Item 5 – Fees and Compensation
Asset-Based and Performance-Based Compensation
Compensation received by the Adviser from its Funds is generally comprised of a management
fee based on a percentage of assets under management (the “Management Fee”) and an incentive
allocation or fee based upon investment performance (the “Incentive Allocation”). A brief
summary of the Adviser’s fees is provided below. Details of applicable fees are set forth in each
Fund’s governing documents, and investors should refer to these governing documents for a
complete understanding of how the Adviser is compensated for its advisory services.
Management Fees range up to 2% per annum of a Fund’s net asset value. Management Fees are
directly deducted from a Fund quarterly in advance or in arrears depending on the Fund, and
charged to each investor’s account monthly or upon redemption. Management Fees are prorated
for any period that is less than a full fiscal quarter and adjusted for subscriptions and redemptions
occurring during the period. With respect to certain closed-end Funds with private equity-like
terms, Management Fees are based on aggregate capital contributions or committed capital.
The Incentive Allocation ranges up to 20% of a Fund’s net realized and unrealized profits each
calendar year. As a result, the Incentive Allocation could be based on unrealized gains that
clients may never realize. The Incentive Allocation generally is calculated as of the end of each
calendar year, subject to a loss carryforward and/or a hurdle, as applicable and accrued monthly
in each investor’s account. The Incentive Allocation is directly deducted from each investor’s
account annually and upon any redemption or distribution. With respect to certain closed-end
Funds with private equity-like terms, the Incentive Allocation is due upon a realization and/or
distribution event.
The Adviser compensates affiliates for all intra-group services in accordance with OECD
transfer pricing principles, and has entered into agreements with third parties entitling such third
parties to share in the revenue of Funds for their services.
With respect to certain Funds or classes formed for particular investors, the Management Fee and
Incentive Allocation differ from the typical ranges and payment cycles described above. In
addition, the Management Fee and Incentive Allocation rates differ from Fund to Fund and, at
times, from share class to share class or among investors within a Fund. All or a portion of the
Management Fee and/or the Incentive Allocation may be waived for certain investors. Investors
who are principals, employees or affiliates of the Adviser or relatives of such persons do not
generally pay a Management Fee and/or the Incentive Allocation.
A third-party Administrator calculates and arranges payment of the Management Fee and, if
applicable, the Incentive Allocation to the Adviser for Funds utilizing third-party Administrators.
If a third-party Administrator is not employed by a Fund, the Adviser calculates and arranges
payment of the Management Fee and, if applicable, the Incentive Allocation in accordance with
the Adviser’s written policies and procedures.
Expenses
In addition to the Adviser’s fees, investors will bear indirectly the fees and expenses charged to
the Funds. Complete information regarding each Fund’s expenses is provided in the respective
Fund’s governing documents. Investors should review the governing documents of the Fund in
which they are invested to fully understand the types of fees and expenses paid by the Fund.
A non-exhaustive summary of expenses that are generally borne by the Funds and/or Fund
Subsidiaries as applicable is provided below:
• Fees and expenses of the auditors, accountants, tax, compliance and legal advisors
• Organizational, start-up and operating expenses of Funds and Fund subsidiaries
• Insurance expenses, including Directors and Officers and Errors and Omissions insurance
expenses (to the extent permitted by ERISA, if applicable)
• Investment fees and expenses (such as third-party sourcing fees or commissions, fees and
expenses of legal and other professionals, due diligence expenses, expenses and costs
associated with pending or threatened litigation, and expenses related to the conduct of an
active shareholder campaign, proxy contest and/or tender offer and associated media,
public relations and other specialists costs) related to the analysis, purchase or sale of
investments, whether or not the investments are consummated
• Costs and expenses related to the analysis, purchase or sale of investments (including
costs associated with systems and software used in connection with investment-related or
risk-management-related activities such as Bloomberg subscriptions for investment team
members)
• Middle and back office system expenses and software costs (e.g., Advent Geneva license)
• Order management expenses (e.g., Bloomberg AIM license)
• Depositary, custodial, and/or prime brokerage fees and expenses
• Clearing and settlement fees and expenses
• Brokerage commissions
• Financing costs
• Expenses related to short sales
• Research, corporate access services to the extent permitted by law or regulation;
administration of a research payment account and ancillary costs associated with
accessing research and market data expenses
• Administrator fees and expenses
• Directors’ fees and expenses (including those of any Fund subsidiaries or special purpose
vehicles) and associated corporate secretarial fees
• Third-party alternative investment fund manager fees and expenses
• Taxes and stamp duty
• Marketing and distribution costs, fees connected with registering a Fund for sale in other
jurisdictions and the fees and expenses of any paying agent or representative appointed in
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