Item 5: Fees and Compensation
The fees applicable to each of the Clients are set forth in detail in the corresponding Offering
Documents. A brief summary of such fees is provided below.
Talos Funds
Management Fee
The Talos Funds will pay the Firm a fee for its services (the “Management Fee”) for each fiscal quarter
equal to a quarter of the applicable Management Fee Rate (as defined below) multiplied by the balance
of each Capital Account of an Investor as of the beginning of such fiscal quarter (before taking into
account the estimated accrued Incentive Allocation, if any). The Talos Funds will calculate and pay the
Management Fee in advance but will amortize the Management Fee monthly over the fiscal quarter for
which such Management Fee is paid.
The “Management Fee Rate” will range from 1.50% to 1.75% per annum.
The Firm, in its sole discretion, may waive or modify Management Fee for any Investor.
Incentive Allocation
Generally, at the end of each Fiscal Year, the Talos Funds will reallocate from each Series Capital
Account to the Talos Funds capital account of the General Partner, in its capacity as general partner of
the Talos Funds, an amount (the “Incentive Allocation”) equal to applicable Incentive Allocation Rate
(as defined below) multiplied by the amount of the net capital appreciation allocated to each Series
Capital Account for such Fiscal Year after reduction by an amount equal to the amount of the
Management Fee debited to such Series Capital Account for such Fiscal Year and any expenses of the
Talos Funds (other than Investor-Related Taxes) corresponding to such Series Capital Account for such
Fiscal Year; provided, however, that the net capital appreciation upon which the calculation of the
Incentive Allocation is based will be reduced to the extent of any balance in such Series Capital
Account's Loss Recovery Account.
The “Incentive Allocation Rate” will range from 17.50% to 20%.
The General Partner, in its sole discretion, may waive or modify the Incentive Allocation for any
Investor.
Talos Eurisko Asset Management LP Part 2A Brochure
Other Types of Fees or Expenses
The Talos Funds will bear all of their operating expenses and their pro rata share of the operating
expenses of all trading vehicles, including subsidiaries and/or special purpose vehicles through which
the Talos Funds invest or intend to invest (each, a “Trading Vehicle”), if any (collectively, the “Fund
Expenses”), including such costs incurred at or prior to the formation of the Fund and prior to the
closing of the Talos Funds, which expenses will include, without limitation:
(a) organizational and offering expenses; (b) expenses associated with all investments and transactions
considered, evaluated and/or consummated by the Talos Funds or any such Trading Vehicles, as well
as the overall consideration and evaluation of such entities' portfolio, including those expenses incurred
before the initial closing of the Talos Funds, including expenses associated with sourcing, negotiating,
investigating, researching, financing and structuring of investments and potential investments, whether
or not consummated, including data and research on-boarding, ingestion, aggregation, and analysis,
third-party research, data, analytics, modeling, risk, structuring, pricing, execution and other third-party
information, technology, hardware, software or other technology systems, including installation and
maintenance, software and service fees (including the expenses with respect to data, data feeds,
subscriptions, expert networks, political intelligence providers and reports); (c) the costs of research-
related computer hardware and software expenses, including Bloomberg terminals and subscriptions
and other market information systems, as well as the costs of research management systems and
corporate access tracking systems; (d) the costs of the Firm’s portfolio management system and any
other software used for accounting and/or monitoring of the portfolio, including subscriptions relating
to, among other things, trading and order management systems and services; (e) expenses associated
with holding, financing, monitoring, hedging, maintaining and disposing of all Talos Funds’
investments and all transaction and other costs associated therewith, including expenses associated with
proxy research and voting services; (f) travel and related expenses associated with investments and
potential investments; (g) professional fees associated with investments and potential investments,
including consulting, due diligence, accounting, valuation, financial, legal and other advisory fees and
expenses; (h) transaction fees, brokerage commissions, custodial fees, clearing and settlement charges
and similar fees and expenses associated with the acquisition, disposition and settling of Talos Funds
investments and potential investments, including fees, expenses and commission paid in connection
with outsourced trading; (i) expenses associated with legal and regulatory filings of the Talos Funds or
such Trading Vehicles in the United States, Bermuda, or in any other jurisdiction, including pursuant
to Sections 13 and 16 of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”),
as well as the expenses associated with preparation and filing of the Firm’s Form 13F, Form 13H, and
Form PF, if applicable, and any other similar filing in any other U.S. or non-U.S. jurisdiction; (j)
administrative, custodial, appraisal, valuation, legal, regulatory, compliance, consulting, advisory and
similar fees, and expenses associated with the Talos Funds’ or such Trading Vehicles’ operations,
investments and transactions, including fees and expenses of the Talos Funds administrator; (k)
expenses incurred in connection with responding to requests or inquiries from any U.S. federal, state,
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