Item 5: Fees and Compensation
For its services to its Clients, Pagoda receives investment management fees and performance-
based compensation.
Investment Management Fees
Pagoda charges a management fee in advance on a quarterly basis based upon the net asset value
(“NAV”) attributable to management fee bearing investors. The management fee is 1.5% of NAV
annually, however, Pagoda, in its sole discretion, may waive, reduce, or recalculate the
management fee for investors, including, without limitation, a limited partner that is a member,
partner, affiliate or employee of Pagoda or an affiliate and relatives of such persons.
Management fees are debited from the relevant investor’s account at the beginning of each fiscal
quarter. If an investor makes an investment in a Fund during a quarter, the investment management
fee will be prorated as of the subscription date.
As management fees are debited in advance, in the event of a withdrawal by an investor other than
as of the last day of a fiscal quarter, Pagoda will reimburse the investor, an amount equal to the
pro-rata portion of the Management Fee, based on the actual number of days remaining in such
fiscal quarter.
Performance-Based Compensation
In certain instances, Pagoda is entitled to annual performance-based incentive allocations. This
incentive allocation is equal to 20% of the capital appreciation of the NAV of an investor’s
account. Pagoda, in its sole discretion, may waive, reduce, or recalculate the incentive allocation
for investors, including, without limitation, a limited partner that is a member, partner, affiliate or
employee of Pagoda or an affiliate and relatives of such persons.
Incentive allocations are subject to loss recovery, which provides that an investor’s account will
not be subject to the incentive allocation until any net loss previously allocated to that investor’s
account has been offset by subsequent net profits. Incentive allocations are deducted from the
relevant investor’s account at the end of each calendar year.
Other Fees and Expenses
In addition to the fees and allocations described above, each Feeder Fund bears its own expenses
and a pro rata share of the Master Fund’s expenses. Such expenses include, but are not limited to,
investment expenses, such as brokerage commissions, investment-related travel expenses, third
party professional fees, and expenses of the Advisory Committee, Fund legal, compliance, audit,
accounting, and administrator fees and expenses, organizational expenses, and indemnification or
other extraordinary expenses that the Funds may be required to bear. The Funds will incur
brokerage and transaction costs. See Item 12 – Brokerage Practices for further information
regarding brokerage and transaction costs.