FEES AND COMPENSATION
A. Advisory Services and Fees
In consideration of our advisory services, we and/or our affiliates generally are entitled to
receive management fees and/or performance-based compensation from our clients. The fees
applicable to each client are set forth in detail in the applicable governing and/or offering
documents. Generally, our fees are payable in arrears, and we bill our fees, or directly deduct our
fees from client accounts, on a monthly, quarterly, or annual basis.
Each client is generally responsible for all fees and expenses incurred, directly or indirectly,
by or on behalf of such client, including, without limitation:
• organizational and offering expenses, to the extent applicable,
• directors’ fees and expenses, as applicable;
• administration fees and expenses;
• brokerage commissions and dealer spreads;
• regulatory filing fees and expenses including Form PF, as applicable;
• transaction-related fees and expenses;
• all fees and expenses incurred in connection with any investment or potential investment,
(including, all research expenses (including research-related travel, expert networks,
research consultants, data bases and online data services), the cost of research reports and
surveys relating to securities, issuers, market segments, or geographic regions, the cost of
third-party pricing services, the costs of portfolio modeling and analysis, bank service
fees, legal fees directly related to any investment and any withholding or transfer taxes);
• legal, accounting, financial statement preparation and auditing fees and expenses;
• tax audit costs, tax filing preparation costs including ASC 740 related consulting, taxes,
and assessments;
• costs related to the preparation, reproduction, and mailing of reports to partners or
shareholders, as applicable;
• expenses associated with compliance with applicable laws and regulations,;
• custodial fees and insurance expenses including D&O/E&O insurance; and
• extraordinary fees and expenses, if any, including, without limitation, any
indemnification obligations.
In connection with the above fees and expenses, the Feeder Funds pay a proportionate
share of such fees and expenses incurred by the Master Fund into which such Feeder Funds
invest. We do not receive a brokerage commission or other compensation attributable to the
purchase or sale of securities or other investment products.
See “Item 12 Brokerage Practices − Selection of Broker-Dealers and Reasonableness of
Compensation” for a discussion of the factors considered in selecting or recommending broker-
dealers for client transactions and determining the reasonableness of commissions and
compensation for such broker-dealers.
B. Expense Allocation
The Adviser has adopted an expense allocation policy (the “Expense Allocation Policy”)
to comply with its duties under the Advisers Act by providing for the fair, equitable and proper
allocation of all such costs, fees and expenses incurred as part of the management of client
assets. While certain expenses will be borne solely by the Firm, such as office space, computer
equipment, regulatory compliance consultation, other expenses will be shared among our clients
in accordance with the terms of the Expense Allocation Policy. All allocations of costs, fees and
expenses will be made in accordance with the Expense Allocation Policy, subject at all times, to
the discretion of the Chief Financial Officer. Our Expense Allocation Policy clarifies the
expenses to be incurred by the Permian Funds, Managed Accounts or the Firm, or a combination
thereof, in accordance with the offering documents of the applicable Permian Fund or the
investment management agreement of the applicable Managed Account. Generally, each
Permian Fund bears its proportionate share of all costs and expenses directly related to its
investment program, including expenses related to proxies, underwriting and private placements,
brokerage commissions, other trading related expenses, such as Bloomberg and third-party trade
capture and/or execution systems or services, interest on debit balances or borrowings, custody
fees, all research expenses (including data bases and online data services), the costs of research
reports relating to securities, issuers, market segments or geographic regions, the cost of third-
party pricing services, the costs of portfolio modeling and analysis, the costs of historical
financial databases, and the costs of credit rating services, directors’ fees and expenses, insurance
expenses (including, but not limited to, directors’ and officers’ liability insurance and errors and
omissions insurance), bank service fees, any entity-level taxes, and any withholding or transfer
taxes. In addition, the Permian Funds bear a disproportionate share of certain expenses (such as
research-related travel and directors and officers/errors and omissions insurance expenses) to the
extent the allocation of a portion of these types of expenses to other clients is not permitted by
the applicable investment management agreement. Further details on the Adviser’s Expense
Allocation Policy are available upon request.
C. Payment of Fees
Client Accounts are subject to the fees and expenses described below. Generally,
management and performance fees and expenses are negotiable and may vary due to account size
and other factors in our discretion. We have waived, and may in the future waive, management
fees or performance allocations with respect to direct or indirect investments made by a client or
our employees and affiliates.
Managed Accounts
Management fees are payable monthly or quarterly in arrears and range from 0.5% to
1.0% of assets under management. Performance fees are payable in arrears and are typically
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