Compass Diversified Enters Seventh Amended Management Services Agreement, Restructures Fees Effective Q1 2025; Base Fee 2% Up To $3.5B, 1.25% Over $3.5B to $10B, 1.5% Over $10B; Incentive Fee 0.25% Over $3.5B To $10B Subject To 12% Return Approval

Author: Benzinga Newsdesk | January 15, 2025 05:16pm

Compass Diversified Holdings (NYSE:CODI), an owner of leading middle market businesses (the "Company" or "CODI"), announced today that on January 15, 2025, it entered into a Seventh Amended and Restated Management Services Agreement with Compass Group Management LLC, the Company's Manager (the "Amendment"). The Amendment, commencing in the first quarter beginning on January 1, 2025, restructures the management fee under the existing Management Services Agreement to consist of a base management fee and an incentive management fee. Pursuant to the Amendment, the base management fee will be (i) 2.0% of the Company's adjusted net assets when the adjusted net assets are less than or equal to $3.5 billion (the "Initial Threshold Fee"), (ii) the Initial Threshold Fee, plus 1.25% of the amount of adjusted net assets exceeding $3.5 billion when the adjusted net assets are more than $3.5 billion but less than $10 billion, or (iii) 1.5% of the Company's adjusted net assets when the adjusted net assets are $10 billion or more.

The incentive management fee will be 0.25% of the amount of adjusted net assets exceeding $3.5 billion, when the adjusted net assets are more than $3.5 billion but less than $10 billion. The incentive management fee is only earned if the Company's annualized internal rate of return on equity for the trailing three years exceeds 12%. Such incentive management fee is also subject to approval by the Compensation Committee of the Company's Board of Directors.

Posted In: CODI