Item 5: Fees and Compensation
Compensation and Fee Schedules
The compensation and fees applicable to each PIA Fund is set forth in detail in each PIA Fund’s
Governing Documents.
With respect to closed-end PIA Funds, generally an affiliate of PIA will be allocated income and
receive distributions in respect of such fund’s cumulative net profits from the disposition of
portfolio investments and net current income from interest, dividends and distributions from
portfolio companies (the “Carried Interest”). Generally, the Carried Interest will not exceed 20%
of such net profits and net income and will be subject to the payment to the investors of a preferred
return. Investors in a PIA fund generally pay a management fee to PIA on an annual basis of 2%
of the capital committed to such PIA fund by the investors, payable quarterly in arrears, net of any
taxes or withholdings (the “Management Fee”); provided, however, the Management Fee will be
reduced to 1.5% on the 11th year of operations.
PIA or its affiliates may, from time to time and in their discretion, waive or calculate differently
the Management Fee or the Carried Interest with respect to certain clients or investors.
PIA or an affiliate thereof may also charge and receive from investors (i) acquisition fees and (ii)
disposition fees relating to portfolio investments that PIA or a portfolio company of PIA acquire
or dispose of, respectively.
Investors in a PIA Fund generally will reimburse PIA or an affiliate thereof for expenses incurred
in connection with the organization of such PIA Fund, its general partner, and PIA, and, also, all
expenses related to the offering of the equity interests in such PIA Fund. Investors in a PIA Fund
will also be responsible for expenses incurred in connection with the identification, internal
evaluation, completion, and monitoring of investments. PIA Fund investors will also bear third
party legal, brokerage, consulting, research, audit, and similar expenses associated with individual
investments and their realization.
Investors in a PIA Fund will be responsible for all other fund expenses, including the Management
Fee, all fees, costs and expenses incurred in connection with the making, holding, management,
sale or proposed sale of any portfolio investment and temporary investment, whether or not
ultimately consummated, including, without limitation, brokerage commissions, finder’s fees,
spreads, mark-ups, clearing and settlement costs, investment banking fees, loan fees, private
placement fees, commitment fees, interest expense, broken deal expenses, and other transactional
charges, consultants’ and other experts’ fees, legal and due diligence expenses in the evaluation
and disposition of investment(including consultant and travel expenses), insurance costs
(including directors’ and officers’ insurance, errors and omissions insurance and other similar
policies), and custody expenses and expenses of any third party to the extent not reimbursed by a
110225617.5
portfolio company. In addition, investors in a PIA Fund will pay its direct operating expenses, such
as fees and expenses incurred in connection with legal, accounting, audit and tax preparation
expenses, filing and registration fees, printing and mailing costs, market information systems and
computer software expenses, fees of pricing services and financial modeling services, filing fees,
advisory committee expenses, expenses of meetings of the members, any principal, interest or
other amounts, if any, owing or that may become due under any credit facility and any
extraordinary costs and expenses (including indemnification or litigation and any judgments or
settlements paid in connection therewith) and any taxes, fees or other governmental charges levied
against such PIA Fund, all out-of-pocket fees and expenses associated with completed
transactions, wind-up and liquidation expenses, and any expenses that are not routine
administrative expenses.
Without the approval of any other PIA Fund investor, PIA or an affiliate thereof may enter into
side letter agreements with one or more investors in a PIA Fund (“Side Letters”). Any Side Letter
entered into with fund investor may adjust the terms of the Governing Documents of that fund
solely with respect to the investor that is a party to such Side Letter. Side Letters may grant
additional rights or benefits to certain investors that are not available to other investors, including
rights relating to access to information, the treatment of confidential information, co-investment
rights, representations or covenants of the PIA Funds’ general partner, PIA or the PIA Funds itself,
restrictions on the disclosure of information, transfers of the investor’s interests, limitations on the
exercise of default remedies and withdrawal rights.
Deduction of Fees
PIA does not currently bill its fees in advance.
Other Fees and Expenses
In addition to the fees payable to PIA, the PIA Funds pay all trading costs and expenses associated
with the investments in their account.
Transaction-Based Compensation
As noted above, PIA or an affiliate thereof may charge and receive from investors acquisition and
disposition fees relating to portfolio investments. Neither PIA nor its supervised persons otherwise
receive any compensation with respect to the purchase or sale of securities or other investment
products by any client, including any PIA Fund.
The foregoing compensation and fees referred to in this Item 5 could create an incentive for
PIA to manage client investments in a manner that could increase the risk of loss.