Side Pocket Investments

Side Pocket Investments

The Fund Manager may determine, in its sole discretion, that certain investments of the Fund have a relatively long-term investment horizon, are illiquid and/or have a value which cannot be readily or reliably ascertained (the “Side Pocket Investments”).

The Fund may establish a new segregated portfolio and issue to the Limited Partners, in compulsory exchange for any of their existing Units in the Fund (the “Initial Units”) a new class of Units (Units of such new class being “Side Pocket Units”) in order to isolate ownership of a Side Pocket Investment made by the Fund. The Fund may also issue multiple sub-classes in order to isolate the ownership of different Side Pocket Investments which are classified by the Fund Manager. The Side Pocket Units are issued to each Limited Partner of the Fund who is a Limited Partner at the time of classification of the Side Pocket Investments, in exchange for such number of the Limited Partner’s Initial Shares as are in amount equal to the aggregate value of such Limited Partner’s Initial Shares (after deducting the Management Fee and Performance Fee, which is to be calculated at the time of such classification, except where waived or delayed by the Fund Manager in its discretion), divided by the aggregate value of all of the issued and outstanding Initial Shares, multiplied by the fair value of the Side Pocket Investments (as determined in good faith in the discretion of the Directors, on the advice of the Investment Adviser and the Administrator) attributable to such new Side Pocket Investment Shares. The Initial Shares exchanged for Side Pocket Investment Shares will be cancelled as of the date the Directors classify the relevant investments as Side Pocket Investments.

A Realisation Event occurs when: (a) a Side Pocket Investment, in the opinion of the Investment Adviser, becomes liquid (including, without limitation, when there is a public offering of the securities constituting the Side Pocket Investment, which offering the Investment Adviser determines reasonably values the Side Pocket Investment); or (b) a Side Pocket Investment is liquidated, sold or otherwise disposed of by the Fund (each, a “Realisation Event”). After the occurrence of the Realisation Event, the Fund shall redeem and cancel the Side Pocket Investment Shares within the following ninety (90) days and either (a) distribute the net proceeds of the Side Pocket Investment to holders of Side Pocket Investment Shares; or (b) issue Shares of the same Class as the Initial Shares to the holders of Side Pocket Investment Shares at the then prevailing Net Asset Value of such Class, which may be then subsequently redeemed in the normal manner at the option of Shareholders. The Redemption Price payable to the Shareholders in relation to the redemption of the Side Pocket Investment Shares shall be net of fees, including any accrued Management Fees or Performance Fees payable with respect to such Side Pocket Investment Shares.

The Investment Adviser will receive a Management Fee and Performance Fee in respect of each Side Pocket Investment Share in the same manner as described in “Charges and 50 Expenses”, save that such shall accrue during the term of the Side Pocket Investment and become payable on the Realisation Event, and further that such will be based on their fair value (as determined by the discretion of the Directors, on the advice of the Investment Adviser and the Administrator). The Investment Adviser may waive or reduce the amount of any accrued fees payable with respect to a Side Pocket Investment in its sole discretion. Other expenses which are quantifiable and directly related to a Side Pocket Investment will be accrued in the price of the relevant Side Pocket Investment Shares. Payment of fees and other expenses relating to the Side Pocket Investment may be paid out of the Side Pocket Investment. The Investment Adviser shall notify Shareholders as soon as practicable following a Realisation Event or a designation by the Fund of a Side Pocket Investment, with details of Participating Shares cancelled or issued to the relevant Shareholder as a result.