Item 5 – Fees and Compensation
The Manager will receive a management fee paid quarterly in advance (the “Management Fee”)
starting on the date of the Initial Closing. The Management Fee will be assessed at the rate of 2%
per annum of (i) total Commitments of the Limited Partners until the termination of the
Commitment Period, and thereafter (ii) funded Commitments of the Limited Partners reduced by
the cost basis of all Realized Investments and Written Down Amounts.
100% of any transaction, directors’, management, monitory, consulting, break-up and other
similar fees received by the Manager in connection with the Fund and its Investments, net of
unreimbursed transaction expenses incurred by the Manager, will be applied to reduce the
Management Fee for the following quarterly period. Any offsets that reduce the Management
Fee for a given quarterly period below zero will be carried forward and reduce future installments
of the Management Fee.
The Fund will pay all costs and expenses incurred in connection with the Fund’s affairs, or will
reimburse the Manager, General Partner and/or its affiliates for having incurred any such
expenses.
The Fund also pays all of the expenses of its administration and operation. These expenses
generally include, among other things:
• investment transaction costs;
• custodial fees;
• bookkeeping, accounting and audit fees and expenses;
• legal fees;
• expenses that we incur for investment research and due diligence;
• tax preparation fees;
• other professional fees;
• governmental fees and taxes;
• travel and travel-related expenses that we incur in connection with
investment activities (including attending professional investment and
industry specific conferences);
• costs of reporting to investors;
• cost of governance activities (such as obtaining investor consents); and
• all other reasonable expenses related to the management and operation of
the Fund or the purchase, sale or transmittal of Fund assets, all as we
determine in our sole discretion.
The Manager is responsible for all its day to day operating expenses, including office overhead
and compensation of its employees.
Limited Partners may request, and the Manager may consent to enter into individual
arrangements, generally referred to as side letters, which may give reductions in management
fees or other specific terms.
Other Compensation and Conflicts of Interest
Union Square Strategic Capital Management is not a registered Broker-Dealer, however, some of
our supervised persons are registered with the Financial Industry Regulatory Authority (“FINRA”)
as representatives of Union Square Advisors, an affiliate Broker-Dealer, if necessary or
appropriate to perform their responsibilities for the Broker-Dealer. Such persons may receive
compensation from Union Square Advisors in connection with activities performed on behalf of
that affiliated Broker-Dealer. Those supervised persons who are also representatives of Union
Square Advisors are not compensated for their services by the Manager. This may lead those
supervised persons to present investment opportunities to the Investment Committee that if
consummated, would provide Union Square Advisors with the opportunity to complete an
investment banking engagement. Those supervised persons would ultimately receive
compensation from Union Square Advisors related to the success of that investment banking
transaction.
It is expected that all the companies in which the Fund may invest are investment banking or
advisory clients of Union Square Advisors. This may present conflicts of interest and may
otherwise affect the activities of our Fund. For example, Union Square Advisors may provide
financial investment banking or advisory services to third parties who have interests that conflict
with those of our Fund, or those of companies in which they are invested (Client Portfolio
Companies). The Broker-Dealer may represent companies competing with Client Portfolio
Companies for acquisition or business opportunities.