ITEM 5: FEES AND COMPENSATION
We charge our Funds an investment management fee, which is charged quarterly in
advance. We also charge our Funds a performance-based fee that takes the form of an
allocation of the Fund’s income determined based upon the cumulative performance of the
Fund. The specific manner in which fees are charged is established in the organizational
documents of each Fund. The fees we charge for our Funds are not negotiable and we have
not entered into side letters or other arrangements providing preferential fee terms to any
Fund investor. With respect to Funds, we send an invoice to the Fund’s administrator, if
applicable, or deduct the fee directly from the Fund’s assets.
Our advisory agreements with clients specify the circumstances under which any fees paid
in advance will be refunded to the extent that the agreement is terminated. Generally, since
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most fees are charged quarterly in advance, refunds may only be available to the extent that
a client is permitted to terminate the advisory agreement on less than 90 days notice.
The terms of each Fund are described in its private placement memorandum (“PPM”),
organization documents, such as a limited partnership agreement, and other related
documents (“Offering Material”) which are delivered to potential investors prior to the
time they invest. Withdrawals by investors in a Fund are governed by the terms set forth
in the Offering Materials of the Fund.
This Brochure may be provided to a prospective investor (“Investor”) in one of our Funds,
together with the Fund’s Offering Material and other related documents (“Governing
Documents”), in connection with Investor’s consideration of an investment in the Fund.
While this Brochure may include information about the Fund, it does not represent a
complete discussion of the features, risks or conflicts associated with the Fund. More
complete information about each of our Funds is included in its Governing Documents.
In no event should this Brochure be considered an offer of interests in a Fund or relied
upon in determining to invest in a Fund. It is also not an offer of, or agreement to
provide, advisory services directly to any recipient. Rather, this Brochure is designed
only to provide information about us to comply with regulatory requirements under the
Advisers Act, which may cause information in this Brochure to differ from the information
provided in the Governing Documents. If there is any conflict between the information in
this Brochure and similar information in the Fund’s Governing Documents, you should
rely on the information in the Governing Documents.
OTHER EXPENSES IN CONNECTION WITH FUNDS.
Each Fund will typically be responsible for its organizational and ongoing expenses,
including, without limitation: legal, accounting, auditing, tax preparation, and related
charges, and filing and other regulatory fees; fees for maintenance of books and records;
custody fees; insurance expense; administrators’ fees and expenses; expenses associated
with the offering of interests and shares; operational expenses of the Fund, including but
not limited to, photocopying, postage, telephone and facsimile expenses; and extraordinary
(including indemnification) expenses, if any, involving the Fund. In addition, each Fund
is responsible for all of transaction costs and investment related expenses (e.g., research)
incurred, directly or indirectly, in connection with its trading activities, including, without
limitation: execution and clearing charges; custodial charges; dealer markups; consulting
fees; and legal charges directly related to investment activities. See Item 12 of this
Brochure, describing our Brokerage Practices, for more information regarding the factors
that we consider in selecting broker-dealers for transactions on behalf of the Funds and
determining the reasonableness of their compensation. If a Fund engages in borrowing or
other leverage, there may be interest expense and fees.
Each Fund’s Offering Materials describe these fees and expenses in greater detail.
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COMPENSATION OF OUR EMPLOYEE MARKETING REPRESENTATIVES.
Our employees who act as our marketing representatives are not normally paid a sales
commission by our Funds for marketing those Funds to our clients. If they were to be paid
a sales commission by any of our Funds, we would fully disclose that in the Fund’s
Offering Materials provided to potential investors prior to investment.
We may, however, compensate our marketing representatives from the management fees
we earn from their clients who invest in our Funds. This practice presents a conflict of
interest and gives our marketing representatives an incentive to recommend our Funds
based on the compensation received, rather than on an investor’s needs.