Townsend Holdings LLC

Item 5 – Fees and Compensation

Compensation and Fees: Fee arrangements are negotiated with individual clients and vary by type and
amount depending on the scope of services provided by Townsend. Townsend’s clients are generally
required to be “qualified purchasers”, within the meaning of the Investment Company Act of 1940, and
“qualified clients” within the meaning of the Investment Advisers Act of 1940.
 Clients may pay fees:
         1. based on a percentage of assets committed to a client's portfolio managed by Townsend
         2. based on a percentage of assets invested in a client’s portfolio managed by Townsend
         3. based on a percentage of the market value of the client's portfolio managed by Townsend
         4. in the form of a retainer
         5. based on a percentage of the net profits earned on the investments of such clients, or
         6. on a one time basis for the performance of a special project

In some cases, Townsend is compensated using a combination of the methods listed above. On rare
occasions, Townsend may provide services to its clients for hourly charges.

How fees are paid: Fees are generally billed to clients quarterly in arrears. For certain funds managed by
Townsend, Townsend (or an affiliate) deducts fees from the funds’ assets on a quarterly basis in arrears.
If clients were to pay fees in advance and Townsend's engagement were subsequently terminated, the
client would be entitled to be reimbursed promptly for the unearned portion of any fees, but would
remain responsible for fees and any reimbursable expenses incurred prior to termination, or as otherwise
specified under the terms of the relevant contract.

Clients may be responsible for the reimbursement or direct payment of certain expenses such as travel or
legal expenses incurred for the benefit of the client and brokerage / transaction charges (see Section 12
“Brokerage Practices”). Other expenses that clients and or/private funds have incurred or may incur could
include audit fees, fund administration fees, legal fees, postage and tax services fees. Townsend employs
certain personnel to supply fund administration and accounting services for certain clients managed by
Townsend. A pro-rata portion of the salaries of such personnel are allocated to the relevant clients. In
the case of unconsummated investments, Townsend allocates expenses related to such investments on a
case-by-case basis determined by the Compliance Committee. Further, Townsend’s fees are generally
exclusive of fees charged by any third-party investment manager or property manager, or charges
imposed by custodians, brokers or other third parties. Fees and expenses are described in each client
agreement or private fund’s offering documents and other disclosure materials.

For certain funds managed by Townsend (or an affiliate), some investors may be charged directly,
quarterly in arrears, an administrative fee if such investor’s effective capital account is below a certain
value. Such administrative fees may be paid from such investor’s share of any distribution and does not
reduce the investor's capital commitment in the applicable fund.

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Townsend’s employees, affiliates or affiliate’s employees may receive compensation in connection with
the distribution of funds managed by Townsend. While this incentive could create a conflict for such
individuals to recommend these products over others, Townsend typically does not recommend such
products to clients. In the occasion Townsend’s clients invest in such products, Townsend would not
charge commissions or markups in addition to advisory fees. Certain funds managed by Townsend (or an
affiliate) may use third parties for introductory services who may receive a fee from the fund or directly
from the clients.

Occasionally certain clients may contract with Townsend to pay quarterly fees based on capital invested
versus capital committed. This fee structure may be seen as a potential conflict of interest by incentivizing
Townsend to invest the capital at a faster pace in order to more quickly collect on contractual fees,
however Townsend effectively mitigates this potential conflict by adhering to a stringent and well
established Investment Committee vetting process for all investments regardless of fee structure.

Termination of Services: Contracts between Townsend and its clients generally are terminable by either
party without penalty upon 60 days notice or such other agreed upon notice period. If an incentive fee is
involved, Townsend may retain the right to share in certain profits generated by its efforts, even after
termination. If an engagement requires disproportionate work at the outset, a contract may require that
total fees reach a pre-specified level to compensate Townsend for its efforts (which could require a
payment on termination if the contract is terminated by the client before expiration of its initial term).

Item 7 – Types of Clients

Townsend typically provides its investment services to:
   • Domestic and foreign corporations and similar entities,
   • State and municipal pension funds,
   • Sovereign wealth funds,
   • Foundations,
   • Trusts,
   • Endowments,
   • Privately offered investment vehicles.

Investment Requirements: Townsend generally requires a $50 million minimum account size for the
acceptance of a separate account client, although exceptions may be made depending on the client and
the investment strategy. Minimum portfolio size may also differ depending upon whether Townsend's
engagement involves discretionary authority. Townsend’s clients are generally required to be qualified
purchasers, as defined in the Investment Company Act of 1940.

Private funds are U.S. and non-U.S. pooled investment vehicles that are offered to investors in a private
offering exemption or in reliance on Regulation S under the Securities Act of 1933, as amended. Private
funds typically are excepted from the definition of “investment company” pursuant to Section 3(c)(1),
3(c)(5) or Section 3(c)(7) of the Investment Company Act. Private funds managed by Townsend may
require investors to qualify as accredited investors, qualified clients and/or qualified purchasers.

This brochure is not an offer to invest in funds managed by Townsend.

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