Fees and Compensation
A. As compensation for its services, Tower Road will generally receive an annualized management fee
(“Management Fee”) equal to 1.5% (i.e., 150 basis points) of the value of each investor’s capital account, subject
to certain variations based on the series of Fund interest held by an investor. The Firm and/or the General
Partner (or an affiliate or designee thereof) will also receive incentive-based compensation (“Incentive
Allocation”) of up to 20% of the Fund’s net profits per annum.
B. The Firm receives the Management Fee directly from a Fund on a quarterly basis. The calculation of
the Management Fee is derived from the most recent calculation of net asset value, as determined by the Funds’
administrator and confirmed by Tower Road and/or the General Partner. The Incentive Allocation, if any, is
calculated as of the end of each fiscal year and deducted directly from the Funds.
C. Tower Road and the Funds generally bear their own expenses. Expenses, above and beyond the
Management Fee and Incentive Allocation discussed above, are allocated on a case by case basis in accordance
with the Governing Documents. Additional expenses the Funds will incur generally include but are not limited
to Fund operating expenses and organizational expenses, which include:
(i) all investment-related costs and expenses (i.e., expenses that, in the Investment Manager’s sole
discretion, are related to the investment of the Fund’s assets, whether or not such investments are
consummated), including commissions and charges, interest on margin accounts and other indebtedness,
expenses relating to short sales, clearing and settlement charges, option premiums and custodial and service
fees, research-related expenses (including research-related travel expenses), expenses relating to consultants,
attorneys, brokers or other professionals or advisors who provide research, advice or due diligence services
with regard to investments;
(ii) fees and expenses related to portfolio exposure and performance management systems, risk
management services and software related to trade reconciliation, treasury, margin, financial and counterparty
management, risk monitoring, performance reporting, valuation quotation services (e.g., Bloomberg terminals,
historical and live financial data and other similar services and data feeds) and trade order management systems
(including systems that facilitate trade compliance, commission management, stock locates and transaction cost
analysis, and third party service providers used for implementation, custom reporting, updates, consultations,
support, maintenance, monitoring and data extracts);
(iii) the Funds’ legal, accounting (including fees associated with accounting software and systems), tax
preparation and other tax-related expenses (including preparation and mailing costs of financial statements, tax
returns and other reports to investors), auditing, consulting and other professional expenses;
(iv) third-party administration costs, fees and expenses (including any costs, fees and expenses related
to investor communications, relations, reporting or other investor materials, tax preparation and related
reporting, performance information, data extraction and other types of reporting and any audit or accounting
services provided by a third-party administrator);
(v) all fees and charges of custodians, clearing agencies and banks;
(vi) compliance and reporting expenses and expenses attributable to regulatory filings that are made
with respect to the Funds or assets of the Funds (including Section 13, Section 16, Form D, Form PF, FATCA,
anti-money laundering compliance, state security filings, general regulatory compliance and non-U.S. position
reporting filings, if applicable, and non-U.S. filings, if any);
(vii) the Funds’ pro rata share of Fund-related insurance costs (including the Funds’ pro rata portion
of director’s and officer’s insurance, errors and omissions insurance, fidelity insurance and other similar policies
covering the General Partner and/or the Investment Manager);
(viii) any taxes (including but not limited to any withholding taxes, transfer taxes, stamp duties and
other governmental or self-regulatory agency-related charges or duties);
(ix) all costs and expenses incurred in attempting to protect and enhance the value of a Fund investment
(including any fees and expenses associated with any pending or threatened litigation, audit, investigation,
administrative or other proceeding, as well as any settlement costs);
(x) any fees and expenses related to a Fund’s liquidation, if applicable;
(xi) fees paid to proxy and securities class action advisory firms;
(xii) expenses relating to the offer and sale of Interests in the Fund and common shares of the Offshore
Fund, as applicable, and withdrawals/redemptions and transfers thereof;
(xiii) Offshore Fund directors’ fees and expenses;
(xiv) other reasonable expenses related to the purchase, sale, preservation or transmittal of the Funds’
assets; and
(xv) any extraordinary expenses (e.g., indemnification expenses).
Certain expenses of the Master Fund that are specific to the Onshore Feeder or the Offshore Feeder may be
specially charged to the Onshore Fund or the Offshore Fund, as applicable. As a result, the Performance of
the Onshore Feeder, Offshore Feeder and Master Fund may be different from one another.
The Funds do not have their own separate employees or offices, and it does not reimburse the Investment
Manager for salaries or office rent. The Investment Manager is responsible for all of its overhead expenses and
other similar expenses, except as provided for herein.
The fee and expense description in this Brochure does not purport to be complete or comprehensive and
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