Item 5 – Fees and Compensation
Management and Performance-Based Fees
ECM is eligible to receive commitment, management, and performances fees in connection with
its investment advisory services. The Funds and Managed Accounts generally pay quarterly
commitment or management fees equal to 1.5% per annum of the Fund or Managed Account’s net
assets, subject to negotiation. The commitment or management fee is paid quarterly, in advance,
based on the net assets as of the first day of the quarter; with the first fee payable on the date
committed capital is drawn by the Fund or Managed Accounts. The first payment, if based on less
than a full period, will be pro-rated to cover the period from the investor’s capital draw date
through the end of that calendar quarter. No fees will be charged on uncalled capital. No portion
of the commitment or management fee shall be refundable. ECM, in its sole discretion, may waive
or reduce its fees for any period of time, or agree to apply different fees for a respective Client.
ECM also charges performance-based fees generally equal to 15% in excess of a preferred return
of a 5% realized IRR threshold.
In certain circumstances, fees may be individually negotiated by the Fund and/or Managed
Accounts. Negotiated fees may be higher or lower than those discussed above. All commitment,
management and performance fees are established at the inception of each Fund or Managed
Accounts, and are disclosed to prospective investors in the applicable offering documents. Each
series may have different fees and liquidity. Greater detail regarding the fees to the Funds may be
found in the applicable offering documents.
Other Fees and Expenses
Clients will also bear direct, and indirect costs, fees and expenses incurred by or on behalf of such
Clients including, among others:
● Organizational/Formation Expenses
Expenses that relate to or arise out of the formation of a Fund or Managed Accounts
including, but not limited to, initial offering expenses, legal and accounting fees, marketing
expenses, consulting fees, government filing fees (including “blue sky” filing fees) and
structuring fees in connection with the formation of the Fund or Managed Accounts and
offering of the Funds or Managed Account’s interests. These organizational expenses shall
not exceed an amount equal to one hundred (100) basis points of the Fund or Managed
Account’s aggregate capital commitments and subject to negotiation. Any organizational
expenses in excess of this amount shall be borne by ECM.
● Operating Expenses
Expenses that relate to the operation of the Fund or Managed Accounts including, but not
limited to, custodial fees, legal fees, valuation agent fees, accounting fees (including audit
and tax preparation expenses), hedging fees, consulting, advisory, investment banking and
other professional fees relating to particular investments or contemplated investments
(sourcing, evaluation, development, negotiation, acquisition, implementation, ownership,
disposition, financing or any related travel expenses), and fees and expenses of third-party
providers of risk management services (including, without limitation, the costs of software
and database packages), administrator and administrative fees and expenses, expenses
related to regulatory and compliance filings associated with the Fund or Managed Accounts
and it’s investment activities, insurance costs, filing and registration fees.
Please refer to ITEM #12 – BROKERAGE PRACTICES, for additional information on brokerage
and other transaction costs.
ECM may, in its sole discretion, pay for any Fund/Managed Account’s organizational and/or
operating expenses and waive the right to be reimbursed for such expenses. Investors should refer
to the applicable Fund/Managed Account’s offering document and other relevant documents for
additional/supplemental information regarding a Fund or Managed Accounts as well as the fees
and expenses associated with such Fund/Managed Accounts.
Neither ECM nor any of its supervised persons accepts compensation for the sale of securities or
other investment products.