentially other Markel affiliated
companies, as well as other third-party fronting carriers. Fronting is a contractual arrangement in
which a rated insurance company allows policies to be issued in its name, with all or most of the risk
reinsured by the third-party reinsurer. Fronting arrangements may provide greater access to the
reinsurance markets by unrated reinsurers, such as the Transformers with which the Funds transact.
Fronting arrangements may and often will provide operating leverage, whereby the fronting
company will cede premium on a portfolio of contracts selected by the Adviser which have an
aggregate exposure in excess of the collateral provided by the Transformer. The fronting company

                                                                                          Nephila Capital Ltd.
                                                                                SEC File Number: 801-63514
                                                                              Brochure Date: March 20, 2026

will bear any losses in excess of this collateral and will charge a tail risk fee in exchange for assuming
...

Item 7 – Types of Clients
The Adviser provides investment advice to Clients that are privately offered pooled investment
vehicles open for investment by sophisticated institutional and high net worth investors, as
described in this Brochure. Investors will be required to satisfy certain minimum regulatory
suitability requirements and make the minimum investment, generally $1,000,000, required for the
particular Fund. The rights and restrictions that apply to Investors may be modified and/or
additional terms agreed by way of side letters. Any such side letters do not provide for preferential
liquidity or fee terms that are not otherwise disclosed in each Fund’s Memorandum. See Item 4.B. –
Advisory Services Offered, above. The Adviser also has acted as sub-adviser to an open-end mutual
fund registered with the SEC under the Investment Company Act of 1940, as amended, and a pooled
investment vehicle authorized pursuant to the European Communities (Undertaking for Collective
Investment in Transferable Securities) Regulations, 2011, as amended.

The Adviser also acts as the insurance manager to a Bermuda incorporated reinsurance company
(“Bermuda Reinsurance Company”). The Bermuda Reinsurance Company is wholly owned by a
Bermuda exempted company. Sophisticated institutional and high net worth investors may invest
directly into the Bermuda exempted company. The Adviser collects a management and incentive fee
in connection with its insurance manager services, which is consistent with the calculation and range
of fees paid by the Funds (see Item 5: Fees and Compensation).

                                                                                          Nephila Capital Ltd.
                                                                                SEC File Number: 801-63514
                                                                              Brochure Date: March 20, 2026