Item 5 – Fees and Compensation
A. Describe how you are compensated for your advisory services. Provide your fee
schedule. Disclose whether the fees are negotiable.
Silverpath has established an early investor management fee for capital contributions made to the
Feeder Funds on or prior to the date on which the Feeder Funds have received a combined $100
million in capital contributions (the “Contribution Threshold”). In consideration for the investment
management services provided to the Funds, the Master Fund pays to Silverpath (on behalf of each
Feeder Fund) an annual management fee of 1% with respect to capital contributions made before
the Contribution Threshold is exceeded and 1.5% for capital contributions received after the
Contribution Threshold is exceeded, of the Master Fund’s net asset value (the “Management Fee”)
attributable to each Feeder Fund (prorated for partial periods and calculated prior to the accrual of
the Incentive Allocation, as defined and discussed in Item 6 below). The Fund will establish separate
sub-accounts for the purpose of calculating different Management Fees for investors who subscribe
for interests both before and after the Contribution Threshold is achieved. Management Fees are
payable without regard to the overall success or income earned by a Fund. No separate Management
Fee generally shall be paid by the Onshore and/or Offshore Fund.
Silverpath, in its sole discretion, may elect to reduce or waive the Management Fee with respect to
any limited partner and/or shareholder, including Principals and employees of the Investment
Manager or its affiliates. In such event, the amount of the Management Fee paid by the Master Fund
to the Investment Manager will be adjusted accordingly. The Principals or other employees of
Silverpath may receive a portion of the Management Fees, Incentive Allocation, or other compensation
received by Silverpath or the General Partner.
Managed Account clients may pay management and/or performance fees to Silverpath as negotiated
and reflected in the IMA for the Managed Account.
B. Describe whether you deduct fees from clients’ assets or bill clients for fees incurred.
If clients may select either method, disclose this fact. Explain how often you bill clients or
deduct your fees.
The Master Fund deducts Management Fees from the capital account of each investor in the
Onshore Fund and from the Shares of each investor in the Offshore Fund on a monthly basis.
Managed Account clients can choose to have their fees deducted from their assets or to be billed.
C. Describe any other types of fees or expenses clients may pay in connection with your
advisory services, such as custodian fees or mutual fund expenses. Disclose that clients will
incur brokerage and other transaction costs, and direct clients to the section(s) of your
brochure that discuss brokerage.
In addition to the incentive fees described in Item 6 below, each Fund bears all offering,
organizational and operating expenses. This includes the Management Fee, legal and accounting
services, investment related expenses (including, but not limited to: commissions; clearing fees; fees,
interest and other costs on margin accounts or other financings or re-financings and research
expenses (such as Bloomberg and S &P Global Market Intelligence), and other expenses incurred in
connection with the initial and continuous offering of interests, regulatory compliance (including
registrations and securities, investment adviser and tax examinations), administrator fees, D&O
insurance, extraordinary expenses and other similar expenses. Expenses paid on behalf of the
Funds by the General Partner, the Investment Manager or their affiliates will be reimbursed by the
Funds except to the extent waived.
Subject to the foregoing, the Investment Manager and the General Partner bear all fixed overhead
expenses required for the administration of the Funds and Managed Accounts (other than such costs
as are borne by such Funds as described above, including third-party administrator fees). This
includes, but is not limited to: salaries and benefits of personnel of the Fund, the Investment Manager
and the General Partner; rent; most office equipment and other overhead-type expenses.
Each Fund’s investors are also responsible for the formation and organizational expenses of their
respective Fund and such Fund’s pro rata share of the Master Fund’s organizational expenses. Each
Fund’s organizational expenses are amortized over a period that is up to 60-months in length, unless
such treatment results in adverse regulatory or accounting consequences in which case the Fund may, in
the discretion of the General Partner, adopt alternative approaches to expensing and/or amortizing such
expenses.
The precise amount of, and the manner and calculation of, the Management Fees for each Fund are set
forth in the respective Fund’s governing documents and/or other documentation received by each
investor prior to making an investment in such Fund. The amount of Management Fees, fund expenses
and any offset thereof may differ from one Fund to another, as well as among investors in the same
Fund.
Managed Account clients can negotiate in their IMA for the allocation of expenses related to their
Managed Account.
D. If your clients either may or must pay your fees in advance, disclose this fact. Explain
how a client may obtain a refund of a pre-paid fee if the advisory contract is terminated before
the end of the billing period. Explain how you will determine the amount of the refund.
No Clients must pay fees in advance. Management Fees applicable to the Funds and Managed
Accounts are paid monthly in arrears as described in the IMA and/or the governing documents
of each Feeder Fund or Managed Account. Any redemption amounts will be adjusted for the
Incentive Allocation and the Management Fee.
E. If you or any of your supervised persons accepts compensation for the sale of
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