Item 5 – Fees and Compensation
Funds
Generally, Funds pay us a management fee that ranges from 1.0% to 2.0% annually. We also receive
incentive allocations, typically 20% of the net capital appreciation allocated to each investor in a Fund,
subject to certain limitations. Certain of our private equity and real estate Funds are assessed fees on a
different basis. These Funds are generally charged a management fee that ranges from 1.0%-2.0%
annually, generally based on capital commitments or contributed capital, and our incentive allocations
are paid out upon divestment of portfolio holdings, subject to the distribution waterfall specified in the
Fund’s legal documents. Additionally, some of our private equity and real estate Funds are generally
subject to our receipt of incentive allocations to achieving “Hurdles” or “Preferred Returns.” Management
fees and incentive allocations are calculated based on the terms set forth in each Fund’s offering materials
and other constituent documents.
In working with the Funds, we have the authority to waive all or a portion of the fees and allocations we
receive from the Funds with respect to any particular investor and we do so for our principals and staff
(and select former staff) and their respective family members, employee benefit plans and estate planning
vehicles that are not subject to management fees and incentive allocations. Because we (or our partners,
principals, or staff (and select former staff)) invest in certain of the Funds, we participate alongside other
investors in the investments of those Funds pro rata in accordance with our capital accounts in the Fund
although our partners, principals and staff (and select former staff) do not pay management fees or
incentive allocations.
In accordance with the terms of the Funds, we are generally permitted to open new tranches for Funds
that have different terms at the request of an incoming investor. When we open these new tranches, we
sometimes grant requests from existing Fund investors to transfer their interest in the relevant Fund to
the new tranche, subject to certain terms and conditions. We have also issued interests in tranches to
persons and entities with whom we are affiliated.
Method and Payment of Fees
Fund Clients generally pay management fees monthly (or quarterly in the case of some of our private
equity and real estate funds) in arrears. Generally, incentive allocations (subject to a high-water mark) are
made annually in arrears as of each year-end, whereas certain of our private equity and real estate funds
receive allocations upon divestment of portfolio holdings. All fees and allocations we receive are deducted
directly from the Funds at the Feeder Fund level.
Additional Expenses
In addition to our fees, unless, and to the extent, otherwise specified in the relevant Fund’s private
placement memorandum or Managed Account agreement, Clients indirectly bear their allocable share of
brokerage commissions, transaction costs, costs associated with the management of investor accounts
and other expenses, as more fully set forth in the offering documents and governing agreements for such
Client. Such fees and expenses vary, and may include (but are not limited to) the following:
• the Client’s transactions and
• the administration and operating expense of the Client including, but not limited to
o the charges and expenses of legal advisers, tax advisers and auditors, as well as consultants,
accountants, and other service providers to the Client;
o fees paid, on a net claim payment basis, to third parties engaged to monitor and process
potential class action claims;
o brokers’ commissions (if any), borrowing charges on securities sold short and any issue or
transfer taxes chargeable in connection with any securities transactions;
o all taxes (and similar amounts) and corporate fees payable to governments or agencies
(including governmental, registration, license and membership fees payable to regulatory as
well as self-regulatory organizations) including expenses incurred in connection with the
registration, qualification or exemption of the Funds under any applicable laws (including but
not limited to external legal and compliance fees and expenses, including regulatory reporting
expenses, and expenses incurred in connection with complying with applicable U.S. and non-
U.S. reporting obligations as well as out-of-pocket expenses preparing regulatory filings
related to the Client or the General Partner and/or Autonomy Capital with respect to the
Client);
o Directors’ fees (if any), governmental registration fees and expenses;
o interest on borrowings, including borrowings from the prime brokers and custodians;
o expenses of prime brokers, dealers, custodians, sub-custodians, transfer agents and
registrars, expenses of registering and qualifying securities and other investments;
o fees and expenses incurred by us in connection with providing our investment management
services, including but not limited to research and due diligence expenses of Autonomy
Capital, its affiliates and third-party consultants acting on their behalf, including, but not
limited to, third-party research or analyses related to proposed or existing investments
(including expenses for databases and other technology services utilized in the investment
management process as well as expenses for transactions that are not consummated);
o communication expenses with respect to investor services and all expenses of meetings of
Shareholders and of preparing, printing and distributing financial and other reports, proxy
forms, prospectuses and similar documents ;
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