Item 5 – Fees and Compensation
Granville’s fixed fees for services as general partner and/or investment manager of
Granville Multi-Strategy Partners, L.P., Granville Equity Partners, L.P., and Granville Multi-
Strategy Global Partners, Ltd. are based upon a percentage of assets managed. The
standard asset-based management fee is 1% per year (0.25% per quarter) and is paid in
advance at the beginning of each calendar quarter. Fees are deducted from investment
fund assets. In the event an investor is admitted on a day other than the first business day
of a calendar quarter, or an investor withdraws funds during a quarter, management fees
are adjusted (charged or refunded for the ratable portion of the quarter) and are paid or
refunded at the beginning of the next quarter. Granville, in its sole discretion, reduces or
waives the standard asset-based management fee for certain investors. For example,
Granville has entered into agreements with certain financial institutions and investment
advisers under which these financial institutions and investment advisers will (1) advise
their clients of the availability of investment funds for which Granville serves as general
partner and/or investment manager and (2) share responsibility for providing services to
mutual clients with respect to investment fund matters. For investors who are clients of
these financial institutions or investment advisers, the standard asset-based management
fee may be, and currently is, discounted for certain investors by up to 25% to reflect the
shared responsibility for providing client services. No management fee is paid by the
general partner or investment manager of investment fund clients, or any investor who is
an affiliate of the general partner or investment manager.
As the general partner of Granville Private Equity Partners, L.P., GPEP Associates, L.P. (of
which Granville is the general partner) receives a fixed quarterly fee equal to 0.235%
(0.94% per year) of each partner’s capital commitment, plus 0.125% (0.5% per year) of the
excess, if any, of the fair market value of each partner’s capital account over the partner’s
capital commitment. The general partner may, in its sole discretion, reduce the quarterly
fee for all partners on the same basis. The fee is paid in advance at the beginning of each
calendar quarter. Fees are deducted from partnership assets.
As the general partner of Granville Investment Fund I, L.P., Granville receives an annual
management fee of 0.25% of the cumulative capital contributions made by partners
participating in certain investments. For the remaining investments Granville receives no
management fee.
As the general partner of Granville Private Equity Partners II, L.P. and Granville Private
Equity Partners III, L.P., Granville for the first five years receives a fixed quarterly fee equal
to 0.1875% (0.75% per year) of each partner’s cumulative capital contributions not to
exceed each partner’s capital commitment. Thereafter, Granville will receive a fixed
quarterly fee equal to 0.1875% (0.75% per year) of the lesser of each partner’s cumulative
capital contributions or capital balance.
The above-described management fees and fixed fees are payable without regard to the
overall success or income earned by an investment fund client and therefore may create an
incentive on the part of Granville to raise or otherwise increase assets under management
to a higher level than would be the case if Granville were receiving a lower or no
management fee or fixed fee.
A separately managed account or investment advisory client that invests in one of
Granville’s investment fund clients generally pays management fees and performance
compensation to Granville or its affiliates, which are in addition to any investment advisory
fees that are paid to Granville by such separately managed account or investment advisory
client. The offering documents of an investment fund client will include additional details
about the amount of and terms applicable to the fees and/or performance compensation
charged by an investment fund client. To the extent a separately managed account or
investment advisory client invests in a Granville managed investment fund client, Granville
and its related persons (directly or indirectly) benefit from fees and compensation payable
to Granville or its affiliates. In addition, because investment fund clients invest in
underlying funds, such separately managed account or investment advisory clients will
bear multiple levels of fees, performance compensation, costs and expenses.
In addition to Granville’s management fees, its investment fund clients also pay certain
operating expenses of such pooled investment funds including, but not limited to,
organizational and offering expenses (such as legal, accounting, professional, expert and
consulting fees and expenses, government filing fees (including any Form D and “blue sky”
filing fees and expenses), printing and mailing expenses, and other expenses incurred in
offering investment fund client interests); administrative costs and expenses; all fees and
compensation paid to underlying investment managers and underlying funds; expenses
related to investments in underlying funds; audit, accounting, and tax return expenses;
legal fees and expenses; constituent document amendment expenses; investor withdrawal
expenses; consulting fees; legal, regulatory and compliance expenses (including
compliance consultant expenses) (but not for the avoidance of doubt any costs or expenses
associated with Granville’s Form ADV); support expenses; taxes, fees or other
governmental charges; fund administrator expenses; expenses incurred in connection with
any meetings of, and communications with, investors (including in connection with
solicitation of consents); litigation expenses; insurance expenses; dissolution expenses; and
custody charges. Investment expenses payable by such investment fund clients include
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