ITEM 5 - FEES AND COMPENSATION
A. Fee Schedule, Payment Method and Prepayment of Fees and Refunds
As investment adviser to each Private Fund, we typically receive an annual management fee
equal to a percentage of the net assets or invested capital, as the case may be, and a performance
fee or incentive allocation equal to a percentage of the Private Fund’s net profits, which may be
subject to a loss carry forward provision or clawback provision, as the case may be. All fees for
the Private Funds are disclosed in the Governing Documents, which are provided to prospective
investors.
We, in our discretion, may waive or reduce the management fee applicable to all or any of the
investors in each Private Fund or agree with an investor to waive or alter the management fee as
to that investor. Investors in a Private Fund may have different fee arrangements. We may from
time to time enter into a side letter agreement with one or more investors in a Private Fund
which may, among other terms, provide for reduced management fees or greater or more
frequent transparency with respect to the Private Fund.
Management fees are payable monthly or quarterly in advance or in arrears, as the case may be,
and performance fees may be payable when earned. We may elect to defer payment of all or part
of the management fee and/or performance fee. Management fees and performance fees are
generally deducted from the applicable Private Fund assets.
Each Private Fund was organized with the intent that it be advised by us, and a related person
serves as the general partner of each Private Fund. No general partner of any Private Fund
intends to cause the Private Fund to terminate its advisory relationship with us absent our
liquidation or bankruptcy. In addition, Private Fund investors generally are not permitted to
withdraw from a Private Fund prior to its dissolution but may sell or transfer their interests
subject to approval by the general partner. Private Fund investors individually have no right to
terminate the Private Fund’s advisory relationship with us.
We and/or our affiliates may be entitled to receive fees from actual or prospective portfolio
investments of the Private Funds, including origination, directors’, transaction, breakup,
commitment, closing, and monitoring fees. Although these fees are in addition to management
fees paid by the Private Funds, we and/or our affiliates will in certain circumstances reduce
management fees in connection with the receipt of such fees.
In addition to the foregoing fees, to the extent that we sponsor or manage any Co-Investment
Fund, we may be entitled to earn certain fees from any Co-Investment Fund in connection
therewith.
Investors should refer to the applicable Governing Documents for more details related to
calculation and payment of fees for the Private Funds.
Five Mile Capital Partners LLC 2019
B. Other Fees and Expenses
The Private Fund assets are held in the custody of a bank, trust company, broker-dealer or other
entity selected by us. The Private Fund will bear any custodial fees associated with such
account. Any fees so incurred by the Private Fund will be in addition to the management fee
payable to us. See Item 15.
The Governing Documents of each Private Fund provide a description of any additional fees and
expenses for which such Private Fund may be responsible. Generally, each Private Fund will be
responsible for all costs and expenses relating to the organization of such Private Fund and of
maintaining the operations of such Private Fund and the investments paid by or on behalf of
such Private Fund, including, without limitation, (i) legal, filing, auditing, consulting,
administration, accounting and other professional fees and expenses; (ii) expenses associated
with periodic reporting to the Private Funds; (iii) financial statements and tax returns; (iv)
insurance, interest and other expenses incurred in respect of borrowings, if any; (v) other
expenses associated with the acquisition, holding, monitoring, settlement and disposition of
such Private Fund’s investments (including, without limitation, any brokerage, custody or
hedging costs); (vi) the costs and expenses of any custodians, lenders, investment banks and
other financing sources; (vii) any indemnity expenses; and (viii) the costs and expenses of any
litigation involving such Private Fund.
To the extent we or any affiliate receive any origination, disposition or exit fees in connection
with the operation of or management of the assets of a Private Fund (“Transaction Fees“), such
Transaction Fees will either be paid to the Private Fund or credited against the management fee
payable to us (in either case net of any related unreimbursed expenses incurred by us or any
affiliate).
Any expenses common to one or more Private Funds generally are allocated among such entities
on a basis reasonably believed to be equitable and fair by us in accordance with the Private
Funds’ Governing Documents and/or our policies.
C. Sales Compensation
We may engage, or cause the Private Funds to engage, unaffiliated placement agents to market
and sell interests or shares in the Private Funds to prospective investors. We require placement
agents to have all appropriate licenses and registrations to conduct their business, including
when applicable, to be registered as broker-dealers with the SEC and to be members of FINRA.
The applicable Five Mile Manager may elect to reduce the management fee to the extent of any
placement fees borne by the Private Fund.
Five Mile Capital Partners LLC 2019