ITEM 5 – FEES AND COMPENSATION
Item 5.A Describe how you are compensated for your advisory services. Provide your
fee schedule. Disclose whether the fees are negotiable.
All clients of GESD are Qualified Purchasers as defined in section 2(a)(51)(A) of
the Investment Company Act of 1940. In addition, each Investor in the Funds
must meet certain eligibility provisions: interests/shares in the Funds are generally
offered to (A) U.S. Investors who are (i) accredited investors within the meaning
of Regulation D of the U.S. Securities Act of 1933, as amended (“Accredited
Investors”) and (ii) qualified purchasers within the meaning of Section 2(a)(51) of
the U.S. Investment Company Act of 1940, as amended (“Qualified Purchasers”);
and (B) non-U.S. Investors. Investors and prospective Investors should refer to
the offering documents for the Funds for a detailed description of the fee
schedules applicable to an investment in the Funds.
It should be noted that the fees paid by Investors are negotiated prior to entering
into the Partnership Agreement. Thereafter, they are fixed.
Item 5.B Describe whether you deduct fees from clients’ assets or bill clients for fees
incurred. If clients may select either method, disclose this fact. Explain how
often you bill clients or deduct your fees.
GESD, or the Affiliated General Partners, deducts fees applicable to the
applicable Fund (and Investors) directly from the Funds’ assets. Clients and
Investors do not have the ability to choose to be billed directly for fees incurred.
In general, GESD receives a management fee based on a fixed percentage of each
Fund’s net assets. In addition, the Affiliated General Partners receive a
performance allocation (“Carried Interest Distribution”), based on a percentage of
net income of the respective fund (pursuant to the detailed terms as described in
each Funds’ governing documents). The management fee is payable quarterly in
advance and the Carried Interest Distribution is made pursuant to the terms of the
respective offering documents.
It is critical that Investors refer to the relevant confidential private
placement memorandum or other governing documents for a complete
understanding of how fees are paid to GESD, or an Affiliated General
Partner. The information contained herein is a summary only and is
qualified in its entirety by such documents.
Item 5.C Describe any other types of fees or expenses clients may pay in connection
with your advisory services, such as custodian fees or mutual fund expenses.
Disclose that clients will incur brokerage and other transaction costs, and
direct clients to the section(s) of your brochure that discuss brokerage.
GESD or the Affiliated General Partners shall bear the following “General Partner
Expenses”:
1. The excess (if any) over Organizational Expense Cap (as defined below);
2. Fees to placement agents; and
3. All normal office overhead of the Affiliated General Partners and GESD
including compensation of the Affiliated General Partners’ and GESD’s
employees, rent and utility expenses, and telecommunications equipment,
office furniture and equipment and computers.
The Funds’ expenses shall include:
1. A set amount of organizational expenses as described in the Funds’
offering documents (the “Organizational Expense Cap”);
2. All expenses of operating the Funds other than General Partner Expenses,
including legal, auditing, consulting, financing and accounting fees and
expenses; expenses associated with each Fund’s financial statements, tax
returns and K-1s; out-of pocket expenses of transactions not
consummated (“Broken Deal Expenses”); other expenses associated with
the acquisition, holding and disposition of the Funds’ investments (e.g.,
legal, accounting, due diligence and travel expenses), including
extraordinary expenses (such as litigation, if any); expenses of an annual
partners’ meeting; research expenses; expenses in connection with
liability and other insurance premiums; costs of “indemnification
damages” (as described in the relevant offering documents); and any
taxes, fees or other governmental charges levied against the Funds.
GESD or the Affiliated General Partners may also receive certain transaction fees,
advisory fees, director’s fees, break-up fees or other similar fees in connection
with portfolio investments of the Funds as compensation for financial advisory
and similar services provided to the Funds’ portfolio companies. The
management fees payable by the Funds are offset by a portion of such fees
pursuant to the terms of the applicable Fund Agreement.
It is critical that Investors refer to the relevant confidential private
placement memorandum and/or other governing documents for a complete
understanding of expenses they may pay through an investment in the Funds.
The information contained herein is a summary only and is qualified in its
entirety by such documents.
Item 5.D If your clients either may or must pay your fees in advance, disclose this fact.
Explain how a client may obtain a refund of a pre-paid fee if the advisory
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