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18.9. Fee Incentive Risk

In addition to receiving a Management Fee, the Manager may also receive a Performance Fee based on the appreciation in the value of the Investment Compartment’s assets. Accordingly, the Performance Fee will increase with regard to unrealized appreciation as well as realized gains. A Performance Fee may be paid on unrealized gains which may subsequently never be realized. The Performance Fee may create an incentive for the Manager to make investments for an Investment Compartment which are riskier than would be the case in the absence of such a fee.