ITEM 5 - FEES AND COMPENSATION
MGG is compensated through the payment of management fees and performance-based
compensation by the Funds. MGG will receive a periodic management fee (the
“Management Fee”) from the Funds, or directly from the investors (as the case may be) as
detailed below.
Subject to the specific terms set forth in the applicable Fund’s Governing Documents, the
annual Management Fee payable by a Fund investor in monthly or quarterly installments
is generally 1.5% (annualized) of the investor’s invested capital in respect of such Fund.
The foregoing Management Fee calculated with respect to the Fund investor is typically
subject to reduction (i.e., offset) for certain amounts, including such investor’s pro rata
share of: (i) 100% of certain types of portfolio company remuneration received by the
Fund’s general partner and/or its related persons, including director fees, consulting fees,
commitment fees, monitoring fees, success fees and break-up fees, if any; and (ii) any
placement fees paid or payable by the Fund (with the result that the placement fees are
ultimately borne by MGG and/or its related persons). MGG may waive or reduce the
Management Fee with respect to any investor in the Fund, including their affiliates or
employees. Management fees are paid by drawdowns of capital commitments from
investors or offset against income generated from the investments.
Additionally, subject to the terms of a Fund’s Governing Documents, MGG is generally
entitled to receive a performance-based allocation, distribution or payment (“Carried
Interest”). Carried Interest is allocated, distributed, or paid pursuant to the terms of the
Fund’s Governing Documents. Carried Interest is generally deducted from the proceeds
the Fund receives in respect of its portfolio investments, including interest and dividend
payments and net proceeds from the sale of portfolio investments. For an additional
discussion regarding performance-based compensation, please refer to Item 6 –
Performance-Based Fees and Side-by-Side Management.
All investors and prospective investors should review the Governing Documents of the
applicable Fund in conjunction with this Brochure for complete information on the
fees and compensation payable with respect to their investment or prospective
investment in the Fund. In certain circumstances, the advisory fees payable to MGG
may be negotiable. Investors and prospective investors in the Funds should note that
similar advisory services may (or may not) be available from other investment advisers
for similar or lower fees.
Co-Investor Management Fees
Under certain circumstances, MGG may also render advisory services to certain Funds
organized to facilitate co-investments by third parties (including, but not limited to,
existing Fund investors) in one or more of the same financing transactions engaged in by
the primary Funds. The investors in these co-investment Funds will generally (but may
not always) be charged an asset-based advisory fee (which may or may not be the same
as that charged to investors in the primary Funds). When such fees are charged, investors
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in the co-investment Funds typically will not be charged the same performance-based
compensation (as described below) as investors in the primary Funds. Further, the asset-
based advisory fees and other fees and expenses an investor in a co-investment Fund may
be obligated to pay is typically negotiated on a case-by-case basis and, as such, the asset-
based advisory fees and other fee and expense payments MGG receives from investors in
a co-investment Fund may vary from investor to investor. Third parties who co-invest
directly may not be charged such vehicle-based fees and expenses, and may only incur
investment-related expenses.
Deduction of Fees; Timing of Payments; Termination
As a general matter, MGG is authorized under the Governing Documents to charge and
deduct advisory fees directly from the assets of the applicable Fund pursuant to the terms
of the Governing Documents. Advisory fee payments are generally made quarterly in
advance and in accordance with the terms of such Governing Documents. Please refer to
the applicable Fund’s Governing Documents for more complete information on the timing
of advisory fee payments.
MGG’s investment advisory services may be terminated by a Fund at any time by prior
written notice to MGG delivered within a reasonable period of time (typically 90 days)
prior to such termination. Upon such termination, any prepaid, unearned fees will be
promptly refunded by MGG (determined on a pro rata basis based on the number of days
elapsed in the applicable fee payment period), and any earned, unpaid fees will be due and
payable by the applicable Fund.
Other Fees and Expenses
In addition to the advisory fees and performance-based fees payable to MGG, subject to
the terms of a Fund’s Governing Documents, a Fund will typically bear organizational
expenses incurred in connection with its formation and incur operating and other expenses,
including but not limited to expenses incurred in connection investment-related expenses
whether relating to investments that are consummated or unconsummated (e.g., costs, fees
and other out-of-pocket expenses directly related to (i) the investigation and diligence of
investment opportunities (whether or not consummated) and research-related expenses,
including, without limitation, news and quotation equipment and services and trading
related computer hardware and software expenses, market data services, fees to third-party
providers of research, alternative data and/or portfolio risk management services and
software and brokerage costs and fees and (ii) the sourcing, negotiation, structuring,
acquisition, settlement, ownership, trading, monitoring, financing (including all amounts
borrowed pursuant to a commitment facility), hedging or sale of its investments and other
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