Fees and Compensation — Form ADV Part 2A (3/25/2020)
[Brochure]
Item 5 Fees and Compensation
CDO Management Fees
As collateral manager, DCM is paid certain collateral management fees by the CDO issuer,
which are typically comprised of a senior collateral management fee that is paid prior to any
distributions to the CDO’s note holders and a subordinate collateral management fee following
distributions to the CDO’s note holders and the payment of various operating expenses. The fees
earned by DCM are negotiated prior to establishing the CDO. Generally, annual collateral
management fees to DCM have not exceeded 0.3% of the value of the collateral in the CDO on
an annual basis.
Portfolio Management Fees
In connection with its portfolio management activities, DCM receives servicing fees, which
include a base servicing fee, a senior preferred distribution, and a junior preferred distribution.
Fee Billing
Collateral management fees are generally paid quarterly in arrears based on the total amount of
collateral held by the CDO at the end of each calendar quarter. With respect to the portfolio
management activities, the base servicing fees are paid quarterly in arrears, the senior preferred
distribution is paid annually in arrears and the junior preferred distribution will be paid at the end
of the joint venture.
Other Fees and Expenses
DCM may be reimbursed by the CDO for certain reasonable fees and expenses paid to third
parties as part of its duties as collateral manager.
DCM is responsible for and pays all overhead expenses of an ordinary and recurring nature such
as rent, supplies, secretarial expenses, compliance expenses, stationery, charges for furniture and
fixtures, employee insurance, payroll taxes and compensation of employees in connection with
DCM’s services. In connection with its portfolio management activities, DCM receives
reimbursements for expenses paid to certain valuation and rating service providers.
Prepaid Fees
DCM’s investment advisory fees are charged to clients in arrears. DCM does not accept prepaid
fees for advisory services.
Compensation for the Sale of Securities
Neither DCM nor any of its supervised persons receive compensation for the sale of any
securities.
Account Minimums and Types of Clients — Form ADV Part 2A (3/25/2020)
[Brochure]
Item 7 Types of Clients
DCM currently provides advisory services to one CDO issuer. A CDO issuer is a special
purpose investment vehicle that raises capital through the issuance of securities and uses the
proceeds to purchase financial assets, typically debt or preferred equity instruments. A CDO
issuer pools collateral assets into a portfolio that generates interest over a fixed period of time.
DCM also provides portfolio management services to a joint venture limited liability company.