ITEM 5 – FEES AND COMPENSATION
A. Advisory Fees and Compensation
As a general matter, the specific organizational documents or investment management agreement for each
Advisory Client detail the fees payable by such Advisory Client. These fees vary from Advisory Client to
Advisory Client, but typically include a management fee and incentive fees/allocations, which are at the
rates and under the terms described in the relevant documents.
For the Funds, a management fee is charged which ranges from 0% to 2%. In some cases, the management
fee decreases in the later years of the fund. Please see the relevant private offering memorandum for more
information.
In addition, consistent with the Investment Advisers Act of 1940, as amended ("Advisers Act") and, as
applicable, Rule 205-3 thereunder, PA or an affiliate may also receive performance allocations or
performance fees from certain Advisory Clients generally based upon net profits allocable to each Fund
Investor, subject to the given Fund’s loss carryforward provision. Such performance fees or allocations
range from 0% to 20%.
Certain other Funds may pay a type of performance allocation, known as a profit share or carried interest,
to affiliates of PA, in addition to the management fees described above. Please see the relevant private
offering memorandum for more information.
It should be noted that PA has, upon request, provided certain larger or strategic Investors and other
Advisory Clients with lower management fees and/or performance fees as subject to side-letter or other
agreements. PA reserves the right to enter into similar arrangements in the future. In addition, investments
in the Funds made by PA, its employees or related persons are not typically subject to the fees described
above, in PA’s sole discretion.
Managed Accounts
Managed Account fees are negotiated and depend on their individual agreement terms. Managed Account
clients should reference their investment management agreements for more information.
Sub-Advised Fund
With respect to the Sub-Advised Fund, PA is compensated in accordance with the investment advisory
agreement.
It is critical that Investors and Managed Account clients refer to the relevant private placement
memorandum, investment management agreement, and/or other governing documents for a
complete understanding of how PA is compensated for its investment advisory services. The
information contained herein is a summary only and is qualified in its entirety by such documents.
B. Payment of Fees
With respect to the Funds, PA deducts fees from Investors’ assets. Fund Investors do not have the ability
to choose to be billed directly for fees incurred.
Deductions for management fees are generally applied quarterly in advance, although certain Funds
calculate and deduct fees semi-annually in advance.
Performance allocations/fees for hedge Funds are typically calculated and payable on an annual basis
following the close of the given Fund’s fiscal year, subject to applicable loss carryforward provisions.
Performance allocations for private equity Funds are typically calculated at the end of the life cycle of the
given Fund and are generally applied after a preferred return is realized. Although certain Funds realize
these performance allocations on a deal-by-deal basis and/or by different methods depending on the type
of gain.
Generally, the incentive allocation is computed and charged separately with respect to each Investor in the
funds and is not affected by the profit or loss received by any other Investor.
With respect to the Sub-Advised Fund, PA does not deduct fees from Investors’ assets and is paid in arrears,
as specified in the investment advisory agreement.
The Foreign Account Tax Compliance provisions of the Hiring Incentives to Restore Employment Act
(“FATCA”) generally imposes a reporting and 30% withholding tax regime with respect to certain U.S.
source income (including dividends and interest) and gross proceeds from the sale or other disposition of
property that can produce U.S. source interest or dividends (“withholdable payments”). As a general matter,
the rules are designed to require U.S. persons’ direct and indirect ownership of non-U.S. accounts and non-
U.S. entities to be reported to the IRS, and the 30% withholding tax regime applies if there is a failure to
provide any required information. Some of our private investment funds are required to provide certain
information, including information regarding their limited partners, to the IRS and to enter into an
agreement with the IRS or comply with an applicable intergovernmental agreement with the United States.
Such an intergovernmental agreement exists between the United States and the Cayman Islands where our
Offshore Funds are based. The Cayman Islands have also adopted the Common Reporting Standard
(“CRS”) issued by the Organization for Economic Cooperation and Development (“OECD”). CRS requires
the reporting of certain investors to their country of domicile. The Funds intend to comply with these
requirements in order to avoid fees and/or withholding taxes under FATCA, CRS, or similar legislation,
regulations or guidance enacted in any jurisdiction applicable to our Advisory Clients. FATCA also
provides that payments from our Funds to any limited partner that are attributable to these withholdable
payments will be subject to the 30% withholding tax unless the limited partner provides such information
as may be required to comply with the provisions of these rules, including, in the case of a non-U.S. limited
partner, information regarding certain U.S. direct and indirect owners of such non-U.S. limited partner. The
failure of a limited partner to provide such information may also result in other adverse consequences
applying to the limited partner, including such limited partner being required to transfer its interest in the
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