Item 5: Fees and Compensation
Pinegrove provides investment advisory services to each of the Funds pursuant to an investment
management services agreement. The applicable Governing Documents set forth in detail the fee
structure relevant to each Fund, but in general, Pinegrove receives compensation from each of its
clients based on the percentage of assets under management (i.e., Management Fee(s) (as defined
below)) and/or performance-based allocation/fees based on capital appreciation or realized gains
(i.e., Carried Interest (as defined below) or other similar economic interests). All Investors and
prospective Investors in a Fund should review the Governing Documents of each Fund in which
they have invested or intend to invest in conjunction with this brochure for complete information
on the fees and compensation payable with respect to a particular Fund. The precise amount and
calculation of fees are set forth in the applicable Fund’s Governing Documents received by each
investor prior to investment in such Fund. Fees are established pursuant to and as set forth in
each Fund’s Governing Documents. Pinegrove may waive, reduce, or modify fees in accordance
with the applicable Governing Documents, including pursuant to Side Letter or similar
arrangements. Management Fees are paid directly from the applicable Fund’s assets. With
respect to new Funds launched by Pinegrove under the Sponsors’ indirect ownership (the “New
Funds”), Pinegrove has offered preferential or no fees to the Sponsors and to certain Investors
with larger and/or earlier capital commitments. Please refer to Item 10 for further details on the
potential conflicts that may arise from the arrangements with the Sponsors.
Management Fees and Carried Interest
The Adviser receives a management fee (the “Management Fee”) from each Fund as set forth in
each Fund’s Governing Documents. The Management Fee is typically based on a percentage of
committed capital or actively invested capital. Management Fees are typically charged quarterly in
advance and are prorated for any period that is less than a full three-month period. In the event an
advisory relationship is terminated during a billing period, any prepaid Management Fee attributable
to the period following termination will be refunded or credited in accordance with the applicable
Fund’s Governing Documents. Pinegrove has offered the Sponsors and certain Investors who make
larger and/or earlier capital commitments preferential or no Management Fees.
A portion of each Fund’s net investment profit is generally allocated to the General Partner or its
affiliates as “Carried Interest.” Pinegrove typically structures this performance-based
compensation with respect to each Fund as profit-sharing allocation through general partner
interests that the applicable General Partner holds in such Fund. Sometimes our performance-
based compensation is subject to a preferred return requirement. In these cases, the General
Partner or its affiliates receive a performance profit allocation when cumulative distributions to a
Limited Partner are sufficient to provide such Limited Partner with a specified return (i.e., a
hurdle).
Generally, any affiliate of Pinegrove or eligible employee, officer, advisor, consultant, advisory
board member, operating partner and similar person in respect of Pinegrove, a Fund or any of their
respective affiliates (collectively, “Affiliated Partners”) who invests their own capital in the
applicable Fund will not bear or pay any Carried Interest. Similarly, with respect to the New
Funds, Pinegrove has offered the Sponsors preferential or no Carried Interest rates, and certain
Investors who make larger and/or earlier capital commitments preferential Carried Interest rates.
For the avoidance of doubt, the Sponsors shall not be considered “Affiliated Partners.”
Typically, the capital contributions of the General Partner and Affiliated Partners, when combined,
will represent only a small portion of the Fund’s overall capital. As a result, Limited Partners will
typically invest greater amounts and may receive a proportionately smaller amount of the profits of
the Fund than the General Partner. The General Partner’s Carried Interest in the Fund may create
an incentive for the General Partner to make riskier investments than it would make if it were
investing exclusively its own funds. Similarly, the Pinegrove investment professionals making
investment decisions on behalf of the Funds will typically be entitled to Carried Interest that may
create an incentive for such investment professionals to make riskier investments on behalf of the
Fund than they would make if investing exclusively their own funds.
Pinegrove and its affiliates may receive director’s fees (including options or stock), transaction
fees, break-up fees, advisory fees, monitoring fees and other similar fees from portfolio companies
or portfolio funds (or their respective affiliates) in connection with the consummation, holding or
disposition of a Fund’s investments or the termination of an unconsummated investment
proposed to be made by a Fund. Such fees net of any unreimbursed expenses generally reduces
the Management Fee of the applicable Fund on a dollar-for-dollar basis as set forth in the
applicable Governing Documents. Conflicts may arise in connection with the payment of such
fees.
Neither Pinegrove nor any of Pinegrove’s supervised persons accepts compensation for the sale
of securities or other investment products.
Other Fees and Expenses
All clients bear various costs, fees, and expenses in addition to the compensation payable to
Pinegrove. All Investors and prospective Investors should review the Governing Documents for
each applicable Fund, which discuss the expenses borne by that Fund. Some of the costs, fees,
and expenses our Funds typically incur may include, but are not limited to:
• Audit fees;
• Brokerage commissions and other transaction costs;
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