Fees and Compensation
Compensation and Fee Schedules
All investors should review the Governing Documents of each M37 Fund alongside this
brochure for a more complete understanding of the fees and compensation applicable to a
particular fund.
M37 receives an asset-based management fee for providing investment management
services to each M37 Fund, and investors in these funds are charged such management fees
at rates of between 0-2% annually. The management fee is generally calculated with
respect to the net asset value of each M37 Fund, except M37 DB Offshore Fund LP, M37
DB Offshore Fund II LP and M37 AI Infra Offshore Fund LP, whose investors are charged
management fees based on the actively invested capital therein. Management fees are
deducted quarterly in advance and paid to M37.
In addition to the management fee, an affiliate of M37 has the right to earn performance-
based compensation at rates of 0 - 20% for each M37 Fund, which is generally calculated
with respect to realized and unrealized gain and allocated annually, except with respect
M37 DB Offshore Fund LP, M37 DB Offshore Fund II LP and M37 AI Infra Offshore
Fund LP, whose investors are charged performance-based compensation only upon
realized gains, in each case as set forth in the applicable Governing Documents.
Deduction of Fees
M37 is authorized under the Governing Documents to charge and deduct advisory fees
directly from the assets of the M37 Funds, in accordance with the timing and amounts
described above.
Other Fees and Expenses
In addition to the fees payable to M37, each fund bears its own expenses, including, without
limitation, the Management Fee.
Each M37 Fund also generally bears all costs, fees and expenses related to its investment
program, as well as expenses related to any special purpose vehicle formed for making or
holding investments, including: (a) the researching, making, holding, monitoring or
disposing of Investments (including prospective Investments, whether or not
consummated), including costs, fees and expenses related to research, due diligence,
proxies, brokerage commissions and borrowing charges on Investments sold short; (b)
research (e.g., all costs and expenses of research reports, subscriptions to research services,
research calls and meetings, research or industry conferences, and membership in trade
associations) and market data, including alternative data (including any computer
hardware, software and connectivity hardware (e.g., telephone and fiber optic lines)
incorporated into the cost of obtaining such research and market data, including third-party
vendors necessary to process such data and any customized development and
implementation costs) and expert networks; (c) exchange, clearing and settlement charges
and other trading-related costs (including the costs of outsourced trading service providers,
including technology support, operational and back office services), fees and expenses
(including trade errors resulting in a loss that are not the result of M37’s disqualifying
conduct), and appraisal fees and investment-related travel expenses (which are travel
expenses related to the purchase, sale or transmittal of, or due diligence regarding,
investments, including business class or the equivalent with respect to international travel,
transportation, lodging, meals, admission costs for attending conferences related to such
Investments and other similar costs and expenses); (d) investment banking fees and
expenses, such as underwritings and private placement expenses; (e) interest on, and
commitment fees and expenses arising out of, debt balances or borrowings (including stock
borrowings) and banking and custody fees; (f) fees of consultants and finders relating to
Investments; and (g) any attorneys, appraisers, accountants, consultants (including
consultants in specializations such as executive talent and human resources, management,
operations, manufacturing, procurement, technology, sales, marketing, acquisition due
diligence, integration/rationalization or other types of operations) or other experts, as well
as other expenses, related to Investments.
Each M37 Fund bears expenses incurred in connection with the offering and sale of
interests in such fund, including legal, accounting and administrative fees, printing costs,
expenses related to preparing offering documents and other marketing materials, expenses
related to the engagement and services of placement agents (including reimbursement of
expenses and indemnification of such placement agents), the cost of negotiating and
documenting any related compensation arrangements, costs of reporting and providing
information to existing and prospective investors, costs of structuring and documenting
any seeding arrangement, expenses related to the negotiation of and compliance with side
letters, travel expenses (including business class or the equivalent with respect to
international travel, transportation, lodging, meals and investor entertainment) related to
the fund’s offering, registration and other filing fees (including any Form D and “blue sky”
filing fees) to the extent such fees are directly related to the fund’s activities, other out-of-
pocket expenses, the cost of compliance with any applicable federal, state and other laws
directly related to the fund’s activities, additional agreement negotiations and other similar
expenses.
Each M37 Fund bears all costs, fees and expenses incurred by it, M37 and affiliates directly
related to the fund’s organization, operations and Investments, including the costs, fees and
expenses associated with compliance, regulatory filings or regulatory and governmental
inquiries of the fund, including: (a) all costs, fees and expenses associated with any
investigations, responding to any subpoenas, participating in any proceedings, entering into
any settlements or disgorging any profits (i) for activity involving the fund or, to the extent
...