Blue Water Advisors LP

Item 5. - Fees and Compensation

Investors and prospective Investors in the Funds should review the relevant Fund Offering
Documents in conjunction with this Brochure for further information regarding fees and
compensation or expenses and the following is subject in its entirety to the information
provided in such Fund Offering Documents.

With respect to each Fund, the Advisor will generally be paid a management fee by the Fund
quarterly in advance. As described in the relevant Fund Offering Documents, management
fees are generally based on either a percentage of a Fund’s net asset value, commitments,
invested capital, or as a fixed amount per annum. The fee percentage and/or the base upon
which the fee is calculated may vary over the life of a Fund, as set forth in the relevant Fund
Offering Documents. Management fees and performance-based compensation are permitted,
in the sole discretion of the Fund Manager, to be waived, reduced or calculated differently
with respect to certain participants in a Fund, including investments in such Fund by the
Advisor and/or its related persons. For certain Funds, the Advisor is permitted, in its sole
and absolute discretion, to defer the advisory fee payable in any period and recoup the

deferred portion in any subsequent period. As a general matter, management fees will be
payable during term extensions unless otherwise agreed with Investors.

As is generally the case in private equity funds, the Fund Offering Documents provide that a
Fund’s management fees will be calculated and charged on a basis that generally is not tied
to the Fund’s then-current net asset value. As further specified in the Fund Offering
Documents, from the effective date of the relevant Fund until a date specified in the Fund
Offering Documents (generally representing the earlier of the end of the Fund’s defined
investment period and the date the relevant Fund Manager (or an affiliate thereof) first
begins receiving or accruing management fees from another Fund meeting certain criteria)
(the “Stepdown Date”), management fees generally will be charged based on a formula tied
to the amount of the relevant Fund’s aggregate commitments. Further, after the Stepdown
Date, management fees generally will be charged and calculated based on a formula tied to
(i) the amount of capital invested (including, where applicable, amounts borrowed in lieu of
capital contributed by such Fund’s Investors [and the amount of any capitalized Fund Fees
(as defined below) or expenses, including expenses of operating partners]) by the relevant
Fund in investments that have not been disposed of or completely written off for U.S. federal
income tax purposes (such investments, “Impaired Value Investments”) or, in certain cases,
(ii) to the net asset value of the relevant Fund as of the conclusion of the previous fiscal year.

As is generally the case for private equity funds, the amount of management fees generally
will not correspond promptly with fluctuations in net asset value of individual investments
or of a Fund, including following the relevant investment period, and will not be reduced in
connection with any write downs (whether temporary or permanent), except in the case of
Impaired Value Investments. Except where the Fund Offering Documents expressly provide
to the contrary, management fees will not be reduced (in whole or in part) in the case of
partial sales or dispositions, distributions (e.g., those resulting from a dividend
recapitalization) or reorganizations, recapitalizations (including recapitalizations involving
dividends), restructurings, roll-over investments, extraordinary dividends or similar
transactions, in each case in circumstances that do not result in the complete disposition of
the relevant Fund’s interest therein, and even in cases where the value of the Fund’s
investment or the Fund’s ownership percentage in such investment has been reduced
(including substantially reduced) as a result of such transaction.

In many circumstances, the post-Stepdown Date management fee base will include
capitalized transaction-specific fees and expenses of unrealized investments, including
certain fees (such as Fund Fees) and expenses paid to third parties, the Advisor or its
affiliates. Further, management fees generally will not be reimbursed or refunded under the
Fund Offering Documents in the event of realizations, dispositions or partial write-downs or
write-offs that occur partway through the relevant calculation period.

The Fund Offering Documents set forth the full list of terms under which management fees
will be reduced, offset or otherwise be limited, and consequently investors should expect to
bear the full specified management fee rate in the Fund Offering Documents until they are
reduced in the circumstances and on the date(s) specified therein.

To the extent permitted by the applicable Fund Offering Documents, it is expected that each
Fund will bear expenses relating to the organization of such Fund, its Fund Manager, the
Advisor and each of their respective general partners or managing members (including
certain of their affiliates), and the marketing and offering of the interests in such Fund
(including, without limitation, any legal, accounting, filing and tax advice expenses and
travel, which may include the use of charter flights, and accommodation expenses of
personnel of the Advisor and/or its affiliates) (collectively “Organizational Expenses”).

The Advisor and/or its affiliates are permitted to earn investment banking fees, consulting
or management fees, monitoring fees, break-up fees, transaction fees and other similar fees
in connection with the purchase, monitoring or disposition of investments or from
unconsummated transactions (“Fund Fees”), and such fees generally will reduce a Fund’s
management fees (but not below zero). In certain cases, as described in the relevant Fund
Offering Document, investment banking fees, consulting or management fees, monitoring
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Item 7. - Types of Clients

The Advisor will provide investment advice to the Funds. Each Fund’s Investors will
generally consist of accredited investors (as defined in Regulation D promulgated under the
Securities Act), qualified clients (as defined under the Investment Advisers Act of 1940, as
amended (the “Advisers Act”)) and qualified purchasers (as defined under the Company Act).