Item 5 Fees and Compensation
The Clients generally pay the Adviser a management fee of 1% per annum. The management fees are
calculated and paid quarterly in advance based on the value of each underlying investor’s capital account
as of the beginning of each fiscal quarter. The management fees are prorated for periods lasting less than
a full quarter. In addition, the Clients make an annual performance-based allocation to an affiliate of the
Adviser (the “Incentive Allocation”). The Incentive Allocation ranges from 15% - 20% of each investor’s
new appreciation related to its capital account as of the close of such fiscal year. Fees will generally be
deducted from the Funds’ custodial accounts.
The Adviser or its affiliates, in its sole discretion, may waive all or any portion of the management
fees/advisory fees or the Incentive Fees/Incentive Allocations for certain investors.
As previously stated, the Clients may invest in third party investment vehicles, such as hedge funds and
private equity funds. The third-party managers of such investment vehicles generally charge management
and incentive fees that are in addition to the fees payable to the Adviser. For direct investments in real
estate or asset-backed operating businesses, which are generally set up as joint venture vehicles, the Funds
may incur property manager fees and other asset manager fees typically paid to the joint venture partner.
These fees vary from investment to investment.
Investors are encouraged to review the particular governing documents for the Funds in which they are
invested which will disclose specific fees related to their investment with the Adviser.
Clients generally will pay some or all the following expenses in connection with the Adviser’s services: (i)
all operating expenses of the Client such as tax preparation fees, governmental fees and taxes, insurance
(including liability insurance and other coverages for the benefit of the Company, the Investment Manager,
the Managing Member and their personnel), administrator fees, and ongoing legal, accounting, auditing,
bookkeeping and other professional fees and expenses; (ii) all fees to protect or preserve any investment
held by the Client, as the case may be, as determined in good faith by the Adviser or its affiliates, including
all fees and expenses in connection with the enforcement of the Client’s rights and remedies with respect
to any asset; (iii) all direct and indirect Client investment and trading costs and expenses including, without
limitation, due diligence, research, consultants, and investment related travel, brokerage commissions,
margin interest, expenses related to short sales, prime brokerage and custodial fees, clearing and settlement
charges, bank service fees and any other expenses reasonably related to the purchase, sale or transmittal of
Company assets; (iv) all fees, costs and expenses payable in connection with the dissolution and liquidation
of the Client; and (v) all fees and other expenses incurred in connection with the investigation, prosecution
or defense of any claims by or against the Client, as well as all fees and other expenses incurred in
connection with any litigation involving the Client and the amount of any judgments or settlements paid in
connection therewith. The Adviser or its affiliates may from time to time pay for any of the Client’s
expenses or waive the right to reimbursement for any such expenses, as well as terminate any such voluntary
payment or waiver of reimbursement.
Item 12 also describes the factors that the Adviser considers in selecting or recommending broker-dealers
for transactions.
Neither the Adviser nor any of its supervised persons accepts compensation for the sale of securities or
other investment products.