Item 5 – Fees and Compensation
Management Fees
The Funds
The Master Fund pays Skye Global a management fee with respect to the non-discretionary
operational and administrative services it provides to each of the Feeder Funds and the
discretionary investment advisory services it provides to the Master Fund. The
management fee is calculated as a percentage of assets under management by Skye Global
in each Feeder Fund. Management fees are payable quarterly in advance based on the asset
value of the applicable Fund as of the first business day of the calendar quarter. Each
underlying investor in a Feeder Fund pays Skye Global the portion of the fee attributable
to that investor’s holdings in the Feeder Fund. The management fee paid to Skye Global
with respect to new investors in the Feeder Funds is equal to 1.5% per year, or 0.375% per
quarter. Series F investors in the Feeder Funds are subject to lower fees for as long as
assets under management in the Master Fund remain above $250 million. Fees paid in
advance are not refundable.
The Managed Account
Skye Global’s Managed Account clients generally compensate Skye Global based on a
quarterly or monthly fee that is computed as a percentage of the value of the assets under
management. All such fee arrangements are individually negotiated.
Performance-Based Compensation
The Funds
At the end of each fiscal year, by virtue of Skye Global LLC, an affiliate of Skye Global
(the “Affiliate”), holding the performance allocation share in the Master Fund, each Feeder
Fund also makes, to the Affiliate, a performance-based allocation in compliance with Rule
205-3 under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). The
performance allocation applicable to the Feeder Funds is equal to 20% of the net profits of
each such Fund and is paid at the Master Fund level to the Affiliate. Skye Global makes
the performance allocation pro rata from the account of each underlying Feeder Fund
investor in the amount attributable to that investor’s holdings in the Feeder Fund. The
performance allocation is subject to a high-water mark. This means that no performance
allocation is made unless the value of investor assets has increased since the prior
allocation. If the client Fund terminates the investment management agreement, or an
underlying investor withdraws its assets from the Fund, fees will be allocated on a pro rata
basis. Skye Global waives the performance allocation associated with investors in the
Funds who are employees or affiliates of Skye Global.
The Managed Account
Fees for all managed accounts are individually negotiated.
Fee Differential
Investors that are affiliated with Skye Global, and Skye Global employees and former
employees do not pay the management fee and are not subject to the performance allocation
with respect to their investment in a Fund.
Early Withdrawal and Related Charges
Any capital contribution that is withdrawn from a Fund before the completion of the
investor’s commitment period is subject to an early termination fee as set out in detail in
the applicable Fund’s confidential private offering memorandum.
The commitment period for investors in the Feeder Funds is one year. Investors who
withdraw a capital contribution prior to the end of the one-year period will pay an early
withdrawal fee equal to 5% of the amount withdrawn prior to the expiration of the
commitment period.
All early withdrawal charges are retained by the Funds. For the purposes of determining
the amount of the early withdrawal fee (if any), contributions are treated on a first in first
out basis.
Other Fees
All fees paid to Skye Global are separate from all costs and expenses related to a Fund’s
operations and, with respect to the Master Fund only, the fees related to its investments.
These costs incurred by the Feeder Funds include, but are not limited to, audit and tax
preparation expenses, partnership representative fees and expenses, legal expenses,
organizational expenses, accounting fees, each Fund’s administration expenses (including
but not limited to the expenses of the Feeder Funds’ administrator), the direct and related
costs of insurance expenses, including costs of any liability insurance obtained on behalf
of the Feeder Funds, indemnification expenses, regulatory and compliance costs and
expenses (including, but not limited to expenses and license fees related to certain
regulatory filings (e.g., FATCA and CRS filings), any issue or transfer taxes chargeable in
connection with any transactions, any entity level taxes and fees, the cost of reporting and
providing information to investors, including printing the Feeder Funds’ offering
documents and delivering them to existing and potential investors and/or ongoing offering
expenses, the costs, if applicable, of ERISA (as defined below) bonding requirements and
other fees and expenses, which may be incurred by a Feeder Fund relating to the cost of
maintaining the Fund’s legal existence. The Feeder Funds will each bear its pro-rata
portion of any restructuring expenses and costs of litigation or investigation involving Fund
activities (except with respect to costs associated with an investigation where there is a
sanction or a violation of the Advisers Act), and any extraordinary expenses. The Feeder
Funds will also bear their pro rata share of the Master Fund’s expenses, including but not
limited to, future re-organizational expenses, the management fee, brokerage commissions
and other transaction costs (including those used to obtain research and related services)
bid/offer spreads, legal fees and expenses incurred in structuring transactions or in
connection with conducting due diligence and negotiating the terms of certain investments,
clearing and settlement charges, consulting expenses, research expenses, custodial and
transfer agency fees, initial and variation margin, interest and commitment fees on debit
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