Item 5 - Fees and Compensation
Subject to the terms of the applicable Governing Documents, we serve as the general partner of the Funds
(“General Partner”) through which we receive a monthly management fee calculated at an annual rate of
1.0% (approximately 0.083% per month) and 2% (approximately 0.1667% per month) of each Limited
Partner’s Capital Account for the various Funds we manage. The monthly management fee will be
calculated and paid monthly in advance by the Master Fund on behalf of each Fund, based on each Master
Fund’s net assets as of the first day of the month. If investor capital is withdrawn at any time other than
the end of a calendar month, a pro rata portion of the management fee will be refunded to the investor
(based on the actual number of days remaining in such partial month.)
We may waive or reduce all or any portion of the fees with respect to any investor in the Funds.
Numerai earns a performance-based incentive allocation based on profits earned over the incentive
allocation at the time of calculation, which varies between the Onshore Funds and Offshore Funds and
each share class. The incentive allocation is paid from each limited partner’s capital account to the General
Partner. The incentive allocation is calculated on an investor-by-investor basis and generally ranges from
0-25% of the net income. The incentive allocation for the Onshore Funds is generally allocated for the
calendar year to each limited partner’s capital account, subject to a highwater mark. The incentive
allocation for the Offshore Funds will be paid to the General Partner, generally monthly equal to 25% of
the realized and unrealized gains and losses, calculated and accrued as of the last day of each calendar
month and on redemption of shares, as of the effective date of redemption. An incentive allocation is also
made as to amounts withdrawn, as of the effective time of the withdrawal by Limited Partners. In the
event that a Limited Partner withdraws capital at any time other than at the end of a calendar year or
calendar month, for purposes of calculating the Incentive Allocation, such deduction will be made with
respect to such Partner’s Capital Account on a pro-rata basis accounting for any partial periods and
crystallized at the time of such redemption. The General Partner, in its sole discretion, may reduce,
otherwise modify, or waive the Incentive Allocation for any Limited Partner.
The Funds bear (and, through their investment in the Master Funds, their pro rata portion of the expenses
of the Master Funds) and shall be responsible for their own expenses, including, but not limited to,
Management Fees, investment related expenses such as the Fund’s brokerage commissions, interest on
margin accounts and other indebtedness, custodial fees, bank service fees, withholding and transfer fees,
taxes, systems and technology expenses, third party research tools, corporate licensing fees, legal and
auditing expenses, accounting, fund administration, outsourced risk management advisory and software,
investment related consultants and travel costs that are research related, technology and computer
services, Fund related insurance costs and indemnification payments (including insurance for the General
Partners), costs and expenses relating to the Funds and General Partners regulatory compliance,
including, without limitation, the costs of compliance programs, examinations, regulatory inquiries and
regulatory filings (including Forms 13D, 13G and 13F, PF, and other regulatory and reporting forms relating
to the Fund’s trading and investing), costs of Foreign Account Tax Compliance Act (“FATCA”) and other
tax-related compliance, expenses incurred with respect to the preparation, duplication and distribution
to Limited Partners and prospective Limited Partners of Fund offering documents, annual reports and
other financial information, and any other services or service provider expenses deemed necessary by the
General Partners on behalf of the Funds, and the fair market value of digital assets, including but not
limited to the Numeraire token, given by Numerai, Inc. for prizes to participants in the data science
tournaments used in the research process by the General Partner and/or its affiliates. The General
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Partners, in their sole discretion, may pay any of the Funds expenses as described above and, in such
scenario, will be entitled to reimbursement from the Fund.
The General Partners will bear the amount (if any) by which the aggregate amount of the Fund expenses
relating solely to fund administration, audits, legal fees and organizational costs (together with the
expenses of the Master Funds and any other feeder funds that invest in the Master Funds) in any trailing
12-month period exceeds 0.5% of the Trailing 12-Month NAV. The “Trailing 12-Month NAV” means the
average of the month-end net asset values of the Master Funds for each month in the trailing 12-month
period.
Where applicable, any expense that relates specifically to a particular Class of Interest will be charged
solely to the respective Limited Partners holding such Class of Interest. The determination as to whether
an expense related specifically to a particular Class of Interest will be made by the General Partner in its
sole discretion.
To the extent that the Funds bears any expenses that also benefit any other Feeder Funds, such expenses
shall be allocated among the Funds and such other investment vehicles pro rata in proportion to the
Fund’s and such other investment vehicles’ relative capital contributions (or in such other appropriate
manner as determined by the General Partner in good faith).
The Fund’s General Partners, or their designee, shall be authorized to incur and pay in the name and on
behalf of the Funds all expenses that they deem necessary or desirable. The organizational expenses of
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