KPS is a limited partnership formed under the laws of the state of Delaware in 2006, but has been doing business through its predecessor and subsidiary entities since 1998. KPS is principally owned by Michael G. Psaros, David P. Shapiro, Raquel V. Palmer and Jay Bernstein (collectively, the “Principals”). The Principals, together with Ryan Baker and Kyle J. Mumford, are collectively referred to herein as the “KPS Partners”. KPS is headquartered in New York, New York and also has affiliate offices and/or personnel in Frankfurt, Germany, Amsterdam and Hong Kong. KPS, through its affiliated management entities, serves as investment manager to private pooled investment vehicles organized and sponsored by KPS and its affiliates (collectively, the “Funds”) to make private equity investments. As of December 31, 2019, KPS and its affiliates, managed $11.6 billion on a discretionary basis on behalf of the Funds. KPS and its affiliates do not manage assets on a non-discretionary basis. KPS primarily focuses on making investments in manufacturing and industrial companies across a diverse array of industries, including basic materials, branded consumer, healthcare and luxury products, automotive parts, capital equipment and general manufacturing. KPS targets investment opportunities involving corporate divestitures and carve-outs, private transactions (e.g., acquisitions from families, entrepreneurs and other financial owners seeking to transition ownership), or restructurings that result in a change of control (whether pursuant to a structure bankruptcy or an out-of-court transaction). The managers and general partners of each of the Funds listed below are controlled and primarily owned by KPS or the Principals. The Funds for which KPS, through its affiliates (as described below), provides management services are as follows:
• KPS Special Situations Fund III, LP (“Fund III”) Delaware limited partnership
• KPS Special Situations Fund III (A), L.P. (“Fund III (A)”) Cayman Islands exempted limited partnership
• KPS Special Situations Fund III, Ltd. (“Fund III Feeder”) Cayman Islands exempted company


• KPS Special Situations Fund III (AIV), LP (“Fund III AIV”) Alberta limited partnership
• KPS Special Situations Fund III (AIV II), LP (“Fund III AIV II” and, together with Fund III, Fund III (A), Fund III Feeder and Fund III AIV, “KPS III”) Delaware limited partnership
• KPS Special Situations Fund III (Supplemental), LP (“Fund III Supplemental”) Alberta limited partnership
• KPS Special Situations Fund III (Supplemental – Feeder), Ltd. (“Fund III Supplemental Feeder”) Cayman Islands exempted company


• KPS Special Situations Fund III (Supplemental – AIV), LP (“Fund III Supplemental AIV”) Delaware limited partnership
• KPS Special Situations Fund III (Supplemental – AIV II), LP (“Fund III Supplemental AIV II” and, together with Fund III Supplemental, Fund III Supplemental Feeder and Fund III Supplemental AIV, “KPS III Supplemental”) Delaware limited partnership
• KPS Special Situations Fund IV, LP (“Fund IV”) Alberta limited partnership
• KPS Special Situations Fund IV (A), LP (“Fund IV (A)”) Alberta limited partnership
• KPS Special Situations Fund IV (B), LP (“Fund IV (B)”) Alberta limited partnership
• KPS Special Situations Fund IV (A-Delaware), LP (“Fund IV (A-Delaware)” and, together with Fund IV, Fund IV (A) and Fund IV (B), “KPS IV”) Alberta limited partnership


• KPS IV Dex Co-Investors (Delaware), LP (“Fund IV (Dex Co-Invest Delaware)”) Delaware limited partnership


• KPS IV Dex Co-Investors, LP (“Fund IV (Dex Co-Invest)” and, together with Fund IV (Dex Co-Invest Delaware), the “KPS IV Co-Investments”) Alberta limited partnership


• KPS Special Situations Fund V, LP (“Fund V”) Ontario limited partnership
• KPS Special Situations Fund V (A), LP (“Fund V (A)” and, together with Fund V “KPS V”) Ontario limited partnership
• KPS Special Situations Mid-Cap Fund, LP (“Mid-Cap”) Ontario limited partnership
• KPS Special Situations Mid-Cap Fund (A), LP (“Mid-Cap (A)”) Ontario limited partnership


• KPS Special Situations Mid-Cap Fund (A–Delaware), LP (“Mid-Cap (A-Delaware)” and, together with Mid-Cap and Mid-Cap (A), “KPS Mid-Cap”) Delaware limited partnership

KPS III, KPS III Supplemental, KPS IV, the KPS IV Co-Investments, KPS V and KPS Mid-Cap are closed to new capital commitments. Information about the Funds is included in this Brochure and is qualified in its entirety by information contained in the Funds’ confidential offering documents, including any private placement memoranda, limited partnership agreements or similar governing documents (the “Governing Documents”). The Funds’ Governing Documents contain complete information on the investment objectives and investment restrictions applicable to each Fund. KPS Management III, LP (“Management III”) is, directly and indirectly, a wholly-owned subsidiary of KPS. It was formed in 2007 and provides investment advisory services to KPS III and KPS III Supplemental. KPS Management IV, LLC (“Management IV”), KPS Management V, LLC (“Management V”) and KPS MC Management, LLC (“Management MC”) are each wholly-owned subsidiaries of KPS. Management IV was formed in 2013 and provides investment advisory services to KPS IV and the KPS IV Co-Investments, Management V and Management MC were formed in 2019 and provide advisory services to KPS V and KPS Mid-Cap, respectively. KPS Cayman Management, Ltd. (“Cayman Management”) was formed in 2009 and serves as the sole shareholder of the KPS sub-managers as further detailed below. Cayman Management is owned, directly and indirectly, by the Principals and employees.

KPS Capital Germany GmbH is wholly-owned by Cayman Management, was formed in 2010 and provides investment advisory services to certain entities of KPS III, KPS III Supplemental, KPS IV, the KPS IV Co-Investments, KPS V and KPS Mid-Cap with respect to non-U.S. investments, primarily in Europe, pursuant to a sub-management agreement with Management III, Management IV, Management V and Management MC.

KPS Netherlands Management BV is wholly-owned by Cayman Management, was formed in 2018 and provides investment advisory services to certain entities of KPS III, KPS III Supplemental, KPS IV, the KPS IV Co-Investments, KPS V and KPS Mid-Cap with respect to non-U.S. investments, primarily in Europe, including activities conducted through Dutch Cooperatives, pursuant to a sub- management agreement with Management III, Management IV, Management V and Management MC. KPS HK Management Limited is wholly-owned by Cayman Management, was formed in 2013 and provides investment advisory services to certain entities of KPS III, KPS III Supplemental, KPS IV, the KPS IV Co-Investments, KPS V and KPS Mid-Cap with respect to non-U.S. investments, primarily in Asia, pursuant to a sub-management agreement with Management III, Management IV, Management V and Management MC. In providing services to the Funds, KPS formulates each Fund’s investment objective, directs and manages the investment and reinvestment of each Fund’s assets, and provides periodic reports to the investors of each Fund. Investment advice is provided directly to the Funds and not individually to the limited partners or shareholders of the Funds (the “Investors”). KPS manages the assets of each Fund in accordance with the terms and conditions of each Fund’s Governing Documents, each of which contains certain restrictions on the types of assets in which the applicable Fund may invest. Investors and prospective investors in a Fund should refer to the applicable Governing Documents for complete information on the specific terms, including investment objectives and investment restrictions, applicable to the Fund. There can be no assurance that any of the Funds’ objectives will be achieved. please register to get more info

KPS or an affiliated entity is entitled to a carried interest and also receives a management fee for providing managerial and administrative services to the Funds. Management fees are generally payable by the Funds quarterly in advance and are pro-rated for any period that is less than a full calendar quarter. The Funds pay their respective management companies (as described in the Advisory Business section above), each of which is primarily owned by or under common control with KPS, aggregate management fees ranging from 1% to 1.75% per annum of committed capital or actively invested capital of each Fund during the life of such Fund. The Funds are also subject to a carried interest of 25%-30% of profits on distributions derived from the disposition of investments or securities (following a preferred return of 8% to the Investors), which is paid to affiliates of KPS. In connection with the investments of the Funds, various “Transaction Fees” are paid to KPS-affiliated parties by a portfolio company. “Transaction Fees” generally include all advisory fees, break-up fees, commitment fees, director’s fees, termination fees, portfolio company management fees, and similar fees, payments or compensation received by KPS and certain of its affiliates in connection with an investment or potential investment. In addition, portfolio companies pay quarterly monitoring fees (together with “Transaction Fees,” “Deal Fees”) to KPS-affiliated parties pursuant to the terms of a management services agreement. All such Deal Fees are retained in full by the KPS-affiliated parties to whom they are paid, and are partially or fully offset (with the percentage amount of offset varying depending on the specific Fund and the type of fee) against management fees otherwise payable by the applicable Fund. Deal Fees are offset net of any unreimbursed expenses incurred by KPS or its affiliates in connection with unconsummated transactions. At the end of a Fund’s term as defined in the relevant Governing Documents, to the extent that there are no management fees otherwise payable against which to offset Deal Fees, such Deal Fees will be retained in full by the KPS-affiliated parties to whom they are paid without any offsetting credit or refund. “Transaction Fees” are expected to be structured to be paid at the time of an acquisition or disposition and are not based on the exit or sale price of a Fund investment. Accordingly, KPS and its affiliated parties can from time to time receive “Transaction Fees” when a Fund does not ultimately profit from an investment. Monitoring fees may be increased in connection with add-ons to an existing platform investment. KPS does not accelerate monitoring fees. For the avoidance of doubt, Deal Fees generally do not include (a) any amounts received from co- investors in connection with a co-investment arrangement, (b) any amounts that constitute Fund expenses or (c) any fees and other compensation received by persons who serve as directors or officers of, or in other similar management roles with respect to, portfolio companies of the Fund at the request of KPS or its affiliates and who are not employees of KPS, and consequently such amounts will not reduce the management fees payable by a Fund. In addition, management fees generally are not reduced by (1) amounts of Deal Fees that are attributable to interests in the Fund held by the KPS and its affiliates (which amounts can be retained by KPS and its affiliates) and (2) any Deal Fees received directly or indirectly by KPS and its affiliates with respect to the portion of any capital invested in a portfolio company of a Fund by co-investors or other third parties. Certain Governing Documents permit KPS to waive or agree to reduce the management fee. Certain waived portions of the management fee are treated by the Governing Documents as a deemed capital contribution by the relevant general partner, which is effectively invested in the relevant Fund on such general partner’s behalf, and operates to reduce the amount of capital such general partner would otherwise be required to contribute to the relevant Fund. The limited partners of the Fund would, in such circumstances, be required to make a pro rata contribution according to their respective commitments to fund any contribution that would otherwise be required of KPS in connection with any such waiver or reduction as described above and, as a result, the exercise of such waiver has the potential to result in an acceleration (or delay) of investor capital contributions. Waived or reduced management fees are not subject to the management fee offsets described above, and the amount of such waived or reduced management fees has the potential to be significant. Due to waived or reduced management fees by KPS and/or timing of receipt of compensation subject to offsets (as described above), it is possible that management fee offsets will not be fully realized by investors in the relevant Fund, resulting in a net additional benefit to KPS. Detailed information regarding the fees charged to each Fund is provided in the Fund’s Governing Documents. In addition to management fees and the carried interest, the Funds will pay, or reimburse KPS or its affiliated parties for, certain costs, fees, expenses, obligations and liabilities incurred by, or arising out of the operation and activities of the Funds (and its subsidiaries’ and intermediate entities’) (to the extent not borne by another party, including a portfolio company), including: (i) fees, costs and expenses incurred in connection with the discovery, evaluation, acquisition, holding, management, monitoring, financing, refinancing, structuring, restructuring, operating, taking public or private, valuing, winding up, liquidating, dissolving or disposing of investments (whether or not consummated and whether or not incurred prior to the initial closing), including (A) private placement, investment banking, sales, appraiser, retainer, finder, adviser, consultant (including, without limitation, operating executives and senior advisors), brokerage, underwriting and transfer agent fees, expenses, commissions and discounts, (B) Bloomberg fees, research and software expenses and other expenses incurred in connection with data services providing price feeds, news feeds, securities and company information, company fundamental data and other information services, all attributable to investments and (C) legal, accounting, registration and other similar costs, fees and expenses; (ii) broken deal expenses; (iii) travel (including first- class or business-class commercial air travel and non-commercial air travel at the available charter rate or, for use of aircraft owned or leased by an affiliate of KPS or its employees, at the available charter rate or reasonably comparable hourly equivalent thereof), accommodation and related expenses, including lodging, meals, and entertainment; provided, that such travel and related expenses are related to (A) investments (whether consummated or proposed but unconsummated), including those incurred in connection with the discovery, evaluation, acquisition, holding, management, monitoring, financing, refinancing, structuring, restructuring, operating, taking public or private, valuing, winding up, liquidating, dissolving or disposing thereof, (B) meeting with or reporting to one or more investors or their representatives or (C) the provision of services to and the administration of the Funds; (iv) fees, costs and expenses incurred in connection with the preparation and distribution of Fund reports, including financial statements, tax returns and Schedule K-1s, the filing of various foreign tax withholding and treaty forms, the representation of the Funds or their limited partners by the “partnership representative” and the “designated individual” and any other administrative, regulatory or other related reporting or filings of the Funds; (v) fees, costs and expenses incurred in connection with reporting to or on behalf of, and other communications and meetings with, or materials prepared for or on behalf of, one or more of the limited partners and the advisory boards of the Funds (including responses to questions and inquiries, fulfillment of requests regarding investments, operations, and compliance of the Funds, and a Fund’s annual meeting (including any specialized equipment and similar costs related thereto)); (vi) any taxes and other governmental charges, fees and duties that may be incurred or payable by the Funds and all expenses incurred in connection with any tax audit, investigation, settlement or review of the Funds; (vii) fees, costs and expenses related to the indemnification obligations, litigation expenses (and damages) incurred in connection with the activities of the Funds and insurance expenses (including premiums) of the general partners, managers and any other protected person of the Funds, including in respect of errors, omissions, fidelity, general partner liability, directors’ and officers’ liability and similar coverage for any protected person acting on behalf of a Fund or its related entities (including such Fund’s pro rata share of expenses with respect to policies whose costs and benefits are expected to be shared with other Funds); (viii) fees, costs or expenses related to compliance with applicable laws, rules and regulations, including costs of reporting to regulatory and tax authorities in any jurisdiction in which a Fund, its related entities, any portfolio company or other entity owned directly or indirectly by a Fund invests, is organized or is marketed or otherwise directly or indirectly conducts business related to a Fund or its investments, including the SEC, the Commodity Futures Trading Commission (the “CFTC”), the U.S. National Futures Association, the U.S. Treasury, the Internal Revenue Service (the “IRS”) and other national, state, provincial or local regulatory and tax authorities in any country or territory (for example, the preparation and filing of Form PF and Form CPO-PQR and Form CTA-PR in the United States and other similar regulatory filings, any compliance or filings related to the offering of interests in a Fund in particular jurisdictions (including under the AIFM Directive (as defined herein)), expenses related to compliance with the GDPR (as defined herein) (and any similar data protection laws, regulations and requirements) and FATCA, and expenses related to complying with rules, statutes or regulations similar to the foregoing, whether in effect or hereafter enacted); provided, that, the costs of a manager’s general compliance with the Investment Advisers Act of 1940, as amended (the “Advisers Act”), such as preparation and updating of Form ADV, will be borne by such manager and its affiliates; (ix) fees, costs and expenses incurred in connection with the dissolution, winding up or termination of a Fund and its related entities; (x) management fees and placement fees; (xi) fees, costs and expenses incurred in connection with the formation of any person, including alternative investment vehicles and subsidiaries of a Fund, through or in which investments may be made; (xii) fees, costs and expenses attributable to investor-related services, the administering and complying with side letters, the process of compiling compendiums of side letter provisions and tracking and implementing applicability in accordance with the “most favored nations” provisions contained in the applicable Governing Documents of the Funds and compliance checklists of any Fund; (xiii) fees, costs and expenses incurred in connection with any restructuring or any amendments, modifications, revisions or restatements to, or waivers of, the Governing Documents of a Fund and its related entities, including the preparation, distribution and implementation thereof; (xiv) fees, costs and expenses that are classified as extraordinary expenses under U.S. generally accepted accounting principles; (xv) fees, costs and expenses incurred in connection with any valuation of the assets of the Funds, including costs, fees and expenses of independent appraisal or valuation services or third-party vendor price quotations; (xvi) fees, costs and expenses incurred in connection with distributions to a Fund’s partners; (xvii) out-of-pocket fees, costs and expenses incurred by the members of any advisory board of the Funds in connection with the fulfillment of their duties, including reasonable travel, accommodation and related expenses incurred in connection with attending meetings (including lodging, meals and entertainment, but excluding any out-of-pocket expenses incurred by advisory board members in connection with any meetings held in conjunction with a Fund’s annual meeting); (xviii) fees, costs and expenses related to the incurrence and repayment of borrowings and portfolio company guarantees permitted under the Governing Documents of a Fund (together with any interest and other amounts payable thereon and fees and expenses related thereto); (xix) fees, costs and expenses related to defaults by partners of the Funds in the payment of any capital contributions (to the extent not paid by such defaulting partners); (xx) fees, costs and expenses related to any transfer or proposed transfer by a Fund partner (to the extent not paid by the transferor or transferee partner); (xxi) fees, costs and expenses attributable to any activities with respect to protecting the confidential or non-public nature of any Fund-related information; (xxii) fees, costs and expenses of any third-party administrators (including, for the avoidance of doubt, administrators that perform anti-money laundering or “know your customer” diligence in connection with the onboarding and ongoing participation of Investors in the Funds), custodians, depositaries (including, for the avoidance of doubt, any depositary appointed pursuant to the AIFM Directive), any Korean representative, any Japanese representative, any Swiss representative and paying agent (pursuant to the Swiss Collective Investment Schemes Act (as amended)), attorneys, accountants, tax advisors and other advisors and professionals; (xxiii) fees, costs and expenses incurred in implementing or maintaining third-party or proprietary software tools, programs or other technology for the benefit of the Funds, including accounting, tax, reporting and information management software systems and hardware, extranet tools, web portals (including any online reporting website used to distribute Fund reports), the use of any online investor tracking platform maintained by a Fund administrator or other transactions and computer systems used in connection with a Fund and its activities (whether maintained by a Fund’s manager or otherwise), including for the purpose of producing, preparing or distributing reports or other communications or administrative functions of a Fund’s general partner or manager, and any consultant fees, costs and expenses incurred in connection with the evaluation of the aforementioned tools, programs and other technology; and (xxiv) fees, costs and expenses incurred in connection with organizing, maintaining, operating and liquidating (A) any subsidiary or other intermediate entity used to acquire, hold or dispose of any investment or (B) administrative investment structures, offices and persons formed or utilized by a Fund in various jurisdictions to facilitate such Fund’s investment activities (for example, the office and structures of affiliates of certain of the Funds in the Netherlands or other similar offices and structures opened in the future), including to (1) perform accounting, administrative, corporate secretarial support and other functions for non-U.S. holding entities organized by the Funds in the jurisdictions where such investments are located, (2) conduct certain aspects of the investment activities of the Funds, (3) act as service providers to the Funds or (4) otherwise operate and manage the activities of investment structures affiliated with the Funds (including, without limitation, the salary and benefits of any personnel responsible for the maintenance of such structures, offices and persons, any travel and accommodation expenses incurred in connection with such structures, offices and persons, and all other overhead costs, fees and expenses incurred in connection therewith and any tax obligations attributable to or withholding on any fees charged in connection with such structures in order to comply with applicable law). All fees paid to any placement agent employed in connection with the offering and sale of interests of a Fund (“Placement Fees”) will be charged to such Fund; however, 100% of all Placement Fees will reduce the management fee otherwise payable by a Fund, on an aggregate basis. The general partner of each Fund, in its sole discretion, reserves the right to call capital for expenses (including management fees) or fund such amounts out of disposition proceeds. A more detailed list of expenses paid by the Funds is set forth in the applicable Governing Documents of the Funds. The fees and expenses borne by a Fund are negotiated with the Investors during such Fund’s fundraising period. Investors should review all fees charged by KPS, its related parties, and others to fully understand the total amount of fees to be paid by the Funds and, indirectly, their respective Investors. Expenses paid by the Funds are allocated among any parallel funds, alternative investment vehicles, other entities that comprise the Funds and co-investment vehicles, that shared in the activities generating such expenses; however, in the event that a co- investment opportunity is not consummated, and prospective co-investors do not agree to bear their share of any broken deal expenses, such expenses will be considered operating expenses of and be borne by the applicable Funds. KPS retains flexibility to structure its compensation from investors and expects in certain circumstances to agree to invoice an investor directly for management fees or other compensation, rather than deducting such amounts from the Investor’s capital account(s). Additionally, KPS, the Funds or their portfolio companies, from time to time, retain consultants, senior advisors or operating executives to provide assistance with deal sourcing, industry insight or due diligence, offer financial and structuring advice and perform other services for the Funds or their respective portfolio companies (“Industry Consultants”), including services that may be similar in nature to those provided by the KPS investment professionals or other KPS personnel. Such services may be provided to KPS or the Funds on an exclusive basis. The nature of the relationship with each such Industry Consultant and the time devotion requirements of each such Industry Consultant may vary significantly. These arrangements will generally be memorialized in formal written agreements (but may also be informal) and are negotiated individually, depending on the anticipated services to be provided. A Fund’s share of any retainer fees, success fees, promotes, profit sharing or other fees paid to Industry Consultants (“Industry Consultant Fees”) will be borne by the Fund (whether paid by the Fund directly, by a portfolio company or by KPS and subsequently reimbursed by the Fund). While such Industry Consultant Fees are believed by KPS to be reasonable and generally at market rates for the relevant services provided, exclusive arrangements or other factors may result in Industry Consultant Fees not always being comparable to costs, fees and expenses charged by other third parties. In addition to Industry Consultant Fees, a Fund will also generally bear its share of any reasonable out of pocket expenses (including, if applicable, travel costs) incurred by Industry Consultants in connection with the provision of their services. Accounting, network, communications, administration and other support benefits, including office space, may be provided by KPS or a Fund to Industry Consultants without charge. To the extent that communications or other equipment or services are provided by a Fund to an Industry Consultant, its cost can be borne by such Fund as a Fund expense. Fees or other payments or benefits received by Industry Consultants in connection with their services, including any amounts paid in connection with particular transactions or investments, will not be considered Deal Fees and consequently will not reduce the management fees paid by the relevant Fund. Industry Consultants will potentially be granted the right to participate alongside the Fund in one or more investments of the Fund, including, but not limited to, through the applicable portfolio company itself. Such co-investment rights may extend beyond those transactions sourced by the applicable Industry Consultant or for which such Industry Consultant provides advice and will potentially result in the Fund investing less capital than it otherwise would have in such transactions. In addition, the cost of structuring such co-investments is expected to be borne by the Fund as a Fund expenses. Moreover, Industry Consultants reserve the right to invest directly in the Fund as limited partners thereof. Industry Consultants can also serve on the boards of portfolio companies or as employees or consultants in an operations capacity. Any directors’ fees, salaries, consultant fees, other cash compensation, stock options or other compensation received by Industry Consultants in such capacities will be borne by the portfolio companies, will not be considered Deal Fees and consequently will not reduce the management fees paid by the relevant Fund. Services provided by these Industry Consultants generally will include, without limitation, providing services directly to a Fund’s portfolio companies, whether as an employee , consultant or service provider of such portfolio company, and will otherwise conform to the description of the role of Industry Consultants above. In addition to the arrangements described more fully in the following paragraph, KPS reserves the right to also transition former KPS employees to become Industry Consultants. please register to get more info

As discussed in the Fees and Compensation section of this Brochure, the Funds are subject to a carried interest of 25-30%, which is paid to general partners that are affiliated with KPS. Although the carried interest is generally used to align KPS’s interests with those of its Funds’ Investors, it also creates an incentive for KPS to make more speculative investments. In addition, the carried interest will potentially incentivize KPS to make different decisions regarding the timing and manner of the realization of its Funds’ portfolio investments than would be the case if the carried interest did not exist. Additionally, to the extent that KPS has Funds with varying carried interest terms and/or KPS personnel are assigned varying percentages of carried interest from the Funds, KPS and such personnel are subject to potential conflicts of interest, to the extent they are involved in identifying investment opportunities as appropriate for Funds from which they are entitled to receive a higher carried interest percentage. KPS seeks to address these conflicts through careful vetting of investment opportunities by its investment professionals and disclosure of investments to Investors by way of capital call notices and quarterly reports. In addition, the Governing Documents of the Funds contain “claw back” provisions applicable in the event of overpayment of the carried interest. KPS manages Funds with similar strategies, and allocates investment opportunities among such funds based on criteria (such as the size of the contemplated investment) described in such Funds’ governing documents as well as its internal policies and procedures regarding investment allocations and decisionmaking. To the extent a conflict is identified, KPS reserves the right to seek to resolve such conflict by seeking the approval of the applicable Funds’ advisory boards which are composed of representatives of the Investors of such Funds (“Advisory Boards”) for its proposed course of action. In such case, KPS will allocate the opportunity through a methodology approved by the applicable Funds’ Advisory Boards. please register to get more info

KPS and its affiliates provide advisory services (as described in the Advisory Business section above) solely to their Fund clients, and references throughout this Brochure to “clients” and to the related duties of KPS and its affiliates to, and practices on behalf of, their clients and/or investors should be construed accordingly. Each of the Funds is a private pooled investment vehicle. Investors in the Funds include a variety of institutional investors (e.g., trusts, public and private employee benefit plans, endowments, foundations, corporations and other types of entities including private funds) and high net worth individuals and from time to time include, directly or indirectly, principals or other employees of KPS and its affiliates and members of their families, Industry Consultants or other service providers retained by KPS. The Funds are operated such that they qualify as “private equity funds” for purposes of Form PF. The relevant general partner of a Fund also generally is permitted from time to time to establish Funds that are alternative investment vehicles in order to permit certain investors to participate in one or more particular investment opportunities in a manner desirable for tax, regulatory or other reasons. Alternative investment vehicle sponsors generally have limited discretion to invest the assets of these vehicles independent of limitations or other procedures set forth in the organizational documents of such vehicles and the related Fund. Investment in the Funds is limited to Investors that meet certain financial sophistication requirements. Investors in the Funds must be (i) “accredited investors” within the meaning of Regulation D under the Securities Act of 1933, as amended, and (ii) “qualified purchasers” within the meaning of the Investment Company Act of 1940, as amended (the “1940 Act”). Certain KPS employees who qualify as “knowledgeable employees” under Rule 3c-5 of the 1940 Act are also permitted to invest (directly or indirectly) in the Funds. Investors considering an investment in the Funds should consult with their own investment, tax and/or legal consultants prior to investing. Additional details concerning applicable Investor suitability criteria are set forth in the Governing Documents of each Fund. The minimum investment in the Funds is generally $10 million, although the general partners of the Funds are permitted to waive or modify the minimum investment in their sole discretion. In addition, the Funds reserve the right to enter into separate agreements, commonly referred to as “side letters”, with certain investors, to waive certain terms, or allow such investors to invest on different terms than those specifically described in the offering documents. Under certain circumstances, these agreements could create preferences or priorities for such investors with respect to other investors. please register to get more info

In formulating investment strategies and investment advice for the Funds, KPS conducts comprehensive due diligence. KPS’s analysis typically focuses on the target company’s business, business model and competitive environment, financial structure and performance, opportunities for value creation, favorable regulation or regulatory events, current and future cash flow projections, as well as synergies with KPS’s investment process. KPS primarily focuses on making controlling equity and equity-related investments in manufacturing and industrial companies across a diverse array of industries, including basic materials, branded consumer, healthcare and luxury products, automotive parts, capital equipment and general manufacturing. KPS reserves the right to also make investments in debt acquired with the aim of establishing a control position, gaining influence in a restructuring process or access to information, as well as in passive debt investments. Debt instruments may include, but will not be limited to, bank debt (e.g., first and second lien debt), bonds and other fixed income instruments. KPS targets investment opportunities involving corporate divestitures and carve-outs, private transactions (e.g., acquisitions from families, entrepreneurs and other financial owners seeking to transition ownership), or restructurings that result in a change of control (whether pursuant to a structure bankruptcy or an out-of-court transaction). KPS’ investment strategy is based on implementing business improvement or turnaround plans and strategies predicated on identifiable and reasonably achievable objectives identified prior to the closing of the acquisition, including, cost reduction, productivity improvements, margin improvement, capital investment and optimal asset utilization, other commercial actions, and, in some situations, the introduction of new management. The KPS Portfolio Operations Group (“KPS Ops Group”) is organically integrated into KPS and works closely with KPS’s investment professionals and portfolio company management. The KPS Ops Group seeks to drive performance improvement by institutionalizing structured programs for continuous improvement at each portfolio company. All members of the KPS Ops Group are full- time employees of KPS and none of their time is billed to portfolio companies or the Funds. The KPS Ops Group expects to periodically engage third-party consultants to assist with certain portfolio company projects. Time and out-of-pocket expenses relating to the activities of these consultants are billed to the respective portfolio company at cost. More detailed information regarding KPS’s investment strategy and activities is contained in the Governing Documents of each Fund. Acquiring interests in any Fund involves a number of risks. An investment in a Fund may be deemed a speculative investment and is not intended as a complete investment program. It is designed for sophisticated investors who fully understand and are capable of bearing the risk of an investment in a Fund, and are capable of bearing illiquidity for substantial periods of time. No guarantee or representation can be made that a Fund will meet its investment objectives or that Investors will receive a return of their capital. All investing involves a risk of loss and the investment strategy offered by KPS could lose money over short or even long periods. Prospective and existing Investors are advised to review the Governing Documents of the applicable Fund for additional detail regarding investment, operational and other actual and potential risks applicable to a particular Fund. Certain material risks presented by KPS’s investment strategy are set forth below. This Brochure does not purport to contain a complete disclosure of all risks that may be relevant to a prospective Investor in a Fund. Investing in the Funds involves a risk of loss that an Investor should be prepared to bear. Investments recommended by KPS involve significant risks. There can be no assurance that KPS will meet the investment objectives of a Fund or otherwise be able to carry out its investment strategy successfully.
Risk Associated with Unspecified Transactions; No Assurance of Investment Return
Investors will not have an opportunity prior to investing in any Fund to evaluate any of the investments to be made by the Funds or the relevant economic, financial and other information regarding such investments. The Investors will be entirely dependent on the judgment and ability of KPS to choose, make and realize investments, and there is no assurance that KPS will identify a sufficient number of attractive opportunities to meet the Funds’ investment objectives or that the Funds will be able to make and realize investments in any portfolio company. An investment in a Fund requires a long-term commitment, with no certainty of return. The nature of, and risks associated with, a Fund’s future investments may differ substantially from those investments undertaken historically by the other Funds. There can be no assurance that a Fund will be able to implement its investment strategy or investment approach, achieve comparable results or that it will be able to avoid losses. There can be no assurance that a Fund will be able to generate returns for its Investors or that the returns will be commensurate with the risks of investing in the type of companies and transactions described herein. There may be little or no near-term cash flow available to the Investors and there can be no assurance that any Investor will receive any distribution from a Fund. Even if a Fund’s investments are consummated successfully, they are not generally expected to result in a return of capital or realization of gains (if any) to the Investors for a number of years after the investment is made. A Fund’s performance over a particular period may not necessarily be indicative of the results that may be expected in future periods. All investments of the Funds involve the risk of loss of capital.
Suitability of Investments
An investment in a Fund is not suitable for all investors. An investment is suitable only for sophisticated investors, and an Investor must have the financial ability to understand and willingness to accept the extent of its exposure to the risks and lack of liquidity inherent in an investment in a Fund. An investment in a Fund requires a long-term commitment, and there can be no assurance that a Fund’s investment objectives will be achieved or that a Fund will be able to dispose of investments at prices equal to or greater than the price at which such Fund purchased such investments.
Difficulty of Locating Suitable Investments; Competition for Investment Opportunities
The success of a Fund will depend on the ability of KPS to identify suitable investments, to negotiate and arrange the closing of appropriate transactions and to arrange the timely disposition of such investments, in each case, consistent with such Fund’s investment objectives. The activity of identifying, completing and realizing an attractive investment opportunity is highly difficult and involves a high degree of uncertainty. The availability of investments generally will be subject to prevailing market conditions. In particular, in light of changes in such market conditions, certain types of investments may not be available to a Fund on terms that are as attractive as the terms on which opportunities were available to previous Funds. Investment availability will also depend on perceptions of a Fund’s ability to consummate transactions. Accordingly, there can be no assurance that KPS will be able to identify a sufficient number of investment opportunities for such Fund to enable it to invest the full commitment amount in opportunities that satisfy such Fund’s investment objectives, or that such investment opportunities will lead to completed investments by such Fund. Even if sufficient investment opportunities are identified, they may be allocated to other Funds. Notwithstanding the foregoing, during the commitment period defined in relevant Governing Documents, the Investors will be required to pay management fees based on the entire amount of their respective commitment, even if the relevant Fund is never fully invested. In addition, a Fund will compete for the acquisition of investments with many other investors, some of which will have greater resources than such Fund. Such competitors may include other public or private investment funds as well as individuals, financial institutions and other institutional and strategic investors. Such competition may be particularly acute with respect to participation by a Fund in auction proceedings and, specifically, those conducted pursuant to Section 363 of Title 11 of the United States Code, as amended (the “Bankruptcy Code”) (i.e., “363 sales”), where a Fund may compete with other prospective bidders to acquire the assets of a distressed company through a bankruptcy court-supervised auction. Further, over the past several years, an ever-increasing number of private investment funds have been formed (and many existing funds have grown in size), and additional funds with similar investment objectives may also be formed in the future by other parties. Some of these competitors may have more relevant experience, greater financial, technical, marketing and other resources, more personnel, higher risk tolerances, different risk assessments, lower return thresholds, lower cost of capital and access to funding sources unavailable to a Fund and a greater ability to achieve synergistic cost savings in respect of an investment than a Fund and KPS. In such an environment, the sourcing and execution of transactions for a Fund, whether on a proprietary basis or otherwise, becomes more challenging. To the extent that a Fund encounters competition for investments, returns to the Investors may decrease, including as a result of higher pricing, foregoing opportunities or negotiating fewer transactional protections in order to remain competitive. Additionally, a Fund may incur bid, due diligence, negotiating, consulting or other costs on investments that may not be successful. As a result, such Fund may not recover all of such costs, which would adversely affect returns. These competitive pressures could impair a Fund’s business, financial condition and results of operations. Moreover, it is possible that competition for appropriate investment opportunities may increase, thus reducing the number of opportunities available to a Fund and adversely affecting the terms upon and expense at which portfolio investments can be made. Diversification Diversification is not an objective of a Fund and KPS is not under any obligation to diversify a Fund’s investments and may otherwise allocate capital among investments as it determines in its sole discretion. Accordingly, a Fund’s portfolio may include a small number of large positions and, as a consequence, the aggregate return of such Fund may be substantially adversely affected by the unfavorable performance of even a single investment. In addition, the Investors have no assurance as to the degree of diversification of a Fund’s investments, either by concentration, geographic region or sector. To the extent a Fund concentrates investments in a particular issuer, industry or geographic region, its investments will become more susceptible to fluctuations in value resulting from adverse economic and/or business conditions with respect thereto. Certain geographic regions and/or industries may be more adversely affected by economic pressures when compared to other geographic regions and/or industries. Moreover, the exposure of a Fund is expected to be highly concentrated in the manufacturing industry and the aggregate return of such Fund may be substantially adversely affected by the unfavorable performance of the overall relative performance of the manufacturing industry. Such concentration may subject a Fund to greater volatility than a more diversified portfolio of investments. Therefore, while this portfolio concentration may enhance total returns to the Investors, if any large position has a material loss, then returns to the Investors may be lower than if they had invested in a well-diversified portfolio. Moreover, because it is not reasonable to expect all of a Fund’s investments to perform well or even return capital, for such Fund to achieve above-average returns, one or a few of its investments must perform very well. There are no assurances that this will be the case. In addition, if a Fund co-invests with other private equity funds, an Investor invested in such other fund(s) may have exposure to a portfolio company through more than one fund.
Dependence on Key Personnel
KPS will have complete discretion in directing the investment of a Fund’s assets. The interests are passive investments and the Investors will have no opportunity to control the day-to-day operations of a Fund, including investment and disposition decisions and decisions regarding the selection of service providers and the operation of the portfolio companies. Subjective decisions made by KPS may cause a Fund to incur losses or to miss profit opportunities on which it would otherwise have capitalized. In order to safeguard their limited liability for the liabilities and obligations of a Fund, the Investors must rely entirely on KPS to conduct and manage the affairs of such Fund. The Investors will have no direct rights against third parties engaged by KPS in respect of a Fund. In addition, to the extent that an Investor or its related persons are not represented by a member of the Advisory Board, such Investor will have no influence over matters submitted to the Advisory Board for review or approval. The success of a Fund will be highly dependent on the financial and managerial expertise of the KPS Partners and other KPS employees and advisors. KPS and the Funds will be relying extensively on the experience, relationships and expertise of these persons. There is ever increasing competition among alternative asset firms, financial institutions, private equity firms, investment managers and other industry participants for hiring and retaining qualified investment professionals, and there can be no assurance that such professionals will continue to be associated with KPS or its affiliates throughout the life of the Funds. The loss of one or more of the KPS Partners could have a material adverse effect on the performance of the Funds. The interests of these professionals in the general partners should tend to discourage them from withdrawing from participation in the Funds’ investment activities. However, there can be no assurance that the KPS Partners will continue to be associated with the general partners or their affiliates throughout the life of the Funds, as the KPS Partners are under no contractual obligation to remain with the general partners for all or any portion of the terms of the Funds, nor can there be any assurance that KPS will be able to attract and retain replacements or additional persons when needed. In addition, in the event that the KPS Partners cannot agree on decisions affecting the Funds, the investment results of the Funds may be adversely affected. Furthermore, although the KPS Partners will devote substantially all of their business time and attention to the activities of KPS and the Funds, the KPS Partners are only required to devote such time as they deem reasonably necessary to conduct the business affairs of a Fund in an appropriate manner. The KPS Partners will continue to manage the public and private securities portfolios and investments of the other Funds (as well as their personal investments) and conflicts of interest may arise in allocating management time, services or functions among the Funds.
Possibility of Fraud or Other Misconduct of Employees and Service Providers
Misconduct by employees of KPS and its affiliates, service providers to such persons or a Fund and/or their respective affiliates could cause significant losses to such Fund. Misconduct may include, among other things, (i) entering into transactions without authorization, (ii) the failure to comply with operational and risk procedures, (iii) misrepresentations as to investments being considered by a Fund, (iv) the improper use or disclosure of confidential or material non-public information, which could result in litigation or serious financial harm (including limiting a Fund’s business prospects or future marketing activities), (v) non-compliance with applicable laws or regulations and (vi) the concealment of any of the foregoing. Such activities may result in reputational damage, litigation, business disruption and/or financial losses to a Fund. KPS has controls and procedures through which it seeks to minimize the risk of such misconduct occurring. However, no assurances can be given that KPS will be able to identify or prevent such misconduct.
Reliance on Portfolio Company Management
The day-to-day operations of a portfolio company will be the responsibility of such company’s management team. Although KPS will be responsible for monitoring the performance of portfolio companies and generally seeks to invest in companies operated by capable management that may be existing or installed by KPS, there can be no assurance that an existing management team, or any successor, will be able to successfully operate a portfolio company in accordance with KPS’s strategy for such company.
Risks in Effecting Operating Improvements
The success of a Fund’s investment strategy will depend, in part, on the ability of KPS to provide institutional management experience and financial insights to portfolio company management, restructure, and effect improvements in the operations of a portfolio company. The activity of identifying and implementing restructuring programs and operating improvements at portfolio companies entails a high degree of uncertainty. There can be no assurance that a Fund will be able to successfully identify and implement such restructuring programs and improvements or that such insights and experience will be utilized and implemented by portfolio companies and, even if implemented, that they will result in operating efficiencies and increased revenues. Temporary Investments In light of the need to be able to deploy capital quickly to capitalize on potential investment opportunities or to establish reserves for anticipated debts, liabilities or obligations, including liquidity needs, cash may be held by a Fund in temporary investments treated as cash equivalents, including money market investments, pending deployment into investments, the amount of which may at times be significant. While the duration of any such holding period is expected to be relatively short, in the event a Fund is unable to find suitable investments, such temporary investments may be held for longer periods, which would be dilutive to overall investment returns. It is not anticipated that any such reserves held in temporary investments will generate significant returns and/or interest, and the Investors should understand that such low returns and/or interest payments on the temporarily invested cash may adversely affect the overall returns of a Fund.
Drawdowns of Capital
Pursuant to the Governing Documents, the relevant general partner may draw down on the Investors’ commitment upon at least 10 calendar days’ prior notice. Capital calls will be issued by the relevant general partner from time to time at the discretion of such general partner, based upon such general partner’s assessment of the needs and opportunities of the relevant Fund. As a result, the Investors must at all times during the term of a Fund maintain sufficient liquidity to meet such capital calls. Except as specifically set forth in the Governing Documents, each Investor’s obligation to satisfy capital calls will be unconditional. An Investor’s obligation to satisfy capital calls will not in any manner be contingent upon the performance or prospects of a Fund or upon any assessment thereof provided by the relevant general partner. Capital calls may not provide all of the information an Investor desires in a particular circumstance, and such information is not a condition precedent for an Investor to meet its funding obligation. Additionally, and notwithstanding the foregoing, the relevant general partner will not be obligated to call 100% of a Fund’s committed capital during such Fund’s term. The fees, costs and expenses incurred by an Investor in fulfilling a capital call (whether bank fees, wire fees, value-added tax or other applicable charge imposed on an Investor) will be borne solely by such Investor and will be in addition to the amounts required by capital calls (and will not be part of or otherwise reduce its committed capital).
Defaults by Investors
If an Investor fails to fund its committed capital when due, a Fund’s ability to complete its investment program or otherwise to continue operations may be substantially impaired and such Fund may be subject to significant penalties, which could materially and adversely affect the returns of the Investors (including non-defaulting Investors). A default by a substantial number of Investors or by one or more Investors who represents a substantial portion of the committed capital would limit opportunities for investment diversification and likely would reduce returns to such Fund. The consequences of defaulting on a capital call are material and adverse to the defaulting Investor. If an Investor fails to contribute any portion of its committed capital upon a call by the relevant general partner, such Investor will be subject to a number of remedies available to the general partner as provided in the Governing Documents, including a 50% reduction of its capital account, the sale of its interest, loss of the right to receive distributions and to vote, as well as liability for all costs, expenses and/or damages resulting from its failure to contribute such capital. The defaulting Investor could lose its entire investment in such Fund and remains liable for amounts due in respect of its committed capital, as well as for interest on such amounts at the maximum rate permitted by law.
Mandatory Withdrawals
An Investor may be compulsorily redeemed from a Fund if the relevant general partner determines that the continued participation of such Investor would be reasonably likely to give rise to a material adverse legal, regulatory, accounting, tax, political or national security consequence to such Fund, any of its Investors, any portfolio company or KPS, and upon any such compulsory redemption, such Investor may receive in lieu of cash an in-kind distribution or a promissory note that will mature on the date of the final distribution by such Fund.
Illiquidity of Investor Interests; Restrictions on Transfer
An interest in a Fund will generally be an illiquid investment. The interests will be issued in reliance upon certain exemptions from registration or qualification under applicable U.S. federal and state securities laws and may not be transferred unless registered under applicable U.S. federal and state securities laws or unless an exemption from such laws is available. No Fund is expected, nor has any obligation, to register the interests under any such laws. There will be no public market for the interests, and none is expected to develop. In addition, Investors will not be entitled to withdraw their capital contributions, and the interests may not, directly or indirectly, be assigned or transferred (including through any transaction that is treated as a transfer solely for U.S. federal income tax purposes) without the written consent of the relevant general partner, which consent may be granted or withheld in its sole discretion. An Investor desiring to transfer its interests will generally be required to reimburse the relevant Fund’s expenses of such transfer which can, in certain circumstances, be substantial. Voluntary withdrawals prior to a Fund’s termination will generally not be permitted except in very limited circumstances as set forth in the Governing Documents. Accordingly, the interests constitute illiquid investments and should only be purchased by persons that are able to bear the risk of their investment for an indefinite period of time.
Limitations on Limited Liability of Investors
Generally, the Funds are organized as limited partnerships. A limited partner of a limited partnership will generally not be liable for the obligations of the limited partnership except in respect of the amount of property the limited partner contributes or agrees to contribute to the capital of the limited partnership. However, pursuant to relevant laws under certain jurisdictions, a limited partner may become liable as a general partner if, in addition to exercising the limited partner’s rights and powers as a limited partner, the limited partner takes part in the control of the business of the limited partnership. There is a risk that, in certain jurisdictions, the limited partners may not be afforded limited liability to the extent that principles of conflicts of law recognizing the limitation of liability of limited partners have not been authoritatively established with respect to limited partnerships formed under the laws of one jurisdiction but which carry on business in another jurisdiction.
Standard of Care and Indemnification
The Governing Documents contain provisions that, subject to applicable law, reduce or modify the duties that certain protected persons defined in the relevant Governing Documents would otherwise owe to the Funds and the Investors. The Funds generally will exculpate and indemnify each such protected person for any loss, damage or expense incurred by such protected person on behalf of the Funds or in furtherance of the interests of the Investors or otherwise arising out of or in connection with the Funds or the business of the Funds, except for losses arising from such protected person’s own fraud, bad faith, willful misconduct, gross negligence or intentional and material breach of the Governing Documents. The Funds’ ability and obligation to indemnify protected persons in respect of any liability arising out of activities performed in connection with a portfolio company prior to the disposition of the related investment is not affected by whether or not the existence of such liability was known at the time of the disposition. The relevant general partners may have the Funds purchase, at the Funds’ expense, insurance to cover any protected person against liability covered by the foregoing indemnification and to otherwise cover liabilities for any breach or alleged breach by a protected person of its duties. The application of the foregoing standards may result in the Investors having a more limited right of action in certain cases than they would in the absence of such standards.
Capital Calls and Use of Subscription Lines and Asset-Backed Facilities; Recourse to Fund
Assets
A Fund may, directly or indirectly through one or more subsidiary vehicles on behalf of such Fund, enter into credit facilities or other borrowing arrangements pursuant to which the investments or other assets of such Fund, including committed capital, may be charged, pledged or assigned as collateral security for (a) amounts borrowed by such Fund or a subsidiary and/or (b) guarantees by such Fund. In connection with the above, the relevant general partner may assign or otherwise transfer (i) the right to issue capital call notices to cause capital contributions to be paid to such Fund, (ii) any account of such Fund into which capital contributions are deposited, (iii) the right to enforce the rights of such Fund and the relevant general partner under the Governing Documents, including the rights and remedies with respect to defaulting Investors and (iv) any other assets of such Fund to a lender. The Investors will not be personally liable for a Fund’s obligations under any borrowing arrangements. However, the inability of a Fund to repay borrowings under a credit facility secured by the committed capital of such Fund could enable a lender to take action against any Investor to the extent of its committed capital in such Fund and, if an Investor’s committed capital is insufficient to repay such Investor’s pro rata share of such borrowings, such Investor may be required to return amounts distributed to it to fund such borrowings, subject to certain limitations set forth in the Governing Documents. Any Fund credit facility may provide for joint and several liability with respect to two or more parallel partnerships defined in the relevant Governing Documents, provided that to the extent that one such parallel partnership pays any such amounts on behalf of the other parallel partnership(s), the parallel partnership whose borrowing was repaid will, to the fullest extent permitted by applicable law, be required to indemnify and reimburse the other parallel partnerships. Capital calls, including those used to pay interest and principal on subscription lines, asset-backed facilities and other indebtedness of a Fund, may be “batched” together into larger, less frequent capital calls, with such Fund’s interim capital needs being satisfied by such Fund borrowing money from such credit facilities. The interest expense and other costs associated with such borrowings will be Fund expenses and, accordingly, will decrease net returns of the Fund. In addition, the use of a subscription-based credit facility may present conflicts of interest because the interest rate on such borrowings are typically less than the rate of the preferred return and such preferred return does not accrue on such borrowings but only accrues on capital contributions when made. As a result, use of such interim leverage arrangements with respect to investments may reduce or eliminate the preferred return received by the Investors and accelerate or increase distributions of carried interest to the relevant general partner, providing such general partner with an economic incentive to fund investments through longer-term borrowings in lieu of drawing down committed capital. As a general matter, use of borrowings in lieu of drawing down committed capital amplifies IRRs (either negative or positive) to the Investors. Subject to the limitations in the Governing Documents, the use of a subscription-based credit facility by a Fund is within the relevant general partner’s discretion. More generally, a Fund’s assets, including all investments and any capital held by such Fund, are available to satisfy all liabilities and other obligations of such Fund, including any indebtedness incurred or guaranteed by such Fund. If a Fund or a portfolio company defaults on secured indebtedness, for example, the lender may foreclose and such Fund could lose its entire investment in the security for such loan. If a Fund itself becomes subject to a liability, parties seeking to have the liability satisfied may have recourse to such Fund’s assets generally and will not be limited to any particular asset, such as the investment giving rise to the liability. In addition, there can be no guarantee that (1) debt facilities will be available at commercially attractive rates throughout the term of a Fund or when due for refinancing, and accordingly, such Fund or the applicable portfolio company may be exposed to less favorable terms or rates upon a refinancing or (2) any facilities negotiated will be fully utilized. Tax-exempt Investors should note that the use of leverage by a Fund may result in certain unwanted tax consequences.
Interim Financing
From time to time, a Fund may provide interim financing to facilitate an investment. Interim financing may take the form of equity or debt investments in, or bank-like loans to, the portfolio company or such other structures as the relevant general partner may determine appropriate under the circumstances. There can be no assurance that a Fund will be able to refinance or repay any interim financing within any period of time specified in the relevant Governing Document following the closing of such interim financing or that such refinancing or repayment will take place on terms and conditions that will be preferable for a Fund or that expenses incurred in connection therewith will not be substantial. Any interim financing not refinanced or otherwise repaid within such period of time would typically be convertible into a more permanent, long-term security; however, for reasons not always in a Fund’s control, such long-term securities may not be issued and such bridge loans may remain outstanding. In such event, the interest rate on such loans may not adequately reflect the risk associated with the unsecured position taken by a Fund. Any such interim financing not refinanced or otherwise repaid within such period of time will be treated as a permanent investment in the portfolio company made on the date of the initial interim financing (regardless of the type of securities held by the relevant Fund at the time of conversion), and will not result in a violation of the investment restrictions applicable to such Fund. In addition, a Fund will not be required to dispose of any portion of, or otherwise reduce, such interim financing and such Fund will consequently hold a greater concentration and have more exposure in the related investment than initially was intended, which could make such Fund more susceptible to fluctuations in value resulting from adverse economic and/or business conditions with respect thereto.
Reinvestment
A Fund may retain or recall for reinvestment the invested capital portion of any proceeds received by such Fund from the sale, refinancing, or recapitalization of any investment (including, but not limited to, any interim financing) within certain period of time specified in the relevant Governing Document after the investment was originally made. Additionally, at the election of the relevant general partner, any amounts drawn down from the committed capital to pay organizational expenses and Fund expenses (including the management fee), may, to the extent the Investors receive subsequent distributions, be added to the committed capital of the Investors and be subject to recall. Accordingly, during the term of a Fund, an Investor may be required to make capital contributions in excess of its committed capital and to the extent such recalled or retained amounts are reinvested by such Fund, an Investor will remain subject to investment and other risks associated with such investments. As a general matter, recycling and reinvestment will have the effect of amplifying a Fund’s IRR, either negative or positive, depending on the performance of investments.
Follow-On investments
A core component of certain Funds’ investment strategy is to buy and build businesses, which requires significant capital. As a result, a Fund will likely be called upon to provide follow-on funding for one or several of its portfolio companies. In addition, a Fund may generally have the opportunity to increase its investment in such portfolio companies. Participating in such follow-on investments could be crucial for such Fund to execute on its value creation plans in respect of its portfolio companies. To that end, the relevant general partner has reserved the ability to continue making follow-on investments following the end of the commitment period up to an amount not to exceed the percentage specified in the relevant Governing Document of the aggregate committed capital. Notwithstanding the foregoing, there can be no assurance that a Fund will wish to make follow-on investments or that a Fund will have sufficient funds to do so. Any decision by a Fund not to make follow-on investments or its inability to make them may have a substantial negative impact on a portfolio company in need of such an investment or may diminish such Fund’s ability to influence the portfolio company’s future development. There can be no assurance that the relevant general partner will be able to predict accurately how much capital may need to be reserved by the relevant Fund for participation in follow-on investments. If more capital is reserved than is necessary, then the relevant Fund may receive a lower allocation of other investment opportunities or may not fully draw its original committed capital. If less capital is reserved than is necessary, then the relevant Fund may not be able to fully protect or enhance its existing investments. If a Fund does not have sufficient capital to participate in all (or a portion) of a follow-on investment opportunity, a successor Fund or another KPS Fund may participate in such follow-on opportunity in lieu of or alongside such Fund. Moreover, to the extent that a Fund does not make a needed follow-on investment, the applicable portfolio company may seek additional capital from other investors. Any such arrangements with other investors could rank senior to, and/or cause the dilution of, the investment of the Fund.
Third-Party Involvement
A Fund may co-invest with third parties through funds, joint ventures or other entities. Such investments may involve risks not present in investments where a third party is not involved, including the possibility that a co-venturer or partner of such Fund may at any time have other business interests and investments other than the joint venture with such Fund, or may have economic or business goals different from those of such Fund. In addition, a Fund may be liable for actions of its co-venturers or partners. A Fund’s ability to exercise control or significant influence over management in these cooperative efforts will depend upon the nature of the joint venture arrangement. In addition, such arrangements are likely to involve restrictions on the resale of a Fund’s interest in the portfolio company.
Expenses
Operating a private investment fund involves significant costs, both in respect of its investment activities and administration of the same. There is no cap on Fund expenses and, as a result, such expenses may be substantial. While such amounts can generally be recycled, these expenses will decrease Investor’s returns, including in respect of successful investments. In addition, the participation of co-investors may increase the amount of expenses borne by a Fund as such co- investors may not bear certain costs and expenses associated with potential investments, including broken deal expenses.
Changes in Investment Focus
KPS has broad discretionary power to decide what investments a Fund will make and the strategies it will use to implement its investment objectives. While the relevant Governing Documents contain a description of the types of investments that the Funds have historically made and information about KPS’ expectations with respect to the Funds, a Fund is not restricted in terms of the percentage of its capital that can be invested in a particular industry and is only generally restricted by the limitations set forth in the relevant Governing Document. A Fund may employ investment techniques and strategies and/or structure investments with instruments that KPS believes will help achieve such Fund’s investment objectives. Many factors may contribute to changes in emphasis in the construction of the portfolio, including changes in market or economic conditions or regulation as they affect various industries and changes in the political or social situations in particular countries. There can be no assurance that the investment portfolio of a Fund will resemble the portfolio of any prior Fund.
Distributions
There can be no assurance that the operation of a Fund will be profitable, that such Fund will be able to avoid losses or that cash from its investments will be available for distribution to the Investors. A Fund will have no source of funds from which to pay distributions to the Investors other than income and gain received on its investments and the return of capital. In addition, while a Fund intends to make distributions in cash, it is possible that certain distributions may be made in kind and could consist of securities for which there is no readily available public market and with respect to which there are substantial transfer restrictions or of securities of entities unable to perform under contractual obligations. If distributions are made of property other than cash, the amount of any such distribution will be accounted for at the fair market value of such property in accordance with the Governing Documents. Specifically, upon termination of a Fund, certain portfolio investments of such Fund may be distributed in kind if the general partner determines that liquidation of any such portfolio investment might cause substantial diminution of the value of such portfolio investment. Widespread holding of portfolio investments, particularly of private illiquid securities, may entail a significant administrative burden. In addition, the direct holding of certain portfolio investments may subject the holder to suit or taxes in states in which such investments are located. Side Letters A general partner (on its own behalf and on behalf of a Fund) may from time to time enter into side letters with one or more Investors whereby such Investors may be granted additional or different rights than the Investors generally have pursuant to the Governing Documents. Examples of such rights may include the right to receive reports from a Fund on a more frequent basis or to receive reports that include information not provided to other Investors, the right to pay reduced management fees, the right to receive co-investment opportunities and such other rights as may be negotiated between the relevant general partner, on the one hand, and such Investors, on the other hand. As a result of such side letters, certain Investors may receive additional benefits that other Investors will not receive. Any rights or terms so established in a side letter with an Investor will govern solely with respect to such Investor (but not any of such Investor’s assignees or transferees unless so specified in such agreement) and will not require the approval of any other Investor notwithstanding any other provision of the Governing Documents. For the avoidance of doubt, matters arising under any side letter are considered matters contemplated in the relevant Governing Document and the limitation on liability provisions therein shall apply equally to any side letter. The relevant general partner will not be required to notify all of the other Investors of any such side letters or any of the rights or terms or provisions thereof. In addition, the relevant general partner will not be required to offer such additional or different rights or terms to any or all of the other Investors. The relevant general partner may enter into such side letters with any party as such general partner may determine in its sole and absolute discretion at any time. The other Investors will have no recourse against the relevant Fund, such general partner, KPS or any of their respective affiliates in the event that certain Investors receive additional or different rights or terms as a result of such side letters. To the extent that compliance with any of the provisions of any such side letter would cause a Fund, the relevant general partner, KPS or any of their respective affiliates to violate their respective fiduciary obligations to other clients or to violate any applicable laws, such Fund, the relevant general partner or KPS, as applicable, may not, or may be unable to, comply with any such provision.
Equity Investments
A substantial portion of the Funds’ investments will be in equity or equity-related investments which by their nature involve business, financial, market and/or legal risks. While such investments offer the opportunity for significant capital gains, they generally represent the most junior position within a portfolio company’s capital structure and are therefore subject to the greatest risk of loss. The Investors must be prepared to bear such capital losses that may result from investments. There can be no assurance that a Fund will be adequately compensated for the risks taken. In addition, there can be no assurance that KPS will correctly evaluate the nature and magnitude of the various factors that could affect the value of a return on a Fund’s investments. Prices and market movements of a Fund’s investments may be volatile, and a variety of other factors that are inherently difficult to predict, such as domestic or international economic and political developments, may significantly affect the results of such Fund’s activities and the value of Fund investments. As a result, a Fund’s performance over a particular period may not necessarily be indicative of the results in future periods.
Investments in Distressed Companies
A Fund will likely invest in companies that are experiencing significant financial or business distress, including companies involved in bankruptcy or other reorganization and liquidation proceedings. Such companies are typically facing liquidity challenges due to debt maturities, covenant violations, cyclical challenges or imminent bankruptcy, or they need financing in order to exit bankruptcy. Such investments may be considered speculative and subject to a high degree of risk and the ability of the relevant portfolio companies to pay their debts on schedule could be adversely affected by interest rate movements, changes in the general economic climate or the economic factors affecting a particular industry, or specific developments within such companies. Investments in companies operating in workout or bankruptcy modes also present additional legal risks, including fraudulent conveyance, voidable preference and equitable subordination risks. The level of analytical sophistication, both financial and legal, necessary for successful investment in companies experiencing significant business and financial difficulties is unusually high. There is no assurance that KPS will correctly evaluate the prospects for a successful reorganization or similar action. In addition, although investments in distressed companies may result in significant returns to a Fund, they involve a substantial degree of risk and may not show any return for a considerable period of time, if at all. Given the nature of such companies, it is possible that one or more investments of a Fund may fail to yield any returns. Such investments could, in certain circumstances, subject such Fund to certain additional potential liabilities that may exceed the value of such Fund’s original investments therein.
Control Position Risk; Board Participation
Generally, a Fund intends to make investments that will allow it to acquire control or exercise influence over management and the strategic direction of a portfolio investment as described in the relevant offering documents. The exercise of control over a company imposes additional risks of liability for environmental damage, product defects, pension liabilities, failure to supervise management and other types of liability in which the limited liability characteristic of business operations may be ignored. The exercise of control over a portfolio company could expose the assets of a Fund to claims by such portfolio company, its security holders and its creditors. While KPS intends to manage the Funds to mitigate exposure to these risks, the possibility of successful claims cannot be precluded. In addition, a Fund may designate directors (and non-executive chairpersons) to serve on the boards of directors of portfolio companies. Although such board positions in certain circumstances may be important to a Fund’s investment strategy and may enhance KPS’s ability to manage investments, they may also have the effect of impairing the Fund’s ability to sell the related securities when, and upon the terms, it may otherwise desire and may subject KPS and the Fund to claims they would not otherwise be subject to as an Investor, including claims of breach of duty of loyalty, securities claims and other director-related claims. In general, a Fund will indemnify the relevant general partner and KPS, as well as any persons holding such board positions at the request of the Fund, the relevant general partner or KPS, from such claims.
Contingent Liabilities
Most of the Funds’ investments will involve private securities. In connection with an investment in private securities, a Fund may assume, or acquire, a portfolio company subject to contingent liabilities. These liabilities may be material and may include liabilities associated with pending litigation, regulatory investigations or environmental actions, among other things. To the extent these liabilities are realized, they may materially and adversely affect the value of a portfolio company. In addition, if a Fund has assumed or guaranteed these liabilities, the obligation would be payable from the assets of such Fund, including committed capital. In connection with the disposition of an investment, a Fund may be required to make representations about the business and financial affairs of the portfolio company typical of those made in connection with the sale of any business, or be responsible for the contents of disclosure documents under applicable securities laws. A Fund may also be required to indemnify the purchasers or underwriters of an investment with respect to certain matters, including the accuracy of any such representations or disclosure documents or with respect to certain potential liabilities or other obligations. These arrangements may result in the incurrence of accrued expenses, liabilities or contingencies, which shall be borne by such Fund and for which the relevant general partner may cause the Fund to establish reserves or escrow accounts. In that regard, distributions, including final distributions, to the Investors will be subject to any such reserves or holdbacks and the Investors may be required to return amounts distributed to them to fund the Fund’s indemnification obligations or other Fund obligations arising out of any legal proceeding against the Fund, subject to certain limitations set forth in the Governing Documents. Furthermore, each Investor that receives a distribution in error or in violation of applicable law will, under certain circumstances, be obligated to recontribute such distribution to the relevant Fund.
Debt Investments in Portfolio Companies
A Fund may make investments in debt acquired with the aim of allowing the Fund to establish a control position, gain influence in a restructuring process or access information. In addition, a Fund may also make passive debt investments. Debt instruments may include, but will not be limited to, bank debt (e.g., first- and second-lien debt), bonds and other fixed income instruments. Such debt may be unsecured and structurally or contractually subordinated to substantial amounts of senior indebtedness, all or a significant portion of which may be secured. Moreover, such debt investments may not be protected by financial covenants or limitations upon additional indebtedness and there is no minimum credit rating for such debt investments. Other factors may materially and adversely affect the market price and yield of such debt investments, including, investor demand, changes in the financial condition of the applicable issuer, government fiscal policy and domestic or worldwide economic conditions. Debt investments involve different and additional risks than investments in equity, including credit risk, interest rate risk, subordination risk and other risks. Moreover, different types of debt instruments involve different types of risk. For example, investments in bank debt involve certain unique risks, including, without limitation: (i) the possible invalidation of an investment transaction as a fraudulent conveyance under the applicable creditors’ rights laws; (ii) so-called lender liability claims by the issuer of the obligations; (iii) environmental and/or other liabilities that may arise with respect to collateral securing the obligations; (iv) adverse consequences resulting from participating in such instruments with other institutions with lower credit quality; and (v) limitations on the ability of a Fund to directly enforce its rights with respect to bank participations. Certain debt instruments that a Fund may invest in may be or become non-performing and possibly in default. Furthermore, the obligor or relevant guarantor may also be in or enter bankruptcy or liquidation. There can be no assurance as to the amount and timing of payments, if any, with respect to any such debt instruments. Further, loans may become non-performing for a variety of reasons and borrowers on loans constituting a Fund’s assets may seek the protection afforded by bankruptcy, insolvency and other debtor relief laws. Upon a bankruptcy filing in a U.S. Bankruptcy Court by an issuer of debt, the Bankruptcy Code imposes an automatic stay on payments of its pre-petition debt. Other protections in such proceedings may include forgiveness of debt, the ability to create super-priority liens in favor of certain creditors of the debtor and certain well-defined claims procedures. Non-performing debt obligations may require substantial workout negotiations, restructuring or bankruptcy filings that may entail a substantial reduction in the interest rate, deferral of payments and/or a substantial write-down of the principal of a loan or conversion of some or all of the debt to equity. Insolvency laws may, in certain jurisdictions, result in a restructuring of the debt without the relevant Fund’s consent under the “cramdown” provisions of applicable insolvency laws and may also result in a discharge of all or part of the debt without payment to the Fund. If an issuer were to file for Chapter 11 reorganization, the Bankruptcy Code authorizes the issuer to restructure the terms of repayment of a class of debt even if the class fails to accept the restructuring as long as the restructured terms are “fair and equitable” to the class and certain other conditions are met.
Investments in Less Established Companies
A Fund may invest a portion of its assets in the securities of less established companies, or early stage companies. A Fund may create new companies by acquiring and combining various non-core assets through complex corporate carve-out transactions. Investments in such companies may involve greater risks than those generally associated with investments in more established companies. For instance, less established companies tend to have smaller capitalizations and fewer resources and, therefore, are often more vulnerable to financial failure. Such companies also may have shorter operating histories on which to judge future performance and in many cases, if operating, will have negative cash flow. In the case of start-up enterprises, such companies may not have significant or any operating revenues. In addition, less mature companies could be more susceptible to irregular accounting or other fraudulent practices. Although KPS believes it is skilled in recognizing potential value where other investors do not, KPS may not be able to successfully implement its value creation plans with respect to all portfolio companies. This risk may be maximized with respect to newly formed and other less established companies. Furthermore, to the extent there is any public market for the securities held by a Fund, securities of less established companies may be subject to more abrupt and erratic market price movements than those of larger, more established companies. Some of the portfolio investments expected to be made by a Fund should be considered highly speculative and may result in the loss of such Fund’s entire investment therein. There can be no assurance that any such losses will be offset by gains (if any) realized on a Fund’s other investments.
Investments in Public Companies
A Fund may invest in public companies (subject to the restrictions in the relevant Governing Documents) or take private portfolio companies public. Investments in public companies may subject the relevant Fund to risks that differ in type or degree from those involved with investments in privately held companies. Such risks include movements in the stock market and trends in the overall economy, greater volatility in the valuation of such companies, increased obligations to disclose information regarding such companies, limitations on the ability of such Fund to dispose of such securities at certain times (including due to the possession by such Fund of material non- public information), increased likelihood of shareholder litigation against such companies’ board members, which may include KPS personnel, regulatory action by the SEC and increased costs associated with each of the aforementioned risks. In addition, it is not expected that a Fund will be able to negotiate additional covenants or other contractual rights that it may otherwise be able to obtain in making privately negotiated investments. Moreover, a Fund may not have the same access to information in connection with investments in public companies, either when negotiating a potential investment or after making an investment, as compared to privately negotiated investments. An investment may be sold by a Fund to a public company where the consideration received is a combination of cash and stock of the public company, which may, depending on the securities laws of the relevant jurisdiction, be subject to lock-up periods.
Minority Investments
A Fund may accumulate minority positions in the outstanding voting stock, or securities convertible into the voting stock, of potential portfolio companies. Minority position investments means that a Fund may not have the right to exert significant influence and would be significantly reliant on the existing management teams and boards of directors of such companies (which may include representatives of other investors with whom such Fund is not affiliated and whose interests may conflict with the interests of such Fund). While KPS will seek to achieve such accumulation through open market purchases, registered tender offers, negotiated transactions, or private placements, a Fund may be unable to accumulate a sufficiently large position in a target company to execute its strategy. In such circumstances, a Fund may dispose of its position in the target company within a short time of acquiring it and there can be no assurance that the price at which such Fund can sell such stock will not have declined since the time of acquisition. This may be exacerbated by the fact that stock of the companies that a Fund may target may be thinly traded and that such Fund’s position may nevertheless have been substantial and its disposal may depress the market price for such stock.
Middle Market Companies
A Fund may invest in middle market companies. Although investments in middle market companies may present greater opportunities for growth, such investments may also entail larger risks than are customarily associated with investments in larger companies. Middle market companies may have relatively limited product lines, markets, and financial and other resources. As a result, such companies may be more vulnerable to general economic trends and to specific changes in markets and technology. In addition, future growth may be dependent on additional financing, which may not be available on acceptable terms when required. Further, there is ordinarily a more limited marketplace for the sale of interests in smaller, private companies, which may make realizations of gains more difficult. In addition, the relative illiquidity of private equity investments generally, and the somewhat greater illiquidity of private investments in middle market companies, could make it difficult for a Fund to react quickly to negative economic or political developments.
Technological Innovations
Current trends in the market generally have been toward disrupting a traditional approach to an industry with technological innovation, and multiple young companies have been successful where this trend toward disruption in markets and market practices has been critical to their success. In this period of rapid technological and commercial innovation, new businesses and approaches may be created that will compete with a Fund and/or its investments or alter the market practices a Fund’s strategy has been designed to function within and depend on for investment return. Any of these new approaches could damage a Fund’s investments, significantly disrupt the market in which it operates and subject it to increased competition, which could materially and adversely affect its business, financial condition and results of investments. In addition, technological innovations and changes serve an important role in the type of manufacturing companies such as those in which a Fund intends to invest. In particular, technological innovations, including advances in process technology and introductions and enhancements of manufacturing equipment, are key for manufacturing companies to maximize product quality and reduce production costs and, consequently, to protect their competitive positioning. A portfolio company’s future growth and financial performance will depend in part upon such portfolio company’s ability to develop, market and integrate new services and to accommodate the latest technological advances and customer preferences. The failure of a portfolio company to develop (if applicable) or implement new technology will result in such portfolio company not remaining competitive in its field and such portfolio company’s revenues decreasing over time.
Environmental Hazards
Some of the Funds’ portfolio companies may generate, emit, store, transport and arrange for disposal of hazardous materials as a consequence of their operations, and therefore could be subject to numerous and extensive environmental, health and safety laws and regulations in respect of their operations. These include laws and regulations with respect to the airborne emission of hazardous materials, the discharge of hazardous materials to receiving water bodies, and the use, management, treatment, storage and disposal of such materials. Compliance with these laws and regulations and the procurement of necessary operating permits and licenses can be costly, and failures to comply can result in material monetary civil and criminal sanctions. Businesses with material air emissions may also face increasing regulation, and increasingly strict emission standards, as a result of programs in the United States and elsewhere to reduce carbon and other greenhouse gas emissions. In addition, under environmental laws enacted by the United States and various states, owners of real property may be liable for the clean-u please register to get more info

KPS and its employees have not been involved in any legal or disciplinary events in the past 10 years that would be material to an Investor’s evaluation of KPS or its personnel. please register to get more info

Related persons of KPS are expected from time to time to serve as directors and officers of, and provide advice to, publicly traded companies and private companies. Investors should be aware that receipt of material non-public information by KPS’s related persons regarding these companies could preclude KPS from effecting transactions in the securities of such companies. Any compensation received by KPS employees for directorships with portfolio companies of the Funds will be deemed to be “Transaction Fees” and will reduce the management fees otherwise payable by the applicable Fund (as described in the Fees and Compensation section above). Certain of the related persons of KPS may have personal investments in companies, limited partnerships or limited liability companies. To the extent that conflicts arise, they are reviewed by KPS’s Chief Compliance Officer. Expenses borne by the Funds are allocated among any parallel funds, alternative investment vehicles, co-investment vehicles, and other entities that comprise the Funds that shared in the activities generating such expenses; however, in the event that a co-investment opportunity is not consummated, and prospective co-investors do not agree to bear their share of any broken deal expenses, such expenses will be considered operating expenses of and be borne by the applicable Funds. KPS reserves the right to occasionally utilize the services of entities that have, directly or indirectly, or whose affiliates have, investments in the Funds. Such services will only be used on an arm’s length basis and when KPS determines they are in the best interest of the Funds. KPS Capital Finance Management, LLC (“KPS Finance Management”), a wholly-owned subsidiary of KPS, serves as administrative agent and/or collateral agent for certain subordinated or second- lien loans made by the Funds to their respective portfolio companies as part of acquisition financing. KPS Finance Management does not charge the Funds or their portfolio companies for its services, nor does it otherwise generate revenue in the ordinary course. However, if a portfolio company defaults on its obligations with respect to any such loan, the interests of KPS Finance Management and the interests of the Funds that issued the loan will potentially conflict with respect to KPS Finance Management’s exercise of any of its default remedies with respect to such loan. It is KPS’s policy that, in exercising such default remedies, KPS Finance Management will at all times act in the best interests of the Funds that provided the loan. Any cash or securities received by KPS Finance Management as a result of the exercise of such default remedies against a portfolio company will be deposited with a qualified custodian on behalf of the applicable Funds. Any other assets received by KPS Finance Management as a result of the exercise of default remedies against a portfolio company will be held for the benefit of the applicable Funds and the proceeds of any sale of such assets shall be deposited with a qualified custodian on behalf of the applicable Funds. please register to get more info

Personal Trading
KPS employees must put the interests of the Funds before their own personal interests and must act honestly and fairly in all respects in dealings with the Funds and Investors. KPS has adopted a Code of Ethics and related internal compliance policies and procedures which govern, among other things, the personal trading activities of its employees. Among other requirements, all employees must obtain pre-approval from the Chief Compliance Officer or his designee for certain personal trades and must also periodically report personal securities accounts in which they hold a beneficial interest, including certain related holdings and transactions. Should potential conflicts of interest arise, KPS employees have an ongoing responsibility to report such conflicts to the Chief Compliance Officer or his designee, who will address such conflicts on a case-by-case basis. KPS has also adopted compliance policies and procedures regarding gifts and entertainment as well as charitable and political contributions. The Chief Compliance Officer or his designee will periodically review employee personal trading activity to confirm that transactions are being conducted in accordance with KPS’s internal compliance policies and procedures. Investors or prospective Investors may obtain a copy of the Code of Ethics by contacting KPS at (212) 338- 5100. KPS and its affiliates expect to from time to time incur expenses on behalf of one or more existing or subsequent Funds. In such cases, KPS and its affiliates will attempt to allocate such expenses on a basis that it considers equitable under the circumstances. From time to time, KPS employees expect to receive and utilize discounts or complimentary services not otherwise available to the public from a KPS portfolio company or other business relationship. KPS and its portfolio companies have entered group purchasing arrangements with certain third-party vendors. KPS does not receive any direct group purchasing fees as a result of these arrangements and participates on the same terms as its portfolio companies. Any applicable incentive rates or rebates are either applied across KPS and its portfolio companies or paid directly to KPS and its portfolio companies, based on the amount of their respective purchases. KPS and its related persons make decisions separately with respect to each Fund. From time to time, a decision that is in the best interest of one Fund may not be in the best interest of, or may be detrimental to, another Fund. KPS will resolve any such conflicts in accordance with any applicable policies and procedures and consistent with its duties to the Funds. In certain cases, KPS reserves the right to seek the approval of the Advisory Board(s) of the applicable Fund(s) for its proposed course of action. Any decisions of an Advisory Board authorized by the Governing Documents are binding on the Investors of the applicable Fund. MDRJ Credit Partners, LP (“MDRJ LP”) is owned and controlled by the Principals. MDRJ LP was formed in 2014 to permit the Principals to invest in term debt securities issued by portfolio companies of certain Funds, up to a maximum amount of 5% of any such issuance, on terms and conditions no less favorable to the applicable portfolio company than the terms and conditions available to third-party investors in such issuance. A similar vehicle, KPS Credit Partners, LP (together with MDRJ LP, the “Credit Partners Vehicles”) was formed in 2019 and includes participation by KPS Partners other than the Principals. If a portfolio company defaults on its obligations with respect to any such securities, the interests of the relevant Credit Partners Vehicle and the interests of the portfolio companies that issued the securities may conflict with respect to the Credit Partners Vehicle’s exercise of any of its default remedies relating to such securities. However, the size of a Credit Partners Vehicle’s investments in debt issued by portfolio companies is limited with the intention that the relevant KPS Partners’ indirect interest in any portfolio company of the Funds should outweigh their interests in the portfolio company as a result of debt investments held by the relevant Credit Partners Vehicle. Furthermore, it is KPS’s policy that, in exercising any default remedies, a Credit Partners Vehicle will at all times act in the best interest of the Funds that invested in the portfolio companies that issued the securities. The Principals will disclose the amount of term debt securities purchased by each Credit Partners Vehicle to the advisory board of the relevant Funds on an annual basis. KPS and its related persons expect to, from time to time, come into possession of material, nonpublic and other confidential information which, if disclosed, might affect an investor’s decision to buy, sell or hold a security. Under applicable law, KPS and its related persons are prohibited from improperly disclosing or using such information for their own benefit or for the benefit of any other person, regardless of whether such person is a Fund. By reason of its responsibilities to the Funds and notwithstanding procedural safeguards including restricted securities lists, KPS expects to acquire material nonpublic or other confidential information that would limit its ability to direct the purchase or sale of certain investments. Moreover, KPS may be restricted from initiating transactions in certain instruments or selling certain investments, due to its possession of material nonpublic or other confidential information, at a time when it would otherwise take such action. KPS and certain of its affiliated parties and employees are Investors in the Funds. As such, KPS and certain of its affiliated parties and employees have a direct financial interest in the transactions of each of the Funds. While investments by such related parties are intended to align the interests of KPS and the related parties with those of the Funds, such investments create potential conflicts of interest. To address such conflicts, the investment arrangements are described and agreed upon in the Governing Documents of each Fund. Generally, investments and dispositions are made on the same economic terms for all Investors, including KPS and its related parties and each investment is made pro rata among the Investors of each Fund, including KPS’s related parties who are Investors, so that KPS and its related parties may not receive more favorable terms or greater exposure to certain investments. please register to get more info

KPS’s business is to focus on making investments in private securities. Accordingly, it does not typically trade in public securities. In the limited circumstances where KPS purchases or sells public securities or holds such securities as a result of a portfolio company going public, it intends to follow applicable SEC guidelines and to seek to obtain best execution of such transactions. KPS does not have any formal soft dollar arrangements or other arrangements that would commit the Funds to any specific or implied level of trading. As an institutional money manager, KPS expects to receive access to research made available through brokerage counterparties or investment banks. KPS believes this research is available to all institutional money managers of similar size. KPS strives to select broker-dealers, investment banks or financial intermediaries that provide the Funds with favorable execution capabilities and qualities. Certain entities are utilized for the Funds due to their presence in specific markets and their ability to trade certain securities or complete specialized types of transactions. Research or additional ancillary services not associated with the transaction provided by such service providers are not determining factors for engaging a particular service provider. please register to get more info

As noted above, KPS focuses on investments in private equity. Prior to being made, all investments are carefully reviewed and approved by the Investment Committee for the applicable Fund. The progress of all portfolio companies is monitored on a regular basis, including monthly review calls conducted by staff of the KPS Ops Group with company management, and is subject to supervision and review by KPS’s senior management. KPS’s Valuation Committee reviews the valuation of the Funds’ investments quarterly in accordance with its valuation policy.

KPS also exercises oversight of its investments through representation on the board of directors of its portfolio companies. KPS generally requires that its portfolio companies report their financial condition on a monthly basis and hold regular board meetings. In addition, KPS generally conducts meetings on at least a monthly basis to review the financial condition of each investment with the members of the applicable deal team. KPS provides quarterly and annual reports (including annual audited financial statements) to each of the Funds’ Investors in accordance with the terms of the Governing Documents of the Funds. In addition, each Investor receives annual tax information with respect to the Funds as necessary for the completion of any applicable Federal tax returns. please register to get more info

In certain circumstances, KPS expects to, pursuant to a written agreement, pay cash consideration for solicitation activities to third parties. KPS intends to pay such consideration in compliance with applicable SEC rules and other laws and regulations that may be in effect from time to time. As discussed under “Fees and Compensation” above, “Transaction Fees” will, in certain circumstances, be paid to KPS-affiliated parties by a portfolio company. please register to get more info

To the extent required, the assets of the Funds are held in custody by unaffiliated broker/dealers, banks or other qualified custodians. KPS is deemed to have access to Investor accounts since its affiliates serve as the general partners of the Funds. Investors will not receive statements from the custodian. Instead, the Funds are subject to an annual audit by an independent public accountant that is registered with, and subject to regular inspection by, the Public Company Accounting Oversight Board, and the audited financial statements are distributed to each Fund’s Investors. The audited financial statements are prepared in accordance with generally accepted accounting principles and distributed within 120 days of each Fund’s fiscal year end. please register to get more info

The Governing Documents of each Fund grant KPS’s affiliated management entities and affiliated general partners discretionary authority to implement investment decisions on behalf of the Funds and to utilize a broad range of investment vehicles. KPS’s investment decisions and advice with respect to each Fund is subject to the limitations set forth in such Fund’s Governing Documents and any side letters that it executes with Investors. please register to get more info

The Funds are primarily invested in private companies which typically do not issue proxies. In the event that a Fund acquires equity positions or other positions in entities that may solicit proxies, KPS will follow applicable policies and procedures to vote such proxies. As is typical in private equity investing, KPS generally approves one or more of its employees to act as representatives on the board of directors of portfolio companies on behalf of the Funds. As noted herein, the KPS Partners serve as board members of the Funds’ portfolio companies in such representative capacity. In situations where KPS votes the proxy for a company in which an employee or employees of KPS serve on the board of directors, KPS has determined that this does not inherently present a conflict of interest as (a) the employee is on the board of directors as a representative of the Funds and (b) the sole purpose of this representation is to maximize the return on the Funds’ investment in such company and to ensure that the Funds’ interests are protected. Given these facts, the Funds and the representative’s role are aligned with respect to proxy voting and otherwise. In the event that one or more of the Funds becomes involved in any class actions, KPS and the general partner(s) of the applicable Fund(s) will use their discretionary authority to act in what they believe to be the best interests of the Funds in directing their participation in such class actions. please register to get more info

KPS has never filed for bankruptcy and is not aware of any financial condition that is expected to affect its ability to manage client accounts. please register to get more info