Item 5 – Fees and Compensation
The Firm’s Clients are generally qualified purchasers, as defined in section 2(a)(51)(A) of the
Investment Company Act of 1940 (“Investment Company Act”). As such, a detailed Client fee
schedule is not included in this Brochure. However, most Clients pay some or all of the following
fees and expenses.
As the investment adviser to the Clients, the Firm will receive a management fee for the prior fiscal
quarter subject to a defined minimum amount for each Client. The management fees are generally
calculated as a percentage of committed or invested capital at various times during the life or term
of the Client, as set forth in the applicable governing documents for the Client. In addition, in certain
circumstances the Firm receives compensation for management and other services performed in
connection with co-investments made in portfolio companies of the Clients.
A full description of the calculation and terms of the management fees is provided in the relevant
Client’s governing and offering documents.
It is contemplated that the Clients will pay some or all of the following fees. Clients will generally
pay an annual management fee, as specified in the applicable governing and offering documents.
The management fee will be paid quarterly in arrears out of current income and investment
proceeds of the applicable Client and/or, at the discretion of the general partner of the applicable
Client, from drawdowns that will reduce unfunded commitments. The management fee during the
investment period is expected to be equal to the sum of (i) 0.75% of aggregate unfunded investor
commitments and (ii) 1.50% of the weighted daily average of the management fee base amount (as
defined in the applicable governing and offering documents). After the expiration of the investment
period, the management fee will equal 1.50% of the weighted daily average of the management fee
base amount.
Clients may use one or more credit facilities in order to make investments, pay management fees,
or pay expenses through borrowings in lieu of, or in advance of, capital contributions, as further
described in the governing and offering documents. Any such credit facilities may be secured by
the capital commitments of Client investors or by the assets of the applicable Client. A more detailed
discussion of such credit facilities is discussed in Item 8.
In certain circumstances, the Firm may waive or reduce management fees and carried interest for
certain Client investors including, but not limited to, for example, employees and directors (current
and former) and certain Firm-affiliated entities. More detailed information about specific fees and
expenses that Clients may pay is provided in the applicable IMA, Partnership Agreement, and/or
Memorandum. Any such exemption from fees and/or carried interest may be made by a direct
exemption, a rebate by the Firm and/or its affiliates, or through other Clients that co-invest with a
relevant fee-paying Client.
The Clients generally invest on a long-term basis. Accordingly, investment advisory and other fees
are expected to be paid, except as otherwise described in the relevant governing and offering
documents, over the term. The relevant Client investors generally are not permitted to withdraw or
redeem interests in the Clients.
Principals, directors, and/or other current or former employees of the Firm generally receive salaries
and other compensation derived from and in certain cases including a portion of the management
fee, carried interest, or other compensation received by the Firm or its affiliates.
The Firm or an affiliate, usually the general partner of the relevant Client, may also receive
performance-based fees and/or carried interest of up to 20% or profits from relevant Clients, as
further described in the relevant governing and offering documents. Please see Item 6 of this
Brochure for more information on performance-based fees and/or carried interest expected to be
received from the Clients by the Firm or its affiliate(s). With respect to performance-based fees
and/or carried interest that may be payable by certain Clients before the disposition of every
investment made by such Client, such fees may be generally subject to a “clawback” depending on
the final overall performance of that Client; alternatively, any loss incurred by the Client may be
carried forward so that no carried interest is owed unless and until losses incurred by such Client
during a prior period or periods have been recouped, subject to certain adjustments such as high-
water marks or hurdles.
In addition to the fees described above, certain Clients may pay additional fees and expenses that
are outlined in the applicable governing and offering documents for the relevant Client. Additional
information related to the timing of the fees the Firm charges its Clients is provided in the governing
and offering documents, which are also provided to investors in the Clients.
Affiliates of the Firm may be engaged in services with respect to the Clients and their investments that
would otherwise be performed by third parties. Those services include acting as a project monitor.
For investments undergoing restructuring or that have been acquired through foreclosure or
otherwise, those services include property management, leasing, development, and construction
management. In connection with these activities, affiliates of the Firm may receive certain fees,
including arranging, brokerage, placement, syndication, solicitation, underwriting, agency, origination,
sourcing, structuring, collateral management, advisory, commitment, facility, float, discounts, spreads,
commissions, concessions, and other fees received as part of such businesses. The compensation
for such services will be set in accordance with the terms set forth in the applicable governing and
offering documents, which include conflict-mitigating measures such as consent by the advisory board
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