Forest Avenue Capital Management LP

“Item 5: Fees and Compensation- Incentive Allocation.” Performance-based compensation
applicable to the Sub-Advisory Account is disclosed in and allocated in accordance with the
Sub-Advisory Agreement.

Performance-based allocation arrangements could create an incentive for us to make riskier
or more speculative investments to generate profits than would be the case if the General
Partner were not receiving any performance-based compensation. \

Certain Conflicts Attendant to Side-by-Side Management

Managing multiple Clients can create actual or potential conflicts of interest for Forest Avenue
in respect of the allocation of investment opportunities, competition for trades and allocating
expenses. These conflicts may be exacerbated in situations where Forest Avenue (the General
Partner) is entitled to higher fees or performance compensation from certain of its Clients
than from other Clients. The results of a Client’s activities may differ significantly from the
results achieved by Forest Avenue on behalf of any other Client or account. Forest Avenue has
implemented policies and procedures, including trade and expense allocation policies,
designed to manage such conflicts.

Item 7: Types of Clients

We provide investment advisory services to the Clients. Investment advice is provided
directly to the Clients and not individually to the Investors. Investors in the Funds may include,
among others, institutions, pension plans, endowments, high net-worth investors, and

Forest Avenue Capital Management LP                                  Form ADV Part 2A Brochure

financially sophisticated investors.

Details concerning applicable Investor suitability criteria and minimum investment are set
forth in the respective Fund’s Offering Documents and subscription materials. The Firm
maintains discretion to accept less than the minimum investment threshold specified in such
documents. Information on minimum investment requirements for the Funds is described, as
appropriate, in the Adviser’s Form ADV, Part 1A.

Certain of the Funds admit only investors that are “accredited investors” within the meaning
set forth in Regulation D under the Securities Act of 1933 and “qualified purchasers” as defined
in Section 2(a)(51) of the Investment Company Act. Certain other Funds require investors to
meet certain suitability qualifications, such as being both (A) “accredited investors” under SEC
Regulation D of the Securities Act of 1933 and (B) “qualified purchasers,” as defined in Section
2(a)(51)(A) of the Investment Company Act. It is anticipated that any future pooled investment
vehicle managed by Forest Avenue will have similar eligibility standards as the Funds.
The Adviser also provides advisory services to the Sub-Advised Account on a discretionary
basis in accordance with the Sub-Advised Agreement.