Merrill Lynch Alternative Investments LLC

Item 5 – Fees and Compensation

Fee Structures

MLAI generally receives an annual management fee (or similar fee) in respect of the advisory and
non-advisory services that it provides to the Advised Funds. Such fee ranges from 0.00% to 2.00%
and is generally based on capital commitments. The manner in which capital commitments are
calculated for purposes of the management fee is described in the Offering Materials for each of the
Advised Funds. The management fee may be payable semiannually in arrears, quarterly in advance,
or quarterly in arrears, depending on the Advised Fund. Certain of the Advised Funds may be
structured as “master-feeder” structures with fees payable at the master and/or feeder level.

Calculation and Deduction of Advisory Fees

Management fees are calculated in accordance with each Advised Fund's Offering Materials.
Typically, each Advised Fund’s third-party administrator will calculate the management fees
payable to MLAI and payment will be remitted in accordance with the investment advisory
agreement.

Other Fees and Expenses

Each Advised Fund typically bears its own operational expenses which may include, but are not
limited to, administration, brokerage, custody, audit and tax expenses. Information on other fees and
expenses are contained in the Offering Materials for each Advised Fund. In addition, all Advised

Funds pay the fees of the respective Underlying Managers, which typically include both a
management fee (percentage of assets) and an incentive fee or allocation. Therefore, each Advised
Fund will incur, either directly or through its investment in its Underlying Fund, management fees,
performance fees, transaction costs and ongoing operating expenses, including such Advised Fund’s
allocable share of such Underlying Fund’s operating and investment expenses. All of these
foregoing fees, costs and expenses must be offset by profits or the value of the Advised Fund will
decline.

MLAI may provide fund administration and portfolio accounting services to certain Advised Funds.
Generally, MLAI provides these services in connection with its management fees.

In certain instances, MLAI is reimbursed over time by the Advised Funds for the organizational and
initial offering costs associated with establishing such Advised Funds. Certain Advised Funds paid
the entirety of their ongoing administrative or offering costs, in certain cases subject to a ceiling
amount over which MLAI absorbed these costs.

Certain Advised Funds maintain a cash reserve, generally less than 5% of the assets of the Advised
Funds for purposes of paying the Advised Funds ongoing fees and expenses. Certain other Advised
Funds may temporarily hold greater amounts of cash for purposes of anticipated fees, expenses, and
capital calls from Underlying Funds. While such cash reserves may be subject to a MLAI
management fee, cash reserve assets held at the Advised Fund level typically are excluded from the
asset base on which Underlying Managers’ management fees and incentive fees, if any, are
calculated.

Refund of Prepaid Fees at Termination of the Client Agreement

As discussed above, MLAI generally bills each Advised Fund for its management fees in arrears.
For certain Advised Funds, however, fees may be payable in advance. Generally, Fund Investors in
the Advised Funds are limited in their ability to terminate their participation in the Advised Funds
and typically will not be refunded for their portion of fees paid to the Advised Funds in advance.
Such limits are set out in the relevant Advised Fund’s Offering Materials.

Compensation for the Sale of Securities

                                    Potential Conflicts of Interest

MLAI does not accept compensation for the sale of securities or other investment products. The
Offering Materials for the Advised Funds provide information about other potential conflicts of
interest related to the sale of securities.

                                      Use of Affiliated Brokers

MLAI generally does not recommend specific portfolio or marketable securities and does not direct
any Underlying Fund to utilize a specific broker-dealer or financial institution for trade execution or
clearing services. MLAI may, however, direct the Futures Funds, which are not advisory clients of
MLAI, to utilize Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”) for trade

clearing services and Merrill Lynch International (“MLI”) for foreign exchange (“FX”) prime
brokerage services.

From time to time, Advised Funds may receive “in-kind” distributions from Underlying Funds,
which then may be sold (to convert into cash) through broker-dealers that may be affiliated or
unaffiliated with MLAI. Fund Investors typically will not have the option to convert these in-kind
distributions through a broker of their choice.

                                         Sources of Revenue

Commissions and other compensation for the sale of investment products does not comprise MLAI’s
primary or exclusive compensation.

                                  Fee Offset for Execution Charges

Not applicable.

Item 7 – Types of Clients

MLAI provides advisory services to pooled investment vehicles that each invest in a single private
equity fund, as described in Item 4 of this Brochure. For certain Advised Funds, MLAI has
established a minimum amount of initial capital for opening or maintaining an Advised Fund,
whereas for other Advised Funds there is no such minimum amount for opening or maintaining such
Advised Fund. As mentioned above in Item 4, information about the investment minimum
applicable to each Advised Fund is also contained in the Offering Materials for such Advised Fund.