ITEM 5 – FEES AND COMPENSATION
Private Funds
A. Types of Fees
Adviser generally is compensated for its advisory services to certain of the Private Funds based on a
percentage of assets under management and performance-based amounts in accordance with each such
Private Fund’s Governing Agreements and/or Management Agreement, as applicable. Private Fund
investors should refer to the relevant Governing Agreements for a complete description of the applicable
fees, compensation, and expenses.
Management Fees
Until the commitment period for a Private Fund has terminated, a Private Fund pays to Adviser annual
advisory fees (“Management Fees”) equal to: (i) a certain percentage of the total capital commitments
(regardless of whether such capital has been invested), or (ii) a certain percentage of the total invested
capital commitments. Following the end of the commitment period of a Private Fund, the Management
Fee of such Private Fund generally is equal to a certain percentage of the total invested capital commitments
of the investors in the applicable Private Fund. The Management Fees for the Private Funds vary depending
on the investment strategy of the particular Private Fund and is specified in the applicable Governing
Agreements. Adviser’s Management Fees generally range from approximately 0.50% to 2.00% per annum.
Adviser, in its discretion, may waive, reduce or alter the Management Fee as to all or any of the investors
in a Private Fund or agree with an investor to waive, reduce or alter the Management Fee as to that investor.
Certain Clients, such as Co-Investment Private Funds, do not pay Management Fees. EIG Capital Markets
also may provide broker-dealer services for compensation, including, without limitation, placement agent,
mergers and acquisitions advisory, transaction origination or sourcing and any other services permitted
under its FINRA Membership Agreement, in connection with capital-raising vehicles or transactions
relating to Adviser’s advisory business (e.g., with respect to co-investment transactions, Co-Investment
Funds and/or other similar transactions), portfolio company transactions and/or in connection with or on
behalf of unaffiliated third parties. See below for more information.
Performance Based Compensation
In addition to Management Fees, Adviser receives performance-based compensation in the form of an
allocation of a profits interest from a Private Fund or a participation right in the profits of an investment
vehicle (commonly referred to as “Carried Interest”) based on the net cash proceeds attributable to Private
Fund investments, subject to a preferred return to that Private Fund’s investors. Adviser, in its discretion,
may waive, alter or reduce the Carried Interest as to all or any of the investors in a Private Fund or agree
with an investor to waive or alter the Carried Interest as to that investor.
Carried Interest for the Private Funds varies depending on the investment strategy of the particular Private
Fund, ranging from approximately 10% to 20% of the profits earned by such Private Fund. Adviser may
receive lower Management Fees and Carried Interest with respect to those Funds it sub-advises. Investors
should refer to each Private Fund’s Governing Agreements for additional or supplementary information
regarding the Carried Interest paid by each Private Fund.
Supplemental Fees
In addition to the Management Fee and Carried Interest, Adviser may receive additional compensation in
connection with management and other services performed for portfolio companies. The Management Fee
charged by certain of the Private Funds may be reduced by all or a portion of such compensation, including
any origination, transaction, monitoring, break-up or other similar fees received by Adviser as described in
the Governing Agreements of the applicable Private Fund (“Supplemental Fees”), and/or side letters, if
applicable. To the extent a Private Fund does not pay a Management Fee, such Supplemental Fees will
accrue to the benefit of Adviser. Adviser may also elect, in its discretion, to share or allocate all or a portion
of Supplemental Fees with or to third party Co-Investors, Co-Investment Private Funds and Managed
Accounts, and any such portion of a fee shared with or allocated to such parties will not reduce the
Management Fee payable by a Fund invested in the relevant investment. As a result, a Fund will, in most
cases, only benefit with respect to its allocable portion of any such fee and not the portion of any fee that
relates to such parties.
In addition, EIG Capital Markets provides (or is expected to provide) certain broker-dealer services for
compensation, including, without limitation, placement agent, mergers and acquisitions advisory,
transaction origination or sourcing and any other services permitted under its FINRA Membership
Agreement, in connection with capital-raising vehicles or transactions relating to Adviser’s advisory
business (e.g., with respect to co-investment transactions, Co-Investment Funds and/or other similar
transactions), portfolio company transactions and/or in connection with or on behalf of unaffiliated third
parties. For example, from time to time, EIG Capital Markets assists in the origination of transactions that
are appropriate for both Clients and unaffiliated third parties. In such cases, EIG Capital Markets generally
will receive compensation from Clients and/or unaffiliated third parties participating in such transactions.
Any compensation received by EIG Capital Markets in connection with such activities will be for the
benefit solely of EIG Capital Markets and will not be shared with or reduce any other Private Fund or
investor fees payable to Adviser except as provided under a Fund’s applicable Governing Agreements.
B. Payment Method
Generally, the Management Fee, net of any Supplemental Fees, as applicable, will be paid quarterly in
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