Incentive Fee. The Incentive Fee shall consist of two parts—an incentive fee based on income and an incentive fee based on capital gains, as follows. (i) The part of the Incentive Fee based on income (the “Income Fee”) will be calculated and payable quarterly in arrears based on the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the current calendar quarter and the eleven preceding calendar quarters (or the appropriate portion thereof in the case of any of the Fund’s first eleven calendar quarters) (in either case, the “Trailing Twelve Quarters”). (ii) For purposes of calculating the Income Fee, Pre-Incentive Fee Net Investment Income means the Fund’s interest income, distribution income and any other income (including any other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that the Fund receives from portfolio companies but excluding fees for providing managerial assistance) accrued during the relevant calendar quarter(s), minus the Fund’s operating expenses incurred during the relevant calendar quarter(s) (including the Base Management Fee, expenses payable under the Administration Agreement and any interest expense and distributions paid on any issued and outstanding debt or preferred shares, but excluding any distribution or shareholder servicing fees and the Incentive Fee). Pre-Incentive Fee Net Investment Income includes, in the case of investments with a deferred interest feature (such as market discount, original issue discount, debt instruments with payment-in-kind (“PIK”) interest, preferred shares with PIK dividends and zero coupon securities), accrued income that the Fund has not yet received in cash. Pre-Incentive Fee Net Investment Income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. For purposes of computing Pre-Incentive Fee Net Investment Income, the calculation methodology will look through derivative financial instruments or swaps as if the Fund owned the reference assets directly. Therefore, net interest income, if any, associated with a derivative financial instrument or swap (which represents the difference between (i) the interest income and fees received in respect of the reference assets of the derivative financial instrument or swap and (ii) the interest expense or financing charges paid by the Fund to the derivative or swap counterparty) will be included in the calculation of Pre-Incentive Fee Net Investment Income for purposes of the Income Fee. (iii) Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters will be compared to a “Hurdle Amount” equal to the product of (i) the “hurdle rate” of 1.75% per quarter (7.00% annualized) and (ii) the sum of the Fund’s net assets (defined as total assets less indebtedness and before taking into account any Incentive Fees payable during the period) at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Hurdle Amount will be calculated after making appropriate adjustments to the Fund’s net asset value at the beginning of each applicable calendar quarter for Fund subscriptions (which shall include all issuances by the Fund of its common shares, including issuances pursuant to its dividend reinvestment plan) and distributions during the applicable calendar quarter. Subject to Section 3(b)( v), the Income Fee will be based on the amount by which (x) the aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters exceeds (y) the Hurdle Amount in respect of the relevant Trailing Twelve Quarters. The Income Fee that will be paid to the Adviser in respect of a particular calendar quarter will equal the excess of the Income Fee as calculated pursuant to this Section 3(b) less the aggregate Income Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters. (iv) The Fund will pay the Income Fee in respect of each calendar quarter as follows: (i) No Income Fee in any calendar quarter in which the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters does not exceed the Hurdle Amount in respect of the relevant Trailing Twelve Quarters; (ii) The Income Fee shall equal 100% of the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters with respect to that portion of such Pre-Incentive Fee Net Investment Income, if any, that exceeds the Hurdle Amount but is less than or equal to an amount (the “Catch-Up Amount”) determined on a quarterly basis by multiplying 2.0588% by the Fund’s net asset value at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Catch-Up Amount is intended to provide the Adviser with an incentive fee of 15% on all of the Fund’s Pre-Incentive Fee Net Investment Income when the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters reaches the Catch-Up Amount in respect of the relevant Trailing Twelve Quarters; and (iii) For any calendar quarter in which the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters exceeds the Catch-Up Amount, the Income Fee shall equal 15% of the amount of the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters that exceeds the Catch-Up Amount. These calculations will be appropriately pro-rated for any period of less than three months and adjusted for any share issuances or repurchases by the Fund during the current quarter. (v) The Income Fee is subject to a cap (the “Incentive Fee Cap”). The Incentive Fee Cap in respect of any calendar quarter is an amount equal to 15% of the Cumulative Pre-Incentive Fee Net Return (as defined below) during the relevant Trailing Twelve Quarters less the aggregate Income Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters. For this purpose, “Cumulative Pre-Incentive Fee Net Return” during the relevant Trailing Twelve Quarters means (x) Pre-Incentive Fee Net Investment Income in respect of the Trailing Twelve Quarters less (y) any Net Capital Loss, if any, in respect of the Trailing Twelve Quarters. If, in any calendar quarter, the Incentive Fee Cap is zero or a negative value, the Fund shall pay no Income Fee to the Adviser in respect of that quarter. If, in any calendar quarter, the Incentive Fee Cap is a positive value but is less than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Incentive Fee Cap in respect of such quarter. If, in any calendar quarter, the Incentive Fee Cap is equal to or greater than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Income Fee in respect of such quarter. “Net Capital Loss” in respect of a particular period means the difference, if positive, between (i) aggregate capital losses, whether realized or unrealized, in respect of such period and (ii) aggregate capital gains, whether realized or unrealized, in respect of such period.
Appears in 3 contracts
Samples: Investment Advisory Agreement (Bain Capital Private Credit), Investment Advisory Agreement (Bain Capital Private Credit), Investment Advisory Agreement (Bain Capital Private Credit)
Incentive Fee. The Incentive Fee shall incentive fee will consist of two parts—an components that are independent of each other, with the result that one component may be payable even if the other is not. A portion of the incentive fee is based on a percentage of the Fund’s income and an incentive fee a portion is based on a percentage of the Fund’s capital gains, each as followsdescribed below.
(i) The part of the Incentive Fee based on income (the “Income Fee”) will be calculated and payable quarterly in arrears Pre-Incentive Fee Net Investment Income. The portion based on the Fund’s aggregate income is based on Pre-Incentive Fee Net Investment Income in respect of the current calendar quarter and the eleven preceding calendar quarters (or the appropriate portion thereof in the case of any of the Fund’s first eleven calendar quarters) (in either case, the Returns. “Trailing Twelve Quarters”).
(ii) For purposes of calculating the Income Fee, Pre-Incentive Fee Net Investment Income means Returns” means, as the context requires, either the dollar value of, or percentage rate of return on the value of the Fund’s net assets at the end of the immediate preceding quarter from, interest income, distribution dividend income and any other income (including any other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other fees that the Fund receives from portfolio companies but excluding fees for providing managerial assistancecompanies) accrued during the relevant calendar quarter(s)quarter, minus the Fund’s operating expenses incurred during accrued for the relevant calendar quarter(s) quarter (including the Base Management Feemanagement fee, expenses payable under the Administration Agreement Agreement, and any interest expense or fees on any credit facilities or outstanding debt and distributions dividends paid on any issued and outstanding debt or preferred shares, but excluding the incentive fee and any distribution or shareholder servicing fees and the Incentive Feefees). Pre-Incentive Fee Net Investment Income includesReturns include, in the case of investments with a deferred interest feature (such as market discount, original issue discount, debt instruments with paymentpay-in-kind (“PIK”) interest, preferred shares with PIK dividends interest and zero coupon securities), accrued income that the Fund has not yet received in cash. Pre-Incentive Fee Net Investment Income does Returns do not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. For purposes of computing Pre-Incentive Fee Net Investment Income, the calculation methodology will look through derivative financial instruments or swaps as if the Fund owned the reference assets directly. Therefore, net interest income, if any, associated with a derivative financial instrument or swap (which represents the difference between (i) the interest income and fees received in respect of the reference assets of the derivative financial instrument or swap and (ii) the interest expense or financing charges paid by the Fund to the derivative or swap counterparty) will be included in the calculation of Pre-Incentive Fee Net Investment Income for purposes Returns, expressed as a rate of return on the value of the Income Fee.
Fund’s net assets at the end of the immediate preceding quarter, is compared to a “hurdle rate” of return of 1.25% per quarter (iii) 5.0% annualized). The Fund will pay the Adviser an incentive fee quarterly in arrears with respect to the Fund’s Pre-Incentive Fee Net Investment Income Returns in respect of the relevant Trailing Twelve Quarters will be compared to a “Hurdle Amount” equal to the product of (i) the “hurdle rate” of 1.75% per quarter (7.00% annualized) and (ii) the sum of the Fund’s net assets (defined as total assets less indebtedness and before taking into account any Incentive Fees payable during the period) at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Hurdle Amount will be calculated after making appropriate adjustments to the Fund’s net asset value at the beginning of each applicable calendar quarter for Fund subscriptions (which shall include all issuances by the Fund of its common shares, including issuances pursuant to its dividend reinvestment plan) and distributions during the applicable calendar quarter. Subject to Section 3(b)( v), the Income Fee will be as follows: • no incentive fee based on the amount by which (x) the aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters exceeds (y) the Hurdle Amount in respect of the relevant Trailing Twelve Quarters. The Income Fee that will be paid to the Adviser in respect of a particular calendar quarter will equal the excess of the Income Fee as calculated pursuant to this Section 3(b) less the aggregate Income Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters.
(iv) The Fund will pay the Income Fee in respect of each calendar quarter as follows:
(i) No Income Fee Returns in any calendar quarter in which the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters does Returns do not exceed the Hurdle Amount in respect hurdle rate of the relevant Trailing Twelve Quarters;
(ii) The Income Fee shall equal 1.25%; • 100% of the dollar amount of the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters Returns with respect to that portion of such Pre-Incentive Fee Net Investment IncomeIncome Returns, if any, that exceeds the Hurdle Amount hurdle rate but is less than or equal a rate of return of 1.43% (5.72% annualized). This is referred to an amount as Pre-Incentive Fee Net Investment Income Returns (which exceeds the hurdle rate but is less than 1.43%) as the “Catchcatch-Up Amountup”) determined on a quarterly basis by multiplying 2.0588; and • 12.5% by of the Fund’s net asset value at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Catch-Up Amount is intended to provide the Adviser with an incentive fee of 15% on all dollar amount of the Fund’s Pre-Incentive Fee Net Investment Income when the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters reaches the Catch-Up Amount in respect of the relevant Trailing Twelve Quarters; and
(iii) For any calendar quarter in which the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters exceeds the Catch-Up Amount, the Income Fee shall equal 15% of the amount of the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters that exceeds the Catch-Up Amount. These calculations will be appropriately pro-rated for any period of less than three months and adjusted for any share issuances or repurchases by the Fund during the current quarter.
(v) The Income Fee is subject to a cap (the “Incentive Fee Cap”). The Incentive Fee Cap in respect of any calendar quarter is an amount equal to 15% of the Cumulative Pre-Incentive Fee Net Return (as defined below) during the relevant Trailing Twelve Quarters less the aggregate Income Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters. For this purpose, “Cumulative Pre-Incentive Fee Net Return” during the relevant Trailing Twelve Quarters means (x) Pre-Incentive Fee Net Investment Income in respect of the Trailing Twelve Quarters less (y) any Net Capital LossReturns, if any, in respect that exceed a rate of the Trailing Twelve Quarters. If, in any calendar quarter, the Incentive Fee Cap is zero or a negative value, the Fund shall pay no Income Fee to the Adviser in respect return of that quarter. If, in any calendar quarter, the Incentive Fee Cap is a positive value but is less than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Incentive Fee Cap in respect of such quarter. If, in any calendar quarter, the Incentive Fee Cap is equal to or greater than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Income Fee in respect of such quarter. “Net Capital Loss” in respect of a particular period means the difference, if positive, between 1.43% (i) aggregate capital losses, whether realized or unrealized, in respect of such period and (ii) aggregate capital gains, whether realized or unrealized, in respect of such period5.72% annualized).
Appears in 3 contracts
Samples: Investment Advisory Agreement (Blackstone Private Credit Fund), Investment Advisory Agreement (Blackstone Private Credit Fund), Investment Advisory Agreement (Blackstone Private Credit Fund)
Incentive Fee. The Incentive Fee shall consist of two parts—an incentive fee based on income and an incentive fee based on capital gains, as follows.
(i) The part of the Incentive Fee based on income (the “Income Fee”) will be calculated and payable quarterly in arrears based on the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the current calendar quarter and Fund or each class of Shares of the eleven Fund (to the extent that the Fund offers multiple classes of Shares) (“Class”), based on such Class’s net asset value relative to the Fund as a whole, for the immediately preceding calendar quarters (or the appropriate portion thereof in the case of any of the Fund’s first eleven calendar quarters) (in either casequarter, the subject to a “Trailing Twelve Quarters”).
(ii) hurdle” and a “catch up” feature. For purposes of calculating the Income Feethis purpose, “Pre-Incentive Fee Net Investment Income Income” means the Fund’s (a) interest income, distribution dividend income and any other income (including any other fees fees, such as commitment, origination, structuring, diligence and consulting fees or other fees that the Fund receives from portfolio companies but excluding fees for providing managerial assistancefees) accrued during the relevant calendar quarter(squarter (or, if applicable, a Class’s allocable share of such income), minus (b) the Fund’s operating expenses incurred during for the relevant calendar quarter(s) quarter (including the Base Management Fee, expenses payable under the Administration Agreement and Agreement, any interest expense and distributions and/or dividends paid on any issued and outstanding debt or preferred sharesstock and, if applicable, any fees payable for distribution and/or shareholder servicing agreements, but excluding any distribution or shareholder servicing fees organizational and offering expenses and the Incentive Fee) (or, if applicable, a Class’s allocable share of such operating expenses) after giving application to any reimbursement or recoupment under any expense limitation agreement to which the Fund may be a party, as may be amended from time to time (the “Expense Limitation and Reimbursement Agreement”). Pre-Incentive Fee Net Investment Income includes, in the case of investments with a deferred interest feature (such as market discount, original issue discount, debt instruments with payment-in-kind (“PIK”) interest, preferred shares with PIK dividends interest and zero coupon securities), accrued income that the Fund has not yet received in cash. Pre-Incentive Fee Net Investment Income does not include any realized capital gains, realized capital losses or unrealized capital appreciation gains or depreciationrealized or unrealized losses. For purposes of computing Pre-Incentive Fee Net Investment Income, expressed as a rate of return on the calculation methodology will look through derivative financial instruments value of the Fund’s or swaps Class’s, as if the Fund owned the reference assets directly. Thereforeapplicable, net interest income, if any, associated with a derivative financial instrument or swap (which represents assets at the difference between (i) the interest income and fees received in respect end of the reference assets immediately preceding calendar quarter, shall be compared to a “hurdle rate” of 2.00% (8.00% annualized) of the derivative financial instrument Fund’s or swap and (ii) Class’s, as applicable, net asset value per quarter. The Fund shall pay the interest expense or financing charges paid by the Fund Adviser an Incentive Fee with respect to the derivative Fund’s or swap counterparty) will be included in the calculation of Pre-Incentive Fee Net Investment Income for purposes of the Income Fee.
(iii) Class’s, as applicable, Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters will be compared to a “Hurdle Amount” equal to the product of (i) the “hurdle rate” of 1.75% per quarter (7.00% annualized) and (ii) the sum of the Fund’s net assets (defined as total assets less indebtedness and before taking into account any Incentive Fees payable during the period) at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Hurdle Amount will be calculated after making appropriate adjustments to the Fund’s net asset value at the beginning of each applicable calendar quarter for Fund subscriptions (which shall include all issuances by the Fund of its common shares, including issuances pursuant to its dividend reinvestment plan) and distributions during the applicable calendar quarter. Subject to Section 3(b)( v), the Income Fee will be based on the amount by which (x) the aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters exceeds (y) the Hurdle Amount in respect of the relevant Trailing Twelve Quarters. The Income Fee that will be paid to the Adviser in respect of a particular calendar quarter will equal the excess of the Income Fee as calculated pursuant to this Section 3(b) less the aggregate Income Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters.
(iv) The Fund will pay the Income Fee in respect of each calendar quarter as follows:
: (i1) No Income no Incentive Fee in any calendar quarter in which the Fund’s aggregate or Class’s, as applicable, Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters does not exceed the Hurdle Amount in respect 2.00% of the relevant Trailing Twelve Quarters;
Fund’s net asset value; (ii2) The Income Fee shall equal 100% of the Fund’s aggregate or Class’s, as applicable, Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters with respect to that portion of such Pre-Incentive Fee Net Investment Income, if any, that exceeds the Hurdle Amount hurdle rate but is less than or equal to an amount (the “Catch-Up Amount”) determined on a quarterly basis by multiplying 2.05882.50% by of the Fund’s net asset value at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Catch-Up Amount is intended to provide the Adviser with an incentive fee of 15% on all of the Fund’s Pre-Incentive Fee Net Investment Income when the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters reaches the Catch-Up Amount in respect of the relevant Trailing Twelve Quarters; and
(iii) For any calendar quarter in which the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters exceeds the Catch-Up Amount, the Income Fee shall equal 15quarter; and (3) 20% of the amount of the Fund’s aggregate or Class’s, as applicable, Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters that exceeds the Catch-Up Amount. These calculations will be appropriately pro-rated for any period of less than three months and adjusted for any share issuances or repurchases by the Fund during the current quarter.
(v) The Income Fee is subject to a cap (the “Incentive Fee Cap”). The Incentive Fee Cap in respect of any calendar quarter is an amount equal to 15% of the Cumulative Pre-Incentive Fee Net Return (as defined below) during the relevant Trailing Twelve Quarters less the aggregate Income Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters. For this purpose, “Cumulative Pre-Incentive Fee Net Return” during the relevant Trailing Twelve Quarters means (x) Pre-Incentive Fee Net Investment Income in respect of the Trailing Twelve Quarters less (y) any Net Capital LossIncome, if any, in respect that exceeds 2.50% of the Trailing Twelve Quarters. If, Fund’s net asset value in any calendar quarter, the Incentive Fee Cap is zero or a negative value, the Fund shall pay no Income Fee to the Adviser in respect of that quarter. If, in any calendar quarter, the Incentive Fee Cap is a positive value but is less than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Incentive Fee Cap in respect of such quarter. If, in any calendar quarter, the Incentive Fee Cap is equal to or greater than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Income Fee in respect of such quarter. “Net Capital Loss” in respect of a particular period means the difference, if positive, between (i) aggregate capital losses, whether realized or unrealized, in respect of such period and (ii) aggregate capital gains, whether realized or unrealized, in respect of such period.
Appears in 2 contracts
Samples: Investment Advisory Agreement (Eagle Point Institutional Income Fund), Investment Advisory Agreement (Eagle Point Institutional Income Fund)
Incentive Fee. The Incentive Fee shall incentive fee will consist of two parts—an components that are independent of each other, with the result that one component may be payable even if the other is not. A portion of the incentive fee is based on a percentage of the Fund’s income and an incentive fee a portion is based on a percentage of the Fund’s capital gains, each as followsdescribed below.
(i) The part of the Incentive Fee based on income (the “Income Fee”) will be calculated and payable quarterly in arrears Pre-Incentive Fee Net Investment Income. The portion based on the Fund’s aggregate income is based on Pre-Incentive Fee Net Investment Income in respect of the current calendar quarter and the eleven preceding calendar quarters (or the appropriate portion thereof in the case of any of the Fund’s first eleven calendar quarters) (in either case, the Returns. “Trailing Twelve Quarters”).
(ii) For purposes of calculating the Income Fee, Pre-Incentive Fee Net Investment Income means Returns” means, as the context requires, either the dollar value of, or percentage rate of return on the value of the Fund’s net assets at the end of the immediate preceding quarter from, interest income, distribution dividend income and any other income (including any other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other fees that the Fund receives from portfolio companies but excluding fees for providing managerial assistancecompanies) accrued during the relevant calendar quarter(s)quarter, minus the Fund’s operating expenses incurred during accrued for the relevant calendar quarter(s) quarter (including the Base Management Feemanagement fee, expenses payable under the Administration Agreement Agreement, and any interest expense or fees on any credit facilities or outstanding debt and distributions dividends paid on any issued and outstanding debt or preferred shares, but excluding the incentive fee and any distribution or shareholder servicing fees and the Incentive Feefees). Pre-Incentive Fee Net Investment Income includesReturns include, in the case of investments with a deferred interest feature (such as market discount, original issue discount, debt instruments with paymentpay-in-kind (“PIK”) interest, preferred shares with PIK dividends interest and zero coupon securities), accrued income that the Fund has not yet received in cash. Pre-Incentive Fee Net Investment Income does Returns do not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. For purposes of computing the Fund’s Pre-Incentive Fee Net Investment Income, the calculation methodology will look through derivative financial instruments or total return swaps as if the Fund owned the reference referenced assets directly. Therefore, net interest income, if any, associated with a derivative financial instrument or swap (which represents the difference between (i) the interest income and fees received in respect of the reference assets of the derivative financial instrument or swap and (ii) the interest expense or financing charges paid by the Fund to the derivative or swap counterparty) will be included in the calculation of Pre-Incentive Fee Net Investment Income for purposes Returns, expressed as a rate of return on the value of the Income Fee.
Fund’s net assets at the end of the immediate preceding quarter, is compared to a “hurdle rate” of return of 1.25% per quarter (iii) 5.0% annualized). The Fund will pay the Adviser an incentive fee quarterly in arrears with respect to the Fund’s Pre-Incentive Fee Net Investment Income Returns in respect of the relevant Trailing Twelve Quarters will be compared to a “Hurdle Amount” equal to the product of (i) the “hurdle rate” of 1.75% per quarter (7.00% annualized) and (ii) the sum of the Fund’s net assets (defined as total assets less indebtedness and before taking into account any Incentive Fees payable during the period) at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Hurdle Amount will be calculated after making appropriate adjustments to the Fund’s net asset value at the beginning of each applicable calendar quarter for Fund subscriptions (which shall include all issuances by the Fund of its common shares, including issuances pursuant to its dividend reinvestment plan) and distributions during the applicable calendar quarter. Subject to Section 3(b)( v), the Income Fee will be as follows: • no incentive fee based on the amount by which (x) the aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters exceeds (y) the Hurdle Amount in respect of the relevant Trailing Twelve Quarters. The Income Fee that will be paid to the Adviser in respect of a particular calendar quarter will equal the excess of the Income Fee as calculated pursuant to this Section 3(b) less the aggregate Income Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters.
(iv) The Fund will pay the Income Fee in respect of each calendar quarter as follows:
(i) No Income Fee Returns in any calendar quarter in which the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters does Returns do not exceed the Hurdle Amount in respect hurdle rate of the relevant Trailing Twelve Quarters;
(ii) The Income Fee shall equal 1.25%; • 100% of the dollar amount of the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters Returns with respect to that portion of such Pre-Incentive Fee Net Investment Income, if any, that exceeds the Hurdle Amount Income hurdle rate but is less than or equal a rate of return of 1.43% (5.72% annualized). This is referred to an amount (the “Catch-Up Amount”) determined on a quarterly basis by multiplying 2.0588% by the Fund’s net asset value at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Catch-Up Amount is intended to provide the Adviser with an incentive fee of 15% on all of the Fund’s as Pre-Incentive Fee Net Investment Income when the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters reaches the Catch-Up Amount in respect of the relevant Trailing Twelve Quarters; and
Returns (iii) For any calendar quarter in which the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters exceeds the Catch-Up Amount, the Income Fee shall equal 15% of the amount of the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters that exceeds the Catch-Up Amount. These calculations will be appropriately pro-rated for any period of less than three months and adjusted for any share issuances or repurchases by the Fund during the current quarter.
(v) The Income Fee is subject to a cap (the “Incentive Fee Cap”). The Incentive Fee Cap in respect of any calendar quarter is an amount equal to 15% of the Cumulative Pre-Incentive Fee Net Return (as defined below) during the relevant Trailing Twelve Quarters less the aggregate Income Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters. For this purpose, “Cumulative Pre-Incentive Fee Net Return” during the relevant Trailing Twelve Quarters means (x) Pre-Incentive Fee Net Investment Income in respect of the Trailing Twelve Quarters less (y) any Net Capital Loss, if any, in respect of the Trailing Twelve Quarters. If, in any calendar quarter, the Incentive Fee Cap is zero or a negative value, the Fund shall pay no Income Fee to the Adviser in respect of that quarter. If, in any calendar quarter, the Incentive Fee Cap is a positive value hurdle rate but is less than 1.43%) as the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Incentive Fee Cap in respect of such quarter. If, in any calendar quarter, the Incentive Fee Cap is equal to or greater than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Income Fee in respect of such quarter. “Net Capital Loss” in respect of a particular period means the difference, if positive, between (i) aggregate capital losses, whether realized or unrealized, in respect of such period and (ii) aggregate capital gains, whether realized or unrealized, in respect of such period.catch-up”; and
Appears in 2 contracts
Samples: Investment Advisory Agreement (HPS Corporate Lending Fund), Investment Advisory Agreement (HPS Corporate Lending Fund)
Incentive Fee. The Incentive Fee shall consist of two parts—: (1) a subordinated incentive fee on income and (2) an incentive fee based on income and an incentive fee based on capital gains, as follows. Each part of the incentive fee is outlined below.
(i) The first part of the Incentive Fee based Fee, referred to as the subordinated incentive fee on income (the “Income Fee”) income, will be calculated and payable quarterly in arrears based on the FundCompany’s aggregate Prepre-Incentive Fee Net Investment Income in respect incentive fee net investment income for the immediately preceding quarter. The payment of the current calendar quarter and subordinated incentive fee on income will be subject to pre-incentive fee net investment income for the eleven preceding calendar quarters (or previous quarter, expressed as a quarterly rate of return on adjusted capital at the appropriate portion thereof in the case of any beginning of the Fund’s first eleven most recently completed calendar quarters) quarter, exceeding 1.875% (in either case7.5% annualized), the subject to a “Trailing Twelve Quarters”catch up” feature (as described below).
(ii) . For purposes of calculating the Income Feethis purpose, Prepre-Incentive Fee Net Investment Income incentive fee net investment income means the Fund’s interest income, distribution dividend income and any other income (including any other fees fees, such as commitment, origination, structuring, diligence and consulting fees or other fees that the Fund Company receives from portfolio companies but excluding fees for providing managerial assistancecompanies) accrued during the relevant calendar quarter(s)quarter, minus the FundCompany’s operating expenses incurred during for the relevant calendar quarter(s) quarter (including the Base Management Fee, Administrative Services expenses and the expenses payable under the Administration Agreement any other administration or similar agreement and any interest expense and distributions dividends paid on any issued and outstanding debt or preferred sharesstock, but excluding any distribution or shareholder servicing fees and the Incentive Feeincentive fee). Pre-Incentive Fee Net Investment Income incentive fee net investment income includes, in the case of investments with a deferred interest feature (such as market discount, original issue discount, discount debt instruments with payment-in-kind (“PIK”) interest, preferred shares with PIK dividends interest and zero coupon securities), accrued income that the Fund Company has not yet received in cash. Pre-Incentive Fee Net Investment Income incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. For purposes of computing Pre-Incentive Fee Net Investment Incomethis fee, the calculation methodology will look through derivative financial instruments or swaps as if the Fund owned the reference assets directly. Therefore, net interest income, if any, associated with a derivative financial instrument or swap (which represents the difference between (i) the interest income and fees received in respect adjusted capital means cumulative gross proceeds generated from sales of the reference assets of Company’s common stock (including proceeds from the derivative financial instrument or swap and (ii) the interest expense or financing charges paid by the Fund to the derivative or swap counterparty) will be included in the calculation of Pre-Incentive Fee Net Investment Income for purposes of the Income Fee.
(iii) Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters will be compared to a “Hurdle Amount” equal to the product of (i) the “hurdle rate” of 1.75% per quarter (7.00% annualized) and (ii) the sum of the FundCompany’s net assets (defined as total assets less indebtedness and before taking into account any Incentive Fees payable during the period) at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Hurdle Amount will be calculated after making appropriate adjustments to the Fund’s net asset value at the beginning of each applicable calendar quarter for Fund subscriptions (which shall include all issuances by the Fund of its common shares, including issuances pursuant to its dividend distribution reinvestment plan) and reduced for non-liquidating distributions, other than distributions during the applicable calendar quarter. Subject to Section 3(b)( v)of profits, the Income Fee will be based on the amount by which (x) the aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters exceeds (y) the Hurdle Amount in respect of the relevant Trailing Twelve Quarters. The Income Fee that will be paid to the Adviser in respect of a particular calendar quarter will equal Company’s stockholders and amounts paid for share repurchases pursuant to the excess Company’s share repurchase program. The calculation of the Income Fee subordinated incentive fee on income for each quarter is as calculated pursuant to this Section 3(b) less the aggregate Income Fees that were paid follows: • No subordinated incentive fee on income shall be payable to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters.
(iv) The Fund will pay the Income Fee in respect of each calendar quarter as follows:
(i) No Income Fee in any calendar quarter in which the FundCompany’s aggregate Prepre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters incentive fee net investment income does not exceed the Hurdle Amount in respect hurdle rate of the relevant Trailing Twelve Quarters;
1.875% (iior 7.5% annualized) The Income Fee shall equal on adjusted capital; • 100% of the FundCompany’s aggregate Prepre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters with respect to that portion of such Pre-Incentive Fee Net Investment Incomeincentive fee net investment income, if any, that exceeds the Hurdle Amount hurdle rate but is less than or equal to an amount 2.34375% in any calendar quarter (9.375% annualized) shall be payable to the Adviser. This portion of the subordinated incentive fee on income is referred to as the “Catch-Up Amount”) determined on a quarterly basis by multiplying 2.0588% by the Fund’s net asset value at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Catch-Up Amount catch up” and is intended to provide the Adviser with an incentive fee of 1520.0% on all of the FundCompany’s Prepre-Incentive Fee Net Investment Income incentive fee net investment income as if the hurdle rate did not apply when the Fund’s aggregate Prepre-Incentive Fee Net Investment Income incentive fee net investment income exceeds 2.34375% (9.375% annualized) in respect of the relevant Trailing Twelve Quarters reaches the Catch-Up Amount in respect of the relevant Trailing Twelve Quartersany calendar quarter; and
(iii) and • For any calendar quarter in which the FundCompany’s aggregate Prepre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters incentive fee net investment income exceeds the Catch-Up Amount2.34375% (9.375% annualized), the Income Fee subordinated incentive fee on income shall equal 1520.0% of the amount of the FundCompany’s aggregate Prepre-Incentive Fee Net Investment Income in respect of incentive fee net investment income, as the relevant Trailing Twelve Quarters that exceeds the Catchhurdle rate and catch-Up Amount. These calculations up will be appropriately pro-rated for any period of less than three months and adjusted for any share issuances or repurchases by the Fund during the current quarterhave been achieved.
(vii) The Income Fee is subject second part of the Incentive Fee, referred to a cap as the incentive fee on capital gains, shall be an incentive fee on realized capital gains earned on liquidated investments from the portfolio of the Company and shall be determined and payable in arrears as of the end of each calendar year (or upon termination of the “Incentive Fee Cap”Agreement). The Incentive Fee Cap in respect of any calendar quarter is an amount This fee shall equal to 15(a) 20.0% of the Cumulative Pre-Incentive Fee Net Return (as defined below) during the relevant Trailing Twelve Quarters less the aggregate Income Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters. For this purpose, “Cumulative Pre-Incentive Fee Net Return” during the relevant Trailing Twelve Quarters means (x) Pre-Incentive Fee Net Investment Income in respect of the Trailing Twelve Quarters less (y) any Net Capital Loss, if any, in respect of the Trailing Twelve Quarters. If, in any calendar quarter, the Incentive Fee Cap is zero or a negative value, the Fund shall pay no Income Fee to the Adviser in respect of that quarter. If, in any calendar quarter, the Incentive Fee Cap is a positive value but is less than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Incentive Fee Cap in respect of such quarter. If, in any calendar quarter, the Incentive Fee Cap is equal to or greater than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Income Fee in respect of such quarter. “Net Capital Loss” in respect of a particular period means the difference, if positive, between (i) aggregate capital losses, whether realized or unrealized, in respect of such period and (ii) aggregate Company’s incentive fee capital gains, whether which shall equal the Company’s realized or unrealizedcapital gains on a cumulative basis from inception, in respect calculated as of such periodthe end of each calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less (b) the aggregate amount of any previously paid capital gain incentive fees.
Appears in 2 contracts
Samples: Investment Advisory and Administrative Services Agreement (HMS Income Fund, Inc.), Investment Advisory and Administrative Services Agreement (HMS Income Fund, Inc.)
Incentive Fee. The Incentive Fee shall consist of two parts—: (1) a subordinated incentive fee on income, and (2) an incentive fee based on income and an incentive fee based on capital gains, as follows. Each part of the incentive fee is outlined below.
(i) The first part of the Incentive Fee based Fee, referred to as the subordinated incentive fee on income (the “Income Fee”) income, will be calculated and payable quarterly in arrears based on the FundCompany’s aggregate Prepre-Incentive Fee Net Investment Income in respect incentive fee net investment income for the immediately preceding quarter. The payment of the current calendar quarter and subordinated incentive fee on income will be subject to pre-incentive fee net investment income for the eleven preceding calendar quarters (or previous quarter, expressed as a quarterly rate of return on adjusted capital at the appropriate portion thereof in the case of any beginning of the Fund’s first eleven most recently completed calendar quarters) quarter, exceeding 1.875% (in either case7.5% annualized), the subject to a “Trailing Twelve Quarters”catch up” feature (as described below).
(ii) . For purposes of calculating the Income Feethis purpose, Prepre-Incentive Fee Net Investment Income incentive fee net investment income means the Fund’s interest income, distribution dividend income and any other income (including any other fees fees, such as commitment, origination, structuring, diligence and consulting fees or other fees that the Fund Company receives from portfolio companies but excluding fees for providing managerial assistancecompanies) accrued during the relevant calendar quarter(s)quarter, minus the FundCompany’s operating expenses incurred during for the relevant calendar quarter(s) quarter (including the Base Management Fee, Administrative Services expenses and the expenses payable under the Administration Agreement any other administration or similar agreement and any interest expense and distributions dividends paid on any issued and outstanding debt or preferred sharesstock, but excluding any distribution or shareholder servicing fees and the Incentive Fee). Pre-Incentive Fee Net Investment Income incentive fee net investment income includes, in the case of investments with a deferred interest feature (such as market discount, original issue discount, discount debt instruments with payment-in-kind (“PIK”) interest, preferred shares with PIK dividends interest and zero coupon securities), accrued income that the Fund Company has not yet received in cash. Pre-Incentive Fee Net Investment Income incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. For purposes of computing Pre-Incentive Fee Net Investment Incomethis calculation, the calculation methodology will look through derivative financial instruments or swaps as if the Fund owned the reference assets directly. Therefore, net interest income, if any, associated with a derivative financial instrument or swap (which represents the difference between (i) the interest income and fees received in respect adjusted capital means cumulative gross proceeds generated from sales of the reference assets of Common Shares (including proceeds from the derivative financial instrument or swap and (ii) the interest expense or financing charges paid by the Fund to the derivative or swap counterparty) will be included in the calculation of Pre-Incentive Fee Net Investment Income for purposes of the Income Fee.
(iii) Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters will be compared to a “Hurdle Amount” equal to the product of (i) the “hurdle rate” of 1.75% per quarter (7.00% annualized) and (ii) the sum of the FundCompany’s net assets (defined as total assets less indebtedness and before taking into account any Incentive Fees payable during the period) at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Hurdle Amount will be calculated after making appropriate adjustments to the Fund’s net asset value at the beginning of each applicable calendar quarter for Fund subscriptions (which shall include all issuances by the Fund of its common shares, including issuances pursuant to its dividend distribution reinvestment plan) and reduced for non-liquidating distributions, other than distributions during the applicable calendar quarter. Subject to Section 3(b)( v)of profits, the Income Fee will be based on the amount by which (x) the aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters exceeds (y) the Hurdle Amount in respect of the relevant Trailing Twelve Quarters. The Income Fee that will be paid to the Adviser in respect of a particular calendar quarter will equal Company’s stockholders and amounts paid for share repurchases pursuant to the excess Company’s share repurchase program. The calculation of the Income Fee subordinated incentive fee on income for each quarter is as calculated pursuant to this Section 3(b) less the aggregate Income Fees that were paid follows: · No subordinated incentive fee on income shall be payable to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters.
(iv) The Fund will pay the Income Fee in respect of each calendar quarter as follows:
(i) No Income Fee in any calendar quarter in which the FundCompany’s aggregate Prepre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters incentive fee net investment income does not exceed the Hurdle Amount in respect hurdle rate of the relevant Trailing Twelve Quarters;
1.875% (iior 7.5% annualized) The Income Fee shall equal on adjusted capital; · 100% of the FundCompany’s aggregate Prepre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters with respect to that portion of such Pre-Incentive Fee Net Investment Incomeincentive fee net investment income, if any, that exceeds the Hurdle Amount hurdle rate but is less than or equal to an amount 2.34375% in any calendar quarter (9.375% annualized) shall be payable to the Adviser. This portion of the subordinated incentive fee on income is referred to as the “Catch-Up Amount”) determined on a quarterly basis by multiplying 2.0588% by the Fund’s net asset value at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Catch-Up Amount catch up” and is intended to provide the Adviser with an incentive fee of 1520.0% on all of the FundCompany’s Prepre-Incentive Fee Net Investment Income incentive fee net investment income as if the hurdle rate did not apply when the Fund’s aggregate Prepre-Incentive Fee Net Investment Income incentive fee net investment income exceeds 2.34375% (9.375% annualized) in respect of the relevant Trailing Twelve Quarters reaches the Catch-Up Amount in respect of the relevant Trailing Twelve Quartersany calendar quarter; and
(iii) and · For any calendar quarter in which the FundCompany’s aggregate Prepre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters incentive fee net investment income exceeds the Catch-Up Amount2.34375% (9.375% annualized), the Income Fee subordinated incentive fee on income shall equal 1520.0% of the amount of the FundCompany’s aggregate Prepre-Incentive Fee Net Investment Income in respect of incentive fee net investment income, as the relevant Trailing Twelve Quarters that exceeds the Catchhurdle rate and catch-Up Amount. These calculations up will be appropriately pro-rated for any period of less than three months and adjusted for any share issuances or repurchases by the Fund during the current quarterhave been achieved.
(vii) The Income Fee is subject second part of the Incentive Fee, referred to a cap as the incentive fee on capital gains, shall be an incentive fee on realized capital gains earned on liquidated investments from the portfolio of the Company and shall be determined and payable in arrears as of the end of each calendar year (or upon termination of the “Incentive Fee Cap”Agreement). The Incentive Fee Cap in respect of any calendar quarter is an amount This fee shall equal to 15(a) 20.0% of the Cumulative Pre-Incentive Fee Net Return (as defined below) during the relevant Trailing Twelve Quarters less the aggregate Income Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters. For this purpose, “Cumulative Pre-Incentive Fee Net Return” during the relevant Trailing Twelve Quarters means (x) Pre-Incentive Fee Net Investment Income in respect of the Trailing Twelve Quarters less (y) any Net Capital Loss, if any, in respect of the Trailing Twelve Quarters. If, in any calendar quarter, the Incentive Fee Cap is zero or a negative value, the Fund shall pay no Income Fee to the Adviser in respect of that quarter. If, in any calendar quarter, the Incentive Fee Cap is a positive value but is less than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Incentive Fee Cap in respect of such quarter. If, in any calendar quarter, the Incentive Fee Cap is equal to or greater than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Income Fee in respect of such quarter. “Net Capital Loss” in respect of a particular period means the difference, if positive, between (i) aggregate capital losses, whether realized or unrealized, in respect of such period and (ii) aggregate Company’s incentive fee capital gains, whether which shall equal the Company’s realized or unrealizedcapital gains on a cumulative basis from inception, in respect calculated as of such periodthe end of each calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less (b) the aggregate amount of any previously paid capital gain incentive fees.
Appears in 2 contracts
Samples: Investment Advisory and Administrative Services Agreement (HMS Income Fund, Inc.), Investment Advisory and Administrative Services Agreement (Main Street Capital CORP)
Incentive Fee. The Incentive Fee shall incentive fee will consist of two parts—an components that are independent of each other, with the result that one component may be payable even if the other is not. A portion of the incentive fee is based on a percentage of the Fund’s income and an incentive fee a portion is based on a percentage of the Fund’s capital gains, each as followsdescribed below.
(i) The part of the Incentive Fee based on income (the “Income Fee”) will be calculated and payable quarterly in arrears Pre-Incentive Fee Net Investment Income. The portion based on the Fund’s aggregate income is based on Pre-Incentive Fee Net Investment Income in respect of the current calendar quarter and the eleven preceding calendar quarters (or the appropriate portion thereof in the case of any of the Fund’s first eleven calendar quarters) (in either case, the Returns. “Trailing Twelve Quarters”).
(ii) For purposes of calculating the Income Fee, Pre-Incentive Fee Net Investment Income means Returns” means, as the context requires, either the dollar value of, or percentage rate of return on the value of the Fund’s net assets at the end of the immediate preceding quarter from, interest income, distribution dividend income and any other income (including any other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other fees that the Fund receives from portfolio companies but excluding fees for providing managerial assistancecompanies) accrued during the relevant calendar quarter(s)quarter, minus the Fund’s operating expenses incurred during accrued for the relevant calendar quarter(s) quarter (including the Base Management Feemanagement fee, expenses payable under the Administration Agreement Agreement, and any interest expense or fees on any credit facilities or outstanding debt and distributions dividends paid on any issued and outstanding debt or preferred shares, but excluding the incentive fee and any distribution or shareholder servicing fees and the Incentive Feefees). Pre-Incentive Fee Net Investment Income includesReturns include, in the case of investments with a deferred interest feature (such as market discount, original issue discount, debt instruments with paymentpay-in-kind (“PIK”) interest, preferred shares with PIK dividends interest and zero coupon securities), accrued income that the Fund has not yet received in cash. Pre-Incentive Fee Net Investment Income does Returns do not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. For purposes of computing the Fund’s Pre-Incentive Fee Net Investment Income, the calculation methodology will look through derivative financial instruments or swaps as if the Fund owned the reference referenced assets directly. Therefore, net interest income, if any, associated with a derivative financial instrument or swap (which represents the difference between (i) the interest income and fees received in respect of the reference assets of the derivative financial instrument or swap and (ii) the interest expense or financing charges paid by the Fund to the derivative or swap counterparty) will be included in the calculation of Pre-Incentive Fee Net Investment Income for purposes Returns, expressed as a rate of return on the value of the Income Fee.
Fund’s net assets at the end of the immediately preceding quarter, is compared to a “hurdle rate” of return of 1.25% per quarter (iii) 5% annualized). The Fund will pay the Adviser an incentive fee quarterly in arrears with respect to the Fund’s Pre-Incentive Fee Net Investment Income Returns in respect of the relevant Trailing Twelve Quarters will be compared to a “Hurdle Amount” equal to the product of (i) the “hurdle rate” of 1.75% per quarter (7.00% annualized) and (ii) the sum of the Fund’s net assets (defined as total assets less indebtedness and before taking into account any Incentive Fees payable during the period) at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Hurdle Amount will be calculated after making appropriate adjustments to the Fund’s net asset value at the beginning of each applicable calendar quarter for Fund subscriptions (which shall include all issuances by the Fund of its common shares, including issuances pursuant to its dividend reinvestment plan) and distributions during the applicable calendar quarter. Subject to Section 3(b)( v), the Income Fee will be as follows: • no incentive fee based on the amount by which (x) the aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters exceeds (y) the Hurdle Amount in respect of the relevant Trailing Twelve Quarters. The Income Fee that will be paid to the Adviser in respect of a particular calendar quarter will equal the excess of the Income Fee as calculated pursuant to this Section 3(b) less the aggregate Income Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters.
(iv) The Fund will pay the Income Fee in respect of each calendar quarter as follows:
(i) No Income Fee Returns in any calendar quarter in which the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters does Returns do not exceed the Hurdle Amount in respect hurdle rate of the relevant Trailing Twelve Quarters;
1.25% per quarter (ii) The Income Fee shall equal 5% annualized); • 100% of the dollar amount of the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters Returns with respect to that portion of such Pre-Incentive Fee Net Investment Income, if any, that exceeds the Hurdle Amount hurdle rate but is less than or equal a rate of return of 1.43% (5.72% annualized). This is referred to an amount (the “Catch-Up Amount”) determined on a quarterly basis by multiplying 2.0588% by the Fund’s net asset value at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Catch-Up Amount is intended to provide the Adviser with an incentive fee of 15% on all of the Fund’s as Pre-Incentive Fee Net Investment Income when the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters reaches the Catch-Up Amount in respect of the relevant Trailing Twelve Quarters; and
Returns (iii) For any calendar quarter in which the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters exceeds the Catch-Up Amount, the Income Fee shall equal 15% of the amount of the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters that exceeds the Catch-Up Amount. These calculations will be appropriately pro-rated for any period of less than three months and adjusted for any share issuances or repurchases by the Fund during the current quarter.
(v) The Income Fee is subject to a cap (the “Incentive Fee Cap”). The Incentive Fee Cap in respect of any calendar quarter is an amount equal to 15% of the Cumulative Pre-Incentive Fee Net Return (as defined below) during the relevant Trailing Twelve Quarters less the aggregate Income Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters. For this purpose, “Cumulative Pre-Incentive Fee Net Return” during the relevant Trailing Twelve Quarters means (x) Pre-Incentive Fee Net Investment Income in respect of the Trailing Twelve Quarters less (y) any Net Capital Loss, if any, in respect of the Trailing Twelve Quarters. If, in any calendar quarter, the Incentive Fee Cap is zero or a negative value, the Fund shall pay no Income Fee to the Adviser in respect of that quarter. If, in any calendar quarter, the Incentive Fee Cap is a positive value hurdle rate but is less than 1.43%) as the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Incentive Fee Cap in respect of such quarter. If, in any calendar quarter, the Incentive Fee Cap is equal to or greater than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Income Fee in respect of such quarter. “Net Capital Loss” in respect of a particular period means the difference, if positive, between (i) aggregate capital losses, whether realized or unrealized, in respect of such period and (ii) aggregate capital gains, whether realized or unrealized, in respect of such period.catch-up”; and
Appears in 2 contracts
Samples: Investment Advisory Agreement (Fidelity Private Credit Fund), Investment Advisory Agreement (Fidelity Private Credit Fund)
Incentive Fee. The Incentive Fee shall consist of two parts—an incentive fee based on income and an incentive fee based on capital gains, as follows.
(i) The part of the Incentive Fee based on income (the “Income Fee”) will be calculated and payable quarterly in arrears based on the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the current calendar quarter and Company for the eleven immediately preceding calendar quarters (or the appropriate portion thereof in the case of any of the Fund’s first eleven calendar quarters) (in either casequarter. For this purpose, the “Trailing Twelve Quarters”).
(ii) For purposes of calculating the Income Fee, Pre-Incentive Fee Net Investment Income Income” means the Fund’s interest income, distribution dividend income and any other income (including any other fees fees, such as commitment, origination, structuring, diligence and consulting fees or other fees that the Fund Company receives from portfolio companies but excluding fees for providing managerial assistancean investment) accrued during the relevant calendar quarter(s)quarter, minus the FundCompany’s operating expenses incurred during for the relevant calendar quarter(s) quarter (including the Base Management Fee, expenses payable under the Administration Agreement (if in effect) and any interest expense and distributions and/or dividends paid on any issued and outstanding debt or preferred sharesPreferred Interests, but excluding any distribution or shareholder servicing fees and the Incentive Fee). Pre-Incentive Fee Net Investment Income includes, in the case of investments with a deferred interest feature (such as market discount, original issue discount, debt instruments with payment-in-kind (“PIK”) interest, preferred shares with PIK dividends interest and zero coupon securities), accrued income that the Fund Company has not yet received in cash. Pre-Incentive Fee Net Investment Income does not include any realized capital gains, realized capital losses or unrealized capital appreciation gains or depreciationrealized or unrealized losses. For purposes of computing Pre-Incentive Fee Net Investment Income, expressed as a rate of return on the calculation methodology will look through derivative financial instruments or swaps as if the Fund owned the reference assets directly. Therefore, net interest income, if any, associated with a derivative financial instrument or swap (which represents the difference between (i) the interest income and fees received in respect value of the reference Company’s net assets at the end of the derivative financial instrument or swap and (ii) immediately preceding calendar quarter, shall be compared to a “hurdle rate” of 2.00% per quarter. The Company shall pay the interest expense or financing charges paid by the Fund Adviser an Incentive Fee with respect to the derivative or swap counterparty) will be included in the calculation of Pre-Incentive Fee Net Investment Income for purposes of the Income Fee.
(iii) Company’s Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters will be compared to a “Hurdle Amount” equal to the product of (i) the “hurdle rate” of 1.75% per quarter (7.00% annualized) and (ii) the sum of the Fund’s net assets (defined as total assets less indebtedness and before taking into account any Incentive Fees payable during the period) at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Hurdle Amount will be calculated after making appropriate adjustments to the Fund’s net asset value at the beginning of each applicable calendar quarter for Fund subscriptions (which shall include all issuances by the Fund of its common shares, including issuances pursuant to its dividend reinvestment plan) and distributions during the applicable calendar quarter. Subject to Section 3(b)( v), the Income Fee will be based on the amount by which (x) the aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters exceeds (y) the Hurdle Amount in respect of the relevant Trailing Twelve Quarters. The Income Fee that will be paid to the Adviser in respect of a particular calendar quarter will equal the excess of the Income Fee as calculated pursuant to this Section 3(b) less the aggregate Income Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters.
(iv) The Fund will pay the Income Fee in respect of each calendar quarter as follows:
: (i1) No Income no Incentive Fee in any calendar quarter in which the FundCompany’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters does not exceed the Hurdle Amount in respect of the relevant Trailing Twelve Quarters;
2.00%; (ii2) The Income Fee shall equal 100% of the FundCompany’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters with respect to that portion of such Pre-Incentive Fee Net Investment Income, if any, that exceeds the Hurdle Amount hurdle rate of 2.00% but is less than or equal to an amount 2.353% in any calendar quarter; and (the “Catch-Up Amount”3) determined on a quarterly basis by multiplying 2.0588% by the Fund’s net asset value at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Catch-Up Amount is intended to provide the Adviser with an incentive fee of 15% on all of the Fundamount of the Company’s Pre-Incentive Fee Net Investment Income when the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters reaches the Catch-Up Amount in respect of the relevant Trailing Twelve Quarters; and
(iii) For any calendar quarter in which the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters exceeds the Catch-Up Amount, the Income Fee shall equal 15% of the amount of the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters that exceeds the Catch-Up Amount. These calculations will be appropriately pro-rated for any period of less than three months and adjusted for any share issuances or repurchases by the Fund during the current quarter.
(v) The Income Fee is subject to a cap (the “Incentive Fee Cap”). The Incentive Fee Cap in respect of any calendar quarter is an amount equal to 15% of the Cumulative Pre-Incentive Fee Net Return (as defined below) during the relevant Trailing Twelve Quarters less the aggregate Income Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters. For this purpose, “Cumulative Pre-Incentive Fee Net Return” during the relevant Trailing Twelve Quarters means (x) Pre-Incentive Fee Net Investment Income in respect of the Trailing Twelve Quarters less (y) any Net Capital LossIncome, if any, in respect of the Trailing Twelve Quarters. If, that exceeds 2.353% in any calendar quarter, the . The portion of such Incentive Fee Cap that is zero attributable to deferred interest (such as payment-in-kind interest or a negative valueoriginal issue discount) will be paid to the Adviser, without interest, only if and to the Fund extent the Company actually receives such deferred interest in cash, and any accrual thereof will be reversed if and to the extent such interest is reversed in connection with any write-off or similar treatment of the investment giving rise to any deferred interest accrual. The Company shall pay no Income Fee make any payments due hereunder to the Adviser in respect of that quarter. If, in any calendar quarter, or to the Incentive Fee Cap is a positive value but is less than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay Adviser’s designee as the Adviser the Incentive Fee Cap in respect of such quarter. If, in any calendar quarter, the Incentive Fee Cap is equal to or greater than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Income Fee in respect of such quarter. “Net Capital Loss” in respect of a particular period means the difference, if positive, between (i) aggregate capital losses, whether realized or unrealized, in respect of such period and (ii) aggregate capital gains, whether realized or unrealized, in respect of such periodmay otherwise direct.
Appears in 2 contracts
Samples: Investment Advisory Agreement (Panagram Capital, LLC), Investment Advisory Agreement (Panagram Capital, LLC)
Incentive Fee. The Incentive Fee shall will consist of two parts—an incentive fee components that are independent of each other, with the result that one component may be payable even if the other is not. A portion of the Incentive Fee is based on a percentage of the Fund’s income and an incentive fee a portion is based on a percentage of the Fund’s capital gains, each as followsdescribed below.
(i) The part of the Incentive Fee based on income (the “Income Fee”) will be calculated and payable quarterly in arrears Pre-Incentive Fee Net Investment Income. The portion based on the Fund’s aggregate income is based on Pre-Incentive Fee Net Investment Income in respect of the current calendar quarter and the eleven preceding calendar quarters (or the appropriate portion thereof in the case of any of the Fund’s first eleven calendar quarters) (in either case, the Returns. “Trailing Twelve Quarters”).
(ii) For purposes of calculating the Income Fee, Pre-Incentive Fee Net Investment Income means Returns” means, as the context requires, either the dollar value of, or percentage rate of return on the value of the Fund’s net assets at the end of the immediate preceding quarter from, interest income, distribution dividend income and any other income (including any other fees fees, such as commitment, origination, structuring, diligence and consulting fees or other fees that the Fund receives from portfolio companies but excluding fees for providing managerial assistancecompanies) accrued during the relevant calendar quarter(s)quarter, minus the Fund’s operating expenses incurred during accrued for the relevant calendar quarter(s) quarter (including the Base Management Fee, expenses payable under the Administration Agreement Agreement, and any interest expense or fees on any credit facilities or outstanding debt and distributions dividends paid on any issued and outstanding debt or preferred shares, but excluding the incentive fee and any distribution or shareholder servicing fees and the Incentive Feefees). Pre-Incentive Fee Net Investment Income includesReturns include, in the case of investments with a deferred interest feature (such as market discount, original issue discount, debt instruments with paymentpay-in-kind (“PIK”) interest, preferred shares with PIK dividends interest and zero coupon securities), accrued income that the Fund has not yet received in cash. Pre-Incentive Fee Net Investment Income does Returns do not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. For purposes of computing Pre-Incentive Fee Net Investment Income, the calculation methodology will look through derivative financial instruments or swaps as if the Fund owned the reference assets directly. Therefore, net interest income, if any, associated with a derivative financial instrument or swap (which represents the difference between (i) the interest income and fees received in respect of the reference assets of the derivative financial instrument or swap and (ii) the interest expense or financing charges paid by the Fund to the derivative or swap counterparty) will be included in the calculation of Pre-Incentive Fee Net Investment Income for purposes Returns, expressed as a rate of return on the value of the Income Fee.
Fund’s net assets at the end of the immediate preceding quarter, is compared to a “hurdle rate” of return of 1.25% per quarter (iii) 5.0% annualized). The Fund will pay the Adviser an incentive fee quarterly in arrears with respect to the Fund’s Pre-Incentive Fee Net Investment Income Returns in respect of the relevant Trailing Twelve Quarters will be compared to a “Hurdle Amount” equal to the product of (i) the “hurdle rate” of 1.75% per quarter (7.00% annualized) and (ii) the sum of the Fund’s net assets (defined as total assets less indebtedness and before taking into account any Incentive Fees payable during the period) at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Hurdle Amount will be calculated after making appropriate adjustments to the Fund’s net asset value at the beginning of each applicable calendar quarter for Fund subscriptions (which shall include all issuances by the Fund of its common shares, including issuances pursuant to its dividend reinvestment plan) and distributions during the applicable calendar quarter. Subject to Section 3(b)( v), the Income Fee will be as follows: • no incentive fee based on the amount by which (x) the aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters exceeds (y) the Hurdle Amount in respect of the relevant Trailing Twelve Quarters. The Income Fee that will be paid to the Adviser in respect of a particular calendar quarter will equal the excess of the Income Fee as calculated pursuant to this Section 3(b) less the aggregate Income Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters.
(iv) The Fund will pay the Income Fee in respect of each calendar quarter as follows:
(i) No Income Fee Returns in any calendar quarter in which the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters does Returns do not exceed the Hurdle Amount in respect hurdle rate of the relevant Trailing Twelve Quarters;
(ii) The Income Fee shall equal 1.25% per quarter; • 100% of the dollar amount of the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters Returns with respect to that portion of such Pre-Incentive Fee Net Investment IncomeIncome Returns, if any, that exceeds the Hurdle Amount hurdle rate but is less than or equal a rate of return of 1.43% (5.72% annualized). This is referred to an amount as Pre-Incentive Fee Net Investment Income Returns (which exceeds the hurdle rate but is less than 1.43%) as the “Catchcatch-Up Amountup”) determined on a quarterly basis by multiplying 2.0588; and • 12.5% by of the Fund’s net asset value at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Catch-Up Amount is intended to provide the Adviser with an incentive fee of 15% on all dollar amount of the Fund’s Pre-Incentive Fee Net Investment Income when the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect Returns, if any, that exceed a rate of the relevant Trailing Twelve Quarters reaches the Catch-Up Amount in respect return of the relevant Trailing Twelve Quarters; and
1.43% (iii) For any calendar quarter in which the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters exceeds the Catch-Up Amount, the Income Fee shall equal 155.72% of the amount of the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters that exceeds the Catch-Up Amountannualized). These calculations will be appropriately pro-rated for any period of less than three months and adjusted for any share issuances or repurchases by the Fund during the current relevant quarter.
(v) The Income Fee is subject to a cap (the “Incentive Fee Cap”). The Incentive Fee Cap in respect of any calendar quarter is an amount equal to 15% of the Cumulative Pre-Incentive Fee Net Return (as defined below) during the relevant Trailing Twelve Quarters less the aggregate Income Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters. For this purpose, “Cumulative Pre-Incentive Fee Net Return” during the relevant Trailing Twelve Quarters means (x) Pre-Incentive Fee Net Investment Income in respect of the Trailing Twelve Quarters less (y) any Net Capital Loss, if any, in respect of the Trailing Twelve Quarters. If, in any calendar quarter, the Incentive Fee Cap is zero or a negative value, the Fund shall pay no Income Fee to the Adviser in respect of that quarter. If, in any calendar quarter, the Incentive Fee Cap is a positive value but is less than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Incentive Fee Cap in respect of such quarter. If, in any calendar quarter, the Incentive Fee Cap is equal to or greater than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Income Fee in respect of such quarter. “Net Capital Loss” in respect of a particular period means the difference, if positive, between (i) aggregate capital losses, whether realized or unrealized, in respect of such period and (ii) aggregate capital gains, whether realized or unrealized, in respect of such period.
Appears in 2 contracts
Samples: Investment Management Agreement (AG Twin Brook Capital Income Fund), Investment Management Agreement (AGTB Private BDC)
Incentive Fee. The Incentive Fee shall consist of two three parts—: (1) a subordinated incentive fee on income, (2) an incentive fee based on income capital gains during operations and an (3) a subordinated liquidation incentive fee. Each part of the incentive fee based on capital gains, as followsis outlined below.
(i) The first part of the Incentive Fee based Fee, referred to as the subordinated incentive fee on income (the “Income Fee”) income, will be calculated and payable quarterly in arrears based on the FundCompany’s aggregate Prepre-Incentive Fee Net Investment Income in respect incentive fee net investment income for the immediately preceding quarter. The payment of the current calendar quarter and subordinated incentive fee on income will be subject to pre-incentive fee net investment income for the eleven preceding calendar quarters (or previous quarter, expressed as a quarterly rate of return on adjusted capital at the appropriate portion thereof in the case of any beginning of the Fund’s first eleven most recently completed calendar quarters) quarter, exceeding 1.875% (in either case7.5% annualized), the subject to a “Trailing Twelve Quarters”catch up” feature (as described below).
(ii) . For purposes of calculating the Income Feethis purpose, Prepre-Incentive Fee Net Investment Income incentive fee net investment income means the Fund’s interest income, distribution dividend income and any other income (including any other fees fees, such as commitment, origination, structuring, diligence and consulting fees or other fees that the Fund Company receives from portfolio companies but excluding fees for providing managerial assistancecompanies) accrued during the relevant calendar quarter(s)quarter, minus the FundCompany’s operating expenses incurred during for the relevant calendar quarter(s) quarter (including the Base Management Fee, Administrative Services expenses and the expenses payable under the Administration Agreement any other administration or similar agreement and any interest expense and distributions dividends paid on any issued and outstanding debt or preferred sharesstock, but excluding any distribution or shareholder servicing fees and the Incentive Feeincentive fee). Pre-Incentive Fee Net Investment Income incentive fee net investment income includes, in the case of investments with a deferred interest feature (such as market discount, original issue discount, discount debt instruments with payment-in-kind (“PIK”) interest, preferred shares with PIK dividends interest and zero coupon securities), accrued income that the Fund Company has not yet received in cash. Pre-Incentive Fee Net Investment Income incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. For purposes of computing Pre-Incentive Fee Net Investment Incomethis fee and the subordinated liquidation incentive fee set forth below, the calculation methodology will look through derivative financial instruments or swaps as if the Fund owned the reference assets directly. Therefore, net interest income, if any, associated with a derivative financial instrument or swap (which represents the difference between (i) the interest income and fees received in respect adjusted capital means cumulative gross proceeds generated from sales of the reference assets of Company’s common stock (including proceeds from the derivative financial instrument or swap and (ii) the interest expense or financing charges paid by the Fund to the derivative or swap counterparty) will be included in the calculation of Pre-Incentive Fee Net Investment Income for purposes of the Income Fee.
(iii) Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters will be compared to a “Hurdle Amount” equal to the product of (i) the “hurdle rate” of 1.75% per quarter (7.00% annualized) and (ii) the sum of the FundCompany’s net assets (defined as total assets less indebtedness and before taking into account any Incentive Fees payable during the period) at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Hurdle Amount will be calculated after making appropriate adjustments to the Fund’s net asset value at the beginning of each applicable calendar quarter for Fund subscriptions (which shall include all issuances by the Fund of its common shares, including issuances pursuant to its dividend distribution reinvestment plan) and reduced for non-liquidating distributions, other than distributions during the applicable calendar quarter. Subject to Section 3(b)( v)of profits, the Income Fee will be based on the amount by which (x) the aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters exceeds (y) the Hurdle Amount in respect of the relevant Trailing Twelve Quarters. The Income Fee that will be paid to the Adviser in respect of a particular calendar quarter will equal Company’s stockholders and amounts paid for share repurchases pursuant to the excess Company’s share repurchase program. The calculation of the Income Fee subordinated incentive fee on income for each quarter is as calculated pursuant to this Section 3(b) less the aggregate Income Fees that were paid follows: • No subordinated incentive fee on income shall be payable to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters.
(iv) The Fund will pay the Income Fee in respect of each calendar quarter as follows:
(i) No Income Fee in any calendar quarter in which the FundCompany’s aggregate Prepre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters incentive fee net investment income does not exceed the Hurdle Amount in respect hurdle rate of the relevant Trailing Twelve Quarters;
1.875% (iior 7.5% annualized) The Income Fee shall equal on adjusted capital; • 100% of the FundCompany’s aggregate Prepre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters with respect to that portion of such Pre-Incentive Fee Net Investment Incomeincentive fee net investment income, if any, that exceeds the Hurdle Amount hurdle rate but is less than or equal to an amount 2.34375% in any calendar quarter (9.375% annualized) shall be payable to the Adviser. This portion of the subordinated incentive fee on income is referred to as the “Catch-Up Amount”) determined on a quarterly basis by multiplying 2.0588% by the Fund’s net asset value at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Catch-Up Amount catch up” and is intended to provide the Adviser with an incentive fee of 1520.0% on all of the FundCompany’s Prepre-Incentive Fee Net Investment Income incentive fee net investment income as if the hurdle rate did not apply when the Fund’s aggregate Prepre-Incentive Fee Net Investment Income incentive fee net investment income exceeds 2.34375% (9.375% annualized) in respect of the relevant Trailing Twelve Quarters reaches the Catch-Up Amount in respect of the relevant Trailing Twelve Quartersany calendar quarter; and
(iii) and • For any calendar quarter in which the FundCompany’s aggregate Prepre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters incentive fee net investment income exceeds the Catch-Up Amount2.34375% (9.375% annualized), the Income Fee subordinated incentive fee on income shall equal 1520.0% of the amount of the FundCompany’s aggregate Prepre-Incentive Fee Net Investment Income in respect of incentive fee net investment income, as the relevant Trailing Twelve Quarters that exceeds the Catchhurdle rate and catch-Up Amount. These calculations up will be appropriately pro-rated for any period of less than three months and adjusted for any share issuances or repurchases by the Fund during the current quarterhave been achieved.
(vii) The Income Fee is subject second part of the Incentive Fee, referred to a cap as the incentive fee on capital gains during operations, shall be an incentive fee on capital gains earned on liquidated investments from the portfolio during operations prior to the liquidation of the Company and shall be determined and payable in arrears as of the end of each calendar year (or upon termination of the “Incentive Fee Cap”Agreement). The Incentive Fee Cap in respect of any calendar quarter is an amount This fee shall equal to 15(a) 20.0% of the Cumulative Pre-Incentive Fee Net Return Company’s incentive fee capital gains, which shall equal the Company’s realized capital gains on a cumulative basis from inception, calculated as of the end of each calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less (as defined belowb) during the relevant Trailing Twelve Quarters less the aggregate Income Fees that were amount of any previously paid capital gain incentive fees.
(iii) The third part of the Incentive Fee, referred to as the Adviser in subordinated liquidation incentive fee, shall equal 20.0% of the preceding eleven calendar quarters (or portion thereof) comprising net proceeds from the relevant Trailing Twelve Quartersliquidation of the Company remaining after investors have received distributions of net proceeds from liquidation of the Company equal to adjusted capital as calculated immediately prior to liquidation. For purposes of this purposecomputation, “Cumulative Pre-Incentive Fee Net Return” during the relevant Trailing Twelve Quarters means (x) Pre-Incentive Fee Net Investment Income in respect liquidation will include any merger of the Trailing Twelve Quarters less (y) any Net Capital Loss, if any, in respect Company with another entity or the acquisition of substantially all of the Trailing Twelve QuartersCompany’s stock or assets in a single or series of related transactions. IfNotwithstanding the foregoing, in any calendar quarter, the Incentive Fee Cap is zero or a negative value, the Fund shall pay no Income Fee to the Adviser in respect of that quarter. If, in any calendar quarter, the Incentive Fee Cap is a positive value but is less than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Incentive Fee Cap in respect of such quarter. IfInvestment Company Act, in no event will the subordinated liquidation incentive fees plus the cumulative incentive fees on capital gains during operations paid by the Company exceed 20.0% of the cumulative realized capital gains on the investments of the Company (including capital gains realized upon any calendar quarterliquidation, including a merger or sale of substantially all of the Incentive Fee Cap is equal to Company’s stock or greater than assets) over the Income Fee calculated in accordance with Section 3(b)(iv) abovelife of the Company, the Fund shall pay the Adviser the Income Fee in respect computed net of such quarter. “Net Capital Loss” in respect of a particular period means the difference, if positive, between (i) aggregate all realized capital losses, whether realized or unrealized, in respect of such period losses and (ii) aggregate unrealized capital gains, whether realized or unrealized, in respect of such perioddepreciation.
Appears in 2 contracts
Samples: Investment Advisory and Administrative Services Agreement (HMS Income Fund, Inc.), Investment Advisory and Administrative Services Agreement (HMS Income Fund, Inc.)
Incentive Fee. The Advisor shall receive an incentive fee (the “Incentive Fee”) calculated as set forth below. In the case of a liquidation of the Fund or if this Agreement is terminated, the Incentive Fee will also become payable as of the effective date of liquidation or termination. The Incentive Fee shall consist of two parts—an incentive fee based is earned on income and an incentive fee based on capital gains, as follows.
(i) The part of the Incentive Fee based on income (the “Income Fee”) will be calculated and payable quarterly in arrears based on the Fund’s aggregate Pre-Incentive Fee Net Investment Income Income, as defined below, and shall be determined and payable in respect arrears as of the current calendar end of each fiscal quarter beginning on and after the eleven preceding calendar quarters (or the appropriate portion thereof in the case of any of the Fund’s first eleven calendar quarters) (in either case, the “Trailing Twelve Quarters”).Effective Date. The Incentive Fee for each fiscal quarter will be calculated as follows:
(iii) For purposes of calculating the Income Fee, Pre-No Incentive Fee Net Investment Income means will be payable in any fiscal quarter in which the Fund’s interest income, distribution income and any other income (including any other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that the Fund receives from portfolio companies but excluding fees for providing managerial assistance) accrued during the relevant calendar quarter(s), minus the Fund’s operating expenses incurred during the relevant calendar quarter(s) (including the Base Management Fee, expenses payable under the Administration Agreement and any interest expense and distributions paid on any issued and outstanding debt or preferred shares, but excluding any distribution or shareholder servicing fees and the Incentive Fee). Pre-Incentive Fee Net Investment Income includes, in the case of investments with a deferred interest feature (such as market discount, original issue discount, debt instruments with payment-in-kind (“PIK”) interest, preferred shares with PIK dividends and zero coupon securities), accrued income that the Fund has not yet received in cash. Pre-Incentive Fee Net Investment Income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. For purposes exceed a quarterly return of computing Pre-Incentive Fee Net Investment Income, the calculation methodology will look through derivative financial instruments or swaps as if the Fund owned the reference assets directly. Therefore, net interest income, if any, associated with a derivative financial instrument or swap (which represents the difference between (i) the interest income and fees received in respect of the reference assets of the derivative financial instrument or swap and (ii) the interest expense or financing charges paid by the Fund to the derivative or swap counterparty) will be included in the calculation of Pre-Incentive Fee Net Investment Income for purposes of the Income Fee.
(iii) Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters will be compared to a “Hurdle Amount” equal to the product of (i) the “hurdle rate” of 1.751.50% per quarter on Adjusted Capital, as defined below (7.00% annualized) and (ii) the sum of the Fund’s net assets (defined as total assets less indebtedness and before taking into account any Incentive Fees payable during the period) at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Hurdle Amount will be calculated after making appropriate adjustments to the Fund’s net asset value at the beginning of each applicable calendar quarter for Fund subscriptions (which shall include all issuances by the Fund of its common shares, including issuances pursuant to its dividend reinvestment plan) and distributions during the applicable calendar quarter. Subject to Section 3(b“Quarterly Return”)( v), the Income Fee will be based on the amount by which (x) the aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters exceeds (y) the Hurdle Amount in respect of the relevant Trailing Twelve Quarters. The Income Fee that will be paid to the Adviser in respect of a particular calendar quarter will equal the excess of the Income Fee as calculated pursuant to this Section 3(b) less the aggregate Income Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters.
(iv) The Fund will pay the Income Fee in respect of each calendar quarter as follows:
(i) No Income Fee in any calendar quarter in which the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters does not exceed the Hurdle Amount in respect of the relevant Trailing Twelve Quarters;
(ii) The Income Fee shall equal 100% of the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters with respect to that portion of such All Pre-Incentive Fee Net Investment Income, if any, that exceeds the Hurdle Amount Quarterly Return, but is less than or equal to an amount 1.875% of Adjusted Capital in any quarter, will be payable to the Advisor.
(the “Catch-Up Amount”iii) determined on a quarterly basis by multiplying 2.0588% by the Fund’s net asset value at the beginning of each applicable calendar For any fiscal quarter comprising the relevant Trailing Twelve Quarters. The Catch-Up Amount is intended to provide the Adviser with an incentive fee of 15% on all of the Fund’s in which Pre-Incentive Fee Net Investment Income when exceeds 1.875% of Adjusted Capital, the Fund’s aggregate Incentive Fee shall equal 20% of Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters reaches the Catch-Up Amount in respect of the relevant Trailing Twelve Quarters; andIncome.
(iiiiv) For any calendar quarter in which the Fund’s aggregate “Pre-Incentive Fee Net Investment Income in respect of Income” is defined as:
(a) interest income, dividend income and any other income accrued during the relevant Trailing Twelve Quarters exceeds the Catch-Up Amountfiscal quarter, the Income Fee shall equal 15% of the amount of minus the Fund’s aggregate Pre-operating expenses for the quarter (including the Management Fee, expenses reimbursed to the Advisor under the administration agreement, dated as of December 6, 2016 and any interest expense and distributions paid on any issued and outstanding preferred Shares, but excluding the Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters that exceeds the Catch-Up Amount. These calculations will be appropriately pro-rated for any period of less than three months and adjusted for any share issuances or repurchases by the Fund during the current quarter.Fee; and
(vb) The Income Fee is subject to a cap (the “Incentive Fee Cap”). The Incentive Fee Cap in respect of any calendar quarter is an amount equal to 15% of the Cumulative Pre-Incentive Fee Net Return (as defined below) during the relevant Trailing Twelve Quarters less the aggregate Income Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters. For this purpose, “Cumulative Pre-Incentive Fee Net Return” during the relevant Trailing Twelve Quarters means (x) Pre-Incentive Fee Net Investment Income in respect of the Trailing Twelve Quarters less (y) any Net Capital Lossnet interest, if any, in respect of associated with a derivative financial instrument or swap (which, is defined as the Trailing Twelve Quarters. If, in any calendar quarter, difference between (A) the Incentive Fee Cap is zero or a negative value, interest income and transaction fees related to reference assets and paid to the Fund shall pay no Income Fee by the derivative or swap counterparty, and (B) all interest and other expenses paid by the Fund to the Adviser in respect of that quarter. If, in any calendar quarter, the Incentive Fee Cap is a positive value but is less than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Incentive Fee Cap in respect of such quarter. If, in any calendar quarter, the Incentive Fee Cap is equal to derivative or greater than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Income Fee in respect of such quarter. “Net Capital Loss” in respect of a particular period means the difference, if positive, between (i) aggregate capital losses, whether realized or unrealized, in respect of such period and (ii) aggregate capital gains, whether realized or unrealized, in respect of such period.swap counterparty);
Appears in 2 contracts
Samples: Investment Advisory Agreement (CION Ares Diversified Credit Fund), Investment Advisory Agreement (CION Ares Diversified Credit Fund)
Incentive Fee. The Incentive Fee shall incentive fee will consist of two parts—an components that are independent of each other, with the result that one component may be payable even if the 11 other is not. A portion of the incentive fee is based on a percentage of the Fund’s income and an incentive fee a portion is based on a percentage of the Fund’s capital gains, each as followsdescribed below.
(i) The part of the Incentive Fee based on income (the “Income Fee”) will be calculated and payable quarterly in arrears Pre-Incentive Fee Net Investment Income. The portion based on the Fund’s aggregate income is based on Pre-Incentive Fee Net Investment Income in respect of the current calendar quarter and the eleven preceding calendar quarters (or the appropriate portion thereof in the case of any of the Fund’s first eleven calendar quarters) (in either case, the Returns. “Trailing Twelve Quarters”).
(ii) For purposes of calculating the Income Fee, Pre-Incentive Fee Net Investment Income means Returns” means, as the context requires, either the dollar value of, or percentage rate of return on the value of the Fund’s net assets at the end of the immediate preceding quarter from, interest income, distribution dividend income and any other income (including any other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other fees that the Fund receives from portfolio companies but excluding fees for providing managerial assistancecompanies) accrued during the relevant calendar quarter(s)quarter, minus the Fund’s operating expenses incurred during accrued for the relevant calendar quarter(s) quarter (including the Base Management Feemanagement fee, expenses payable under the Administration Agreement Agreement, and any interest expense or fees on any credit facilities or outstanding debt and distributions dividends paid on any issued and outstanding debt or preferred shares, but excluding the incentive fee and any distribution or shareholder servicing fees and the Incentive Feefees). Pre-Incentive Fee Net Investment Income includesReturns include, in the case of investments with a deferred interest feature (such as market discount, original issue discount, debt instruments with paymentpay-in-kind (“PIK”) interest, preferred shares with PIK dividends interest and zero coupon securities), accrued income that the Fund has not yet received in cash. Pre-Incentive Fee Net Investment Income does Returns do not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. For purposes of computing the Fund’s Pre-Incentive Fee Net Investment Income, the calculation methodology will look through derivative financial instruments or total return swaps as if the Fund owned the reference referenced assets directly. Therefore, net interest income, if any, associated with a derivative financial instrument or swap (which represents the difference between (i) the interest income and fees received in respect of the reference assets of the derivative financial instrument or swap and (ii) the interest expense or financing charges paid by the Fund to the derivative or swap counterparty) will be included in the calculation of Pre-Incentive Fee Net Investment Income for purposes Returns, expressed as a rate of return on the value of the Income Fee.
Fund’s net assets at the end of the immediate preceding quarter, is compared to a “hurdle rate” of return of 1.25% per quarter (iii) 5.0% annualized). The Fund will pay the Adviser an incentive fee quarterly in arrears with respect to the Fund’s Pre-Incentive Fee Net Investment Income Returns in respect of the relevant Trailing Twelve Quarters will be compared to a “Hurdle Amount” equal to the product of (i) the “hurdle rate” of 1.75% per quarter (7.00% annualized) and (ii) the sum of the Fund’s net assets (defined as total assets less indebtedness and before taking into account any Incentive Fees payable during the period) at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Hurdle Amount will be calculated after making appropriate adjustments to the Fund’s net asset value at the beginning of each applicable calendar quarter for Fund subscriptions (which shall include all issuances by the Fund of its common shares, including issuances pursuant to its dividend reinvestment plan) and distributions during the applicable calendar quarter. Subject to Section 3(b)( v), the Income Fee will be as follows: • no incentive fee based on the amount by which (x) the aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters exceeds (y) the Hurdle Amount in respect of the relevant Trailing Twelve Quarters. The Income Fee that will be paid to the Adviser in respect of a particular calendar quarter will equal the excess of the Income Fee as calculated pursuant to this Section 3(b) less the aggregate Income Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters.
(iv) The Fund will pay the Income Fee in respect of each calendar quarter as follows:
(i) No Income Fee Returns in any calendar quarter in which the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters does Returns do not exceed the Hurdle Amount in respect hurdle rate of the relevant Trailing Twelve Quarters;
(ii) The Income Fee shall equal 1.25%; • 100% of the dollar amount of the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters Returns with respect to that portion of such Pre-Incentive Fee Net Investment Income, if any, that exceeds the Hurdle Amount Income hurdle rate but is less than or equal a rate of return of 1.43% (5.72% 12 annualized). This is referred to an amount (the “Catch-Up Amount”) determined on a quarterly basis by multiplying 2.0588% by the Fund’s net asset value at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Catch-Up Amount is intended to provide the Adviser with an incentive fee of 15% on all of the Fund’s as Pre-Incentive Fee Net Investment Income when the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters reaches the Catch-Up Amount in respect of the relevant Trailing Twelve Quarters; and
Returns (iii) For any calendar quarter in which the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters exceeds the Catch-Up Amount, the Income Fee shall equal 15% of the amount of the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters that exceeds the Catch-Up Amount. These calculations will be appropriately pro-rated for any period of less than three months and adjusted for any share issuances or repurchases by the Fund during the current quarter.
(v) The Income Fee is subject to a cap (the “Incentive Fee Cap”). The Incentive Fee Cap in respect of any calendar quarter is an amount equal to 15% of the Cumulative Pre-Incentive Fee Net Return (as defined below) during the relevant Trailing Twelve Quarters less the aggregate Income Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters. For this purpose, “Cumulative Pre-Incentive Fee Net Return” during the relevant Trailing Twelve Quarters means (x) Pre-Incentive Fee Net Investment Income in respect of the Trailing Twelve Quarters less (y) any Net Capital Loss, if any, in respect of the Trailing Twelve Quarters. If, in any calendar quarter, the Incentive Fee Cap is zero or a negative value, the Fund shall pay no Income Fee to the Adviser in respect of that quarter. If, in any calendar quarter, the Incentive Fee Cap is a positive value hurdle rate but is less than 1.43%) as the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Incentive Fee Cap in respect of such quarter. If, in any calendar quarter, the Incentive Fee Cap is equal to or greater than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Income Fee in respect of such quarter. “Net Capital Loss” in respect of a particular period means the difference, if positive, between (i) aggregate capital losses, whether realized or unrealized, in respect of such period catch-up”; and (ii) aggregate capital gains, whether realized or unrealized, in respect of such period.•
Appears in 1 contract
Samples: Investment Advisory Agreement (T. Rowe Price OHA Select Private Credit Fund)
Incentive Fee. The Incentive Fee shall consist of two parts—an incentive fee based on income and an incentive fee based on capital gains, as follows.:
(i) The part of the Pre-Incentive Fee based on income (the “Net Investment Income Fee”) Component. One part will be calculated and payable quarterly in arrears based on the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of for the current calendar quarter and the eleven preceding calendar quarters (or the appropriate portion thereof in the case of any of the Fund’s first eleven calendar quarters) (in either case, the quarter. “Trailing Twelve Quarters”).
(ii) For purposes of calculating the Income Fee, Pre-Incentive Fee Net Investment Income Income” means the Fund’s interest income, distribution dividend income and any other income (including any other fees fees, such as commitment, origination, structuring, diligence and consulting fees or other fees that the Fund receives from portfolio companies but excluding and fees for providing significant managerial assistance) accrued earned during the relevant calendar quarter(s)quarter, minus the FundCompany’s operating expenses incurred during for the relevant calendar quarter(s) quarter (including the Base Management Fee, expenses payable under the Administration Agreement Fee and any interest expense and distributions dividends paid on any issued and outstanding debt or preferred sharesstock, but excluding any distribution or shareholder servicing fees and the Incentive Fee). Pre-Incentive Fee Net Investment Income includes, in the case of investments with a deferred interest feature (such as market discount, original issue discount, debt instruments with payment-in-kind (“PIK”) interest, preferred shares stock with PIK payment-in-kind dividends and zero coupon securities), accrued income that the Fund has we have not yet received in cash. The Investment Adviser is not under any obligation to reimburse us for any part of the Incentive Fee it received that was based on accrued income that we never received as a result of a default by an entity on the obligation that resulted in the accrual of such income. Pre-Incentive Fee Net Investment Income does not include any realized capital gains, realized and unrealized capital losses or unrealized capital appreciation or depreciation. For purposes of computing Pre-Incentive Fee Net Investment Income, expressed as a rate of return on the calculation methodology will look through derivative financial instruments or swaps as if the Fund owned the reference assets directly. Therefore, net interest income, if any, associated with a derivative financial instrument or swap (which represents the difference between (i) the interest income and fees received in respect value of the reference Company’s net assets at the end of the derivative financial instrument or swap and (ii) the interest expense or financing charges paid by the Fund to the derivative or swap counterparty) will be included in the calculation of Pre-Incentive Fee Net Investment Income for purposes of the Income Fee.
(iii) Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters immediately preceding calendar quarter, will be compared to a “Hurdle Amount” equal to the product of (i) the “hurdle rate” of 1.75% per quarter (7.00% annualized) and (ii) the sum of the Fund’s net assets (defined as total assets less indebtedness and before taking into account any Incentive Fees payable during the period) at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters“Hurdle Rate”). The Hurdle Amount Company will be calculated after making appropriate adjustments pay the Investment Adviser an Incentive Fee with respect to the FundCorporation’s net asset value at the beginning of each applicable calendar quarter for Fund subscriptions (which shall include all issuances by the Fund of its common shares, including issuances pursuant to its dividend reinvestment plan) and distributions during the applicable calendar quarter. Subject to Section 3(b)( v), the Income Fee will be based on the amount by which (x) the aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters exceeds (y) the Hurdle Amount in respect of the relevant Trailing Twelve Quarters. The Income Fee that will be paid to the Adviser in respect of a particular calendar quarter will equal the excess of the Income Fee as calculated pursuant to this Section 3(b) less the aggregate Income Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters.
(iv) The Fund will pay the Income Fee in respect of each calendar quarter as follows:
(i) No Income Fee in any calendar quarter in which the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters does not exceed the Hurdle Amount in respect of the relevant Trailing Twelve Quarters;
(ii) The Income Fee shall equal 100% of the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters with respect to that portion of such Pre-Incentive Fee Net Investment Income, if any, that exceeds the Hurdle Amount but is less than or equal to an amount (the “Catch-Up Amount”) determined on a quarterly basis by multiplying 2.0588% by the Fund’s net asset value at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Catch-Up Amount is intended to provide the Adviser with an incentive fee of 15% on all of the Fund’s Pre-Incentive Fee Net Investment Income when the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters reaches the Catch-Up Amount in respect of the relevant Trailing Twelve Quarters; and
(iii) For any calendar quarter in which the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters exceeds the Catch-Up Amount, the Income Fee shall equal 15% of the amount of the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters that exceeds the Catch-Up Amount. These calculations will be appropriately pro-rated for any period of less than three months and adjusted for any share issuances or repurchases by the Fund during the current quarter.
(v) The Income Fee is subject to a cap (the “Incentive Fee Cap”). The Incentive Fee Cap in respect of any calendar quarter is an amount equal to 15% of the Cumulative Pre-Incentive Fee Net Return (as defined below) during the relevant Trailing Twelve Quarters less the aggregate Income Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters. For this purpose, “Cumulative Pre-Incentive Fee Net Return” during the relevant Trailing Twelve Quarters means (x) Pre-Incentive Fee Net Investment Income in respect of the Trailing Twelve Quarters less (y) any Net Capital Loss, if any, in respect of the Trailing Twelve Quarters. If, in any calendar quarter, the Incentive Fee Cap is zero or a negative value, the Fund shall pay no Income Fee to the Adviser in respect of that quarter. If, in any calendar quarter, the Incentive Fee Cap is a positive value but is less than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Incentive Fee Cap in respect of such quarter. If, in any calendar quarter, the Incentive Fee Cap is equal to or greater than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Income Fee in respect of such quarter. “Net Capital Loss” in respect of a particular period means the difference, if positive, between (i) aggregate capital losses, whether realized or unrealized, in respect of such period and (ii) aggregate capital gains, whether realized or unrealized, in respect of such period.
Appears in 1 contract
Samples: Investment Advisory and Management Agreement (Highland Distressed Opportunities Fund, Inc.)
Incentive Fee. The Incentive Fee shall consist of two parts—an incentive fee based on income and an incentive fee based on capital gains, as follows.:
(i) The first part of the Incentive Fee based on income (the “Income Income-Based Fee”) will shall be calculated and payable quarterly in arrears based on the FundCompany’s aggregate Prepre-Incentive Fee Net Investment Income in respect of incentive fee net investment income for the current calendar quarter and the eleven preceding calendar quarters (or the appropriate portion thereof in the case of any of the Fund’s first eleven calendar quarters) (in either case, the “Trailing Twelve Quarters”).
(ii) quarter. For purposes of calculating this Agreement, pre-incentive fee net investment income for any given calendar quarter is calculated as (A) the Income Fee, Pre-Incentive Fee Net Investment Income means the Fund’s sum of interest income, distribution dividend income and any other income (including any other fees fees, such as commitment, origination, structuring, diligence and consulting fees or other fees that the Fund Company receives from portfolio companies companies, but excluding fees for providing managerial assistance) accrued by the Company during the relevant such calendar quarter(s)quarter, minus (B) the FundCompany’s operating expenses incurred during the relevant calendar quarter(s) for such quarter (including the Base Management Fee, any expenses payable under the Administration Agreement and any interest expense and distributions dividends paid on any issued and outstanding debt or preferred sharesstock, but excluding any distribution or shareholder servicing fees and the Incentive Fee). Pre-Incentive Fee Net Investment Income incentive fee net investment income includes, in the case of investments with a deferred interest feature (such as market discount, original issue discount, debt instruments with payment-in-kind (“PIK”) interest, preferred shares stock with PIK payment-in-kind dividends and zero coupon securities), accrued income that the Fund Company has not yet received in cash. Pre-Incentive Fee Net Investment Income does incentive fee net investment income shall not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. For purposes of computing PreIn calculating the Income-Incentive Based Fee Net Investment Incomefor any given calendar quarter, the calculation methodology will look through derivative financial instruments or swaps as if the Fund owned the reference assets directly. Therefore, Company’s pre-incentive fee net interest investment income, if any, associated with expressed as a derivative financial instrument or swap (which represents rate of return on the difference between (i) the interest income and fees received in respect value of the reference assets of the derivative financial instrument or swap and (ii) the interest expense or financing charges paid by the Fund to the derivative or swap counterparty) will be included in the calculation of Pre-Incentive Fee Net Investment Income for purposes of the Income Fee.
(iii) Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters will be compared to a “Hurdle Amount” equal to the product of (i) the “hurdle rate” of 1.75% per quarter (7.00% annualized) and (ii) the sum of the FundCompany’s net assets (defined as total assets less indebtedness and before taking into account any Incentive Fees incentive fees payable during the period) at the beginning end of each applicable the immediately preceding calendar quarter comprising (the relevant Trailing Twelve Quarters“Rate of Return”), shall be compared to a hurdle rate of 2.0% per quarter (the “Hurdle Rate”). The Hurdle Amount will be calculated after making appropriate adjustments Company shall pay the Advisor an Income-Based Fee with respect to the FundCompany’s pre-incentive fee net asset value at the beginning of each applicable calendar quarter for Fund subscriptions (which shall include all issuances by the Fund of its common shares, including issuances pursuant to its dividend reinvestment plan) and distributions during the applicable calendar quarter. Subject to Section 3(b)( v), the Income Fee will be based on the amount by which (x) the aggregate Pre-Incentive Fee Net Investment Income investment income in respect of the relevant Trailing Twelve Quarters exceeds (y) the Hurdle Amount in respect of the relevant Trailing Twelve Quarters. The Income Fee that will be paid to the Adviser in respect of a particular calendar quarter will equal the excess of the Income Fee as calculated pursuant to this Section 3(b) less the aggregate Income Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters.
(iv) The Fund will pay the Income Fee in respect of each calendar quarter as follows:
(iA) No Income no Income-Based Fee in any calendar quarter in which the FundCompany’s aggregate Prepre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters incentive fee net investment income does not exceed the Hurdle Amount Rate in respect of the relevant Trailing Twelve Quarterssuch quarter;
(iiB) The Income Fee shall equal 100% of the FundCompany’s aggregate Prepre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters incentive fee net investment income with respect to that portion of such Prepre-Incentive Fee Net Investment Incomeincentive fee net investment income, if any, that exceeds the Hurdle Amount Rate but is less than or equal to an amount (the “Catch-Up Amount”) determined on a quarterly basis by multiplying 2.05882.5% by the Fund’s net asset value at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Catch-Up Amount is intended to provide the Adviser with an incentive fee of 15% on all of the Fund’s Pre-Incentive Fee Net Investment Income when the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters reaches the Catch-Up Amount in respect of the relevant Trailing Twelve Quarterssuch quarter; and
(iiiC) For any calendar quarter 20% of the Company’s pre-incentive fee net investment income, if any, that exceeds 2.5% in which the Fund’s aggregate Pre-Incentive Fee Net Investment Income such quarter; provided that, no incentive fee in respect of Section 3(b)(i) hereof will be payable except to the relevant Trailing Twelve Quarters exceeds the Catch-Up Amount, the Income Fee shall equal 15extent 20.0% of the amount cumulative net increase in net assets resulting from operations over the calendar quarter for which such fees are being calculated and the 11 preceding quarters exceeds the cumulative incentive fees accrued and/or paid pursuant to Section 3(b) hereof for such 11 preceding quarters. For the foregoing purposes, the “cumulative net increases in net assets resulting from operations” is the amount, if positive, of the Fund’s aggregate Presum of pre-Incentive Fee Net Investment Income in respect incentive fee net investment income, Base Management Fee, realized gains and losses and unrealized appreciation and depreciation of the relevant Trailing Twelve Quarters that exceeds Company for the Catchcalendar quarter for which such fees are being calculated and the 11 preceding calendar quarters. Income-Up Amount. These calculations will Based Fees shall be appropriately proadjusted for any share issuances or repurchases during the calendar quarter, and Income-rated Based Fees for any period of less than three months and adjusted for any share issuances or repurchases by shall be prorated based on the Fund during the current quarternumber of days in such period.
(vii) The Income second part of the Incentive Fee is subject to a cap (the “Incentive Capital Gains Fee”) shall be calculated and payable in arrears at the end of each fiscal year (or, upon termination of this Agreement pursuant to Section 9, as of the termination date) based on the Company’s net capital gains. For purposes of this Agreement, net capital gains are calculated by subtracting (A) the sum of the Company’s cumulative aggregate realized capital losses and aggregate unrealized capital depreciation from (B) the Company’s cumulative aggregate realized capital gains. If such amount is positive at the end of the relevant calendar year, then the Capital Gains Fee Cap”). The Incentive Fee Cap in respect of any calendar quarter is an amount for such year shall be equal to 1520% of the Cumulative Pre-Incentive Fee Net Return (as defined below) during the relevant Trailing Twelve Quarters such amount, less the aggregate Income amount of Capital Gains Fees paid in all prior years. If such amount is negative, then there shall be no Capital Gains Fee for such year. If this Agreement shall terminate as of a date that is not a calendar-year end, the termination date shall be treated as though it were paid to a calendar-year end for purposes of calculating and paying a Capital Gains Fee. Any Capital Gains Fee for any partial year shall be prorated based on the Adviser number of days in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarterssuch year. For purposes of this purpose, “Cumulative Pre-Incentive Fee Net Return” during Agreement:
(A) cumulative aggregate realized capital gains are calculated as the relevant Trailing Twelve Quarters means (x) Pre-Incentive Fee Net Investment Income in respect sum of the Trailing Twelve Quarters less (y) any Net Capital Loss, if any, in respect of the Trailing Twelve Quarters. If, in any calendar quarter, the Incentive Fee Cap is zero or a negative value, the Fund shall pay no Income Fee to the Adviser in respect of that quarter. If, in any calendar quarter, the Incentive Fee Cap is a positive value but is less than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Incentive Fee Cap in respect of such quarter. If, in any calendar quarter, the Incentive Fee Cap is equal to or greater than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Income Fee in respect of such quarter. “Net Capital Loss” in respect of a particular period means the differencedifferences, if positive, between (i1) the net sales price of each investment in the Company’s portfolio when sold and (2) the original cost of such investment;
(B) cumulative aggregate realized capital losses are calculated as the absolute value of the sum of the differences, if negative, between (1) the net sales price of each investment in the Company’s portfolio when sold and (2) the original cost of such investment; and
(C) aggregate unrealized capital lossesdepreciation is calculated as the absolute value of the sum of the differences, whether realized or unrealizedif negative, between (1) the valuation of each investment in respect the Company’s portfolio as of the end of the applicable calculation date and (2) the original cost of such period and (ii) aggregate capital gains, whether realized or unrealized, in respect of such periodinvestment.
Appears in 1 contract
Samples: Investment Advisory and Management Agreement (MONROE CAPITAL Corp)
Incentive Fee. The Incentive Fee shall consist of two parts—an incentive fee based on income and an incentive fee based on capital gains, as follows.
(i) The part of the Incentive Fee based on income (the “Income Fee”) will be calculated and payable quarterly in arrears based on and equal to 15% of the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the current calendar quarter and Fund or each class of Shares of the eleven Fund (to the extent that the Fund offers multiple classes of Shares) (“Class”), based on such Class’s net asset value relative to the Fund as a whole, for the immediately preceding calendar quarters (or the appropriate portion thereof in the case of any of the Fund’s first eleven calendar quarters) (in either casequarter, the subject to a “Trailing Twelve Quarters”).
(ii) hurdle” and a “catch up” feature. For purposes of calculating the Income Feethis purpose, “Pre-Incentive Fee Net Investment Income Income” means the Fund’s (a) interest income, distribution dividend income and any other income (including any other fees fees, such as commitment, origination, structuring, diligence and consulting fees or other fees that the Fund receives from portfolio companies but excluding fees for providing managerial assistancefees) accrued during the relevant calendar quarter(squarter (or, if applicable, a Class’s allocable share of such income), minus (b) the Fund’s operating expenses incurred during for the relevant calendar quarter(s) quarter (including the Base Management Fee, expenses payable under the Administration Agreement and Agreement, any interest expense and distributions and/or dividends paid on any issued and outstanding debt or preferred sharesstock and, if applicable, any fees payable for distribution and/or shareholder servicing agreements, but excluding any distribution or shareholder servicing fees organizational and offering expenses and the Incentive Fee) (or, if applicable, a Class’s allocable share of such operating expenses) after giving application to any reimbursement or recoupment under any expense limitation and reimbursement agreement to which the Fund may be a party, as may be amended from time to time (the “Expense Limitation and Reimbursement Agreement”). Pre-Incentive Fee Net Investment Income includes, in the case of investments with a deferred interest feature (such as market discount, original issue discount, debt instruments with payment-in-kind (“PIK”) interest, preferred shares with PIK dividends interest and zero zero-coupon securities), accrued income that the Fund has not yet received in cash. Pre-Incentive Fee Net Investment Income does not include any realized capital gains, realized capital losses or unrealized capital appreciation gains or depreciationrealized or unrealized losses. For purposes of computing Pre-Incentive Fee Net Investment Income, expressed as a rate of return on the calculation methodology will look through derivative financial instruments value of the Fund’s or swaps Class’s, as if the Fund owned the reference assets directly. Thereforeapplicable, net interest income, if any, associated with a derivative financial instrument or swap (which represents assets at the difference between (i) the interest income and fees received in respect end of the reference assets immediately preceding calendar quarter, shall be compared to a “hurdle rate” of 2.00% (8.00% annualized) of the derivative financial instrument Fund’s or swap Class’s, as applicable, net asset value per quarter and (ii) a “catch up” feature, the interest expense or financing charges paid by Incentive Fee. The Fund shall pay the Fund Adviser an Incentive Fee with respect to the derivative Fund’s or swap counterparty) will be included in the calculation of Pre-Incentive Fee Net Investment Income for purposes of the Income Fee.
(iii) Class’s, as applicable, Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters will be compared to a “Hurdle Amount” equal to the product of (i) the “hurdle rate” of 1.75% per quarter (7.00% annualized) and (ii) the sum of the Fund’s net assets (defined as total assets less indebtedness and before taking into account any Incentive Fees payable during the period) at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Hurdle Amount will be calculated after making appropriate adjustments to the Fund’s net asset value at the beginning of each applicable calendar quarter for Fund subscriptions (which shall include all issuances by the Fund of its common shares, including issuances pursuant to its dividend reinvestment plan) and distributions during the applicable calendar quarter. Subject to Section 3(b)( v), the Income Fee will be based on the amount by which (x) the aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters exceeds (y) the Hurdle Amount in respect of the relevant Trailing Twelve Quarters. The Income Fee that will be paid to the Adviser in respect of a particular calendar quarter will equal the excess of the Income Fee as calculated pursuant to this Section 3(b) less the aggregate Income Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters.
(iv) The Fund will pay the Income Fee in respect of each calendar quarter as follows:
: (i1) No Income no Incentive Fee in any calendar quarter in which the Fund’s aggregate or Class’s, as applicable, Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters does not exceed the Hurdle Amount in respect hurdle of 2.00% of the relevant Trailing Twelve Quarters;
Fund’s net asset value; (ii2) The Income Fee shall equal 100% of the Fund’s aggregate or Class’s, as applicable, Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters with respect to that portion of such Pre-Incentive Fee Net Investment Income, if any, that exceeds the Hurdle Amount hurdle rate but is less than or equal to an amount (the “Catch-Up Amount”) determined on a quarterly basis by multiplying 2.05882.3529% by of the Fund’s net asset value at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Catch-Up Amount is intended to provide the Adviser with an incentive fee of 15% on all of the Fund’s Pre-Incentive Fee Net Investment Income when the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters reaches the Catch-Up Amount in respect of the relevant Trailing Twelve Quarters; and
(iii) For any calendar quarter in which the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters exceeds the Catch-Up Amount, the Income Fee shall equal (9.4118% annualized); and (3) 15% of the amount of the Fund’s aggregate or Class’s, as applicable, Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters that exceeds the Catch-Up Amount. These calculations will be appropriately pro-rated for any period of less than three months and adjusted for any share issuances or repurchases by the Fund during the current quarter.
(v) The Income Fee is subject to a cap (the “Incentive Fee Cap”). The Incentive Fee Cap in respect of any calendar quarter is an amount equal to 15% of the Cumulative Pre-Incentive Fee Net Return (as defined below) during the relevant Trailing Twelve Quarters less the aggregate Income Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters. For this purpose, “Cumulative Pre-Incentive Fee Net Return” during the relevant Trailing Twelve Quarters means (x) Pre-Incentive Fee Net Investment Income in respect of the Trailing Twelve Quarters less (y) any Net Capital LossIncome, if any, in respect that exceeds 2.3529% of the Trailing Twelve Quarters. If, Fund’s net asset value in any calendar quarter, the Incentive Fee Cap is zero or a negative value, the Fund shall pay no Income Fee to the Adviser in respect of that quarter. If, in any calendar quarter, the Incentive Fee Cap is a positive value but is less than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Incentive Fee Cap in respect of such quarter. If, in any calendar quarter, the Incentive Fee Cap is equal to or greater than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Income Fee in respect of such quarter. “Net Capital Loss” in respect of a particular period means the difference, if positive, between (i) aggregate capital losses, whether realized or unrealized, in respect of such period and (ii) aggregate capital gains, whether realized or unrealized, in respect of such period.
Appears in 1 contract
Samples: Investment Advisory Agreement (Eagle Point Enhanced Income Trust)
Incentive Fee. The Incentive Fee shall consist of two parts—an incentive fee based on income and an incentive fee based on capital gains, as follows.:
(i) The first part of the Incentive Fee based on income (the “Income Income-Based Fee”) will shall be calculated and payable quarterly in arrears based on the FundCompany’s aggregate Prepre-Incentive Fee Net Investment Income in respect of incentive fee net investment income for the current calendar quarter and the eleven immediately preceding calendar quarters (or the appropriate portion thereof in the case of any of the Fund’s first eleven calendar quarters) (in either case, the “Trailing Twelve Quarters”).
(ii) quarter. For purposes of calculating this Agreement, pre-incentive fee net investment income for any given calendar quarter is calculated as (A) the Income Fee, Pre-Incentive Fee Net Investment Income means the Fund’s sum of interest income, distribution dividend income and any other income (including any other fees fees, such as commitment, origination, structuring, diligence and consulting fees or other fees that the Fund Company receives from portfolio companies companies, but excluding fees for providing managerial assistance) accrued by the Company during the relevant such calendar quarter(s)quarter, minus (B) the FundCompany’s operating expenses incurred during the relevant calendar quarter(s) for such quarter (including the Base Management Fee, any expenses payable under the Administration Agreement and any interest expense and distributions dividends paid on any issued and outstanding debt or preferred sharesstock, but excluding any distribution or shareholder servicing fees and the Incentive Fee). Pre-Incentive Fee Net Investment Income incentive fee net investment income includes, in the case of investments with a deferred interest feature (such as market discount, original issue discount, debt instruments with payment-in-kind (“PIK”) interest, preferred shares stock with PIK payment-in-kind dividends and zero coupon securities), accrued income that the Fund Company has not yet received in cash. Pre-Incentive Fee Net Investment Income incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. For purposes of computing PreIn calculating the Income-Incentive Based Fee Net Investment Incomefor any given calendar quarter, the calculation methodology will look through derivative financial instruments or swaps as if the Fund owned the reference assets directly. Therefore, Company’s pre-incentive fee net interest investment income, if any, associated with expressed as a derivative financial instrument or swap (which represents rate of return on the difference between (i) the interest income and fees received in respect value of the reference assets of the derivative financial instrument or swap and (ii) the interest expense or financing charges paid by the Fund to the derivative or swap counterparty) will be included in the calculation of Pre-Incentive Fee Net Investment Income for purposes of the Income Fee.
(iii) Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters will be compared to a “Hurdle Amount” equal to the product of (i) the “hurdle rate” of 1.75% per quarter (7.00% annualized) and (ii) the sum of the FundCompany’s net assets (defined as total assets less indebtedness and before taking into account any Incentive Fees incentive fees payable during the period) at the beginning end of each applicable the immediately preceding calendar quarter, shall be compared to a hurdle rate of 2.0% per quarter comprising the relevant Trailing Twelve Quarters(8.0% annualized). The Hurdle Amount will be calculated after making appropriate adjustments Company shall pay the Advisor an Income-Based Fee with respect to the FundCompany’s pre-incentive fee net asset value at the beginning of each applicable calendar quarter for Fund subscriptions (which shall include all issuances by the Fund of its common shares, including issuances pursuant to its dividend reinvestment plan) and distributions during the applicable calendar quarter. Subject to Section 3(b)( v), the Income Fee will be based on the amount by which (x) the aggregate Pre-Incentive Fee Net Investment Income investment income in respect of the relevant Trailing Twelve Quarters exceeds (y) the Hurdle Amount in respect of the relevant Trailing Twelve Quarters. The Income Fee that will be paid to the Adviser in respect of a particular calendar quarter will equal the excess of the Income Fee as calculated pursuant to this Section 3(b) less the aggregate Income Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters.
(iv) The Fund will pay the Income Fee in respect of each calendar quarter as follows:
(iA) No Income no Income-Based Fee in any calendar quarter in which the FundCompany’s aggregate Prepre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters incentive fee net investment income does not exceed the Hurdle Amount hurdle rate of 2.0% in respect of the relevant Trailing Twelve Quarterssuch quarter;
(iiB) The Income Fee shall equal 100% of the FundCompany’s aggregate Prepre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters incentive fee net investment income with respect to that portion of such Prepre-Incentive Fee Net Investment Incomeincentive fee net investment income, if any, that exceeds the Hurdle Amount hurdle rate of 2.0% but is less than or equal to an amount 2.5% in such quarter (the “Catch-Up Amount”) determined on a quarterly basis by multiplying 2.058810.0% by the Fund’s net asset value at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Catch-Up Amount is intended to provide the Adviser with an incentive fee of 15% on all of the Fund’s Pre-Incentive Fee Net Investment Income when the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters reaches the Catch-Up Amount in respect of the relevant Trailing Twelve Quartersannualized); and
(iiiC) For any calendar quarter in which the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters exceeds the Catch-Up Amount, the Income Fee shall equal 1520% of the amount of the FundCompany’s aggregate Prepre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters that exceeds the Catch-Up Amount. These calculations will be appropriately pro-rated for any period of less than three months and adjusted for any share issuances or repurchases by the Fund during the current quarter.
(v) The Income Fee is subject to a cap (the “Incentive Fee Cap”). The Incentive Fee Cap in respect of any calendar quarter is an amount equal to 15% of the Cumulative Pre-Incentive Fee Net Return (as defined below) during the relevant Trailing Twelve Quarters less the aggregate Income Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters. For this purpose, “Cumulative Pre-Incentive Fee Net Return” during the relevant Trailing Twelve Quarters means (x) Pre-Incentive Fee Net Investment Income in respect of the Trailing Twelve Quarters less (y) any Net Capital Lossincentive fee net investment income, if any, that exceeds 2.5% in respect of the Trailing Twelve Quarters. If, in any calendar quarter, the Incentive Fee Cap is zero or a negative value, the Fund shall pay no Income Fee to the Adviser in respect of that quarter. If, in any calendar quarter, the Incentive Fee Cap is a positive value but is less than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Incentive Fee Cap in respect of such quarter. If, in any calendar quarter, the Incentive Fee Cap is equal to or greater than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Income Fee in respect of such quarter. “Net Capital Loss” in respect of a particular period means the difference, if positive, between quarter (i) aggregate capital losses, whether realized or unrealized, in respect of such period and (ii) aggregate capital gains, whether realized or unrealized, in respect of such period10.0% annualized).
Appears in 1 contract
Samples: Investment Advisory and Management Agreement (FIDUS INVESTMENT Corp)
Incentive Fee. The Incentive Fee shall incentive fee will consist of two parts—an components that are independent of each other, with the result that one component may be payable even if the other is not. A portion of the incentive fee is based on a percentage of the Fund’s income and an incentive fee a portion is based on a percentage of the Fund’s realized capital gains, as follows.
(i) The part of the Incentive Fee based on income (the “Income Fee”) will be calculated and payable quarterly in arrears Pre-Incentive Fee Net Investment Income. The portion based on the Fund’s aggregate income is based on Pre-Incentive Fee Net Investment Income in respect of the current calendar quarter and the eleven preceding calendar quarters (or the appropriate portion thereof in the case of any of the Fund’s first eleven calendar quarters) (in either case, the Returns. “Trailing Twelve Quarters”).
(ii) For purposes of calculating the Income Fee, Pre-Incentive Fee Net Investment Income means Returns” means, as the context requires, either the dollar value of, or percentage rate of return on the value of the Fund’s net assets at the end of the immediate preceding quarter from, interest income, distribution dividend income and any other income (including any other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other fees that the Fund receives from portfolio companies but excluding fees for providing managerial assistancecompanies) accrued during the relevant calendar quarter(s)quarter, minus the Fund’s operating expenses incurred during accrued for the relevant calendar quarter(s) quarter (including the Base Management Feemanagement fee, expenses payable under the Administration Agreement Agreement, and any interest expense or fees on any credit facilities or outstanding debt and distributions dividends paid on any issued and outstanding debt or preferred shares, but excluding the incentive fee and any distribution or shareholder servicing fees and the Incentive Feeand/or distribution fees). Pre-Incentive Fee Net Investment Income includesReturns include, in the case of investments with a deferred interest feature (such as market discount, original issue discount, debt instruments with paymentpay-in-kind (“PIK”) interest, preferred shares with PIK dividends interest and zero coupon securities), accrued income that the Fund has not yet received in cash. Pre-Incentive Fee Net Investment Income does Returns do not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. For purposes of computing Pre-Incentive Fee Net Investment Income, the calculation methodology will look through derivative financial instruments or swaps as if the Fund owned the reference assets directly. Therefore, net interest income, if any, associated with a derivative financial instrument or swap (which represents the difference between (i) the interest income and fees received in respect of the reference assets of the derivative financial instrument or swap and (ii) the interest expense or financing charges paid by the Fund to the derivative or swap counterparty) will be included in the calculation of Pre-Incentive Fee Net Investment Income for purposes Returns, expressed as a rate of return on the value of the Income Fee.
Fund’s net assets at the end of the immediate preceding quarter, is compared to a “hurdle rate” of return of 1.25% per quarter (iii) 5.0% annualized). The Fund will pay the Manager an incentive fee quarterly in arrears with respect to the Fund’s Pre-Incentive Fee Net Investment Income Returns in respect of the relevant Trailing Twelve Quarters will be compared to a “Hurdle Amount” equal to the product of (i) the “hurdle rate” of 1.75% per quarter (7.00% annualized) and (ii) the sum of the Fund’s net assets (defined as total assets less indebtedness and before taking into account any Incentive Fees payable during the period) at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Hurdle Amount will be calculated after making appropriate adjustments to the Fund’s net asset value at the beginning of each applicable calendar quarter for Fund subscriptions (which shall include all issuances by the Fund of its common shares, including issuances pursuant to its dividend reinvestment plan) and distributions during the applicable calendar quarter. Subject to Section 3(b)( v), the Income Fee will be as follows: · no incentive fee based on the amount by which (x) the aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters exceeds (y) the Hurdle Amount in respect of the relevant Trailing Twelve Quarters. The Income Fee that will be paid to the Adviser in respect of a particular calendar quarter will equal the excess of the Income Fee as calculated pursuant to this Section 3(b) less the aggregate Income Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters.
(iv) The Fund will pay the Income Fee in respect of each calendar quarter as follows:
(i) No Income Fee Returns in any calendar quarter in which the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters does Returns do not exceed the Hurdle Amount in respect hurdle rate of the relevant Trailing Twelve Quarters;
1.25% per quarter (ii) The Income Fee shall equal 5.0% annualized); · 100% of the dollar amount of the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters Returns with respect to that portion of such Pre-Incentive Fee Net Investment IncomeIncome Returns, if any, that exceeds the Hurdle Amount hurdle rate but is less than or equal a rate of return of 1.43% (5.72% annualized). This is referred to an amount as Pre-Incentive Fee Net Investment Income Returns (which exceeds the hurdle rate but is less than 1.43%) as the “Catchcatch-Up Amountup”) determined on a quarterly basis by multiplying 2.0588; and · 12.5% by of the Fund’s net asset value at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Catch-Up Amount is intended to provide the Adviser with an incentive fee of 15% on all dollar amount of the Fund’s Pre-Incentive Fee Net Investment Income when the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters reaches the Catch-Up Amount in respect of the relevant Trailing Twelve Quarters; and
(iii) For any calendar quarter in which the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters exceeds the Catch-Up Amount, the Income Fee shall equal 15% of the amount of the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters that exceeds the Catch-Up Amount. These calculations will be appropriately pro-rated for any period of less than three months and adjusted for any share issuances or repurchases by the Fund during the current quarter.
(v) The Income Fee is subject to a cap (the “Incentive Fee Cap”). The Incentive Fee Cap in respect of any calendar quarter is an amount equal to 15% of the Cumulative Pre-Incentive Fee Net Return (as defined below) during the relevant Trailing Twelve Quarters less the aggregate Income Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters. For this purpose, “Cumulative Pre-Incentive Fee Net Return” during the relevant Trailing Twelve Quarters means (x) Pre-Incentive Fee Net Investment Income in respect of the Trailing Twelve Quarters less (y) any Net Capital LossReturns, if any, in respect that exceed a rate of the Trailing Twelve Quarters. If, in any calendar quarter, the Incentive Fee Cap is zero or a negative value, the Fund shall pay no Income Fee to the Adviser in respect return of that quarter. If, in any calendar quarter, the Incentive Fee Cap is a positive value but is less than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Incentive Fee Cap in respect of such quarter. If, in any calendar quarter, the Incentive Fee Cap is equal to or greater than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Income Fee in respect of such quarter. “Net Capital Loss” in respect of a particular period means the difference, if positive, between 1.43% (i) aggregate capital losses, whether realized or unrealized, in respect of such period and (ii) aggregate capital gains, whether realized or unrealized, in respect of such period5.72% annualized).
Appears in 1 contract
Incentive Fee. The Incentive Fee shall will consist of two parts—an incentive fee components that are independent of each other, with the result that one component may be payable even if the other is not. A portion of the Incentive Fee is based on a percentage of the Fund’s income and an incentive fee a portion is based on a percentage of the Fund’s capital gains, each as followsdescribed below.
(i) The part of the Incentive Fee based on income (the “Income Fee”) will be calculated and payable quarterly in arrears Pre-Incentive Fee Net Investment Income. The portion based on the Fund’s aggregate income is based on Pre-Incentive Fee Net Investment Income in respect of the current calendar quarter and the eleven preceding calendar quarters (or the appropriate portion thereof in the case of any of the Fund’s first eleven calendar quarters) (in either case, the Returns. “Trailing Twelve Quarters”).
(ii) For purposes of calculating the Income Fee, Pre-Incentive Fee Net Investment Income means Returns” means, as the context requires, either the dollar value of, or percentage rate of return on the value of the Fund’s net assets at the end of the immediate preceding quarter from, interest income, distribution dividend income and any other income (including any other fees fees, such as commitment, origination, structuring, diligence and consulting fees or other fees that the Fund receives from portfolio companies but excluding fees for providing managerial assistancecompanies) accrued during the relevant calendar quarter(s)quarter, minus the Fund’s operating expenses incurred during accrued for the relevant calendar quarter(s) quarter (including the Base Management Fee, expenses payable under the Administration Agreement Agreement, and any interest expense or fees on any credit facilities or outstanding debt and distributions dividends paid on any issued and outstanding debt or preferred shares, but excluding the incentive fee and any distribution or shareholder servicing fees and the Incentive Feefees). Pre-Incentive Fee Net Investment Income includesReturns include, in the case of investments with a deferred interest feature (such as market discount, original issue discount, debt instruments with paymentpay-in-kind (“PIK”) interest, preferred shares with PIK dividends interest and zero coupon securities), accrued income that the Fund has not yet received in cash. Pre-Incentive Fee Net Investment Income does Returns do not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. For purposes of computing Pre-Incentive Fee Net Investment Income, the calculation methodology will look through derivative financial instruments or swaps as if the Fund owned the reference assets directly. Therefore, net interest income, if any, associated with a derivative financial instrument or swap (which represents the difference between (i) the interest income and fees received in respect of the reference assets of the derivative financial instrument or swap and (ii) the interest expense or financing charges paid by the Fund to the derivative or swap counterparty) will be included in the calculation of Pre-Incentive Fee Net Investment Income for purposes Returns, expressed as a rate of return on the value of the Income Fee.
Fund’s net assets at the end of the immediate preceding quarter, is compared to a “hurdle rate” of return of 1.25% per quarter (iii) 5.0% annualized). The Fund will pay the Adviser an incentive fee quarterly in arrears with respect to the Fund’s Pre-Incentive Fee Net Investment Income Returns in respect of the relevant Trailing Twelve Quarters will be compared to a “Hurdle Amount” equal to the product of (i) the “hurdle rate” of 1.75% per quarter (7.00% annualized) and (ii) the sum of the Fund’s net assets (defined as total assets less indebtedness and before taking into account any Incentive Fees payable during the period) at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Hurdle Amount will be calculated after making appropriate adjustments to the Fund’s net asset value at the beginning of each applicable calendar quarter for Fund subscriptions (which shall include all issuances by the Fund of its common shares, including issuances pursuant to its dividend reinvestment plan) and distributions during the applicable calendar quarter. Subject to Section 3(b)( v), the Income Fee will be as follows: • no incentive fee based on the amount by which (x) the aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters exceeds (y) the Hurdle Amount in respect of the relevant Trailing Twelve Quarters. The Income Fee that will be paid to the Adviser in respect of a particular calendar quarter will equal the excess of the Income Fee as calculated pursuant to this Section 3(b) less the aggregate Income Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters.
(iv) The Fund will pay the Income Fee in respect of each calendar quarter as follows:
(i) No Income Fee Returns in any calendar quarter in which the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters does Returns do not exceed the Hurdle Amount in respect hurdle rate of the relevant Trailing Twelve Quarters;
(ii) The Income Fee shall equal 1.25%; • 100% of the dollar amount of the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters Returns with respect to that portion of such Pre-Incentive Fee Net Investment IncomeIncome Returns, if any, that exceeds the Hurdle Amount hurdle rate but is less than or equal a rate of return of 1.43% (5.72% annualized). This is referred to an amount as Pre-Incentive Fee Net Investment Income Returns (which exceeds the hurdle rate but is less than 1.43%) as the “Catchcatch-Up Amountup”) determined on a quarterly basis by multiplying 2.0588; and • 12.5% by of the Fund’s net asset value at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Catch-Up Amount is intended to provide the Adviser with an incentive fee of 15% on all dollar amount of the Fund’s Pre-Incentive Fee Net Investment Income when the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters reaches the Catch-Up Amount in respect of the relevant Trailing Twelve Quarters; and
(iii) For any calendar quarter in which the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters exceeds the Catch-Up Amount, the Income Fee shall equal 15% of the amount of the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters that exceeds the Catch-Up Amount. These calculations will be appropriately pro-rated for any period of less than three months and adjusted for any share issuances or repurchases by the Fund during the current quarter.
(v) The Income Fee is subject to a cap (the “Incentive Fee Cap”). The Incentive Fee Cap in respect of any calendar quarter is an amount equal to 15% of the Cumulative Pre-Incentive Fee Net Return (as defined below) during the relevant Trailing Twelve Quarters less the aggregate Income Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters. For this purpose, “Cumulative Pre-Incentive Fee Net Return” during the relevant Trailing Twelve Quarters means (x) Pre-Incentive Fee Net Investment Income in respect of the Trailing Twelve Quarters less (y) any Net Capital LossReturns, if any, in respect that exceed a rate of the Trailing Twelve Quarters. If, in any calendar quarter, the Incentive Fee Cap is zero or a negative value, the Fund shall pay no Income Fee to the Adviser in respect return of that quarter. If, in any calendar quarter, the Incentive Fee Cap is a positive value but is less than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Incentive Fee Cap in respect of such quarter. If, in any calendar quarter, the Incentive Fee Cap is equal to or greater than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Income Fee in respect of such quarter. “Net Capital Loss” in respect of a particular period means the difference, if positive, between 1.43% (i) aggregate capital losses, whether realized or unrealized, in respect of such period and (ii) aggregate capital gains, whether realized or unrealized, in respect of such period5.72% annualized).
Appears in 1 contract
Samples: Investment Advisory Management Agreement (Apollo Debt Solutions BDC)
Incentive Fee. The Incentive Fee shall incentive fee will consist of two parts—an components that are independent of each other, with the result that one component may be payable even if the other is not. A portion of the incentive fee is based on a percentage of the Fund’s income and an incentive fee a portion is based on a percentage of the Fund’s capital gains, each as followsdescribed below.
(iA) The part of the Incentive Fee based on income (the “Income Fee”) will be calculated and payable quarterly in arrears Pre-Incentive Fee Net Investment Income. The portion based on the Fund’s aggregate income is based on Pre-Incentive Fee Net Investment Income in respect of the current calendar quarter and the eleven preceding calendar quarters (or the appropriate portion thereof in the case of any of the Fund’s first eleven calendar quarters) (in either case, the Returns. “Trailing Twelve Quarters”).
(ii) For purposes of calculating the Income Fee, Pre-Incentive Fee Net Investment Income means Returns” means, as the context requires, either the dollar value of, or percentage rate of return on the value of the Fund’s net assets at the end of the immediate preceding quarter from, interest income, distribution dividend income and any other income (including any other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other fees that the Fund receives from portfolio companies but excluding fees for providing managerial assistancecompanies) accrued during the relevant calendar quarter(s)quarter, minus the Fund’s operating expenses incurred during accrued for the relevant calendar quarter(s) quarter (including the Base Management Fee, expenses payable under the Administration Agreement management fee and any interest expense or fees on any credit facilities or outstanding debt and distributions dividends paid on any issued and outstanding debt or preferred shares, but excluding the incentive fee and any distribution or shareholder and/or stockholder servicing fees and the Incentive Feefees). Pre-Incentive Fee Net Investment Income includesReturns include, in the case of investments with a deferred interest feature (such as market discount, original issue discount, debt instruments with payment-in-kind (“PIK”) interest, preferred shares with PIK dividends interest and zero coupon securities), accrued income that the Fund has not yet received in cash. Pre-Incentive Fee Net Investment Income does Returns do not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. For purposes of computing Pre-Incentive Fee Net Investment Income, the calculation methodology will look through derivative financial instruments or swaps as if the Fund owned the reference assets directly. Therefore, net interest income, if any, associated with a derivative financial instrument or swap (which represents the difference between (i) the interest income and fees received in respect of the reference assets of the derivative financial instrument or swap and (ii) the interest expense or financing charges paid by the Fund to the derivative or swap counterparty) will be included in the calculation of Pre-Incentive Fee Net Investment Income for purposes Returns, expressed as a rate of return on the Income Fee.
(iii) Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters will be compared to a “Hurdle Amount” equal to the product of (i) the “hurdle rate” of 1.75% per quarter (7.00% annualized) and (ii) the sum value of the Fund’s net assets (defined as total assets less indebtedness and before taking into account any Incentive Fees payable during the period) at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Hurdle Amount will be calculated after making appropriate adjustments to the Fund’s net asset value at the beginning of each applicable calendar quarter for Fund subscriptions (which shall include all issuances by the Fund of its common shares, including issuances pursuant to its dividend reinvestment plan) and distributions during the applicable calendar quarter. Subject to Section 3(b)( v), the Income Fee will be based on the amount by which (x) the aggregate Pre-Incentive Fee Net Investment Income in respect end of the relevant Trailing Twelve Quarters exceeds immediate preceding quarter, is compared to a “hurdle rate” of return of 1.25% per quarter (y) the Hurdle Amount in respect of the relevant Trailing Twelve Quarters5.0% annualized). The Income Fee that will be paid to the Adviser in respect of a particular calendar quarter will equal the excess of the Income Fee as calculated pursuant to this Section 3(b) less the aggregate Income Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters.
(iv) The Fund will pay the Income Fee Investment Adviser an incentive fee quarterly in respect of each calendar quarter as follows:
(i) No Income Fee in any calendar quarter in which the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters does not exceed the Hurdle Amount in respect of the relevant Trailing Twelve Quarters;
(ii) The Income Fee shall equal 100% of the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters arrears with respect to that portion of such Pre-Incentive Fee Net Investment Income, if any, that exceeds the Hurdle Amount but is less than or equal to an amount (the “Catch-Up Amount”) determined on a quarterly basis by multiplying 2.0588% by the Fund’s net asset value at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Catch-Up Amount is intended to provide the Adviser with an incentive fee of 15% on all of the Fund’s Pre-Incentive Fee Net Investment Income when the Fund’s aggregate Pre-Incentive Fee Net Investment Income Returns in respect of the relevant Trailing Twelve Quarters reaches the Catch-Up Amount in respect of the relevant Trailing Twelve Quarters; and
(iii) For any each calendar quarter in which the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters exceeds the Catch-Up Amount, the Income Fee shall equal 15% of the amount of the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters that exceeds the Catch-Up Amount. These calculations will be appropriately pro-rated for any period of less than three months and adjusted for any share issuances or repurchases by the Fund during the current quarter.
(v) The Income Fee is subject to a cap (the “Incentive Fee Cap”). The Incentive Fee Cap in respect of any calendar quarter is an amount equal to 15% of the Cumulative Pre-Incentive Fee Net Return (as defined below) during the relevant Trailing Twelve Quarters less the aggregate Income Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters. For this purpose, “Cumulative Pre-Incentive Fee Net Return” during the relevant Trailing Twelve Quarters means (x) Pre-Incentive Fee Net Investment Income in respect of the Trailing Twelve Quarters less (y) any Net Capital Loss, if any, in respect of the Trailing Twelve Quarters. If, in any calendar quarter, the Incentive Fee Cap is zero or a negative value, the Fund shall pay no Income Fee to the Adviser in respect of that quarter. If, in any calendar quarter, the Incentive Fee Cap is a positive value but is less than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Incentive Fee Cap in respect of such quarter. If, in any calendar quarter, the Incentive Fee Cap is equal to or greater than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Income Fee in respect of such quarter. “Net Capital Loss” in respect of a particular period means the difference, if positive, between (i) aggregate capital losses, whether realized or unrealized, in respect of such period and (ii) aggregate capital gains, whether realized or unrealized, in respect of such period.follows:
Appears in 1 contract
Samples: Investment Management Agreement (Goldman Sachs Private Credit Fund LLC)
Incentive Fee. The Advisor shall receive an incentive fee (the “Incentive Fee”). The Incentive Fee shall consist of two parts—an incentive fee based on income and an incentive fee based on capital gains, as follows.:
(i) Investment Income Fee. The part of the Incentive Fee based on Advisor shall receive an investment income fee (the “Investment Income Fee”) will be calculated and payable quarterly in arrears based on equal to 15% of the Fundexcess, if any, of the Company’s aggregate Pre-Incentive Fee Net Investment Income in respect of for the current calendar fiscal quarter and the eleven preceding calendar quarters over a quarterly hurdle rate equal to 2% (or the appropriate portion thereof in the case of any of the Fund’s first eleven calendar quarters) (8% annualized), multiplied, in either case, by the Company’s average monthly Net Assets for the quarter. “Trailing Twelve Quarters”).
(ii) For Net Assets” means the Managed Assets less deferred taxes, debt entered into for the purposes of calculating leverage and the Income Fee, Pre-Incentive Fee aggregate liquidation preference of outstanding preferred shares. “Net Investment Income Income” means the Fund’s interest incomeincome (including accrued interest that we have not yet received in cash), dividend and distribution income from equity investments (but excluding that portion of cash distributions that are treated as a return of capital), and any other income (including any other fees such as commitment, origination, syndication, structuring, diligence diligence, monitoring, and consulting fees or other fees that the Fund receives Company is entitled to receive from portfolio companies but excluding fees for providing managerial assistancecompanies) accrued during the relevant calendar quarter(s)fiscal quarter, minus the FundCompany’s operating expenses incurred during the relevant calendar quarter(s) for such quarter (including the Base Management Fee, expenses payable under the Administration Agreement and pursuant to Section 11 below, any interest expense expense, any accrued income taxes related to net investment income, and distributions dividends paid on any issued and outstanding debt or preferred sharesstock, if any, but excluding any distribution or shareholder servicing fees and the Incentive FeeFee payable hereunder). Pre-Incentive Fee Net Investment Income also includes, in the case of investments with a deferred interest or income feature (such as market discount, original issue discount, debt or equity instruments with a payment-in-kind (“PIK”) interestfeature, preferred shares with PIK dividends and zero coupon securities), accrued income that the Fund Company has not yet received in cash. Pre-Incentive Fee Net Investment Income does not include any realized capital gains, realized capital losses losses, or unrealized capital appreciation or depreciation. For purposes of computing Pre-Incentive Fee Net The Investment Income, the calculation methodology will look through derivative financial instruments or swaps as if the Fund owned the reference assets directly. Therefore, net interest income, if any, associated with a derivative financial instrument or swap (which represents the difference between (i) the interest income and fees received in respect of the reference assets of the derivative financial instrument or swap and (ii) the interest expense or financing charges paid by the Fund to the derivative or swap counterparty) will be included in the calculation of Pre-Incentive Fee Net Investment Income for purposes of the Income Fee.
(iii) Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters will be compared to a “Hurdle Amount” equal to the product of (i) the “hurdle rate” of 1.75% per quarter (7.00% annualized) and (ii) the sum of the Fund’s net assets (defined as total assets less indebtedness and before taking into account any Incentive Fees payable during the period) at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Hurdle Amount will be calculated after making appropriate adjustments to the Fund’s net asset value at the beginning of each applicable calendar quarter for Fund subscriptions (which shall include all issuances by the Fund of its common shares, including issuances pursuant to its dividend reinvestment plan) and distributions during the applicable calendar quarter. Subject to Section 3(b)( v), the Income Fee will be based on the amount by which (x) the aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters exceeds (y) the Hurdle Amount in respect of the relevant Trailing Twelve Quarters. The Income Fee that will be paid to the Adviser in respect of a particular calendar quarter will equal the excess of the Income Fee as calculated pursuant to this Section 3(b) less the aggregate Income Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters.
(iv) The Fund will pay the Income Fee in respect of each calendar quarter as follows:
(i) No Income Fee in any calendar quarter in which the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters does not exceed the Hurdle Amount in respect of the relevant Trailing Twelve Quarters;
(ii) The Income Fee shall equal 100% be calculated and payable quarterly in arrears within thirty (30) days of the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect end of each fiscal quarter, with the fee first accruing from the first anniversary of the relevant Trailing Twelve Quarters with respect to that portion day the Company receives the proceeds from its initial offering of such Pre-Incentive Fee Net Investment Income, if any, that exceeds the Hurdle Amount but is less than or equal to an amount common shares (the “Catch-Up Amount”) determined on a quarterly basis by multiplying 2.0588% by the Fund’s net asset value at the beginning Commencement of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Catch-Up Amount is intended to provide the Adviser with an incentive fee of 15% on all of the Fund’s Pre-Incentive Fee Net Investment Income when the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters reaches the Catch-Up Amount in respect of the relevant Trailing Twelve Quarters; and
(iii) For any calendar quarter in which the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters exceeds the Catch-Up Amount, the Income Fee shall equal 15% of the amount of the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters that exceeds the Catch-Up Amount. These calculations will be appropriately pro-rated for any period of less than three months and adjusted for any share issuances or repurchases by the Fund during the current quarter.
(v) The Income Fee is subject to a cap (the “Incentive Fee CapOperations”). The Incentive Investment Income Fee Cap in respect of any calendar quarter is an amount equal to 15% calculation shall be adjusted appropriately on the basis of the Cumulative Pre-Incentive Fee Net Return (as defined below) during the relevant Trailing Twelve Quarters less the aggregate Income Fees that were paid to the Adviser number of calendar days in the preceding eleven calendar quarters (first fiscal quarter the fee accrues or portion thereof) comprising the relevant Trailing Twelve Quarters. For this purpose, “Cumulative Pre-Incentive Fee Net Return” fiscal quarter during which the relevant Trailing Twelve Quarters means (x) Pre-Incentive Fee Net Investment Income Agreement is in respect effect in the event of termination of the Trailing Twelve Quarters less (y) Agreement during any Net Capital Loss, if any, in respect of the Trailing Twelve Quarters. If, in any calendar fiscal quarter, the Incentive Fee Cap is zero or a negative value, the Fund shall pay no Income Fee to the Adviser in respect of that quarter. If, in any calendar quarter, the Incentive Fee Cap is a positive value but is less than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Incentive Fee Cap in respect of such quarter. If, in any calendar quarter, the Incentive Fee Cap is equal to or greater than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Income Fee in respect of such quarter. “Net Capital Loss” in respect of a particular period means the difference, if positive, between (i) aggregate capital losses, whether realized or unrealized, in respect of such period and (ii) aggregate capital gains, whether realized or unrealized, in respect of such period.
Appears in 1 contract
Samples: Investment Advisory Agreement (Tortoise Capital Resources Corp)
Incentive Fee. The Incentive Fee shall consist of two parts—an incentive fee based on income and an incentive fee based on capital gains, as follows.:
(i) The first part of the Incentive Fee based on income (the “Income Income-Based Fee”) will shall be calculated and payable quarterly in arrears based on the FundCompany’s aggregate Prepre-Incentive Fee Net Investment Income in respect of incentive fee net investment income for the current calendar quarter and the eleven preceding calendar quarters (or the appropriate portion thereof in the case of any of the Fund’s first eleven calendar quarters) (in either case, the “Trailing Twelve Quarters”).
(ii) quarter. For purposes of calculating this Agreement, pre-incentive fee net investment income for any given calendar quarter is calculated as (A) the Income Fee, Pre-Incentive Fee Net Investment Income means the Fund’s sum of interest income, distribution dividend income and any other income (including any other fees fees, such as commitment, origination, structuring, diligence and consulting fees or other fees that the Fund Company receives from portfolio companies companies, but excluding fees for providing managerial assistance) accrued by the Company during the relevant such calendar quarter(s)quarter, minus (B) the FundCompany’s operating expenses incurred during the relevant calendar quarter(s) for such quarter (including the Base Management Fee, any expenses payable under the Administration Agreement and any interest expense and distributions dividends paid on any issued and outstanding debt or preferred sharesstock, but excluding any distribution or shareholder servicing fees and the Incentive Fee). Pre-Incentive Fee Net Investment Income incentive fee net investment income includes, in the case of investments with a deferred interest feature (such as market discount, original issue discount, debt instruments with payment-in-kind (“PIK”) interest, preferred shares stock with PIK payment-in-kind dividends and zero coupon securities), accrued income that the Fund Company has not yet received in cash. Pre-Incentive Fee Net Investment Income incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. For purposes of computing PreIn calculating the Income-Incentive Based Fee Net Investment Incomefor any given calendar quarter, the calculation methodology will look through derivative financial instruments or swaps as if the Fund owned the reference assets directly. Therefore, Company’s pre-incentive fee net interest investment income, if any, associated with expressed as a derivative financial instrument or swap (which represents rate of return on the difference between (i) the interest income and fees received in respect value of the reference assets of the derivative financial instrument or swap and (ii) the interest expense or financing charges paid by the Fund to the derivative or swap counterparty) will be included in the calculation of Pre-Incentive Fee Net Investment Income for purposes of the Income Fee.
(iii) Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters will be compared to a “Hurdle Amount” equal to the product of (i) the “hurdle rate” of 1.75% per quarter (7.00% annualized) and (ii) the sum of the FundCompany’s net assets (defined as total assets less indebtedness and before taking into account any Incentive Fees incentive fees payable during the period) at the beginning end of each applicable the immediately preceding calendar quarter comprising (the relevant Trailing Twelve Quarters“Rate of Return”), shall be compared to a hurdle rate of 2.0% per quarter (the “Hurdle Rate”). The Hurdle Amount will be calculated after making appropriate adjustments Company shall pay the Advisor an Income-Based Fee with respect to the FundCompany’s pre-incentive fee net asset value at the beginning of each applicable calendar quarter for Fund subscriptions (which shall include all issuances by the Fund of its common shares, including issuances pursuant to its dividend reinvestment plan) and distributions during the applicable calendar quarter. Subject to Section 3(b)( v), the Income Fee will be based on the amount by which (x) the aggregate Pre-Incentive Fee Net Investment Income investment income in respect of the relevant Trailing Twelve Quarters exceeds (y) the Hurdle Amount in respect of the relevant Trailing Twelve Quarters. The Income Fee that will be paid to the Adviser in respect of a particular calendar quarter will equal the excess of the Income Fee as calculated pursuant to this Section 3(b) less the aggregate Income Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters.
(iv) The Fund will pay the Income Fee in respect of each calendar quarter as follows:
(iA) No Income no Income-Based Fee in any calendar quarter in which the FundCompany’s aggregate Prepre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters incentive fee net investment income does not exceed the Hurdle Amount Rate in respect of the relevant Trailing Twelve Quarterssuch quarter;
(iiB) The Income Fee shall equal 100% of the FundCompany’s aggregate Prepre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters incentive fee net investment income with respect to that portion of such Prepre-Incentive Fee Net Investment Incomeincentive fee net investment income, if any, that exceeds the Hurdle Amount Rate but is less than or equal to an amount (the “Catch-Up Amount”) determined on a quarterly basis by multiplying 2.05882.5% by the Fund’s net asset value at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Catch-Up Amount is intended to provide the Adviser with an incentive fee of 15% on all of the Fund’s Pre-Incentive Fee Net Investment Income when the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters reaches the Catch-Up Amount in respect of the relevant Trailing Twelve Quarterssuch quarter; and
(iiiC) For any calendar quarter in which the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters exceeds the Catch-Up Amount, the Income Fee shall equal 1520% of the amount of the FundCompany’s aggregate Prepre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters that exceeds the Catch-Up Amount. These calculations will be appropriately pro-rated for any period of less than three months and adjusted for any share issuances or repurchases by the Fund during the current quarter.
(v) The Income Fee is subject to a cap (the “Incentive Fee Cap”). The Incentive Fee Cap in respect of any calendar quarter is an amount equal to 15% of the Cumulative Pre-Incentive Fee Net Return (as defined below) during the relevant Trailing Twelve Quarters less the aggregate Income Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters. For this purpose, “Cumulative Pre-Incentive Fee Net Return” during the relevant Trailing Twelve Quarters means (x) Pre-Incentive Fee Net Investment Income in respect of the Trailing Twelve Quarters less (y) any Net Capital Lossincentive fee net investment income, if any, that exceeds 2.5% in respect such quarter; provided that, no Income-Based Fee will be payable except to the extent 20.0% of the Trailing Twelve Quarterscumulative net increase in net assets resulting from operations over the calendar quarter for which such fees are being calculated and the 11 preceding quarters exceeds the cumulative Incentive Fees accrued and/or paid pursuant to Section 3(b) hereof for such 11 preceding quarters. If, in any calendar quarterFor the foregoing purposes, the Incentive Fee Cap “cumulative net increases in net assets resulting from operations” is zero or a negative value, the Fund shall pay no Income Fee to the Adviser in respect of that quarter. If, in any calendar quarter, the Incentive Fee Cap is a positive value but is less than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Incentive Fee Cap in respect of such quarter. If, in any calendar quarter, the Incentive Fee Cap is equal to or greater than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Income Fee in respect of such quarter. “Net Capital Loss” in respect of a particular period means the differenceamount, if positive, between (i) aggregate capital lossesof the sum of pre-incentive fee net investment income, whether Base Management Fee, realized or unrealized, in respect gains and losses and unrealized appreciation and depreciation of the Company for the calendar quarter for which such period fees are being calculated and (ii) aggregate capital gains, whether realized or unrealized, in respect of such periodthe 11 preceding calendar quarters.
Appears in 1 contract
Samples: Investment Advisory and Management Agreement (MONROE CAPITAL Corp)
Incentive Fee. The Incentive Fee shall will consist of two parts—an incentive fee components that are independent of each other, with the result that one component may be payable even if the other is not. A portion of the Incentive Fee is based on a percentage of the Fund’s income and an incentive fee a portion is based on a percentage of the Fund’s capital gains, each as followsdescribed below.
(i) The part of the Incentive Fee based on income (the “Income Fee”) will be calculated and payable quarterly in arrears Pre-Incentive Fee Net Investment Income. The portion based on the Fund’s aggregate income is based on Pre-Incentive Fee Net Investment Income in respect of the current calendar quarter and the eleven preceding calendar quarters (or the appropriate portion thereof in the case of any of the Fund’s first eleven calendar quarters) (in either case, the Returns. “Trailing Twelve Quarters”).
(ii) For purposes of calculating the Income Fee, Pre-Incentive Fee Net Investment Income means Returns” means, as the context requires, either the dollar value of, or percentage rate of return on the value of the Fund’s net assets at the end of the immediate preceding quarter from, interest income, distribution dividend income and any other income (including any other fees fees, such as commitment, origination, structuring, diligence and consulting fees or other fees that the Fund receives from portfolio companies but excluding fees for providing managerial assistancecompanies) accrued during the relevant calendar quarter(s)quarter, minus the Fund’s operating expenses incurred during accrued for the relevant calendar quarter(s) quarter (including the Base Management Fee, expenses payable under the Administration Agreement Agreement, and any interest expense or fees on any credit facilities or outstanding debt and distributions dividends paid on any issued and outstanding debt or preferred shares, but excluding the incentive fee and any distribution or shareholder servicing fees and the Incentive Feefees). Pre-Incentive Fee Net Investment Income includesReturns include, in the case of investments with a deferred interest feature (such as market discount, original issue discount, debt instruments with paymentpay-in-kind (“PIK”) interest, preferred shares with PIK dividends interest and zero coupon securities), accrued income that the Fund has not yet received in cash. Pre-Incentive Fee Net Investment Income does Returns do not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. For purposes The impact of computing Pre-Incentive Fee Net Investment Income, the calculation methodology will look through derivative financial instruments or swaps as if the Fund owned the reference assets directly. Therefore, net interest income, if any, associated with a derivative financial instrument or swap (which represents the difference between (i) the interest income expense support payments and fees received in respect of the reference assets of the derivative financial instrument or swap and (ii) the interest expense or financing charges paid by the Fund to the derivative or swap counterparty) will be included in the calculation of recoupments are also excluded from Pre-Incentive Fee Net Investment Income for purposes of the Income Fee.
(iii) Returns. Pre-Incentive Fee Net Investment Income in respect Returns, expressed as a rate of return on the relevant Trailing Twelve Quarters will be compared to a “Hurdle Amount” equal to the product of (i) the “hurdle rate” of 1.75% per quarter (7.00% annualized) and (ii) the sum value of the Fund’s net assets (defined as total assets less indebtedness and before taking into account any Incentive Fees payable during the period) at the beginning end of each applicable calendar the immediately preceding quarter, is compared to a “hurdle rate” of return of 1.500% per quarter comprising the relevant Trailing Twelve Quarters(6.000% annualized). The Hurdle Amount Fund will be calculated after making appropriate adjustments pay the Adviser an incentive fee quarterly in arrears with respect to the Fund’s net asset value at the beginning of each applicable calendar quarter for Fund subscriptions (which shall include all issuances by the Fund of its common shares, including issuances pursuant to its dividend reinvestment plan) and distributions during the applicable calendar quarter. Subject to Section 3(b)( v), the Income Fee will be based on the amount by which (x) the aggregate Pre-Incentive Fee Net Investment Income Returns in respect of the relevant Trailing Twelve Quarters exceeds (y) the Hurdle Amount in respect of the relevant Trailing Twelve Quarters. The Income Fee that will be paid to the Adviser in respect of a particular calendar quarter will equal the excess of the Income Fee as calculated pursuant to this Section 3(b) less the aggregate Income Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters.
(iv) The Fund will pay the Income Fee in respect of each calendar quarter as follows:
(i) No : • no incentive fee based on Pre-Incentive Fee Net Investment Income Fee Returns in any calendar quarter in which the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters does Returns do not exceed the Hurdle Amount in respect hurdle rate of the relevant Trailing Twelve Quarters;
1.500% per quarter (ii) The Income Fee shall equal 6.000% annualized); • 100% of the dollar amount of the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters Returns with respect to that portion of such Pre-Incentive Fee Net Investment IncomeIncome Returns, if any, that exceeds the Hurdle Amount hurdle rate but is less than or equal a rate of return of 1.710% (6.860% annualized). This is referred to an amount (as the “Catchcatch-Up Amountup”) determined on a quarterly basis by multiplying 2.0588% by the Fund’s net asset value at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Catch-Up Amount is intended to provide the Adviser with an incentive fee of 15% on all of the Fund’s Pre-Incentive Fee Net Investment Income when the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters reaches the Catch-Up Amount in respect of the relevant Trailing Twelve Quarters; and
(iii) For any calendar quarter in which the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters exceeds the Catch-Up Amount, the Income Fee shall equal 15% of the amount of the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters that exceeds the Catch-Up Amount. These calculations will be appropriately pro-rated for any period of less than three months and adjusted for any share issuances or repurchases by the Fund during the current quarter.
(v) The Income Fee is subject to a cap (the “Incentive Fee Cap”). The Incentive Fee Cap in respect of any calendar quarter is an amount equal to 15% of the Cumulative Pre-Incentive Fee Net Return (as defined below) during the relevant Trailing Twelve Quarters less the aggregate Income Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters. For this purpose, “Cumulative Pre-Incentive Fee Net Return” during the relevant Trailing Twelve Quarters means (x) Pre-Incentive Fee Net Investment Income in respect of the Trailing Twelve Quarters less (y) any Net Capital Loss, if any, in respect of the Trailing Twelve Quarters. If, in any calendar quarter, the Incentive Fee Cap is zero or a negative value, the Fund shall pay no Income Fee to the Adviser in respect of that quarter. If, in any calendar quarter, the Incentive Fee Cap is a positive value but is less than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Incentive Fee Cap in respect of such quarter. If, in any calendar quarter, the Incentive Fee Cap is equal to or greater than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Income Fee in respect of such quarter. “Net Capital Loss” in respect of a particular period means the difference, if positive, between (i) aggregate capital losses, whether realized or unrealized, in respect of such period and (ii) aggregate capital gains, whether realized or unrealized, in respect of such period.
Appears in 1 contract
Samples: Investment Advisory Management Agreement (Middle Market Apollo Institutional Private Lending)
Incentive Fee. The Incentive Fee shall consist of two parts—an incentive fee based on income and an incentive fee based on capital gains, as follows.
(i) The part of the Incentive Fee based on income (the “Income Fee”) will be calculated and payable quarterly in arrears based on the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the current calendar quarter and Company for the eleven immediately preceding calendar quarters (or the appropriate portion thereof in the case of any of the Fund’s first eleven calendar quarters) (in either casequarter. For this purpose, the “Trailing Twelve Quarters”).
(ii) For purposes of calculating the Income Fee, Pre-Incentive Fee Net Investment Income Income” means the Fund’s interest income, distribution dividend income and any other income (including any other fees fees, such as commitment, origination, structuring, diligence and consulting fees or other fees that the Fund Company receives from portfolio companies but excluding fees for providing managerial assistancean investment) accrued during the relevant calendar quarter(s)quarter, minus the FundCompany’s operating expenses incurred during for the relevant calendar quarter(s) quarter (including the Base Management Fee, expenses payable under the Administration Agreement Fee and any interest expense and distributions and/or dividends paid on any issued and outstanding debt or preferred sharesPreferred Stock, but excluding any distribution or shareholder servicing fees and the Incentive Fee). Pre-Incentive Fee Net Investment Income includes, in the case of investments with a deferred interest feature (such as market discount, original issue discount, debt instruments with payment-in-kind (“PIK”) interest, preferred shares with PIK dividends interest and zero coupon securities), accrued income that the Fund Company has not yet received in cash. Pre-Incentive Fee Net Investment Income does not include any realized capital gains, realized capital losses or unrealized capital appreciation gains or depreciationrealized or unrealized losses. For purposes of computing Pre-Incentive Fee Net Investment Income, expressed as a rate of return on the calculation methodology will look through derivative financial instruments or swaps as if the Fund owned the reference assets directly. Therefore, net interest income, if any, associated with a derivative financial instrument or swap (which represents the difference between (i) the interest income and fees received in respect value of the reference Company’s net assets at the end of the derivative financial instrument or swap and (ii) immediately preceding calendar quarter, shall be compared to a “hurdle rate” of 2.00% per quarter. The Company shall pay the interest expense or financing charges paid by the Fund Adviser an Incentive Fee with respect to the derivative or swap counterparty) will be included in the calculation of Pre-Incentive Fee Net Investment Income for purposes of the Income Fee.
(iii) Company’s Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters will be compared to a “Hurdle Amount” equal to the product of (i) the “hurdle rate” of 1.75% per quarter (7.00% annualized) and (ii) the sum of the Fund’s net assets (defined as total assets less indebtedness and before taking into account any Incentive Fees payable during the period) at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Hurdle Amount will be calculated after making appropriate adjustments to the Fund’s net asset value at the beginning of each applicable calendar quarter for Fund subscriptions (which shall include all issuances by the Fund of its common shares, including issuances pursuant to its dividend reinvestment plan) and distributions during the applicable calendar quarter. Subject to Section 3(b)( v), the Income Fee will be based on the amount by which (x) the aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters exceeds (y) the Hurdle Amount in respect of the relevant Trailing Twelve Quarters. The Income Fee that will be paid to the Adviser in respect of a particular calendar quarter will equal the excess of the Income Fee as calculated pursuant to this Section 3(b) less the aggregate Income Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters.
(iv) The Fund will pay the Income Fee in respect of each calendar quarter as follows:
: (i1) No Income no Incentive Fee in any calendar quarter in which the FundCompany’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters does not exceed the Hurdle Amount in respect of the relevant Trailing Twelve Quarters;
2.00%; (ii2) The Income Fee shall equal 100% of the FundCompany’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters with respect to that portion of such Pre-Incentive Fee Net Investment Income, if any, that exceeds the Hurdle Amount hurdle rate of 2.00% but is less than or equal to an amount 2.35294% in any calendar quarter; and (the “Catch-Up Amount”3) determined on a quarterly basis by multiplying 2.0588% by the Fund’s net asset value at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Catch-Up Amount is intended to provide the Adviser with an incentive fee of 15% on all of the Fundamount of the Company’s Pre-Incentive Fee Net Investment Income when the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters reaches the Catch-Up Amount in respect of the relevant Trailing Twelve Quarters; and
(iii) For any calendar quarter in which the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters exceeds the Catch-Up Amount, the Income Fee shall equal 15% of the amount of the Fund’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters that exceeds the Catch-Up Amount. These calculations will be appropriately pro-rated for any period of less than three months and adjusted for any share issuances or repurchases by the Fund during the current quarter.
(v) The Income Fee is subject to a cap (the “Incentive Fee Cap”). The Incentive Fee Cap in respect of any calendar quarter is an amount equal to 15% of the Cumulative Pre-Incentive Fee Net Return (as defined below) during the relevant Trailing Twelve Quarters less the aggregate Income Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters. For this purpose, “Cumulative Pre-Incentive Fee Net Return” during the relevant Trailing Twelve Quarters means (x) Pre-Incentive Fee Net Investment Income in respect of the Trailing Twelve Quarters less (y) any Net Capital LossIncome, if any, in respect of the Trailing Twelve Quarters. If, that exceeds 2.35294% in any calendar quarter, the . The portion of such Incentive Fee Cap that is zero attributable to deferred interest (such as payment-in-kind interest or a negative valueoriginal issue discount) will be paid to the Adviser, without interest, only if and to the Fund extent the Company actually receives such deferred interest in cash, and any accrual thereof will be reversed if and to the extent such interest is reversed in connection with any write-off or similar treatment of the investment giving rise to any deferred interest accrual. The Company shall pay no Income Fee make any payments due hereunder to the Adviser in respect of that quarter. If, in any calendar quarter, or to the Incentive Fee Cap is a positive value but is less than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay Adviser’s designee as the Adviser the Incentive Fee Cap in respect of such quarter. If, in any calendar quarter, the Incentive Fee Cap is equal to or greater than the Income Fee calculated in accordance with Section 3(b)(iv) above, the Fund shall pay the Adviser the Income Fee in respect of such quarter. “Net Capital Loss” in respect of a particular period means the difference, if positive, between (i) aggregate capital losses, whether realized or unrealized, in respect of such period and (ii) aggregate capital gains, whether realized or unrealized, in respect of such periodmay otherwise direct.
Appears in 1 contract
Samples: Investment Advisory Agreement (Pearl Diver Credit Co Inc.)
