Item 5 – Fees and Compensation
A. Fee Schedule
The fees and compensation payable to Taika are negotiable and may vary among its
Clients. Currently, for Taika managed private funds, the range of compensation is
generally as follows:
1. Management Fee
With respect to the Funds, Taika typically receives a monthly asset-based management fee
calculated as a percentage of each Investor’s capital account, payable monthly in advance.
The management fee is generally 2% annualized. With respect to SMA and Sub-Advisory
Clients, Management Fees vary on a case-by-case basis. Management Fees may be
higher or lower than those set for the Funds, often considering constraints and rights
negotiated with the SMA Client, as well as the Performance Fees.
2. Performance-based Fees
From the Funds, Taika generally receives an incentive allocation equal to a percentage of the
net income allocated to each Investor for the year, but only to the extent net income allocated
to that Investor exceeds any cumulative losses that were allocated to that Investor for earlier
periods and that have not been recovered (a “high water mark”). This incentive allocation is
generally 20% and is typically made at the end of each calendar year.
The incentive allocation will only be charged to accounts of those investors who are “qualified
clients” as defined in Rule 205-3 of the Investment Advisers Act of 1940, as amended
(“Advisers Act”), in accordance with applicable state law.
With respect to SMA and Sub-Advisory Clients, Management Fees vary on a case-by-
case basis. Performance Fees may be higher or lower than those set for the Funds, often
considering constraints and rights negotiated with the SMA Client, as well as the
Management Fees.
3. Other Fees
Consulting Services
Taika does not provide consulting services to its Clients.
4. Fee Comparison
Client expenses, including the management fee and any performance-based fees may
constitute a higher percentage of average net assets than could be found in other investment
programs.
B. Payment of Fees
Management fees, performance-based fees, and third-party fees (discussed below) are
deducted from Client assets. Management fees, which are paid in advance, are withdrawn in
advance at the beginning of the month based on the prior month-end value of client assets.
Part 2A of ADV:
Taika Brochure
Performance-based fees are determined as of the last business day of the calendar year and
as of any date on which an Investor makes a withdrawal or receives a distribution from such
Investor’s capital account(s).
Taika’s sole Sub-Advisory Client has a different frequency and timing for payment of fees
than the Funds, and future SMA Clients may also have differing fee payment schedules that
are tailored to each client’s specific needs.
C. Third-Party Fees
Clients shall pay such costs and expenses as Taika shall reasonably determine to be
necessary, appropriate, advisable or convenient to carry on its business and realize its
objective, including but not limited to: (i) management fees; (ii) all general investment
expenses (i.e., expenses which Taika reasonably determines to be directly related to the
investment of the Client’s assets); (iii) all administrative, legal, accounting, auditing, record-
keeping, tax form preparation, compliance and consulting costs and expenses; (iv) fees, costs
and expenses of third-party service providers that provide such services; and, (v) any
extraordinary expenses, among other expenses. Costs and expenses that are borne by the
Clients are disclosed in the Constituent Documents or the individual management
agreements for Sub-Advisory and SMA Clients.
Taika’s fees are exclusive of brokerage commissions, transaction fees, and other related costs
and expenses which shall be incurred by the Funds, SMAs, and Sub-Advisory Clients. Such
charges, fees and commissions are exclusive of and in addition to Taika’s management and,
where applicable, performance-based fee, and Taika shall not receive any portion of these
commissions, fees, and costs. Any deviations are, or will be, specified in the management
agreements of Sub-Advisory and future SMA Clients.
Please see Item 12 of this Brochure regarding brokerage activity.
D. Prepayment of Fees
Taika will pro rate the management fee for Fund Interests held for less than a full month as a
result of subscribing for interests other than on the first business day of the month. The same
pro ration of fees process applies for SMA and Sub-Advisory Clients where the advisory
services commence after the first business day of the month. Prepaid but unearned fees are
refunded to the Clients, as the case may be.
Taika generally requires Fund investors wishing to withdraw amounts from their capital
accounts to provide 45 days written notice for the last calendar day of a fiscal quarter, with
withdrawals subject to further restrictions within the first 12 months of investors capital
contribution, or for non-quarter end calendar dates and does not permit withdrawals on any
other date. SMA and Sub-Advisory Clients may have more or less favorable withdrawal
rights. Withdrawal rights are negotiated with SMA and Sub-Advisory Clients on a case-
by-case basis and consider the unique liquidity requirements of the Client, as well as
the broader rights and obligations negotiated for in the sub-advisory of future
individual management agreements.
Part 2A of ADV:
Taika Brochure
E. Outside Compensation for the Sale of Securities
Neither Taika nor its supervised persons accept compensation for the sale of securities or
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