ITEM 5. Fees and Compensation
Glencoe may charge Funds an investment advisory fee where applicable. The fees are calculated
in accordance with the governing Fund documents. They are payable semi-annually and are
generally due in advance no earlier than the fifteenth (15th) calendar day of the relevant period or
they are payable quarterly and are generally due on the first (1st) calendar day of the relevant
period. During a Fund’s commitment period, the annual fee ranges from 1% to 2% of the total
commitment of the investors in the Fund(s). Following the commitment period of a particular
Fund, the fee percentage is typically reduced and is applied to the then current invested capital of
the investors. Investment advisory fee percentages and commitment periods are described in the
offering document or governing documents for each Fund and the respective management and/or
services agreements applicable to each Fund (collectively, as applicable, “Fund Documents”).
For all Funds, the investment advisory fee may be reduced in part, as further set forth in the Fund
Documents for each Fund, by a percentage of those fees described further in Item 5.
The foregoing represents the investment advisory fees that are generally charged, however, fees
are negotiable in certain circumstances and arrangements with any particular Fund or Fund
investor may differ from those described herein.
As provided by Fund Documents, Fund investors generally are required to make capital
contributions. Fund investors may receive capital call notices periodically. A Fund general partner
or manager may cause a Fund to pay investment advisory fees to Glencoe, as further provided
herein.
As provided by Fund Documents, Funds will be charged other expenses, such as third party
expenses incurred in connection with the operation of the Funds or the investment portfolio. These
amounts include costs and expenses related to the purchase, evaluation of, holding and sale of
portfolio investments (to the extent not reimbursed but including failed transaction costs);
expenses of any agents, custodians, counsel and accountants (including audit, tax preparation and
certification fees); any insurance, indemnity or litigation expenses, certain taxes, fees or other
governmental charges levied against the Funds; compensation payable to independent members of
Glencoe’s investment committee; out-of-pocket expenses (including travel and entertainment) and
extraordinary expenses of the Funds. The charging of such expenses to and among Funds may give
rise to a conflict of interest because Glencoe could have an incentive to favor one Fund over
another when making allocation decisions or to allocate expenses to Funds that could otherwise
be borne by Glencoe directly. Further, as discussed in Items 10 and 11 below, Glencoe or related
persons of Glencoe may engage in transactions with or alongside a Fund or Funds, and similar
allocation dilemmas may arise in relation to allocating expenses to Glencoe or its related persons
that arise from such activities. To address such conflicts, Glencoe has policies and procedures to
ensure that expenses will be allocated to and across the Funds, itself, and its related persons in a
fair and equitable manner.
In certain Funds, fees, in addition to the investment advisory fee described above, are paid to
Glencoe and its affiliates with respect to the purchase, financing, evaluation of,
management/holding and sale of portfolio investments. These additional fees generally offset the
advisory fee, if one is payable, by a certain percentage.
As a result of contracts with or ownership in portfolio companies held by certain of its Funds,
Glencoe or its affiliates may have the right to appoint board members to such portfolio companies,
or to influence their appointment, and to determine or influence a determination of their
compensation. From time to time, portfolio company board members may approve compensation
and/or other amounts payable to Glencoe and/or its affiliates. Glencoe and/or its affiliates may
also, from time to time, employ or contract with personnel with pre-existing ownership interests
in, or employment or other relationships with, portfolio companies and such personnel may also
offer their services across multiple portfolio companies and/or Glencoe and/or its affiliates. See
Item 10 for additional detail.
Prospective investors in the Funds should review Fund Documents carefully before investing.
In the event a Fund holds a marketable security or illiquid security that becomes marketable, the
Fund will be responsible for any brokerage, custodial, transfer-agent or related cost associated with
the sale of such security. Glencoe does not typically invest in the type of securities where
brokerage expenses are imposed. Glencoe does not have any affiliated brokers or dealers.
Distributions to investors in the Funds may be subject to some form of performance-based fee or
carried interest for the benefit of Glencoe or one of Glencoe’s affiliates. For more information,
please see Item 6 (Performance-Based Fees and Side-By-Side Management).