Carlyle Investment Management LLC

Item 5. Fees and Compensation

CIM or its affiliates 4 generally receive management fees, incentive fees, carried interest or similar
profit allocations from Advisory Clients. Advisory Clients frequently also indirectly incur or
generate other fees payable to CIM or its affiliates, depending on the nature of their portfolio
activities. CIM or its affiliates, for example, earn fees and other compensation from prospective
and actual portfolio companies, purchasers, sellers and other parties as compensation for services
(collectively, “Service Fees”). These Service Fees can include project, structuring, topping,
termination, break-up, directors’, organizational, set-up, investment banking, underwriting,
syndication, closing, commitment, advisory, consulting, amendment, servicing, and other similar
fees in connection with the purchase, monitoring, or disposition of underlying investments
(including warrants, options, derivatives and other rights in respect of securities) or from
unconsummated transactions. In general, the specific legal and/or organizational documents of the
relevant Advisory Client, the investment management agreement between CIM (or an affiliate)
and such Advisory Client or the agreements in respect of the portfolio investments describe the
basic fee structure relevant to the investors in such Advisory Client. To the extent provided in such
organizational documents or investment management agreement, CIM’s management fees from
Advisory Clients generally are reduced (offset) by a specified portion of the Service Fees that arise
out of such Advisory Client’s investment activities. The Service Fees can be and often are
substantial, and if not fully offset pursuant to organizational documents will be indirectly borne by
investors.

Certain fees are excluded from the definition of “Service Fees” and not subject to a management
fee offset. For certain Advisory Clients, capital markets fees earned by GCM (which includes a
broker-dealer affiliate of CIM that is a U.S.-registered broker-dealer and other affiliates providing
similar services with respect to loans) for conducting a financial services, loan origination,
structuring, placement or other similar business, including, for example, as a broker, dealer,
distributor, syndicator, arranger, servicer or originator of securities or loans, are not considered
“Service Fees” subject to any management fee offset. As described in more detail below, these
capital markets fees include offering, placement, financing, syndication, capital structure advisory,
turnaround, workout, underwriting, solicitation, investment banking, currency, hedging,
structuring, loan agent, loan servicing, rating advisory or similar fees in connection with the
activities of an Advisory Client and its portfolio companies, including with respect to an initial
public offering or private placement, the arranging or provision of credit facilities (including any
related extensions or refinancing) for an Advisory Client or one of its portfolio companies and
other vehicles managed or controlled by Carlyle, the placing of co-investment, the distribution or

  For the purposes of this Brochure, references to “CIM or its affiliates” or “CIM and its affiliates” do not include
references to Carlyle-affiliated advisers, such as CGCIM, AlpInvest, CASP and CAPDP, unaffiliated advisers, such
as Atlas NV, NGP and Riverstone, or any Carlyle portfolio companies, including portfolio companies that are
investment advisers registered with the SEC (e.g., Content Partners LLC, or the separately registered investment
advisers affiliated with TCW Group, Inc.).

placement of loans or equity securities of an Advisory Client portfolio company or otherwise
arranging or providing financing for such portfolio company alone or with other lenders, which
could include other vehicles managed or controlled by Carlyle (any such fees, “GCM Fees”). GCM
may manage or otherwise participate in underwriting syndicates and/or selling groups with respect
to the securities and/or loans and debt instruments of portfolio companies and other non-controlled
entities in or through which certain Advisory Clients invest, including in respect of securities or
other instruments of such portfolio companies in which Advisory Clients have not invested. GCM
also manages or otherwise participates in underwriting syndicates and/or selling groups with
respect to securities and/or loans and other instruments held directly or indirectly by certain co-
investment vehicles. Further, GCM will be involved in the public offering or private placement of
such securities and/or loans and other instruments, and/or sometimes provide capital markets
advisory services to portfolio companies and other non-controlled entities in or through which
Advisory Clients invest, including in connection with mergers, acquisitions, and restructurings;
and will alone, or with other counterparties, provide acquisition financing, lines of credit and other
corporate lending or financing products and services to such entities in addition to financing
provided through an Advisory Client’s investment. In addition, certain of Carlyle’s investment
advisory professionals will be involved in such activities of GCM, and their activities are expected
to give rise to GCM Fees that are not subject to any management fee offset, even though such
persons are involved in investment-related activities on behalf of one or more Advisory Clients.
In addition, fees attributable to co-investors or internal or external co-investment vehicles and fees
eligible to be treated as expenses of an Advisory Client are expected to also be retained by Carlyle
and its affiliates, including GCM, and excluded from “Service Fees” and not subject to a
management fee offset.

Other than transactions expressly permitted by the governing agreements of the relevant Advisory
Client, any fees paid to CIM or its affiliates by a portfolio company or an Advisory Client are
...

Item 7. Types of Clients

The vast majority of CIM’s Advisory Clients are pooled investment vehicles. CIM also provides
advisory services on a separately managed account basis to, among others, entities associated with
non-U.S. and U.S. state and local governments and their instrumentalities. CIM also provides other
advisory, sub-advisory and co-advisory services as described above.

CIM and its affiliates typically require that each third-party investor in an Advisory Client be an
“accredited investor” as defined in Regulation D under the Securities Act and a “qualified
purchaser” as defined in the 1940 Act. Typically, a minimum investment amount is imposed on
third parties investing in the investment vehicles for which CIM acts as investment adviser or
collateral manager (through its relying advisers, including ALLP, Carlyle CLO, CBAM CLO and
Carlyle CLO Europe). This minimum often is set at $5-10 million, but can be subject to a reduction
upon prior agreement by CIM or an affiliate (subject to applicable legal requirements) and is often
much lower for investment vehicles targeted at high-net worth individuals. A minimum investment
amount can also be established pursuant to the laws of the jurisdiction in which the investment
vehicle was established.