Item 5. Fees and Compensation
Fees
Detailed information regarding fees is included in each fund’s confidential offering memorandum.
Because this brochure will only be delivered to “qualified purchasers” investing in our funds, as defined
in section 2(a)(51) of the Investment Company Act of 1940, a complete description of our compensation
arrangements is not required to be included in this brochure.
Some of our funds pay a management fee and an incentive allocation or performance fee and some of our
funds only pay a management fee. Regardless of whether an investor invests directly in an investing fund
or indirectly through a dedicated feeder fund that invests substantially all of its assets into an investing
fund formed to carry out the investment program, only one layer of management fees and incentive
allocations or performance fees will be assessed with respect to the investor.
In the event that our investment management agreement with a fund is terminated, management fees are
pro rated for partial periods.
Incentive allocations and performance fees are calculated as a percentage of profits of the applicable
funds. The investing funds pay incentive allocations or performance fees, in whole or in part, on mark-to-
market performance at the end of a period (year-end or upon a partial or full withdrawal), subject to a
high watermark.
Management fees are paid to us directly by the funds. Incentive allocations and performance fees are
allocated to our account with the relevant fund.
Management fees, incentive allocations and performance fees may be negotiable.
Expenses
Whether an expense is a fund or firm expense shall be determined jointly by the Chief Compliance
Officer and Chief Financial Officer, with the assistance of such other parties as they deem necessary.
Expense allocation determinations may be made as to broad categories or expense types or on an expense
item-by-expense item basis. How an expense is allocated as between funds and the firm shall be
documented by the applicable Controllers and consistently applied thereafter.
If permitted under a fund's controlling documents, from time to time the management company may
advance payment of an expense on behalf of the fund and to the extent that the expense may be
appropriately borne by the funds, the management company may seek reimbursement from the funds.
Once a determination is made that an expense is a fund expense that is attributable to more than one fund,
the Chief Compliance Officer and Chief Financial Officer, with the assistance of such other parties as
they deem necessary, shall determine the appropriate allocation methodology among the funds. There
may be situations where an expense may be allocable to some but not all of the funds that receive the
benefit of such expense. In these situations, the funds that can bear the expense shall bear their allocable
share of the expense and the firm shall pay the remainder.
The payment of expenses by a fund will reduce the value of each investor’s investment in the fund.
Detailed information regarding the expenses to which each fund is subject is set out in the offering
documents with respect to the particular fund.
All funds will pay their out–of–pocket operating expenses, including:
organizational expenses;
administrative fees and expenses payable to an administrator;
professional fees, consulting fees (including without limitation, fees payable to business,
financial, tax, political and expert network consultants) and expenses of auditors and legal
counsel;
government filing and registration fees;
insurance (including director’s and officer’s insurance and errors and omissions insurance);
expenses incurred in connection with tax compliance;
costs of communications with limited partners; and
such other expenses as are set forth in the fund’s private placement memorandum and/or
organizational documents.
Each dedicated feeder fund will also pay its pro rata share of the expenses of any investing fund into
which its assets are invested. Investee fund expenses may include:
organizational expenses;
investment expenses; and
any extraordinary expenses incurred.
Each investing fund will pay the following additional expenses relating to its ongoing operations:
expenses of purchasing, carrying and disposing of portfolio positions, such as:
○ brokerage commissions;
○ research;
○ data and information service providers (e.g., Bloomberg, Debtwire, etc.);
○ interest and commitment fees on borrowings; and
○ withholding and transfer taxes;
professional fees and expenses of attorneys, accountants, appraisers and other third-party
consultants (including without limitation, fees payable to business, financial, tax, political and
expert network consultants) in connection with researching and implementing investment
opportunities;
transaction costs associated with making investments in portfolio funds;
a pro rata share of the expenses of portfolio funds in which the master funds invests,
including:
○ such portfolio funds’ organizational, operating and investment expenses; and
○ any extraordinary expenses incurred by such portfolio funds;
fees payable to advisors of portfolio funds.