Item 5: Fees and Compensation
The Governing Fund Documents set forth in detail each Fund’s fee structure. Delta receives
compensation from a combination of management fees and carried interest allocations - the latter of
which is typically paid to an affiliate serving as general partner to the Fund in question. A Fund may
enter into separate agreements, commonly referred to as “side letters”, or other similar agreements,
with a particular Investor, which could establish rights under or supplement the terms of the
applicable Governing Fund Documents in a manner that grants the Investor more favorable terms
with respect to management fees and/or carried interest allocations.
Management fees are typically paid quarterly in advance directly by each Investor, either by way of
drawdowns from unfunded capital commitments or by deductions from distributable capital. Carried
interest allocations are made at such time that a Fund makes a distribution that permits the allocation
in question.
In addition to management fees and carried interest, Funds will pay, or reimburse Delta and/or the
applicable general partner, the following expenses:
• Legal and other expenses: incurred in connection with the planning, formation, organization,
documentation, funding, marketing and start-up of a Fund and its general partner; and in
connection with the subscription by Investors for Fund interests (including, without
limitation, fund-raising, communication, marketing, travel (including, without limitation,
transportation, accommodation and meal expenses), printing, legal, administrative and filing
fees and expenses and accounting fees and expenses), but not including any placement fees.
• Any taxes, fees, duties or other governmental charges or costs imposed on a Fund and any
fees and expenses for the preparation and filing of any governmental or regulatory reports
relating to a Fund or any investment or proposed investment.
• Commitment fees and other fees and expenses incurred in connection therewith and
principal and interest payable under, any indebtedness, credit facility or other credit
arrangement of a Fund, any investment, or any alternative investment vehicle (to the extent
not reimbursed by any third party or alternative investment vehicle).
• Accounting fees, third party fees, fees and expenses of consultants, advisors, third party
administrators and custodians, attorneys’ fees and any expenses related to any of the
foregoing.
• Due diligence fees and expenses, financing fees and expenses and all other costs and
expenses related to the identification, evaluation, acquisition, holding, monitoring, valuation
and disposition of investments (whether or not the transaction is consummated) (including
out-of-pocket travel expenses, broken deal fees and expenses, legal and accounting
expenses, consulting expenses and any banking, brokerage, registration, qualification,
finders’ and similar fees or commissions).
• All out-of-pocket fees and expenses incurred by a Fund, its general partner, or any other
person or affiliate in connection with any conference or meeting of Investors and any Fund
advisory committee (including services, food, lodging, transportation and entertainment
provided at or in connection with any such meetings).
• Premiums and fees, costs and expenses associated with D&O/GPL liability or other
insurance coverage.
• Any expenses associated with compliance with applicable laws, rules and regulations
regarding registered investment advisers incurred by Delta and its respective affiliates.
• The costs and expenses of any litigation, audit, examination, investigation, indemnification
or governmental proceeding involving a Fund or any Fund investment or proposed Fund
investment and the amount of any judgments, settlements, indemnification or other amounts
paid in connection therewith.
• Any expenses associated with a Fund’s reporting, financial statements, tax returns, tax forms
(including, without limitation, Schedule K-1s) and tax and financial reporting, as well as
fees, costs and expenses incurred in connection with any communications or inquiries with
Investors (including with respect to reporting, capital calls and distributions), compliance
with side letters or the amendment or supplement of any documentation relating to a Fund
and Investors.
• Fees, costs and expenses incurred in connection with dissolving, liquidating, winding-up
and terminating a Fund.
• Any expenses associated with compliance with applicable laws, rules and regulations by a
Fund or in respect of a Fund’s investments.
• Any expenses associated with the operation and actions of a Fund’s advisory committee.
• Expenses incurred in connection with the establishment of any alternative investment
vehicle (to the extent not reimbursed by such alternative investment vehicle).
• Operations specialist costs (as further explained below) to the extent not otherwise paid or
reimbursed by a third party.
In addition to management fees and carried interest, Delta, a Fund general partner, and their
personnel or affiliates may also receive various fees from the claimant of a litigation finance
investment (or other third party), in connection with the purchase, monitoring, support and
resolution of such investments (“Corporate Service Fees”). If received, such Corporate Service Fees
(but not associated expenses) will typically be offset against applicable management fees to the
extent they exceed any cap specified in the applicable Governing Fund Documents.
In addition to compensation payable by Delta, certain Delta personnel may also receive additional
...