Item 5 – Fees and Compensation
Advisory Contracts and Fees
5.A. Adviser Compensation
Fee Schedules
Private Funds
Detailed descriptions of Private Fund fees are located in each Private Fund’s Offering
Documents.
The management fee is calculated and paid quarterly in arrears, in an amount equal to one
half of one percent (0.5%) of the average month-end net asset value of the Fund during the
applicable calendar quarter (approximately 2% annually). Twin may also receive incentive
compensation paid through an annual allocation of profits from each Investor. The incentive
compensation is equal to, in the aggregate, 20% of the appreciation of each series’ net asset
value and is subject to a high-water mark. The incentive compensation, if any, is accrued
monthly and may be allocated as of December 31 (or as of a termination date of the
investment management agreement). If an Investor in the Private Fund makes a redemption
prior to the end of a calendar year, an incentive allocation will be made at such time with
respect to the redeemed amount.
In the sole discretion of Twin, management and performance-based fees may be waived,
reduced, or calculated differently with respect to certain Investors, including, without
limitation, Investors that are officers, directors, members, partners, or employees
(collectively the “Employees”) of Twin, members of the immediate families of such persons,
and trusts or other entities for their benefit. Thus, different investors may pay different
management fees or incentive compensation based on the investment date or waivers.
Certain Private Funds may maintain multiple class structures with differing fees paid by each
class.
SMCs
SMCs are subject to different terms and fee arrangements. The terms of these arrangements
are negotiated between Twin and the SMC’s. Fees charged include incentive compensation
as a percentage of the net profits (including unrealized gains) on the account. To the extent
the incentive compensation described above constitutes the type of performance-based fee
contemplated by Section 205(a)(1) of the Investment Advisers Act of 1940, as amended (the
“Act”), Twin charges this fee in compliance with Rule 205-3 of the Act.
Other Advisory Fee Arrangements
Twin reserves the right, in its sole discretion, to negotiate and to charge different advisory
fees for certain accounts or Clients based on the Client’s particular needs as well as overall
financial condition, goals, risk tolerance, and other factors unique to the Client’s particular
circumstances.
5.B. Direct Billing of Advisory Fees
For current SMCs, the Client is responsible for calculating management and performance
fees. Twin does not deduct the management fees and performance fees from Client accounts.
For the Private Funds, management fees and performance fees are deducted from Client
accounts by instructing the Private Funds' custodian to pay such fees.
5.C. Other Non-Advisory Fees
In addition to the compensation paid to Twin described above, each Client incurs its own
brokerage commissions, transaction fees, and other related costs and expenses related to the
purchase, sale and transmittal of Client investments, such as charges imposed by custodians,
brokers, and other third parties such as custodial fees, deferred sales charges, odd-lot
differentials, transfer taxes, wire transfer and electronic fund fees, and other fees and taxes
on brokerage accounts and securities transactions. In addition, the Private Funds may also
incur legal, administrative, tax, professional liability insurance, audit, regulatory fees and
registration costs. Client accounts investing in mutual funds or exchange traded funds will
also incur internal management fees, which are disclosed in those funds’ prospectuses. Such
charges, fees, and commissions are exclusive of, and in addition to, Twin’s fee. Twin does not
receive any portion of these commissions, fees, and costs.
Any expenses shared by more than one Private Fund will be allocated pro-rata based on each
fund’s capital or in a manner that is demonstrably fair. Expenses that are attributable to
Twin and one or more Clients will be allocated in a manner that is demonstrably fair and that
is consistent with disclosures to all affected Clients.
Item 12 further describes the factors that Twin considers in selecting or recommending
broker-dealers for Client transactions and determining the reasonableness of their
compensation (e.g., commissions).
5.D. Advance Payment of Fees
This item is not applicable as Client Accounts are charged in arrears for management and
performance fees.
5.E. No Compensation for Sale of Securities or Other Investment Products
Adviser’s supervised persons do not accept compensation for the sale of securities or other
investment products, including asset-based sales charges or service fees from the sale of
mutual funds.