Item 5. Fees and Compensation
The Adviser, or an affiliated advisory entity, typically receives asset-based compensation and
performance-based compensation with respect to each of the Funds as follows:
Quarterly Annual Incentive
Fund Management Fee Allocation/Fee
BRF 0.375% 20%
BORF 0.375% 20%
Asset-Based Compensation – Management Fee
The Adviser, or an affiliated advisory entity, charges each Fund a quarterly investment
management fee of 0.375% of the total market value of such Fund’s assets under management.
These management fees are charged each quarter in advance based on the total market value of the
assets in the relevant Fund (including net unrealized appreciation or depreciation of investments
and cash, cash equivalents and accrued interest) on the first day of such fiscal quarter. If an initial
or additional investment is made to a Fund during a quarter, the management fee will be charged
as of the date of such investment based on the value of such investment as of such date and will
be prorated for the number of days remaining in the quarter. The Adviser or one of its affiliates
deducts the management fee from each Fund by instructing such Fund’s administrator at the
beginning of each quarter.
To the extent that the Adviser or one of its affiliated entities receives any type of fee or commission
from any company in which it invests, the management fee paid to the Adviser will be reduced by
the amount of such fee or by a pro rata amount if more than one Fund managed by the Adviser or
its affiliates holds the same investment. Notwithstanding the foregoing, neither the Adviser nor
any of its affiliates prohibit their employees from receiving directors’ fees or other compensation
or remuneration from companies in which the Funds invest and such compensation will not offset
management fees paid to the Adviser.
These fees are not negotiable.
Performance-Based Compensation – Incentive Allocation
The Adviser or its related persons are also paid a performance-based fee, called an “incentive
allocation” or an “incentive fee”, which is compensation that is based on a share of capital gains
on or capital appreciation of the assets of a Fund. This compensation is typically an amount equal
to 20% of the net profits allocated to an investor in a Fund. Under certain circumstances, receipt
of performance-based compensation is subject to a hurdle rate of 10%.
These fees are not negotiable.
Additional information regarding each Fund’s performance-based compensation is provided in its
offering materials.
Expenses
In addition to paying investment management and performance-based fees, the Funds will also be
subject to other investment expenses such as custodial charges, brokerage fees, commissions and
related costs; interest expenses; taxes, duties and other governmental charges; transfer and
registration fees or similar expenses; costs associated with foreign exchange transactions; other
portfolio expenses; and costs, expenses and fees (including, investment advisory and other fees
charged by investment advisers with, or funds in, which a Fund invests) associated with products
or services that may be necessary or incidental to such investments or accounts. In addition, the
Funds may incur and bear the following expenses: (i) legal fees; (ii) fees charged by accountants
for their professional services; (iii) finder, placement and investment banker fees; (iv) expenses
associated with communicating with limited partners or shareholders; (v) reasonable and customary
allocation of insurance expenses; (vi) fees and expenses of the administrator of the Funds; and (vii)
with respect to BORF, director fees and Cayman Island director and company registration fees.
Fund assets may be invested in money market mutual funds, ETFs or other registered investment
companies. In these cases, a Fund will bear its pro rata share of the investment management fee
and other fees of the fund, which are in addition to the investment management fee paid to the
Adviser. To the extent a Fund is invested in a master-feeder structure, such Fund bears a pro rata
share of the expenses associated with the related master fund. In addition, the Funds will incur
brokerage and other transaction costs.
Please refer to Item 12 of this Brochure for a discussion of the Adviser’s brokerage practices.