Item 5: Fees and Compensation
Compensation from the Master Fund. As further set forth in each Fund’s governing documents, Tyrian
receives compensation from the Master Fund in the form of management fees (the “Management Fee”)
generally quarterly in advance and the General Partner receives compensation in the form of
performance-based allocations (the “Incentive Allocation”) generally from the Master Fund on an
annual basis in arrears and upon redemptions by investors in the Funds, subject to a standard “highwater
mark”. Investors in the Onshore Fund and the Offshore Fund are not subject to any additional Management
Fees or Incentive Allocations at the level of either such Fund.
Tyrian may agree with a Fund and/or the Master Fund to waive all or a portion of the Management Fee with
respect to one or more investors. The General Partner may agree with a Fund and/or the Master Fund to
waive all or a portion of the Incentive Allocation with respect to one or more investors. Also, investors in
the Funds who are associated with our firm, such as our officers or employees, or their family members or
friends, generally do not pay management fees or incur incentive allocations.
Neither Tyrian nor the General Partner bills the investors in the Funds for Management Fees or Incentive
Allocations. Rather, Management Fees are deducted from the assets of the Master Fund on a quarterly basis,
in advance. Each Fund is responsible for its pro rata portion of the Management Fee and in turn charges its
applicable Management Fee to the capital accounts or shares, as applicable, of each investor in such Fund
accordingly. Similarly, the Incentive Allocations are made within the Master Fund generally at the end of
each year, or sooner with respect to any investor who withdraws or redeems from a Fund at any time other
than at the end of a fiscal year. We generally do not permit investors in the Funds to withdraw or redeem
capital other than at the end of a calendar quarter, so refunds of prepaid fees for partial quarters are not
applicable to investors in the Funds.
Compensation for the Managed Accounts.
Tyrian also receives compensation from the Managed Account in the form of advisory fees (the “Advisory
Fees”) and performance-based fees (the “Performance Fees”). The Managed Account owner is a
“qualified purchaser” as that term is defined in Section 2(a)(51)(A) of the Investment Company Act of 1940,
as amended (the “1940 Act”) and the terms of the Advisory Fees and Performance Fees with respect to the
Managed Account are separately negotiated between Tyrian and the owner of the Managed Account.
Tyrian typically sends an invoice to the Managed Account owner or Administrator who will authorize fees
to be paid to Tyrian for management and Performance Fees as defined in the IMA with the Managed
Account.
In addition to the compensation described above, each Fund will bear all costs and expenses related to its
investments and operations, including, but not limited to: the Management Fee; investment expenses (i.e.,
expenses related to the investment of the assets of the Funds, including, without limitation, clearance,
exchange, structuring, technology fees, legal, brokerage and other transaction costs, custody fees, interest
and other borrowing charges, including on securities sold short, professional and legal expenses relating to
particular investments, and other expenses reasonably related to the investment decision and monitoring
process); expenses from derivatives transactions; taxes; insurance premiums obtained on behalf of the
Funds; legal fees and expenses; regulatory expenses; consulting fees; accounting; audit and tax preparation
fees and expenses; the Funds’ administrator’s fees; indemnification expenses, and other ordinary and
extraordinary expenses associated with the operation of the Funds and their investment activities. It is
anticipated that most investment related expenses and certain other expenses, will be incurred by the Master
Fund, and each Fund will be responsible for its pro rata portion of such expenses. A portion of the Funds’
and the Master Fund’s operating expenses may be shared with other investment entities or accounts
managed by the General Partner, Investment Manager or any of their respective affiliates on an equitable
basis. Although investors in the Funds who are affiliated with Tyrian do not pay management fees or
performance-based compensation, they do pay their pro rata share of the applicable Fund’s operating costs.
The Managed Account generally will pay all expenses incurred in connection with transactions effected or
positions held on behalf of the Managed Account, including, without limitation: trading losses; any
Advisory Fee or Performance Fee payable to Tyrian hereunder; proxy voting services; investment expenses
such as clearance, exchange, structuring, technology fees, legal, brokerage and other transaction costs,
custody fees, interest and other borrowing charges, including on securities sold short, professional and legal
expenses relating to particular investments, and other expenses reasonably related to the investment
decision and monitoring process, research fees and expenses (including research related travel) provided
such expenses are allocated to all accounts managed by Tyrian in proportion to the size of each account;
bank service fees; interest on loans and debit balances and withholding, transfer or other taxes; the costs of
any outside professionals or consultants retained in connection with specific positions; the Managed
Account related insurance costs; and any other expenses reasonably related to the purchase, preservation,
sale or transmittal of the Managed Account. The Managed Account shall also bear all audit, tax, legal,
compliance, administrator and accounting expenses of the Managed Account (including third party
accounting services). The Managed Account fees and expenses are subject to negotiation and may vary
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