Item 5: Fees and Compensation
DESCRIPTION OF COMPENSATION AND FEE SCHEDULE
In consideration of our services, certain of our affiliates generally are entitled to receive carried interest distributions
with respect to the Funds but the Funds are not subject to any management fees or similar asset-based fees in favor of
us or our affiliate. While such performance-based carried interest distributions are described in detail in each Fund’s
governing documents, a summary is set forth below.
Carried Interest Distributions
With respect to each Fund, our affiliate generally is entitled to receive a carried interest distribution equal to 20% of
net cash available from operations and asset or equity sales during the applicable monthly or other period (following
a preferred rate of return of 8%, compounded annually from the date of contribution, to investors). On each “clawback
determination date” (as such term is defined in the applicable governing documents of such Fund), if carried interest
distributions to our affiliates with respect to any investor have been made that resulted in our affiliates receiving more
than 20% of net profits on an aggregate basis with respect to that investor, our affiliates may be obligated to return
carried interest distributions to the applicable fund for distribution to that investor (in accordance with the terms set
forth in the applicable governing documents of such Fund).
Our advisory fees with respect to such Funds generally are not negotiable. Nevertheless, we may elect to waive or
reduce such carried interest distributions that would otherwise be payable by any of the Funds pursuant to the terms
and conditions of the governing documents of such Fund.
PAYMENT OF FEES
Within thirty days after the end of each month, and at any additional times selected by the general partner or manager,
each Fund generally will pay distributions to the investors by wire transfer out of net cash flow, which distributions
for any such period will be equal to the amount of the Fund’s net available cash from operations and asset or equity
sales during such period less cash deemed necessary by the general partner or manager for certain reserves of the
Fund.
OTHER FEES AND EXPENSES
Subject to the terms and conditions set forth in the applicable governing documents, all reasonable direct, third-party
out-of-pocket costs and expenses incurred in a Fund’s business generally are borne by such Fund, including, without
limitation, the costs and expenses set forth below. Each Fund bears any actual, documented, out-of-pocket, third party
expenses related to the offering and formation of such Fund, including any legal costs incurred by the general partners
or managers, as applicable, of such Fund (typically subject to a cap). Organizational expenses that are attributable to
a particular investor that caused a Fund to incur such expenses may be specially allocated to such investor. In addition
to any carried interest distributions and organizational expenses, each Fund generally bears all costs, fees and expenses
relating to its business and activities including, but not limited to, the following: (i) legal, auditing, consulting and
accounting expenses; (ii) expenses associated with the preparation of the Fund’s financial statements, tax returns and
Schedule K-1 forms; (iii) expenses associated with annual meetings of the investors; (iv) expenses of the advisory
committee; (v) certain insurance expenses; (vi) expenses associated with acquisitions whether or not consummated
(i.e., dead deals) including the expenses of any co-investment vehicles that would have participated in such deals and
third-party service providers, management and divestiture of its investments; (vii) expenses associated with hedging
obligations; (viii) reasonable travel and entertainment expenditures related to on-going asset management of projects;
(ix) reasonable travel expenditures related to acquisition due diligence; (x) general and administrative expenses
incurred by corporate entities acquired by a Fund; (xi) costs and expenses incurred in connection with the Advisers
Act (typically subject to a cap); and (xii) any extraordinary expenses (such as litigation). Certain of the Funds will
bear fees and expenses relating to credit and any borrowings (including interest). To the extent applicable, these Funds
generally will be responsible for and pay any applicable brokerage and/or custodial fees and expenses. See Item 12
below. The Funds reimburse us and the applicable general partners or managers for all direct, third-party out of pocket
costs, fees and expenses reasonably incurred in connection with the acquisition or disposition of properties.
Expenses may be incurred by or relate to more than one of the Funds. We allocate aggregate costs among the applicable
Funds (and, in certain cases, among us, our affiliates, the applicable Funds, the portfolio investments of the Funds,
etc. (collectively, the “Expense Parties”)) in accordance with allocation policies and procedures which are reasonably
designed to allocate expenses in a fair and equitable manner over time among such applicable Expense Parties and
consistent with the governing documents of such Expense Parties as well as our fiduciary obligations to the Funds. In
general, we allocate expenses among the applicable Funds in proportion to the size of the investment made by each
such Fund or entity to which the expense relates. We may, however, use other methods to allocate certain expenses
among the applicable Funds if we deem another method to be more appropriate based upon the relative use of a product
or service, the nature or source of the product or service, the relative benefits derived by the applicable Funds from
the product or service, or other relevant factors. Nevertheless, the portion of a common expense that we allocate to a
Fund for a particular product or service may not reflect the relative benefit derived by such Fund from that product or
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