The fundamentals of hedge fund management

MATERIAL FROM: THE FUNDAMENTALS OF HEDGE FUND MANAGEMENT Onshore Documents Offshore Documents Marketing Presentation Checklist HedgeAnswers 141 South Ave., Suite 8, Fanwood, NJ 07023 (908) 680-0010 W: www.hedgeanswers.com DISCLAIMER: THIS IS TO BE USED ONLY AS AN ILLUSTRATION AND NOT FOR PREPARATION OF DOCUMENTS Copyright © DASP All rights reserved For the Exclusive Use of: Copy No. (COMPANY NAME)FUND, LLC (A Delaware Limited Liability Company) CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED, AND HAVE NOT BEEN REGISTERED WITH, OR APPROVED BY, ANY STATE SECURITIES OR BLUE SKY ADMINISTRATOR OR ANY OTHER REGULATORY AUTHORITY NO SUCH AUTHORITY HAS PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THIS CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM, NOR IS IT INTENDED THAT ANY SUCH AUTHORITY WILL DO SO ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL _ EACH INVESTOR IN THE INTERESTS OFFERED HEREBY MUST ACQUIRE SUCH INTERESTS SOLELY FOR INVESTOR’S OWN ACCOUNT, FOR INVESTMENT PURPOSES ONLY AND NOT WITH AN INTENTION OF DISTRIBUTION, TRANSFER OR RESALE, EITHER IN WHOLE OR IN PART _ The date of this Confidential Private Placement Memorandum is [DATE] DISCLAIMER: THIS IS TO BE USED ONLY AS AN ILLUSTRATION AND NOT FOR PREPARATION OF DOCUMENTS Copyright © DASP All rights reserved GENERAL INFORMATION THE LIMITED LIABILITY COMPANY INTERESTS (COLLECTIVELY, THE “INTERESTS”) OF (COMPANY NAME)FUND, LLC (THE “FUND”) OFFERED HEREBY ARE BEING OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SECTION 4(2) OF THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), RULE 506 THEREUNDER, AND APPLICABLE STATE SECURITIES LAWS INTERESTS ARE AVAILABLE ONLY TO INVESTORS WHO ARE WILLING AND ABLE TO BEAR THE ECONOMIC RISKS OF THIS INVESTMENT THE INTERESTS ARE SPECULATIVE AND, BY THEIR NATURE, MAY BE CONSIDERED TO INVOLVE A HIGH DEGREE OF RISK INVESTMENT IN THE FUND IS DESIGNED ONLY FOR SOPHISTICATED INVESTORS WHO ARE ABLE TO BEAR A SUBSTANTIAL LOSS OF THEIR CAPITAL CONTRIBUTIONS IN THE FUND SEE “RISK FACTORS.” THIS CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM (“MEMORANDUM”) CONSTITUTES AN OFFER ONLY IF THE NAME OF AN OFFEREE APPEARS IN THE APPROPRIATE SPACE PROVIDED ON THE COVER PAGE OF THIS MEMORANDUM AND ONLY IF DELIVERY OF THIS MEMORANDUM IS PROPERLY AUTHORIZED BY THE FUND THIS MEMORANDUM HAS BEEN PREPARED BY THE FUND SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED PURCHASE OF INTERESTS, AND ANY REPRODUCTION OF THIS MEMORANDUM, IN WHOLE OR IN PART, OR THE DIVULGENCE OF ANY OF ITS CONTENTS, WITHOUT THE PRIOR WRITTEN CONSENT OF THE FUND, IS PROHIBITED NOTWITHSTANDING THE FOREGOING, AN OFFEREE MAY, WITHOUT THE CONSENT OF THE FUND, PROVIDE A COPY OF THIS MEMORANDUM (OR ANY PORTION THEREOF) TO SUCH OFFEREE’S LEGAL OR TAX ADVISORS OR TO ANY TAXING AUTHORITY OR OTHERWISE AS SET FORTH UNDER “INCOME TAX CONSIDERATIONS.” NO OFFERING LITERATURE OR ADVERTISING IN ANY FORM WHATSOEVER SHALL BE EMPLOYED IN THE OFFERING OF THE INTERESTS EXCEPT FOR THIS MEMORANDUM NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY REPRESENTATION OR WARRANTY OR PROVIDE ANY INFORMATION WITH RESPECT TO THE INTERESTS EXCEPT SUCH INFORMATION AS IS CONTAINED IN THIS MEMORANDUM NEITHER THE DELIVERY OF THIS MEMORANDUM NOR ANY SALES MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE MATTERS DISCUSSED HEREIN SINCE THE DATE HEREOF ( COMPANY NAME) LLC, AS THE MANAGING MEMBER OF THE FUND (THE “MANAGING MEMBER”), HAS USED ITS BEST EFFORTS TO OBTAIN AND PROVIDE ACCURATE INFORMATION FOR THIS MEMORANDUM, BUT NO REPRESENTATION OR WARRANTY IS MADE WITH RESPECT TO THE ACCURACY OF SUCH INFORMATION DISCLAIMER: THIS IS TO BE USED ONLY AS AN ILLUSTRATION AND NOT FOR PREPARATION OF DOCUMENTS Copyright © DASP All rights reserved i THIS MEMORANDUM DOES NOT CONSTITUTE AN OFFER OR SOLICITATION IN ANY STATE OR OTHER JURISDICTION IN WHICH AN OFFER OR SOLICITATION IS NOT LAWFUL OR AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO THE CONTENTS OF THIS MEMORANDUM SHOULD NOT BE CONSTRUED AS INVESTMENT, LEGAL OR TAX ADVICE EACH PROSPECTIVE INVESTOR IS URGED TO SEEK INDEPENDENT INVESTMENT, LEGAL AND TAX ADVICE CONCERNING THE CONSEQUENCES OF INVESTING IN THE FUND THE INTERESTS ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE 1933 ACT PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE REQUIREMENTS AND CONDITIONS SET FORTH IN THIS MEMORANDUM INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME INVESTORS (AND EACH EMPLOYEE, REPRESENTATIVE OR OTHER AGENT OF INVESTORS) MAY DISCLOSE TO ANY AND ALL PERSONS, WITHOUT LIMITATIONS OF ANY KIND, THE TAX TREATMENT AND TAX STRUCTURE OF THE TRANSACTION AND ALL MATERIALS OF ANY KIND (INCLUDING OPINIONS OR OTHER TAX ANALYSIS) THAT ARE PROVIDED TO INVESTORS RELATING TO SUCH TAX TREATMENT AND TAX STRUCTURE THIS AUTHORIZATION OF TAX DISCLOSURE IS RETROACTIVELY EFFECTIVE TO THE COMMENCEMENT OF THE FIRST DISCUSSIONS BETWEEN SUCH INVESTOR AND THE FUND REGARDING THE TRANSACTIONS CONTEMPLATED HEREIN DISCUSSIONS IN THIS MEMORANDUM BELOW AS THEY RELATE TO CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES ARE NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, FOR THE PURPOSE OF AVOIDING UNITED STATES FEDERAL TAX PENALTIES SUCH DISCUSSIONS WERE WRITTEN TO SUPPORT THE PROMOTION OR MARKETING OF THE TRANSACTIONS OR MATTERS ADDRESSED IN THIS MEMORANDUM, AND ANY TAXPAYER TO WHOM THE TRANSACTIONS OR MATTERS ARE BEING PROMOTED, MARKETED OR RECOMMENDED SHOULD SEEK ADVICE BASED ON ITS PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR DISCLAIMER: THIS IS TO BE USED ONLY AS AN ILLUSTRATION AND NOT FOR PREPARATION OF DOCUMENTS Copyright © DASP All rights reserved ii TABLE OF CONTENTS Page GENERAL INFORMATION i SUMMARY iv THE MANAGING MEMBER AND THE INVESTMENT MANAGER INVESTMENT OBJECTIVE AND STRATEGY ADMINISTRATOR BROKERAGE ARRANGEMENTS; CUSTODIAN RISK FACTORS .6 CERTAIN ERISA CONSIDERATIONS 18 RESPONSIBILITY OF THE MANAGING MEMBER AND THE INVESTMENT MANAGER .21 CONFLICTS OF INTEREST 22 FEES, EXPENSES AND THE PERFORMANCE ALLOCATION 25 VALUATION OF THE FUND’S ASSETS 26 REDEMPTIONS 28 THE LIMITED LIABILITY COMPANY AGREEMENT 30 INCOME TAX CONSIDERATIONS 32 INVESTMENT REQUIREMENTS 39 PRIVATE PLACEMENT 40 ADDITIONAL INFORMATION 41 Exhibits A - Form of Limited Liability Company Agreement B - Form of Subscription Documents DISCLAIMER: THIS IS TO BE USED ONLY AS AN ILLUSTRATION AND NOT FOR PREPARATION OF DOCUMENTS Copyright © DASP All rights reserved iii SUMMARY The following is a summary of this Memorandum This Memorandum contains more detailed information under the captions referred to below, and this summary is qualified in its entirety by the information appearing elsewhere in this Memorandum Terms which are used but are not defined in this Memorandum shall have the same meanings set forth in the Limited Liability Company Agreement attached hereto as Exhibit A (the “LLC Agreement”) The Fund Fund (COMPANY NAME)Fund, LLC (the “Fund”) was organized as a limited liability company on [DATE] under the Delaware Limited Liability Company Act The Fund’s businesses address is [Address and Telephone] Managing Member & Investment Manager ( COMPANY NAME) LLC, the managing member of the Fund, is a Delaware limited liability company organized on [DATE] (the “Managing Member”) The Managing Member has unfettered authority to manage the Fund’s activities The Managing Member has delegated to ( COMPANY NAME) , a Delaware limited liability company organized on [DATE] and an affiliate of the Managing Member, the responsibility as investment manager to manage the assets of the Fund (the “Investment Manager”) pursuant to an investment management agreement (the “Investment Management Agreement”) The Managing Member’s and the Investment Manager’s address and telephone numbers are the same as those of the Fund ( Name) and ( Name) are the individuals responsible for management of the Managing Member and the Investment Manager Investment Objective and Business of the Fund The Fund’s investment objective is to achieve superior capital appreciation by investing its assets with investment managers (“Managers”) of registered investment companies (i.e mutual funds) and exchange traded funds (“ETFs”), and by utilizing hedging strategies which the Investment Manager implements from time to time to protect down side risks and to mitigate volatility of the portfolio Initially, the Investment Manager anticipates allocating the Fund’s assets to approximately 4-6 Managers that employ diversified investment strategies, including, but not limited to, small cap growth, small cap value, medium cap growth, medium cap value, large cap growth and large cap value and trading strategies involving derivatives and hybrid instruments These allocations may be made in two ways: directly through brokerage accounts pursuant to discretionary investment management agreements with Managers (“Managed Accounts”); and indirectly, by purchasing shares or interests in registered investment companies, ETFs and other investment funds managed by Managers (together with the Managed Accounts, the “Investment Vehicles”) The Investment Manager’s current intention is to invest substantially all of the Fund’s assets in Investment Vehicles Although the Investment Manager intends to achieve the Fund’s investment objective primarily by investing in Investment Vehicles, the Fund, on occasion, may trade, buy, sell, and otherwise acquire, hold, dispose of, and deal in, directly or indirectly through its investment in Investment Vehicles, on margin or otherwise, (i) U.S and non-U.S equity and equity-related securities DISCLAIMER: THIS IS TO BE USED ONLY AS AN ILLUSTRATION AND NOT FOR PREPARATION OF DOCUMENTS Copyright © DASP All rights reserved iv (publicly-traded and privately offered, listed and unlisted), including, but not limited to, convertible debt securities, preferred stocks and their related common stocks, “new issues,” U.S Treasury securities and indices, (ii) U.S and non-U.S bonds and other fixed income securities and debt obligations, government securities, mortgage-backed securities, bank debts, money market obligations, distressed equity, high yield securities, (iii) derivatives instruments such as, without limitation, options, warrants and forward contracts, and (iv) such other instruments, rights, and interests as determined by the Investment Manager or the Managers, as applicable (hereinafter referred to collectively as “Financial Instruments”) The Fund may maintain assets in cash, short-term securities, money market instruments and such other similar instruments to meet the expense needs of the Fund and/or to fund redemptions or for such other reasons as may be determined by the Managing Member or the Investment Manager The foregoing outline of the Fund’s investment strategy represents the Investment Manager’s present intentions in view of current market conditions and other factors The Investment Manager may vary the foregoing investment objectives and guidelines to the extent it determines that doing so will be in the best interest of the Fund There is no assurance that the Fund’s investment objectives will be achieved, and results may vary substantially over time Any investment strategy pursued for the Fund is in the absolute and sole discretion of the Investment Manager Master Fund The Investment Manager reserves the right to pursue the Fund's investment objective either by directly investing the Fund's assets or by causing all or part of the Fund's assets to be invested in a centralized investment vehicle commonly known as a "master fund" (the Fund being a "feeder fund") Such master fund would invest and reinvest assets of the Fund, together with assets of other similar entities, following the same investment strategy described herein Administrator [NAME] (the “Administrator”) has been retained by the Fund to assist the Managing Member with the Fund’s administrative matters The Administrator’s [address, telephone number, facsimile number ] Brokerage Arrangements; The Fund will enter into brokerage arrangements (including prime brokerage arrangements) with one or more financial institutions, including any brokers, Custodian dealers, custodians or other institutions (collectively, the “Brokers”) through which the Fund effects transactions with regard to any direct investments in Financial Instruments The Fund may modify its brokerage arrangements at any time without notice to or consent from the Members, including, without limitation, by retaining additional Brokers or terminating its relationship with current Brokers Portfolio transactions are executed by Brokers selected on behalf of the Fund on the basis of their ability to effect prompt and efficient executions at competitive rates The Managers generally are responsible for selecting the Brokers for the portion of the Fund’s assets under their management The Managers may select Brokers on the basis that the Brokers may provide “soft dollar” benefits to the Managers, their affiliates and/or other DISCLAIMER: THIS IS TO BE USED ONLY AS AN ILLUSTRATION AND NOT FOR PREPARATION OF DOCUMENTS Copyright © DASP All rights reserved v investment accounts under their management; however, neither the Managing Member, the Investment Manager nor their affiliates will receive any “soft dollar” benefits Risks The Fund is a relatively new entity with a limited operating history An investment in the Fund is speculative and involves substantial risks, including the risk of loss of an investor’s entire investment These risks also include, but are not limited to, the speculative nature of trading and investing in Financial Instruments, the substantial charges which the Fund will incur, regardless of whether any profits are earned and the actual and potential conflicts of interest in the structure and operation of the Fund’s business Past performance of the Fund, Managing Member, the Investment Manager, their principals, and their affiliates or of any investment vehicles advised by them is no guarantee of performance results of the Fund See “Risk Factors” and “Conflicts of Interest.” The Offering Securities Offered The Fund is offering limited liability company interests (“Interests”) on a private placement basis to investors who satisfy the suitability standards described below Since the Fund may invest in “new issues,” directly or indirectly, the allocation of “new issue” profits, losses and expenses will be limited to those Members that are not “restricted persons.” See “Risk Factors-Newly Issued Securities.” Accepted subscribers will be admitted to the Fund as members (“Members”) as of the first Business Day following the end of the month in which the Fund receives and accepts such investor’s capital contributions and executed subscription documents in the form attached hereto as Exhibit B (the “Subscription Documents”), or at such other times as the Managing Member, in its sole discretion, shall determine The Managing Member may designate certain Members (including knowledgeable employees, affiliates and relatives of the principals of the Investment Manager or the Managing Member) as “Special Members,” having interests with different rights and obligations from the Interests offered hereby Minimum Subscription The minimum initial subscription is [Amount] per subscriber, or such lesser amounts as the Managing Member, in its sole discretion, may permit Existing Members may subscribe for additional amounts with a minimum subscription of [Amount], or such lesser amounts as the Managing Member, in its sole discretion, may permit Any subscriptions for Interests may be accepted or rejected, in whole or in part, in the sole discretion of the Managing Member All subscriptions for Interests are irrevocable, unless determined otherwise by the Managing Member DISCLAIMER: THIS IS TO BE USED ONLY AS AN ILLUSTRATION AND NOT FOR PREPARATION OF DOCUMENTS Copyright © DASP All rights reserved vi Eligible Investors This offering is designed for sophisticated investors that satisfy the requirements of Regulation D promulgated under the Securities Act of 1933, as amended (the “1933 Act”) An investment in the Fund generally is not suitable for non-U.S persons or U.S tax-exempt investors Only persons who have a pre-existing relationship with the Managing Member, the Investment Manager or their principals, employees or representatives, and are (i) “accredited investors” as defined in Rule 501 of Regulation D under the 1933 Act, (ii) “qualified clients” as defined in Rule 205-3 adopted under the Advisers Act, and (iii) knowledgeable and experienced in financial and business matters such that they are capable of evaluating the merits and risks of an investment in the Fund, will be permitted to invest in the Fund An investment in the Fund should not be made by any investor who (i) cannot afford a total loss of their investment and (ii) has not (either alone or in conjunction with a financial advisor) carefully read or does not understand, this Memorandum and the LLC Agreement The Offering The Fund will accept subscriptions at the end of each month effective for investment on the first Business Day of the next succeeding month and at such additional times as the Managing Member, in its sole discretion, may permit (each a “Closing Date”) Each capital contribution by a Member will be treated as the acquisition of a new Interest and will not be aggregated with that Member’s existing Interest(s) Each Interest therefore will be treated separately for purposes of calculating fees, allocations and expenses Subscription Procedure In order to purchase an Interest, a subscriber must (i) complete, execute and deliver the Subscription Documents and (ii) pay the full amount of the subscription by arranging for a wire transfer, both in accordance with the instructions in the Subscription Documents In general, the Fund must receive the Subscription Documents and the subscription amount no later than four Business Days prior to the Closing Date on which the subscription is intended to be accepted by the Fund If the Fund receives Subscription Documents or the subscription amount later than four Business Days prior to the Closing Date, unless the Managing Member, in its sole discretion, waives the untimeliness of such subscription, such subscription will be held until the next Closing Date that immediately follows the date of receipt of such subscription, at which time such subscription will be considered for acceptance by the Fund Interest earned on subscriptions will be treated as interest earned by the Fund on the applicable Closing Date Fees, Expenses and the Performance Allocation Management Fee The Investment Manager receives a monthly management fee, in arrears, from the Fund equal to 1/12th of 1% of the month-end Net Asset Value of the Fund (1% per annum) (the “Management Fee”) Payment of the Management Fee is due as of the last Business Day of each calendar month and is payable by the DISCLAIMER: THIS IS TO BE USED ONLY AS AN ILLUSTRATION AND NOT FOR PREPARATION OF DOCUMENTS Copyright © DASP All rights reserved vii Fund as soon as practicable thereafter For purposes of calculating the Management Fee, Net Asset Value includes (i) the accrued Performance Allocation (as defined below), if any, (ii) the Management Fee payable or incurred by the Fund and (iii) any distributions or redemption amounts paid during the applicable month in which the Management Fee is calculated The Management Fee is adjusted for Interests held by Special Members “Net Asset Value” is defined under “Valuation of the Fund’s Assets.” Performance Allocation The Managing Member receives a special allocation to its capital account in the Fund, credited at the end of each calendar year, equal to 20% of the New Net Profit (as defined under “Fees, Expenses and the Performance Allocation”) allocable to each Interest (other than Interests held by Special Members) (the “Performance Allocation”) The Performance Allocation will be calculated separately for each Interest, will be net of all fees and expenses, including the Management Fee, and will be subject to a “high water mark” since a Performance Allocation was last due with respect to that Interest A Performance Allocation will be made provisionally at the end of each month and will be recouped on account of net losses occurring in that same year after provisional Performance Allocations are made The Performance Allocation due to the Managing Member shall not be affected by subsequent losses experienced by the Fund or any Member The Performance Allocation will vest at the end of each calendar year In the event that the effective date of a Member’s full or partial redemption is not the last day of a calendar year, the Performance Allocation attributable to amounts redeemed from such Member’s capital account will be determined for the period from the beginning of that year through the Redemption Date (as defined below) Managers’ Fees By virtue of its investments with different Managers, the Fund will pay its share of all fees and expenses charged by those Managers, which will result in the layering of fees and expenses Managers are compensated or receive allocations on terms that may include fixed and/or performance-based fees or allocations Generally, management fees, if applicable, range from 1% to 2% (annualized) of the average value of the Fund's investment, and performance fees or allocations, if applicable, range from 20% to 25% of the capital appreciation in the Fund's investment for the year The Fund may negotiate reduced fees and/or allocations with certain Managers Any such reductions will inure to the benefit of the Fund Organizational and Initial Offering Expenses The Fund’s organizational and initial offering costs and expenses are expected to total approximately [Amount] For financial accounting purposes, the Fund is amortizing those expenses over a 60-month period commencing [Date] The Fund believes that amortizing the organizational expenses is more equitable DISCLAIMER: THIS IS TO BE USED ONLY AS AN ILLUSTRATION AND NOT FOR PREPARATION OF DOCUMENTS Copyright © DASP All rights reserved viii MANAGER CHECKLIST HedgeAnswers 141 South Ave., Suite 8, Fanwood, NJ 07023 T: (908) 680-0010 W: www.hedgeanswers.com DISCLAIMER: THIS IS TO BE USED ONLY AS AN ILLUSTRATION AND NOT FOR PREPARATION OF DOCUMENTS Copyright © DASP All rights reserved Managers Checklist … Office Space … Insurances … Utilities … Payroll … Technology … Technology Information Vendor … Legal … Accountants … Administrative … Staffing … Marketing … Office Supplies … Logistical Headaches HedgeAnswers 141 South Ave., Suite 8, Fanwood, NJ 07023 T: (908) 680-0010 W: www.hedgeanswers.com DISCLAIMER: THIS IS TO BE USED ONLY AS AN ILLUSTRATION AND NOT FOR PREPARATION OF DOCUMENTS Copyright © DASP All rights reserved Due Diligence Questionnaire HedgeAnswers 141 South Ave., Suite 8, Fanwood, NJ 07023 T: (908) 680-0010 W: www.hedgeanswers.com DISCLAIMER: THIS IS TO BE USED ONLY AS AN ILLUSTRATION AND NOT FOR PREPARATION OF DOCUMENTS Copyright © DASP All rights reserved Standard Due Diligence: (NAME) Fund General Information Please describe all the strategies you deploy in the (NAME) Fund (e.g fixed income arb, convertible arb, event arb, long/short equities, etc.): The core tenet of (NAME)’s investing strategy is relative value investing In general, relative value investing in the (NAME) Fund involves the purchase of undervalued securities and hedging with fair value or overvalued securities Regardless of the specific asset class, this is the core of the strategy Current asset classes involved in the multi-strategy portfolio include Mortgage Arbitrage, Global Fixed Income Arbitrage, Convertible Bond Arbitrage, Event Driven Arbitrage, and Capital Structure Arbitrage The asset allocation is dynamic, dependent upon current market conditions and opportunities in specific asset classes The expectation is that the multi-strategy fund will have an improved risk/return profile, since the fund has a wide investment universe and a large set of markets to explore for hedging purposes Do you operate in all markets globally or you limit yourself to specific markets? Globally What you consider the revenue prospects to be for the strategies you exploit? We anticipate a Libor + xxx basis points to LIBOR + xxx basis points annual return profile with a minimum of volatility and drawdown The strategy is designed to be market neutral, so market conditions should have limited impact There is no guarantee of performance Please describe for each of your major funds, their name, whether they are on or offshore, the strategies followed, and fees: x% Management fee accrued and paid monthly with a xx% Incentive fee accrued monthly and paid annually ♦ (NAME) Fund, LP and Convertible (NAME) Fund, Ltd.: with onshore and offshore spokes Convertible Securities Arbitrage ♦ (NAME)Global Fund LLC and (NAME) Global Fixed Fund Ltd.: Global Sovereign debt, GSE, MBS, ABS and corporate debt relative value trading ♦ (NAME) Fund LLC and (NAME) Fund Ltd.: with onshore and offshore spokes ♦ (NAME)Global Fund LLC and (NAME) Global Fund Ltd.: with onshore and offshore spokes Directional value/ correlation positioning fund A Investment Process How you identify profit opportunities in each of your strategies? What quantitative tools you use? In each of the strategies, we perform intense analysis of individual securities, identify undervalued securities, and develop hedging plans The combination of the security and its hedge are stress-tested to assure the efficacy of the hedge Risk Management reviews portfolios to assure compliance with fund guidelines Additionally, stress-testing is an ongoing process in which we monitor possible changes in market conditions (NAME) possesses a rare combination of technology, experience and discipline, all of which are utilized in the investment process All quantitative tools have been developed internally, and are subject to constant review and improvement What is your investment time horizon? Typically, strategy horizons from entry to exit range between x and x months Risk management: a) Please describe the key risks to each strategy (e.g., interest rates, pre-payment, credit, etc.) Risks are detailed more fully in the Private Placement Memorandum of the fund and investors should consult this for a more complete description i) Mortgage backed securities: Risk in any strategy is determined by five factors: ♦ Interest rate risk Portfolios are managed on a duration neutral basis Consequently, portfolios will have minimal exposure to movement in interest rates ♦ Yield Curve risk Mortgage securities may have specific and varying exposures to certain parts of the yield curve Key rate duration is performed on all securities (and is part of the hedging process), which enables (NAME) to negate this exposure DISCLAIMER: THIS MATERIAL IS TO BE USED ONLY AS AN ILLUSTRATION AND NOT FOR PREPARATION OF DOCUMENTS; NOR DOES IT ANY WAY CONSTITUTE LEGAL OR ANY OTHER FORM OF ADVICE Copyright © DASP All rights reserved Page of ♦ Spread risk As (NAME) Mortgage Arbitrage portfolios will be long mortgage securities and generally short something other than mortgage securities, mortgage basis risk is present However, diligent security selection is one of the many techniques designed to minimize this risk ♦ Convexity and volatility risk Convexity and volatility exposures are hedged by offsetting instruments and options strategies Liquidity risk In general, under certain circumstances, repurchase markets may slow down and cause liquidity constraints Consequently, term financing arrangements are pursued, which better match the investment cycle and are largely protected against short-term liquidity issues Additionally, multiple borrowing relationships are utilized to diversify away dependence on any specific lender ♦ ii) Global Fixed Income Arbitrage strategy: ♦ Interest rate risk Portfolios are managed on a duration neutral basis Consequently, portfolios are structured to minimize exposure to movement in interest rates ♦ Yield Curve risk All fixed income securities may have specific and varying exposures to certain parts of the yield curve Key rate duration is performed on all securities (and is part of the hedging process), which enables (NAME) to negate this exposure ♦ Liquidity risk In general, under certain circumstances, repurchase markets may slow down and constrain liquidity Consequently, term financing arrangements are pursued, which better match the investment cycle and are largely protected against short-term liquidity issues Additionally, multiple borrowing relationships are utilized to diversify away dependence on any specific lender ♦ Spread risk The global fixed income arbitrage strategy is based on spread relationships of correlated instruments The security selection process isolates advantageous situations, so the risk from adverse spread movements is minimal ♦ Strategy correlation risk The portfolio is stress tested under varying market environments to assure the expected minimal correlations across the portfolio Positions will be added to minimize ongoing risk iii) Convertible debt arbitrage strategy: ♦ Spread risk Convertible Arbitrage comprises unique security positions, which may narrow or widen relative to Libor or government bonds depending on market conditions “Beta” hedges on the portfolio including the arrangement of credit- oriented swaps mitigate the potential spread risk ♦ Convexity risk Convexity is hedged by offsetting instruments and listed options ♦ Volatility risk In general convertibles are long the conversion option, therefore in most circumstances, there is long volatility This is managed through diversification and trading of listed options ♦ Issuer risk: This is subsumed in the spread and volatility risks, but it is critical that solid fundamental and credit analysis guide investment decisions to minimize single-name or sector specific risks iv) Event-driven strategy: Risk in any event-driven transaction is determined by several factors, some of which include: ♦ government and regulatory agency intervention risk, ♦ fundamentals of the companies, their balance sheets and other relevant information, ♦ general market conditions that affect deal prices, the collar bands being exceeded etc., ♦ appearance and effect of other interested parties on the deal table such as competing acquirers, consumer groups, and active shareholders b) Please detail the investment process from trade assessment, execution and risk management Core Exposure Management: (NAME) attempts to: (1) Minimize fund exposures to the outright level and direction of interest rates (if it is a relative-value/arbitrage investment vehicle) (2) Minimize fund exposures to the outright level and direction of equity prices (if it is a relative-value/arbitrage investment vehicle) DISCLAIMER: THIS MATERIAL IS TO BE USED ONLY AS AN ILLUSTRATION AND NOT FOR PREPARATION OF DOCUMENTS; NOR DOES IT ANY WAY CONSTITUTE LEGAL OR ANY OTHER FORM OF ADVICE Copyright © DASP All rights reserved Page of (3) Control drawdowns and help preserve capital, by running and analyzing risk exposure reports, stress tests, managing correlations Traders must monitor and judiciously manage and if necessary liquidate positions whose realized performance profile does not match prior analysis, payoff criteria, expectations, or changes in market fundamentals change the position’s or portfolio’s original risk-return characteristics The Process of Front–Line Investment Analysis and Risk Management: The process of risk assessment and management ranges from trade identification, to execution, to trade risk management and through operations This process is continuous and proceeds generally as follows: (1) Dimensions of anomaly/dislocation/arbitrage/investment opportunity relative to market information and events, and economic or mathematically determinable relationships are identified and analyzed (2) Dimensions of arbitrage opportunities relative to historical and experiential data; core economic/ technical /market reason for the existence of arbitrage opportunity are identified and analyzed; estimates of temporal duration and persistence of arbitrage opportunity are obtained; and probabilistic and economic assessment of further movements in the securities is evaluated (3) The correlation of a proposed investment position with current portfolio of investments is determined Investment opportunities, which reduce the correlation risk in the portfolio, have a significantly higher likelihood of being executed (4) Availability of hedge instruments, which allow for the isolation and extraction of the relative value opportunity and minimize exposure to other market risks is identified and calculated (5) Financing (e.g repurchase agreements) markets, liquidity, and opportunity are reviewed For example, liquidity of relevant securities and execution channels ensuring optimality vis-à-vis transaction costs is analyzed (6) An exit strategy in terms of profit-taking and loss minimization is developed (7) Ensuring security type, trade sizing and risk exposures not exceed any regulatory limits or limits specified in investment strategy guidelines (8) Trader/Portfolio Manager performs trade checking at the system input stage (9) Subject to the guidelines established by the Risk Management team, the portfolio management team’s judgment and analysis also plays a role in the assessment of overall risk and its management: i.e., the sum total of portfolio manager assessments of all available information, statistical estimates and general/specific market conditions are vital tools in accurately assessing trade and portfolio risk (10) Portfolio management teams are held primarily responsible for trade input into the operations system Therefore portfolio management teams must check out trade ticket entries (11) All portfolio management teams must adhere to any limits set by Risk-Management at all times Summarizing, at the portfolio level, factors such as inter-strategy correlation, size of the exposure and fit for the portfolio are to be considered in order to ensure that the portfolio does not have any one way positions across the portfolio and the diversification across strategies is maintained Existing positions may be modified depending on the opportunities in the marketplace and assessments of different, portfolio specific diversification requirements From experience and investment philosophy, portfolio managers are instructed when warranted to be relatively quick in exiting losing positions Finally, tail event and systemic risks must be monitored and managed through (a) purchase of options in the ‘tails’, i.e options which cover extreme market moves; (b) purchase of default protection for credit exposures; (c) overall portfolio structure Operations: The firm has an Operations division whose functions range from: (1) Trade verification and checkout (2) Day to day operation cash-flow management and securities handling duties (3) Delivery of risk and position reports and p&l’s to desk and principals (4) Coordination with technology and systems division for ensuring appropriate operational management of all relevant operational function Oversight Function of Risk Management Policies/Protocols: All portfolio management teams have a joint morning meeting daily, chaired by the firm’s Chief Investment Officer, where they report and discuss major positions, major exposures, market developments and impact on every portfolio The firm-wide risk-management team evaluates all positions and monitors their progress to: DISCLAIMER: THIS MATERIAL IS TO BE USED ONLY AS AN ILLUSTRATION AND NOT FOR PREPARATION OF DOCUMENTS; NOR DOES IT ANY WAY CONSTITUTE LEGAL OR ANY OTHER FORM OF ADVICE Copyright © DASP All rights reserved Page of a b c d e f g h i j Ensure adherence to prescribed regulatory and investment guidelines Help define risk exposure levels, in consultation with senior portfolio managers, and ensure that these levels are maintained (this will depend on the type of trade, investment strategy) Assist in structuring trades which attempt to minimize risk and withstand systemic/tail events Oversee the generation of daily risk and position reports in the Risk Management System This requires the Risk Management team to coordinate efforts with research and technology, and operations Lead and coordinate development of risk management technology and tools with portfolio management and systems development teams Ensure portfolio stress and scenario analysis are run, updated and made available to portfolio management to enhance decision-making Examine risk reports and stress test analysis to detect any unintended or unanticipated or incidental risk exposures, and ensure such are rectified immediately by trading team Coordinate and oversee efforts with documentation team to ensure counter-party credit agreements are drafted and executed with terms that are in the best interests of clients, and are fair and equitable to all parties concerned, and in keeping with industry standards and practices Work with (NAME) Legal team to assist in ensuring relevant documents provide clients with the suitable and equitable terms The risk management team reports directly to the Chief Investment Officer of (NAME), who oversees portfolio risk for all clients The CIO reports directly to the President and they advise portfolio managers as and when they see fit Finally, for a complete description of potential risk factors for the (NAME) Fund, please see the “Risk Factors” section, pages xxx, of (NAME) Fund’s Private Placement Memorandum c) How you calculate your hedges and what instruments you use? With all strategies, all identifiable risks are analysed and relevant ones are hedged as desired in a cost-effective manner Certain basis risks may exist as a structural necessity Hedge instruments include other securities, treasuries, swaps, and options How much leverage you typically use? Leverage is achieved through repurchase agreements and levels of leverage depend very much on the risk-reward opportunity and relative liquidity of the instruments being traded by the fund 1) Mortgage arbitrage: The recent average has been around xx 2) Global fixed income arbitrage strategy: recently, the leverage has ranged between xx and xxx 3) Convertible arbitrage strategy: Leverage has recently averaged xxx Leverage is achieved through margin borrowing in the convertible strategy Describe your cash management policy? Cash positions including those in margin accounts are reconciled daily by our operations department The Fund’s custodian, the (NAME), holds cash, collateral and securities Our financing trading team is charged with ensuring that we optimise in terms of return on cash, and this is implemented by our active participation in the repo market Finally, we strive to maintain sufficient levels of unencumbered cash in the fund which are more than enough for operating under regular market conditions and allow the fund to deal with unforeseen contingencies in times of market dislocations What systems (programs, etc.) are used for fund management on a regular basis? Of the many in-house systems, a sample includes (a) models to generate yield curves (splines etc.) for bond and swap valuation, (b) PCA and related analyses to evaluate yield curve strategies, (c) models evaluating the basis and different delivery options between futures and cash markets, (d) term structure models ranging from Hull-White to more complex factor models, (e) Multi-currency models, (f) models for evaluating volatilities cash, futures and swap markets, etc The primary system for risk analysis/monitoring is a proprietary interactive system called (NAME) In brief, this system allows one to analyse every fund managed by (NAME) (NAME) has drill-down abilities for a plethora of analyses from basic risk measures to batteries of stress tests beginning at the fund level all the way down to the single position level DISCLAIMER: THIS MATERIAL IS TO BE USED ONLY AS AN ILLUSTRATION AND NOT FOR PREPARATION OF DOCUMENTS; NOR DOES IT ANY WAY CONSTITUTE LEGAL OR ANY OTHER FORM OF ADVICE Copyright © DASP All rights reserved Page of The (NAME) is the proprietary system used by the (NAME) to process all trades related to portfolio management It is more than just a ticket entry system since every trade executed follows a number of stages with full documentation and accountability of any changes or updates made at each point Additionally, the inhouse applications provide tools to independently verify P&L, hedging and position maintenance parameters (i.e., cashflow, margins, cancel/corrects, claims, collateral mgmt) How many positions you typically hold? The number of positions depends primarily on market opportunities, and desired level of diversification B Turnover Approximate annual turnover: Mortgage-backed securities: xxx%; Global arbitrage: xxx%; Convertible Arbitrage: xxx% C Investment Information Macro outlook for your strategies and revenue potential Our investment strategy is generally not dependent upon macro market conditions Current conditions suggest a favourable environment for arbitrage strategies Fund performance and net asset value Since several asset classes are involved in many different strategies; we find such attribution of P&L varies considerably depending on markets and hence not entirely meaningful In positions and strategies contributions to p&l may differ considerably year over year D Company and Management Information People: any changes, particularly to key professional staff: (NAME) currently employs a staff of xxx employees (see organizational chart) Infrastructure: any substantial changes: Improvement is an ongoing trend in all areas: systems, client service and our trading process We continue to evaluate our process in respect to changes in the marketplace and make the appropriate improvements E Company Information Who are the major shareholders (more than, say, 10% holding) in the company? The company is owned by a holding company, which is owned by (NAME) In addition, there are x principals but they not have an ownership stake Please provide details on the people in your firm: See attached organizational chart and biographies Employee compensation: Employees receive a salary and an annual bonus, which is determined by the principals It is based on overall firm performance and employee contribution in achieving the same Is the company financially sound? Yes Who are the offshore fund’s administrators? (NAME) F Infrastructure Please describe the trade execution, confirmation and post-trade accounting and valuation process, identifying which stages are automated (NAME) has developed a number of modules and utilities used for daily trading: The system used by (NAME) to process all trades related to portfolio management is more than just a ticket entry system Every trade executed follows a number of stages with full documentation and DISCLAIMER: THIS MATERIAL IS TO BE USED ONLY AS AN ILLUSTRATION AND NOT FOR PREPARATION OF DOCUMENTS; NOR DOES IT ANY WAY CONSTITUTE LEGAL OR ANY OTHER FORM OF ADVICE Copyright © DASP All rights reserved Page of accountability of any changes or updates made at each point: 1) Initial Entry - done by the trader, 2) Checkout trade details confirmed with the counterparty, 3) Confirmation - on settlement date Major emphasis in the design of the system has been placed on minimizing the input required by the user with specific focus on minimizing and preventing entry errors For a security trade the only input needed by the trader is the name of the security, the face amount and its price All the relevant trade details (CUSIP, factor, accrued interest, and total cash) are provided or calculated by the system to prevent possible entry errors All the operations handled by the system are designed to increase reliability and efficiency and as a result, decrease the number of employees required to handle a very large trading volume The integrity of the trading system is protected by its ability to restrict different users of the system to perform only specific operations Settlement processing, security pair-offs and cash pair-offs are much easier to manage and monitor by combining the trading and financing functions within a single system A large number of reports are available to the user, including cash availability, profit and loss statement, future activity, principal and interest payments and claims The system currently handles the trading, financing and hedging activity for all the funds managed by (NAME) Who is responsible for trade execution, confirmation and post-trade accounting and valuation? What controls are in place to maintain these separate from portfolio management? The trading desk works as a team on the portfolio All executed trades are input into our proprietary ticket system Trading and settlement areas are segregated The back office works directly with our counterparties and our custodian to settle trades The step-by-step process is as follows: Trades are entered into the system by the trading desk Our back office immediately accesses the information, and is responsible for verifying the details of the trade and implementation of the settlement process with the relevant counterparties Accounting reports are generated by our system and are compared with the administrator and custodian on a daily basis This process alleviates any problems or questions that may arise on settlement date We receive confirmations on each trade, which are then matched against our records Monthly statements from brokers are received and filed accordingly How are positions valued and priced? Please refer to Memorandum for a detailed description What contingency arrangements you have in place? We have set up several levels of defence against contingencies to prevent any disruptions (NAME)’s portfolios are backed up daily on multiple network servers and distinct hard copies are also generated everyday The systems are maintained and backed up so that in the event of an emergency, they can be managed from two remote locations, one in (NAME) and the other in (NAME) G Liquidity & Fees Liquidity terms & conditions: Subscriptions are monthly Redemptions are quarterly with xx-day prior notice The minimum investment is $xxx How liquid are the instruments in the portfolio? This would be dependent on market conditions Please detail all fees and expenses: • Management fees: x% • Performance fees: xx% • Up-front fees: N/A • Redemption fees: Redemptions are quarterly with xx days notice x% redemption fee if initial investment is withdrawn within the first twelve months H Compliance Who is responsible for compliance in the firm? DISCLAIMER: THIS MATERIAL IS TO BE USED ONLY AS AN ILLUSTRATION AND NOT FOR PREPARATION OF DOCUMENTS; NOR DOES IT ANY WAY CONSTITUTE LEGAL OR ANY OTHER FORM OF ADVICE Copyright © DASP All rights reserved Page of The CFO works in conjunction with the Legal Department With regard to contractual agreements with the companies with which you trade, what types of controls are in place with regard to updating the agreements? Are they updated on a regular (e.g., every years) basis? Counterparties are selected and authorised by the CFO Upon Approval, (NAME) is notified and documentation is put in place Contractual agreements with counterparties are updated in keeping with market practice Our inhouse counsel reviews all counterparty agreements to ensure compliance with all rules and regulations of regulatory authorities (NAME) carefully monitors the market value of securities pledged and received to and from its counterparties A daily reconciliation of all collateral positions maximises the use of cash and collateral All market-to-market requests issued by counterparties are carefully reviewed by the manager of operations who has many years of front and mid-office experience When warranted, market valuations will be reviewed with the applicable portfolio manager All legal issues at the firm are dealt with by our in-house legal team and whenever necessary we search advice from external legal experts Please list your accountant and attorney of the company: See Private Placement Memorandum Is there any material, criminal, civil or administrative proceedings pending or threatened against the firm or any of its principles, or have there been any such matters? There have been no complaints, proceedings, etc involving the Fund, (NAME) or its principal’s investment/securities activities (NAME) was previously involved in arbitration with a third-party consultant wherein most of the consultant's claims were dismissed (NAME) is presently involved with arbitration with a third-party consultant regarding the consultant’s fees We not believe their claims to have merit, and in any event, they are not material to the firm’s business (NAME) has interposed a counterclaim against the third party consultant for breach of contract, which exceeds the claimants’ claims for damages To the best of the firm’s knowledge and belief there have been no complaints, proceedings, etc involving (NAME) employees’ investment management activities What are the firm’s employee own account dealing procedures? Employees are responsible for reporting and receiving approval for any transaction which may be similar to transactions entered in to by the firm Duplicate monthly brokerage statements are maintained on file for each employee A more detailed description of this procedure is outlined in the firm’s employee manuals DISCLAIMER: THIS MATERIAL IS TO BE USED ONLY AS AN ILLUSTRATION AND NOT FOR PREPARATION OF DOCUMENTS; NOR DOES IT ANY WAY CONSTITUTE LEGAL OR ANY OTHER FORM OF ADVICE Copyright © DASP All rights reserved Page of *(NAME): IMPORTANT DISCLAIMERS The information contained in these materials (collectively, the “Materials”), is exclusively for investors in Funds sponsored by the (NAME) and select prospective investors These Materials shall not constitute an offer to sell, or a solicitation of an offer to buy, any securities, including an interest in any Fund described herein No such offer or solicitation may be made prior to the delivery of such Fund’s confidential private placement memorandum The memorandum is important and should be read in its entirety, along with all its exhibits, before any offeree decides whether to invest These Materials are intended for educational, illustration and discussion purposes only and are qualified in their entirety by reference to the more detailed information and disclosures contained in each Fund’s memorandum and constituent documents These Materials not attempt to set forth all of the terms and conditions regarding an investment in any Fund These Materials contain certain information about certain Funds and their respective investment strategies, objectives, portfolios, performance, investment terms and other information and not attempt to describe all of the Funds or investment strategies utilized by (NAME) No representation is made that the Materials contain complete information about any Fund, including its summary of investment strategy, or complete information about all of the products and services offered by (NAME) The investment strategies described may not be suitable for all investors These Materials are not intended to be and not constitute investment advice by (NAME)’ nor an opinion or recommendation by (NAME) regarding the appropriateness of any investment All performance information is net of fees and as of the dates shown There is no assurance or guarantee that a Fund’s investment strategy or objectives will be successful or that a Fund will be profitable or will not incur losses Investment results may vary substantially over time No representation is made that any investor will or is likely to achieve results comparable to those shown Investors should not place undue reliance on such performance in making a decision to invest Past performance is no guarantee of future results Any example, graph or similar information regarding (NAME)’s or a Fund’s investment strategy, risk, investment results, portfolio profit and loss, allocations or investment process is presented for educational and illustration purposes only and is intended to be used in a discussion of investment strategy, risk and/or process, not to suggest investment performance This includes certain trading information which otherwise would only be available to traders and or analysts of (NAME) No representation is made that the information is complete or timely The information is not necessarily indicative of the performance or profitability of a Fund, (NAME), or any investor in the past or future Any statements or investment examples are non-factual in nature and constitute only views, beliefs, opinions or intentions, as of the date shown, which are subject to change due to a variety of factors, including fluctuating market conditions No representation is made that such non-factual statements or examples are now, or will continue to be, complete or accurate No statement, example, graph or similar information should be construed as an investment recommendation Certain information provided herein is based on third-party sources, including data obtained from recognized statistical services, issuer reports or communications, and other sources Although such information is believed to be accurate, we have not verified such information and not make any representations as to its accuracy or completeness Indices and other financial benchmarks are provided for illustrative purposes only, are unmanaged, reflect reinvestment of income and dividends and not reflect the impact of advisory fees Investors cannot invest directly in an index Comparisons to indexes have limitations because indexes have volatility and other material characteristics that may differ from each Fund For example, a Fund may typically hold substantially fewer securities than are contained in an index Indices also may contain securities or types of securities that are not comparable to those traded by a Fund Therefore, the Fund’s performance may differ substantially from the performance of an index Because of these differences, indexes should not be relied upon as an accurate measure of comparison DISCLAIMER: THIS MATERIAL IS TO BE USED ONLY AS AN ILLUSTRATION AND NOT FOR PREPARATION OF DOCUMENTS; NOR DOES IT ANY WAY CONSTITUTE LEGAL OR ANY OTHER FORM OF ADVICE Copyright © DASP All rights reserved Page of These Materials are being provided to you on a confidential basis Accordingly, these Materials may not be reproduced in any manner, in whole or in part, and may not be delivered to any person without the prior written permission of (NAME) DISCLAIMER: THIS MATERIAL IS TO BE USED ONLY AS AN ILLUSTRATION AND NOT FOR PREPARATION OF DOCUMENTS; NOR DOES IT ANY WAY CONSTITUTE LEGAL OR ANY OTHER FORM OF ADVICE Copyright © DASP All rights reserved Page of Hedge Fund Budget HedgeAnswers 141 South Ave., Suite 8, Fanwood, NJ 07023 T: (908) 680-0010 W: www.hedgeanswers.com DISCLAIMER: THIS IS TO BE USED ONLY AS AN ILLUSTRATION AND NOT FOR PREPARATION OF DOCUMENTS Copyright © DASP All rights reserved Minimum Start up Budget for Hedge Funds Onshore Offshore Legal Fees Filing Fees Accountant Review of Operating Documents Operating Capital $ $ 50,000.00 1,500.00 $ $ 12,000.00 2,000.00 $ $ 5,000.00 100,000.00 $ $ 5,000.00 100,000.00 Subtotal $ 156,500.00 $ 119,000.00 $ TBD TBD TBD TBD 15,000.00 $ TBD TBD TBD TBD 12,000.00 Rent Technology/Computers/Phones Marketing and Promotion Salary Miscellaneous DISCLAIMER: THIS MATERIAL IS TO BE USED ONLY AS AN ILLUSTRATION AND NOT FOR PREPARATION OF DOCUMENTS; NOR DOES IT ANY WAY CONSTITUTE LEGAL OR ANY OTHER FORM OF ADVICE Copyright © DASP All rights reserved CONTACT INFORMATION: HedgeAnswers 141 South Ave., Suite Fanwood, NJ 07023 T: (908) 680-0010 W: www.hedgeanswers.com Email: Bianca Razzanobr@globalcontentgrp.com OR Christine Enners- cenners@answersandco.com HedgeAnswers 141 South Ave., Suite 8, Fanwood, NJ 07023 T: (908) 680-0010 W: www.hedgeanswers.com DISCLAIMER: THIS IS TO BE USED ONLY AS AN ILLUSTRATION AND NOT FOR PREPARATION OF DOCUMENTS Copyright © DASP All rights reserved ... management fee, in arrears, from the Fund equal to 1/12th of 1% of the month-end Net Asset Value of the Fund (1% per annum) (the Management Fee”) Payment of the Management Fee is due as of the. .. in the management of the Fund, or in the conduct of its business Moreover, Members have no right to influence the management of the Fund, whether by voting, redemption, removing or replacing the. .. portion of any class of equity interests in the Fund, so that the assets of the Fund should not be considered "plan assets" for purposes of ERISA and Section 4975 of the Code, although there can