ITEM 5 – FEES AND COMPENSATION
Item 5.A Describe how you are compensated for your advisory services. Provide your
fee schedule. Disclose whether the fees are negotiable.
Note: If you are an SEC-registered adviser, you do not need to include this
information in a brochure that is delivered only to qualified purchasers as
defined in section 2(a)(51)(A) of the Investment Company Act of 1940.
Valtura is compensated in the form of a management fee (the “Management Fee”)
and performance-based fee or allocation (the “Incentive Allocation”). Investors
bear their respective portions of the Management Fee and Performance
Compensation.
Management Fees are generally paid to Valtura by the Master Fund quarterly in
advance calculated at a rate of 1.5% per annum of the net asset value of each
Founders Share and 2.0% per annum of the Standard Shares as of the first day of
the month without accrual of the Incentive Allocation. Management Fees are
prorated for interests or shares of a Fund that are purchased at any time other than
the first day of a calendar month.
The Performance Compensation is based on the net profits (including realized
and unrealized gains and losses) at the end of each fiscal year, or upon
withdrawal/redemption of interests or shares or termination and liquidation of the
Fund. The Performance Compensation is generally equal to 15% of the profits
of the Founders Shares and 20% of the net profits of the Standard Shares, subject
to a loss carryforward provision.
The portion of the Management Fees and Performance Compensation applicable
to an Investor may be rebated, waived or reduced by Valtura for Investors that are
principals, employees or affiliates of the Investment Manager or the General
Partner of the Onshore Fund, relatives of such persons, and for certain large or
strategic investors.
Separately-managed account client(s) have, and may in the future, negotiate fees
and, thus, fees for separately-managed account(s) may differ from those of the
Funds.
It is very important that Investors refer to the respective private offering
memorandum for a complete understanding of fees and other forms of
payment. The information contained herein is a summary only and is
qualified in its entirety by such materials.
Item 5.B Describe whether you deduct fees from clients’ assets or bill clients for fees
incurred. If clients may select either method, disclose this fact. Explain how
often you bill clients or deduct your fees.
Although the Incentive Allocation is made at the Master Fund level, when
calculating the Incentive Allocation, all items of income, loss, profit and expense
incurred directly by the Funds will be taken into account. Management Fees and
Incentive Allocation are deducted from Investors’ assets invested in the Funds.
Separately-managed account fees are deducted directly from the clients’ custodial
accounts. Investors do not have the ability to choose to be billed directly for fees
incurred.
It is very important that Investors refer to the respective private offering
memorandum for a complete understanding of how fees are deducted from
their assets or otherwise paid to Valtura. The information contained herein
is a summary only and is qualified in its entirety by such materials.
Item 5.C Describe any other types of fees or expenses clients may pay in connection
with your advisory services, such as custodian fees or mutual fund expenses.
Disclose that clients will incur brokerage and other transaction costs, and
direct clients to the section(s) of your brochure that discuss brokerage.
The Funds generally pay the costs of offering interests/shares to prospective
investors, including external legal and accounting expenses. The Funds generally
bear a share of the expenses incurred in connection with operations, including
legal, accounting (including third-party accounting services), audit,
administration, other professional fees and expenses, organizational expenses,
research expenses, investment expenses such as commissions, custodial fees,
bank service fees, insurance costs (including Directors & Officers and Errors &
Omissions insurance for the Investment Manager) and other expenses related to
the purchase, sale, preservation or transmittal of the Funds’ assets.
From time to time, the Funds and the separately-managed account may invest in
securities of investment companies that are not managed by Valtura, such as
closed-end funds, open-end funds and exchange-traded funds (“ETFs”) as part of
hedging, trading and investment strategies. To the extent that the Funds and the
separately-managed account invest in such securities, the Funds and the
separately-managed account incur layered fees; that is, they not only pay fees
directly to Valtura, but also pay fees charged by the entities that manage the
investment companies’ securities. Such fees may include custodial fees,
management fees, early termination fees and other fees and expenses assessed by
the sponsor, custodian, transfer agent or other service providers to an investment
company.
The Funds and the separately-managed account are charged brokerage
commissions and other transaction costs and expenses in connection with their
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