Item 5: Fees and Compensation
GIM provides investment advisory services to the Fund pursuant to an investment management
agreement (the “IMA”), the terms of which and the services to be provided are established in
conjunction with the Fund’s formation. The IMA sets forth the fee structure relevant to the Fund
and the management services that GIM will provide by reference to the Governing Fund
Form ADV Part 2 Brochure | Geronimo Investment Management March 2019
Documents. While these are generally described herein, Investors should carefully review these
documents to fully understand the total fee amounts and other expenses that will be paid by the
Fund and its Limited Partners to the Investment Manager.
Management Fee
Pursuant to the IMA, GIM is compensated for managing the Fund’s assets, and providing other
services such as performing financial analyses, monitoring the Fund’s assets, and/or other
administrative services. In consideration of these services, the Fund will pay GIM a quarterly
management fee (the “Management Fee”) in advance based on the amount and timing (generally
referred to as the “Commitment Period”) of capital committed. The Commitment Period generally
begins at the time of the Initial Closing and may not end until six years later.
GIM and its affiliates reserve the right to waive or reduce management fees for certain investors,
including employees, a limited number of strategic partners, advisors and consultants and others
as may be determined in GIM’s sole discretion.
Carried Intere st Allocations
A portion of the Fund’s cash is expected to be distributed to the General Partner in the form of a
yield-carry fee (“Yield Carry”); furthermore a portion of the Fund’s net investment profit is
expected to be allocated to the capital account of its General Partner in the form of carried interest
fees (“Carried Interest” or “Exit Carry”). The manner in which such carried interest is calculated
is more fully described in the Governing Fund Documents and Investors should refer to these
documents for further details. Generally, however, Investors in the Fund are subject to a yield
carry of 20% of the realized cash yield above 5% per annum measured every three years and an
exit carry of 20% subject to an 8% preferred return and a GP catch-up clause, a claw-back and an
escrow.
As is the case with Management Fees, GIM and its affiliates reserve the right to waive or reduce
carried interest for certain investors, including employees, a limited number of strategic partners,
advisors and consultants and others as may be determined in GIM’s sole discretion.
Partner Giveback
The General Partner may require each Limited Partner to return distributions made to such Partner
for the purpose of meeting that Partner’s pro rata share of Fund Expenses (including
indemnification obligations). No Limited Partner will be required to return all or a portion of a
distribution to the extent that such return, combined with all prior returns of distributions, would
exceed 25% of such Limited Partner’s Commitment. The obligation to return a distribution will
cease upon the third anniversary of the date of termination of the Fund, unless written notice of a
specific pending or threatened claim is given to each Limited Partner prior to such date, in which
case such obligation will continue with respect to such claim only.
Other Fees Earned by GIM
GIM and/or its affiliates may receive directors’ fees, consulting fees, advisory fees or equivalent
compensation from Portfolio Investments or other persons. These fees will be offset against
GIM’s Management Fee.
Form ADV Part 2 Brochure | Geronimo Investment Management March 2019
Offering and Organizational Expenses
The Fund will bear all legal, organizational and offering expenses, including the out-of-pocket
expenses of the General Partner and its agents (but excluding placement agent fees), actually
incurred in the formation of the Fund and the General Partner up to an amount not to exceed
$2,000,000 (“Organizational Expenses”). GIM will bear full economic responsibility for
Organizational Expenses in excess of $2,000,000 and all fees payable to any placement agent for
the Fund through an offset, on a dollar-for-dollar basis, against the management fee payable by the
Fund.
Other Fund Expenses
In addition to management fees, Yield Carry, Carried Interest, and Other Fees, the Limited
Partners will bear indirectly and pay (to the extent not reimbursed by a portfolio company) all
other expenses ("Partnership Expenses”) relating to the business of the Partnership not paid by the
Manager pursuant to the Management Agreement, including without limitations:
a. all expenses incurred in connection with the operation of the Partnership, including but not
limited to, all expenses incurred with the diligence of a potential portfolio investment,
acquisition, financing, management, administration, operation and disposition of any
portfolio investment, including all travel expenses, data and market research expenses,
expenses incurred in the preparation and distribution of reports and memoranda accounting
expenses, legal fees and disbursements, transfer agent fees and expenses, expenses of other
service providers, advisers and consultants;
b. all out-of-pocket expenses incurred in connection with the preparation or delivery of or
otherwise relating to reports made to the Limited Partners or the Advisory Board,
including, without limitation, audit costs;
c. all costs related to litigation, dispute resolution or settlement involving the Partnership, the
General Partner, the Manager or any portfolio investment or Portfolio Company,
including, without limitation, attorneys' fees incurred in connection therewith;
d. all costs related to the Partnership's indemnification and exculpation of the General
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