Item 5 – Fees and Compensation
ADVISORY FEES
All Investors and prospective investors should review the Governing Documents of each
Northstar Fund in conjunction with this Brochure for complete information on the fees and
compensation payable in connection with a particular Northstar Fund. Different Northstar Funds
may be subject to different management fees and performance-based compensation
arrangements. NCP charges its clients annual advisory fees that generally range from 0.25% to
2.0% of an asset fee base. The asset fee base for an initial period of years (usually 3 to 5) is
equal to the client’s full committed capital regardless of how much has been contributed by
Investors.
After the initial period of years (usually 3 to 5), the asset fee base will generally decrease over
time with asset sales, write-offs or capital commitment waivers, subject to certain caveats. NCP
may be granted a direct or indirect interest in capital accounts (at no charge) in client funds as an
indirect payment of advisory services.
Investors who are related to NCP or an affiliate may receive up to a 100% discount or rebate of
their share of advisory fees. These discounts, if applicable, are disclosed in detail in the
applicable fund’s Governing Documents or other agreement negotiated directly with its
Investor(s).
Management fees, performance-based incentive allocations and other fees paid by the Northstar
Funds to NCP not generally negotiated with the client but certain Investors may negotiate terms
(including fees payable to NCP and carried interest payable to applicable General Partners)
through the negotiation of the limited partnership agreement, side letters, or similar documents.
With respect to private investment funds that the Northstar Funds may raise in the future, certain
limited partners negotiate future investment fund terms (including fees payable to NCP and
carried interest payable to applicable General Partners) through the negotiation of the Governing
Documents.
The Governing Documents of the Northstar Funds will generally provide that the General
Partner will allocate capital from the capital accounts of limited partners to pay fees and
performance-based compensation to NCP and/or the General Partner of the fund. The General
Partners of the Northstar Funds generally may elect to apply distributable proceeds to pay
management fees.
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OTHER COMPENSATION, FEES AND EXPENSES
The General Partners or managers of most of our clients (or their special-purpose affiliated
entities) may receive a share of the profits generated by the client. This share of profits is often
referred to as a carried interest or promote. The specific payment terms and other conditions of
the carried interest are set forth in the relevant Governing Documents..
If other types of fees and expenses will be paid by a client, they will be described in the client’s
Governing Documents or other agreement negotiated directly with its Investor(s) if known.
Some of the other types of fees and expenses that usually will be paid by a client are: auditing
fees and costs; custodial fees and costs; development fees, disposition fees, acquisition fees,
banking fees and costs; franchise taxes and entity formation and maintenance fees; legal
expenses; securities and “blue sky” filing fees; an allocable portion of the costs (including third
party service fees) related to recording, managing and reporting of accounting, tax and financial
information, Investor subscription processing, cash calls and distributions; fees and costs related
to asset management information technology and software; fees and costs related to anti-money
laundering and other regulatory compliance; expenses related to roadshows, printing and
offering related activities; postage and travel expenses.
EXPENSES CHARGED TO CLIENTS
Organizational Expenses. Subject to its Governing Documents, each Northstar Fund will pay or
otherwise bear all fees, costs, expenses and other liabilities incurred in connection with the
formation, organization and/or sale of interests in such fund, its General Partner or similar
person and/or investment manager, including commissions, costs and all out-of-pocket legal,
accounting, tax, consulting, filing, capital raising, marketing, printing, electronic database, travel
(which may include expenses for the use of private aircraft, first class or business class travel),
accommodations, meals and other similar fees, costs and expenses (collectively, the
“Organizational Expenses”).
Not all client are subject to the same fees, costs and expenses. For example, when the General
Partner of a Northstar Fund enters into arrangements with, and compensates, unaffiliated third
parties for Investor referrals to the funds, these arrangements will be fully disclosed to affected
Investors. The General Partner of the fund may cause the applicable Northstar Fund to pay the
placement agent a placement fee and reimburse the placement agent for expenses incurred by it
in connection with such arrangement.
Allocation of Expenses. NCP, the General Partners, and their affiliates from time to time incur
fees, costs and expenses on behalf of one or more Northstar Funds. To the extent such fees, costs
and expenses are incurred for the account of more than one client, each client will bear an
allocable portion of any such fees, costs, and expenses generally in proportion to the size of its
investment in the activity or entity to which the expense relates (subject to the terms of each
fund’s applicable Governing Documents) or in such other manner as the General Partners
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consider fair and equitable under the circumstances. Northstar endeavors to allocate such fees,
costs and expenses on a fair and equitable basis over time.
BILLING PROCEDURES
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