Item 5 – Fees and Compensation
ADVISORY FEES AND COMPENSATION
The Adviser's fees for advisory services vary among its Clients. The fees applicable to each Private Fund are
set forth in detail in each Private Fund's offering documents. The Adviser, or an affiliate of the Adviser, receives
performance-based compensation from certain Clients. The fees applicable to each Advisory Client are set forth
in detail in each Advisory Client’s IMA. A summary of such fees is provided below.
The Adviser generally receives a fee for investment management services (the "Management Fees"). The
Adviser’s management fees may vary depending upon factors such as, the type of account or Client, the asset
classes being managed, the amount of assets being managed, the investment horizon or time period associated
with the assets being managed, the level of services and the investment strategies being employed by the
Adviser. The Adviser’s management fees generally are asset-based and calculated at an annual rate as a
percentage of the value of the assets managed by the Adviser. Management fees are typically paid by deducting
the fee from the applicable account, alternately Clients may pay their fees directly from an external account after
the receipt of an invoice.
Management fees typically are up to 0.75% per annum of the assets managed by the Adviser for a particular
Client and payable monthly or quarterly or in arrears or in advance. The timing of a payment may differ depending
on an account's arrangement and underlying investments.
Management fees will vary depending on a number of factors. Further, management fees may be negotiated,
and may be payable more or less frequently depending on the Client and the arrangement. The amount of the
management fee is usually prorated for periods of less than a full billing period.
The Adviser (or its affiliates) receives performance-based compensation from certain clients for its advisory
services. See Item 6 for additional details.
Such performance-based compensation may be calculated in several different ways depending on the nature of
the Client’s strategy, and may include factors related to performance benchmarks and performance hurdles, high
water marks (or lack thereof). Depending on the nature of the arrangement, fees may be assessed on unrealized
appreciation. Performance-based compensation can be up to 5.00% of realized and unrealized net profits
allocated to each Client’s (or Investor’s) account in accordance with the agreed payment schedules or as
otherwise stated in the applicable constituent documents. Performance-based compensation, depending on,
among other things, the strategy, may or may not be subject to preferred return hurdles, catch-up allocations,
clawbacks and/or loss recovery provisions, sometimes referred to as a “high water mark.” Performance-based
compensation is typically paid or made (as applicable) directly to the Adviser or an affiliate of the Adviser by the
applicable Client (or Investor) or by deducting the fee from the applicable account. To the extent that the Adviser
charges performance-based compensation, such performance-based compensation will comply with the
requirements of Section 205 and Rule 205-3 under the Advisers Act and such other provisions as are applicable,
including but not limited to the 1940 Act.
With respect to certain Clients, the Adviser may enter into fee-sharing or other similar arrangements with other
advisers or other parties, such as affiliates of the Adviser.
The management fees and the performance-based compensation that the Adviser (or its affiliates) will receive
may not have been established on the basis of an arm’s-length negotiation between the Client and the Adviser
(or its affiliates). Moreover, with respect to funds-of-funds strategies, the management fees and performance-
based compensation received by the managers of the underlying funds (regardless of type, e.g., private funds,
mutual funds, ETFs) in which a Client invests may not have been established in an arm’s-length negotiation
between such managers and the respective funds. For example, certain Clients invest in underlying private
funds, the affiliated managers of which receive management fees and performance-based compensation that
may not have been negotiated in an arm’s-length negotiation.
The Adviser may agree to different fees or allocations, including performance-based compensation with respect
to a Client, and each Client is expected to indirectly bear performance-based compensation with respect to
investments in applicable issuers.
The Adviser (and its affiliates, as applicable) reduces or waives management fees, performance-based
compensation and/or certain expenses for certain investors, including affiliates of the Adviser and current or
former employees or partners of the Adviser and/or its affiliates (including members of the applicable investment
team and/or their families or family-related investment entities) and strategic investors of affiliates of the Adviser,
investors holding founder interests in the Adviser’s Private Funds and certain investors in multi-strategy vehicles
that the Adviser may sponsor.
The Adviser’s IMAs generally provide that the Client and/or the Adviser may terminate the contract upon proper
advance notice to the other party. As permitted by applicable law, the terms of IMAs, including fee schedules,
terms of payments, performance fees, and termination provisions, are generally negotiated and will vary. Clients
invested in certain asset class portfolios of a Private Fund managed by the Adviser will continue to pay the
Adviser management and/or performance fees in connection with those investments after terminating the
Adviser’s investment management services. Such management and/or performance fees will continue to be paid
until the final disposition of the investment in these portfolios of a Private Fund. Such management and/or
...