Item 5 - Fees and Compensation
Our fees and compensation are described in each Feeder Fund’s governing documents and/or the
investment management agreements we enter into with our Accounts, as applicable. All of our
current Accounts and investors in the Feeder Funds are “qualified purchasers” as defined in Section
2(a)(51) of the Investment Company Act of 1940, as amended (the “1940 Act”).
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Trexquant’s fees and compensation for the Accounts are separately negotiated with each
institutional Client.
We deduct our management fees from the Master Funds monthly in advance. We invoice our
management fees from the Accounts monthly in advance.
We receive performance-based fees from Clients on an annual basis in arrears and upon redemptions
by investors in the Feeder Funds and Accounts. In our discretion, our management and/or
performance-based fees may be paid by the Feeder Funds instead of by a Master Fund for any period
of time.
Once paid, fees are not refundable.
Each Feeder Fund will pay, or reimburse us and/or the General Partner for advancing, such Feeder
Fund’s own expenses and its pro rata share of the respective Master Fund’s expenses, including,
without limitation, the following: (i) trading related commissions and expenses such as brokerage
fees, commissions and expenses (including the costs of negotiating, documenting and/or amending
agreements with prime brokers, ISDAs and other agreements with trading and financing
counterparties), bank service fees, interest on loans and debit balances, borrowing charges on
securities sold short, clearing and settlement charges and custodial fees and expenses; (ii) data
expenses such as fees and expenses for research, analytics and market data (including, without
limitation, third-party data sources and any information technology hardware, software, data
subscriptions (including alternative data, structured/analyzed data, raw market data and on-line
news and quotation services such as Refinitiv or Bloomberg) or other technology incorporated into
the cost of obtaining such research, analytics and market data); (iii) expenses related to the offering
and sale of such Feeder Fund’s interests (including, without limitation, our fees and expenses
incurred in connection with private placement regimes such as the European Alternative Investment
Fund Managers Directive, fees and expenses (including third- party fees) incurred in connection
with complying with the offering and distribution laws and regulations of jurisdictions in which the
shares or interests may be offered or sold from time to time, Form D and blue sky filing and similar
fees and expenses, and costs incurred related to the negotiation and compliance with the provisions
of any side letter agreement with investors); (iv) professional fees, including, without limitation,
legal, compliance, consulting, accounting and administration fees and expenses (including, without
limitation, related to the Funds compliance with the Foreign Account Tax Compliance Act and the
Automatic Exchange of Information or similar laws enacted in other jurisdictions, as well as any
fees and expenses related to compliance with anti-money laundering laws and regulations applicable
to each Feeder Fund (including AML officer fees and expenses)), and the fees and expenses of any
other service providers who provide services to such Feeder Fund (on matters that would not have
arisen but for their respective advisory relationships with such Feeder Fund)); (v) investor reporting
costs (including the development, implementation and maintenance of an investor electronic
delivery site and/or system); (vi) our fees and expenses incurred in connection with preparing and
filing reports related to such Feeder Fund’s trading activities (including under investment advisory
or commodity pool operator laws, such as Form PF, Section 13 filings, Section 16 filings and other
similar regulatory filings for such Feeder Fund); (vii) audit and tax preparation expenses; (viii) any
taxes applicable to such Feeder Fund on account of its operations and/or trades; (ix) director
expenses such as fees of the Offshore Fund’s independent directors and trustees, and fees of the
governance committee members of a Master Fund; (x) insurance expenses, including, without
limitation, premiums for directors and officers, errors and omissions, and cybersecurity and liability
insurance policies covering such Feeder Fund and the principals, officers, employees, managers,
partners, members, affiliates or agents of the foregoing, and the directors and governance committee
members (in each case, even if such insurance covers conduct for which indemnity would not be
available from the Funds); (xi) any reorganizational fees and expenses; (xii) the costs of any
litigation or investigation involving activities of the Feeder Funds and a Master Fund, including
amounts paid in settlements thereof and attorneys’ fees; and (xiii) any and all expenses related to
the management and operation of such Feeder Fund, as well as the purchase, sale or transmittal of
assets, as we will determine in our discretion, including costs and expenses incurred in creating and
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maintaining the technology and data infrastructure needed in order to assimilate, research and back-
test large numbers of data sets and execute trades efficiently (including, without limitation,
hardware related expenses such as the costs of purchasing or leasing data center servers, data center
locations services fees, software expenses or other technology such as costs of software licensing,
implementation, data management and recovery services and custom development, which include,
without limitation, legal expenses related to negotiating with counterparties in connection with the
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