Item 5 - Fees and Compensation
A. Below is a discussion of how the Adviser is compensated in connection with providing advisory
services to its Clients. The Adviser may enter into different fee arrangements on a client-by-client
basis. It is critical that all Clients, and investors in all Clients, refer to the applicable Client’s
governing documents for a complete understanding of how the Adviser and its affiliates are
compensated for advisory services. The information contained herein is a summary only and is
qualified in its entirety by each applicable Client’s Offering Documents.
Management Fees. The Adviser receives the management fees (the “Management Fees”) to be
between 1.5%-2% of committed capital depending on the stage in the life cycle of the Fund. The
Management Fee is payable by a Fund to the Adviser or its designee quarterly in advance. The
Management Fee begins to accrue as of the date of the initial closing based on total commitments,
regardless of when an investor is actually admitted. The Management Fee is pro-rated for any
partial years of the Fund.
Carried Interest. Additionally, the general partner of the Fund, or other affiliate of the Adviser,
(the “General Partner”) may be eligible to receive an incentive or performance allocation from the
Fund based on a percentage of investment proceeds on distributions (the “Carried Interest”).
Distributions are split between Fund investors and the General Partner as set forth in the Fund’s
governing documents. The Adviser expects the Carried Interest to be between 15% and 20% of
net profits of the Fund.
Lower fees for comparable services may be available from other sources.
B. Management Fees are payable by the Fund to the Adviser and Carried Interest is distributed by the
Fund to the General Partner, in each case on the terms provided for in the Fund’s Offering
Documents. The General Partner may draw-down capital commitments from the investors in the
Fund, or may use amounts that would otherwise be available for distribution to such investors, in
order to meet the obligation to pay the Management Fees.
C. The Fund bears legal and other organizational expenses incurred in the formation of the Fund
(including fees and expenses of counsel and other advisors to the Fund and the Adviser, and travel
expenses of the Adviser and other direct costs) (the “Organizational Expenses”) up to an aggregate
amount agreed upon in the Fund’s Offering Documents. With respect to Organizational Expenses
in excess of the agreed upon amount stated in the Fund’s Offering Documents, such expenses are
borne by the Adviser or an affiliate, although the Adviser may elect to have such excess expenses
advanced by the Fund, in which case there will be a corresponding reduction to Management Fees
next payable to the Adviser. Each Fund investor, including investors admitted at subsequent
closings, bears their pro rata portion of the aggregate Organizational Expenses paid by the Fund.
The Fund bears all expenses incurred in connection with its operations, meetings and liquidation
(such expenses, “Fund Expenses”) as set forth in its operating agreement, including expenses
incurred in connection with pursuing investment opportunities (whether or not consummated) and
making, monitoring, and disposing of investments; audit, accounting, legal, brokerage, insurance,
indemnification, travel, litigation, and custodian expenses; expenses relating to compliance with
regulatory requirements applicable to the Fund; and taxes, fees, and other governmental charges
levied against the Fund or its subsidiaries. The Fund pays Fund Expenses on a pro rata basis with
any parallel investment entity based on the aggregate capital commitments of the Fund relative to
the aggregate capital commitments of such parallel investment entity. Fund Expenses may be
capped at a certain amount and any expenses in excess of that amount will be paid by the Adviser.
Fund expenses include, but are not limited to: (i) (A) fees, costs and other expenses directly related
to the discovery, investigation, negotiation, structuring, making, holding, developing, operating,
managing, monitoring and disposing of investments, including fees, costs and expenses associated
with the organization, operation, administration, restructuring or winding-up, dissolution,
liquidation and winding-up of any special purpose vehicles and including potential investments that
are not consummated (including those relating to unconsummated investments that may have been
attributable to third-party co-investors if such investments had been consummated); (B) investment
banking fees, bank charges, placement, syndication and solicitation fees, arranger fees, sales
commissions, and other investment, execution, closing and administrative fees, costs and expenses;
(C) expenses of any administrator and valuation expert (including in relation to calling capital from
and making distributions to the Fund investors, the administration of assets, financial planning and
treasury activities); (D) fees and expenses of custodians, advisors, consultants, economists,
sourcing persons, brokers, outside counsel, accountants, auditors tax professionals and other
professionals; (E) due diligence, research and other Fund or investment-related travel expenses
(including costs and expenses of accommodations, meals and aircraft travel (and with respect to
travel on non-commercial aircraft, costs of travel at a comparable business class commercial airline
rate)); (F) fees, costs and expenses related to accounting services and the creation of financial
reports and responses to reporting requests from the Fund investors, including the costs incurred to
audit and provide access (whether through the Fund’s website or other portal) to such reports and
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