Trigate Management LLC

5. FEES and COMPENSATION
TriGate managed investment Funds are organized as limited partnerships. Under this structure TriGate is
compensated through a combination of management fees and performance-based equity distributions
(“Carried Interest”). Carried Interest is described in detail in the next section.

Management fees are typically a fixed percentage multiplied by either (i) the total capital commitment
of the investor, or (ii) the actual net invested capital of the investor. The exact fee percentage is
determined on a Fund-by-Fund basis by the partnership agreement but typically is in a range of 0.50% to
1.75% per annum, depending on the level of discretion, Fund structure and size of commitment.
Management fees are paid quarterly in arrears from cash sources available to the fund including
operating cash, short-term borrowings or contributed equity.

Fund investors bear the cost of fees and expenses to identify, acquire, improve, maintain, service and
dispose of the Fund investments and govern the operations of the Fund. These costs vary and typically
include (but are not limited to) legal, audit, accounting, tax preparation, analytics, travel, and
transaction costs paid to custodians, brokers, agents and other third parties. Also, the Funds pay for
routine business insurance costs associated with the operations of the Funds including property
casualty, general liability, umbrella liability and professional liability coverage. Fund investors should
review all expenses to fully understand the total burden borne by the Funds.

6. PERFORMANCE BASED COMPENSATION and SIDE-BY-SIDE MANAGEMENT
If contractually specified Fund level performance objectives are met, the GP will receive equity-based
Carried Interest cash incentive payments from the Fund. Carried interest is paid after a specified
minimum return objective (or “hurdle”) has been reached, typically stated in the form of an Internal
Rate of Return (IRR) on invested capital. In the case of TriGate CalSTRS, Carried Interest is paid as both a
return on Capital and after a return of capital using an IRR. The specific IRR hurdle rates vary by Fund, as
does the Carried Interest percentage. There may be more than one return hurdle within a fund, each
with a different Carried Interest percentage. It is possible that the various compensation structures
among Funds may create an incentive for TriGate to spend more time or resources on one Fund over
another.

7. TYPES OF INVESTORS
TriGate’s primary focus is on institutional investors such as pension funds, endowments, foundations
and sovereign wealth funds but also includes trusts, estates and high net-worth individuals.