JFL Capital Management LLC

Item	5	–	Fees	and	Compensation

A.	     Fee	Schedule
The	 fees	 and	 compensation	 payable	 to	 JFL	 are	 negotiable	 and	 vary	 among	 its	 Clients.
However,	the	range	of	compensation	is	generally	as	follows:
        1.	      Management	Fee
The	 Firm	 typically	 receives	 a	 monthly	 asset-based	 management	 fee	 calculated	 as	 a
percentage	of	each	Investor’s	capital	account,	payable	monthly	in	advance.	The	management
fee	is	generally	2.0%.
        2.	      Incentive	Allocation
The	Firm	generally	receives	an	incentive	allocation	equal	to	a	percentage	of	the	net	income
allocated	to	each	Investor	for	the	year,	but	only	to	the	extent	net	income	allocated	to	that
Investor	exceeds	any	cumulative	losses	that	were	allocated	to	that	Investor	for	earlier	periods
and	that	have	not	been	recovered	(a	“high	water	mark”).	This	incentive	allocation	is	generally
25%	and	is	typically	made	at	the	end	of	each	calendar	year.
The	incentive	allocation	will	only	be	charged	to	accounts	of	those	Investors	who	are	“qualified
clients”	 as	 defined	 in	 Rule	 205-3	 of	 the	 Investment	 Advisers	 Act	 of	 1940,	 as	 amended
(“Advisers	Act”),	in	accordance	with	applicable	state	law.
	       3.	      Fee	Comparison
The	 expenses	 of	 the	 Client,	 including	 the	 management	 fee	 and	 incentive	 allocation	 may
constitute	a	higher	or	lower	percentage	of	average	net	assets	than	would	be	found	in	other
investment	vehicles.
B.	     Payment	of	Fees
Management	fees,	incentive	allocations,	and	third-party	fees	(discussed	below)	are	deducted
from	 Client	 assets.	 Management	 fees,	 which	 are	 paid	 in	 advance,	 are	 withdrawn	 at	 the
beginning	of	the	month.	Incentive	allocations	are	allocated	as	of	the	last	business	day	of	the
calendar	 year	 and	 as	 of	 any	 date	 on	 which	 an	 Investor	 makes	 a	 withdrawal	 or	 receives	 a
distribution	from	such	Investor’s	capital	account(s).
C.	     Third-Party	Fees
The	Client	shall	pay	such	costs	and	expenses	as	the	Firm	shall	reasonably	determine	to	be
necessary,	 appropriate,	 advisable	 or	 convenient	 to	 carry	 on	 its	 business	 and	 realize	 its
objective,	including:		(i)	management	fees;	(ii)	all	general	investment	expenses	(i.e.,	expenses
which	the	Firm	reasonably	determines	to	be	directly	related	to	the	investment	of	the	Client’s
assets);	 (iii)	 all	 administrative,	 legal,	 accounting,	 auditing,	 record-keeping,	 tax	 form
preparation,	compliance	and	consulting	costs	and	expenses;	(iv)	fees,	costs	and	expenses	of
third-party	service	providers	that	provide	such	services;	and,	(v)	any	extraordinary	expenses.
JFL’s	fees	are	exclusive	of	brokerage	commissions,	transaction	fees,	and	other	related	costs
and	expenses	which	shall	be	incurred	by	the	Clients.		Such	charges,	fees	and	commissions	are

                                                                                   Part	2A	of	ADV:
                                                              JFL	Capital	Management	LLC	Brochure

exclusive	 of	 and	 in	 addition	 to	 the	 Firm’s	 fees	 and	 compensation,	 and	 the	 Firm	 shall	 not
receive	any	portion	of	these	commissions,	fees,	and	costs.
Please	see	Item	12	of	this	Brochure	regarding	brokerage.
D.	     Prepayment	of	Fees
Prepaid	management	fees	are	earned	within	one	month	after	payment.
E.	     Outside	Compensation	for	the	Sale	of	Securities
Neither	JFL	nor	its	supervised	persons	accept	compensation	for	the	sale	of	securities	or	other
investment	products	outside	of	its	association	with	JFL.
The	 foregoing	 discussion	 in	 Items	 5	 represents	 JFL’s	 basic	 compensation
arrangements.		The	management	fees	and	incentive	allocations	described	above	are
structured	to	comply	with	Rule	205-3	under	the	Advisers	Act	and	applicable	state	laws.
Fees	 and	 other	 compensation	 are	 negotiable	 in	 certain	 circumstances	 and
arrangements	with	any	particular	Investor	may	vary.		Although	the	Firm	believes	its
fees	are	competitive,	lower	fees	for	comparable	services	may	be	available	from	other
investment	advisers.

Item	7	–	Types	of	Clients

JFL	provides	investment	advice	and	portfolio	management	services	to	the	Clients.
JFL	 may	 in	 the	 future	 provide	 the	 same	 or	 similar	 services	 to	 other	 privately	 placed
investment	funds	and/or	separately	managed	accounts.
The	Firm	intends	to	restrict	the	number	of	Investors	in	the	Funds	and	will	offer	Interests	only
through	non-public	transactions	in	order	to	maintain	the	Funds’	exclusion	from	“investment
company”	status	under	the	Investment	Company	Act	of	1940,	as	amended	(the	“Investment
Company	Act”).

                                                                                   Part	2A	of	ADV:
                                                              JFL	Capital	Management	LLC	Brochure

Prospective	 Investors	 must	 meet	 eligibility	 criteria,	 and	 are	 subject	 to	 certain	 withdrawal
requirements	 and	 limitations.	 Prospective	 Investors	 are	 encouraged	 to	 thoroughly	 review
the	 Funds’	 Constituent	 Documents,	 which	 set	 forth	 all	 of	 the	 terms	 in	 detail.	 Though	 the
Clients	generally	pursue	the	same	strategy,	offering	terms	may	differ.
The	Funds.		Each	Investor	generally	must	be	an	“accredited	investor”	(as	defined	in	Regulation
D	under	the	Securities	Act	of	1933),	an	Investor	who	is	eligible	to	enter	into	a	performance
fee	arrangement	under	state	and/or	federal	law,	as	applicable,	and	must	meet	other	criteria
as	specified	in	the	Constituent	Documents.		The	minimum	initial	investment	is	$250,000,	and
the	minimum	additional	investment	is	$50,000,	subject	to	waiver	at	the	discretion	of	JFL.
Separately	Managed	Accounts.		Terms	for	separately	managed	accounts	are	generally	similar
to	the	Funds,	but	can	be	negotiated	on	a	case	by	case	basis	and	may	differ	from	those	of	the
Funds.		Account	minimums	are	negotiable	and	vary	among	these	Clients.