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.
Management Fees. Clients pay a management fee to the Adviser as compensation for its
management services. The fee is equal to a percentage of the limited partners’ total capital
commitments. Until the end of a specified investment period, the management fee percentage
shall be 2.0% per annum of the total capital commitments. Thereafter, the annual management
fee will be 2.0% per annum of the invested capital. The management fee is billed quarterly to
each Client and payable by the Client quarterly in advance on the first day of each calendar
quarter.
Performance-based fees. The Adviser does not charge performance-based fees. However, a
portion of each Client’s investment profit is allocated to the capital account of the general
partner as “carried interest.”
In the event of an early termination of the Client, the management fee for the quarter of the
termination would be determined on a pro-rata basis based on the number of days the Client
was operating in that quarter.
B. With respect to Management Fees, the Adviser, or the general partner of the applicable Client,
may draw-down capital commitments from the investors in the Client, or may use amounts that
would otherwise be available for distribution to such investors, in order to meet the Client’s
obligation to pay the Management Fee.
C. Generally, a Client will pay for all ordinary and extraordinary expenses incurred by it or on its
behalf, including, but not limited to, all legal, accounting, auditing, administrative, information
technology and other systems, reporting and tax preparation fees and expenses, and all out-of-
pocket expenses relating to the Client and its investment activities, but excluding travel and
entertainment. Additionally, a Client will reimburse its general partner and its affiliates for
actual expenses related to the organization of the Client, though in certain instances such
organizational expenses may be subject to an expense cap and Management Fee offset. It is
critical that investors and prospective investors refer to a Client’s investment management
agreement, private placement memorandum and/or agreement of limited partnership (as
applicable) for a complete understanding of how the Adviser and the applicable general partner
are compensated for advisory services and what organizational and operational expenses are
charged to the Client and ultimately borne by investors.
The Adviser does not maintain any trading accounts and does not use “soft” dollars.
Please refer to Item 12, Brokerage Practices, for more information.
D. As stated above, Management Fees are payable quarterly. The Adviser will refund any pre-
paid Management Fees by a Client if the advisory contract with such Client is terminated before
the end of the billing period. Management Fee refunds are calculated on a pro-rata basis for
partial periods.
E. The Adviser typically performs management, transaction related services and other services
for actual and prospective portfolio companies. Additionally, a portfolio company may
reimburse a Client for specific expenses incurred on behalf of that portfolio company.