Item 5. Fees and Compensation
Management Fee
As compensation for investment advisory services rendered to the JLL Funds, JLL Partners
receives from each JLL Fund an annual management fee payable quarterly in advance. Limited
partners in the JLL Funds are billed for this fee directly. Upon termination of a Management
Agreement, appropriate treatment will be given to all management fees collected in advance. As
described below, the management fee may be reduced or waived in some circumstances in
connection with the receipt by JLL Partners or its related persons of various fees paid by actual
or prospective portfolio companies. The management fee is generally subject to waiver or
reduction by JLL Partners in its sole discretion, including in connection with investments made
by the Fund General Partners or its related persons.
To the extent provided in the Management Agreements and the partnership agreements of the
JLL Funds, JLL Partners will pay out of its management fees certain operating expenses,
including expenses on account of rent, utilities, office supplies, office equipment, travel,
entertainment, compensation of its employees (other than carried interest described in Item 6
below) and other routine administrative expenses relating to the services and facilities provided
by JLL Partners to the JLL Funds. Each JLL Fund will bear all other expenses relating to it to
the extent not borne by its portfolio companies, including the cost of directors’ and officers’
liability insurance, legal, accounting, investment banking, consulting, research, brokerage,
finders', custody, transfer, registration, advisory board, appraisal, damages, annual meeting,
winding up and liquidating the JLL Funds, filing notification or other regulatory requirements,
interest, taxes and extraordinary expenses, and other similar fees and expenses. Some of these
expenses borne by the JLL Funds may relate to costs associated with unexecuted transactions.
Certain expenses are incurred on behalf of, or for the benefit of, more than one JLL Fund. In
such a case, such expenses are apportioned among the applicable JLL Funds on a pro rata based
on each JLL Fund's respective Capital Commitments or in such other equitable manner intended
to reflect the relative benefits received by each of the applicable JLL Funds.
Other Fees
JLL Partners and its affiliates will typically perform management, advisory, monitoring,
consulting, transaction-related services, financial advisory and other services ("Related Services")
for, and will receive fees from, actual or prospective portfolio companies or other deal related
investment vehicles of the JLL Funds, including such fees in connection with mergers,
acquisitions, add-on acquisitions, refinancings, public offerings, sales and similar transactions.
These fees may be significant and could, in some instances, exceed the management fee. Such
fees may be paid in cash, in securities of portfolio companies or investment vehicles (or rights
thereto) or otherwise.
Although such fees are in addition to the management fees paid by the JLL Funds, JLL Partners
will reduce future management fees in connection with the receipt of these fees. The calculation
of such reduction varies from fund to fund and is described in the applicable fund documents.
Such reductions will be credited on a regular basis. To the extent any such credit would reduce
the management fee for a given quarter below zero, such credit will be carried forward for future
application. These fees are disclosed in the annual financial statements of the applicable JLL
Fund.
Although JLL Partners does not generally utilize the services of broker-dealers for transaction
related services, in the event that it chooses to use a broker-dealer for limited purposes relating to
a particular JLL Fund, such JLL Fund will incur brokerage and other transaction costs. For
additional information regarding brokerage practices, please see Item 12 below.