AB 2020 Form 10-K

Alternative 6 Additional Assumptions • Investment income (including interest, dividends, fees, etc.) = 3.00% • PIFNII (investment income – (management fee + other expenses)) = 2.40% PIFNII exceeds 8% Hurdle Rate, but is less than the 8% Catch-up Cap. See detailed formula in Alternative 2. Income Based Fee = (100% × (1.67% – 1.50%)) + (10.0% × (1.94% – 1.67%)) + (100% × (2.06% – 1.94%)) + (15.0% × (2.35% – 2.06%)) + (100% × (2.40% – 2.35%)) = 0.17 + (10.0% × 0.27%) + (100% × 0.12%) + (15% × 0.29%) + (100% × 0.05%) = 0.17% + 0.03% + 0.11% + 0.04% + 0.05% = 0.40% Alternative 7 Additional Assumptions • Investment income (including interest, dividends, fees, etc.) = 3.20% • PIFNII (investment income – (management fee + other expenses)) = 2.60% PIFNII exceeds 8% Hurdle Rate, but is less than the 8% Catch-up Cap. See detailed formula in Alternative 2. Income Based Fee = (100% × (1.67% – 1.50%)) + (10.0% × (1.94% – 1.67%)) + (100% × (2.06% – 1.94%)) + (15.0% × (2.35% – 2.06%)) + (100% × (2.50% – 2.35%)) + (20% × (2.60% – 2.50%)) = 0.17% + (10.0% × 0.27%) + (100% × 0.12%) + (15% × 0.29%) + (100% × 0.15%) + (20.0% × 0.10%) = 0.17% + 0.03% + 0.11% + 0.04% + 0.15% + 0.02% = 0.52% Example 2—Capital Gains Incentive Fee: Alternative 1: Assumptions • Year 1: $20 million investment made in Company A (“Investment A”), and $30 million investment made in Company B (“Investment B”) • Year 2: Investment A is sold for $50 million and fair value (“FV”) of Investment B determined to be $32 million • Year 3: FV of Investment B determined to be $25 million • Year 4: Investment B sold for $31 million The capital gains incentive fee, if any, would be: • Year 1: None (No sales transactions) • Year 2: $6 million (20.0% multiplied by $30 million realized capital gains on sale of Investment A) • Year 3: None; $5 million (20.0% multiplied by ($30 million realized cumulative capital gains less $5 million cumulative capital depreciation)) less $6 million (previous Capital Gains Fee paid in Year 2) 10