FEES AND COMPENSATION
A. Advisory Fees and Compensation
The fees applicable to each Fund are set forth in detail in each Fund’s offering
documents. A brief summary of such fees is provided below:
Management Fee
Generally, each Fund pays the Investment Adviser a quarterly fee for investment
management services (the “Management Fee”) that is between 0.125 and 0.5% (i.e., 0.5% to 2%
per annum) of the net asset value of each investor’s capital account or series of shares (as
applicable) as of the beginning of such fiscal quarter. The Management Fee is calculated and
paid in advance but is amortized monthly over the quarter for which such Management Fee is
paid.
The Management Fee will be prorated for any capital contribution, subscription or
withdrawal by an investor that is effective other than as of the first day of a quarter. In the event
of a withdrawal by an investor other than as of the last day of a quarter, the Investment Adviser
will pay to the applicable Fund an amount equal to the pro rata portion of the Management Fee,
based on the actual number of days remaining in such quarter, and the applicable Fund will
distribute such amount to the withdrawing investor. In the sole discretion of the Fund General
Partner, the Management Fee may be waived, reduced or calculated differently with respect to
certain investors.
Performance Compensation.
Domestic Funds. Generally, at the end of each fiscal year of a Domestic Fund, the
Investment Adviser is entitled to an incentive fee (the “Domestic Incentive Fee”) in an amount
between 20% and 30% of the net capital appreciation allocated to each investor’s capital account
over the Management Fee debited to such capital account for such fiscal year, subject to a loss
carryforward mechanism.
Typically, the Incentive Fee will be determined as of the last day of a Domestic Fund’s
fiscal year. Any Domestic Incentive Fee accrued in respect of an investor’s capital account will
be paid to the Investment Adviser upon an interim year withdrawal or distribution from such
capital account or in connection with the termination of the applicable Domestic Fund. In the
sole discretion of the Investment Adviser, the Domestic Incentive Fee may be waived, reduced or
calculated differently with respect to certain investors.
Offshore Fund. Generally, at the end of each fiscal year of the Offshore Fund, the
Investment Adviser is entitled to an incentive fee (the “Offshore Incentive Fee,” and together
with the Domestic Incentive Fee, the “Performance Compensation”) in an amount between 20%
and 30% of the net realized and unrealized appreciation in the net asset value of each series of
shares, adjusted for any redemption of shares in the series made during the year and any accruals
of the Incentive Fee and subject to a loss carryforward mechanism.
Typically, the Offshore Incentive Fee will be determined as of the last day of the
Offshore Fund’s fiscal year. Any Offshore Incentive Fee accrued in respect of a series of shares
will be paid to the Investment Adviser upon an interim year redemption of shares in such series.
In the sole discretion of the Investment Adviser, the Offshore Incentive Fee may be waived,
reduced or calculated differently with respect to certain investors.
B. Payment of Fees
Fees and compensation paid to us or our affiliates by the Funds are generally deducted
from the assets of such Funds. As discussed above, Management Fees are generally deducted on
a quarterly basis and Performance Compensation is generally deducted on an annual basis.
C. Additional Fees and Expenses
Each client bears its own expenses and its pro rata share of any trading vehicle’s
expenses, including the following: (i) Management Fee; (ii) Performance Compensation; (iii)
expenses related to the research, due diligence and monitoring of actual and prospective
investments (whether or not consummated) and the consummation of investments, including the
following: third-party investment sourcing fees; fees and expenses related to obtaining research
and market data (including any information technology hardware, software or other technology
incorporated into the cost of obtaining such research and market data); due diligence expenses
including consulting and appraisal fees; travel expenses; brokerage and prime brokerage and
futures commission merchant fees, commissions and expenses; expenses relating to short sales;
clearing and settlement charges; custodial fees and expenses; bank service fees; interest expenses
and fees related to financings or refinancings; fees and expenses of proxy research and voting
services; and fees and expenses of third-party professionals, including consultants, investment
bankers, attorneys and accountants; (iv) organizational and reorganizational expenses; and (v)
operational expenses, including the following: fees and expenses relating to information
technology hardware, software or other technology (including costs of software licensing,
implementation, data management and recovery services and custom development) used to
research investments, evaluate and manage risk, facilitate valuations, facilitate accounting
functions, facilitate compliance with the rules of any self-regulatory organization or applicable
law (including reporting obligations), facilitate and manage the order execution of securities or
otherwise manage a Fund or any trading vehicle, such as Bloomberg terminals, portfolio
management systems, risk management systems and order management systems; fees and
expenses of third-party risk management products, models and services; third-party
administrative fees and expenses; fees and expenses of third-party professionals, including
consultants, valuation service providers, attorneys and accountants; the costs of any litigation or
investigation involving activities of a Fund or any trading vehicle; third-party audit and tax
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