An Annualized Capital Account is created in the month in which Additions and Subscriptions (§ 6.1) and Withdrawals and Redemptions (§ 6.2) are made, for both the Unicorn Pairs Fund, LP and the individual Limited Partners. For Additions and Subscriptions the Annualized Capital Account begins in the month it was created, named either “Month 201X Additions Annualized Capital Account” or “Month 201X Subscriptions Annualized Capital Account”. For Withdrawals and Redemptions the account begins either the first day of the Fiscal Year, if it is debited from the Yearly Capital account, or the first day of the month of the earliest Annualized Capital Account it is debited from, named either “Month 201X Withdrawals Annualized Capital Account” or “Month 201X Redemption Annualized Capital Account”.

In the case of Additions and Subscriptions the beginning balance of a Limited Partner’s Annualized Capital Account is equal to the Additions and Subscriptions made that month. For the Fund, the beginning balance is equal to the Additions and Subscriptions made by all the Limited Partners that month. In the case of Withdrawals and Redemptions,
PR  =  yBBal / yEBal aBBal  =  (WR × PR) aEBal  =  WR adjusted yBBal  =  existing yBBal - aBBal adjusted yEBal  =  existing yEBal - aBBal
  • where an Annualized Capital Account is debited, the beginning balance is the first day of the month of the debited Annualized Capital Account. A “performance ratio” (PR) is calculated on the debited Annualized Capital Account. The PR is multiplied by the Withdrawals and Redemptions to determine the “beginning balance” of the new Annualized Capital Account (aBBal) and subtracted from the debited Annualized Capital Account “beginning balance”. The Withdrawal and Redemption, before fees, is subtracted from the “ending balance” of the debited Annualized Capital Account and added to the “ending balance” of the new Annualized Capital Account.
PR  =  debited aBBal / debited aEBal aBBal  =  (WR × PR) aEBal  =  WR adjusted debited aBBal  =  debited aBBal - aBBal adjusted debited aEBal  =  debited aEBal - WR In determining the amounts transferred to the Limited Partner in the case of Withdrawals and Redemptions, the “ending balance” (aEBal) of the newest Annualized Capital Account is reduced to zero by the amount of Withdrawals and Redemptions, less Fees (§ 3.3). aEBal  =  WR aEBal  =  aEBal - Fees      (Management and Performance Fees charged) aEBal  =  aEBal - aEBal      (Funds Transferred) aEBal  =  0 To accurately charge Fees on Annualized Capital Accounts, the Performance Fees (§ 3.6) and Management Fees (§ 3.5) need to be “annualized” on a monthly basis. The number of months annualized starts with the month of the “beginning balance” and ends the month of the “ending balance”. To determine the “annualized percentage” (A%) divide the number of months by 12. A%  =  Number of months / 12 On the last day of the Fiscal Year, or when the Annualized Capital Account is set to zero because of Withdrawals and Redemptions, any and all Fees are charged. If the “annualized” Performance is above the High Water Mark (§ 3.4), the Annualized Capital Account of the Limited Partner is charged an “annualized” Management Fee (§ 3.5) and an “annualized” Performance Fee (§ 3.6).

To determine the Fees charged, the dollar amount of the Annualized Capital Account performance is defined as the difference between the “ending balance” (aEBal) and the “beginning balance” (aBBal). The “net performance” on which fees are based, is the performance in dollars less the High Water Mark. If the “net performance” is greater than zero then a Performance Fee is charged. The annual Management Fee is an annualized 2% of the “ending balance”. The Performance Fee is 20% of the “net performance” minus the annual Management Fee. Performance Amount  =  aEBal - aBBal Net Performance  =  Year End Performance - High Water Mark If Net Performance > 0, then Annual Management Fee  =  aEBal × (2% × A%) Performance Fees  =  (Net Performance - Annual Management Fee) × 20%