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.
WCG will receive a quarterly management fee from the Funds, calculated and
payable quarterly in advance, ranging from 0.3375% to .50% (1.35% to 2.0%
annually) of the aggregate net asset value of each investor’s investment as of the
beginning of such quarter. In addition, WCG (or the General Partner for the
Domestic Feeder) will receive an annual incentive fee (or an annual incentive
allocation in the case of the Domestic Feeder) ranging from 15% to 20% of the
increase in the net asset value of each investor’s investment during such year
(calculated net of accruals and payments of fees and expenses, and gross of any
accruals of the incentive fee/allocation), subject to a standard loss carryforward
(or “high water mark”) provision.
The Strategies Fund is subject to management and incentive fees as negotiated
between WCG and the Strategies Fund.
See Item 5.B.
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.
The Funds’ administrator deducts fees from Fund assets in accordance with the
investment management agreements between WCG and the Funds. In general,
WCG receives a management fee from the administrator that is based on each
Fund’s net assets, payable quarterly in advance, normally within 15 calendar days
after the beginning of each calendar quarter. The management fee is prorated for
subscriptions made during a calendar quarter.
In general, WCG (or the General Partner for the Domestic Feeder) will receive an
incentive fee (or an incentive allocation in the case of the Domestic Feeder) that is
based on each of the Fund’s net profits, subject to a standard loss carryforward (or
“high water mark”) provision. Under the high water mark provision, generally no
incentive fee will be paid by (or allocation will be made with respect to) an
investor until any net loss previously allocated to such investor’s capital
account/shares has been offset by subsequent net profits. The incentive
fee/allocation is calculated and charged at the end of each fiscal year and in the
event of an investor withdrawal/redemption, but only with respect to the
withdrawn/redeemed amount. In addition, if an investor makes a
withdrawal/redemption, its high water mark level is ratably reduced to reflect such
withdrawal/redemption.
While it is WCG’s general policy that the management fee and the incentive
fee/allocation are not negotiable, WCG, in its sole and absolute discretion, may
elect to reduce, waive, calculate differently or rebate the management fee or the
incentive fee/allocation with respect to investments made by its affiliates and
others. In general, employees of WCG will not, directly or indirectly, be subject
to the management fee or the incentive fee/allocation.
The Strategies Fund administrator deducts management and incentive fees from
the Strategies Fund assets in accordance with the investment management
agreement between WCG and the Strategies Fund.
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.
Each Fund bears its own, and its pro rata share of the Master Fund’s operating
expenses, including, without limitation, administrative expenses (including an
administrative fee to the Funds’ administrator), legal expenses, expenses
associated with its investment program, internal and external accounting, audit
and tax preparation expenses, interest, taxes, costs and other expenses associated
with the operation of the Fund, including, without limitation, all extraordinary
expenses. As of the date of this Brochure, the Funds have paid and fully
amortized their organizational expenses.
The Strategies Fund will pay the costs and expenses of (i) all transactions carried
out by it or on its behalf and (ii) the administration of the Strategies Fund,
including (a) the charges and expenses of legal advisers and auditors, (b) brokers’
commissions (if any), borrowing charges on securities sold short and any issue or
transfer taxes chargeable in connection with any securities transactions, (c) all
taxes and corporate fees payable to governments or agencies, (d) directors’ fees (if
any) and expenses, (e) interest on borrowings, (f) communication expenses with
respect to investor services and all meetings of shareholders and of preparing,
printing and distributing financial and other reports, proxy forms, prospectuses
and similar documents, (g) the fees and expenses incurred by the investment
manager in connection with the provision of its investment management services,
including, but not limited to, third party research-related expenses, (h) the cost of
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