Item 5 - Fees and Compensation
Under the Advisory Agreement with each of the Funds, WCP IM II is entitled to compensation for
its services in the form of an annual management fee (the “Management Fee”), payable monthly
or quarterly in advance, which is typically between 0.75 % and 1.5% per annum. The Management
Fee for Edgewater is charged quarterly based on the invested capital of the Fund. The Management
Fee to Tactical Securities is charged monthly based on the aggregate beginning values of each
investor’s capital account for the applicable calendar month. The Management Fee for the Funds
generally is offset by any additional fees, such as directors’ fees, break-up fees and other fees,
received by WCP IM II in connection with its work on the Funds’ investments. The management
fees payable by Managed Accounts, if any, are negotiated on a case-by-case basis and described in the
relevant Advisory Agreement.
As set forth in Item 6 below, WCP IM II and/or the General Partners of the Funds are each also
eligible to receive performance allocations and/or carried interest allocations, which are typically
between 0% and 20% of the relevant fund’s net capital appreciation or profit and subject to certain
adjustments or other terms, as applicable. The Fund offering and organizational documents or
Advisory Agreement for each Client, as applicable, include further details on fees, compensation
and related matters. Management Fees and performance-based allocations or carried interest
allocations are paid directly by the Clients, which are subsequently either deducted from an
investor’s assets invested with WCP IM II at the payment date or withheld from distributions.
Additional Fees and Expenses:
WCP IM II’s advisory fees do not include all of the fees that Clients may bear. In addition to WCP
IM II’s Management Fee and performance-based allocations or carried interest allocations, Fund
investors will bear indirectly as partnership expenses their pro rata share of any fees and expenses
charged by WCP IM II and/or the General Partners to the Funds, and deducted directly from the
Funds, and Managed Account investors may pay similar fees and expenses directly. Those fees
will vary, but typically include professional fees such as legal and accounting fees, and these fees
and/or expenses may be paid directly to third parties. Clients may bear the following fees and
expenses:
• Legal Fees;
• Administrative Fees;
• Professional Fees (including, without limitation, expenses of architects, engineers,
consultants and experts);
• Taxes;
• Insurance;
• Audit Fees;
• Brokerage Commissions;
• Corporate Licensing Fees;
• Bank Service Fees;
• Transaction Fees;
• Custodial Fees;
• Investment-related and marketing-related travel expenses;
• Organizational Costs; and
• Investment-related expenses (including fees and expenses relating to proposed but
unconsummated investments).
In addition, for certain investments, the Funds and/or the Managed Accounts organize special
purpose vehicles for the purpose of (a) making certain investments, including on a joint-venture
basis and/or (b) incentivizing and compensating operating partners. Each special purpose vehicle
may be directly or indirectly and wholly- or partially-owned by the Funds and/or the Managed
Accounts. Without limiting the rights of the Funds and/or the Managed Accounts to organize
special purpose vehicles, the Funds and/or the Managed Accounts may utilize special purpose
vehicles to make certain investments if the use of such vehicles would allow the Funds and/or the
Managed Accounts to overcome legal or regulatory constraints or invest in a more tax efficient
manner, would facilitate participation in certain types of investments or would otherwise be
beneficial for the Funds and/or the Managed Accounts. Certain special purpose vehicles provide
for a management fee, development fee, other fees and/or incentive compensation (including
carried interest) paid to the operating partner or a related party of the operating partner, and such
fees and/or incentive compensation are paid by the Funds. Neither WCP IM II nor its respective
affiliates will receive additional payments related to any such fees or other consideration.
The foregoing list and description are not exhaustive; Fund investors and Managed Account
investors should review the applicable Fund offering materials and organizational documents or
Advisory Agreement, as applicable, for a more extensive description of the fees and expenses
associated with an investment in the Funds and Managed Accounts. For more information, see