AB 2020 Form 10-K

• Year 4: $200,000; $6.2 million (20.0% multiplied by $31 million cumulative realized capital gains) less $6 million (Capital Gains Fee paid in Year 2) Alternative 2 Assumptions • Year 1: $20 million investment made in Company A (“Investment A”), $30 million investment made in Company B (“Investment B”) and $25 million investment made in Company C (“Investment C”) • Year 2: Investment A sold for $50 million, FV of Investment B determined to be $25 million and FV of Investment C determined to be $25 million • Year 3: FV of Investment B determined to be $27 million and Investment C sold for $30 million • Year 4: FV of Investment B determined to be $35 million • Year 5: Investment B sold for $20 million The capital gains incentive fee, if any, would be: • Year 1: None (No sales transactions) • Year 2: $5.00 million (20.0% multiplied by $25 million ($30 million realized capital gains on Investment A less $5 million unrealized capital depreciation on Investment B)) • Year 3: $1.40 million ($6.4 million (20.0% multiplied by $32 million ($35 million cumulative realized capital gains less $3 million unrealized capital depreciation)) less $5.00 million (Capital Gains Fee paid in Year 2)) • Year 4: None (No sales transactions) • Year 5: None ($5.00 million (20.0% multiplied by $25 million (cumulative realized capital gains of $35 million less realized capital losses of $10 million)) less $6.40 million (cumulative Capital Gains Fee paid in Year 2 and Year 3)) Example 3—Deferral of Cash Payment of Incentive Fees: Assumptions • Year 1: $20 million investment made in Company A (“Investment A”) • Year 2, Quarter 4: Fair value (“FV”) of Investment A determined to be $19 million • Net Assets for the 2 year period = $20mm (1) Period Hurdle Rate Management Fee Other Expenses Investment Income Pre- Incentive Fee Net Investment Income Income- Based Fee (2) Year 1, Quarter 1 1.5% 0.38% 0.22% 2.80% 2.20% 0.33% Year 1, Quarter 2 1.5% 0.38% 0.22% 2.80% 2.20% 0.33% Year 1, Quarter 3 1.5% 0.38% 0.22% 2.80% 2.20% 0.33% Year 1, Quarter 4 1.5% 0.38% 0.22% 2.80% 2.20% 0.33% Year 2, Quarter 1 1.5% 0.38% 0.22% 2.80% 2.20% 0.33% Year 2, Quarter 2 1.5% 0.38% 0.22% 2.80% 2.20% 0.33% Year 2, Quarter 3 1.5% 0.38% 0.22% 2.80% 2.20% 0.33% Year 2, Quarter 4 1.5% 0.38% 0.22% 2.80% 2.20% 0.33% Most recent four full fiscal quarter period ending Year 2, Quarter 4: a) PIFNII as a return on net assets = 2.20% * 4 = 8.8% b) Realized capital gain/(loss) = zero c) Unrealized capital appreciation/(depreciation) = ($1mm), as a return on net assets = (5%) 11