ITEM 5. FEES AND COMPENSATION
This section contains summary of the fees and expenses that are typically charged to Advisory
Clients. Please refer to the governing documents of the particular Advisory Client of interest for
detail information regarding fees and expenses specific to that Advisory Client.
Management Fees
The Company or its affiliated general partners receive management fees from Advisory
Clients. The annual management fee is typically in the range of 1-2 percent of investors’
committed capital during the relevant Advisory Client’s investment period. Certain Advisory
Clients formed as co-investment funds may not pay a management fee. Following the
termination or expiration of the investment period, the fee percentage is typically applied only
to the amount of investor capital actually invested in portfolio investments that have not been
realized. The management fee percentage may also be reduced depending on whether another
Advisory Client commences to pay a management fee. Management fees are paid by or on behalf
of an Advisory Client and may be funded by requiring investors in such Advisory Client to make
capital contributions or by having the Advisory Client pay such fee from other assets, including
investment proceeds or short-term borrowings.
The percentage rate and the amount to which such rate is applied to determine the
management fees payable by an Advisory Client are generally established at the time an Advisory
Client is organized and are paid proportionately by all third-party investors. If the management
fees are changed subsequent to an interim closing, such changes are generally applicable to all
third-party investors. The management fees are generally paid quarterly in advance and the
documents governing the Advisory Client provide that if the term for which the fees are paid or
the manner in which the fees are calculated changes, or QEP serves as investment manager for
less than a full quarterly period subsequent to any advance payment, adjustments to such fees
will be made, including refunding overpayments, based on the number of days remaining in the
applicable period. The manner of calculation and application of management fees are detailed in
the documents governing the Advisory Client and disclosed in the offering documents by which
interests in the Advisory Client were or are offered and sold.
The general partner (or similar managing fiduciary) of an Advisory Client, and affiliates
and equity owners of QEP that invest in or alongside an Advisory Client generally do not pay any
management fees. Certain individuals who are not employees of QEP but who have pre-existing
business relationships with QEP or possess specific industry expertise that invest in or alongside
an Advisory Client may, but need not, pay management fees.
Transaction Fees
Advisory Clients, or companies in which they make investments, may pay to QEP
transaction fees, break-up fees, monitoring fees and other similar advisory fees relating to
specific transactions or portfolio investments (collectively, “Transaction Fees”). To the extent
QEP or any its affiliates are entitled to receive any Transaction Fees, all of such fees will reduce
the management fees otherwise payable by the Advisory Client. QEP believes that this dollar-for-
dollar management fee offset substantially mitigates any potential conflict QEP or any of its
affiliates may have to the extent that it has an opportunity to earn a Transaction Fee from any
acquisition, disposition or other transaction relating to an Advisory Client.
Expenses
The Firm shall pay all ordinary overhead and administrative expenses, (including salaries,
bonuses and similar compensation, cost-based payments for shared back office and
administrative services, rent, equipment expenses and any general partner regulatory expenses)
to the extent that such expenses are not Operating Expenses. If QEP, or its affiliates bears or
advances payment of any Operating Expense, the Advisory Client shall reimburse the
Firm, as applicable.
Each Advisory Client is governed by its own governing documents, which details a
description of expenses for such Advisory Client. While differences exist among Advisory Clients,
the following is a description of expenses generally charged to each Advisory Client.
Organizational Expenses. To the extent not paid or reimbursed by a portfolio investment,
expenses, costs and liabilities incurred in connection with the establishment, organization,
negotiating, funding and start-up of the Advisory Client, the general partner, any parallel
investment vehicle and any general partner or other control person of any parallel investment
vehicle, and warehoused investments (including travel which may include private air travel),
lodging, meals, entertainment, printing, mailing, postage, courier, legal, administrative or other
filings, capital raising, accounting and regulatory compliance (including the initial and/or
preliminary registrations, filings and compliance contemplated by various regulations including
AIFMD, anti-money laundering and “know-your-client” laws, (including the use of any third-party
administrator for such purposes) and the engagement of any third-party compliance
consultants), the preparation of, and negotiations, execution and delivery with respect to,
Advisory Client agreements or other similar agreements in respect of any parallel investment
vehicles, investment management agreements, the PPM and supplements thereto,
presentations and other marketing materials, investment management agreements and any side
letters, marketing materials or arrangements with placement agents, and any related or similar
documents any other similar agreement, (collectively, “Organizational Expenses”). The total
amount of the organizational costs, including costs of soliciting investors, that these investors are
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