Item 5: Fees and Compensation
We generally are compensated for our advisory services to the Funds based on a percentage
of assets under management and performance-based amounts.
Management Fee
Until the commitment period for a Fund has terminated, a Fund generally pays us an annual
advisory fee (“Management Fee”) equal to 2.0% of the total capital commitments
(regardless of whether such capital has been invested) in the applicable Fund. Following the
end of the commitment period of a Fund, the Management Fee of such Fund is equal to 2.0%
of the net invested capital (plus certain reserves) in the applicable Fund.
We may waive or reduce the Management Fee as to all or any of the Investors in a Fund or
agree with an Investor or prospective investor to waive or alter the Management Fee as to
that Investor. The Management Fee charged by certain of the Funds may be reduced by all or
a portion of any origination, transaction, break-up or similar fees that we may receive as
described in the CPPM of the applicable Fund.
There can be no assurance as to when capital will be invested or that the entire capital
commitment of an Investor will be invested by each Fund.
Mistral Capital Management, LLC Form ADV Part 2A
Carried Interest
For certain of the Funds that we advise, we also are apportioned carried interest distributions
from such Funds (“Carried Interest”) based on the net cash proceeds attributable to the
Fund’s investments. In our discretion, we may waive or reduce the Carried Interest as to all
or any of the Investors in a Fund, or agree with an Investor to waive or alter the Carried
Interest as to that Investor.
The Carried Interest can vary for each Fund but is typically 20.0% of the distributions earned
by a Fund. Investors and prospective investors should refer to each Fund’s CPPM for additional
or supplementary information regarding the Funds as well as the fees paid by each Fund.
Lower fees for comparable services may be available from other sources. The expenses of a
Fund, including the Management Fee and Carried Interest, may constitute a higher percentage
of average net assets than would be found in other investment vehicles not managed by us.
Payment Method
Generally, the Management Fee is payable semi-annually in advance from drawdowns of the
Investors’ unfunded capital commitments, provided that, to the extent of subsequent
distributions, such amounts will be added back to unfunded capital commitments and may be
recalled by the Fund. The Management Fee is pro-rated for any period that is less than six
months.
The Carried Interest for each Fund generally is paid out as a distribution of the net cash
proceeds attributable to dispositions of portfolio investments of the Fund. Upon termination
of a Fund, the General Partner will be required to return to the Fund distributions of Carried
Interest previously received (net of income taxes distributable thereto) to the extent that they
exceed the amounts that should have been distributed to the General Partner as Carried
Interest pursuant to “Distributions” applied on an aggregate basis covering all transactions of
the Fund.
Expenses
Organizational Expenses
Subject to any expense limitations that may be described in the CPPM of a particular Fund,
each Fund will bear all legal and other expenses incurred in the formation of the Fund and the
offering of interests in the Fund (other than any placement fees). Organizational expenses in
excess of this amount, and any placement fees, will be paid by the Fund but borne by the
Firm through a 100% offset against the Management Fee.
Operating Expenses
We will bear the ordinary day-to-day expenses incidental to the operation of a Fund. The
Funds will bear all out-of-pocket expenses, such as travel, fees and expenses of lenders,
investors, consultants, attorneys, accountants, administrators, advisors and other related
expenses associated with the sourcing and investigating of all transactions whether or not
consummated, monitoring portfolio investments, ongoing administration of portfolio
investments and fees and expenses of the Fund’s Management Board (as defined below). In a
completed transaction, the portfolio company will generally (but not necessarily) be
responsible for the fees and expenses of its lenders, investors, consultants, attorneys,
accountants and advisors and other costs associated with consummating the transaction,
including out-of-pocket travel expenses.
Mistral Capital Management, LLC Form ADV Part 2A
The Funds will bear such day-to-day expenses as taxes, fees of auditors, accountants,
administrators and counsel, expenses of the Advisory Committee, expenses of annual
meetings, insurance, and litigation, and, subject to the approval of the Advisory Committee,
any extraordinary expense.
Sales Compensation
We will not receive sales commissions in connection with sales of interests in the Funds.