Item 5: Fees and Compensation
In consideration of Bow Capital’s investment advisory and other services, Bow Capital generally
receives a management fee and a carried interest from each of the Funds. Additionally, consistent with
each Fund’s Governing Documents, the Funds bear certain out-of-pocket expenses incurred by the
Firm in connection with the services provided to the Funds and/or their portfolio companies.
Generally, the Funds pay Bow Capital a management fee equal to a percentage of the total Investor
capital commitments of such Fund which is paid quarterly in advance (the “Management Fee”). The
base upon which the fee is calculated will vary over the life of the Fund, as negotiated and determined
at the time the Fund is established and as set forth in its Governing Documents. The percentage of
the Management Fee charged to each Fund varies up to 2% annually. It is often reduced upon the
occurrence of certain events that are fully described in the Governing Documents of each Fund
(“Post-Commitment Period”).
Management Fees are typically funded with capital contributions drawn for such purpose but may also
be funded with or withheld from proceeds from investments. Carried interest distributions generally
will be distributed to Bow Capital’s affiliates from time to time upon the disposition of investments
by a Fund and are distributed to such affiliate in accordance with the terms of the applicable
Governing Documents.
The General Partner of the Funds, typically receive certain allocations and distributions calculated and
charged based on a share of capital gains on or capital appreciation of the assets of such Fund, as
negotiated and determined at the time such Fund is established and as set forth in its Governing
Documents. These allocations and distributions are commonly known as “carried interest.” Bow
Capital’s affiliates generally do not receive carried interest until all Investors have received aggregate
distributions equal to the sum of their capital contributions to the Fund.
In the sole discretion of each Fund’s General Partner, the Carried Interest may be waived, reduced or
calculated differently with respect to certain Investors.
Unless it is specifically provided otherwise in the applicable Governing Documents, the Management
Fee is reduced by one hundred percent (100%) transaction, commitment, break-up, advisory,
syndication, guarantee, directors, officers, management and other fees received from any portfolio
company or prospective portfolio company held by a Fund and organizational expense incurred above
the organizational expense cap specified in the applicable Governing Documents.
Bow Capital and its affiliates generally pay routine operating and overhead costs and expenses,
including salaries, bonus and benefits, rent, entertainment, office furniture, and fixtures and computer
equipment. In addition to any Management Fees payable to Bow Capital, the Funds are responsible
for certain charges imposed by third parties and affiliates (“Fund Expenses”). The Firm pays such
Fund Expenses on behalf of the Funds and is reimbursed by the Funds on a quarterly basis.
Subject to the Governing Documents of the applicable Fund, Management Fees allocated to each
limited partner will be reduced by an amount equal such limited partner’s pro rata share of placement
agent and any transaction, commitment, break-up, advisory, syndication, guarantee, directors, officers,
management and other applicable fees.
All costs, expenses and losses of the organization and operations of the Fund will be borne by the
Funds, whether arising prior or subsequent to the initial closing, whether incurred by the Fund, the
General Partner, and associated with, without limitation, the formation, operation, dissolution,
winding-up, or termination of the Fund, including, without limitation: (i) out-of-pocket expenses
associated with the organization of the General Partner or the Fund or the syndication of interests
therein (including all costs and expenses of the Fund and General Partner); (ii) the out-of-pocket
expenses incurred in connection with maintaining the existence of the General Partner, the Fund and
their related vehicles and the routine administrative expenses of the Fund, General Partner and any
related vehicles, including all costs and expenses in connection with any required registration or
regulatory compliance by the Fund; (iii) legal, accounting, audit, valuation, tax compliance, custodial,
consulting and other professional fees; (iv) banking, brokerage, broken-deal, registration, qualification,
finders, depositary and similar fees or commissions; (v) transfer, capital and other taxes, as well as
charges, duties and fees, and any other costs (including broken- deal, unconsummated deal and similar
costs), incurred in or related to sourcing, investigating, identifying, developing, negotiating,
structuring, trading, settling, monitoring, acquiring, holding, selling or otherwise managing or
disposing, or hedging against changes in the value, of Fund investments, assets or obligations,
including reasonable expenses related to travel and accommodation, regardless of whether such
investments are subsequently consummated (to the extent not reimbursed by portfolio companies, by
sellers or other third parties, and not otherwise capitalized as part of such investments); (vi) insurance
premiums, indemnifications, costs of litigation and other extraordinary expenses; (vii) costs of
financial statements and other reports to limited partners as well as costs of all governmental returns,
reports and other filings; (viii) interest expenses; (ix) amounts paid to or for the benefit of portfolio
company investments other than as capital contributions thereto or in exchange for securities issued
thereby; (x) the management fee, as well as any out-of-pocket costs, expenses or losses incurred in
generating or realizing (or in seeking to generate or realize) fees subject to offset.; (xi) advertising and
...