Item 5. Fees and Compensation
All investors and potential investors should review the Governing Documents for the Funds in
conjunction with this brochure for more complete information on the fees and compensation
payable with respect to the Funds.
Measure 8’s revenue is derived from investment management fees and incentive/performance
fees. While a general description of these fees is discussed herein, specific terms of these
arrangements are detailed in the Governing Documents for each Fund. SMAs fees are negotiable
and detailed in each client’s investment management agreement. Generally, SMA fees are
invoiced quarterly in advance. With respect to the Funds, Measure 8 and its affiliates including
the Funds’ general partners, generally receive an annual management fee equal to or up to 2.00%
of assets under management (with exception of Phoenix Growth, a Closed-End Fund, which
received one-time investment fee), and an annual performance allocation of up to 20% of net
profits. Measure 8 debits management fees directly from the Funds’ custodial accounts in arrears
for the Open-End Fund and in advance for the Closed-End Funds. Incentive allocations are
assessed directly against investors’ capital account balances, are generally assessed annually and
are subject to each investor’s respective high- water mark. In addition, redemptions in the Open-
Fund are subject to a 5% fee payable to the Fund if redeemed within the first 12 months of initial
investment.
Measure 8’s management fees vary by Client and Measure 8 reserves the right to waive or
reduce fees for certain investors, including employees and others as may be determined in
Measure 8’s sole discretion. Generally, Measure 8 management persons or employees, their
relatives and investment or estate planning vehicles, do not pay management fees and/or
performance-based compensation on their Fund investments. However, such investors are still
assessed their pro-rata share of Fund expenses, which will either be paid by such investors
directly or allocated to Measure 8. Measure 8 will be reimbursed by the Funds for out-of-pocket
expenses incurred on behalf of the Funds. However, the Funds do not reimburse Measure 8 or
the general partner for general overhead costs. If Measure 8 provides advisory services to
separately managed accounts, these accounts generally will not be assessed a management fee
and will only pay incentive fees.
Mutual funds, closed-end funds, exchange traded funds and alternative investment funds are
investment vehicles and the investment strategies, objectives and types of securities held by such
funds vary widely. In addition to the advisory and/or performance fee charged by Measure 8,
clients indirectly pay for the expenses and advisory fees charged by the funds in which their
assets are invested. All such funds incur operating expenses in connection with the management
of the fund. Investment funds pass some or all of these expenses through to their shareholders
(the individual investors in the funds) in the form of management fees. The management fees
charged vary from fund to fund. In addition, funds charge shareholders (individual investors in
the funds) other types of fees such as early redemption or transaction fees. These charges also
vary widely among funds. As a result, clients will still pay management fees, and/or performance
fees, and other, “indirect” fees and expenses as charged by each mutual fund (or other fund) in
which they are invested.
In addition to management fees and incentive allocations, Clients and investors in the Funds bear
a variety of other expenses, including, as applicable Funds formation expenses; research and due
diligence, including travel-related expenses associated with research and due diligence such as
airfare, hotel accommodations, train tickets; quotation and valuation services; underwriting and
private placements; order management software; brokerage commissions; transactions costs;
“broken deals” (i.e., transactions which are not ultimately consummated by the Funds); trade
settlement; interest; custody fees; audit, tax and legal expenses; regulatory and compliance
expenses, including Form PF, Regulation D and state blue sky filings, and other filings of the
Funds, the general partners and the Company; fund administration expenses (such as, but not
limited to, performing risk management, fund accounting, investor reporting costs, calculating
Net Asset Values, and anti-money-laundering, client identification, and know-your-customer
analyses) and other service provider expenses; insurance premiums of the Funds, the general
partners and the Company (including insurance premiums with respect to any of their principals,
partners and officers); directors costs; costs of any litigation or investigation and costs associated
with reporting; liability insurance; any costs of providing information to existing and prospective
investors; and other ongoing operational expenses. Clients bear technology and communication
expenses related to research (including Bloomberg services), although technology and other
costs may be offset using “soft dollars” (See discussion of soft-dollar expenses below in the
section The Receipt of Research and Other Soft Dollar Benefits).
Measure 8 Principals and employees generally do not receive break-up, success, monitoring,
consulting or other similar fees in connection with their board of directors or other service to
portfolio companies (except as described below with respect to the Curaleaf investment). In the
event that such fees are received by Measure 8 in the future it is expected that such fees would
reduce management fees payable to Measure 8 in accordance with, and subject to the applicable
terms of the Funds’ respective Governing Documents.
In addition to the full-time investment professionals of Measure 8, the Company may engage the
services of certain operating partners to work actively with Measure 8 on sourcing and
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