The Registrant is a leading independent investment firm specializing in leveraged loans (including syndicated and private), private credit, high yield bonds, distressed investments and corporate structured products (including collateralized loan obligations (“CLOs”)). The Registrant may also engage in other investment products, such as equity securities (including common or preferred stock, closed-end funds, exchange-traded funds and similar securities and warrants), real assets (including aircraft, automobiles, shipping, real estate, and/or related assets), structured finance, mortgage securities investments and interest rate and currency hedging. The majority of investments are made in private securities and obligations, but the Registrant does also invest in publicly traded securities. The Registrant makes control and non-control investments and takes both long and short positions on behalf of its clients. The Registrant’s investment activities are concentrated primarily in the U.S. and Europe. With approximately $31.9 billion of capital under management on a primarily discretionary basis as of January 1, 2019, the Registrant manages various pooled funds, CLOs and single investor mandates and a publicly traded business development company (a “BDC”) (each, a “Client” and collectively, “Clients”).

Investment advisory services provided to each Client are tailored to such Client’s specific investment strategy, objectives, limitations and restrictions, as set forth in each investment advisory agreement, private placement memorandum, offering circular and/or other Client constituent document, as applicable. In addition, from time to time, the Registrant provides capital markets advisory services to certain public or private issuers of debt or equity securities and Clients.

The Registrant (through a predecessor entity) was founded in 1991 and is owned by Oak Hill Advisors GenPar, L.P., as the general partner, and WSI OHA (H), LLC, WSI OHA (S), LLC and FW Credit Partners, L.P., as the limited partners. The Registrant maintains its principal place of business in New York City and has additional offices, including in Fort Worth, Texas; Los Angeles, California; London, England; Sydney, Australia; Hong Kong, China; and Luxembourg. please register to get more info

Fees and Compensation

The relationship between the Registrant and its Clients is governed by investment advisory agreements and/or other Client constituent documents, as applicable. Fees for advisory services are negotiable. With respect to separately managed account Clients, either the Registrant or the Client may generally terminate the applicable investment advisory agreement, without penalty, upon 30- 90 days’ prior written notice to the other party. With respect to single investor and/or commingled fund Clients, depending on the structure and terms of a particular fund, investors therein may have monthly, quarterly, annual or more limited withdrawal rights (and in some cases may have no withdrawal rights) and may otherwise be limited in their ability to dissolve such fund and receive a return of their capital. Certain separately managed account and/or fund Clients may be subject to termination fees if the account or fund, as applicable, is terminated and/or dissolved (or an investor in a fund withdraws) prior to a defined period, as negotiated by the Registrant and the applicable Client. Clients may be charged management fees monthly or quarterly, in arrears or in advance, and the management fees may be deducted or invoiced, as determined at the commencement of the Client advisory relationship. Generally, management fees are payable quarterly in arrears. Pursuant to the terms of applicable investment advisory agreements, and/or other Client constituent documents, as applicable, Clients who pay management fees in advance may be refunded a prorated portion of the management fee if the advisory relationship was terminated prior to the end of the relevant billing period. Depending on the type of Client and the nature of the management services to be provided by the Registrant, management fees are generally based on capital commitments, unreturned capital contributions, cost basis of investments, or the net asset value of a Client; and for capital market or similar engagements, a fixed fee may apply. Each of the investment advisory agreements and/or other Client constituent documents, as applicable, generally provide for a management fee of up to 2%. In addition, certain investment advisory agreements and/or other Client constituent documents, as applicable, provide for an incentive fee, carried interest or incentive allocation (collectively, “performance-based fees”) of up to 25% of all net income and gains and losses derived from portfolio investments. Certain strategic investors may receive a portion of the performance-based fees, and/or receive a reduction, waiver, or adjustment of management fees and/or performance-based fees. Certain investment advisory agreements and/or other Client constituent documents, as applicable, provide for a preferred rate of return or soft or hard hurdle rate of return to Clients (i) on a fixed basis of 5-12%, (ii) on a floating basis of LIBOR plus up to 500 bps, or (iii) based on the performance of designated indices (in certain cases, with catch up to the Registrant or affiliate, as applicable), and some provide for a “high water mark” (which is also referred to at times as a “loss recovery account”). All compensation arrangements in which the Registrant receives a fee based on a share of capital gains or capital appreciation will comply with the requirements of Rule 205-3 of the U.S. Investment Advisers Act of 1940 (as amended, the “Advisers Act”). The allocable portion of directors’ fees and awards, transaction fees and/or similar fees in connection with Client transactions will be retained by the Registrant and/or its affiliates, provided that such amounts (net of certain expenses and hypothetical taxes) may be credited on a pro rata basis to certain relevant Clients against any management fees otherwise payable by such Clients, in each case, subject to the relevant investment advisory agreements and/or other Client constituent documents. Amounts not credited will be retained by the Registrant.

Expenses

Clients may bear any and all fees, costs and expenses attributable to the activities of the Clients or the Registrant incurred for the benefit of the Clients, in accordance with the terms of the investment advisory agreements and/or other Client constituent documents.

Fees, costs and expenses attributable to the activities of the Clients or the Registrant and/or its affiliates on behalf of the Clients include, but are not limited to, those related to the evaluation, discovery, investigation, development, acquisition, monitoring, management, holding, enhancement, restructuring or disposition of investments (whether or not consummated, and including any portion of such expenses that is not borne by co-investors). These include, but are not limited to, the fees, costs and expenses (including disbursements) related to: loan fees, private placement fees, brokerage and sales fees, commissions, appraisal fees, research fees and bid/ask and/or dealer spreads; any affiliated or unaffiliated service providers (including fixed fees (such as retainers) and/or performance-based fees), including any agent in respect of any private credit investment; underlying investment vehicles; interest and clearing and settlement charges, commitment fees, taxes including transfer taxes and premiums, and underwriting commissions and discounts; short sales; market data (including, without limitation, in connection with any multimedia, analytical, database, news or third-party research or information services and market data providers (including research or information services subject to the Markets in Financial Instruments Directive (Directive 2014/65/EU) (“MiFID II”)) and any computer hardware and connectivity hardware (e.g., terminals and telephone and fiber optic lines) incorporated into the cost of obtaining such research and market data); legal, accounting, audit, investment banking, and third- party industry and due diligence experts (including, without limitation, for credit and risk analytics, collateral review and loss mitigation); any finders, senior advisors, originators, consultants (including sourcing consultants, operating consultants, research consultants, industry expert consultants and/or subject matter consultants) and other persons acting in a similar capacity (in each case, whether or not such persons are engaged by the Registrant and/or its affiliates in respect of a Client in a dedicated or exclusive capacity), including fixed fees (such as retainers) and/or performance-based fees, in each case, whether in the form of cash, options, warrants, stock or otherwise, and including expenses of any of the foregoing persons, including communications (including internet access fees), travel (including international cellular charges), meals, lodging and other similar expenses; oversight servicers and servicers (including fixed and/or performance-based fees); filings; communications (including internet access fees associated with the Registrant’s investment professionals), travel (including international cellular charges), meals, lodging as well as late meal and car services; organizing, maintaining and operating entities controlled by the Registrant and/or its affiliates that facilitates a Client’s investments (including rent, salaries and ancillary costs of such entities, costs and expenses of service providers of such entities, and expenses related to the corporate governance of such entities); interest and related expenses and custodial, depositary, trustee, record keeping and other administration services; operations and reconciliation; hedging and the incurrence of leverage and indebtedness, including borrowings, dollar rolls, reverse purchase agreements, credit facilities (including credit facilities secured by a Client’s unfunded capital commitments), securitizations, margin financing and derivatives and swaps, including any principal or interest on borrowings and indebtedness (including, without limitation, in connection with lines of credit, loan commitments, letters of credit, and in guaranteeing the obligations of any issuers or their affiliates); formation, organization, operation, winding up, dissolution and termination of any special purpose entity (including, for the avoidance of doubt, all equivalent fees, costs and expenses to those set forth herein that are borne by Clients), alternative investment vehicle and/or co-investment vehicle; and all other fees, costs and expenses (including amounts payable to affiliates of the Registrant) related to the sourcing, evaluation, discovery, investigation, development, acquisition, monitoring, pricing, underwriting, servicing and/or disposition of potential or actual investments (whether or not consummated). In addition, Clients will bear any fees (including fixed and performance fees) payable to joint venture partners or third-party managers (in each case, without offset to any fixed and performance fees paid by Clients to the Registrant and/or its affiliates). Other fees, costs and expenses attributable to the activities of the Clients or the Registrant and/or its affiliates on behalf of the Clients include, but are not limited to, any and all fees, costs and expenses (including disbursements) relating to: (i) implementing or maintaining third-party or proprietary software tools, programs or other technology for the benefit of the Clients (including, without limitation, any and all costs and expenses of any investment, books and records, portfolio compliance and reporting systems such as Wall Street Office, Everest (Black Mountain), Hazeltree, Electra, Omgeo, Trinity and similar systems and services, including, without limitation, consultant, software licensing, data management and recovery services fees and tools, programs, subscriptions or other systems providing market data (including expenses incurred in connection with any multimedia, analytical, database, news or third-party research or information services (including research or information services subject to MiFID II)) and any computer hardware and connectivity hardware (e.g., terminals and telephone and fiber optic lines) incorporated into the cost of obtaining such research and market data), analytical, database, news or third-party research or information services to Clients); (ii) attorneys, auditors, accountants, tax professionals (in each case, including secondees and temporary personnel or consultants that may be engaged on short- or long-term arrangements as deemed appropriate by the Registrant) and administrators relating to Client matters (including costs and expenses of in-house professionals and related administrative personnel, including personnel of the Registrant responsible for legal, tax, and accounting (including portfolio reconciliation, portfolio compliance and reporting) services or otherwise for implementing, maintaining and supervising the procedures relating to the books and records of the Clients, inclusive of their allocated administrative and overhead costs, fees, liabilities and expenses (“Overhead”), which includes all costs, fees and expenses on account of rent, utilities, insurance, salaries, wages, payroll taxes, bonuses, employee benefits, furnishings, telecommunications and certain information services and certain office expenses, including office supplies and equipment and other similar expenses); (iii) Client financial statements, reports, notices, tax returns and Schedule K-1s (or similar schedules) (including any audits relating thereto), including the costs of creating, printing translating (as applicable) and distributing such financial statements, notices, reports, tax returns and Schedule K-1s (or similar schedules) and any postage costs and expenses relating to Client matters; (iv) taxes and other governmental charges (including transfer taxes and premiums and entity-level taxes and fees associated with corporate licensing); (v) the maintenance of registered offices, corporate licensing and similar expenses; (vi) insurance services, premiums or expenses, including (a) errors, omissions, fidelity, crime, cybersecurity, general partner liability, directors’ and officers’ liability and similar coverage for any person acting on behalf of the Registrant or its affiliates and (b) any Client investment, including casualty insurance, real estate insurance, title insurance, shipping-related insurance, insurance on loans, property insurance and similar coverage; (vii) compliance with any law or regulation (including ongoing compliance, filing, recordkeeping and reporting obligations, related software, and fees, costs and expenses incurred in implementing or maintaining such software and any fees and expenses related to the retention of, and services provided by, any service provider or agent engaged by Registrant and/or its affiliate in connection with such compliance) or in connection with any litigation or governmental review, audit (including any tax audit), inquiry, investigation, proceeding or tax contest, including the amount of any judgments, settlements or fines paid in connection therewith; (viii) distributions to the Clients (or investors therein); (ix) meetings with some or all of the Registrant’s Clients (including any annual meeting of the Registrant that one or more of the Registrant’s Clients are invited to attend), including, without limitation, travel, meal, and lodging expenses of the Registrant and its representatives, and ancillary activities related thereto; (x) out-of-pocket expenses incurred by members of any board or advisory committee (including, without limitation, travel, meal, and lodging expenses); (xi) the formation, marketing, maintenance, dissolution, winding up or termination of Client accounts or entities, entities controlled by the Registrant and/or its affiliates (including, without limitation, out-of-pocket legal, accounting, tax, regulatory, filing, capital raising, printing, translation, distribution, travel, lodging and meals); (xii) any amendments, modifications, revisions or restatements to the investment advisory agreements and/or other Client constituent documents, including, without limitation, related entities (including the constituent documents of any special purpose entity, alternative investment vehicle and/or co-investment vehicle, as applicable (including any fees, costs and expenses incurred in connection with establishing co-investment vehicles in connection with proposed investments that are not consummated, to the extent not borne by such vehicles)); (xiii) the negotiation and preparation of, and compliance with, side letters and most favored nations processes (as applicable); (xiv) valuation (including, without limitation and as applicable, any and all fees, costs and expenses associated with advisors, accountants, independent pricing services and third-party valuation consultants); (xv) communications (including internet access fees), lodging, travel, cellular phone and meals (including late cars and meals) and other similar costs, fees and expenses (including for the personnel of the Registrant and its affiliates and third parties); (xvi) and any postage costs and expenses related to Client matters; and (xvii) Client indemnification obligations and management fee obligations.

The Registrant allocates fees, costs and expenses among Clients and the Registrant in a fair and equitable manner consistent with its Expense Allocation Policy, as determined by the Registrant in good faith. Fees, costs and expenses will generally be allocated to applicable Clients and related entities on a pro rata basis based on a measure of assets under management, or otherwise as deemed fair and equitable by the Registrant in good faith. Certain Clients and related entities pay fees, costs and expenses on a fixed amount basis. Expenses allocated to a Client will indirectly be borne by all underlying investors and, if applicable, underlying feeder funds, regardless of whether the expenses relate to any one investor or a subset of investors, unless otherwise determined by the Registrant in good faith. With respect to fees, costs and expenses associated with investment activity, such expenses generally will be allocated to the Clients and related entities that are invested in or are eligible to invest in the relevant asset type or strategy, as determined by the Registrant on the basis of the relevant investment advisory agreements and/or other Client constituent documents. With respect to fees, costs and expenses associated with a consummated investment, such expenses generally will be allocated to the Clients and related entities that participated in the investment, pro rata based on each Client’s participation in such investment. With respect to expenses associated with an unconsummated investment, such expenses generally will be allocated to the Clients and related entities that were provisionally allocated for the prospective (but unconsummated) investment or, if no provisional allocation was made, then to the Clients and related entities eligible to invest in such asset type or strategy. The eligibility of a Client to participate in a specific asset type or strategy will be determined by the Registrant in good faith on the basis of the Client’s investment advisory agreement and/or other constituent documents and/or the Client’s past investments, even if such asset type or strategy is not enumerated in the relevant documents. A Client who has previously invested in (or consented to invest in) an asset type or strategy (even on a one-off basis pursuant to the Client’s consent) will be considered eligible for such asset type or strategy for purposes of allocating to such Client the fees, costs and expenses associated with such asset type or strategy, including for unconsummated investments, until such Client affirmatively informs the Registrant that it no longer wishes to be considered for investments of such asset type or strategy. Each applicable Client and related entity will be allocated its pro rata share of any fees, costs and expenses associated with an unconsummated investment based on assets under management. This pro rata allocation will result in different allocable amounts than had an expense related to an unconsummated investment been allocated pursuant to a pro forma investment allocation using the Registrant’s trade allocation schedule, which utilizes cash availability and maximum issuer size. See Brokerage Practices – Bunched Orders and Trade Allocation herein for more information on the Registrant’s Trade Allocation Policies and Procedures. The Registrant pays all or a portion of the allocated amount of expenses for those Clients with whom the Registrant has contractually agreed not to charge or for whom it waives such expenses (in each case, in whole or in part, based on the contractual agreement with the applicable Client). The Registrant and/or its affiliates have waived, reduced and/or calculated differently the fees, costs and expenses for the Registrant’s employees and certain strategic investors and friends and family of the Registrant who invest in certain Client funds. Clients and investors in Client funds may additionally negotiate variations from the Registrant’s standard fees, costs and expenses. Some services may be provided at cost by the Registrant’s employees who provide legal, tax and accounting (including portfolio reconciliation, portfolio compliance and reporting) services and, in each case, their supervising persons. Some services may be provided by Group Administrative Services, LLC (e.g., insurance services) or OH Administration Corp. (e.g., benefit plan services). These are entities that provide services to separate firms that bear or once bore the Oak Hill name (collectively, the “Other Oak Hill Entities”). The Other Oak Hill Entities include, among others, Oak Hill Capital Management, LLC (a private equity fund adviser) and its client funds. These Other Oak Hill Entities operate separately, have separate and independent general partners and managers, and make decisions on an independent basis. The Registrant believes engaging Group Administrative Services, LLC and OH Administration Corp. permits the Registrant to achieve certain economies of scale.

The Registrant does not earn a profit for the services provided by in-house legal and accounting professionals. Specifically, the Registrant charges Clients their allocable portion of the lesser of (a) actual applicable cost (including allocated portions of Overhead) of such professionals or (b) an amount not to exceed the reasonable estimated cost had the service been performed by an outside firm of national repute, as determined in good faith by the Registrant. For in-house legal professionals and accounting professionals (that work on tax matters), the allocable cost for each Client or entity is based on weekly timesheets maintained by such professionals, reflecting a fixed total weekly number of work-hours for each professional. For in-house accounting professionals in general, each accounting professional is part of an accounting group that covers a designated list of Clients or entities based on similar strategies or account types, and such professionals maintain weekly timesheets (reflecting a fixed total weekly number of work-hours for such professional) in which such professional allocates his or her time between the Registrant and its affiliates, on the one hand, and their designated Clients or entities, on the other hand. The cost of services provided by each accounting group is generally allocated across the Clients and entities supported by such accounting group pro rata based on assets under management. With respect to Oak Hill Special Opportunities Fund, allocated costs of in-house legal professionals of Oak Hill Capital Management, LLC, an unaffiliated investment adviser that jointly advises such fund, are also charged to such fund. Also, certain office services, which are part of Overhead, are provided by Bass Enterprises Production Co., an unaffiliated service provider partially owned by an affiliate of FW Credit Partners, L.P. Fees for these services are negotiated on an arm’s-length basis. With respect to the Registrant’s brokerage practices, please refer to the Brokerage Practices section herein. please register to get more info

As noted above, the Registrant and its related general partners and/or advisory affiliates charge certain Clients performance-based fees, which are fees based on a share of income from, capital gains on, or capital appreciation of, such Clients’ assets. The fact that the Registrant and its related general partners and/or advisory affiliates are compensated based on the profits of such Clients may create an incentive for the Registrant to make investments on behalf of such Clients that are riskier, more speculative, or expected to generate higher returns than would be the case in the absence of such compensation.

Furthermore, the Registrant could be incentivized to allocate certain investment opportunities that are riskier, more speculative, or expected to generate higher returns to Clients that pay performance- based fees to the Registrant on terms that are preferential to other Clients. For example, some Clients pay higher performance-based fees as compared to other Clients. Some Clients pay performance- based fees periodically on realized and unrealized net gains, whereas other Clients only pay performance-based fees on a deferred basis, as investments are realized. Some Clients have a high water mark, a soft or hard hurdle and/or a preferred return, and the Registrant could be incentivized to allocate investment opportunities to Clients that are close to their respective high water mark, soft or hard hurdle and/or a preferred return, in order to begin to accrue or to continue accruing and/or receiving performance-based fees. Similarly, the Registrant could be incentivized to allocate certain investment opportunities to Clients with preferential expense terms, such as accounts that pay a greater portion of the Client’s expenses. For Clients with unfunded commitments and credit lines or other financing facilities (including subscription facilities), where the Registrant may have the discretion to either call capital or to draw on the credit line or other financing facilities, the Registrant could be incentivized to draw on such credit line or other financing facilities rather than calling capital, if doing so is expected to generate a higher internal rate of return (or a lower preferred return) for purposes of calculating performance-based fees.

Performance-based fees received by the Registrant and its related general partners and/or advisory affiliates are based primarily on net income and realized and unrealized gains and losses. As a result, the performance-based fees earned could be based on unrealized gains that Clients may never realize. Notwithstanding the above potential conflicts, the Registrant’s investment allocation process does not take into account management fees and expenses or performance-based fees when allocating investment opportunities. To mitigate these conflicts, the Registrant has implemented Trade Allocation Policies and Procedures, as described in the Brokerage Practices section herein. The Registrant has implemented controls that seek to ensure fair and equitable allocation, and conducts reviews of the performance of accounts with similar investment objectives. please register to get more info

The Registrant provides investment advisory services to various pooled funds, CLOs and single investor mandates and a BDC, in each case, for which the Registrant and certain of its affiliates serve as the general partner and/or investment adviser (or in a similar capacity). The Registrant’s Clients (including investors therein) include, without limitation, pension funds, sovereign wealth funds, insurance companies, financial institutions, foundations, endowments, fund of funds, family offices and high net worth individuals. All investors in private fund Clients are required to be either “qualified purchasers” or employees who are deemed to be “knowledgeable employees” under the U.S. Investment Company Act of 1940 (as amended, the “40 Act”), or must otherwise be permitted to invest under applicable securities laws.

The Registrant does not have a formal minimum assets under management threshold with respect to separately managed accounts and single investor vehicles, but it may require minimum investments on a case-by-case basis. Pooled funds for which the Registrant or an affiliate serves as general partner and/or investment adviser generally impose a minimum investment requirement for admission as a limited partner, shareholder or similar investor, although in most cases the general partner and/or the investment adviser of the applicable fund may, in its sole discretion, accept commitments of lesser amounts (subject to applicable law). Additional suitability requirements for investment in each of the private fund Clients are more fully discussed in the disclosure and subscription documents for each fund. please register to get more info

Method of Analysis and Investment Strategies The Registrant’s corporate credit investment philosophy is typically based on five tenets: (i) intensive, fundamental credit analysis; (ii) relative value analysis; (iii) focus on risk-adjusted returns; (iv) loss avoidance; and (v) active portfolio management.
• Intensive, fundamental credit analysis is the cornerstone of the Registrant’s investment strategy and includes: (i) business, vehicle and borrower analysis, which involves a comprehensive fundamental evaluation of a company and includes historical and projected financial modeling; (ii) capital structure analysis, which evaluates the terms and structure of a company’s debt and equity securities relative to the company’s business risk; and (iii) valuation analysis, which considers the enterprise value of a company in both the public and private markets. The main sources of information the Registrant uses in conducting research and diligence include, without limitation: o Annual and quarterly company reports, prospectuses and press releases; o Credit agreements, indentures, shareholder agreements, offering circulars and related documents; o Bankruptcy and other court filings; o Company books and records; o Investment manager and trustee reports; o Financial publications; o Third party research and governmental agency reports; and o Corporate rating services.
• Relative value analysis involves identifying relative value among industries, issuers and financial instruments. This process focuses on evaluating the risks assumed by investors relative to the returns implied by asset prices. The Registrant believes that different industries possess different components of risk, which may include cyclical, technological, legal and regulatory risks. Further, the Registrant believes that different companies possess different components of risk, which may include competitive, financial and managerial risks. Finally, each instrument or layer in a company’s capital structure has a different measure of risk based on collateral, subordination, covenants, liquidity, interest rate sensitivity and other considerations.
• Focus on risk-adjusted returns involves identifying investments that offer the maximum return for the least amount of risk, and thinking about “yield-to-event” rather than yield-to- maturity.
• Loss avoidance involves concentrating on issuers with stable (or improving) businesses and securities which possess strong asset (or value) coverage and structural protection (e.g., security, covenants) in the event of credit problems.
• Active portfolio management involves the continuous integration of credit and relative value analyses combined with opportunistic management of the portfolio. The Registrant believes that active portfolio management is an important component of its investment strategy because market conditions and companies’ credit quality continually change. In addition, the Registrant employs a common investment process across the various sectors within the structured products market The investment process is typically based on: (a) collateral analysis; (b) structural and documentation analysis; (c) collateral manager review; (d) scenario analysis; (e) relative value analysis; and/or (f) surveillance and portfolio management.
• Collateral analysis is the cornerstone of the investment process and involves an extensive analysis and deep understanding of the underlying collateral for each structured product investment. Specifically, the analysis of the collateral pool is done largely on an asset-by- asset basis. The individual assets in the collateral pool are analyzed for historical and current performance and, most importantly, the assets are evaluated for future performance. For the portfolio assets, this analysis and evaluation focuses on their (i) future expected cash flow and value, (ii) default propensity, (iii) timing of potential default and (iv) potential loss severity.
• Structural and documentation analysis involves analyzing the structural elements of each investment and doing an in-depth review of the key governing transaction documents. The structural review includes a capital structure analysis, which evaluates the terms and structure of a transaction’s various asset classes. The documentation review is performed by the Registrant, and in certain instances is supplemented through review by outside counsel.
• Collateral manager review involves analyzing the historical performance and general quality of a particular collateral manager. .
• Scenario analysis involves projecting the future cash flows of a collateral pool and modeling how the projected returns of a particular investment tranche may vary as the projections of the underlying cash flows are modified under different scenarios. The scenarios can be varied based on asset-specific considerations as well as macro-economic factors. The scenario analysis seeks to integrate the analyses performed on the collateral, structure, documentation, and collateral manager, so that the boundaries of risk and return can be reasonably calculated and understood, prior to making an investment decision.
• Relative value analysis involves identifying relative value. This process focuses on evaluating the risks assumed by investors relative to the returns implied by asset prices. This analysis also incorporates relative risk and return across the various tranches and capital structures available for investment in the structured products markets.
• Surveillance and portfolio management involves performing investment surveillance on each portfolio asset on a regular basis, in addition to monitoring overall portfolio risks. Generally, the performance to date of each investment is evaluated relative to projected performance at the time the investment was made. Taking into account current market pricing and expected ongoing collateral performance, future projected returns are calculated and a buy/sell/hold decision is made. This process also allows relative value decisions to be made both among investments already in the portfolio and those available for purchase in the markets. Portfolio concentration risks and macroeconomic risks are continually evaluated, and hedging strategies may be employed to mitigate certain of these risks. The Registrant’s investment team performs three primary functions: research, trading and portfolio management.
• Research: Research professionals are responsible for all aspects of credit and structured products analysis and due diligence, as described above. In addition, as part of the research process, research professionals may: (i) conduct diligence meetings with management, selected customers, suppliers, competitors, service providers and industry analysts; (ii) engage outside consultants and legal and accounting experts, as necessary; and (iii) prepare internal research reports and recommendations for the portfolio manager. The industry-focused research professionals regularly monitor both existing and prospective investments as well as fundamental trends in their respective industry segments.
• Trading: Trading professionals are responsible for managing the trading process and for providing the investment team with insight on relative value and capital markets issues. The trading professionals also generate market-oriented investment ideas for the research group.
• Portfolio Management: The portfolio managers approve all investment decisions and supervise the research and trading professionals. The approval process is typically based on meetings with research and trading professionals on each investment. Investment decisions are based on, among other factors, credit analysis, relative value, diversification and/or market conditions with the objective of maximizing risk adjusted returns. Risk of Loss The description contained herein is an overview of certain risks to Clients (and investors therein) relevant to the Registrant’s method of analysis, investment strategies and types of securities recommended, and is not intended to be complete. Additional risks and uncertainties applicable to Clients may exist. A detailed description of applicable risk factors is set forth in Client private placement memoranda, public filings (e.g., Forms 10-K and 10-Q) and/or other Client documents and disclosures as applicable, which the Registrant will make available to current Clients, investors and qualified prospective investors upon request. All investments involve a risk of loss and any investment strategy offered by the Registrant could lose money over the short or long term. Clients and investors should carefully consider a number of different risks including, but not limited to, the following:

A. Investment Strategy Risks

Investment and Trading Risks. All investments in securities and obligations risk the loss of capital, including the risk of a total loss of invested capital. The Registrant believes that its investment and research programs and techniques may moderate this risk through a careful selection of securities, obligations and other financial instruments. No guarantee or representation is made that a Client’s program will be successful. Past performance is not necessarily indicative of future performance. Clients’ investment programs may utilize such investment techniques as leverage, margin transactions, short sales, derivatives and other swaps (including for purposes of interest rate and/or currency hedging), options on securities and forward contracts, which practices may, in certain circumstances, increase the adverse impact to which the Clients may be subject. Clients may invest in loans, bonds or other fixed-income securities or obligations, including, without limitation, public and private non-investment grade bonds, secured loans, second lien debt, structured products, convertible securities and other financial instruments with fixed-income characteristics. Such securities and obligations will primarily be below investment grade and face ongoing uncertainties and exposure to adverse business, financial or economic conditions which could lead to the applicable issuer’s inability to timely meet interest and principal payments. The market prices of such instruments are also subject to abrupt and erratic market movements and changes in liquidity and above-average price volatility, and the spread between the bid and ask prices of such instruments may be greater than those prevailing in other financial markets.

Economic, Political and Market Risks. The investments made by the Clients may involve a high degree of business and financial risk that can result in substantial losses. In particular, these risks could arise from changes in the financial condition or prospects of the entity in which the investment is made, changes in national or international economic and market conditions and changes in laws, regulations, trade barriers, exchange rates and controls, fiscal policies, or political conditions of countries in which investments are made, including the risks of war and the effects of terrorist attacks and security operations. Changes in such aspects may result in the disruption of the global credit markets, periods of reduced liquidity, greater volatility, general widening of credit spreads and a lack of price transparency. The Registrant’s investments are expected to be sensitive to the performance of the overall global economy. A negative impact on economic fundamentals and consumer and business confidence would likely increase market volatility and reduce liquidity, both of which could have a material adverse effect on Clients’ performance and these or similar events may affect the ability of Clients to execute their investment strategies. In the past decade, there have been periods of global market uncertainty and adverse financial conditions. Volatile and difficult global credit market conditions adversely affect the market values of equity, fixed-income and other financial instruments. The possibility of partial or total loss of capital will exist, and investors should not invest unless they can readily bear the consequences of such loss. Market disruptions may cause dramatic losses for the Clients and such can result in otherwise historically low-risk strategies performing with unprecedented volatility and risk. In addition, interest rate changes may affect the value of Clients’ debt instruments as well as the ability of companies or businesses in which the Clients may invest to refinance debt securities. Factors that may affect market interest rates include, without limitation, inflation, slow or stagnant economic growth or recession, unemployment, money supply, governmental monetary policies, international disorders and instability in domestic and foreign financial markets. In a changing interest rate environment, the Registrant may not be able to manage this risk effectively, and performance could be adversely affected. The Registrant will not necessarily hedge Clients’ interest rate risk.

Changing political environments, regulatory restrictions and changes in government institutions and policies in and outside the United States could adversely affect Client investments. Civil unrest, ethnic conflict or regional hostilities may contribute to instability in some countries. Such instability may impede business activity and adversely affect the environment for foreign investments. Actions in the future of one or more governments could have a significant effect on the various economies, which could adversely affect market conditions, prices and yields of securities and other obligations.

Below Investment Grade Debt Securities and Obligations. Risks associated with investing in high yield fixed income securities and obligations (e.g., leveraged loans and high yield bonds) include: o the issuer’s inability to pay interest or repay principal; o illiquidity in the markets may make the securities and obligations difficult or impossible to sell; o the issuer or company may repay the security or obligation prior to maturity; o companies that issue such securities and obligations are often highly leveraged and may not have available to them more traditional methods of financing; o such issuers and companies generally do not issue publicly traded securities, making it more difficult to hedge the risks associated with such investments; and o information relating to companies that issue such securities and obligations may be less readily available and reliable than other companies, such as those that issue publicly traded securities, and therefore Clients are more dependent on the analytical abilities of the Registrant. Leveraged Loans. The Registrant may invest on behalf of Clients in leveraged loans. Leveraged loans will generally be rated below investment grade or may also be unrated. As a result, the risks associated with leveraged loans are similar to the risks of other below investment grade fixed- income instruments. In addition to the risks for such fixed income obligations set forth above, leveraged loans, including those acquired via participations, entail other risks such as (i) the risk that the underlying borrower may experience a default and a bankruptcy, and the related risks thereto, (ii) environmental liabilities that may arise with respect to collateral securing the obligations and (iii) extended settlement periods. In general, the secondary trading market for leveraged loans may not be as liquid or efficient as those for certain other debt securities. To the extent a secondary market for leveraged loans exists, it may be subject to irregular trading activity, wide bid/ask spreads and extended trade settlement periods. In addition, where loans are acquired via participations, additional risks apply, such as (i) limitations on the ability of the Registrant to directly enforce its rights (including set-off) versus the obligor, (ii) exposure to the creditworthiness and performance risk of the participation seller, and (iii) limitations on the ability to directly benefit from the collateral supporting the debt instrument. As a result, Clients will assume the credit risk of both the obligor and the seller selling the participation. In the event of the insolvency of such seller, the Clients may be treated as a general creditor of such seller, and may not benefit from any set-off between such seller and the obligor. Under a participation, the Registrant may not be entitled to negotiate the covenants restraining the activities of the borrower under the leveraged loans that it invests in on behalf of Clients. As a result, such loans may not include certain financial covenants and may not sufficiently protect the Client’s income stream.

Clients will compete with a broad spectrum of lenders, some of which may have greater financial resources than the Clients, and some of which may be willing to lend money on better terms (from a borrower’s standpoint) than the Clients. Increased competition for, or a diminution in the available supply of, qualifying loans may result in lower yields on such loans, which could reduce returns to Clients. In addition, a high percentage of leveraged loans are issued as “covenant-lite.” Client’s investments in loans with limited covenant protections may pose a higher risk, as the borrowers of such loans are subject to fewer covenants with respect to, among other things, other debt that such borrowers may incur. The lack of such covenants may increase the likelihood that such borrowers could default on their payments to a Client, thereby resulting in losses to such Client.

High Yield Bonds. The Registrant may invest on behalf of Clients in high yield bonds (i.e., bonds that are rated in the sub-investment rating categories by credit rating agencies). Such securities are generally not exchange-traded and, as a result, these instruments may trade in a smaller secondary market than exchange-traded bonds. In addition, such issuers may not have publicly traded equity securities, making it more difficult to hedge the risks associated with such investments. In addition to the risks for such fixed income securities set forth above, the market values of certain of these lower-rated and unrated debt securities tend to reflect individual corporate developments to a greater extent than do higher-rated securities, which react primarily to fluctuations in the general level of interest rates, and tend to be more sensitive to economic conditions than higher-rated securities. Also, high yield bonds tend to be more volatile than higher-rated securities and may not be protected by financial covenants or limitations on additional indebtedness. Furthermore, companies that issue such lower-rated and/or unrated securities are often highly leveraged and may not have available to them more traditional methods of financing. Lower Credit Quality Investments. There may be no restrictions on the credit quality of the investments of certain Clients. Instruments in which the Registrant may invest on behalf of certain Clients may be deemed by rating agencies to have substantial vulnerability to default in payment of interest and/or principal. Other investments may be unrated. Lower-rated and unrated instruments in which the Registrant may invest on behalf of Clients are subject to significant uncertainties or major risk exposures to adverse conditions, may be more illiquid, and are considered to be predominantly speculative. Generally, such investments offer a higher return potential than higher- rated investments, but involve greater volatility of price and greater risk of loss of income and principal. The market values of certain of these investments (such as subordinated securities) also tend to be more sensitive to changes in economic conditions than higher-rated instruments. Declining real estate values, in particular, will increase the risk of loss upon default, and may lead to a downgrading of the applicable investments by rating agencies. The value of such investments may also be affected by changes in the market’s perception of the entity issuing or guaranteeing them, or by changes in government regulations and tax policies. In general, the ratings of nationally recognized rating organizations represent the opinions of these agencies as to the quality of the investments that they rate. These ratings may be used by the Registrant as initial criteria for the selection of portfolio investments. Such ratings, however, are relative and subjective; they are not absolute standards of quality and do not evaluate the market value risk of the investments. It is also possible that a rating agency might not change its rating of a particular issue on a timely basis to reflect subsequent events. Sovereign Debt Investments. Clients may invest in sovereign debt instruments, which involve special risks. The governmental authority that controls the repayment of the sovereign debt may be unwilling or unable to repay the principal and/or interest when due in accordance with the terms of such instruments due to: (i) the extent of its foreign reserves; (ii) the availability of sufficient foreign exchange on the date a payment is due; (iii) the relative size of the debt service burden to the economy as a whole; or (iv) the government debtor’s policy towards the International Monetary Fund and the political constraints to which a government debtor may be subject. If an issuer of sovereign debt defaults on payments of principal and/or interest, Clients may have limited legal recourse against the issuer and/or guarantor. In certain cases, remedies must be pursued in the courts of the jurisdiction of the defaulting party itself, and a Client’s ability to obtain recourse may be limited. All of a Client’s investments in sovereign debt instruments (if any) will be subject to typical market risks. Bridge Loans. It is a common practice for financial institutions to commit to providing bridge loans to facilitate acquisitions, including leveraged buyouts. Bridge loans are frequently made because, for timing or market reasons, longer-term financing is not available at the time the funds are needed, which is often at the time of the closing of an acquisition. In the past, these commitments were not frequently drawn upon due to the availability of other sources of financing; however, due to market conditions affecting the availability of these other sources of financing (principally high- yield bond transactions), bridge loan commitments have been and may be drawn upon more regularly. Since these commitments were not regularly drawn upon in the past, there is little history for investors to rely upon in evaluating investments in bridge loans. Bridge loans often have shorter maturities. Borrower and lenders typically agree to shorter maturities based on the anticipation that the bridge loans will be replaced with other forms of financing within such shorter time period. However, the source and timing of such replacement financing may be uncertain and can be affected by, among other things, market conditions and the financial condition of the borrower at the maturity date of the bridge. If the borrower is unable to obtain replacement financing and repay the bridge loan at maturity, the terms of the bridge loan may provide for the bridge loan to be converted to a longer term loan. If bridge loans are not repaid (or cannot be disposed of on favorable terms) on the dates projected by the Registrant, there may be an adverse effect upon the ability of the Registrant to manage Client assets in accordance with its models and projections or an adverse effect upon the performance of Client accounts and the ability to make distributions to investors. Illiquid and Restricted Investments. Investments selected by the Registrant may be illiquid due to transfer restrictions, the size of an interest held or for other reasons. As a result, it may be necessary to hold these investments for an indefinite period of time. Generally, a less liquid investment bears more risk than a more liquid one. For example, if the Registrant is unable to liquidate an investment as its value declines, the Registrant will be unable to limit Clients’ losses on such investment. Similarly, if a Registrant is unable to liquidate an investment at a time when cash is needed, the Registrant may miss other investment opportunities or be forced to sell other investments at unfavorable times. The market prices, if any, for such investments may be volatile. The sale of restricted and illiquid securities may require more time and result in higher brokerage charges or dealer discounts and other selling expenses than would the sale of securities eligible for trading on national securities exchanges or in the over-the-counter markets. Restricted securities may sell at a price lower than similar securities that are not subject to restrictions on resale.

Distressed Investments. The Registrant may invest on behalf of Clients in companies that are experiencing significant financial or business difficulties, including companies in need of restructuring or already involved in bankruptcy or other reorganization and liquidation proceedings. These investments involve a substantial degree of risk. The level of analytical sophistication, both financial and legal, necessary for successful investment in companies experiencing significant business and financial difficulties is unusually high. There is no assurance that the Registrant will correctly evaluate the value of the assets collateralizing Clients’ distressed investments or the prospects for a successful reorganization or similar action. Distressed investments require active monitoring and may, at times, require participation in business strategy or reorganization proceedings.

Restructuring Situations. The Registrant may invest on behalf of Clients in companies that face financial or operational difficulties or are otherwise in need of restructuring. To the extent that the Registrant becomes involved in such proceedings, the Clients may have a more active participation in the affairs of the company than that assumed generally by an investor. The Registrant may not be able to implement a restructuring in a timely manner or at all, and the companies may go out of business or become subject to bankruptcy proceedings. Risks include, without limitation: (i) a subsequent characterization of a payment from the company as a “fraudulent conveyance”; (ii) the recovery as a “preference” of liens perfected or payments made on account of a debt in the 90 days before a bankruptcy filing; (iii) a bankruptcy court decision to disallow, subordinate or disenfranchise Clients’ claims to the company’s assets (including due to equitable subordination claims by other creditors); and (iv) so-called lender liability claims by the issuer of the obligations. Other factors could adversely affect a Client’s investment in such a situation, including the Registrant’s misjudgment of the time required to complete a restructuring, failing to adequately monitor the company and the creditors’ committees or incurring liability as an insider or fiduciary of the company. In addition, involvement by the Registrant in a company’s reorganization proceedings could result in the imposition of restrictions limiting the Clients’ ability to liquidate their position in the issuer. Furthermore, reorganizations can be contentious and adversarial. It is by no means unusual for participants to use the threat of, as well as actual, litigation as a negotiating technique. The process can involve substantial legal, professional and administrative costs to the company itself and the Registrant’s Clients. In addition, restructurings are subject to unpredictable and lengthy delays, and, during the process, the company’s competitive position may erode, interest may not be current or accruing, key management may depart and/or the company may not be able to invest adequately. The Registrant anticipates that it and its Clients may be named as defendants in civil proceedings. The expense of defending against claims by third parties and paying any amounts pursuant to settlements or judgments would generally be borne by the applicable Clients. In certain cases, Clients’ priority rights may be affected or impaired by a bankruptcy process. The Registrant and/or its affiliates, on behalf of Clients, may elect to serve on creditors’ committees, official or unofficial, equity holders’ committees or other groups to ensure preservation or enhancement of Clients’ positions as creditors or equity holders. As a result, Clients may be restricted or prohibited under applicable law from transacting in investments in the relevant company. If the Registrant and/or its affiliates resigns from or does not participate in such committees or groups, the Clients may not realize the benefits, if any, of participation on such committees or groups.

In any reorganization or liquidation proceeding relating to a company in which the Registrant invests for a Client, such Client may lose its entire investment, may not show any return for a considerable period of time, or may be required to accept cash, securities or other instruments with a value less than the Client’s original investment. Under such circumstances, the returns generated from a Client’s investments may not compensate such Client adequately for the risks assumed.

Energy-Related Investments. Clients may invest in energy-industry assets and businesses, which are typically regulated to varying degrees, including restrictions imposed by environmental regulators. In addition, statutory and regulatory requirements may include those imposed by energy, zoning, land use, safety, labor and other regulatory or political authorities. It is possible that changes to applicable regulations or regulatory practice could have adverse consequences for Clients’ energy investments. Certain energy-industry assets and businesses may be subject to financing and other support from national, state and local governments and regulatory agencies. The elimination of, or reduction in, such financial and other support could have a material adverse effect on the relevant company’s financial condition or results of operation. Ordinary operation or the occurrence of an accident, with respect to an energy asset, could cause environmental damage, which may result in significant financial distress to such asset. Certain environmental laws and regulations may require that an owner or operator of an energy asset address prior environmental contamination, which could involve substantial costs. Companies may be exposed to substantial risk of loss from environmental claims or protests.

Renewable Energy. Clients may make investments in renewable energy projects. The market for renewable energy is emerging and rapidly evolving, and its future success is uncertain. If renewable energy technology proves unsuitable for widespread commercial deployment or if the demand for renewable energy products fails to develop sufficiently (including as a result of changes in market conditions, such as a decrease in the price of fossil fuels), Clients’ investments in renewable energy projects may be adversely affected. While renewable energy projects currently enjoy wide support from U.S. state and local governments and regulatory agencies, there is no assurance that such support will continue in the future and any reduction or elimination of governmental support will have an adverse effect. Renewable energy projects rely on incentives that support the sale of energy generated from renewable sources, including state adopted renewable portfolio standard programs, which vary among states, but generally require power suppliers to provide a minimum percentage or base amount of electricity from specified renewable energy sources for a given period of time. Software and Technology Related Investments. Clients may invest in portfolio companies whose performance may be highly correlated with their ability to successfully implement new technology and/or exploit existing technologies. The technology sector is challenged by various factors, including rapidly changing market conditions and participants, new competing products and services and improvements in existing products and services. There is no assurance that products or services sold by portfolio companies will not be rendered obsolete or adversely affected by competing products and services or other challenges. In the event that the technology sector declines or that portfolio companies are unable to utilize technology successfully and competitively, returns to Clients may decrease.

Infrastructure Related Investments. Clients may invest in the assets of infrastructure companies, which are susceptible to various factors that may negatively impact their businesses or operations, including costs associated with compliance with and changes in environmental, governmental and other regulations, rising interest costs in connection with capital construction and improvement programs, government budgetary constraints that impact publicly funded projects, the effects of general economic conditions throughout the world, surplus capacity and depletion concerns, increased competition from other providers of services, uncertainties regarding the availability of fuel and other natural resources at reasonable prices, the effects of energy conservation policies, unfavorable tax laws or accounting policies and high leverage. Infrastructure companies will also be affected by innovations in technology that could render the way in which a company delivers a product or service obsolete, significant changes to the number of ultimate end-users of a company’s products, inexperience with and potential losses resulting from a developing deregulatory environment, increased susceptibility to terrorist attacks and natural or man-made disasters and other natural risks (including earthquakes, floods, lightning, hurricanes, tsunamis and wind). Infrastructure companies also face operating risks, including the risk of fire, explosions, leaks, mining and drilling accidents or other catastrophic events.

Registered Closed-End Funds, Exchange-Traded Funds and CLOs. The Registrant may cause a Client to invest a portion of its assets in one or more registered closed-end funds, exchange-traded funds, or CLOs (including CLOs managed by the Registrant or its affiliates) or similar securities. When such investments are made, such Client (and, indirectly, any investor in such Client) will effectively be paying, in addition to the compensation payable to the Registrant, such Client’s proportionate share of any management fees or other compensation (including any performance- based compensation) charged by the manager of such registered closed-end fund, exchange-traded fund, CLO or similar security, as well as its pro rata portion of the expenses incurred by such entity. Event-Oriented Situations. The price offered for securities or other obligations of a company involved in an announced deal can generally represent a significant premium above the market price prior to the announcement. Furthermore, the difference between the price paid by the Clients for securities or other instruments of a company involved in an announced deal and the anticipated value to be received for such securities or other instruments upon consummation of the proposed transaction will often be very small. If the proposed transaction appears likely not to be consummated or, in fact, is not consummated or is delayed, the market price of the securities or other instruments will usually decline, perhaps by more than the Clients’ anticipated profit. Opportunistic/Macro Investing. Clients may invest on an opportunistic basis, seeking to take advantage of trends in the market. On occasion, the Registrant may identify trends in the market and seek to invest in such trends before the rest of the market, and then sell before a trend ends. Opportunistic investing can be very volatile and involve heavy short-term trading. Short-term trading can generate high trading costs and produce gains taxable at higher rates.

Use of Leverage. The Registrant may use leverage in its investment program, as agreed with the relevant Clients, including the use of borrowed funds and certain types of swaps, repurchase agreements, options, such as puts and calls, and warrants. Leverage strategies increase the risk of loss, potentially up to a loss of total commitment amount and profits. Leverage may be applied with respect to a Client portfolio as a whole or with respect to one or more investments, and the presence of such leverage will magnify the volatility of and substantially increase the risk profile of investments. To the extent the Registrant purchases securities and/or obligations with borrowed funds, net assets will tend to increase or decrease at a greater rate than if borrowed funds are not used. The interest costs associated with such borrowing will reduce Clients’ returns. If the interest expense on borrowings were to exceed the return on the investments made with borrowed funds, the use of leverage would result in a lower rate of return than if leverage was not used, magnifying the potential loss on amounts invested and therefore increasing the risks associated with such an investment. Lenders may, under the terms of financing arrangements put in place with them, have the right to withhold distributions of interest payments in respect of any or all leveraged investments for various reasons, including in the event that any such investment fails to perform as expected. Further, to the extent income received from investments is used to make payments under any financing arrangement, a Client and its investors may be allocated income, and, therefore, tax liability, in excess of cash received by them in distributions. Borrowings will typically be secured by Clients’ securities and other assets and/or by assignment of the obligations of the Client’s investors to make capital contributions to the Client. Under certain circumstances and pursuant to a Client’s constituent documents, assets may need to be liquidated or additional investor capital may need to be called to meet interest and principal payments on the borrowings. Under certain circumstances, the lender may demand an increase in the collateral that secures the Clients’ obligations and if the Clients were unable to provide additional collateral, the lender could liquidate assets held in the account to satisfy such Clients’ obligations to the lender. Liquidation in such manner could have extremely adverse consequences.

Use of Derivatives; Hedging Transactions. The Registrant will, from time to time, utilize a variety of financial instruments such as derivatives, swaps, caps and floors, options, futures, and forward contracts both for investment purposes and for risk management purposes, including to hedge against fluctuations in the relative values of its portfolio positions from changes in commodity prices, currency prices and market interest rates, and for speculative or financing purposes. Hedging against a decline in the values of the Registrant’s portfolio positions does not eliminate the possibility of fluctuations in the values of such positions or prevent losses if the values of such positions decline. However, such hedging can offset the decline in the value of such portfolio positions. Such hedging transactions may also limit the opportunity for gain if the values of the underlying portfolio positions should increase. Furthermore, there is a risk that the Registrant may not anticipate a particular risk so as to hedge against it or may choose not to hedge a known potential risk. Joint Ventures. The Registrant may cause Clients to co-invest with third parties through partnerships, joint ventures or other entities. In such cases, the existing management and board of directors of such companies may include representation of other financial investors with whom such Clients are not affiliated and whose interests may conflict with the interests of such Clients. In addition, Clients may in certain circumstances be liable for the actions of their third-party partners or co-venturers. Investments made with third parties in joint ventures or other entities also may involve carried interests and/or other fees payable to such third-party partners or co-venturers. Clients may not have control over these investments, may not have sole discretion over such investments and may have a limited ability to protect their positions therein. The Registrant generally expects that appropriate minority investor rights for Clients will be obtained to protect their interests to the extent possible. There can be no assurance that such minority investor rights will be available, however, or that such rights will provide sufficient protection of Client interests. The Registrant’s participation on behalf of Clients in a joint venture may impose an obligation on the Registrant to offer to the joint venture investment opportunities of which the Registrant becomes aware in the course of its other investment activities.

Investments in Platform Structures and Similar Entities and Related Conflicts of Interest. The Registrant may cause Clients to acquire full or partial passive or controlling ownership interests in an operating business (each, a “Platform”). An investment in a Platform may be with one or more third-party joint or co-investors, and the investment strategy may include engaging a third- party team to operate, service or otherwise manage the Platform. In some cases, Clients may make equity or debt investments in (and may act as a seed investor in) a third-party management team as part of the Platform investment. Any such third-party management teams may have little or no operating history upon which to judge future performance, little or negative cash flow, may employ or propose to employ new and/or untested technologies and products and may have personnel with limited experience working together, all of which will enhance the difficulty of evaluating these investment opportunities. If not already in place, such third-party management teams will need to implement and maintain accounting, legal and other administrative resources and will be subject to other substantial operational risks, including uncertain market acceptance of the Platform’s or management teams’ products and services, potential regulatory risks relating to new or untried and/or untested business models (if applicable) and/or products and services (to the extent they relate to regulated activities in the relevant jurisdiction), high levels of competition among similarly situated businesses, lower capitalization and less access to financial resources and the potential for rapid organizational or strategic change. Although a Client may provide a Platform and/or its management entity with capital (including seed capital) in connection with a Platform investment, depending on the terms of the investment, such Client may not have the right to participate in any residual or going concern value upon disposition of such Platform or any associated management entity. The associated management teams may provide various services to a Client in connection with such Platform’s investments, including sourcing, consulting, servicing, due diligence, underwriting and/or other similar services. Any fees (including any management fees and/or performance-based compensation paid to third party management teams), costs and expenses arising from or in connection with the discovery, evaluation, investigation, development, consummation, management and disposition of any potential or actual Platform investments will be considered expenses of the operating company and will, directly or indirectly, be borne by the Client. It is possible the Registrant may make an investment in the associated management entity. In that case, any fees earned by the associated management teams from the operating company, including management fees or performance-based compensation arrangements, will be evaluated on a case- by-case basis and the Registrant and its related general partner and/or advisory affiliates may determine, in their sole discretion, subject to Client constituent documents, not to reduce or offset advisory fees paid by the Client by the amount of any such fees or other compensation.

To the extent that the participation of a Client in a Platform investment that is otherwise suitable for such Client would cause the investment to become subject to requirements and/or restrictions of any applicable law, rule or regulation that could have an adverse impact on any or all participating investors in such Platform investment, such Client may be excluded from participating in such Platform investment. Furthermore, once established, a Platform may be structured as a closed-ended vehicle and act as the exclusive investment vehicle for Clients of the Registrant with respect to certain asset classes or investment opportunities that would otherwise be suitable for such Client. In such case, otherwise suitable investment opportunities may be allocated only to such Platform (including to any Clients participating in such Platform) and not to Clients whose investment activities commenced after the establishment of such Platform. Even if a Platform investment is structured as an open-ended vehicle, it may be determined that a new Client should not participate in such existing Platform investment, including if such participation could dilute or otherwise adversely impact other Clients’ participation in such Platform investment. Platform investments are generally illiquid in nature. See “Illiquid and Restricted Investments” for more information.

The Registrant’s acquisition, on behalf of its Clients, in Platform investments creates the potential for certain conflicts of interest. For example, the Registrant may cause Clients to invest in a Platform in which the Registrant or its affiliate has a direct or indirect economic interest, which may be a controlling interest, in which case the Registrant may have been incentivized to cause a Client to invest in such Platform partially because of such direct or indirect economic interest. To the extent that a Client invests in a Platform and the Registrant holds an equity interest solely in the management entity of such Platform, the Registrant will have a conflict of interest which could affect its decisions vis-à-vis the Platform and such Client. Additionally, the Registrant may cause a Client to invest in a Platform to make investments that the Client could otherwise have invested in directly where investing indirectly through such Platform results in more favorable expense treatment or other economic advantages for the Registrant and/or its affiliates.. In addition, the Registrant and its related general partner and/or advisory affiliates may have an incentive to arrange the purchase by a Client of assets (including loans backed by real estate, ships, airplanes and similar collateral) from a Platform or services from the associated management entity (thereby generating profits or fees for the Clients that have an interest in such Platform and/or its management entity). Finally, conflicts could arise if the associated management entity breaches its sales agreement, servicing agreement, consultancy arrangement and/or other similar arrangement with another Client or otherwise fails to perform its responsibilities adequately with respect to such Client, resulting in harm or damages to such Client. In such circumstances, the Registrant and its related general partner and/or advisory affiliates may have a conflict in determining whether to seek appropriate recourse for the affected Client, including through litigation. The Registrant and its related general partner and/or advisory affiliates intend to resolve all such conflicts using their good faith judgment, taking into account all factors they deem relevant in their sole discretion. Co-investments. In some cases, Clients or related investment entities may co-invest with third parties through partnerships, joint ventures or other entities. Investments may involve risks not present in investments where a co-investor is not involved, including the possibility that a co- investor may at any time have economic or business interests or goals that are inconsistent with those of the Clients, or may be in a position to take action(s) contrary to the investment objectives of the Clients investing in such investment. In addition, the Clients may in certain circumstances be liable for the actions of such co-investor.

In some cases, the Registrant may receive an investment opportunity first and present it to a co- investor. This would occur if the Registrant is offered an opportunity amount in excess of the aggregate amount it has determined is appropriate for its Clients (i.e., an overage allocation). The Registrant is not required to offer any co-investment opportunities to any specific investor or Client and co-investors may include, in the Registrant’s discretion, one or more investors in a Client, one or more Clients of the Registrant, affiliates of the Registrant (and/or their respective affiliates) and/or any other persons or entities who the Registrant believes may provide a strategic, sourcing or similar benefit to the Registrant or its Clients due to industry expertise or otherwise. Conversely, in some circumstances, the size of an investment opportunity otherwise available to any one Client may be less than it would otherwise have been if such opportunity had not been offered to a co- investor. Co-investors may not be subject to or otherwise be charged any management fees and/or performance fees or other performance compensation. The Registrant may be incentivized to provide co-investment opportunities to a specific party for any reason, including but not limited to encouraging a strategic or Client relationship, financial sophistication, ease and speed of investment decision-making, and/or advantageous fees. The Registrant may, in its discretion, choose to form an entity for third-party co-investments and, if so, such entity may itself be deemed a Client. A co- investor may choose to co-invest in an investment directly, through an entity formed by the Registrant or, if such investor is an existing separately managed account or fund-of-one, through its existing Client account. Clients may commit or initially fund an investment for a co-investor. There is a risk that a Client may be allocated a higher share of an investment than it would otherwise be allocated because a co-investor ultimately decides not to, or is unable to, participate in an investment. The Registrant will generally seek to ensure that participants in any co-investment opportunity, including Clients, invest on comparable economic terms to the extent determined appropriate; however, participation by any single Client in certain investments on comparable economic terms with other Clients and with third party co-investors may not be appropriate in all circumstances and a Client may participate in such investments on different and potentially less favorable economic terms than such parties if the Registrant deems such participation as being otherwise in the Client’s best interests (e.g., by allowing such Client to participate in an investment in which it would otherwise not have been able to participate due to, among other reasons, required minimum commitment amounts). Such parties may have interests or requirements that conflict with and adversely impact Clients (for example, with respect to liquidity requirements, available capital, the timing of acquisitions and dispositions and/or control rights). This may have an adverse impact on such Client. In order to facilitate an investment, the Registrant may, on behalf of one or more Clients, make (or commit to make) an investment with a view to selling a portion of such investment to co-investors or other persons prior to or within a brief period of time after making such investment. In such event, the applicable Client(s) will bear the risk that any or all of the excess portion of such investment may not be sold or may only be sold on unattractive terms and that, as a consequence, such Client(s) may hold a larger portion than expected in such investment or may realize lower than expected returns from such investment. In addition, if a co-investor chooses not to participate in an investment (or an investment is not ultimately consummated), and unless otherwise agreed with such co-investor, the Registrant’s Client(s) participating in such investment (or who would have participated had such investment been consummated) may bear the entire amount (including any amount otherwise allocable to any such co-investor) of any break-up fees or broken deal expenses and/or other fees, costs and expenses related to such investment.

Lender Liability and Equitable Subordination. In recent years, a number of judicial decisions in the United States have upheld the right of borrowers to sue lending institutions on the basis of various evolving legal theories (collectively termed, “lender liability”). Generally, lender liability is founded upon the premise that an institutional lender has violated a duty (whether implied or contractual) of good faith and fair dealing owed to a borrower or has assumed a degree of control over the borrower resulting in a creation of a fiduciary duty owed to the borrower or its other creditors or shareholders. In addition, under common law principles that in some cases form the basis for lender liability claims, if a lender or bondholder (i) intentionally takes an action that results in the undercapitalization of a borrower to the detriment of other creditors of such borrower, (ii) engages in other inequitable conduct to the detriment of such other creditors, (iii) engages in fraud with respect to, or makes misrepresentations to, such other creditors or (iv) uses its influence as a stockholder to dominate or control a borrower to the detriment of other creditors of such borrower, a court may elect to subordinate the claim of the offending lender or bondholder to the claims of the disadvantaged creditor or creditors, a remedy called “equitable subordination.” Clients could be subject to these risks. In addition, laws of non-U.S. jurisdictions may also impose liability upon lenders or bondholders under factual circumstances similar to those described above, with consequences that may or may not be analogous to those described above under U.S. federal and state laws.

Provision of Managerial Assistance. Clients may obtain rights to participate substantially in and to influence substantially the conduct of the management of the issuers in which the Registrant invests on their behalf. The Registrant may designate directors (and non-executive chairmen) to serve on the boards of directors of issuers. The designation of directors and other measures contemplated could expose the assets of such Clients to claims by an issuer, its security holders and its creditors. The exercise of control over a company imposes additional risks of liability for environmental damage, product defects, failure to supervise management, violation of governmental regulations and other types of liability which the limited liability characteristic of business operations usually ignores. If these liabilities were to occur, such Clients could suffer losses in its investments. While the Registrant intends to manage the Clients in a way that will minimize exposure to these risks, the possibility of successful claims cannot be precluded. Synthetic Securities. In addition to credit risks associated with holding below investment grade securities and obligations, Clients investing in synthetic instruments will usually have a contractual relationship only with the counterparty of such synthetic instruments, and not the issuer of the underlying or linked obligation (whether an equity, debt or other instrument). Clients generally will have no right to directly enforce compliance by the underlying or linked issuer, nor any rights of set-off against such issuer, nor have any voting rights with respect to the underlying or linked obligation. Clients will not benefit directly from the collateral supporting that obligation or have the benefit of the remedies that would normally be available to a holder of that obligation. If a Client enters into a derivative instrument whereby it agrees to receive the return of a security or financial instrument or a basket of securities or financial instruments it will typically contract to receive such returns for a predetermined period of time. During such period, the Client may not have the ability to increase or decrease its exposure. In addition, such customized derivative instruments can be highly illiquid and it is possible that the Client will not be able to terminate such derivative instruments prior to their expiration date or that the penalties associated with such a termination might impact the Client’s performance in a material adverse manner. In addition, in the event of insolvency of the counterparty to such a contract, Clients will be treated as general creditors of such counterparty. As a result, concentrations of synthetic instruments in any one counterparty subject these investments to an additional degree of risk with respect to defaults by the counterparty as well as by the issuer of the underlying or linked obligation.

Short Selling. Short selling creates the risk of a theoretically unlimited loss, in that the price of the underlying security could theoretically increase without limit, thus increasing the cost to the investor of buying those securities to cover the short position. There can be no assurance that the securities necessary to cover a short position will be available for purchase. Additionally, certain market participants could accumulate such securities in a “short squeeze,” which would reduce the available supply of, and thus increase the cost of, such securities. Purchasing securities to close out the short position can itself cause the price of the securities to rise further, thereby exacerbating the loss.

In response to dislocations in the financial services industry and other market events, the SEC and many European securities regulators, including the United Kingdom’s Financial Conduct Authority implemented certain prohibitions and disclosure requirements on short selling of securities. In Europe, the European Short Selling Regulation (No 236/2012) came into force in 2012 and restricts uncovered short sales of shares and European sovereign debt instruments, prohibits the entry into uncovered sovereign credit default swaps and requires investors to notify the relevant competent authority of any net short positions in European sovereign debt instruments and shares admitted to a trading venue in the European Union. Limitations on the short selling of securities could interfere with the ability of a Client to execute certain aspects of its investment strategies, including its ability to hedge certain exposures and execute transactions to implement its risk management guidelines.

Residential Loans. Residential loans are residential mortgage loans secured by real property and are obligations of the borrowers thereunder. Some, but not all, residential loans are government- guaranteed or privately insured. Residential loans may be prepaid at any time. Residential loans may be securitized and the securities issued in such securitization may be guaranteed or credit enhanced. Therefore, the value of the underlying collateral, the creditworthiness of the borrower, and the priority of the lien are each of great importance. A decrease in real estate or other prices relating to the underlying collateral may reduce the equity component in such real estate or other collateral and may result in higher loan-to-value ratios. A residential loan is directly exposed to losses resulting from default and foreclosure on the underlying collateral. The rate of defaults and size of losses on residential mortgage loans will be affected by a number of factors, including general economic conditions, the condition of the area where the related mortgaged property is located, geographic risks such as natural hazards, the borrower’s equity in the mortgaged property, the standards by which the loan was originated and the financial circumstances of the borrower. Residential loans include so-called “Jumbo” mortgage loans, which have original principal balances that exceed the maximum for residential loans imposed by government sponsored entities (e.g., Fannie Mae or Freddie Mac). In addition, adverse changes in the real estate market increase the probability of default, as the incentive of the borrower to retain equity in the property declines. Furthermore, many of the properties which will secure real estate loans originated or purchased by Clients may be suffering varying degrees of financial distress or may be located in economically distressed areas. If the fair market value of the collateral securing a residential loan falls below the remaining principal balance of the loan, the loan has greater risk of payment default as well as a risk that the net proceeds of any foreclosure will not cover the entire loan. If a residential mortgage loan is in default, the loan may need to be restructured, which may result in a write-down of the principal of the loan, or may result in foreclosure. The Registrant may find it necessary or desirable to foreclose on some if not many of the loans acquired. This foreclosure process may be lengthy and expensive. There is unlikely to be a liquid secondary market for these types of investments. The liquidation proceeds upon sale of such collateral may not satisfy the Client’s basis or outstanding balance of principal and interest on the loan, resulting in a loss to the Clients. Any costs or delays involved in the effectuation of a foreclosure of the loan or a liquidation of the underlying collateral will further reduce the proceeds and thus increase the loss. In addition, there can be no assurance as to the adequacy of the protection of the maintenance of the anticipated priority and perfection of the applicable security interests. Furthermore, claims may be asserted that might interfere with enforcement of the rights of Clients. In the event of a foreclosure, Clients may assume direct ownership of the underlying collateral. Furthermore, residential mortgage loans may be subject to various federal and state laws, public policies and principles of equity that protect consumers, which among other things may regulate interest rates and other charges, require certain disclosures, require licensing of originators, prohibit discriminatory lending practices, regulate the use of consumer credit information and regulate debt collection practices. Violation of certain provisions of these laws, public policies and principles may limit the servicer’s ability to collect all or part of the principal of or interest on a residential mortgage loan, entitle the borrower to a refund of amounts previou please register to get more info

The Registrant and its management persons have not been involved in any legal or disciplinary events in the past 10 years that the Registrant believes would be material to a Client’s or a prospective client’s evaluation of the Registrant’s advisory business or the integrity of its management or its management persons. please register to get more info

From time to time, certain of the Registrant’s employees may serve on various creditor committees or as directors of privately held or publicly traded companies in which Clients invest. Clients should be aware of the fact that receipt of material non-public information, whether through such positions or otherwise, could preclude the Registrant from effecting discretionary transactions on behalf of Clients in certain securities. The Registrant’s investment adviser affiliates include Oak Hill Special Opportunities Management, LLC (“OHSOM”). OHSOM is a joint venture management company formed in 2002 by the Registrant and Oak Hill Capital Management, LLC, an unaffiliated investment adviser, to provide investment advisory services for investments in financially distressed companies to certain private investment funds. These funds have concluded their investment period according to their terms. Additional affiliated investment advisors are set out in Part 1A of the Registrant’s Form ADV. For purposes of the Advisers Act, the Registrant exercises supervision and control over, and takes responsibility for the investment advice given by, its affiliates, and the Registrant considers all such affiliates’ clients to be Clients. Notwithstanding the foregoing, OHSOM is jointly supervised by the Registrant and Oak Hill Capital Management, LLC, which is not an affiliate of the Registrant. WSI OHA (H), LLC and WSI OHA (S), LLC, investment vehicles ultimately controlled by investment funds managed by Wafra Investment Advisory Group, Inc., are limited partners in the Registrant. please register to get more info

Personal Trading
The Registrant and/or its affiliates have multiple advisory, transactional, financial and other interests that may conflict with those of its Clients (and the investors therein). For example, the Registrant or an affiliate thereof may, subject to legal and fiduciary obligations, sponsor, form or manage additional investment vehicles in the future to pursue particular investment opportunities. The Registrant and/or its affiliates are not restricted from allocating investment opportunities to or forming other Clients or from engaging in other business activities, even though such activities may be in competition with existing Clients and/or may involve substantial time and resources of the Registrant and/or its affiliates. For each Client, there can be no assurance that the Registrant and/or its affiliates will resolve all conflicts of interest in a manner that is favorable to such Client.

Although neither the Registrant nor its affiliates are engaged by a Client to advise them as to the appropriateness of investing in future investment vehicles managed or sponsored by the Registrant, because of the Registrant’s or its affiliates’ relationship to those investment vehicles, should a Client invest, the Registrant could be considered, indirectly, to have recommended that investment to such Client.

The Registrant may own securities or obligations issued by companies in which Clients are invested. In that circumstance, conflicts may arise, as described in Investing on Behalf of Multiple Clients. In addition, the Registrant may cause Clients to invest in a security or an issuer (e.g., a pooled investment vehicle) in which the Registrant and/or a related person has a direct or indirect economic interest. In making such a decision, the Registrant may have been incentivized to cause Clients to invest in such security or issuer partially because of such direct or indirect economic interest therein. In addition, the Registrant and/or a related person may from time to time hold direct or indirect economic interests in companies (1) to whom the Registrant and/or its affiliates direct work for the benefit of one or more Clients, and for which the expense is payable by one or more Clients, (2) that are investors in a Client, and/or (3) that make investments that are within the investment mandates of the Registrant’s Clients. The Registrant manages any potential conflicts of interest. Certain of the related persons of the Registrant may hold interests in investment vehicles, including vehicles associated with Other Oak Hill Entities or Wafra Investment Advisory Group, Inc. From time to time, the Registrant may recommend or cause a Client to invest in an issuer that is related to such entities and/or which has a representative of the Other Oak Hill Entities (or their affiliates) or Wafra Investment Advisory Group, Inc. serving as an officer, director or advisor (or in a comparable position), or in a security made available to the Registrant by such entities. On occasion, the Registrant may be offered the opportunity to make such investments for Clients at a discount. Clients will not have the right to participate in any investment opportunity presented by or to or available to the Other Oak Hill Entities or Wafra Investment Advisory Group, Inc. The Registrant or a related person may purchase a security or other instruments issued by the same issuer as that held by a Client or recommended by the Registrant. Such purchases may be made through a co-investment vehicle.

In addition, where the Registrant or an affiliate of the Registrant serves as the general partner and/or investment advisor of a Client, the Registrant may be considered to be participating in transactions effected for those Clients. In connection with the risk retention rules, the Registrant and/or an affiliate thereof may be required to invest in and retain certain investment amounts in Affiliated CLOs, or to originate loan obligations for the benefit of Affiliated CLOs. The Registrant is not required to comply with these requirements with respect to its management of open-market CLOs in the United States , due to an appellate court ruling discussed above. See Methods of Analysis – Risk of Loss – Business Risks – Business and Regulatory herein for more information.

The Registrant has adopted a Code of Ethics and Personal Trading Policy. Among other things, this policy requires that employees act with integrity, place the interests of Clients above their own, disclose and mitigate actual and potential conflicts of interest and comply with applicable provisions of relevant securities laws. This policy also requires employees to pre-clear certain personal securities transactions, report certain personal securities transactions on at least a quarterly basis and provide the Registrant with a detailed summary of certain holdings annually.

A copy of the Registrant’s Code of Ethics and Personal Trading Policy shall be provided to any Client or qualified prospective client or investor upon request. please register to get more info

A. Best Execution

The Registrant’s selection of a broker-dealer to execute Client transactions is based primarily upon a broker-dealer’s ability to deliver best execution for the Registrant’s Clients for the relevant transactions. Factors that the Registrant may use in selecting a broker-dealer include the price per unit of the security or other instrument, a broker-dealer’s execution capabilities, commission rates, the value of advice and research reports, a broker-dealer’s ability to deliver prompt, accurate confirmations and on-time delivery of securities or other instruments, a broker-dealer’s ability to maintain confidentiality of the Registrant’s trading intentions, and any other factors that the Registrant determines to be relevant and appropriate. The commissions or transaction costs (including spreads) charged by any broker-dealer may be greater than the amount another firm might charge if the Registrant determines in good faith that the amount of such commission is reasonable in relation to the value of the brokerage services and research information provided by the broker-dealer. 1. Soft Dollars The Registrant receives advice and research reports from broker-dealers who may execute portfolio transactions. This research may be used to service one or more of the Registrant’s Clients. Research or brokerage services may include research reports on particular industries and companies, economic surveys and analyses, recommendations as to specific securities or other instruments, online quotations, news and research services, access to an electronic communication network for order entry and account information, participation in broker-dealer sponsored research conferences and other services providing lawful and appropriate assistance to the Registrant in the performance of its investment decision-making responsibilities on behalf of its Clients. If a particular broker- dealer’s research contributed to the investment research process, transactions may be directed to such broker-dealer, assuming such broker-dealer meets the aforementioned criteria. The Registrant does not formally commit to provide any particular level of commissions (or markups or markdowns) to broker-dealers who provide research services. The Registrant understands that the benefits received through its relationship with broker-dealers generally do not depend upon the amount of transactions directed to, or the amount of assets custodied by, such broker-dealers. Receipt of such research or other products or services may create an incentive for the Registrant to select or direct more business to particular broker-dealers. However, the Registrant will execute trades in accordance with the best execution principles outlined above. The Registrant also pays certain broker-dealers for research services provided, including in connection with compliance with the Markets in Financial Instruments Directive II in Europe.

2. Brokerage for Client Referrals

The Registrant may effect transactions or otherwise utilize broker-dealers that have, or whose affiliates have, referred or recommended investors to it (including via capital introduction programs) and broker-dealers or registered representatives of broker-dealers that personally or through related persons or family members have investments in funds managed by the Registrant. The foregoing may create an incentive for the Registrant to direct more business to these broker- dealers in order to generate future referrals or additional affiliated investments. However, the Registrant will execute trades in accordance with the best execution principles outlined above.

3. Directed Brokerage

The Registrant does not routinely recommend, request or require that Clients direct the Registrant to execute transactions through a specified broker-dealer. A separately managed account Client may seek to direct the brokerage or direct the terms of the trade for one or more trades for such account. In such a situation, the Registrant may be unable to achieve most favorable execution of the trades, with respect to the commissions (or spreads) or execution price. B. Cross Trades The Registrant may also arrange for a transaction between certain Clients, in which one Client buys a security or other obligation from, or sells a security or other obligation to, the account of another Client (“cross trades”). The Registrant receives no compensation (other than its management and performance-based fees), directly or indirectly, for effecting a particular cross trade. The Registrant engages in cross trades only after determining the trade is in the best interest of each participating Client and that the securities or other instruments are suitable and appropriate for each participating Client. The Registrant will generally not execute cross trades through a broker-dealer; however, in the instances when a broker-dealer is used, the Registrant seeks to ensure that the compensation paid to the broker-dealer to execute these types of transactions is reasonable and commensurate with the level of services being provided. Notwithstanding the foregoing, two or more separately managed account Clients may specifically direct the execution of one or more specific cross trades between such accounts, where such Clients are represented by a single entity in their interactions with the Registrant.

The Registrant may arrange cross trades at its discretion. Cross trades do not require Client consent, unless otherwise set forth in the Client investment advisory agreements and/or other constituent documents. For pooled funds or certain single investor mandates, the Registrant may be authorized to appoint a committee that has the ability to approve or disapprove certain related party transactions and certain other transactions and matters involving potential conflicts of interest that the Registrant deems to be material. Such committee may approve of such transactions prior to or contemporaneously with, or ratify such transactions subsequent to, the consummation of such transactions, and the relevant Clients’ investors and the Client will be bound by the decisions of such committee. In addition, from time to time, the Registrant may cross a security or obligation that was originated by a selling Client. In the event of such a cross trade in respect of an originated investment, the price paid by the applicable Client in connection with such trade will be based on the fair value of the applicable securities or obligations as determined by the Registrant in accordance with its then-current Cross Trade Policy, and then, as appropriate, will generally be reviewed by a third-party valuation consultant and confirmed to be reasonable. A heightened conflict of interest exists in circumstances where a Client’s investment strategy is or includes originating securities or obligations and then selling such securities or obligations primarily to other Clients (as well as third-party purchasers), and, accordingly, such strategy may, at least in part, be dependent on the existence and ability of other Clients (or third-party purchasers) to purchase such securities or obligations from the originating Client. In addition, the Registrant may be incentivized to sell a security or obligation originated by a Client to other Clients at a price that is no less than the fair market value at the time of origination. In addition, such trade in respect of an originated investment may be approved or disapproved by an independent client representative or similar person appointed to act on behalf of the applicable Client. The person(s) so selected to approve or disapprove any of the foregoing transactions may be exculpated and indemnified by the Client and their expenses may be reimbursed by the Client, in each case, subject to the investment advisory agreements and/or other constituent documents. C. Bunched Orders and Trade Allocation Orders for the same security or obligation entered on behalf of more than one eligible Client will generally be aggregated. Aggregating orders across Clients could, among other adverse consequences, affect the prices of and the availability of the securities or other obligations in which any Client invests. Generally, all Clients participating in each aggregated trade shall receive the average price and, subject to minimum ticket charges (if any), pay a pro rata portion of commissions and/or execution costs. If an aggregated order is filled across multiple trades at different prices, the Clients may (or may not) be allocated on an average price basis. The Registrant considers a number of factors when allocating trades among Clients. Initial allocation amounts for purchases among Clients is generally based on both (i) available cash and (ii) maximum issuer size. The available cash and maximum issuer size will be determined at the discretion of the Registrant, taking into consideration Client guidelines and other applicable factors (which generally include available cash, unfunded capital commitments, planned capital flows and, at the discretion of the Registrant, leverage and certain liquid investments).

Following the determination of the initial allocation, other factors may be considered by the Registrant, as it deems appropriate, in making final allocation determinations among Clients, including, but not limited to, investment objectives, the timing of capital inflows and outflows and anticipated capital commitments, subscriptions and distributions and/or withdrawals, liquidity, yield, transaction costs, transaction-specific minimum investment obligations, eligibility requirements, and/ or other statutory or contractual restrictions or obligations, portfolio diversification, relative market or industry exposure, tax efficiencies and potential adverse tax consequences, regulatory, policy and/or other restrictions applicable to participating Clients and/or to their investors, the avoidance of odd lots or a de minimis allocation to one or more of the participating Clients, the risk profile of an investment opportunity and the applicable Clients, the type of asset (e.g., loan versus equity), the capital available for the investment opportunity, and any other factors similar to the foregoing or any other considerations deemed relevant by the Registrant. The Registrant in certain situations will adjust trade allocations in cases where it is limited in its ability to allocate across all Clients. Subsequent purchases of an investment may be allocated based on the relative existing positions in such investment among Clients. For trades less than or equal to $10 million market value (or, for assets denominated in euro or sterling, €10,000,000 or £10,000,000, respectively), the Registrant may allocate to one or more Clients in a fair and equitable manner, as determined by the Registrant in good faith. The Registrant considers ongoing transaction costs and liquidity considerations for small lot sizes (e.g., the Registrant will take into account assignment costs that materially affect the cost to transact).

Based on the foregoing investment allocation methodology, a Client with higher available cash than a similarly sized or even larger sized Client will, if the maximum issuer size is equal, have a higher initial allocation percentage to an investment. Also, a Client with a larger maximum issuer size than a similarly sized or even larger size Client will, if the amount of available cash is equal, have a higher initial allocation percentage to an investment. The outcome of any allocation determination by the Registrant and its affiliates may result in the allocation of all or none of an investment opportunity to a Client. There can be no assurance that a Client will have an opportunity to participate in certain investments that fall within the Client’s investment objectives. The Registrant’s Trade Allocation Policies and Procedures may be amended by the Registrant at any time at its discretion. Furthermore, the Registrant’s Clients may invest in certain investment strategies, and then the Registrant may subsequently offer Clients the same or similar investment strategies through stand- alone vehicles, which may serve as primary or exclusive vehicles for such investment strategies. Any opportunity to invest in such a stand-alone vehicle will be considered for all Clients who invested previously in such investment strategies, in accordance with the Registrant’s Trade Allocation Policies and Procedures, as described above, and taking into account the relevant factors, including the length of the investment period and any applicable post-investment period term of each Client. As a result, a Client that is approaching the end of its investment period may not be allocated investment opportunities that have longer investment time horizons or that are more illiquid, even if such opportunity is otherwise an eligible investment. A Client whose investment activities commenced after the establishment of such stand-alone vehicle may not be able to participate in such stand-alone vehicle, if it is a closed-ended vehicle, or the Registrant determines it could dilute or adversely impact the existing Clients in such vehicle.

In some cases, management fees are based on invested capital (and not on cash or committed capital), and the Registrant could be incentivized to favor allocations to such Clients, to use leverage (if permitted) for such Clients in order to ramp them more quickly, and to hold onto investments longer in order to continue to earn management fees. Similarly, in the case of Clients that pay management fees solely based on called capital, the Registrant could be incentivized to call capital early and to favor allocations to such Clients.

With respect to the BDC, the 40 Act prohibits certain “joint” or “principal” transactions between the BDC and certain affiliates of the BDC, including certain Clients of the Registrant. Such prohibited transactions may include investments in the same portfolio investment (whether at the same or different times) or the BDC buying or selling any security directly from or to another Client of the Registrant (or under certain circumstances, from or to a portfolio company of such Client). Despite compliance with the 40 Act, potential conflicts of interest may arise in the portfolio holdings held by the BDC and other Clients. These prohibitions may limit the scope of investment opportunities that would otherwise be available to the BDC and other Clients.

D. Standard of Care and Trade Errors

In general, Client investment advisory agreements and/or other constituent documents provide that (i) the Registrant, affiliates of the Registrant and their respective affiliates, officers, directors, employees, direct or indirect partners, managers, trustees, members, shareholders, agents and/or legal representatives, (ii) any person or entity (as applicable) who serves at the request of the Registrant on behalf of a Client as an officer, director, employee, direct or indirect partner, manager, trustee, member, shareholder, agent and/or legal representative of any other person or entity (as applicable), including, without limitation, any alternative investment vehicle or any issuer, (iii) any controlling person, assignee or successor of any of the foregoing, (iv) any employee of a Client (each of the foregoing clauses (i)-(iv), a “Protected Person”) and (v) any advisory committee member of a Client will not be liable in damages or otherwise to a Client or to any investor therein for any act or omission by it in connection with such Client’s activities, except for any liability that resulted from such Protected Person’s own gross negligence, actual fraud or willful misconduct (or, with respect to an advisory committee member of a Client, such advisory committee member’s own fraud or willful misconduct), unless otherwise agreed to in the investment advisory agreements and/or other constituent documents or as required by applicable law, provided that any exculpation or indemnification provision(s) in a Client’s investment advisory agreement and/or other constituent documents will not be construed to provide for the exculpation or indemnification of any Protected Person for any liability (including liability under U.S. federal securities laws which, under certain circumstances, impose liability even on persons that act in good faith), claims, damages or losses to the extent (but only to the extent) that such liability, claims, damages or losses may not be waived, modified or limited under applicable law, but will be construed so as to effectuate such provisions to the fullest extent permitted by law. Additionally, Client investment advisory agreements and/or other constituent documents generally provide that a Protected Person will not be liable for losses due to the negligence of brokers or other agents of the applicable Client unless such Protected Person was responsible for the selection of such broker or other agent and such Protected Person acted in such selection with gross negligence, actual fraud or willful misconduct. Subject to the investment advisory agreements and/or other constituent documents of a Client, this standard of care will result in a Client bearing the costs of any trade errors committed by a Protected Person, so long as the errors do not evidence gross negligence, actual fraud or willful misconduct. Examples of trade errors that may be committed by investment advisers include executing a purchase instead of a sale (or vice versa), marking a short sale as a long sale, purchasing or selling a security or other instrument in the incorrect amount, or purchasing or selling the wrong security or other instrument. Although a broker-dealer may choose to assume responsibility for a trade error loss caused by the Registrant, the Registrant is prohibited from obtaining a broker-dealer’s agreement to do so in exchange for the Registrant’s promise to direct future commissions to such broker-dealer. please register to get more info

Clients are reviewed by the relevant Portfolio Manager(s) who are responsible for the strategies applicable to each Client, and other appropriate investment, operations, legal and compliance and accounting personnel on a regular basis. Matters reviewed include the specific investments held by each Client, the percentage of assets in various types of asset classes, the financial and regulatory reporting relating to investments, the relative and absolute performance of each Client account and liquidity, leverage and counterparty exposure of each Client account.

With respect to the pooled funds and CLOs for which the Registrant serves as general partner and/or investment adviser, the Registrant may provide regular reports to investors invested in such Clients, as specified in the applicable investment advisory agreement and/or other constituent documents.

For audited funds (other than as described below), the Registrant or the administrator delivers to each investor therein audited financial statements of such fund typically within 90 or 120 days of the conclusion of such fund’s fiscal year-end, as well as an audited balance sheet of such fund, a statement of net income or net loss for such fiscal year, a statement of cash flows, a statement of each investor’s capital account and the amount of each investor’s share in such fund’s taxable income or loss for each such year. In addition, for some funds, within 30 days of the end of each month, each investor therein receives an unaudited statement of such investor’s investment in such fund and changes thereto for the month. Also, for some funds, within 45 to 60 days of the end of each of the first three quarters of each fiscal year, each investor therein receives an unaudited statement of such investor’s investment in the fund and changes thereto for the quarter. For “cash flow” CLOs, the trustee delivers monthly reports to each investor therein detailing compliance with covenants specified by the applicable indenture and related documents. Further, the issuer delivers information to each investor such that it can determine its respective share of taxable income or loss for each fiscal year. In addition, the Registrant may also deliver periodic reports describing significant events and providing performance results, as required by the investment advisory agreement and/or other constituent documents of the applicable CLO. With respect to each separately managed account for which the Registrant serves as the investment adviser, the Registrant delivers to each Client monthly, quarterly and/or annual performance reports, as applicable, including information relating to the trading activity in the account during such period and the holdings of the account at the applicable reporting date.

In addition to the foregoing reports and statements, the Registrant may also enter into side letter arrangements that provide for additional transparency for certain Clients (and investors therein).

For each Client, the Registrant will not assign (as that term is defined under the Advisers Act) its investment advisory contract with such Client without the prior written consent of such Client, other than to an affiliate of the Registrant. please register to get more info

The Registrant may, from time to time, agree to compensate certain financial institutions and other placement agents and solicitors for helping the Registrant raise capital. Such placement agents and solicitors may also provide other services to Clients, for which they may be compensated.

Certain unaffiliated third parties may refer Clients to the Registrant, or refer investors to fund Clients sponsored or managed by the Registrant. The Registrant does not compensate such unaffiliated third parties separately for any referrals, absent a placement agent, solicitation or other similar arrangement. Such referring third parties may have other business or personal relationships with the Registrant and/or its affiliates, such as being invested in the Registrant’s fund Clients, being sources of investment opportunities for the Registrant, or providing other services to the Registrant. In addition, certain portfolio companies may make discounts available to the Registrant and its employees. please register to get more info

Client funds and securities are held by unaffiliated broker-dealers or banks, to the extent required; however, the Registrant may have access to Client custody accounts, as authorized pursuant to an investment advisory agreement or because an affiliate of the Registrant serves as the general partner of a fund Client or a related special purpose vehicle (together, “Investment Entities”). Investment Entity Clients may be subject to an annual audit; if so, the audited financial statements are distributed to each investor in the relevant Investment Entity Clients. The audited financial statements will be prepared in accordance with generally accepted accounting principles and distributed within 90 or 120 days (as applicable) of the Investment Entity Client’s fiscal year end. For Investment Entity Clients not subject to an annual audit and separately managed account Clients for which the Registrant is deemed to have custody, a qualified independent accounting firm will conduct an annual surprise examination on the holdings over which the Registrant has custody, and the investors in such Investment Entity Clients and such separately managed account Clients receive quarterly account statements from the custodians with regard to such holdings. Clients that receive account statements directly from a custodian should carefully review these account statements. The Registrant generally does not act as custodian or otherwise take or retain possession, custody, title or ownership of holdings of separately managed account Clients. In such cases, the Registrant is not authorized to receive any Client assets and, notwithstanding anything in the Client investment advisory agreement, the custody agreement(s) and/or other constituent documents to the contrary (including any authority granted to the Registrant pursuant to such documents), is not deemed to maintain custody of such Client’s assets, as the term “custody” is defined in Rule 206(4)-2 under the Advisers Act. please register to get more info

The Registrant generally has discretionary authority to determine, without obtaining specific consent from Clients, the instruments and amount to be bought or sold on behalf of a Client. Any limitations on authority are included in a Client’s investment advisory agreement and/or other constituent documents (including any side letters that are executed with investors).

The Registrant and the general partners of, and investors in, certain funds managed by the Registrant are authorized, without the approval of any investor, to enter into side letters or similar written agreements with investors that have the effect of establishing rights under, or altering or supplementing the terms of, the investment advisory agreement and/or other constituent documents. Rights that may be established and terms that may be altered or supplemented include, without limitation, rights and terms relating to greater portfolio transparency, fee waivers or reductions, minimum investment amounts, reports and other information, confidentiality, timing of funding, expenses, distributions, legal or regulatory requirements (e.g., tax and ERISA), advisory committee membership, as applicable, and other more favorable investment terms such as withdrawal rights. To the extent that compliance with any of the provisions of any side letters or similar written agreements would cause the Registrant and/or its affiliates to violate their respective fiduciary duties or obligations or to violate any applicable laws, any non-compliance with any such provision will not be deemed to be a breach of such written agreements. please register to get more info

The Registrant has implemented written policies and procedures governing voting Client proxies (the “Proxy Voting Policy”). When agreed upon with a Client, the Registrant will be responsible for voting Client proxies relating to equity securities. Pursuant to the Proxy Voting Policy, the Registrant is to vote Client proxies in the interest of maximizing shareholder value, or in certain cases, pursuant to written proxy voting guidelines of such Client. The Registrant generally maintains voting discretion with respect to Client proxies, subject to the applicable investment advisory agreement and/or other Client constituent documents. The appropriate investment professional of the Registrant assigned to such proxy vote, as well as applicable Partners, must disclose to the Compliance Group, as well as the applicable operations manager, whether such individuals are aware of any potential conflicts of interest related to the specific proxy they are voting. All material conflicts of interest will be addressed in a manner deemed appropriate by the Registrant, acting in good faith. The Registrant maintains a record of all proxy votes cast on behalf of Clients. Clients may contact the Registrant for a copy of the Proxy Voting Policy or information with respect to a specific proxy vote. please register to get more info

The Registrant has never filed for bankruptcy and is not aware of any financial condition that is expected to affect its ability to meet the Registrant’s contractual commitments to its Clients. please register to get more info