Item 5 Fees and Compensation
As compensation for its investment management services, TPRV receives a management fee based on
the assets under management of each of the Feeder Funds. The management fee is set forth in the
Funds’ Governing Documents. TPRV retains the discretion to waive fees for one or more investors, in
whole or in part, without notification to other investors, however, and certain investors in one or more
Funds have negotiated for and pay reduced management fees.
Management fees are payable quarterly in advance and generally are paid at the Master Fund level.
The Master Fund pays the management fee to TPRV and deducts a corresponding amount from the
capital accounts maintained by the Feeder Funds in the Master Fund. Each investor’s share of the
management fee is, in turn, deducted from the investor’s capital account balance in the Feeder Funds,
or, in the case of investors in the Offshore Feeder, offset against the net asset value underlying their
shares.
The capital account of an investor admitted to a Fund on a day other than the first day of the calendar
quarter is charged a pro rata portion of the management fee corresponding to the number of months
remaining in the quarter. Investor withdrawals occur on the last day of the quarter. In the unlikely
event that an investor were to be permitted to withdraw as of a date other than the last day of the
quarter, no portion of the management fee would be refunded, but the portion of the management fee
attributable to the number of complete months remaining in the quarter following such withdrawal
would not be deducted from the withdrawn investor’s capital account.
In addition to the management fee, investors bear their allocable share of expenses associated with the
operations of the Funds and the protection of Fund assets. These expenses include:
▪ all transaction costs relating to the Funds’ investments (including, without limitation, expenses
related to the investments of the Funds’ assets, such as brokerage commissions and other
transaction costs (brokerage commissions are also discussed in Item 12), research (including,
without limitation, Bloomberg services and other market data services and other data associated
with the calculation and distribution of the Fund’s net asset value), due diligence and negotiation
expenses (including related travel expenses), whether or not the related investment is
consummated, clearing and settlement charges, custodial fees, margin and interest expenses and
commitment fees on debit balances or borrowings, borrowing charges on securities sold short,
and any issue or transfer taxes chargeable in connection with any securities transactions);
▪ consulting, legal and other professional fees relating to potential and actual investments;
directors’ fees, expenses of professionals providing services to the Funds, including legal, audit
and tax preparation expenses; the fees and expenses of the advisory board of the Master Fund;
accounting fees; administration fees and expenses (including fees and expenses of the Funds ’
administrator, including middle office functions, anti-money laundering compliance and
preparation of regulatory filings for the Funds);
▪ fees and expenses for risk management services, including risk management software (including,
without limitation FrontArena software); insurance expenses, including costs of any liability
insurance obtained on behalf of the Funds (including, without limitation, directors and officers
insurance);
▪ organizational expenses (which may be amortized); regulatory costs and expenses (including filing
and license fees and preparation and submission of filings such as Form PF); costs of reporting
and providing information to investors; any entity-level taxes;
▪ costs of any litigation or investigation involving Fund activities, indemnification expenses, any
extraordinary expenses;
and all other costs and expenses related to the Funds’ business and operations. It is anticipated that
most investment-related and other expenses will be incurred by the Master Fund; in such case, each
of the Onshore Feeder and the Offshore Feeder is responsible for its pro rata portion of such expenses.
These expenses are deducted from the capital accounts of investors (or reflected in the net asset value
of the Offshore Feeder) at the end of the fiscal period in which they are accrued by the Funds (typically
monthly).