EFTA01419618.pdf

AGP LP 519 Alpha Group Capital Paul Barrett Item 1. Cover Page Brochure of Alkeon Capital Management, LLC 350 Madison Avenue, 9th Floor New York, NY 10017 Telephone: March 28, 2016 This brochure provides information about the qualifications and business practices of Alkeon Capital Management, LLC ("Alkeon"). If you have any questions about the contents of this brochure, please contact us at or The information in this brochure has not been approved or verified by the United States Securities and Exchange Commission or by any state securities authority. Additional information about Alkeon also is available on the SEC's website at www.adviserinfo.sec.gov. Although Alkeon is a "registered investment adviser," that registration does not imply a certain level of skill or training. Item 2. Material Changes There have been no material changes to this brochure since its last annual update on March 26, 2015. EFTA01419618 AGP LP 519 Alpha Group Capital Paul Barrett Item 3. Item 1. Item 2. Item 3. Item 4. Item 5. Item 6. Item 7. Item 8. Item 9. Item 10. Item 11. Item 12. Item 13. Item 14. Item 15. Item 16. Item 17. Item 18. Item 19. Table of Contents Cover Page 1 Material Changes 1 Table of Contents 2 Advisory Business 3 Fees and Compensation 5 Performance-Based Fees and Side-By-Side Management 11 Types of Clients 11 Methods of Analysis, Investment Strategies and Risk of Loss 11 Disciplinary Information 15 Other Financial Industry Activities and Affiliation 15 Code of Ethics, Participation or Interest In Client Transactions and Personal EFTA01419619 Trading 16 Brokerage Practices 17 Review of Accounts 20 Client Referrals and Other Compensation 21 Custody 21 Investment Discretion 21 Voting Client Securities 21 Financial Information 21 Requirements for State-Registered Advisers 22 Privacy Policy 22 Trade Error Policy 22 2 EFTA01419620 AGP LP 519 Alpha Group Capital Paul Barrett Item 4. Advisory Business Alkeon is a Delaware limited liability company that has been in business since 2002. Alkeon's manager, controlling owner and principal portfolio manager is Panayotis "Takis" Sparaggis. As of December 31, 2015, Alkeon had total discretionary assets under management of approximately $3.566 billion. Alkeon only manages assets on a discretionary basis. Alkeon provides portfolio management and subadvisory services to private domestic and offshore investment funds, registered investment funds and other products sponsored by: • • • Alkeon; Oppenheimer Asset Management Inc. ("OAM"), a subsidiary of Oppenheimer Holdings, Inc. ("OPY"); ALPRO Funds Management Limited, a private limited liability company incorporated in Ireland ("ALPRO"); MS Alkeon UCITs Fund ("MS UCITs"), a sub-fund of FundLogic Alternatives plc, a company incorporated with limited liability as an open-ended investment company with variable capital under the laws of Ireland and authorized by the Central Bank of Ireland; and • Alkeon Alkeon acts as the investment manager to various private domestic and offshore investment funds as described below. Alkeon Growth Funds. Alkeon acts as investment manager to Alkeon Growth Partners, LP, Alkeon Growth Partners II, LP, Alkeon Growth PW Partners, LP and Alkeon Growth RJ Partners, LP (each, a "Growth US Feeder" and together, the "Growth US Feeders"), all Delaware limited partnerships. Alkeon also acts as co-investment manager (along with Alkeon Capital Offshore, LLC, as described in Item 10) to Alkeon Growth Offshore Fund, Ltd. and Alkeon Growth Offshore Fund II, Ltd. (each, a "Growth Offshore Feeder" and together the "Growth Offshore Feeders") and Alkeon Growth Master Fund, Ltd. (the "Growth Master Fund"). The EFTA01419621 Growth Master Fund and the Growth Offshore Feeders are exempted companies organized under the laws of the Cayman Islands. These funds are organized in a "master- feeder" structure, whereby the Growth US Feeders and the Growth Offshore Feeders invest their assets in the Growth Master Fund, where all trading is executed. Alkeon Select Funds. Alkeon acts as investment manager to Alkeon Select Partners, LP (the "Select US Feeder"), a Delaware limited partnership. Alkeon also acts as co- investment manager (along with Alkeon Capital Offshore, LLC) to Alkeon Select Offshore Fund, Ltd. (the "Select Offshore Feeder") and Alkeon Select Series SPC Fund, Ltd. (the "Select Master Fund"). The Select Master Fund is an exempted segregated portfolio company organized under the laws 3 SALI Fund Management, LLC ("SALI"). EFTA01419622 AGP LP 519 Alpha Group Capital Paul Barrett of the Cayman Islands and the Select Offshore Feeder is an exempted company organized under the laws of the Cayman Islands. These funds are organized in a "master- feeder" structure, whereby the Select US Feeder and the Select Offshore Feeder both invest their assets in the Select Master Fund, where all trading is executed. Alkeon Asia Growth Funds. Alkeon acts as investment manager to Alkeon Asia Growth, LP (the "Asia Growth US Feeder"), a Delaware limited partnership, Alkeon Asia Growth Offshore Fund, Ltd. (the "Asia Growth Offshore Feeder") and Alkeon Asia Growth Master Fund, Ltd. (the "Asia Growth Master Fund"). The Asia Growth Master Fund and the Asia Growth Offshore Feeder are both exempted companies organized under the laws of the Cayman Islands. These funds are organized in a "master-feeder" structure, whereby the Asia Growth US Feeder and the Asia Growth Offshore Feeder both invest their assets in the Asia Growth Master Fund, where all trading is executed. Alkeon Capital Partners Funds. Alkeon acts as investment manager to Alkeon Capital Partners, LP (the "Alkeon Capital Partners US Feeder"), a Delaware limited partnership. Alkeon also acts as co-investment manager (along with Alkeon Capital Offshore, LLC) to Alkeon Capital Partners Offshore Fund, Ltd. (the "Alkeon Capital Partners Offshore Feeder") and Alkeon Capital Partners Master Fund, Ltd. (the "Alkeon Capital Partners Master Fund"). The Alkeon Capital Partners Master Fund and the Alkeon Capital Partners Offshore Feeder are both exempted companies organized under the laws of the Cayman Islands. These funds are organized in a "master-feeder" structure, whereby the Alkeon Capital Partners US Feeder and the Alkeon Capital Partners Offshore Feeder both invest their assets in the Alkeon Capital Partners Master Fund, where all trading is executed. Alkeon Global Alpha Funds. Alkeon acts as investment manager to Alkeon Global Alpha LP, a Delaware limited partnership (the "Global Alpha US Feeder"), Alkeon Global Alpha Master Fund, L.P., a Cayman Islands exempted limited partnership (the "Global Alpha Master Fund") and Alkeon Global Alpha Ltd., a Cayman Islands exempted company (the "Global Alpha Offshore Feeder"). These funds are organized in a "master-feeder" structure, EFTA01419623 whereby the Global Alpha US Feeder and the Global Alpha Offshore Feeder both invest their assets in the Global Alpha Master Fund, where all trading is executed. OAM Alkeon acts as sub-adviser to Advantage Advisers Global Growth, L.L.C. (the "Global Growth Fund"), a Delaware limited liability company. Alkeon also serves as sub- adviser to Advantage Advisers Xanthus Fund, LLC, a Delaware limited liability company ("Xanthus Fund") which is registered under the Investment Company Act of 1940 Act (the "1940 Act") as a closed-end, non-diversified management investment company. In addition, Alkeon acts as sub-adviser to an offshore fund, Advantage Advisers Global Growth Ltd., a Cayman Islands exempted company (the "Global Growth Offshore Fund" and with the Global Growth Fund and Xanthus Fund the "OAM Funds"). Advantage Advisers Multi-Manager, LLC ("AAMM") is the investment manager of the Global Growth Offshore Fund and Xanthus Fund Advantage Advisers Management, LLC ("AAM") is the investment manager of the Global Growth Fund. AAM is also a special advisory member of 4 EFTA01419624 AGP LP 519 Alpha Group Capital Paul Barrett Xanthus Fund and the Global Growth Fund. OAM is the managing member and Alkeon is a non-managing member of AAMM and AAM. ALPRO Alkeon acts as investment manager to ALPRO Growth Fund, plc ("ALPRO Growth") an openended variable capital company authorized as designated company under Part XIII of the Companies Act, 1990 of Ireland and supervised by the Central Bank of Ireland. ALPRO is manager of ALPRO Growth. MS UCITs Alkeon acts as investment manager for MS Alkeon UCITs Fund ("MS UCITs), a sub-fund of FundLogic Alternatives plc, a company incorporated with limited liability as an open-ended investment company with variable capital under the laws of Ireland and authorized by the Central Bank of Ireland. Insurance Series Alkeon acts as sub-adviser to Alkeon Insurance Growth Fund Series Interests of the SALI MultiSeries Fund, L.P., a Delaware series limited partnership (the "Insurance Series"). SALI and SALI Fund Partners, LLC are the investment manager and general partner, respectively, of the SALI Multi-Series Fund, L.P. General Information about Alkeon's Advisory Business Alkeon invests principally, but not solely, in long or short positions of publicly-traded and private companies in global markets on behalf of the funds it manages, but is authorized to enter into any type of investment transaction that it deems appropriate under the terms of the offering documents for those funds. The investors in the funds that Alkeon manages have no opportunity to select or evaluate any fund investments or strategies. Alkeon selects all fund investments and strategies. Alkeon's discretionary authority is limited, however, as described in Item 16. Item 5. Fees and Compensation Alkeon's compensation is negotiable and varies, but typically, it receives an asset-based fee from each fund based on a percentage of that fund's assets under management. In addition, Alkeon, or an affiliate of Alkeon, also typically receives an annual, semi-annual or quarterly incentive fee/allocation based on the amount of the net realized and unrealized profits attributable to an EFTA01419625 investor for that period, adjusted for net losses incurred by such investor in prior periods. The asset-based fee and incentive fee/allocation are charged to client accounts and investors in the manners described below. Alkeon complies with Rule 205-3 under the Investment Advisers Act of 1940, to the extent required by applicable law. Incentive fees/- allocations may create an incentive for Alkeon to make more risky and speculative investments than it would otherwise make. 5 EFTA01419626 AGP LP 519 Alpha Group Capital Paul Barrett Alkeon Alkeon Growth Funds Alkeon Growth Partners, LP is divided into multiple series of interests distinguished by the following different management fees and liquidity rights: (i) investors in Series One, which was sold prior to April 1, 2007, and is no longer being offered, pay a monthly fee of 0.125% (1.5% per annum) of their capital account balance and generally may withdraw their investment on the last day of any calendar quarter; (ii) investors in Series Two pay a monthly fee of 0.1667% (2% per annum) of their capital account balance and generally may withdraw their investment on the last day of any calendar quarter; (iii) investors in Series Three pay a monthly fee of 0 125% (1.5% per annum) of their capital account balance and generally may withdraw their investment as of the end of any calendar quarter beginning with the end of the calendar quarter that immediately precedes the first anniversary of their initial investment; and (iv) investors in Series Four, which is only offered to investors whose investment in the fund is made through a feebased advisory program sponsored by a registered broker-dealer or registered investment adviser who recommends their investment in the fund, pay a monthly fee of 0.104% (1.25% per annum) of their capital account balance, in addition to the fee charged by the fee- based advisory program, and generally may withdraw their investment on the last day of any calendar quarter. Alkeon Growth Partners II, LP is divided into multiple series of interests distinguished by the following different management fees and liquidity rights: (i) investors in Series One pay a monthly fee of 0.1667% (2% per annum) of their capital account balance, and generally may withdraw their investment on the last day of any calendar quarter; (ii) investors in Series Two pay a monthly fee of one-twelfth of 1% (1% per annum) of their capital account balance, in addition to a minimum 0.50% per annum fee by their financial institution on the account which holds their investment, and generally may withdraw their investment on the last day of any calendar quarter after a one year lock up; and (iii) investors in Series Three pay a monthly fee of 0.125% (1.5% per annum) of their capital account balance and generally may withdraw their EFTA01419627 investment as of the end of any calendar quarter beginning with the end of the calendar quarter that immediately precedes the first anniversary of their initial investment. As of May 1, 2012, only Series One (2% per annum) is offered for new subscriptions. Alkeon Growth PW Partners, LP is divided into multiple series of interests distinguished by the following different management fees and liquidity rights: (i) investors in Series One pay a monthly fee of 0.1667% (2% per annum) of their capital account balance and generally may withdraw their investment on the last day of any calendar quarter; (ii) investors in Series Two pay a monthly fee of 0.125% (1.5% per annum) of their capital account balance and generally may withdraw their investment as of the end of any calendar quarter beginning with the end of the calendar quarter that immediately precedes the first anniversary of their initial investment; (iii) investors in Series Three, which is no longer being offered to new investors, pay a monthly fee of one-twelfth of 1.25% (1.25% per annum) of their capital account balance, in addition to a minimum 0.75% per annum fee by their financial institution on the account which holds their investment, and generally may withdraw their investment on the last day of any calendar quarter; and (iv) investors in Series Four, which is only offered to investors whose investment in the fund is made through a fee-based advisory program sponsored by a registered broker-dealer or registered investment adviser who recommends their investment in the fund, pay a monthly fee 6 EFTA01419628 AGP LP 519 Alpha Group Capital Paul Barrett of 0.104% (1.25% per annum) of their capital account balance, in addition to the fee charged by the fee-based advisory program, and are generally permitted to make withdrawals as of the last day of any calendar quarter. Investors in Alkeon Growth R3 Partners, LP pay a monthly fee of 0.125% (1.5% per annum) of their capital account balance and generally may withdraw their investment as of the end of any calendar quarter beginning with the end of the calendar quarter that immediately precedes the first anniversary of their initial investment. Alkeon Growth Offshore Fund, Ltd. is divided into multiple sub-classes of Class A and B Shares (which are available to investors based on their FINRA Rule 5130 and 5131 status relating to new issues) distinguished by the following different management fees and liquidity rights. SubClass One Shares are charged a monthly fee of 0.125% (1.5% per annum) of their net asset value for investors investing prior to April 1, 2006. Sub-Class Two Shares are charged a monthly fee of 0.1667% (2% per annum) of their net asset value for investors investing after April 1, 2006, but before December 1, 2007 (the other Growth Offshore Feeder was not formed until 2010). These two Sub-Classes are no longer being offered. For those investing on or after December 1, 2007, Alkeon Growth Offshore Fund, Ltd. generally offers two separate sub- classes of shares distinguished by different management fees and liquidity rights. Sub-Class Three Shares are charged a monthly fee of 0.1667% (2% per annum) of their net asset value and generally may be redeemed monthly, subject to a 5% redemption fee payable to the Growth Master Fund for redemptions within the first year of the investor's initial investment. Sub - Class Four Shares are charged a monthly fee of 0.125% (1.5% per annum) of their net asset value and generally may be redeemed monthly after a two year lock up. Sub-Class Five Shares are charged a monthly fee of 0.104% (1.25% per annum) of their net asset value and generally may be redeemed monthly, subject to a 5% redemption fee payable to the Growth Master Fund for redemption within the first year of the investor's initial investment. Sub-Class Five Shares are only being offered to U.S. tax-exempt shareholders who invest in the fund through a fee-based advisory program EFTA01419629 sponsored by a U.S. registered broker-dealer or registered investment adviser who recommends their investment in the fund Alkeon Growth Offshore Fund, Ltd. also has two classes of "advisory" shares. Class IA are offered to certain high net worth and institutional investors investing through a sponsored advisory fee program or platform charging a minimum advisory fee of at least 0.75% per annum. Any holder of Class IA Shares may redeem all or a portion of such Class IA Shares monthly, subject to a 5% redemption fee payable to the Growth Master Fund with respect to redemptions prior to the first anniversary of the date such Class IA Shares were issued. Class I Shares are not currently offered but may be offered in the future to institutional investors who make a certain minimum investment in the fund, and the shares may have different fee and liquidity terms than the fund's other shares. Alkeon Growth Offshore Fund II, Ltd. is divided into multiple sub-classes of Class A and B Shares (which are available to investors based on their FINRA Rule 5130 and 5131 status relating to new issues) distinguished by different management fees and liquidity rights. SubClass One Shares are charged a monthly fee of 0.1667% (2% per annum) of their net asset value and generally may be redeemed monthly, subject to a 5% redemption fee payable to the Alkeon Growth Master Fund for redemptions within the first year of the investor's initial investment. 7 EFTA01419630 AGP LP 519 Alpha Group Capital Paul Barrett Sub-Class Two Shares are charged a monthly fee of one-twelfth of 1% (1% per annum) of their net asset value, in addition to a minimum 0.50% per annum fee charged by their financial institution on the account which holds the investment, and generally may be redeemed monthly after a two year lock up. Sub-Class Three Shares are charged a monthly fee of 0.125% (1.5% per annum) of their net asset value and generally may be redeemed monthly after a two year lock up. Alkeon, or an affiliate of Alkeon, also receives an annual incentive allocation or fee (as applicable) with respect to each investor in each Growth US Feeder and Growth Offshore Feeder equal to 20% of the net realized and unrealized profits attributable to each investor for the year, adjusted for net losses incurred by such investor in prior years. Alkeon Select Funds. Alkeon charges the Select US Feeder a monthly management fee of 0.1667% (2.0% per annum) of the net asset value of the fund. Investors generally may withdraw their investment on the last day of each month. Alkeon charges the Select Offshore Feeder a monthly management fee of 0.1667% (2.0% per annum) of the net asset value of the fund. Investors generally may redeem their investment on the last day of each month. Alkeon Asia Growth Funds. The Asia Growth US Feeder has two separate investment series distinguished by the following different management fees and liquidity rights: (i) investors in Series One, which is no longer being offered, pay a monthly management fee of 0.125% (1.5% per annum) of their capital account balance and generally may withdraw such investment beginning on the last day of the calendar quarter occurring at least 24 months after the date of such investment and quarterly thereafter; provided that withdrawals also are permitted beginning on the last day of the calendar quarter occurring on at least 12 months after the date of such investment subject to a 4% withdrawal fee payable to the Asia Growth Master Fund; or (ii) investors that make an investment in Series Two pay a monthly management fee of 0.1667% (2% per annum) of their capital account balance and generally may withdraw such investment on the last day of any calendar quarter, subject to a 4% withdrawal fee payable to the Asia Growth EFTA01419631 Master Fund for withdrawals occurring less than 12 months after the date such Series Two Interest was purchased. Alkeon, or an affiliate of Alkeon, also receives an annual incentive allocation equal to 20% of the net realized and unrealized profits attributable to each investor for the year, adjusted for net losses incurred by such investor in prior years. Alkeon charges the Asia Growth Offshore Feeder a monthly management fee of 0.1667% (2% per annum) of the net asset value of the fund. Investors generally may redeem their shares on the last day of any calendar quarter, subject to a 4% redemption fee payable to the Asia Growth Master Fund for redemptions occurring less than 12 months after the date those shares were issued. Alkeon, or an affiliate of Alkeon, also receives an annual incentive fee equal to 20% of the net realized and unrealized profits attributable to each investor for the year, adjusted for net losses incurred by such investor in prior years. Alkeon Capital Partners Funds. Alkeon charges the Alkeon Capital Partners US Feeder a monthly management fee of 0.1667% (2.0% per annum) of the net asset value of the fund. Investors generally may withdraw their investment on the last day of any calendar quarter 8 EFTA01419632 AGP LP 519 Alpha Group Capital Paul Barrett occurring at least 24 months after the date of such investment; provided that withdrawals also are permitted on the last day of any calendar quarter occurring less than 24 months after the date of such investment subject to a 4% withdrawal fee payable to the Alkeon Capital Partners Master Fund. Alkeon, or an affiliate of Alkeon, also receives an annual incentive allocation equal to 20% of the net realized and unrealized profits attributable to each investor for the year, adjusted for net losses incurred by such investor in prior years. Alkeon charges the Alkeon Capital Partners Offshore Feeder a monthly management fee of 0.1667% (2.0% per annum) of the net asset value of the fund. Investors generally may redeem their shares on the last day of any calendar quarter occurring at least 24 months after those shares were issued; provided that redemptions also are permitted on the last day of any calendar quarter occurring less than 24 months after the date those shares were issued subject to a 4% redemption fee payable to the Alkeon Capital Partners Master Fund. Alkeon, or an affiliate of Alkeon, also receives an annual incentive fee equal to 20% of the net realized and unrealized profits attributable to each investor for the year, adjusted for net losses incurred by such investor in prior years. Alkeon Global Alpha Funds. The Global Alpha US Feeder has three separate investment classes distinguished by different management fees and liquidity rights. Investors that invest in (i) Class A pay a monthly management fee (approximately 2% per annum) and generally may withdraw such investment on that last day of any calendar quarter, (ii) Class B pay a monthly management fee (approximately 1.5% per annum) and generally may withdraw such investment on the last day of each calendar quarter; provided that withdrawals during the 12 months beginning with the month in which the investment was made will be subject to a 4% withdrawal fee payable to the Global Alpha Master Fund or (iii) Class C pay a monthly management fee (approximately 1% per annum) and generally may withdraw such investment only as of the last day of any calendar quarter that occurs on or after the day preceding the second anniversary of the date of that investment (a two-year lock up). The Global Alpha Offshore Feeder has separate investment classes EFTA01419633 distinguished by different management fees and liquidity rights. With respect to any shares, an investor can elect (i) to pay a monthly management fee (approximately 2% per annum) and generally may redeem those shares on the last day of any fiscal quarter; (ii) pay a monthly management fee (approximately 1.5% per annum) and generally may redeem those shares on the last day of each calendar quarter; provided that redemptions during the 12 months beginning with the month in which those shares were issued will be subject to a 4% redemption fee payable to the Global Alpha Master Fund; or (iii) pay a monthly management fee (approximately 1% per annum) and generally may redeem those shares only as of the last day of any calendar quarter that occurs on or after the day preceding the second anniversary of the date those shares were issued (a two year lock up). Alkeon, or an affiliate of Alkeon, receives an annual allocation amount equal to 20% of the net realized and unrealized profits attributable to each investor in the Global Alpha US Feeder and the Global Alpha Offshore Feeder, adjusted for net losses incurred by such investor in prior years. 9 EFTA01419634 AGP LP 519 Alpha Group Capital Paul Barrett OAM Alkeon receives fees for the advisory and/or administration services it provides with respect to the Xanthus Fund, Global Growth Fund and Global Growth Offshore Fund, equal to a portion of each fund's monthly fee of 0.1445833% (1.75% per annum) of the net asset value of the fund. Through its non-managing member interest in AAM, Alkeon is allocated a portion of the annual performance-based compensation allocated to AAM from the Global Growth Fund and Xanthus Fund. Alkeon also receives a portion of the performance-based fee paid by the Global Growth Offshore Fund to AAMM. This performance-based compensation across all funds equals, for each fund, 20% of the net realized and unrealized profits attributable to each investor for each year, adjusted for net losses incurred by such investor in prior years. ALPRO ALPRO charges ALPRO Growth a monthly management fee of 0.125% (1.5% per annum) of the net asset value of the fund for investors investing in the fund prior to July 1, 2006, and generally charges a monthly fee of 0.1667% (2% per annum) for investors investing after that date. ALPRO also receives a quarterly incentive fee equal to 20% of the net realized and unrealized profits attributable to each investor for the quarter, adjusted for net losses incurred by such investor in prior quarters. Alkeon is paid a portion of the management and incentive fees described above. MS UCITs MS UCITs has different classes of shares distinguished by different management fees and liquidity rights. The fund's sponsor receives a monthly management fee of between 1% and 2.5% of the net asset value of the applicable class of shares and an annual performance fee of 20% of the net realized and unrealized profits attributable to each class, adjusted for net losses incurred in prior periods. Alkeon is paid a portion of the management fee and the performance fee. Insurance Series The Insurance Series has different classes of partnership interests distinguished by different management fees and liquidity rights. SALI receives a monthly management fee of up to 1.25% of the net asset value of the applicable class of partnership interests and EFTA01419635 an annual performance fee of 20% of the net realized and unrealized profits attributable to each class, adjusted for net losses incurred in prior periods. Alkeon is paid a portion of the management fee and the performance fee. General Information about Alkeon's Fees and Compensation Alkeon's fees are accrued by each fund and calculated by that fund's third party administrator. Alkeon invoices each fund for its fees based on such calculation. Alkeon believes that its fees are competitive with fees charged by other investment advisers for comparable services. Comparable services may be available, however, from other sources for lower fees. 10 EFTA01419636 AGP LP 519 Alpha Group Capital Paul Barrett The disclosure in this Item 5, together with the disclosure in Item 12, allow a plan that is subject to the Employee Retirement Income Security Act of 1974 and that invests in an investment limited partnership of which Alkeon is general partner, to use the "alternative reporting option" to report Alkeon's compensation as "eligible indirect compensation" on the Schedule C of the plan's Form 5500 Annual Return/Report of Employee Benefit Plan. In all cases, expenses, the pro rata portion of the asset-based fee and the incentive amount through the date of termination are charged to the account. An investor who withdraws from a fund on a date other than an Alkeon-permitted withdrawal date, however, does not receive a refund of the asset-based fee previously paid. Each fund is responsible for its own costs and expenses, including trading costs and expenses (such as brokerage commissions, expenses related to short sales, and clearing and settlement charges), ongoing legal, accounting and bookkeeping and certain allocable insurance fees and expenses, and the fees and expenses charged by any fund administrator for its accounting, bookkeeping and other services. Alkeon bears its own operating, general, administrative and overhead costs and expenses, other than the expenses described above. Some of Alkeon's research and brokerage costs and expenses may be paid, however, by securities brokerage firms that execute clients' securities trades, as discussed in Item 12 below. Item 6. Performance-Based Fees and Side-By-Side Management All of the funds that Alkeon manages (except the Alkeon Select Funds) pay performance-based compensation as described in Item 5. Alkeon has a conflict of interest because it has an incentive to allocate investment opportunities to the accounts that charge performance-based fees. Alkeon reviews its investment allocations among the funds on a regular basis to address this conflict. Item 7. Types of Clients The minimum initial investment for each of the Alkeon funds generally is $1,000,000. These minimums are subject to reduction or waiver at the discretion of Alkeon. Item 8. Methods of Analysis, Investment Strategies and Risk of Loss Investment Strategy EFTA01419637 Alkeon's investment objective for all of the funds it manages generally is to achieve capital appreciation by investing primarily in long or short positions of publicly- traded and private companies across sectors globally. Alkeon will seek to generate absolute returns by investing in the securities of companies that can provide positive returns relative to the general equity securities market. Alkeon provides advisory or sub-advisory services to its clients using the general strategy described above except that (a) the Alkeon Growth Funds, the OAM Funds, ALPRO Growth, MS UCITs and the Insurance Series primarily invest in long and short positions of global growth stocks; (b) the Alkeon Select Funds invest primarily in long positions of global growth stocks; (c) the Alkeon Asia Growth Funds invest primarily in long and short positions of global growth 11 EFTA01419638 AGP LP 519 Alpha Group Capital Paul Barrett stocks based in the Asia Pacific region; and (d) the Alkeon Capital Partners Funds and the Alkeon Global Alpha Funds invest primarily in long and short positions of companies globally. Alkeon employs a bottom-up, fundamentally driven, research-intensive approach to investing. Alkeon's investment program will focus on investing in the equity securities of companies that Alkeon believes are well positioned to benefit from demand for their products or services, including companies that can innovate or grow rapidly relative to their peers in their markets. This analytical process involves the use of valuation models, review and analysis of published research, and, in some cases, discussions with industry experts and company visits. Alkeon also takes into account economic and market conditions. General Disclosure The investment strategies summarized above represent Alkeon's current intentions, are general in nature and are not exhaustive. Other than limitations in a particular fund's investment program or those imposed by applicable law, there are no limits on the types of securities in which Alkeon may take positions on behalf of its clients, the types of positions that it may take, the concentration of its investments or the amount of leverage that it may use. Alkeon may use any trading or investment techniques, whether or not contemplated by the expected investment strategies described above. In addition, there are limitations in describing any investment strategy due to its complexity, confidentiality and indefinite nature. Depending on conditions and trends in securities and commodities markets and the economy generally, Alkeon may pursue any objectives or use any techniques that it considers appropriate and in clients' interests. Risk Factors Investing in securities involves risk of loss that clients should be prepared to bear. Below are some of the risks that investors should consider before investing in any fund that Alkeon manages. Any or all of such risks could materially and adversely affect investment performance, the value of any fund or any security held in a fund, and could cause investors to lose substantial amounts of money. Below is only a brief summary of some of the risks that a client or investor may encounter. Potential investors in a fund should review such fund's EFTA01419639 offering documents carefully and in their entirety, and consult with their professional advisors before deciding whether to invest. • A fund may be concentrated in securities of technology and growth sector companies, many of which may have small-sized market capitalizations. Those securities involve substantially higher risks than do investments in securities of non - technology and growth sectors and larger companies. • Investor sentiment on the market, an industry or an individual stock, fixed income or other security is not predictable and can adversely affect a fund's investments. A fund may not achieve its investment objectives. A strategy may not be successful and investors may lose some or all of their investment. 12 EFTA01419640 AGP LP 519 Alpha Group Capital Paul Barrett • • • Alkeon may take positions in securities of small, unseasoned companies that are less actively traded and more volatile than those of larger companies. Alkeon sells securities short, resulting in a theoretically unlimited risk of loss if the prices of the securities sold short increase. Changes in economic conditions can adversely affect investment performance. At times, economic conditions in the U.S. and elsewhere have deteriorated significantly, resulting in volatile securities markets and large investment losses. Government actions responding to these conditions could lead to inflation and other negative consequences to investors. • • A fund's investments may not be diversified. Therefore, a loss in any one position, industry or sector in which a fund has invested may cause significant losses. Alkeon may invest in companies involved in (or are the target of) special situations such as acquisition attempts, liquidations, work-outs, spin-offs and other similar transactions. There is substantial uncertainty concerning the outcome or occurrence of these special situations and therefore any investment in such companies entails an increased risk of loss. • • • Some of a fund's positions may be or become illiquid, in which case Alkeon may not be able to sell such positions. Alkeon may invest in emerging markets which involves additional risks not typically associated with investing in more established economies or securities markets If the valuation of a fund's assets is inaccurate, Alkeon might receive more compensation than that to which it is entitled, a new investor in a fund might receive an interest that is worth less than the investor paid and an investor that is withdrawing assets might receive more than the amount to which the investor is entitled, to the detriment of other investors. EFTA01419641 The fund and not Alkeon is responsible for any trade errors that Alkeon makes for that fund, even when the error hurts the fund, unless (1) the CCO determines otherwise (e.g., if the CCO determines that the error is not within the limitation of liability clause in the governing documents for that fund) or (2) otherwise provided in the governing documents for that fund. • Alkeon invests in securities of non-U.S. companies and governments. The risks of these investments include: political risks; economic conditions of the country in which the issuer is located; limitations on foreign investment in any such country; currency exchange risks; withholding taxes; limited information about the issuer; limited liquidity; and limited regulatory oversight. 13 EFTA01419642 AGP LP 519 Alpha Group Capital Paul Barrett • • • Alkeon may use leverage by borrowing on margin or investing in derivative instruments (such as options, swaps and futures) which increases volatility and the adverse impact to which Alkeon's funds may be subject. Alkeon may purchase and sell options on securities. The sale of options could result in unlimited loss depending on actual price movement in the underlying security. A fund may not be able to generate cash necessary to satisfy investor withdrawals and redemptions. Substantial withdrawals and redemptions in a short period could force Alkeon to liquidate investments too rapidly, and may so reduce the size of a fund that it cannot generate returns or reduce losses. • Alkeon's investment program emphasizes active management of the portfolio. Consequently, the fund's portfolio turnover and brokerage commission expenses may exceed those of other private investment funds. A high portfolio turnover rate may also result in the greater realization of capital gains, including short- term gains which are taxable to certain investors at the same rates as ordinary income. • Counterparties such as brokers, dealers, custodians and administrators with which Alkeon does business on behalf of the funds may default on their obligations. For example, a fund may lose its assets on deposit with a broker if the broker, its clearing broker or an exchange clearing house becomes bankrupt. A fund may limit or suspend withdrawals or redemptions of an investor's assets from the fund. Alkeon may provide certain investors or clients more frequent or detailed reports, special compensation arrangements and withdrawal redemption rights that it does not provide to other investors or clients. A fund may establish a reserve for contingencies if Alkeon considers it appropriate. Investors may not withdraw or redeem assets covered by that reserve until it EFTA01419643 is lifted. Some of the funds that Alkeon manages are not registered investment companies under the 1940 Act. Alkeon believes that this registration is not required because an exemption is available under applicable law. Investors in those funds do not have certain regulatory protection that they would have if this registration was in place. • • No fund or investor has been represented by separate counsel. The attorneys who represent Alkeon do not represent funds or investors. Funds and investors must hire their own counsel for legal advice and representation. Federal, state and international governments may increase regulation of investment advisers, private investment funds and derivative securities, which may increase the time and resources that Alkeon must devote to regulatory compliance, to the detriment of investment activities. 14 EFTA01419644 AGP LP 519 Alpha Group Capital Paul Barrett • • Alkeon's activities could cause adverse tax consequences to funds and investors, including liability for interest and penalties. Alkeon and its affiliates may spend time on activities that compete with a fund without accountability to investors, including investing for other clients and their own accounts. If Alkeon receives better compensation and other benefits from managing other assets or funds compared to managing another fund, it has incentive to allocate more time to those other activities. These factors could influence Alkeon not to make investments on a fund's behalf even if such investments would benefit the fund. The above is only a brief summary of some of the important risks that a client or investor may encounter. Before deciding to invest in a fund that Alkeon manages, you should consider carefully all of the risk factors and other information in the fund's offering documents. Item 9. Disciplinary Information Not applicable. Item 10. Other Financial Industry Activities and Affiliation Alkeon is the sole member of SilverBay Capital Management, LLC, a Delaware limited liability company ("SilverBay") that was formed in August 2009, which is also registered as an investment adviser with the SEC. Alkeon's personnel (through SilverBay) manage ACAP Strategic Fund and Bluepoint Investment Series Trust, both registered investment companies, and may manage other registered investment funds in the future. Some of Alkeon's personnel also are registered representatives and employees of Breakwater Group, LLC ("Breakwater"), a broker-dealer that may be deemed to be affiliated with Alkeon. Currently, Breakwater assists in the distribution of the ACAP Strategic Fund and Bluepoint Investment Series Trust and does not maintain a trading function. Additional information about SilverBay is available on the SEC's Investment Adviser Public Disclosure website, and additional information about Breakwater is available on FINRA's website. Alkeon Capital Advisers, LLC, an affiliate of Alkeon that is owned primarily EFTA01419645 by Mr. Sparaggis, is the general partner of the Growth US Feeders, Select US Feeder, Asia Growth US Feeder, Alkeon Capital Partners US Feeder, Global Alpha US Feeder and Global Alpha Master Fund. Alkeon Capital Offshore, LLC, an affiliate of Alkeon that is owned by Mr. Sparaggis, is the coinvestment manager with Alkeon for the Growth Offshore Feeders, the Growth Master Fund, Select Offshore Feeder, Select Master Fund, Alkeon Capital Partners Offshore Feeder and Alkeon Capital Partners Master Fund. As detailed in Item 4 above, Alkeon acts as sub-adviser to an investment fund registered under the 1940 Act. 15 EFTA01419646 AGP LP 519 Alpha Group Capital Paul Barrett Item 11. Code of Ethics, Participation or Interest In Client Transactions and Personal Trading Employees of Alkeon and their immediate family members may, from time to time, make investments for their own accounts that differ from the investments that Alkeon makes for its clients. These individuals may also have a pre-existing interest or position in securities Alkeon also invests in for its clients. The investment objectives of Alkeon employees and their immediate family members may conflict with the investment objectives of the funds and/or clients that Alkeon manages or advises. Alkeon employees or their immediate family members may also invest in the funds that Alkeon manages or advises; such personal investments may not be balanced between funds or strategies. Alkeon and its employees have a fiduciary duty to place the interests of Alkeon's clients ahead of their own. Accordingly, employees of Alkeon and their family members are required to comply with a Code of Ethics governing personal trades, which was designed to comply with applicable provisions of Sections 204A and 206 of the Investment Advisers Act of 1940 and Rule 17j-1 under the 1940 Act. The Code of Ethics generally requires that employee trades be "precleared" and limits the timing and execution of those trades so as not to disadvantage client positions. Trades of employees and family members will be monitored by Jennifer Shufro, Alkeon's Managing Director of Legal and Compliance (the "Compliance Director"). In addition, employees and related persons are required to have duplicate brokerage statements and trade confirmations sent to Alkeon, which are also reviewed by the Compliance Director. Alkeon requires that all individuals must act in accordance with all applicable regulations governing federally registered investment advisers. Alkeon's Code of Ethics further includes the firm's policy prohibiting the use of material non-public information. Any managing member, member, officer, employee, or agent of Alkeon's not in compliance with Alkeon's Code of Ethics may be subject to discipline. Clients and prospective clients may obtain a copy of Alkeon's Code of Ethics by contacting the Compliance Director via e-mail at [email protected] or by EFTA01419647 telephone at (212) 716-6575. Because Alkeon manages more than one account, there may be conflicts of interest over its time devoted to managing any one account and allocating investment opportunities among all accounts that it manages. For example, Alkeon selects investments for each client based solely on investment considerations for that client. Different clients may have differing investment strategies and expected levels of trading. Alkeon may buy or sell a security for one type of client but not for another, or may buy (or sell) a security for one type of client while simultaneously selling (or buying) the same security for another type of client. Alkeon attempts to resolve all such conflicts in a manner that is generally fair to all of its clients. Alkeon may give advice to, and take action on behalf of, any of its clients that differs from the advice that it gives or the timing or nature of action that it takes on behalf of any other client so long as it is Alkeon's policy, to the extent practicable, to allocate investment opportunities to its clients fairly and equitably over time. Alkeon is not obligated to acquire for any account any security that Alkeon or its officers, managers, members or employees may acquire for its or their own accounts or for any other client, if in Alkeon's absolute discretion, it is not practical or desirable to acquire a position in such security for that account. 16 EFTA01419648 AGP LP 519 Alpha Group Capital Paul Barrett Item 12. Brokerage Practices Subject to the investment guidelines and restrictions imposed by clients, Alkeon generally has the authority to determine, without specific client consent, the securities and amounts thereof to be purchased or sold. In selecting brokers or dealers to execute transactions, Alkeon need not solicit competitive bids and does not have an obligation to seek the lowest available commission cost or to negotiate "e