Fees and Compensation
Compensation and Fee Schedules
All investors should review the Governing Documents for each Fidem Fund in conjunction
with this brochure for more complete information on the fees and compensation payable
with respect to a particular Fidem Fund. All Fidem clients and all investors in Fidem Funds
must be “qualified purchasers” as that term is defined in Section 2(a)(51) of the Investment
Company Act of 1940 (as amended, the “Company Act”) pursuant to Section 3(c)(7) of the
Company Act.
Fidem will generally receive from each Fidem Fund: (i) management fees (“Management
Fee”) equal to a percentage of each limited partner’s commitment or capital account
balance; and (ii) either performance-based allocations or carried interest (“Incentive
Fees”). From time to time, Fidem has entered into, and may in the future enter into, side
letters or similar agreements with some Fidem Fund investors that provide different
economic or other terms to investors, including with respect to fees.
Investors and prospective investors in each Fidem Fund should refer to the Governing
Documents of the applicable Fidem Fund for more complete information on the advisory
fees charged by Fidem.
Investors and prospective investors in the Fidem Funds should note that similar advisory
services may (or may not) be available from other investment advisers for similar or lower
fees.
Deduction of Fees
Fidem is authorized under the Governing Documents to charge and deduct advisory fees
directly from the assets of the Fidem Funds, at the times and in the amounts described
above. The third-party administrator of Fidem Funds calculates the fees due to Fidem and
wires the payment from the appropriate Fidem Fund’s assets.
Other Fees and Expenses
A Fidem Fund (or any special purpose vehicles formed for the purposes of pursuing the
Fidem Fund’s investment strategy) may and often will enter into a service agreement with
FA2 Advisors, LLC (“FA2 Advisors”), an affiliate of Fidem, pursuant to which FA2
Advisors will provide certain services, including loan servicing, vendor and service
support, financial reporting, arrangement of tax return preparation, financial projection,
performance monitoring and reporting, and management, to Fidem Fund or such special
purpose vehicles. In exchange for providing such services, FA2 Advisors will be
compensated by the Fidem Fund or the special purpose vehicle, as applicable, through
servicing fee calculation/arrangement.
In addition to the fees payable to Fidem and FA2 Advisors, each Fidem Fund bears (or
shall reimburse Fidem for) its own expenses, including, but not limited to: (i) all general
investment expenses (i.e., exchange commissions and expenses, brokerage commissions,
research expenses, data processing costs and expenses, bank service fees, interest expenses,
borrowing charges, custodial expenses, outsourced risk management advisory and
software, market data, investment-related consultants and travel costs that are research-
related and other investment expenses); (ii) all administrative, custodial, legal, accounting,
auditing, record-keeping, tax form preparation, compliance, and consulting costs and
expenses; fees related to the engagement of a service provider and the services it provides
including loan servicing, vendor and service support, financial reporting, arrangement of
tax return preparation, financial projection, performance monitoring and reporting, and
management for the Fund’s portfolio (which, for the avoidance of doubt, may be payable
by a Special Purpose Vehicle); (iii) all fees, costs and expenses related to middle office
operations which may include daily reconciliation of cash, cost, positions, and valuations;
(iv) fees, costs, and expenses of third-party service providers that provide such services;
(v) costs and expenses associated with preparing investor communications, printing, and
mailing costs; (vi) insurance costs and expenses (e.g., for the assets of the Fidem Fund,
D&O, E&O); (vii) marketing and syndication expenses; (viii) taxes and other
governmental charges; (ix) governmental licensing, filing, and exemption fees (including
Blue Sky filing fees); (x) indemnification obligations; (xi) all expenses (including
reasonable attorneys’ fees) incurred in connection with any threatened, pending, or
anticipated litigation, IRS examination or audit, or similar audit or examination by any
state or local taxing authority, or other legal proceeding; (xiii) expenses of any limited
partners’ advisory committee; (xiv) all costs and expenses related to the formation and
organization of the Fidem Fund and any special purpose vehicle, including, without
limitation, legal and accounting fees, travel expenses and costs of the offering and sale of
the interests in the Fidem Fund; and (xv) any extraordinary expenses.
Fidem may determine that more than one Fidem Fund should bear the expenses associated
with particular investments or services. Generally, a Fidem Fund may only bear an expense
if it is permitted to bear such expense under the Fidem Fund’s Governing Documents.
Fidem will generally seek to allocate costs and expenses borne by more than one Fidem
Fund in a manner that generally reflects each Fidem Fund’s relative size of investments,
consumption of resources, receipt of benefits and/or other equitable considerations that
may be appropriate under the circumstances.
The section titled “Brokerage Practices” describes the factors Fidem considers in selecting
or recommending broker-dealers and counterparties and determining the reasonableness of
their compensation.
Transaction-Based Compensation
Neither Fidem nor its supervised persons will receive any compensation with respect to the
purchase or sale of securities or other investment products by any Fidem Fund.
Performance-Based Fees and Side-by-Side Management