Item 5: Fees and Compensation
Jones Road will be compensated in the form of management fees, performance fees, carried interest
and other fees.
The fees applicable to each Client are set forth in detail in the corresponding Offering Documents for
the Jones Road Funds, or for any SMAs in the Investment Management Agreement; a brief summary
of such fees is provided below.
It is important that Clients refer to the respective Offering Documents and other governing documents (including, any
Investment Management Agreement) for a complete understanding of fees and other forms of compensation. The
information contained herein is a summary only and is qualified in its entirety by such materials.
Management Fees
Jones Road is paid an investment management fee (“Management Fee”) based upon the terms of the
of the applicable Offering Documents corresponding to the Fund. The Management Fee is normally
deducted from the assets of such Clients on the first day of each calendar quarter, and is paid in advance
based upon the Fund’s net asset value on the first day of the quarter. The Management Fee payable
for any period other than a full calendar quarter will be adjusted on a pro rata basis according to the
actual number of days in such period. Management Fee rates will typically not be more than 1.5% per
annum of net asset value. Investors that subscribe for interests in a Fund for the first closing(s) and/or
above certain investment amount thresholds will obtain reduced Management Fee rates. Furthermore,
investors in certain bespoke co-investment vehicles may benefit from lower Management Fee rates in
those instances. Jones Road earns a Management Fee (the mechanics of which are generally consistent
with the above) in connection with its SMAs and any such fee would be as set forth in the applicable
Investment Management Agreement.
Performance Fees or Carried Interest
Jones Road (or an affiliate) may receive “Performance Fees” or Carried Interest” from Clients.
Jones Road earns a Performance Fee (or incentive allocation) of an agreed percentage (generally up to
20%) of a Client’s net asset value appreciation (realized as well as unrealized) in connection with a Fund
and any SMA it advises. Any such Performance Fee would be as set forth in the applicable Client’s
offering documents or Investment Management Agreement and may be subject to applicable hurdles
and/or high-water marks. Such Performance Fees are typically based on calendar year performance.
Investors that subscribe for interests for the first closing(s) and / or above certain investment amount
thresholds will obtain reduced Performance Fee rates. Carried Interest may be received in connection
with distributions to underlying closed-end fund investors provided certain agreed upon return of
capital and preferred returns have been achieved. The maximum Carried Interest rates will generally
be up to 20% after returning 100% of investor capital contributions and exceeding the preferred return
(typically 8%). As a result, Carried Interest is not expected to be received on a regularly scheduled
basis. Investors that subscribe for interests in a Fund for the first closing(s) and/or above certain
investment amount thresholds will obtain reduced Carried Interest rates.
Expenses
Expenses Generally
The Firm is responsible for and shall pay, or cause to be paid, all of their own ordinary administrative
and overhead expenses, including, without limitation, all costs and expenses related to rent, salaries,
office equipment, supplies, wages, bonuses, and other employee benefits.
Jones Road is authorized to incur and pay in the name and on behalf of a Client all expenses which
they deem necessary or advisable. Jones Road seeks to allocate expenses among applicable Clients and
the applicable investments of each Client in a fair and reasonable manner and in accordance with
applicable internal policies.
Organizational Expenses
Clients pay for certain expenses related to their organization and reorganization, such as legal expenses,
accounting expenses, filing expenses and fees incurred in connection with organizing and establishing
the Fund and its affiliates and expenses incurred in connection with offering of interests in the Fund;
provided, however, that if any amounts due to any placement agent are paid by the Fund, such amounts
will reduce the Management Fee, Performance Fee (or incentive allocation), Carried Interest and/or
similar amounts, as applicable.
Operational Expenses
Clients generally bear all of their operational expenses, including without limitation, the following: (i)
expenses related to the research, due diligence and monitoring of actual and prospective investments
(whether or not consummated) and the consummation of investments, including, without limitation,
the following: third-party investment sourcing fees; fees and expenses related to obtaining research and
market data; due diligence expenses including, without limitation, consulting and appraisal fees; travel
expenses; brokerage, prime brokerage and futures commission merchant fees, commissions and
expenses; expenses relating to reorganizations, restructurings and workouts; expenses relating to short
sales; clearing and settlement charges; custodial fees and expenses; bank service fees; interest expenses
and fees related to financings or refinancings; fees and expenses of proxy research and voting services;
and fees and expenses of third-party professionals, including, without limitation, consultants,
investment bankers, attorneys and accountants; (ii) reorganizational and certain operational expenses
of affiliated entities necessary for operation of a Fund; and (iii) fees and expenses relating to
information technology hardware, software or other technology (including, without limitation, costs of
software licensing, implementation, data management and recovery services and custom development)
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