Item 5. Fees and Compensation
A. Compensation
The Firm is compensated for investment advisory services it provides based on a percentage of the assets
managed by the Firm on behalf of a client and through performance-based compensation. Compensation to
the Firm for services provided to SMAs takes the form of management fees, and compensation to the Firm
for services provided to the Funds and CDOs takes the form of management fees and carried interest. Such
compensation may be paid to the Firm or an affiliate of the Firm. The Firm is permitted to waive, reduce
or otherwise modify the management fee and/or incentive compensation for any investor in a Fund, and has
NGC Capital Management LLC 3 March 29, 2024
Form ADV Part 2A: Firm Brochure
done so for affiliates of the Firm. In addition, the Firm occasionally enters into a side letter arrangement
with certain Fund investors, in which the Firm has granted such investors with preferential terms.
It is anticipated that compensation to the Firm for services provided to other clients may take the form of
management or performance fees, carried interest or other incentive-based compensation related to the
performance of such other client accounts. Such compensation may be paid to the Firm or an affiliate of
the Firm. In some cases, it is possible that these fees may be negotiated with a client prior to engagement.
B. Payment of Fees
Typically, management fees paid by the Funds are based on the aggregate adjusted book value or fair market
value of the assets owned by the Funds and paid quarterly in advance. Incentive fees paid by the Funds will
be payable later in the Funds’ lives after investors have received a specified preferred return.
Typically, management fees paid by the CDOs are based on the cash and principal value of the assets held
within each CDO, and are paid quarterly in arrears. Incentive fees paid by the CDOs will be payable later
in the CDOs’ lives after investors have received a specified target return.
Typically, management fees paid by SMAs are based on the gross asset value of the assets managed by the
Firm and are paid quarterly in advance.
Management fees and incentive fees paid by other Firm clients are tailored for each such other client.
Although the foregoing is a brief summary of the management fee and incentive compensation
arrangements applicable to the Firm’s clients, please note that this brief summary is not a substitute for the
detailed terms provided in the advisory agreement, offering document, organizational agreement or other
governing documents of each of the Firm’s clients. Clients, prospective clients, Fund investors, prospective
Fund investors, CDO investors and prospective CDO investors should therefore review the applicable
advisory agreement, offering document, organizational agreement or other governing documents carefully
because such documents, and not the summary in this brochure, describe more specifically the fees such
client will pay.
C. Additional Expenses
The expenses paid by the Firm’s clients are set forth in detail in the advisory agreement, offering document,
organizational agreement or other governing documents of the relevant client. Such expenses may differ
among clients and within clients. Thus, although the following is a summary of expenses the Firm’s clients
may generally bear, it is not an exhaustive or complete list with respect to all clients. Clients, prospective
clients, Fund investors, prospective Fund investors, CDO investors and prospective CDO investors should,
therefore, review the applicable advisory agreement, offering document, organizational agreement or other
governing documents carefully because such documents, and not the summary in this brochure, describe
more specifically the expenses such client will bear.
Generally, each of the Firm’s clients will bear its own operating and other expenses, which may include,
but not be limited to:
Management fees and performance-based compensation paid to the Firm;
Expenses and fees related to the evaluation and development of investments (e.g., investment-
related travel and lodging expenses, quotation service expenses, appraisal fees, consulting fees,
rating agency expenses, and pricing and valuation fees, and other due diligence expenses),
regardless of whether a transaction for such investment is consummated;
NGC Capital Management LLC 4 March 29, 2024
Form ADV Part 2A: Firm Brochure
Expenses and fees related to the acquisition, hedging and disposition of investments (e.g.,
private placement fees, arranger fees, syndication fees, private placement fees, investment
banking fees, commitment fees, servicing fees, brokerage fees, commissions, mark-ups or
mark-downs, settlement fees, breakup fees, and other transaction fees);
Expenses and fees related to the monitoring and holding of investments (e.g., interest expense,
recordkeeping expenses, custody fees, bank charges, and risk management expenses);
Interest and expenses related to client borrowings and indebtedness;
Legal expenses;
Costs associated with regulatory compliance (e.g., expenses related to anti-money laundering
monitoring, expenses related to investor-related compliance obligations (such as AIFMD and
FATCA), expenses related to investment-specific regulatory filings (such as Hart-Scott-Rodino
notifications), and expenses related to non-position-specific regulatory filings (such as Forms
PF and Forms D));
Expenses of forming, maintaining and winding up private investment fund vehicles and
...