Correction (July 5, 2026): an earlier version of this note misstated the fee terms. The fund charges a 1% management fee and a 25/50 performance fee with a 20% breakpoint, crystallized annually against a perpetual high-water mark. The text below has been updated to match the Offering Memorandum, which governs.
Every fee answers one question: when does the manager get paid?
Ours has a short answer. The meaningful part of our compensation arrives after you make a new high - and at no other time.
That sentence is the whole philosophy of this page; everything below is just the mechanism that enforces it. Because here's what most fee disclosures miss: a fee isn't a number you compare across funds. It's a machine that decides what your manager is rewarded for. Two funds quoting the identical headline can charge wildly different amounts - and, more importantly, can be paid to do completely different things. So we'll show you our machine, every part, and what it pays us to care about.
What we charge
Here is the entire schedule, in one breath:
A 1% management fee. A two-tier performance fee - 25% of new profit up to a 20% annual return, 50% of the part above it. Nothing else.
The management fee is 1% of net asset value per year - deliberately thin, there to keep the lights on, not to be the business. The performance fee is where the compensation actually lives, and it is charged only when your capital is worth more than it has ever been worth before - and then only on the new part. In a flat year you pay 1% and nothing more. In a losing year, the same. There is no admin fee, no setup fee, no separate expense line.
Fifty percent on the top tier is a large performance share, larger than the customary twenty. We'll make the honest case for it below, because that case is part of the disclosure. But first the mechanics - a fee you can't trace is just a headline by another name.
The easiest fee to disclose is the one you actually charge.
The high-water mark
The performance fee is governed by a high-water mark - the piece of machinery that makes sure you never overpay.
Your high-water mark is the highest value your units have ever reached at a crystallization. You pay only on profit above that mark. Make a new high and the mark ratchets up to meet it. Dip, and the mark stays put - it never falls, and it never expires. So a loss followed by a recovery is never charged: you're climbing back over ground you already paid on, and we don't bill it twice.
The two tiers
The performance rate itself has two gears, split at a 20% annual return:
- 25% of new profit, up to a 20% return for the year.
- 50% of new profit above that line.
A worked example, in real numbers. Say your holding starts the year at \$100,000 and finishes at \$130,000 - a 30% net year, all of it above your mark. The first 20 points of return (\$20,000) are charged at 25%: \$5,000. The 10 points above the breakpoint (\$10,000) are charged at 50%: \$5,000. Total fee \$10,000; you keep \$20,000 - a net 20% year - and your mark ratchets up to the post-fee value. If the next year the book slips to below that mark, you pay no performance fee at all, and none until you've climbed back over it. You never pay for the same dollar of recovery twice.
When it's taken
The performance fee crystallizes once a year, on 31 December, on settled, reconciled value - not on a hopeful mid-year spike that later evaporates. The arithmetic is mechanical: your units times the year-end NAV per unit, minus your high-water mark; if that's positive, the two-tier rate applies to it, and the mark resets up. If it's zero or negative, no fee, and the mark holds. A redemption mid-year settles its share of the fee at the same arithmetic on the way out. You are billed on profit the book actually reached and settled at - and the NAV it's struck from is itself fully reconciled.
For the Edge class, which runs in discrete cycles rather than a calendar year, the same rates apply but the fee crystallizes at each cycle close, against a separate high-water mark for that class. One nuance worth stating plainly: collection of the Edge performance fee is currently waived or deferred at the manager's discretion - but crystallization still resets the mark either way, so a waived fee never comes back to bill you later.
What we don't charge
This is the part that turns a fee schedule into an honest one - because the costs a fund doesn't show you are usually the ones that matter most.
No expense ratio, no pass-through costs. Running this system costs real money - servers, market-data and RPC infrastructure, the people, the legal line. At a lot of funds those land on you as an expense ratio stacked on top of the headline. Here they don't. The manager absorbs them out of its own share. The schedule you see is not the schedule plus expenses. It's the whole bill.
That's the difference between a menu price and the price you actually pay - the same gap that separates a quoted yield from the alpha you keep.
What incentives does this create?
Step back from the percentages and ask what each kind of fee actually rewards.
A management fee pays us for assets. A performance fee pays us for performance. Those are not the same thing.
A manager paid mostly on assets has one dominant incentive: gather more of them. Raise a bigger fund, then a bigger one - the cheque grows with size regardless of what the size does to returns. But edge is finite. Past a point, more capital makes performance worse, not better. A pure asset-gatherer is paid to sail straight past that point, because their income rises even as your return falls. The fee quietly rewards the one thing that hurts you.
We kept the management fee at 1% precisely so it can't become the business. At that level it covers overhead and nothing more; the weight of our compensation sits entirely in the performance fee, above your mark. We aren't paid meaningfully for holding your money; we're paid meaningfully only if it grows. If we ever let the book get too big to perform, our own income is the first thing to suffer - which is exactly the alignment you should want from the inside.
Where we sit in the waterfall
Here is the real argument for the structure - not the headline, not the thin management fee, but the order in which pain and profit are handed out.
Founder capital sits in first-loss, beneath yours. When the book loses, that capital is hit before a senior investor takes a cent of damage. When the book wins, the performance fee is paid only after you've been carried back above your high-water mark. We are last in line for profit and first in line for loss.
We lose first and get paid last.
A fee is just a number until you know where its owner sits in the waterfall. Ours sits underneath you. That single fact does more to align us with you than any headline percentage, in either direction, ever could.
Why the top rate is high
Fifty percent above the breakpoint sounds expensive. Sometimes it is. Sometimes the whole schedule is cheaper than two and twenty. The only honest way to know is to stop comparing headlines and add up what you actually pay over a full cycle - the good years and the bad.
Here is the shape of it across the three kinds of year:
In a flat year and a losing year, a 2-and-20 fund still bills you in full: 2% of assets, plus the expense ratio, whether or not you made money. Our bill in those years is 1%, full stop. In a strong year we cost more - 50% of the gain above a 20% return is a big number, and we won't pretend otherwise. That's the trade: you pay us well precisely when we've made you money, and very little when we haven't.
Whether that's cheaper for you depends on the path - on how many flat and down years sit between the good ones. We think it's the honest side of the trade to be on. But the only way to know is to do the arithmetic over a full cycle, which is exactly why we showed it rather than asserting it.
What you can check
A fee schedule you can't reconcile is just a friendlier headline. So, in the spirit of how you can verify us: every performance fee is computed at crystallization from your units, the reconciled NAV per unit, and your high-water mark - three numbers you can see. Take your prior mark, the new settled value, the difference; charge 25% of it up to a 20% year and 50% of the rest, and that's the fee. If our arithmetic and yours disagree, that's a discrepancy you're entitled to raise, not a black box you're asked to accept.
A fee you can compute is a fee you can trust. The ones to fear are the ones you'd need an accountant and a subpoena to total up.
The one line to keep
If you need a spreadsheet and a lawyer to understand a fee, it isn't transparent. This one doesn't.
A fee tells you what a manager is paid to care about. Ours pays us seriously only when you've reached new ground.