ITEM 5 – FEES AND COMPENSATION
Funds
The Adviser receives a management fee and performance-based fees, either in the form of an incentive
allocation or carried interest, as compensation for providing investment advisory services to the Funds.
The Funds’ management fees, performance-based fees and other compensation payable to the Adviser
are disclosed in the Constituent Documents of each of the Funds.
In general, the Funds pay to the Adviser a management fee equal to a percentage of, (i) in the case of the
Funds engaged in the Publics Strategy (the “Hedge Funds”), the net asset value (“NAV”) of each capital
account, up to 1% or 2% annually (with rates varying by investor class in certain instances), in accordance
with the terms of the applicable Constituent Documents, or (ii) in the case of the Funds engaged in the
Credit Strategy (the “Credit Funds”), the invested capital of each investor, up to 1.5% or 2% annually, in
accordance with the terms of the applicable Constituent Documents. In general, the Hedge Funds will
debit from each capital account and pay to the Adviser the applicable management fee in advance,
determined as of the first day of each calendar month or calendar quarter, as set forth in the applicable
Constituent Documents. Management fees owed by the Credit Funds will generally be paid out of current
income and disposition proceeds of the Fund and, in the Adviser’s discretion, from drawdowns that will
reduce unfunded commitments, beginning on the initial drawdown of capital, calculated quarterly in
advance. While interests in the Hedge Funds may be redeemed in certain instances in accordance with
the applicable Constituent Documents, management fees of the Credit Funds are expected to be paid,
except as otherwise described in the applicable Constituent Documents, over the term of the relevant
Credit Fund, and investors generally are not permitted to withdraw or redeem interests in the Credit
Funds.
The management fees for the Funds are non-negotiable, however the Adviser’s agreement with each Fund
gives the Adviser the discretion to vary these fees or to agree to a different management fee arrangement
in respect of any capital account or commitment of capital of an investor or waive or reduce the
management fee in respect of any capital account or commitment of capital of an investor. This will not
entitle the investor that holds such capital account or capital commitment, as applicable, or any other
investor, to such a different arrangement, waiver or reduction in respect of any other capital account or
capital commitment. The Adviser does not charge management fees against any capital account or capital
commitment established for the Adviser or its employees or other personnel. Management fees are
calculated after taking into account any Fund level expenses and are payable regardless of the overall
success or income earned by the Funds.
Investors in the Funds pay their pro rata share of costs and expenses the Adviser reasonably determines
to be necessary, appropriate, advisable or convenient to effect the Funds’ formation, carry on their
business and realize their objectives (“Costs and Expenses”). For the Hedge Funds, such Costs and
Expenses include (i) Fund organizational and initial offering expenses; (ii) management fees; (iii) costs and
expenses incurred in connection with the offer and sale of interests or shares in a Fund (as applicable);
(iv) costs and expenses incurred by the Adviser while traveling on a Fund’s behalf; (v) costs and expenses
incurred by the Adviser in connection with investigating investment opportunities for a Fund and
reviewing the continued suitability of a Fund’s investments in light of such Fund’s investment objectives,
including payments to unaffiliated third-party research firms; (vi) expenses related to third-party software
systems including but not limited to order management and execution, portfolio accounting, risk
management, anti-money laundering, Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), and compliance software; (vii) costs and expenses incurred in connection with the investment
and reinvestment of Fund assets, including brokerage commissions, dealer mark-ups, mark-downs and
spreads, and related clearing and settlement charges; (viii) all custodial, administrative, cybersecurity,
information technology, legal, accounting, auditing, record-keeping, tax form preparation, compliance,
proxy voting and consulting costs and expenses (including costs and expenses associated with obtaining
systems and other information designed to facilitate Fund accounting, record-keeping, and/or the
operation and maintenance of information systems, including related hardware and software); and fees,
costs and expenses of third-party service providers that provide such services; (ix) expenses associated
with providing information to risk aggregators; (x) costs of examination and regulatory inquiries and
filings; (xi) legal costs and expenses incurred in connection with any threatened, pending or anticipated
litigation, examination or proceeding; (xii) costs and expenses, including printing and mailing costs and
expenses related to third-party software systems, associated with preparing investor notices and
communications; (xiii) governmental licensing, filing and exemption fees; (xiv) indemnification obligations
as set forth in the applicable Fund governing documents and (xv) extraordinary expenses (if any). Expenses
that relate to a Hedge Fund and one or more of the SMA clients will be allocated on a pro rata basis each
month on the basis of such Fund’s and such other clients’ respective NAVs. If an investment in a Hedge
Fund is redeemed at any time other than at the end of a fiscal year, any accrued expenses will be paid to
the Adviser at such time. In addition, the Hedge Funds’ Constituent Documents contain lock up and
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