Item 5: Fees and Compensation
The Funds may pay the Adviser an investment management fee ranging from 0.15% to 1.0%
per annum depending on various factors including, but not limited to, the size of the
investment, an agreement by an Investor to maintain such investment for a significant period
of time or other similar commitment by an Investor, or type of Fund. The investment
management fees are calculated and paid quarterly in advance based on the value of each
Investor's account(s) or commitments, as applicable, as of the beginning of each fiscal
quarter. The investment management fees may be prorated for periods less than a full
quarter in the Adviser’s discretion.
Certain Funds may receive cash flows ("Seed Cash Flows") from strategic relationships with
hedge fund managers ("Seed Investments") in addition to the market-related return on their
investments. Any portion of Seed Cash Flows directly attributable to the Funds’ investment
with such hedge fund manager or investment fund and which the Funds treat as a rebate or
reduction on fees paid on their own capital investment will be included in the general net
Form ADV Part 2A
profits of the eligible Funds and shared among Investors (the “Discount from Seed
Managers”). Seed Cash Flows net of the Discount from Seed Managers are referred to
herein as “Net Seed Cash Flows”. As of the end of each fiscal year, in certain funds or client
accounts, up to 70% of Net Seed Cash Flows may be allocated to the Adviser or its affiliate,
and Seed Cash Flows to the Adviser or its affiliate may be subject to a loss carry forward
("Investment Manager Seed Cash Flows"). Receipt of Investment Manager Seed Cash Flows
may be subject to a hurdle rate.
In addition, the Funds pay or allocate to the Adviser or its affiliate performance-based
compensation. The performance-based compensation is calculated based on a percentage of
the net profits of each Fund at the end of each fiscal year and ranges from 2% to 20.0%
depending on various factors including, but not limited to, the size of the investment, an
agreement by an Investor to maintain such investment for a significant period of time or
other similar commitment by an Investor, the rate of return of the Investor, or type of Fund,
and may be subject to a loss carry forward. With respect to certain Funds, receipt of
performance-based compensation may be subject to a negotiated hurdle rate based on an
index or a minimum internal rate of return. The performance-based compensation may or
may not be charged on Net Seed Cash Flows, although all Seed Cash Flows will be included
for purposes of determining whether the hurdle rate, if any, has been achieved.
The Adviser or its affiliate may, in effect, waive or reduce investment management fees,
Investment Manager Seed Cash Flows and performance-based compensation for certain
Investors.
Investment management fees are deducted from each Fund quarterly by instructing the
administrator to the Funds to deduct the applicable fee.
Each Fund will pay its own expenses, including, but not limited to, the fees payable to the
Adviser (a portion of which may be paid to any placement agents) and the fees and expenses
of the administrator, directors’ fees, legal, accounting, tax, auditing and other external
professional expenses (including background checks of hedge fund managers in which the
Funds invest ("Hedge Fund Managers") and internal conflict reviews of the Adviser),
investment expenses such as commissions, research and external operational due diligence
expenses, organizational expenses in the case of certain Funds, interest on margin accounts
and other indebtedness, custodial fees, bank service fees and direct and indirect fees and
expenses paid to Hedge Fund Managers, including fees paid to Hedge Fund Managers with
respect to any managed account with Hedge Fund Managers and any pooled managed
account entity organized to facilitate such manged accounts, if any, and other reasonable
expenses related to the purchase, sale or transmittal of the relevant Fund's assets. In
addition, each Fund will pay a portion of the premiums for a liability insurance policy and a
fidelity bond covering the Funds, the Adviser and certain affiliates. In general, any expenses
which relate specifically to a particular Seed Investment will generally be charged only to that
Seed Investment and applied against Net Seed Cash Flows. Certain Funds will pay any out-
of-pocket expenses of their advisory committee. Further, because the Funds typically invest
in other pooled investment vehicles that themselves pay advisory and performance-based
fees to their respective advisors (including, without limitation, fees based on a percentage of
assets under management and performance-based compensation), the Funds will bear a
proportionate share of such fees in addition to those paid to the Adviser by the Funds. The
Funds also bear their pro rata share of the underlying fund's operating and other expenses
including, but not limited to, in addition to those listed above, sales expenses, legal expenses,
internal and external accounting audit and tax preparation expenses and organizational
expenses.
Form ADV Part 2A
In certain Funds, a portion of fund assets may be invested in money market mutual funds,
ETFs or other registered investment companies. In these cases, those Funds will bear their
pro rata share of the investment management fee and other fees of the fund, which are in
addition to the investment management fees paid to the Adviser.
To the extent the Funds are invested in master-feeder structures, the feeder funds bear a
pro rata share of the expenses associated with the related master fund. In addition, Funds
will incur brokerage and other transaction costs. Please refer to Item 12 of this Brochure
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