Item 5: Fees and Compensation
How is Polus compensated?
The specific terms of compensation for Polus will be disclosed in the relevant Client’s Governing
Documents. Under such documents, Polus will be entitled to receive annual management fees from
the relevant Client and, subject to exceeding a predefined return threshold, a performance or
incentive fee which is paid at the end of the deal. The fees payable to Polus can vary from Client to
Client and could be different from the fees and compensation payable in respect of any prior or
successor client. All investors should review the Governing Documents of the relevant Client in
conjunction with this brochure for complete information on the fees and compensation payable with
respect to that particular Client. The management fees will be accrued and paid on the interest
payment dates of the CLO, in arrears based on fees outlined in each Client’s Governing Documents.
The payments are made by the Trustee as part of the interest payment date waterfall payments.
Polus intends to deliver this brochure only to “qualified purchasers” as defined in Section 2(a)(51)(A)
of the Investment Company Act and “accredited investors” within the meaning of Regulation D of
the Securities Act of 1933, as amended (the “Securities Act”); and therefore, is not required to
disclose its Clients’ fee schedules.
Polus generally has the discretion to negotiate, waive, modify, reduce or rebate the fees and/or
allocations to be paid or made with respect to any investor or class of investors in a Client, including
Polus’ affiliates or employees, without notice to other investors. Polus currently has an arrangement
with an investor pursuant to which a portion of the management fees that would otherwise be
payable to Polus are paid to the investor. Polus does not expect to receive a management fee or
performance compensation in connection with CLO warehousing arrangements, however any such
fees may be negotiated with respect to any Client.
Other types of fees and expenses
Each CLO, subject to and as set out in its Governing Documents, will typically pay or otherwise bear
all of the fees, costs, expenses and other liabilities resulting from or arising in connection with its
operations (collectively, the “Operating Expenses”) including, without limitation, those relating to:
legal advisers, consultants, rating agencies, accountants, auditors, placement agents, brokers and
other professionals retained in connection with the CLO; custodial, trustee, transfer agent and
recordkeeping services; collateral management services, collateral administration services,
compliance services; asset pricing or rating services; software providers, programming and data entry
services directly related to the management of the CLO portfolio; taxes, regulatory and governmental
charges; costs and expenses in connection with compliance with any applicable risk retention regime;
insurance allocated to such CLO (including the Adviser’s group insurance policy, directors’ and
officers’ liability or other similar insurance policies, errors and omissions insurance, financial
institution bond insurance and any other insurance for coverage of liabilities to any person that are
incurred in connection with activities of such CLO; litigation expenses (including those incurred in
connection with the investigation, prosecution, defense, judgment or settlement of litigation) and
other extraordinary expenses (including those that are classified as such under U.S. generally
accepted accounting principles); such CLO’s indemnification obligations (including any fees, costs and
expenses incurred in connection with indemnifying covered persons consistent with the applicable
Governing Documents); any amendments, modifications or restatements to the Governing
Documents; the dissolution, winding up and termination of such CLO; and any other fees, costs and
expenses as set out in the Governing Documents. Please see “Item 12: Brokerage Practices” of this
brochure for more information about Polus’ brokerage arrangements for the Clients.
Except as set forth in the Clients’ Governing Documents, Polus will be responsible for its own day-to-
day operating expenses, such as compensation of its staff and the cost of office space, office
equipment, communications, utilities and other such overhead expenses.
Neither Polus nor any of its supervised persons accept compensation for the sale of securities or
other investment products.
Further, one of the employees of Polus, Mr. Randy S. Griffith Jr. (CRD #: 7429122) is entitled to receive
compensation from the Adviser or PCML for his responsibilities described in more detail in, and in
accordance with the agreements between the Adviser, PCML, and Foreside Fund Services, LLC
(“Foreside”). Mr. Griffith is fully seconded to PCML, and his role and responsibilities are provided only
to PCML. Therefore, he is a supervised person of PCML, not the Adviser. Such fees are generally
determined by reference to various factors including PCML’s relative role in sourcing the business or
introduction, or participating in the execution of the mandate and will be established on an arm’s
length basis and described in more detail in agreements between the Adviser and PCML. Mr. Griffith
is a registered representative of Foreside, a registered broker-dealer with the SEC in the U.S. The
broker-dealer is not a current Client of, or investor in a Private Fund advised by Polus. Polus does not
use the subject broker-dealer to effect trades or investments for the Clients. Please see “Item 10:
Other Financial Industry Activities and Affiliations” and “Item 14: Client Referrals and Other
Compensation” of this brochure for more detailed description of potential conflicts of interest and
Polus’ client referral arrangements.
Investors and prospective investors in the Clients should carefully review the offering materials and
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