FEES AND COMPENSATION
A. Advisory Fees and Compensation.
1. The Funds
Asset-Based Compensation
The Firm receives management fees (“Management Fees”) from the Funds. The
specific terms of the Management Fees applicable to each Fund are more fully set forth
in the respective governing documents of each Fund. The Management Fees for the
Funds generally range between 1% and 2% per annum. Subject to the governing
documents of the Funds, the Management Fees are generally calculated as follows:
During the initial stages of a Fund, the Management Fees are generally based
on the capital commitments to the Fund.
With respect to the TLP Vehicles following the initial commitment period of
these Funds, Management Fees from each of these Funds are then generally
based on the contributed capital plus the committed capital under management
with Tinicum.
The Firm may waive, reduce or modify the Management Fees for certain investors in
any of the Funds.
Performance-Based Compensation
The General Partners may receive performance-based compensation, which is
compensation that is based on a share of capital gains or capital appreciation of the
assets of a Fund. As is more fully set forth in the respective governing documents of
each Fund, each General Partner is entitled to receive up to a 20% carried interest from
its respective Funds, which is calculated after investors receive a return of their total
capital contributions to such Funds and a preferred return of a specified rate, subject to
catch-up allocations to the General Partner after such preferred return is achieved.
Tinicum may waive, reduce or modify the performance-based compensation for certain
investors in any of the Funds.
2. Tinicum Select SMAs
The Firm receives management fees from investors as compensation for the investment
management and advisory services provided to investors who have Tinicum Select SMAs
(the “Tinicum Select Management Fee”). The Tinicum Select Management Fee charged
is based on a percentage of the total net asset value of each Tinicum Select SMA. Each
investor’s IMA sets forth the terms of the Tinicum Select Management Fee applicable to
such investor’s Tinicum Select SMA.
3. Co-Investment Vehicles
See Item 4.F above.
B. Payment of Fees.
1. The Funds:
Management Fees owed are paid directly to the Firm, and each Fund distributes the carried
interest (if any) due under its governing documents directly to its respective General
Partner. The Management Fees will generally be paid quarterly, in advance. Distributions
of carried interest from a Fund are generally made after investments are disposed of at a
gain by such Fund and at such other times as described in such Fund’s governing
documents.
2. Tinicum Select SMAs:
Tinicum Select Management Fees are paid quarterly in arrears.
3. Co-Investment Vehicles
4. See Item 4.F above.
C. Additional Fees and Expenses.
1. The Funds:
Tinicum does not receive any fees from the Funds, other than Management Fees and the
carried interest described above, but Tinicum is reimbursed by the Funds for certain
expenses. The Funds do not pay Tinicum closing fees upon consummation of transactions,
but portfolio companies in which the Funds have invested capital may pay breakup fees,
transaction fees and monitoring fees (including consulting fees, directors’ fees and other
similar fees) directly to Tinicum or its owners or employees. In that case, Management
Fees charged to limited partners of the Fund(s) that invested capital in any such portfolio
company are generally reduced by such breakup, transaction and/or monitoring fees, as
applicable. The Management Fees will not be reduced however by (i) certain amounts
received by Tinicum or its owners or employees as reimbursements for out-of-pocket
expenses or (ii) amounts received by such persons in their capacities as employees of a
portfolio company or for services that would otherwise be provided by portfolio company
employees.
Tinicum is entitled to be reimbursed for expenses that are required to be borne by the
Funds. Those expenses include certain expenses relating to the formation of the Funds and
costs and expenses relating to the Funds’ activities, investments and business (to the extent
not borne or reimbursed by a portfolio company), as is more specifically described in the
governing documents of each Fund, including, but not limited to, brokerage, custodial,
finders’ and other fees; registration expenses; financing commitment and transaction costs;
fees and expenses of certain consultants and advisers to the Fund, its General Partner, and
the Firm; auditing, accounting, administration, compliance (compliance expenses borne by
the Funds include a portion of the Chief Compliance Officer’s salary, compliance
consultant fees, compliance software costs, Form ADV and PF filing fees, and compliance-
related legal costs), consulting, legal, tax return preparation and other professional fees and
expenses; fees and expenses of any third party data, research, and/or services used by
Tinicum in its investment decision-making process; interest expenses; expenses of
preparing and distributing reports, financial statements and notices to investors in the Fund;
fees and expenses of valuation, appraisal and/or pricing services and software; litigation
and other extraordinary expenses; and other expenses as may be detailed in each Fund’s
offering memorandum. From time to time, the Funds may invest in master limited
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