Fees and Compensation
a. Advisory Clients
For Advisory Clients the management fee is separately negotiated between HQ and each Advisory Client and can
vary.
HQ may also be entitled to compensation on the basis of a share of the capital gains upon, or the capital
appreciation of, the investments, or any portion of the investments,(incentive allocation) from an Advisory Client as
long as the Advisory Client meets the definition of a “qualified client” under the Investment Advisers Act of 1940 (as
amended, the “Advisers Act”). Incentive Allocations are also separately negotiated with each Advisory Client and are
further described below in Item 6 Performance Based Fees and Side-by-Side Management. HQ in its discretion may
waive or reduce the management fee or Incentive Allocation chargeable to any Advisory Client.
b. Non-Discretionary Advisory Clients
The financial planning and wealth management services we or one of our Affiliates may provide are in conjunction
with our investment advisory services, and, in certain instances, our Affiliates may charge additional fees for any of
these services. From time to time, we also recommend unaffiliated outside professionals to provide services to an
Advisory Client. The Advisory Client will generally be responsible for any fees charged by outside professionals, in
addition to our management fee and Incentive Allocations. In connection with our financial planning and wealth
management services, we may recommend on a non-discretionary basis the purchase of public securities or fixed or
variable life and other insurance products or annuities.
An Advisory Client may purchase similar products or various other products we recommend through other brokers
or agents not affiliated with us.
c. Private Funds
For the Funds, HQ is entitled to receive both a management fee as well as an Incentive Allocation, , as outlined
below. Generally, HQ is entitled to an annual management fee ranging from 0.5% to 1.0% billed either quarterly in
advance or as a portion of each Investor’s capital contribution. Further, depending on the Fund, HQ is entitled to an
Incentive Allocation generally equal to 10% of Investor distributions exceeding their original capital commitment.
Investors in the Funds are encouraged to refer to the respective Fund Operative Documents for more information.
HQ has the discretion to reduce or waive the management fee or carried interest with respect to any Investor,
including Affiliates of the General Partner and HQ.
Please see Item 6 Performance Based Fees and Side-by-Side Management for more information related HQ’s eligible
carried interest allocation.
Expenses
Investors in the Funds may also incur the cost, directly and indirectly, of certain additional expenses of the Funds.
Such expenses may include administration, custody, legal, audit and other similar expenses involved in the ongoing
operation of the Funds. Investors and prospective Investors are encouraged to refer to the respective Fund’s
Operative Documents for more information related to specific Fund expenses. Nonetheless, the Funds will pay (or
reimburse the General Partner and HQ ) for the Fund’s organizational, offering and startup expenses, including but
not limited to legal, travel, accounting, filing, capital raising and other organizational expenses.
While not an exhaustive list, the Funds will pay (or reimburse the General Partner and HQ) for all costs and expenses
relating to its operations (to the extent not reimbursed or otherwise paid by DCG), including without limitation the
following: (i) fees, costs and expenses related to the identification, evaluation, negotiation, acquisition, due diligence,
restructuring, closing, holding, monitoring and disposition of the investment and other assets, including, without
limitation, travel expenses, commissions or brokerage fees or similar charges and other similar third-party expenses
in connection therewith; (ii) expenses related to organizing and maintaining entities, including holding companies,
through or in which the investment will be made; (iii) the management fee; (iv) legal, auditing, consulting,
administration, accounting and other professional expenses (including expenses associated with the preparation of
the Funds’ financial statements, tax returns and IRS Schedule K-1s and other reporting and providing information to
Investors); (v) insurance premiums related to indemnification of the General Partner, HQ and their respective Affiliates
against any liability related to the Investments and operation of the Funds, including directors’ and officers’ liability
insurance; (vi) all third party expenses in connection with transactions not consummated; (vii) indemnification and
indemnity contributions or reimbursement obligations of a Fund as set forth in the Fund’s Operative Documents ; (viii)
taxes or government charges; (ix) principal, interest and other fees, charges and costs associated with permitted
borrowing; (x) bank and custodial fees; (xi) costs of any investigation or proceeding involving a Fund’s activities as set
forth in the Fund’s Operative Documents; (xii) organizational expenses identified in each respective Fund’s Operative
Documents; (xiii) costs and expenses for terminating, dissolving and winding up a Fund; and (xiv) all other costs,
expenses and fees reasonably related to a Fund and its operations. The General Partner or HQ shall advance payments
for Fund expenses on behalf of the Funds until Investor capital contributions are received, and the Funds will
reimburse the General Partner or HQ as soon as possible thereafter on a dollar-for-dollar basis.
If one of the Funds invests into a private fund not managed by our affiliates or HQ, then an Investor in the Fund
effectively will incur two levels of advisory fees: (1) the Fund’s management fee and Incentive Allocation; and (2) any
...