Item 5. Fees and Compensation
ARC receives various fees from the Fund that were negotiated at the time of formation. The specific
manner in which ARC charges fees for a Fund is established in the Fund’s Governing Documents. ARC
and/or its affiliates will generally earn the following compensation from the Funds: (1) a management fee
as set forth in the applicable Governing Documents; and (2) performance-based compensation calculated
upon a specified percentage of the Fund’s return on its invested capital.
The commitment-based management fee (the “Management Fee”) is paid to ARC periodically in
accordance with the terms of the Fund’s Governing Documents and generally ranges from 1.0% to 1.75%
of commitments. Management Fee rates typically decrease after each relevant vehicle’s investment
period expires. The Management Fee payable for any payment period that is less than a complete
calendar quarter or year, as applicable, shall be calculated on a pro rata basis to reflect the actual number
of days during such payment period to which the Management Fee relates. The Management Fee shall be
assessed in addition to the amount committed by Limited Partner in a Fund as its capital commitment.
ARC may decrease, or waive in whole or in part, the Management Fee for any Limited Partner.
All fees are subject to negotiation, and existing and future Limited Partners may have differing fee
arrangements. It is critical that potential Limited Partners refer to the Fund’s Governing Documents for a
complete understanding of how ARC is compensated for its advisory services. The information contained
herein is a summary only and is qualified in its entirety by such documents.
Organizational Fees and Expenses
Each Limited Partner will be required to pay its pro rata share, based on its commitments, of its third-
party out-of-pocket expenses incurred by the general partner (the “General Partner”) in connection with
the organization of the Fund. The Fund is responsible for the organizational fees and expenses incurred
in connection with the creation, and the marketing and offering of interests in such Fund, including all
legal, accounting and filing expenses, printing costs, travel and accommodation expenses, and other
related fees and expenses (the “Organizational Expenses”). The General Partner may decrease, or waive
in whole or in part, the Organizational Expenses for any Limited Partner.
Fund Expenses
Except as may otherwise be expressly provided in the applicable Governing Documents, the Fund
shall pay its Management Fee and shall be responsible for paying or reimbursing the General Partner
directly for all out-of-pocket fund expenses (the “Fund Expenses”), which the General Partner may
decrease, or waive in whole or in part, for any Limited Partner.
Unless decreased or waived by the General Partner, the Fund will be responsible for paying all of its
administrative, operating, offering and organizational costs, including, but not limited to, broken deal
expenses, fees and expenses arising out of borrowings made by the Fund, professional, legal and
consulting fees, fees associated with board meetings, regulatory and compliance costs, and fees and
expenses related to any investments into a trading company or other vehicle such as travel, as such
expenses are incurred.