Item 5: Performance-Based Fees and Side-By-Side Management .................................................. 5
Item 6: Types of Clients ..................................................................................................................... 6
Item 7: Methods of Analysis, Investment Strategies, and Risk of Loss ............................................. 6
Item 8: Disciplinary Information ....................................................................................................... 10
Item 9: Other Financial Industry Activities and Affiliations ............................................................... 11
Item 10: Code of Ethics, Participation or Interest in Client Transactions, and Personal Trading .... 11
Item 11: Brokerage Practices .......................................................................................................... 12
Item 12: Review of Accounts ........................................................................................................... 12
Item 13: Client Referrals and Other Compensation ......................................................................... 12
Item 14: Custody .............................................................................................................................. 12
Item 15: Investment Discretion ........................................................................................................ 12
Item 16: Voting Client Securities ...................................................................................................... 13
Item 17: Financial Information ......................................................................................................... 13
Item 3: Advisory Business
MFO Investments LLC (“MFOI”) is an investment adviser with its principal place of business in
Birmingham, Michigan. MFOI is owned by its principals Mark Mitchell, Josh Burrows, and Brian Rath.
MFOI provides non-discretionary investment advisory services to separately managed accounts
(“Accounts”) to investors that are entities. It is anticipated that MFOI will provide discretionary
investment advisory services to one or more privately offered pooled investment vehicles (the
“Funds,” and together with Accounts, the “Clients”). Investors in the Funds are referred to herein as
the “Fund Investors.”
MFOI’s investment advisory services are subject to the terms of each Account’s investment
management agreement (“IMA”) and each Fund’s offering documents (“Offering Documents”),
respectively. MFOI does not tailor its advisory services to the individual needs of Clients. MFOI does
not participate in Wrap Fee Programs.
As of December 31, 2023, MFOI had approximately $243,478,089 of regulatory assets under
management, all of which was managed on a non-discretionary basis.
The fees applicable to the Clients are set forth in detail in the IMAs and Offering Documents. A
general summary of the fees charged by MFOI is provided below.
Management Fee
The Accounts pay MFOI a management fee (“Management Fee”) in accordance with each Account’s
IMA.
With respect to the Funds, it is anticipated that the Funds will pay MFOI a Management Fee based
on the value of the Client’s capital commitment or invested capital of 2% per year. The Management
Fee for the Funds will be payable quarterly. MFOI, in its discretion, may waive or reduce the
management fee as to all or any of the Fund Investors as provided in the Offering Documents.
Performance-Based Compensation
With respect to the Funds, it is anticipated that MFOI, or an affiliate of MFOI (the “General Partner”),
will be entitled to performance-based compensation (the “Performance Fee”) of 20% of capital gains
on or capital appreciation of the invested assets of the Funds, after the Funds have achieved a
minimum per-annum investment return hurdle. MFOI, in its discretion, may waive or reduce the
Performance Fee as to all or any of the Fund Investors as provided in the Offering Documents.
Other Types of Fees or Expenses
The Accounts pay expenses in accordance with each Account’s IMA.
With respect to the Funds, expenses attributable to and borne by each Fund will be described in the
respective Fund’s Offering Documents. A Fund will generally bear all fees, costs, expenses, liabilities
and obligations relating to the Fund’s (and its subsidiaries and intermediate entities’) activities,
investments and business to the extent not reimbursed by a portfolio
company or applied to reduce
Management Fees, which generally include, but are not limited to, the following: organizational and
start-up expenses, including legal, travel, accounting, filing, printing, capital raising and other
organizational expenses; costs and expenses of the Fund that are not reimbursed by portfolio
companies (which reimbursements may be for travel and any other out-of-pocket expenses incurred
in connection with the structuring, organizing, acquiring, managing, monitoring, operating, holding,
winding up, liquidating, dissolving and/or disposing of such portfolio company investments, including
follow-on investments and re-financings), including legal, auditing, consulting, financing, accounting,
administration and custodian fees and expenses; expenses associated with the Fund’s financial
statements, tax returns, Schedule K-1s and any other Fund-related reporting or filing obligations;
regulatory related fees and expenses (including fees and expenses related to the preparation and
filing of Form PF); expenses incurred in connection with transactions not consummated; expenses
of the annual meetings of the Fund Investors and any other meeting with any Fund Investors;
insurance (including directors and officers insurance); other expenses associated with the
acquisition, holding and disposition of its investments, including extraordinary expenses (such as
litigation, if any); and any taxes, fees or other governmental charges levied against the Fund.
Expenses attributable at the portfolio company level generally are described in portfolio company
management services agreements.
It is anticipated that the Funds also will bear expenses indirectly to the extent a portfolio company
(or intermediate entity) pays expenses, including expenses of MFOI and/or its affiliates. Generally
included in the expenses permitted to be borne by a Fund will be the fees, costs, expenses, liabilities
and obligations of legal counsel, consultants and/or other service providers to procure, develop,
establish, review, revise, customize, upgrade and/or negotiate relationships relating to the items
listed in the previous paragraph, which generally are expected to be significant. In certain cases,
these or similar expenses (and/or other fees) are expected to be charged to portfolio companies,
capitalized into the cost basis of a transaction or, to the extent necessary or desirable for operational,
administrative, tax or other reasons, charged at the level of an intermediate holding company
between the relevant Fund and the portfolio company. The Funds are likely bear additional and
greater expenses, directly or indirectly, than many other pooled investment products, such as mutual
funds, and there can be no assurance that the benefits to Fund Investors will be commensurate with
such expenses.
In certain circumstances, MFOI expects to permit certain investors to co-invest in portfolio
companies alongside one or more Funds, subject to MFOI’s related policies and the relevant
governing documents and/or side letter(s). Where a co-invest vehicle is formed, such entity generally
will bear expenses related to its formation and operation, many of which are similar in nature to those
borne by the Funds. Please s
ee Item 15:-Investment Discretion for disclosures regarding the
allocation of co-investments.
As a general matter, it is anticipated that Fund expenses will be allocated among all relevant Funds
or coinvest vehicles eligible to reimburse expenses of that kind. In all such cases, subject to
applicable legal, contractual or similar restrictions, expense allocation decisions will generally be
made by MFOI or its affiliates using their reasonable judgment, considering such factors as they, in
their sole discretion, deem relevant. The allocations of such expenses among Clients may not be
proportional, and any such determinations involve inherent matters of discretion (e.g., in determining
whether to allocate pro rata based on number of Funds or co-invest vehicles receiving related
benefits or proportionately in accordance with asset size, or in certain circumstances determining
whether a particular expense has greater benefit to a Fund or MFOI). The allocation of expenses by
MFOI between it and any Client and among Clients represents a conflict of interest for MFOI. To
address this conflict, MFOI will adopt and implement policies and procedures for the allocation of
expenses.