ITEM 5 – FEES AND COMPENSATION
The Adviser provides investment advisory services to its clients pursuant to separate investment advisory
agreements, which along with the relevant offering and governing documents, where applicable, explain the
details regarding fees.1
Management Fee
Fund VIII was organized as a limited partnership, with affiliates of the Adviser acting as the Fund’s manager
and general partner. In Fund VIII, an affiliate of the Adviser receives an annual asset management fee (the
“Management Fee”) from the Fund generally in an amount equal to: (i) until the Fund’s funding limitation
date, 1.5% of the Fund’s aggregate capital commitments and (ii) thereafter, 1.5% of aggregate actively
invested capital. The Management Fee is generally paid to an affiliate of the Adviser either monthly in arrears
or quarterly in advance (as specified in the applicable Fund’s governing documents). A Fund’s general
partner, or the manager of the Fund, each as applicable, may, in its sole discretion, waive, delay payment or
reduce the management fee payable by any specific investor. Management fees are waived in respect of Fund
capital commitments attributable to affiliates of the Adviser and Global Diversification Corp., a Delaware
corporation (“Global”).
Fund IX was organized as a limited partnership, with affiliates of the Adviser acting as the Fund’s manager
and affiliates of the advisor together with Global acting as the general partner. The asset management fee for
Fund IX is structured as an advance from limited partners, generally equal to 2% of committed capital during
Fund IX’s investment period, which investment period was terminated in 2021. Thereafter, the 2% asset
management fee is paid on 2% of actively invested capital (referred to herein as the “AMF Advance”). AMF
Advances may be repaid to the limited partners with fees earned from joint venture partners that make
investments in Fund IX (“JV Partners”) and from promote earned by the general partner for investments
made in Fund IX; however, it should be noted that the AMF Advance may not be repaid in full. Details of
the AMF Advance and the reimbursement thereof are described further in the applicable Fund Documents.
The AMF Advance is paid to the manager of Fund IX quarterly in advance (as specified in the applicable
Fund Documents). Fund IX’s manager may, in its sole discretion, waive, delay payment or reduce the AMF
Advance payable by any specific investor. The AMF Advance is waived in respect of Fund capital
commitments attributable to Global and affiliates of the Adviser.
Fees Offset Against Management Fee
In Fund VIII, profits (less allocable overhead and expenses) from property management fees, hotel
management fees, and construction management fees paid by Fund VIII assets to Vector Property Services,
LLC (“VPS”), an affiliate of the Adviser that performs certain property management services and Mile High
Hospitality, LLC (“MHH”) (formerly High Velocity Hospitality, LLC), an affiliate of Adviser that performs
hotel management services for hotel assets owned by the Funds, are returned to the limited partners as an
offset against the Management Fee. In Fund VIII, any transaction fees, or other similar fees received by an
affiliate of the Adviser will be returned to the limited partners as an offset against the Management Fee in
accordance with the relevant terms of the Fund Documents.
Fund VIII organizational expenses, including costs and expenses directly or indirectly incurred in connection
with the formation and organization of, and sale of interests in, Fund VIII exceeding $1.25 million are
returned to the limited partners as an offset against the Management Fee.
All of the unaffiliated limited partners invested in the Funds are qualified purchasers, as defined in Section
2(a)(51)(A) of the Investment Company Act of 1940, therefore, the specific details of each Fund’s fee schedule are
not required to be provided in this Brochure.
Development Fee
In addition to the AMF Advance, Fund IX charges a development fee equal to 3% of the total gross
development or construction costs for new construction and refurbishment or expansion as further described
in the Fund Documents. This development fee is paid to the Adviser or an affiliate thereof and is further
described below (see “Development Fee and Reimbursement for Out-of-Pocket Expenses”).
Fees Offset Against Development Fee
In Fund IX, certain fees and expenses, including, but not limited to Fund IX organizational expenses that
exceed $1.25 million, are treated as an offset against the Development Fees as described in the Fund
Documents.
Certain Other Fees
In Fund IX, property management fees, hotel management fees, and brokerage commissions and other
similar fees were paid by the Fund, or by portfolio investments in which the Fund has an interest, to affiliates
of the Adviser. In Fund IX certain of these fees may be applied toward repayment of AMF Advances as
further described in the Fund Documents.
Property Management and Sub-management Fees
In certain cases, the Funds will contract with an unrelated third-party local property manager to perform
certain property management services (e.g., JLL) pursuant to a management agreement where the third-party
property manager earns a property management fee. In these instances, the combined cost of services
performed by the third-party manager and VPS will not exceed the amount that VPS is entitled to charge the
fund for such services. The third-party may be engaged by VPS under a sub-management agreement.
Development Fee and Reimbursement for Out-of-Pocket Expenses
A development fee equal to 3% of the total gross development or construction costs for new construction
and refurbishment or expansion is generally paid by the Funds to the Adviser or an affiliate thereof (a
“Development Fee”). Neither the Adviser nor any affiliate thereof will be entitled to Development Fees for
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