Item 5 – Fees and Compensation
A. Compensation for Advisory Services
The Adviser receives asset- and performance-based fees and allocations from the Funds through a
deduction from the capital account of each limited partner.
The specific payment terms and other conditions of these fees and allocations are set forth in the
Fund’s documentation.
Management Fee
The following is a summary of the terms of the management fees paid by the Funds1:
• fees are paid quarterly in advance;
• the annual management fees range from 0-1% of aggregate invested capital; and
• “invested capital” does not include investments that have been written off.
The Adviser does not currently have a fee schedule.
Performance Allocation
The following is a summary of the terms of the performance-based allocations allocated by the
Funds to the GLCP General Partners:
• after the Fund’s limited partners receive a return of capital and a preferred return (and,
subject to any other performance hurdles, as set forth in the relevant Fund documentation),
the Fund’s general partner is allocated 10% to 22.5% of any proceeds distributable to a
limited partner that are received by the relevant Fund; and
• all performance-based compensation will be effected consistent with the requirements of
Section 205 of the Advisers Act and Rule 205-3 thereunder.
Related Conflicts
In respect of Vinvention LP and WG Capital Partners LP 100% of the management fee is paid to Vinvention Capital
Partners GP LLC and WG Capital Partners GP LLC, respectively, who use this fee to pay for operating expenses
incurred in connection with the management of the respective funds. In the event that the management fee paid
exceeds such operating expenses, the excess amount is distributed as follows: In the case of Vinvention LP, 65% to
Bespoke and 35% to other members of Vinvention Capital Partners GP LLC, respectively. In the case of WG Capital
Partners LP, 100% to Bespoke. In respect of Bespoke A LP, Bespoke B LP and Asclepius Capital Partners LP, no
management fees are received, however, the Adviser receives reimbursement for expenses incurred in connection
with the management of these funds and holds founder shares.
Where management fees are based on invested capital, the Adviser may be incentivized to
overvalue the Fund’s investments to increase the amount of its management fees. Further, the
Adviser may be incentivized not to write off investments because doing so could reduce the amount
upon which the management fees are charged.
Asset-based and performance-based compensation may incentivize the Adviser to dedicate
increased resources to the Fund(s) that are charged a higher fee or better-performing Fund(s) (in
order to increase the amount of fees payable to the Adviser).
The terms of the performance-based compensation could also incentivize the Adviser to make
decisions regarding potential investments and the timing and structure of realization transactions
that may not be in the best interests of the relevant Fund (and its investors). For example, the
Adviser may be incentivized to make more risky or speculative investments than it would
otherwise make in the absence of performance-based compensation. Further, the relevant general
partner would be in a position to receive carried interest distributions earlier if profitable
investments were liquidated prior to investments that were not profitable because, at the time
proceeds from those profitable investments were realized, the relevant Fund would not be required
to first distribute capital to limited partners to make up for prior losses associated with
unprofitable investments.
The Adviser believes that the fact that (i) the Funds do not have overlapping primary investment
periods, (ii) the Adviser maintains allocation procedures (described in Item 10 below), (iii) each
Fund typically makes all of its primary investments in respect of a single company and (iv) the
Adviser values Fund assets pursuant to specific valuation policies and procedures (see “Valuation”
below) helps to mitigate these actual and potential conflicts of interest.
Other Compensation
The Adviser and its personnel have received (and may in the future receive additional) initial fees,
service fees, add-on fees, financial advisory fees, monitoring fees, break-up fees, organization and
financing fees and similar fees for arranging acquisitions and other major financial restructurings,
divestment/exit fees and directors’ and other fees and annual retainers from the portfolio
companies in which the Funds invest (or from a potential target of or potential purchaser of those
portfolio companies). Unless otherwise required by a Fund’s documentation, the Adviser does not
generally require its personnel to return, or redirect, any such amounts to the relevant Fund, nor
does the Adviser offset the advisory fees paid by the Fund by such amounts.
Fee Waivers/Reductions
Limited partners of the Fund have in the past negotiated and may in the future negotiate different
fee terms than those set forth in the Fund’s documentation (through side letters).
Indemnification
Each Fund is obligated to indemnify GLCP, Bespoke (in the case of Vinvention LP and WG Capital
Partners LP), the Fund’s general partner and certain of their respective personnel under certain
circumstances, as set forth in the relevant Fund’s documentation.
Valuation
The value of the Funds’ investments is relevant to numerous aspects of those entities, including any
management fees and performance allocations borne by the Funds (and therefore their limited
partners). Under its valuation policies, GLP LLP’s board of directors makes the final determination
as to the value of an investment, and may rely conclusively on the valuations provided by managers,
advisors, directors or other similarly situated persons. With respect to Vinvention LP, WG Capital
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