Item 5. Fees and Compensation
The Funds may compensate the Adviser through two distinct mechanisms: management fee and incentive
compensation. Details regarding fees and expenses and how they are charged are set forth in each Fund’s
governing documents, which must be reviewed carefully by each investor and potential investor of a Fund.
Management Fee
The Master Fund will pay to the Adviser a quarterly management fee calculated at an annual rate of (i) 2%
of the net assets of the Feeder Funds attributable to Sub-Class A Series/Shares and (ii) 1.5% of the net assets
of the Feeder Funds attributable to Sub-Class B Series/Shares. The RG Fund will pay to the Adviser a
quarterly management fee calculated at an annual rate of 1.5% of the net asset value of the RG Fund. The
management fee will be paid quarterly in advance. The management fee will be adjusted for subscriptions
and redemptions occurring during the quarter. Any prepaid fees shall be refunded pro rata if the relevant
advisory contract is terminated before the end of a quarter.
The Adviser may waive or modify the management fee for Investors that are partners, employees or
affiliates of the Adviser, relatives of such persons, and for certain investors. Pursuant to an agreement
between the Adviser and one early-stage investor ( the “Strategic Investor” and the agreement the “Seed
Agreement”), the Adviser pays the Strategic Investor a minority portion of the management fee it receives
from the Affiliated Funds.
The management fee applicable to the Sub-Advisory Fund was specifically negotiated between the Adviser
and the Sub-Advisory Fund and is set forth in the relevant sub-advisory agreement.
Incentive Compensation
At the end of each fiscal year, each investor in a Feeder Fund will be subject to an incentive compensation
assessment at the Master Fund level equal to, in the aggregate, 20% of the net profits attributable to their
account (including unrealized gains and losses), if any, subject to a loss carryforward. At the end of each
fiscal year, each shareholder of the RG Fund will be subject to an incentive fee equal to 15% of the net
profits attributable to their account (including unrealized gains and losses), if any, subject to a loss
carryforward. The incentive compensation may take the form of either a cash fee or capital reallocation.
Pursuant to the Seed Agreement, the Adviser pays the Strategic Investor a minority portion of the incentive
compensation it receives from the Affiliated Funds. The Adviser may waive or modify the incentive
compensation for investors that are partners, employees or affiliates of the Adviser or the General Partner
(as defined below), relatives of such persons, and for certain investors.
The Adviser renders its services to the Affiliated Funds at its own expense and are responsible for their
overhead expenses including: office rent; utilities; furniture and fixtures; stationery; secretarial/internal
administrative services; salaries and bonuses; entertainment expenses; employee insurance and payroll
taxes. All other expenses are paid by the Affiliated Funds and include, but are not necessarily limited to,
(i) legal, compliance, fund administrator, audit and accounting expenses (including third party accounting
services); (ii) organizational expenses; (iii) Affiliated Fund-related insurance costs (including a portion of
D&O and E&O insurance for the Adviser and outside Directorship liability); (iv) research fees and expenses
(e.g., Bloomberg), including research-related travel; (v) the management fee; (vi) investment expenses such
as commissions; (vii) interest on margin accounts and indebtedness; (viii) borrowing charges on securities
sold short; (ix) custodial fees; (x) bank service fees; (xi) portfolio and risk management software; and (xii)
any other expenses related to the purchase, sale or transmittal of Affiliated Fund assets. Organizational
expenses are borne by the Affiliated Fund and, for net asset value purposes, may be amortized over a period
of up to 60 months from the date the Affiliated Fund commenced operations.
The expenses paid by the Sub-Advisory Fund and Adviser with respect to the Sub-Advisory Fund are set
forth in the relevant sub-advisory agreement.