Item 5. Fees and Compensation
As of October 1, 2025, each Feeder Fund pays Watchtower a quarterly investment management fee
(“Management Fee”) of 1.00% per annum of the net asset value of each series of shares or capital account of
the applicable Feeder Fund (prior to reduction for any Incentive Allocation (as defined below) that is accrued
as of the applicable calculation date). The Management Fee is generally charged on the first day of each quarter
and is prorated for partial quarters. The Management Fee is paid by the Master Fund, with the expense
allocated to the applicable investor’s capital accounts on a monthly basis. In addition, each Feeder Fund pays
Watchtower GP an annual performance-based allocation (the “Incentive Allocation”), generally calculated as
of the end of each fiscal year, equal to 12%–17% of net capital appreciation (subject to a high-water mark and,
where applicable, a hurdle), or, for certain series, 25% of outperformance relative to a specified index. The
Adviser’s compensation from each Feeder Fund is set forth in the applicable Offering Documents. While the
amount of compensation and method of payment are not generally negotiable, Watchtower may, in its sole
discretion, waive or reduce the Management Fee and Incentive Allocation for certain investors that are
members, principals, employees or affiliates of Watchtower or friends and relatives of such persons and for
certain strategic investors.
In the event that an investor withdraws or redeems from a Feeder Fund during a quarter, Watchtower will return
to such Fund (and subsequently to the redeeming investor) an amount equal to the pro rata portion of the
Management Fee based on the number of days remaining in such quarter. Upon a withdrawal or redemption
by an investor from a Fund other than at the end of a fiscal year, the Incentive Allocation, if any, will be
allocated with respect to the amount being withdrawn or redeemed, as applicable. For additional information
on performance-based compensation, see Item 6 of this Brochure, “Performance-Based Fees and Side-by-Side
Management.
The below expenses may not be applicable to all of the Funds. For any capital terms not defined herein, and for
additional details regarding the below, please refer to the relevant Offering Documents. To the extent permitted
under the applicable Offering Documents, each Feeder Fund generally bears its own expenses, and its pro rata
share of the Master Fund’s expenses, including, without limitation, the Management Fee; investment
expenses, whether or not such investments are consummated, such as brokerage commissions (see Item 12
herein for more information on brokerage expenses), expenses relating to short sales, clearing and settlement
charges, custodial fees, bank service fees, interest expenses, trading-related compliance expenses, research
costs and expenses (including subscription and other fees for news, quotation, reports, financial databases, and
similar information and pricing services); professional fees (including, without limitation, expenses of
consultants, investment bankers, attorneys, accountants and other experts) relating to investments; fees and
expenses relating to software tools, programs or other technology utilized in managing the Feeder Fund or the
Master Fund (including, without limitation, third-party software licensing, implementation, data management
and recovery services and custom development costs); research and market data (including, without limitation,
any computer hardware and connectivity hardware (e.g., telephone and fiber optic lines) incorporated into the
cost of obtaining such research and market data); compliance and regulatory expenses for the Feeder Fund,
the Master Fund and Watchtower (including fees and expenses with respect to any compliance consultants,
cybersecurity and SEC examination reviews, FATCA and Common Reporting Standard compliance and any
filings made by Watchtower relating to the Feeder Fund or the Master Fund, e.g., Form PF/Annex IV);
administrative expenses (including fees and expenses of the Administrator); legal expenses in connection with
the Fund’s and the Master Fund’s ongoing operations (including the updating of the Feeder Fund’s offering
documents, processing transfer requests, negotiations with prospective investors and extraordinary legal
expenses, such as those related to litigation or regulatory investigations or proceedings); offering expenses
(excluding placement agency fees and related expenses); external accounting and valuation expenses; audit
and tax return preparation and filing expenses; costs related to errors and omissions insurance and directors
and officers insurance for Watchtower GP, Watchtower and their respective affiliates (proportionately shared
by Watchtower and each Fund); insurance covering the members of the board of directors of the Offshore
Fund (the “Directors”); fees and expenses of the Directors; fees and expenses of the advisory board of the
Onshore Fund and the Master Fund (the “Advisory Board”); costs of printing and mailing offering materials,
reports and notices; Investor-Related Taxes; all registration fees, filing fees and other expenses charged by the
jurisdiction in which the Feeder Fund and the Master Fund were formed; organizational expenses;
indemnification expenses; and extraordinary expenses.
Neither Watchtower nor any of its Supervised Persons accepts compensation (e.g., brokerage commissions) for
the purchase or sale of securities or other investment products.