Item 5 - Fees and Compensation
Below is a general summary of how the Investment Manager is compensated by its Clients. A detailed
explanation of the fees and expenses being borne by the Clients can be found in the relevant governing
documents.
Management Fee. The Funds pay the Investment Manager a quarterly management fee based on the net
assets of the Funds (the “Management Fee”). The Management Fee is generally paid in advance at the
beginning of the quarter and is subject to an adjustment for contributions and withdrawals made during the
quarter. Management Fees range between 1.25% and 2%. Once paid, the Management Fee is non-
refundable.
The Investment Manager, in its sole discretion, may waive or modify the Management Fee for Investors,
including, without limitation, those Investors that are members, principals, employees or affiliates of the
Investment Manager or the General Partner, relatives of such persons, and for certain large or strategic
Investors.
The Investment Manager has entered into an agreement with a strategic investor (the “Strategic Investor”).
The Strategic Investor, among other things, is entitled to an interest in the Management Fee otherwise payable
to the Investment Manager and such amount offsets what otherwise would be paid to the Investment Manager.
The Strategic Investor also receives a portion of the performance-based allocation/fee (“Incentive
Allocation/Fee”) otherwise allocable/payable to the General Partner/Investment Manager, as well as certain
most favored nation rights, tag along and drag along rights and preferential Management Fee and Incentive
Allocation rates based on the Fund’s assets under management.
In addition to the agreement with the Strategic Investor, the Investment Manager has entered into
agreements (“Side Letters”) with Fund Investors. Side Letters are subject to terms and conditions that are
more advantageous than those set forth in the Fund Documents. For example, some Side Letters currently
provide for capacity rights; a reduction or rebate in Management Fees or Incentive Allocations/Fees paid
by the Investor; informational rights relating to the Fund and the Investment Manager (e.g., information
regarding certain regulatory events; information regarding insider withdrawals) and other terms and
provisions. In the future, the Funds may enter into additional Side Letters where Investors may receive
reports from the Funds on a more frequent basis or that include information not provided to other Investors
(including, without limitation, more detailed information regarding portfolio positions); different withdrawal
rights in terms of notice periods, the frequency of withdrawals and/or such other rights as may be
negotiated by the Funds and such Investors. The modifications are solely at the discretion of the Investment
Manager or General Partner and may, among other things, be based on the size of the Investor's investment
in the Funds or affiliated investment entity, an agreement by an Investor to maintain such investment in the
Funds for a significant period of time or other similar commitment by an Investor to the Funds, or may be
granted to founding or strategic Investors.
The Funds are not required to notify any or all of the other Investors of any such Side Letters or any of the
rights and/or terms or provisions thereof, nor are the Funds be required to offer such additional and/or
different rights and/or terms to any or all of the other Investors. The other Investors have no recourse
against the Funds, the General Partner, the Investment Manager and/or any of their affiliates in the event
that certain Investors receive additional and/or different rights and/or terms as a result of such Side Letters.
Other Fees and Expenses.
The Funds bear their own operating and other expenses. These expenses include, without limitation, the
Management Fee; Fund legal, compliance (including consultants’ fees), risk management expenses
(including third-party risk management products, models, and services, along with software licensing and
consultants’ fees), administrator (including, but not limited to, middle and back office services and software
necessary for trade capture and portfolio management), audit and tax preparation (including third-party tax
preparation), expenses related to any middle office service provider other than the administrator, FATCA
expenses, and accounting expenses (including third party accounting services and accounting software);
entity level taxes and fees and expenses related to compliance with applicable law and regulations in
connection with activities of the Funds; Organizational Expenses (as defined below); execution and order
management system fees and expenses; investment-related expenses for both actual and prospective
investments, such as due diligence expenses including, without limitation, consulting and appraisal fees,
investment-related legal expenses, loan administration costs, broken deal expenses, expenses related to
reorganizations, restructuring and workouts, fees related to financings or re-financings, fees and expenses of
proxy research and voting services, fees and expenses of third-party professionals (including, without
limitation, consultants, investment bankers, attorneys and accountants), commissions, research fees and
expenses (including third-party research, advisers and consultants, news and quotations equipment and
services such as Bloomberg and similar subscriptions and data services and research-related travel (including
meals and lodging), fees for providers of market and portfolio data and software and fees related to industry
conferences and seminars); interest on margin accounts and other indebtedness; borrowing charges on
securities sold short; custodial fees; bank service fees; Fund-related insurance costs (including D&O and
E&O insurance for the Investment Manager and the General Partner and members of the Governance
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