Item 5. Fees and Compensation
Asset-Based Compensation
Each Fund of Funds pays the Adviser a quarterly fixed fee based upon the value of the net assets of such
Fund of Funds in an amount equal to 0.25% (i.e., approximately 1.0% per annum) (the “Fixed Fee”). With
respect to the Feeder Fund, the Hedge Fund pays the Adviser and Maplelane, in the aggregate, a quarterly
fixed fee based upon the value of the net assets of the Feeder Fund’s investment in the Hedge Fund, in an
amount equal to 0.5% (i.e., 2.0% per annum) (the “Feeder Fund Fixed Fee” and together with the Fixed
Fee, the “Fixed Fees”).
The Fixed Fees will be paid in advance as of the first business day of each calendar quarter and will be
calculated based on the net assets as of the first day of the quarter.
For any period less than a full quarter, the Fixed Fees will be prorated. While it is highly unlikely that an
Investor will withdraw or redeem mid-quarter, any prepaid but unearned Fixed Fees will be refunded to an
Investor that withdraws or redeems mid-quarter. The Adviser generally determines the amount of the
relevant refund on a pro rata basis, based upon the portion of the relevant period during which it provided
services. The Adviser or its affiliate may waive or reduce the Fixed Fees to be paid for certain investors in
the Funds.
Performance-Based Compensation
The Adviser or its affiliate also receives performance-based compensation, which is based on a share of
capital gains on or capital appreciation of the assets of a Fund (the “Incentive Fee/Allocation”).
The Incentive Fee/Allocation for each Fund of Funds is an amount equal to 10% of each Investor's share
of net profits and is subject to a “loss carryforward” provision. The Adviser (or its affiliate) may, in its sole
discretion, waive or reduce the Incentive Fee/Allocation.
After calculating the Management Fees and the Incentive Fee/Allocation and confirming such amounts with
the Adviser, the Fund’s administrator deducts the Management Fee or Incentive Fee/Allocation from the
Investors.
In addition to the Fixed Fees and, if applicable, the Incentive Fee/Allocation, Investor accounts will also be
subject to other expenses including legal, auditing and other professional expenses, research expenses,
investment expenses such as commissions, interest on margin accounts and other indebtedness, custodial
fees, the expenses related to various filings (or portions thereof) made in connection with managing the
Fund's portfolio (including Section 13 filings, Section 16 filings and Form PF), Fund-related insurance costs
(including D&O and E&O insurance covering the Adviser, Maplelane and their affiliates and outside
directorship liability), administrator fees and expenses, fees payable to any Fund Managers, bank service
fees, directors’ fees (and all reasonable travel, hotel and other related expenses incurred by directors in
providing services to the Cayman Fund) and any other fees and expenses related to the purchase, sale or
transmittal of Fund assets.
In addition to the Funds’ direct expenses, the Funds, and ultimately the Investors, will indirectly bear their
pro rata share of the expenses of the Underlying Funds. These indirect expenses include the Underlying
Funds’ investment expenses (such as custodial fees and brokerage commissions) and may include
overhead expenses (such as rent, personnel expenses, equipment, supplies, management and consulting
fees and similar expenses).
Further, the third-party managers of the Underlying Funds, including Maplelane (collectively, the “Fund
Managers”) may charge each Fund of Funds (i) a fixed base fee (typically 1%-2% of net assets on an
annual basis) and (ii) an incentive fee or allocation based upon a percentage of any profits of the investment
entity (typically 20%-30% of profits), although some Underlying Fund managers may charge significantly
more.
Assets of each Fund of Funds may also be invested in money market mutual funds, ETFs or other registered
investment companies. In these cases, the Funds of Funds, and ultimately the Investors, will bear their pro
rata share of the investment management fee and other fees of such Underlying Fund, which are in addition
to the Fixed Fee paid to the Adviser.