Exhibit 99.3

KAYNE ANDERSON CAPITAL ADVISORS, L.P. AND SUBSIDIARIES

Consolidated Statement of Financial Condition

(Unaudited)

The accompanying notes are an integral part of these unaudited interim consolidated financial statements.

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KAYNE ANDERSON CAPITAL ADVISORS, L.P. AND SUBSIDIARIES

Consolidated Statement of Operations

(Unaudited)

(1)         See accompanying note 11.

The accompanying notes are an integral part of these unaudited interim consolidated financial statements.

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KAYNE ANDERSON CAPITAL ADVISORS, L.P. AND SUBSIDIARIES

Consolidated Statement of Changes in Partners’ Capital and Redeemable Non-controlling Interests

(Unaudited)

(1)         See accompanying note 2.

(2)         Included in equity-based compensation charges is a reallocation of equity in the amount of $7.3 million from non-controlling interest in subsidiaries to partners’ capital in KACALP resulting from the application of liquidation preferences in KA Fund Advisors, LLC.

The accompanying notes are an integral part of these unaudited interim consolidated financial statements

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KAYNE ANDERSON CAPITAL ADVISORS, L.P. AND SUBSIDIARIES

Consolidated Statement of Cash Flows

(Unaudited)

The accompanying notes are an integral part of these unaudited interim consolidated financial statements

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KAYNE ANDERSON CAPITAL ADVISORS, L.P. AND SUBSIDIARIES

Consolidated Statement of Cash Flows (Continued)

(Unaudited)

The accompanying notes are an integral part of these unaudited interim consolidated financial statements

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KAYNE ANDERSON CAPITAL ADVISORS, L.P. AND SUBSIDIARIES

Notes to Interim Consolidated Financial Statements

(Unaudited)

1. ORGANIZATION

Kayne Anderson Capital Advisors, L.P. (“KACALP”), a limited partnership, together with its consolidated subsidiaries in which it holds a controlling financial interest (collectively, the “Partnership”) is a registered investment advisor with the Securities and Exchange Commission (“SEC”) pursuant to the Investment Advisers Act of 1940 and provides investment advisory and asset management services. These services are provided to publicly traded funds, limited partnerships and limited liability companies for which the Partnership is the general partner or managing member and to certain managed accounts. The investment advisory and asset management services include the management of a broad range of investment opportunities from energy marketable securities, energy closed-end funds, energy private equity, growth private equity, real estate private equity, middle market credit, municipal opportunities and separately managed accounts (collectively the “KACALP Funds” or the “Funds”).

KACALP’s partnership agreement continues until December 31, 2025, unless sooner terminated as provided for in the seventh amended and restated limited partnership agreement, as amended from time to time. KACALP is managed by Kayne Anderson Investment Management, Inc., its general partner. The liability of each limited partner is limited to the amount of capital contributions made by such limited partner.

2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) as contained within the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”). In the opinion of management, all adjustments considered necessary for a fair presentation of the Company’s unaudited, interim, consolidated financial statements have been included and are of a normal and recurring nature. The results of operations presented for the interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year.

Use of Estimates

The preparation of the interim consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the interim consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Principles of Consolidation

In February 2015, the FASB released Accounting Standards Update (“ASU”) 2015-02, Amendments to the Consolidation Analysis (the “Guidance” or “ASU 2015-02”). ASU 2015-02 amends the consolidation guidance of ASC 810; specifically, among other changes, ASU 2015-02 eliminates the deferral for certain investment companies from applying the amendments to ASC 810 required under ASU 2009-17 (FAS 167), and amends the factors that would cause a limited partnership to be considered a variable interest entity (“VIE”) or voting interest entity (“VOE”) and the criteria for

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KAYNE ANDERSON CAPITAL ADVISORS, L.P. AND SUBSIDIARIES

Notes to Interim Consolidated Financial Statements (Continued)

(Unaudited)

2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

assessing whether fees paid to a decision maker are considered a variable interest. The new standard is effective for public entities beginning January 1, 2016 and for non-public entities beginning January 1, 2017. Early adoption is permitted. The Partnership has elected to early adopt the standard as of January 1, 2013 and has applied the amendments retrospectively.

The Partnership’s interim consolidated financial statements include VIEs for which the Partnership is considered the primary beneficiary, and certain entities that are not considered VIEs in which the Partnership has a controlling financial interest. These entities include Kayne Partners Fund, L.P., Kayne Partners Fund III (Q.P.), L.P., Kayne Anderson Private Investors, L.P., Kayne Anderson Private Investors II, L.P., Kayne Event Driven Fund, L.P., KAFU Holdings, QP, Freshpet Investors, LLC, Kayne Anderson Real Estate Partners I, L.P., and Kayne Anderson Energy Fund IV, L.P. (collectively, the “Consolidated Funds”). Principally all intercompany balances and transactions related to the Consolidated Funds have been eliminated in consolidation.

The determination of whether or not to consolidate entities under U.S. GAAP requires significant judgment. These analyses are based on the assumptions of management, as well as judgments regarding significance and the design of the entities. To make these judgments, management performs and reviews an entity-by-entity analysis with consideration of 1) whether the Partnership has a variable interest in the entity and 2) whether the entity is a VIE.

For legal entities evaluated for consolidation, the Partnership must determine whether the interests that it holds and fees received from the Funds qualify as a variable interest. Fees received by the Partnership are not considered variable interests if: (i) the fees are compensation for services provided and are commensurate with the level of effort required to provide those services, (ii) the service arrangement includes only terms, conditions, or amounts that are customarily present in arrangements for similar services negotiated at arm’s length and (iii) the Partnership’s other economic interests in the VIE, held directly and indirectly through its related parties, as well as economic interests held by entities under common control, would not absorb more than an insignificant amount of the entity’s losses or receive more than an insignificant amount of the entity’s residual returns.

For those entities in which the Partnership has a variable interest, the Partnership performs an analysis to first determine whether the entity is a VIE that must be consolidated by its primary beneficiary. Performance of such analysis requires the exercise of judgment.

The primary beneficiary of a VIE is generally defined as the party who has a controlling financial interest in the VIE. The Partnership is deemed to have a controlling financial interest in a VIE if it has: (i) the power to direct the activities of the VIE that most significantly affect the VIE’s economic performance, and (ii) the obligation to absorb losses of the VIE or the right to receive returns from the VIE that could potentially be significant to the VIE. For purposes of evaluating (ii) above, fees paid to the Partnership are excluded if the fees are commensurate with the level of effort required to be performed and the arrangement includes only customary terms, conditions or amounts present in arrangements for similar services negotiated at arm’s length. The Partnership also evaluates its economic interests in the VIE held directly by it and indirectly through its related parties, as well as economic interests held by related parties under common control, where applicable. The primary beneficiary evaluation is generally performed qualitatively on the basis of all facts and circumstances.

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KAYNE ANDERSON CAPITAL ADVISORS, L.P. AND SUBSIDIARIES

Notes to Interim Consolidated Financial Statements (Continued)

(Unaudited)

2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

However, quantitative information may also be considered in the analysis, as appropriate. For certain Funds evaluated for consolidation, the Partnership determined that no individual party was considered to be the primary beneficiary; however, the Partnership and entities considered to be under common control with the Partnership demonstrated the characteristics of the primary beneficiary. For these instances, the Partnership must determine the party within this common control that is most closely associated to the respective legal entity being evaluated. In order to do so, the Partnership considered both qualitative and quantitative factors placing emphasis on the exposure to losses and decision making ability. Changes in the economic interests (either by the Partnership, related parties of the Partnership, or third parties) or amendments to the governing documents of the VIE could affect an entity’s status as a VIE or the determination of the primary beneficiary. The primary beneficiary evaluation is updated continuously. Refer to Note 6 for further discussion regarding VIEs.

For VOE’s, the Partnership consolidates the entity if it has a controlling financial interest. The Partnership has a controlling financial interest in a VOE if: (i) for legal entities other than limited partnerships, the Partnership owns a majority voting interest in the VOE or, for limited partnerships and similar entities, the Partnership owns a majority of the entity’s kick-out rights through voting limited partnership interests and (ii) non-controlling shareholders or partners do not hold substantive participating rights and no other conditions exist that would indicate that the Partnership does not control the entity. The Partnership does not consolidate any VOEs in which it serves as the general partner and/or the investment manager.

A previously consolidated fund managed by the Partnership, KAFU Holdings, LP (the “Deconsolidated Fund”), was deconsolidated during 2015 due to changes in facts and circumstances. The Deconsolidated Fund is considered a VIE as the holders of the equity investments at risk, as a group, lack the power to direct activities of the entity or absorb losses and receive returns that could be potentially significant to the Deconsolidated Fund. Prior to the quarter ended March 31, 2015, the Partnership was considered to be the primary beneficiary of the Deconsolidated Fund as the Partnership had the power to direct the most significant activities, had the obligation to absorb losses, and had the right to receive returns that could be potentially significant to the Deconsolidated Fund. During the quarter ended March 31, 2015, the Deconsolidated Fund transferred a significant amount of capital of the Partnership, in-kind, to KAFU Holdings QP, a newly formed fund in 2015. As a result, the Partnership was no longer considered the primary beneficiary as it no longer had the obligation to absorb losses or the right to receive returns that could be potentially significant to the Deconsolidated Fund. The Partnership recorded a decrease in non-controlling interests of Consolidated Funds of approximately $2,408.2 million to reflect the deconsolidation in the Consolidated Statement of Changes in Partners Capital and Redeemable Non-Controlling Interests. In addition, the effects of the deconsolidation are reflected as a non-cash supplemental disclosure within the Consolidated Statement of Cash Flows. The Partnership retained a total investment of approximately $1.1 million in the Deconsolidated Fund which are measured at fair value as of March 31, 2015. The retained investment in the Deconsolidated Fund is included in investments in limited partnerships and limited liability companies on the Consolidated Statement of Financial Condition.

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KAYNE ANDERSON CAPITAL ADVISORS, L.P. AND SUBSIDIARIES

Notes to Interim Consolidated Financial Statements (Continued)

(Unaudited)

2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Non-Controlling Interests in Consolidated Funds and Consolidated Subsidiaries

The interim consolidated financial statements reflect the assets, liabilities, investment income, expenses and cash flows of the Consolidated Funds and consolidated subsidiaries on a gross basis. The Partnership records non- controlling interests of the Consolidated Funds and consolidated subsidiaries to reflect the economic interests of the Consolidated Funds and consolidated subsidiaries held by investors other than interests attributable to KACALP, after consideration of contractual arrangements that govern allocations of income or loss. Considerations for contractual agreements also include amounts that would be paid in a hypothetical liquidation. Principally all of the management fee income and performance allocation earned by the Partnership from the Consolidated Funds are eliminated in consolidation. However, because the eliminated amounts are earned from and funded by the non-controlling interests, income allocated to the non-controlling interests has been reduced, and the income allocated to the Partnership has been increased by the amounts eliminated. The non-controlling interests within the Consolidated Statement of Financial Condition are comprised of: i) redeemable non- controlling interests reported outside of the permanent capital section when investors have the right to redeem their interest or the interests are redeemable upon the occurrence of an event that is not solely within the control of the Partnership, ii) equity attributable to non-controlling interests of the Consolidated Funds reported inside the permanent capital section when the investors do not have the right to redeem their interests, and iii) equity attributable to non-controlling interests of the consolidated subsidiaries, principally in affiliated investment advisors and asset managers. The non- controlling interests are adjusted for subscriptions and redemptions by investors and their pro-rata income or loss allocations from the respective Consolidated Funds and consolidated subsidiaries.

For Consolidated Funds in which the investors do not have the rights to redeem their interests, investors are generally not able to redeem their interests until the Consolidated Funds liquidate or are otherwise wound-up. Non-controlling interests related to redeemable Consolidated Funds are subject to monthly or quarterly redemptions by investors in these Consolidated Funds following the expiration of a specified period of time (typically one year). When redeemable amounts become contractually payable to investors, they are classified as a liability of the Consolidated Funds in the Consolidated Statement of Financial Condition.

Cash

The Partnership currently maintains principally all of its day-to-day operating cash balances with City National Bank, a major financial institution. At times, cash balances may be in excess of Federal Deposit Insurance Corporation Insurance limits.

Investments

The Partnership invests directly in exchange traded funds and master limited partnerships, and directly or indirectly invests in non-consolidated KACALP Funds as well as other limited liability companies and limited partnerships. U.S. GAAP permits entities to choose to measure certain eligible financial assets, financial liabilities and firm commitments at fair value (the “Fair Value Option”), on an instrument-by-instrument basis in relation to these investments by the Partnership. The election to use the Fair Value Option is available when an entity first recognizes a financial asset or financial

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KAYNE ANDERSON CAPITAL ADVISORS, L.P. AND SUBSIDIARIES

Notes to Interim Consolidated Financial Statements (Continued)

(Unaudited)

2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

liability or upon entering into a firm commitment. The Fair Value Option is irrevocable and requires changes in fair value to be recognized in earnings. Investments in exchange traded funds and master limited partnerships are included in investments in securities, at fair value on the Consolidated Statement of Financial Condition. Investments in non-consolidated KACALP Funds as well as other limited liability companies and limited partnerships are included within investments in limited partnerships and limited liability companies within the Consolidated Statement of Financial Condition. Related earnings are classified as investment income within the Consolidated Statement of Operations. For the Partnership’s investments in the KACALP Funds that are not consolidated, which would otherwise be accounted for under the equity method, the Fair Value Option has been elected. The election of the fair value option was deemed to most accurately reflect the nature of the investments in the non-consolidated KACALP Funds. In estimating the fair value for financial instruments for which the Fair Value Option has been elected, the Partnership uses the valuation methodologies as discussed in Note 3.

In May 2015, the FASB issued ASU 2015-07, Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent), an amendment to ASC Topic 820, Fair Value Measurements. The new guidance eliminates the requirement to categorize within the fair value hierarchy investments whose fair values are measured at net asset value (“NAV”) using the practical expedient in accordance with ASC Topic 820. Instead, entities will be required to disclose the fair values of such investments so that financial statement users can reconcile amounts reported in the fair value hierarchy table to the amounts reported on the statement of financial condition. The new guidance is effective for fiscal years beginning after December, 15 2015 for public entities and fiscal years beginning after December 15, 2016 for entities other than public business entities. Early adoption is permitted. The Partnership and the Consolidated Funds elected to early adopt and apply the new guidance retrospectively during the year ended December 31, 2014.

Revenue Recognition

The Partnership’s two primary sources of revenues are: (i) management fee revenue, and (ii) performance allocation, carried interest, and incentive fee (collectively “performance allocation”) revenue. These revenues are derived from the Partnership’s advisory and asset management services provided to the KACALP Funds.

Management Fee Revenue

The Partnership earns management fees from limited partners, members, or third parties in KACALP Funds. Management fees are based on contractual terms specified within the KACALP Funds agreements, investment management agreements, or consulting agreements. The Partnership earns management fees from separately managed accounts, limited partners, members, or third parties in each of the KACALP Funds at a fixed percentage of NAV, total assets, committed capital or invested capital, or in some cases, a fixed fee. Management fees are accrued as earned, and are calculated and paid monthly or quarterly depending on the individual agreements.

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KAYNE ANDERSON CAPITAL ADVISORS, L.P. AND SUBSIDIARIES

Notes to Interim Consolidated Financial Statements (Continued)

(Unaudited)

2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Performance Allocation Revenue

Performance allocation revenue is earned based on the performance of the KACALP Funds as defined in the respective investment management agreements and governing documents. Principally all performance allocation revenue is earned from affiliated Funds of the Partnership.

The Partnership follows Method 2 of ASC 605-20, Revenue Recognition (“ASC 605”) for revenue based on a formula. Under this method, the Partnership records revenue when it is entitled to performance-based revenue, subject to certain hurdles or benchmarks. Performance-based revenue is assessed as a percentage of the investment performance of the KACALP Funds. Performance allocation for any period is based upon an assumed liquidation of the KACALP Funds’ net assets on the reporting date, and distribution of the net proceeds in accordance with the KACALP Funds’ income allocation provisions. Performance allocation may be subject to reversal to the extent that the performance allocation recorded exceeds the amount due to the general partner or investment manager based on the KACALP Funds’ cumulative investment returns. The terms of performance allocation vary by fund structure and investment strategy. As a result, performance allocation earned in the reporting period is not indicative of any future period. Due to the inherent uncertainty, these estimated values may differ significantly from the values that would have been used had a ready market for the investments existed, and it is reasonably possible that the difference could be material.

For hedge fund style entities, performance allocation revenue is ultimately realized and distributed at the end of the fiscal year when crystalized (or other determination date as determined per the individual fund agreements). Crystallization of performance allocations is subject to loss recoupment and certain profit hurdle rates.

For private equity-style entities, performance allocation revenue is ultimately realized and distributed when: (i) an underlying investment is profitably disposed of, (ii) amounts contributed by investors are returned partially or in full, (iii) the investment fund’s cumulative returns are in excess of the preferred return. The Partnership’s decision to realize carry considers such factors as the level of embedded valuation gains, the portion of the fund invested, the portion of the fund returned to the limited partner investors, and the length of time the fund has been in carry, as well as other qualitative measures.

Unrealized performance allocations relate to the unrealized appreciation of the underlying investments of the KACALP Funds, calculated as if the KACALP Funds were liquidated and distributions, including performance allocation, were made to the general and limited partners subject to distribution preferences in accordance with the respective fund agreements. Unrealized performance allocations are subject to fair value changes in future periods.

For certain KACALP Funds, realized performance allocations are subject to reversal in the event that the KACALP Funds incur future losses. The reversal is limited to the extent of the cumulative performance allocations received to date. In all cases, each fund is considered separately in this regard, and for a given Fund, performance allocations can never be negative over the life of a Fund. If all of the existing investments of the KACALP Funds became worthless, the amount of cumulative performance allocations that had been received by the Partnership would be returned net of both the income taxes paid thereon and the tax benefit of the performance allocation returned (‘claw-back’).

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KAYNE ANDERSON CAPITAL ADVISORS, L.P. AND SUBSIDIARIES

Notes to Interim Consolidated Financial Statements (Continued)

(Unaudited)

2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

The Partnership may be liable to repay certain KACALP Funds for previously received performance allocations. If the KACALP Funds were liquidated at their then current fair values as of March 31, 2015, the amount of the claw-back would be approximately $12.9 million, net of taxes, related to the Kayne Anderson Mezzanine Partners Funds. For the quarter ended March 31, 2015, the Partnership accrued the potential claw-back amount as a reduction of performance allocation revenue. As of March 31, 2015, the claw-back amount is reported in performance allocation payable on the Consolidated Statement of Financial Condition. Under separate agreements with certain key employees of the Partnership, the realized performance allocations are shared between the Partnership and the key employees. As a result, the net exposure to the Partnership may be less than the total claw-back amount.

The management fees and performance allocation revenue from the Consolidated Funds are eliminated in consolidation, and therefore are not reflected as revenue in its interim consolidated financial statements. The Partnership’s share of the earnings from the Consolidated Funds is increased by the amount of the eliminated management fees and performance allocation revenue. Further, certain investments held by employees, directors and other related parties in the KACALP Funds are not subject to management fees or performance allocations.

Other Income and Interest Expense

Other income and interest expense is accrued as incurred. Other income is principally consulting fee revenue generated from debt related transactions. Interest expense is principally related to the outstanding revolving line of credit with City National Bank. Refer to Note 7 for further discussion regarding debt obligations.

Employee Compensation and Benefits

Employee compensation and benefits consists of (a) employee compensation including salary, guaranteed payments, and bonus payments, (b) equity-based compensation associated with grants of equity-based awards to senior management and other key employees, (c) profit sharing arrangements issued to senior management and other key employees to allow such individuals to participate in the earnings and cash flows of the Partnership and its respective businesses, (d) profit sharing arrangements issued to portfolio managers, deal team members, and other key employees that allow such individuals to participate in a share of the management fees and performance allocations and (e) fringe benefits, health and wellness, and other employee benefits.

As of March 31, 2015, KACALP has Class A, B, C and D equity units, with 1,000 units issued and outstanding for each class. Class A, B, C, and D units are considered to be substantive classes of equity interests in KACALP. The units allocated to employees are classified as equity awards under U.S. GAAP and equity-based compensation expense is recognized when the units were granted with a corresponding increase to equity. Compensation cost relating to the issuance of equity-based awards to senior management and other key employees is measured at fair value at the grant date, net of expected forfeitures (if any), and expensed over the vesting period on a straight-line basis. KACALP utilizes contractual cash flows in determining fair value at the grant date. The determination of contractual cash flows takes into consideration the preferred returns for each specific class of shares,

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KAYNE ANDERSON CAPITAL ADVISORS, L.P. AND SUBSIDIARIES

Notes to Interim Consolidated Financial Statements (Continued)

(Unaudited)

2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

revenue growth rates, and enterprise multiples. Discount rates are applied to the contractual cash flows to reflect the volatility of the Partnership’s earnings. A further discount is then applied to the net present value of the cash flows to reflect the lack of marketability and liquidity restrictions. Each of these factors is subject to significant judgment. Equity-based awards that do not require future service are expensed immediately. Distributions to holders of Class A, B, C and D units are considered as capital distributions and are included within the Consolidated Statement of Partners’ Capital.

As of March 31, 2015, KACALP has 1,000 Class E units issued and outstanding. Class E units granted to the employees of KACALP are not considered a substantive class of equity under U.S. GAAP and as such, no equity-based compensation expense is recognized when the units were granted. Class E units granted to employees are considered to be profit sharing arrangements under U.S. GAAP and as such, payments to the employees holding Class E units are included within compensation and benefits in the Consolidated Statement of Operations. These payments are accrued as compensation expense in the year in which the related income was earned and are paid out in the subsequent year.

As of March 31, 2015, the Partnership has Class A, B and C interests within KA Fund Advisors, LLC (“KAFA”), a consolidated subsidiary, with 1,000 units issued and outstanding for each class. The Class A, B, and C interests represent partnership allocations of income or losses based on specific allocation percentages of the holder. KACALP owns 1,000 units of the Class A interests, issued 1,000 units of Class B interests to key employees of KAFA, retained 560.9 units of the Class C interests, and issued the remaining 439.1 units of Class C to the same population of employees who were granted the Class B interests.

Class A and B interests are considered to be substantive equity and any interests issued to employees are classified as equity awards under U.S. GAAP. A portion of Class C interests are considered to be substantive classes of equity if employees receiving Class C interests are able to retain the vested interests upon termination. The remaining portion of Class C interests that employees are not able to retain upon termination is considered to be profit sharing arrangements under U.S. GAAP. The Class C interests that were considered to be substantive equity and allocated to employees are classified as equity-based compensation awards under U.S. GAAP. Equity-based compensation expense is recognized based on the grant date fair value, net of expected forfeitures (if any), and expensed over the vesting period on a straight-line basis. Valuation methodology for the KAFA equity units is consistent with the valuation methodology of units issued at the KACALP level.

The Partnership also has profit-sharing arrangements whereby certain employees and senior management are entitled to a share of the cash flow of their respective business, including management fees and performance allocations. The Partnership allocates management fee revenue, net of operating expenses, to portfolio managers as a way for the portfolio managers to participate in the earnings growth of their respective businesses. Management fee allocations are recognized as compensation expense in the performance year. Performance allocations are recognized as compensation expense in conjunction with the recognition of the related performance allocations revenue and until paid, are recognized as a component of compensation payable. Such compensation expense is subject to both positive and negative adjustments. Accordingly, upon any reversal of performance allocation revenue, including claw-back amounts, the related compensation expense is also reversed.

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KAYNE ANDERSON CAPITAL ADVISORS, L.P. AND SUBSIDIARIES

Notes to Interim Consolidated Financial Statements (Continued)

(Unaudited)

2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Property, Equipment, and Leasehold Improvements

Property, equipment, and leasehold improvements consists of furniture and fixtures, leasehold improvements, computer software, and corporate aircrafts that are recorded at cost, less accumulated depreciation and amortization within property, equipment and leasehold improvements, net of accumulated depreciation and amortization in the Consolidated Statement of Financial Condition. Depreciation and amortization of property, equipment, and leasehold improvements is calculated using the straight-line method over the assets’ estimated useful lives, which for leasehold improvements is the remaining lease term, and three to fifteen years for all other fixed assets. The Partnership evaluates fixed assets for impairment whenever events or changes in circumstances indicate that an asset’s carrying value may not be fully recovered. The costs associated with maintenance and repairs are recorded as other operating expenses when incurred.

Translation of Foreign Currency

Assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at the period/quarter-end exchange rates. Transactions denominated in foreign currencies, including purchases and sales of investments, and income and expenses, are translated into U.S. dollar amounts on the transaction date. Adjustments arising from foreign currency transactions are reflected in the Consolidated Statement of Operations.

The Partnership and the Consolidated Funds do not isolate the portion of the results of operations arising from the effect of changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of investments held. Such fluctuations for the Partnership are included in investment income and such fluctuations for the Consolidated Funds are included in net realized gain (loss) on investments of Consolidated Funds and net change in unrealized gain (loss) on investments in Consolidated Funds.

Income Taxes

The Partnership does not record a provision for the U.S. federal, state, or local taxes because the partners report their share of the Partnership’s income or loss on their income tax returns. The Partnership files an income tax return in the U.S. federal jurisdiction, and may file income tax returns in various U.S. states. The Partnership’s tax returns for tax years for which the applicable statutes of limitation have not expired are subject to examination by federal, state, local and foreign jurisdictions, where applicable. The Partnership has no examinations in progress.

In accordance with U.S. GAAP, the Partnership is required to determine whether its tax positions are more likely than not to be sustained upon examination by the applicable taxing authority, based on the technical merits of the position. The tax benefit recognized is measured at the largest amount of benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant taxing authorities. Based on its analysis, the Partnership has determined that it has not incurred any liability for unrecognized tax benefits as of March 31, 2015. The Partnership does not expect that its assessment regarding unrecognized tax benefits will materially change over the next twelve months. However, the Partnership’s conclusions may be subject to review and adjustment at a

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KAYNE ANDERSON CAPITAL ADVISORS, L.P. AND SUBSIDIARIES

Notes to Interim Consolidated Financial Statements (Continued)

(Unaudited)

2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

later date based on factors including, but not limited to, questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions, compliance with U.S. federal, U.S. state and foreign tax laws, and changes in the administrative practices and precedents of the relevant taxing authorities. Open tax years are those that are open for exam by the respective taxing authorities. The Company is no longer subject to U.S. tax examinations with respect to such returns for tax years before 2011. As of March 31, 2015, the Partnership did not have any unrecognized tax benefits.

Policies of Consolidated Funds

The Consolidated Funds qualify as investment companies for U.S. GAAP purposes. Pursuant to specialized accounting guidance for investment companies, and the retention of that guidance in the Partnership’s interim consolidated financial statements, the investments held by the Consolidated Funds are reported at their fair values.

As of March 31, 2015, the Consolidated Funds have adopted FASB Accounting Standards Update No. 2013-08 (“ASU 2013- 08”), entitled Financial Services—Investment Companies (Topic 946)—Amendments to the Scope, Measurement, and Disclosure Requirements, which clarifies the characteristics of an investment company and provides comprehensive guidance for assessing whether an entity is an investment company. The Consolidated Funds qualify as investment companies and follow the accounting and reporting requirements of ASU 2013-08. For the quarter ended March 31, 2015, the Consolidated Funds did not provide financial support or have any contractual obligations to provide financial support to any of its investees.

Investments, at Fair Value

Investments are held at fair value. See Note 3 for information regarding the valuation of these assets.

Investments in Securities and Securities Sold Short

Investments in securities and securities sold short that are freely tradable and are listed on major securities exchanges are generally valued at their last reported sales price as of the valuation date. When no sale is reported on that date, the Consolidated Funds’ policies value securities held long at their last observed “bid” price, which reflects the highest price that the marketplace participants are willing to pay for an asset, and values securities sold short at their last reported “ask” price, which represent the lowest price that the marketplace participants are willing to accept for an asset. To the extent these securities are actively traded and valuation adjustments are not applied, they are categorized in Level I of the fair value hierarchy. Securities traded on inactive markets or valued by reference to similar instruments are generally categorized in Level II of the fair value hierarchy.

Cash and Cash Equivalents

The Consolidated Funds consider highly liquid, short-term interest-bearing instruments of sufficient credit quality with original maturities of three months or less, and other instruments readily convertible into cash, to be cash equivalents. At times, cash balances may be in excess of Federal Deposit

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KAYNE ANDERSON CAPITAL ADVISORS, L.P. AND SUBSIDIARIES

Notes to Interim Consolidated Financial Statements (Continued)

(Unaudited)

2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Insurance Corporation Insurance limits. Cash and cash equivalents held at Consolidated Funds represents cash that, although not legally restricted, is not available to support the general liquidity needs of the Partnership, as the use of such amounts is generally limited to the investment activities of the Consolidated Funds.

Due from/to Brokers

Amounts due from broker may be restricted to the extent that they serve as deposits for securities sold short. Amounts due to brokers represent margin borrowings that are collateralized by certain marketable securities and partners’ restricted pledged collateral as of March 31, 2015.

Derivative Instruments

The Consolidated Funds record their derivative activities at fair value. Gains and losses from derivative contracts are included in net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments of Consolidated Funds in the Consolidated Statement of Operations. For further information regarding the valuation of these instruments, see Note 4.

Income Taxes

The Consolidated Funds are generally not subject to U.S. federal and state income taxes and, consequently, no income tax provision has been made in the accompanying interim consolidated financial statements because individual investors are responsible for taxes on their proportionate share of the taxable income.

Kayne Anderson Real Estate Partners I, L.P. (“KAREP”) had established KAREP REIT, Inc. (“REIT”), a wholly-owned real estate investment trust, to invest in certain real estate entities. REIT is required to distribute at least 90% of its taxable income to shareholders and meet certain asset and income tests as well as certain other requirements. REIT will generally not be liable for federal and state income taxes, provided it satisfies the necessary requirements.

Income and Expense Recognition

Investment transactions are accounted for on a trade-date basis. Realized gains and losses from disposition of securities are generally determined using the highest-cost share first method. Dividends are recorded on the ex- dividend date and interest is recognized on the accrual basis. Dividends also include income and expense items generated from the cash distributions from master limited partnerships investments, held long or sold short, respectively. All expenses of operating the Consolidated Funds shall be borne by the Consolidated Funds and recorded on an accrual basis as incurred.

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Notes to Interim Consolidated Financial Statements (Continued)

(Unaudited)

2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

New Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (“ASU 2014 09”). ASU 2014-09 supersedes the revenue recognition requirements in ASC 605—Revenue Recognition (“ASC 605”) and most industry-specific guidance throughout the ASC. ASU 2014 09 is a comprehensive new revenue recognition standard for contracts with customers that will supersede most current revenue recognition guidance including industry- specific guidance. This standard contains principles that an entity will apply to determine the measurement of revenue and timing of when it is recognized. The entity will recognize revenue to reflect the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. The new standard is effective for public entities beginning December 15, 2017 and for non-public entities beginning December 15, 2018. Early application is permitted for annual reporting periods beginning after December 15, 2016, including interim periods. The standard permits the use of either the retrospective or cumulative effect transition method. The Partnership is currently evaluating the impact on its interim consolidated financial statements upon the adoption of this new standard.

In April 2015, the FASB issued ASU 2015-03 guidance simplifying the presentation of debt issuance costs. The amendments require that debt issuance costs related to recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the new guidance. The amendments are effective for annual reporting periods, including interim periods within those reporting periods, beginning after December 15, 2015, and early adoption is permitted. The guidance is to be applied on a retrospective basis and accounted for as a change in accounting principle. The Company is currently evaluating the impact of this guidance on its interim consolidated financial statements. The Partnership is currently evaluating the impact on its interim consolidated financial statements upon the adoption of this new guidance.

3. FAIR VALUE MEASUREMENTS

The Partnership follows the fair value measurement and disclosure guidance under U.S. GAAP, which establishes a hierarchical disclosure framework. This framework prioritizes and ranks the level of market price observability used in measuring investments at fair value. The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). Market price observability is affected by a number of factors, including the type of investment, the characteristics specific to the investment and the state of the marketplace including the existence and transparency of transactions between market participants. Investments with readily available active quoted prices or for which fair value can be measured from actively quoted prices in an orderly market generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. In all cases, an instrument’s level within the hierarchy is based upon the market pricing transparency of the instrument and does not necessarily correspond to the Partnership’s perceived risk or liquidity of the instrument.

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Notes to Interim Consolidated Financial Statements (Continued)

(Unaudited)

3. FAIR VALUE MEASUREMENTS (Continued)

Financial assets and liabilities measured at fair value are classified into one of the following categories:

·                  Level I—Quoted prices are available in active markets for identical investments as of the reporting date.

·                  Level II—Fair value is determined based on inputs other than quoted prices that are observable for the asset or liability either directly or indirectly as of the reporting date. This category may include inputs in markets that are not considered to be active.

·                  Level III—Fair value is determined based on inputs that are unobservable for the investment and includes situations where there is little, if any, market activity for the asset or liability. The inputs into the determination of fair value require significant management judgment or estimation and the Partnership may use models or other valuation methodologies to arrive at fair value.

Fair value is a market-based measure, based on assumptions of prices and inputs considered from the perspective of a market participant that are current as of the measurement date, rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, the Partnership and Consolidated Funds own assumptions are set to reflect those that market participants would use in pricing the asset or liability at the measurement date.

The availability of valuation techniques and availability of observable inputs can vary from security to security and is are affected by a wide variety of factors, including the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Because of the inherent uncertainty of valuation, those estimated values may be materially higher or lower than the values that would have been used had a ready market for the securities existed. Accordingly, the degree of judgment exercised by the Partnership and Consolidated Funds in determining fair value is greatest for securities categorized in Level III. In certain cases, the level in the fair value hierarchy which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement.

Corporate and Convertible Bonds

The fair value of corporate and convertible bonds is are estimated using recently executed transactions, market price quotations (where observable), bond spreads, or credit default swap spreads. The spread data used is for the same maturity as the bond. If the spread data does not reference the issuer, then data that references a comparable issuer is used. When observable price quotations are not available, fair value is determined based on cash flow models using yield curves, bond or single name credit default swap spreads, and recovery rates based on collateral values as key inputs. Corporate and convertible bonds are generally categorized in Level II of the fair value hierarchy when readily observable market inputs can be obtained. In instances where there is a lack of marketability or significant unobservable inputs, they are categorized in Level III of the fair value hierarchy.

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Notes to Interim Consolidated Financial Statements (Continued)

(Unaudited)

3. FAIR VALUE MEASUREMENTS (Continued)

Private Bank Debt

The fair value of bank debt is generally valued using recently executed transactions, market prices quotations (where observable), and market observable credit default swap levels. When quotations are unobservable, proprietary valuation models and default recovery analysis methods are employed. Private bank debt is categorized in Level II or III of the fair value hierarchy.

Investments in Private Operating Companies

The Consolidated Funds’ investments in private operating companies consist of membership interests in limited liability companies, direct private equity and debt investments, limited liability common and preferred units, promissory notes and warrants. The transaction price, excluding transaction costs, is typically the Consolidated Funds’ best estimate of fair value at inception. When evidence supports a change to the carrying value from the transaction price, adjustments are made to reflect expected exit values in the investment’s principal market under current market conditions. Ongoing reviews by the Consolidated Funds’ management are based on an assessment of trends in the performance of the underlying investment from the inception date through the most recent valuation date. These assessments typically incorporate valuation methodologies that consider the evaluation of arm’s length financing and sale transactions with third parties, an income approach reflecting a discounted cash flow analysis, and a market approach that includes a comparative analysis of acquisition multiples and pricing multiples generated by market participants. In certain instances, the Consolidated Funds may use multiple valuation methodologies for a particular investment and estimate its fair value based on a weighted average or a selected outcome within a range of multiple valuation results. These investments in private operating companies are generally included in Level III of the fair value hierarchy.

Equity investments valued using a market approach utilized valuation multiples times the annual Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”), or another performance metric such as revenues, net earnings or projected future revenues. The selected valuation multiple was estimated through a comparative analysis of the performance and characteristics of each investment within a range of comparable companies or transactions in the observable marketplace. The fair value of the Consolidated Funds’ investments is considered, on the whole, as a basket of related securities. Once management has estimated the underlying entities’ business enterprise value, a waterfall analysis of the entities’ capital structure is considered.

Investments in Oil and Gas Companies

The Consolidated Funds invest in oil and gas companies which are generally formed as limited liability companies or limited partnerships. The transaction prices, excluding transaction costs, of the underlying operating companies are typically the Consolidated Funds’ best estimate of fair value at inception. When evidence supports a change to the carrying value from the transaction price, adjustments are made to reflect expected exit values in the investments’ principal market under current market conditions.

Management determines an appropriate discount rate to apply to the cash flows from the oil and gas resources based on the nature and risks of the specific asset. Additionally, the Consolidated Funds’

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KAYNE ANDERSON CAPITAL ADVISORS, L.P. AND SUBSIDIARIES

Notes to Interim Consolidated Financial Statements (Continued)

(Unaudited)

3. FAIR VALUE MEASUREMENTS (Continued)

management assigns further probability-weighted discounts to proven, yet undeveloped properties. These investments are generally included in Level III of the fair value hierarchy.

Investment in Limited Partnership

KAFU Holdings, QP (“KAFU”), one of the Consolidated Funds, holds an investment in a limited partnership that consists of a direct private equity investment in Plains AAP, L.P., owned by Plains GP Holdings, L.P. (“PAGP”), a publically traded entity. KAFU gives value to its right to convert its private GP interest into shares of PAGP on a one-for-one basis at KAFU’s option. Since KAFU can convert on a one-for-one basis, KAFU uses the market price of PAGP to value these investments.

Investments in real estate entities

KAREP’s investments in real estate entities through REIT consist of membership and partnership interests in limited liability companies and limited partnerships, of which certain investments are made directly through REIT. The transaction price, excluding transaction costs, is typically KAREP’s best estimate of fair value at inception. When evidence supports a change to the carrying value from the transaction price, adjustments are made to reflect expected exit values in the investment’s principal market under current market conditions. Ongoing reviews by the KAREP’s management are based on an assessment of trends in the performance of each underlying investment from the inception date through the most recent valuation date. These assessments typically incorporate valuation methodologies that consider the evaluation of arm’s length financing and sale transactions with third parties, an income approach reflecting a discounted cash flow or direct capitalization analysis, and a market approach that includes a comparative analysis of acquisition multiples and pricing multiples generated by market participants. In certain instances, KAREP may use a blended approach of multiple valuation methodologies for a particular investment and estimate its fair value based on a weighted average or a selected outcome within a range of multiple valuation results. These investments in real estate entities are generally included in Level III of the fair value hierarchy.

Warrants from portfolio companies

The Consolidated Funds may receive warrants from portfolio companies upon investments in the debt of the respective companies. The warrants provide the Consolidated Funds with exposure and potential gains upon equity appreciation of the portfolio company’s equity value.

The fair value of the Consolidated Funds’ warrants are determined based upon the expected value, as if exercised, to be realized in a sale transaction of the Consolidated Funds’ entire investment position of each particular issuer as of the valuation date. The fair value of the Consolidated Funds’ investments is considered, on the whole, as a basket of related securities.

Option contracts

Options which are listed on major securities exchanges are valued at their last reported sales price as of the valuation date or based on bid or ask price at the close of business. When the Consolidated Funds purchase an option, they pay a premium and an amount equal to the premium is recorded as an asset. When the Consolidated Funds write an option, they receive a premium and an amount equal to

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KAYNE ANDERSON CAPITAL ADVISORS, L.P. AND SUBSIDIARIES

Notes to Interim Consolidated Financial Statements (Continued)

(Unaudited)

3. FAIR VALUE MEASUREMENTS (Continued)

the premium is recorded as a liability. The asset or liability is subsequently adjusted to reflect the then current market fair value of the option. Depending on the frequency of trading, listed options are generally classified in Level I or II of the fair value hierarchy.

The following table summarizes the Partnership’s and the Consolidated Funds’ assets and liabilities measured at fair value on a recurring basis within the fair value hierarchy levels at March 31, 2015:

(a)                   As further described in Note 2 to these interim consolidated financial statements, certain investments that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit a reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Statement of Financial Condition.

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KAYNE ANDERSON CAPITAL ADVISORS, L.P. AND SUBSIDIARIES

Notes to Interim Consolidated Financial Statements (Continued)

(Unaudited)

3. FAIR VALUE MEASUREMENTS (Continued)

The Consolidated Funds hold investments that are privately issued or otherwise restricted as to resale. For these investments, reliable market quotations are not readily available, and as such, valuations are determined in a manner that most accurately reflects the fair value of the investment on the valuation date. Unless otherwise determined by the Partnership, the following valuation process is used for such investments.

The Partnership establishes valuation processes and procedures to ensure that the valuation techniques for the investments categorized within Level III of the fair value hierarchy are fair, consistent, and verifiable. The Partnership designates a valuation committee (the “Committee”) to oversee the entire valuation process of the Partnership’s and Consolidated Funds’ Level III investments. The Committee is comprised of various personnel of the Partnership, including members of the Consolidated Funds’ portfolio management and deal team. The Committee is responsible for developing the Partnership’s and Consolidated Funds’ written valuation processes and procedures, conducting periodic reviews of the valuation policies, and evaluating the overall fairness and consistent application of the valuation policies.

Valuations determined by the Partnership and Consolidated Funds are required to be supported by market data, industry accepted third-party pricing models, or other methods the Committee deems to be appropriate, including the use of internal proprietary pricing models. Level III investment valuations may reflect internal assumptions which may or may not agree with the assumptions of other market participants.

The following table summarizes the changes in the Partnerships’ and the Consolidated Funds’ Level III assets for the quarter ended March 31, 2015:

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KAYNE ANDERSON CAPITAL ADVISORS, L.P. AND SUBSIDIARIES

Notes to Interim Consolidated Financial Statements (Continued)

(Unaudited)

3. FAIR VALUE MEASUREMENTS (Continued)

(1)                   Represents investments in Consolidated Funds as of December 31, 2014 that were deconsolidated during the period. Balance was previously eliminated upon consolidation and not reported as Level III investment as of March 31, 2015.

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KAYNE ANDERSON CAPITAL ADVISORS, L.P. AND SUBSIDIARIES

Notes to Interim Consolidated Financial Statements (Continued)

(Unaudited)

3. FAIR VALUE MEASUREMENTS (Continued)

The Partnership records transfers between Level I, Level II or Level III, if any, at the end of the period. Transfers between Level I and Level II generally relate to whether a market becomes active or inactive. Transfers between Level II and Level III generally relate to whether significant relevant observable inputs are available for the fair value measurements in their entirety.

The table below summarizes information about the significant unobservable inputs used in determining the fair value of the Level III assets and liabilities held by the Consolidated Funds at March 31, 2015:

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KAYNE ANDERSON CAPITAL ADVISORS, L.P. AND SUBSIDIARIES

Notes to Interim Consolidated Financial Statements (Continued)

(Unaudited)

3. FAIR VALUE MEASUREMENTS (Continued)

(1)                                  Represents a price which is created by incorporating multiple broker quotes, where available.

(2)                                  Certain investments are valued based on recent transactions, generally defined as investments purchased or sold within six months of the valuation date. The Partnership has determined that there has been no change to the valuation based on the underlying assumptions used at the closing of such transactions.

Certain investments of the Partnership are valued, as a practical expedient, utilizing the net asset valuation provided by an underlying private investment company, without adjustment, when the net asset valuation of the investment is calculated (or adjusted by the Partnership if necessary) in a manner consistent with U.S. GAAP for investment companies. Practical expedients are applied to these investments consistently with the Partnership’s positions in these investments, unless it is probable that the Partnership will sell a portion of such investments at amounts different from the net asset valuation. If it is probable that the Partnership will sell these investments at amounts different from the net asset valuation or in other situations where practical expedients are not available, the Partnership considers other factors in addition to the net asset valuation, such as features of the investment, including subscription and redemption rights, expected discounted cash flows, transactions in the secondary market, bids received from potential buyers, and overall market conditions in its determination of fair value.

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KAYNE ANDERSON CAPITAL ADVISORS, L.P. AND SUBSIDIARIES

Notes to Interim Consolidated Financial Statements (Continued)

(Unaudited)

3. FAIR VALUE MEASUREMENTS (Continued)

For investments valued using NAV per share, a summary of fair value by strategy type along with the remaining unfunded commitment and any redemption restrictions of such investments as of March 31, 2015 are presented below: