Item 5 – Fees and Compensation
For providing advisory services to the Funds, the General Partner charges each Fund a
Management Fee as described below. In addition, the General Partner is entitled to receive
“Carried Interest,” a form of performance-based compensation, from each Fund, as described
below. Prior to investing in a Fund, each Limited Partner was provided with the Fund’s offering
memorandum and organizational documents, which included information on the methods of
compensation to the General Partner and associated risks. Prospective investors in any Future
Fund will be advised to refer to the appropriate offering memorandum and organizational
documents for similar information. Any Future Fund may have different terms than those
summarized herein.
Management Fees. Management Fees are charged to the Funds in two distinct stages. During
the Investment Period (as defined in the Limited Partnership Agreements), when Symmetric is
seeking to identify potential Portfolio Companies and conducting due diligence and negotiations
to close new investments, the Management Fee is determined at an annual rate of 2.25% of the
capital committed to each Fund by its Limited Partners. After the Investment Period, the
Management Fee is reduced by 10% each year for five years. After that period, or earlier if a
successor fund has been raised by Symmetric, the Management Fee will generally be determined
at an annual rate of 2% of Investment Cost. “Investment Cost” is generally defined in the Limited
Partnership Agreements as the acquisition cost of the Fund’s remaining Portfolio Company
investments, less write-offs and write-downs relating to such investments. Management Fees are
billed to Limited Partners quarterly in advance.
Carried Interest. Carried Interest is generally equal to 20% of the aggregate net profits generated
over the life of each Fund. The aggregate net profits are calculated for each Fund as a whole and
not on the basis of each individual Portfolio Company investment. Carried Interest distributions
are subject to clawback by the Funds, as discussed below.
Other Fees, Expenses and Off-Sets. Symmetric’s Principals and employees are frequently
appointed as directors to Portfolio Companies. These individuals monitor the business activities
of the Portfolio Companies and may provide advice and assistance with such matters as personnel,
marketing, product development, strategy, financing, and mergers and acquisitions. As
compensation for such services, private equity fund managers may charge monitoring fees to
Portfolio Companies, although this is not customary for Symmetric. Similarly, private equity fund
managers may charge a transaction fee on the closing of a Portfolio Company investment or sale,
and they may charge break-up fees on potential investments or transactions that do not close.
Symmetric does not generally charge such fees. If charged, these fees would typically be
negotiated and agreed upon with the Portfolio Company at the time of the Funds’ investment or in
advance of the specific event.
In the event any such monitoring, transaction, or break-up fees are earned by Symmetric or its
affiliates, under the Limited Partnership Agreements, the Management Fees charged to the Funds
as a whole would generally be reduced by the full amount of such fees.
The payment of such fees by portfolio companies will, in some, but not all, circumstances create
a conflict of interest between Symmetric and its affiliates and the Funds and their investors
because the amount of these fees and reimbursements are often substantial and the Funds and
FORM ADV, PART 2A -5- SYMMETRIC CAPITAL, LLC
their investors do not share in these fees and reimbursements. Symmetric determines the amount
of these fees for the services provided and reimbursements based on agreements with sellers,
buyers, management teams, the board of directors of or lenders to portfolio companies, and/or
third party co-investors it its transactions. In some cases, there is not an independent third-party
involved on behalf of the relevant portfolio company. Therefore, a conflict of interest exists in
the determination of any such fees and other related terms in the applicable agreements with the
portfolio company.
Additionally, a portfolio company will often reimburse Symmetric for expenses, which often
include expenses for travel, meals and entertainment
Investments in Funds. The Principals and certain employees of Symmetric will generally
participate in each Fund’s investments by investing in the General Partner (which in turn invests
directly in each Fund as a Limited Partner).
Write-Downs and Permanent Write-Offs. As disclosed above, following the Investment Period
and after the raising of a successor fund or the extension of the term of a Fund, Management Fees
collected by Symmetric are calculated based on Investment Cost. This Management Fee
calculation methodology creates a potential conflict of interest in that Symmetric has an incentive
not to reduce its valuations of Portfolio Companies to the extent that may otherwise be dictated by
available market data and prudent fair valuation techniques. To address this potential conflict,
Symmetric has adopted detailed valuation policies and procedures, which are incorporated in the
Limited Partnership Agreements. In addition, Portfolio Company valuations are reviewed on at
least an annual basis by an independent certified public accountant that is both registered with and
subject to regular inspection by the Public Companies Accounting Oversight Board (“PCAOB”),
and a copy of the audited financials is sent to each Limited Partner.
Clawbacks. In accordance with the terms of each Fund’s Limited Partnership Agreement,
cumulative Carried Interest distributions made by a Fund to the General Partner are subject to
clawback by the Fund upon the liquidation of the Fund if such distributions exceed the amount of
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