ITEM 5 – FEES AND COMPENSATION
A. Fees
Gold Hill is compensated through the payment of management fees and performance fees by
the Funds. The specific terms relating to the fees paid by each Fund, summarized below, are
negotiated by the Investors in such Fund at the time of its formation and, as such, vary from
Fund to Fund.
All Investors in the Funds are accredited investors within the meaning of Regulation D of the
Securities Act and qualified purchasers within the meaning of Section 2(a)(51) of the
Investment Company Act .
Following formation of a Fund, the fees paid by the Funds are not negotiable.
Gold Hill (indirectly or directly) receives a management fee (the “Management Fee”) from
each Fund that is paid in cash quarterly in advance, with fees for any period shorter than a
full quarter being prorated for such quarter. In general, the amount payable by a Fund to
Gold Hill a percentage (generally ranging from 1.5% to 2% per annum) of the aggregate
capital commitments to such Fund. Following the end of a Fund’s investment period, the
Management Fee generally transitions to a percentage (typically 1%) of the Fund’s
outstanding investments.
Gold Hill, or the Affiliated General Partners, deducts fees applicable to the Funds directly
from the Fund’s assets. Clients do not have the ability to choose to be billed directly for fees
incurred.
In addition, the Affiliated General Partners may receive a performance allocation (“Carried
Interest”) based on, among other factors, net aggregate profits earned by a Fund (pursuant to
the detailed terms as described in each Fund’s governing documents).
Gold Hill or the Affiliated General Partners or their members, employees or other affiliates
may 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 may be offset (typically on a dollar for dollar basis)
of such fees pursuant to the terms of the applicable Fund Agreement.
B. Fund Expenses
The normal day-to-day operating expenses of the Funds are paid by Gold Hill or the
Affiliated General Partner from the Management Fee, including the salaries of the Gold Hill
employees (including the Principals), rent, communications, travel, consulting, other
expenses incurred in investigating, evaluating or managing investments or investment
opportunities including the cost of servicing and administering any loans made to Portfolio
Companies. Placement agent fees relating to the raising of capital for the Funds, if any, are
typically borne by the applicable Fund, but are considered a Management Fee offset the
quarter after which they are paid.
The Funds are responsible for all other organizational expenses of the Funds including: (i)
legal, accounting, audit and custodial fees and expenses; (ii) brokerage, broker-dealer,
registration, qualification, depository and similar fees or commissions; (iii) transfer, capital
and other taxes, duties and costs incurred in acquiring, holding, selling or otherwise
disposing of the respective Funds’ assets, including repossessed collateral for any loan; (iv)
costs of investor meetings, financial statements and other reports; and (v) the costs of
organizing the respective Fund, provided that such organizational costs will not exceed the
minimum stated in the respective Funds’ documents.
Please refer to Item 12 of this Brochure for information regarding Gold Hill MFV’s