FEES AND COMPENSATION
Palestra charges each private fund an investment management fee that varies depending on the
applicable share class, as described in each private fund’s Offering Documents. Management fees
are payable in advance and generally range from 0% to 2% per annum based on the value of the
private fund’s assets as of the first day of each month or quarter, as applicable. Management fees
charged quarterly are pro-rated for any period less than a full quarter.
An affiliate of Palestra is also entitled to receive annual performance-based compensation that
varies depending on the applicable share class, as described in each private fund’s Offering
Documents. Performance-based compensation generally ranges from 0% to 30% and is based on
capital appreciation of the private fund’s assets or outperformance of a benchmark, subject to a
“high water mark” or an “underperformance carryforward”, as applicable.
A third-party fund administrator calculates the management fee and performance-based
compensation for Palestra’s review. Once confirmed, Palestra and its affiliates debit fees and
performance-based compensation directly from the applicable private funds; investors in the
private funds are not invoiced separately for fees. Investors in private funds are subject to
management fees and performance-based compensation indirectly through their investment in a
particular private fund.
Palestra and its affiliates are permitted to waive or modify the management fees and performance-
based compensation for certain investors in the private funds, including members, employees or
affiliates of Palestra, relatives of such persons, and certain large or strategic investors, and have
done so. For more detailed information and a complete description of management fees and
performance-based compensation paid to Palestra and its affiliates refer to the relevant private
fund’s Offering Documents.
In addition to management fees and performance-based compensation, investors indirectly bear
costs and expenses associated with the private funds’ operations, which are more fully described
in the private funds’ Offering Documents. These costs and expenses vary by private fund, but may
include, without limitation, the following categories: all investment-related costs and expenses
(i.e., expenses that, in the Palestra’s sole discretion, are related to the investment of assets, whether
or not such investments are consummated), including commissions and charges, interest on margin
accounts and other indebtedness, expenses relating to short sales, clearing and settlement charges,
option premiums and custodial and service fees, research-related expenses (including research-
related travel expenses) and expenses relating to consultants, attorneys, brokers or other
professionals or advisors who provide research, advice or due diligence services with regard to
investments; fees and expenses related to portfolio exposure and performance management
systems, risk management services and software related to trade reconciliation, treasury, margin,
financial and counterparty management, risk monitoring, performance reporting, valuation
quotation services (e.g., Bloomberg terminals, historical and live financial data and other similar
services and data feeds) and trade order management systems (including systems that facilitate
trade compliance, commission management, stock locates and transaction cost analysis, and third
party service providers used for implementation, custom reporting, updates, consultations, support,
maintenance, monitoring and data extracts); legal, accounting, tax preparation and other tax-
related expenses (including preparation and mailing costs of financial statements, tax returns and
other reports), auditing, consulting and other professional expenses (including fees of third party
compliance providers); third-party administration costs, fees and expenses (including any costs,
fees and expenses related to investor communications, relations, reporting or other investor
materials, performance information, data extraction and other types of reporting and any audit or
accounting services provided by a third-party administrator); compliance and reporting expenses
(including fees and expenses of providing quarterly statements that comply with the Investment
Advisers Act of 1940 (the “Advisers Act”) and other applicable law and regulation), as well as
expenses attributable to regulatory filings that are made with respect to the Partnership or its assets
(including, without limitation, filings required to be made pursuant to Sections 13 and 16 of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), Form PF, Annex IV, Form
D, Bureau of Economic Affairs and Treasury International Capital filings, the Foreign Account
Tax Compliance Act, anti-money laundering compliance), state security filings, general regulatory
compliance and non-U.S. position reporting filings, if applicable, and any other non-U.S. filings);
insurance costs (director’s and officer’s insurance, errors and omissions insurance, fidelity
insurance and other similar policies); any taxes (including, without limitation, any withholding
taxes, transfer taxes, stamp duties and other governmental or self-regulatory agency-related
charges or duties); all costs and expenses incurred in attempting to protect and enhance the value
of an investment (including any fees and expenses associated with any pending or threatened
litigation, audit, investigation, administrative or other proceeding, as well as any settlement costs);
fees and expenses related to any activist-related activities; fees and expenses of any board of
directors or review committee; any fees and expenses related to liquidation, if applicable; fees paid
to proxy and securities class action advisory firms; expenses relating to the offer and sale of
interests and withdrawals and transfers thereof; expenses of any master fund (which may include
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