Item 5 – Fees and Compensation
A. Fee Schedule
The fees and compensation payable to the Firm are negotiable and vary among its Clients.
However, the range of compensation is generally as follows:
1. Management Fee
The Firm typically receives a semi-annual asset-based management fee calculated as a
percentage of each Investor’s capital account, payable in advance. The management fee
varies by fund and is generally between 1.5% and 2% on capital commitments and between
1.125% and 1.75% on aggregate capital contributions for investments. A “Management Fee
Offset” may apply to the extent that a General Partner receives certain other fees, as described
more fully in the Funds’ Governing Documents. Fees may be waived at the discretion of the
Firm.
2. Performance-based Fees
Each Fund’s General Partner generally receives a carried interest equal to a percentage of all
realized profits, as described more fully in each Fund’s Governing Documents. The carried
interest is subject to a giveback at the end of life of the funds if the General Partner has
received excess cumulative distributions.
The carried interest will only be charged to accounts of those Investors who are “qualified
clients” as defined in Rule 205-3 of the Investment Advisers Act of 1940, as amended
(“Advisers Act”).
4. Fee Comparison
Client expenses, including the management fee and any performance-based fees may
constitute a higher percentage of average net assets than could be found in other investment
programs.
B. Payment of Fees
Management fees, performance-based fees, and third-party fees (discussed below) are
deducted or drawn from Client assets. Management fees, which are paid in advance, are
withdrawn at the beginning of the semi-annual period. Performance-based fees are
determined as of the last business day of the calendar year.
C. Third-Party Fees
Each Fund is responsible for its offering and organizational expenses, including travel and
accommodation expenses, filing fees and expenses and printing costs or other similar
amounts with respect to the offering of and subscription for Interests in the Fund, and
including the fees and expenses of marketing agents in connection with the offer and sale of
Interests. To the extent the Fund’s General Partner has not elected to pay such costs and
expenses, each Fund will bear the costs and expenses of its operation, which includes: (i) fees,
costs and expenses of any administrators, custodians, attorneys and accountants (including
audit and certification fees and the costs of printing and distributing reports to Partners), (ii)
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all out-of-pocket fees, costs and expenses, if any, incurred in developing, negotiating,
structuring, acquiring and disposing of actual Investments, including without limitation any
financing, legal, accounting, advisory and consulting expenses in connection therewith (to the
extent not subject to any reimbursement of such costs and expenses by entities in which the
Fund invests or other third parties), (iii) broken deal expenses, as defined and described in
the applicable Governing Documents, (iv) brokerage commissions, custodial expenses and
other investment costs actually incurred in connection with actual investments, (v) interest
on and fees and expenses arising out of all borrowings made by the Fund, including, but not
limited to, the arranging thereof, (vi) the costs of any litigation, D&O liability or other
insurance and indemnification or extraordinary expense or liability relating to the affairs of
the Fund, in accordance with the Governing Documents, (vii) expenses of liquidating the
Fund, (viii) any taxes (other than certain taxes described in the Governing Documents), fees
or other governmental charges levied against the Fund and all expenses incurred in
connection with any tax audit, investigation, settlement or review of the Fund, (ix) to the
extent not paid by a corporation or its electing tax exempt partners (as defined in the
Governing Documents), its corporation expenses (which expenses will be specially allocated
to the electing tax exempt partners with an interest in such corporation), and (x) the out-of-
pocket expenses of committees described below in Item 16.
D. Prepayment of Fees
The Funds invest in the securities of private companies on a long-term basis. Accordingly, all
fees are paid during the term of the Funds and Investors are generally not permitted to
withdraw or redeem Interests in the Funds. Fees paid at the beginning of a fiscal period (such
as management fees) will not be refunded or prorated for partial periods.
E. Outside Compensation for the Sale of Securities
Neither the Firm nor its supervised persons accepts compensation for the sale of securities
or other investment products outside of its association with the Firm.
The foregoing discussion in Items 5 represents the Firm’s basic compensation
arrangements. The management fees and incentive allocations described above are
structured to comply with Rule 205-3 under the Advisers Act and applicable state laws.
Fees and other compensation are negotiable in certain circumstances and
arrangements with any particular Investor may vary. Although the Firm believes its
fees are competitive, lower fees for comparable services may be available from other
investment advisers.