Item 5 – Fees and Compensation
General. Phillimore provides investment advisory services to the Funds pursuant to investment
management and/or limited partnership agreements (the “Agreements”). The Agreements for each
Fund, along with specific organizational documents of the Funds, set forth in detail the fee
structure relevant to each such Fund. The terms of the Agreements are generally established at the
time of the formation of the applicable Fund.
The Onshore Fund is currently offering one class of limited partnership interests (the “Interests”).
The Onshore Fund has created three sub-classes of limited partner interests: Sub-Class A Interests
are offered to Founder Investors (as defined below); Sub-Class B Interests are offered to investors
who are not Founder Investors; and Sub-class C Interests are offered to employees, partners,
affiliates or “friends and family” of the General Partner. Sub-Class A Interests, Sub-Class B
Interests and Sub-Class C Interests have different fee terms, but otherwise have identical terms.
The Onshore Fund may in the future, without the consent of the limited partners in the Onshore
Fund, create new classes, sub-classes, series or tranches of Interests which are subject to different
terms (including with respect to withdrawals, management fees, and performance fees).
Asset-Based Compensation. An aggregate fixed management fee (the “Management Fee”) is
payable monthly in arrears at a percentage rate of the net asset value of each Investor’s Capital
Account as of the end of each month, adjusted for any contributions and withdrawals made during
the month and without accrual of the Performance Fee (as defined below), if any. The
Management Fee is debited against the relevant Investor’s Capital Account and paid to the General
Partner for its investment advisory services to the Master Fund. If the management agreement is
terminated as of a date other than the last day of a calendar month, the standard management fee
will be prorated for the number of days in the month during which the management agreement was
effective. The General Partner may elect to waive, rebate, reduce or calculate differently the
Management Fee for any Investor, including employees, partners, affiliates, or “friends and
family” of the General Partner. The General Partner is not charged the Management Fee.
All investors in the Funds are qualified purchasers and therefore, this brochure does not contain
our advisory service fee schedule for the Funds.
Performance-Based Compensation. The General Partner is entitled to receive annual performance-
based compensation (the “Performance Fee”) from the Funds, equal to a percentage of any net
capital appreciation allocated to each Investor’s Capital Account. The Performance Fee is subject
to a loss carryforward provision. The General Partner may elect to waive, reduce or calculate
differently the Performance Fee for any Investor, including employees, partners, affiliates, or
“friends and family” of the General Partner. In the event that an Investor is permitted to withdraw
or redeem completely or partially from a Fund other than at the end of the fiscal year, the
Performance Fee with respect to such Investor for such year will be determined, at the time of
withdrawal, with respect to the portion being withdrawn or redeemed through the applicable
withdrawal date.
Phillimore deducts fees from the assets of Investors invested in the Funds. Investors in the Funds
do not have the ability to choose to be billed directly for fees incurred.
Phillimore or a Fund may enter into side letters or similar written agreements with Investors which
have the effect of establishing rights, or altering or supplementing the terms of, the relevant
governing documents including the Management Fee and Performance Fee.
In addition to bearing the Management Fee and Performance Fee, if any, the Funds will also be
subject to their pro rata share of expenses including, but not limited to: legal, accounting,
bookkeeping, tax compliance, auditing, consulting (including fees and expenses of operating
partners, industry advisors and other third-party consultants) and other professional expenses,
including those of valuation firms, and expenses associated with compliance with securities and
commodities regulations; administration fees and other expenses charged by or relating to the
services of third-party providers of administration services; fees and expenses associated with the
preparation and distribution of reports to the Investors; third-party and out-of-pocket market data
expenses (including, without limitation, news, quotation, statistics and pricing services; and
hardware, data bases and other technical and telecommunications services and equipment used in
the investment management and order management processes); interest and fees (including,
without limitation, commitment, structuring, and underwriting fees) on margin loans, committed
loan facilities, total return swaps and other indebtedness; bank service, custodial and similar fees;
fees and expenses related to the purchase or sale of instruments; expenses related to the purchase,
monitoring, sale, settlement, custody or transfer of the Funds’ assets (directly or through trading
affiliates); third-party and out-of-pocket fees and expenses relating to systems used in connection
with the operation of the Funds and investment related activities; fees and expenses in connection
with any advisory board or committee; entity-level taxes (except to the extent that such taxes have
actually been reimbursed or deemed to have been paid by an Investor or former Investor); fees and
expenses relating to the offer and sale of Interests (including, without limitation, organizational
fees and expenses), which may, in the Adviser’s sole discretion, be amortized for financial
accounting purposes over a five year period, and filing and legal fees; costs and expenses incurred
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