Item 5 – Fees and Compensation
The Adviser receives from the Funds various fees that are negotiated at the time of formation of
the Funds. The specific manner in which the Adviser charges fees for a Fund is established in the
relevant Fund’s Governing Documents. The Adviser and/or its affiliates generally earn the
following compensation from the Funds: (1) a budgeted management fee as set forth in the
applicable Governing Documents; and (2) performance-based compensation that is generally
payable, subject to certain conditions, upon the distribution of investment proceeds (see ‘Carried
Interest” below).
Management Fee
Perry Creek receives a management fee covering its overhead expenses (including salaries of its
personnel, office rental expenses and ordinary office administration costs) and expenses related
to the regulatory obligations of Perry Creek (the “Management Fee”). Each limited partner in a
Fund (each, a “Limited Partner”) pays a pro rata share of the Management Fee for such Fund based
on the Limited Partner’s commitment. Management Fees will generally be shared by Fund I, Fund
II, PCCP, PCCSP and Fund III on a pro rata basis, in proportion to (i) for each of Fund I, Fund II, PCCP
and PCCSP, its net asset value, and (ii) for Fund III, the sum of such Fund’s undrawn capital
commitments plus its net asset value. Management Fees are paid quarterly in advance and are
deducted from each Investor’s assets invested in a Fund. Investors do not have the ability to choose
to be billed directly for fees incurred. Transaction fees, break-up fees, advisory fees, director’s fees,
monitoring fees, and other similar fees received by Perry Creek or its affiliates (attributable to the
portion of any investment made or to be made by a Fund and net of unreimbursed expenses) are
offset against and reduce future Management Fees for such Fund.
Limited Partners may not withdraw from a Fund, and may not assign, sell, exchange, charge, pledge
or transfer any of their interests, rights or obligations with respect to their interests in such Fund
without the prior written consent of the relevant General Partner. As such, Management Fees are
not refunded to Limited Partners.
Expenses
Each Fund has paid all organizational expenses incurred in connection with its establishment.
Except for those expenses covered by the Management Fee, each Fund will pay for all expenses
relating to its activities (to the extent not reimbursed by an investment) including, but not limited
to, the following: all expenses incurred in connection with the evaluation, acquisition, holding,
refinancing, recapitalization, disposition or proposed disposition of any investments (including
private placement fees, taxes, brokerage fees, sales commissions, underwriting commissions and
discounts, travel expenses, appraisal fees, legal, accounting, administrator and consultant fees);
expenses related to meetings of such Fund’s Advisory Committee (“Advisory Committee”) and the
Limited Partners; costs and fees related to regulatory obligations of such Fund, e.g., filings under
Section 13 or Section 16 of the Securities Exchange Act of 1934 (the “Exchange Act”); costs and
fees relating to the preparation of financial and tax reports, portfolio valuations and tax returns of
such Fund; the costs of prosecuting or defending any legal action for or against such Fund; all costs
related to such Fund’s indemnification obligations and the premium costs of any insurance
maintained to cover such obligations; interest on and fees and expenses arising out of all permitted
borrowings made by such Fund; the costs of any litigation; all unreimbursed out-of-pocket costs
relating to the investment transactions that are not consummated (including legal, accounting and
consulting fees); all expenses of liquidating such Fund; and any taxes, fees or other governmental
charges levied against such Fund and all expenses incurred in connection with any tax audit,
investigation, settlement or review of such Fund.
Please refer to Item 12 of this Brochure for a description of Perry Creek’s brokerage practices.
Carried Interest
Subject to a clawback (which is a type of refund) and a preferred return for the benefit of the Limited
Partners, each General Partner is generally entitled to a 20% carried interest (the “Carried Interest”)
with respect to profits generated by the relevant Fund’s investments.
Neither the Management Fee nor the Carried Interest is negotiable. Each General Partner at its sole
discretion may reduce or waive its Carried Interest with respect to any Limited Partner.
Neither Perry Creek nor any of its supervised persons accepts compensation for the sale of
securities or other investment products.
It is important that Limited Partners refer to the applicable Fund Documents for a complete
understanding of how the Adviser and the relevant General Partner are compensated for
services. This is particularly true with respect to performance-based compensation. The
information contained herein is a summary only and is qualified in its entirety by such
documents.