Item 5 – Fees and Compensation
CVC Management generally charges each Client a fixed fee based on the value of the
Client’s initial investment.
The state of a company that has proven its concept, achieved significant revenues compared to its competition and
is approaching cash flow break even or positive net income. A later-stage company is approaching a liquidity event
such as an Initial Public Offering (“IPO”) or buyout.
The fees applicable to each Fund are set forth in detail in each Fund’s offering materials,
any supplement thereto and/or disclosure documents. CVC Management’s compensation may
differ among Clients based upon multiple factors including, without limitation, the complexity of
the underlying investment, account size and other opportunity-specific considerations.
Although a brief summary of certain Fund fees is provided below, please note that such
brief summary is not a substitute for the detailed terms provided in each Fund’s applicable
offering materials, any supplement thereto and/or disclosure documents. Fund
investors/prospective investors are thus strongly urged to closely review such disclosure
documents for information with respect to management fee and performance compensation
terms. Please note, lower fees for comparable services may be available from other sources.
Any management fee paid to CVC Management shall be referred to herein as a
“Management Fee”. Each Fund generally pays a one-time, up-front Management Fee based on
total capital invested. The Management Fee is generally as follows:
3% of initial capital contributions
Any performance-based incentive allocation paid to CVC Management shall be referred
to herein as a “Performance-Based Fee”. Each Fund generally pays a one-time Performance-
Based Fee based on performance of the Fund. The Performance-Based Fee is generally as
follows:
10% of cumulative gains.
This Performance-Based Fee is typically allocated upon the capital distribution to
investors of a Fund.
The Management Fee and Performance-Based Fee are generally deducted by CVC
Management from the assets of such Client. As discussed above, the Management Fee is
generally deducted at the time of the initial investment and the Performance-Based Fee is
generally deducted upon the capital distribution to investors of the Fund. In the event the
advisory contract is terminated prior to the distribution event the Management Fee and
Performance-Based Fee are generally not refundable.
Each Fund is responsible for the payment of its organizational and ongoing operational
expenses, as provided under the terms of the applicable operating agreement, any supplement
thereto and/or the governing documents (the “Governing Documents”). Such charges and fees
are exclusive of and in addition to the Management Fee paid to CVC Management. Fund
expenses may include, without limitation, investment-related expenses (e.g., brokerage
commissions, custodial fees, bank service fees, and interest expenses) and other transaction-
related expenses; investment-related research; professional fees (including, without limitation,
expenses of consultants and experts); administrative expenses; accounting expenses; operating
expenses (e.g., corporate action processing, pricing services, portfolio management reporting
software and reconciliation); legal expenses; auditing and tax preparation expenses; costs of
printing and mailing reports and notices; reasonable travel and travel-related expenses incurred
in connection with the Client; interest on balances due and other fees and charges of financial
counterparties, banks and custodians; any taxes and other governmental charges and duties
imposed on or payable by the Client; organizational expenses; corporate licensing; governmental
fees and regulatory expenses (including filing fees); assignment fees; establishment of operation
of the Clients’ subsidiaries or special purpose vehicles; expenses incurred in connection with the
offering and sale of membership interests and other similar expenses related to the Client;
premiums for liability insurance covering the Client’s directors (if any), CVC Management and
its partners, directors, officers, employees and agents; any fees and expenses associated with the
organization and conduct of any board of directors’ and shareholders’ meeting; any fees and
expenses associated with maintaining the Client’s registered office; litigation and
indemnification expenses and other extraordinary expenses not incurred in the ordinary course of
the Client’s business; and other expenses related to the Client as determined in sole discretion of
CVC Management, a CVC Management affiliate or board of director (if any), as applicable.
Emilio DiSanluciano and Joseph Dempsey are Registered Representatives with
Morpheus Securities LLC. In such a capacity, they may sell securities through Morpheus
Securities LLC and receive normal and customary commissions as a result of such purchases and
sales. This presents a conflict of interest to the extent that either recommends that a Client invest
in a security which results in a commissions being paid to them. When recommending the sale of
securities or investment products for which the person received compensation, they will
document the conflict of interest and inform the investor of the conflict of interest. Investors
always have the option to purchase recommended products through other brokers or agents that
are not affiliated with the Firm. Commissions are not a primary source of income for Mr.
DiSanluciano or Mr. Dempsey. Advisory fees that are charged to Clients are not reduced to
offset any commissions or markups on securities or investment products recommended.