ITEM 5 - FEES AND COMPENSATION
Warshaw expects to provide investment management services to the Funds pursuant to
investment management agreements which, along with the governing documents of the Funds,
set forth in detail the fee structure relevant to the Funds.
In general, Warshaw receives compensation in the form of asset-based management fees charged
to the Master Fund based on a percentage of the assets under management (the “Management
Fee”) as well as a performance based allocation (the “Performance-Based Allocation”).
Warshaw’s fee schedule is omitted because this brochure is being delivered only to qualified
purchasers as defined in the Investment Company Act of 1940. These compensation
arrangements, which are briefly described below, are described in detail in the offering
memoranda and governing documents applicable to the Funds.
While compensation is generally not negotiable, under certain circumstances, Warshaw may, in
its sole discretion, waive all or a portion of its Management Fee or Performance-Based
Allocation with respect to certain investors, including, but not limited to, strategic investors or
“friends and family” investors, affiliates and employees (and their families) of the Manager.
The Master Fund pays the Management Fee quarterly in advance as of the first calendar day of
each calendar quarter. The Management Fee will be prorated for partial quarters and refunded on
a pro rata basis if the advisory contract is terminated or a Feeder Fund investor redeems before
the end of the quarter. Both the Management Fee and the Performance-Based Allocation will be
deducted from client accounts.
The Funds will pay their own organizational and operating expenses, including: expenses related
to the creation and development of proprietary trading, risk and operational databases and
interfaces that will be integral to the Manager’s trading and risk management processes,
(including related legal fees); investment expenses such as commissions, ticket charges, prime
brokerage fees and similar charges incurred in connection with trading the Funds’ account; legal
(including the fees and expenses of counsel for the Manager as well as expenses incurred in the
preparation and filing of Form PF and any other similar fund-specific regulatory filing),
compliance, auditing, accounting and other professional expenses (for example, accounting,
including third-party accounting services, compliance and filing-related costs as well as legal
fees charged in negotiating trading and other financing agreements); administration expenses and
fees including the costs of investment management-related reporting; the cost of Bloomberg and
other quotation services; the expenses associated with the Hedge Castle suite of OMS and
accounting functions; research expenses (including research-related and due diligence travel and
expenses); all costs relating to the use and operation of order and risk management systems
(including communication lines such as T-1 and T-3 lines); custodial fees; bank and wire service
and transaction fees; regulatory reporting costs; and other expenses and legal fees related to the
purchase, sale and maintenance of Master Fund assets (including withholding, income and other
taxes). The Funds’ operating expenses also include the costs of the Manager’s (and its affiliates)
directors’ and officers’ insurance, errors and omissions insurance, and other insurance costs and
any other costs associated with the Funds’ business. Depending on the timing of a withdrawal,
certain withdrawal fees may apply.
Warshaw Asset Management, LLC – Form ADV Part 2A, filed as of January 19, 2016 Page 5
Please refer to Item 12 “Brokerage Practices” below for information about brokerage fees.
Side Letters
The General Partner, on behalf of the U.S. Fund and the Manager on behalf of the Offshore
Fund, may from time to time enter into letter agreements or other similar agreements
(collectively, “Other Agreements”) with one or more investors with respect to the Feeder Funds.
Such Other Agreements may provide an investor with additional or different rights (including
certain supplemental reporting and information rights and special economic rights) than are
generally available to other investors. Any terms contained in such an Other Agreement with an
investor will govern with respect to such investor notwithstanding the provisions of the offering
document or any related agreements. Other Agreements may grant lower fees, lower minimum
subscription requirements, additional reporting and informational rights regarding the investor’s
portfolio as well as other matters. Certain investors have institutional needs, due diligence
requirements or statutory and/or regulatory legal requirements for “risk reports” and similar
analysis of and other information regarding the Master Fund’s portfolio that others do not).
Other Agreements will not include terms that the General Partner or Manager, as applicable,
believe would have an adverse impact on the other investors or give an investor an unfair
advantage as an investor over other investors, and will not provide any investor with
“preferential liquidity” — as interpreted from time to time by the Securities and Exchange
Commission.
Warshaw Asset Management, LLC – Form ADV Part 2A, filed as of January 19, 2016 Page 6