Item 5: Fees and Compensation
The Firm charges fees for investment advisory services generally as a percentage of assets under
management. Investment advisory fees are negotiable; however, compensation will typically
include an origination or acquisition fee of 0% - 2.00%, an annual asset or portfolio management
fee during the investment period of 0% - 1.50% and a divestiture fee of 0% - 1.50%. In addition,
when permitted, the Firm will receive additional compensation in the form of participation (less
than 50%) in an investment property’s net cash flow and/or in the residual profits upon sale or
loan repayment. In all cases the fee will be agreed to by the client and disclosed in the advisory
agreement or in the case of private funds in the offering documents or private placement
memorandum (or equivalent).
The Firm may also act as the manager of private investment funds. In such cases the Firm will
receive a management fee from such funds based on net assets invested in the fund as well as
carried interests in the returns of the funds after investors in the funds have received a specified
rate of return on their investments. All of such carried interests and fees would be disclosed in the
applicable fund documents.
Fees are generally billed to separate account clients and are deducted from fund accounts. Fees
are payable at the time services are provided, or in arrears, generally on a quarterly basis.
In certain circumstances, the Firm engages real estate or mortgage loan brokers as well as
securities brokers whose fees will be paid by the client. See Section on Brokerage Practices.
Other Fees and Expenses:
In addition to the fees payable to the Firm, subject to the separate account client and
investment fund documents, investors will pay or otherwise bear all fees, costs, expenses,
and other liabilities arising in connection with its operation, including (but not limited to):
any sales or other taxes, fees, or government charges that may be assessed against the
fund or client;
commissions, brokerage fees, and similar charges incurred in connection with the
purchase or sale of fund investments;
costs and expenses incurred in investigating, developing, negotiating, structuring,
settling, monitoring, and holding portfolio investments (whether or not consummated),
including travel, legal, tax, and accounting expenses therewith;
market data costs; research-related expenses;
the costs and expenses such as travel-related expenses, of holding meetings or
conferences with fund investors (or other clients);
costs of any investigation, administrative proceeding or regulatory matter, litigation and
threatened litigation involving a client or a fund;
indemnification obligations and expenses;
expenses attributable to normal and extraordinary investment banking, commercial
banking, accounting, auditing, appraisal, tax advisory, tax preparation, legal, external
consulting, custodial, and registration services provided to a fund, its subsidiaries’ assets
or a client;
fees, costs and expenses, including premiums related to risk management services and
insurance;
costs of dissolving a fund or client’s investment vehicle and liquidating its assets;
organizational expenses, including costs and expenses pertaining to the offering and sale
of interests in a fund, related legal and other organizational payments and travel expenses.
The Firm may from time to time incur fees, costs, and expenses on behalf of more than one
separate account client or fund. To the extent such fees, costs, and expenses are incurred for
the benefit of more than one fund or client, each such fund or separate account client will
bear an allocable portion of any such fees, costs, and expenses in proportion to the size of its
investment in the activity or entity to which such expense relates (subject to the terms of
each fund or client’s governing documents). The Firm endeavors to allocate such fees, costs,
and expenses on a fair and equitable basis. Please refer to the separate account agreement or
fund documents for complete information on the expenses payable by advisory clients.
In accordance with fund documents, fees are generally deducted directly from the client
accounts. Aside from the base management fee and the fund level incentive fee, there are no
fees earned by the Firm or its affiliates from the underlying investments or other services.