Item 5. Fees and Compensation
Item 5.A.
Fees payable by Clients to KIG or its related persons are set forth in detail in the Governing Documents of
the applicable Client. A brief summary of those fees is provided below.
Management Fee
KIG receives a fixed management fee from the Funds, calculated monthly, in an amount equal to one-
twelfth (1/12) of an annual rate ranging from 0.5% to 2.0% of the capital account of each Limited Partner.
The management fee rate for each Limited Partner may differ based on the liquidity associated with the
relevant series of interest subscribed to, with less liquid interests generally subject to a lower management
fee.
The management fee is paid by the Funds monthly. The management fee will be prorated in the event that
additional capital contributions are made on a date other than the start of a month or if a Fund ends on a
date other than the last day of a month. The Manager may waive all or part of the management fee otherwise
due with respect to any investor including, without limitation, its affiliates, members, and/or employees.
The Funds’ terms, classes of interest, and management fee calculations are more fully described in the
Governing Documents of the Funds.
The Manager does not have a standard fee schedule for the Sub-Advised Account. Any management fees
received by KIG and/or its related persons with respect to the Sub-Advised Account are calculated and paid
in accordance with each Sub-Advised Account’s Governing Documents.
Performance-Based Compensation
An affiliate of KIG receives a performance-based incentive allocation from Limited Partners of KIG
Investment Partnership, LP and KIG Offshore Feeder Fund Limited in an amount equal to 20% of net
appreciation of each capital subaccount relating to a capital contribution (including unrealized gains).
Certain classes of interests are subject to a 6% cumulative annual hurdle rate, compounded annually.
An affiliate of KIG may receive a carried interest from Limited Partners of OTX Investment Fund, LP upon
distribution of capital to Limited Partners. Limited Partners will first be distributed an amount up to its
unreturned capital contribution. Once the Limited Partner has received a return of its capital contribution,
any further proceeds will be distributed eighty percent (80%) to each Limited Partner and twenty percent
(20%) to the General Partner as its carried interest.
The Manager may waive all or part of the incentive allocation or carried interest with respect to any investor
including, without limitation, its affiliates, members, and/or employees. The Fund’s terms, classes of
interest, and incentive allocation calculations are more fully described in the Governing Documents of the
Fund.
Any performance-based compensation received by KIG and/or its related persons with respect to the Sub-
Advised Account is calculated and paid and/or allocated in accordance with the Sub-Advised Account’s
Governing Documents.
Item 5.B.
All management fees or performance-based compensation received by KIG or a related person with
respect to Limited Partners of the Funds are deducted from the capital accounts of such Limited Partners
at the frequency described in 5.A.
Any management fees or performance-based compensation received by KIG and/or its related persons
with respect to the Sub-Advised Account are received in accordance with the Sub-Advised Account’s
Governing Documents.
Item 5.C.
The Manager renders its services to the Funds at its own expense, including the salaries of employees
necessary to render such services and certain overhead expenses attributable to the Manager’s operations.
Other overhead expenses will be shared among the Funds, the Manager and certain other accounts
managed by KIG (if applicable).
Operating and investment expenses of the Funds are borne by the Funds, as applicable, including, without
limitation, any custodial fees, interest and other lenders’ charges, taxes (other than income taxes),
brokerage commissions, management fees, legal, administration, audit and accounting expenses, filing
fees, research expenses, travel expenses, expenses of any transfer agent or similar recordkeeping agent
and organizational expenses to establish additional vehicles (such as an additional feeder fund, a parallel
fund or a similar vehicle) in connection with any restructuring of a Fund. All expenses payable by a Fund
will be paid by the Fund directly from a Fund’s assets. A portion of a Fund’s operating expenses may be
shared with other investment entities or accounts managed by the General Partner, the Manager or their
affiliates on an equitable basis.
The Manager may, in its sole discretion, elect to assume certain of the expenses of the Fund on an ongoing
basis, and to no longer assume such expenses at any time in its sole discretion.
Any expenses paid by the Sub-Advised Accounts are set forth in each Sub-Advised Account’s Governing
Documents, and include brokerage and certain other transaction costs.
See Item 12 of this brochure for a more detailed discussion of KIG’s brokerage practices.
Item 5.D.
The management fees paid by the Funds are calculated and paid monthly and the paid by the Sub-Advised
Account are accrued monthly and paid semi-annual.
The Management Fee will be prorated in the event that a Funds initial closing takes place or additional
capital contributions are made on a date other than the start of a month. A prorated portion of the
Management Fee will be refunded if a Fund liquidates or ends on a date other than the last day of a month.
Item 5.E.
Not applicable. Neither KIG nor its supervised persons are compensated for the sale of securities or other
investment products.