Item 5. Fees and Compensation
Citi Alternatives offers investment management and advisory services for a percentage of assets
under management or fees based on performance as described below and in Item 6, and such fees
are based upon the scope of the engagement and the services required by the relevant Feeder, Fund
of Funds, Co-Investment Fund, or Managed Account and disclosed in the relevant investment
advisory agreement or account documentation, as applicable. As among Feeders, Funds of Funds
and Co-Investment Funds, fees differ based upon a number of factors, including the structure of
such Feeder, Fund of Funds or Co-Investment Fund and the complexity and trading strategy of
such fund and any relevant Underlying Funds or Co-Investments. For the Managed Accounts, fees
may differ based upon a number of factors, including without limitation, account complexity and
size, assets under management, overall relationship with Citi Alternatives and its affiliates and
relevant negotiated commercial terms, including any relevant investment objectives and
restrictions. As compensation for its investment management and advisory services, Citi
Alternatives’ advisory or management fees are typically calculated based on committed capital,
net asset value, current fair value and/or remaining invested capital, with respect to such Citi
Alternatives’ clients. The amounts of such fees and allocations, including how and when fees are
calculated, charged and paid, and how allocations are calculated and made, are described in detail
in the offering documents for each Feeder, Fund of Funds and Co-Investment Fund and the account
documentation for each Managed Account, and investors and potential investors should review
these materials carefully when making their investment decisions so that they have a complete
understanding of the fees and expenses that can be charged to investors.
The following descriptions of fees are current as of the date of this brochure. Citi Alternatives may
in the future charge other types of fees and use different fee structures, including variations of
performance or incentive fees and allocations (referred to herein as “incentive” fees or allocations),
payment and termination terms. The management fees, other fees and distributions described
herein are generally subject to modification, waiver or reduction by Citi Alternatives in its sole
discretion, both voluntarily and on a negotiated basis with selected investors and clients via side
letter and other arrangements, which may not be disclosed to other investors in the same Citi
Alternatives’ client or other clients. The fee structures described herein may be modified from
time to time. Fees may differ from one Citi Alternatives’ client to another, as well as among
investors in the same Citi Alternatives’ client.
Employees of Citi Alternatives and its affiliates invest in Feeders, Funds of Funds, Co-Investment
Funds and Managed Accounts on the same terms as other clients and generally do not receive any
reductions in management fees and incentive fees and allocations; however, employees that are
Managing Directors receive a 50% discount on placement fees payable to the affiliate distributors.
Additionally, in respect of certain products, employees will be considered affiliated with one
another for purposes of determining applicable fees where the aggregate commitment amount of
any affiliated investors could entitle individual investors to invest in series with lower fees than
the series for which their individual commitment amounts would otherwise make them eligible,
and commitment level requirements that otherwise would apply for an investor to be eligible for a
series or share class have in the past and will in the future be waived by Citi Alternatives and/or
on behalf of its products for certain investors, such as for Citigroup employees and members of
their families.
Fees Charged: Feeder Platforms
Each Feeder will charge a management fee payable to Citi Alternatives (a “Platform Management
Fee”), which fees at present range from 0.00% to 1.00% per annum of assets under management.
Certain Feeders included on the Private Equity and Real Estate Platforms will also charge incentive
fees or incentive allocations (“Feeder Incentive Payments”) allocable or payable to Citi
Alternatives, which fees at present range from 0.00% to 10.00% of profits. The Platform
Management Fee and Feeder Incentive Payments will vary by class and/or series within a Feeder,
and for certain clients investing via Managed Accounts or other Citi advised programs, such clients
will be charged either no fees or a reduced fee (as described below). In addition to the Platform
Management Fee and Feeder Incentive Payments, typically management and incentive fees or
allocations will be paid by the Feeders to the relevant Portfolio Manager based on the assets
invested into the relevant Master Company or Co-investment SPV Vehicle and the performance
they experience. Citigroup Global Markets, Inc. (“CGMI”), an affiliate of Citi Alternatives, CPA
and certain other affiliated placement agents typically also receive from a Portfolio Manager an
investor servicing fee (“Servicing Fees”). In addition, in some cases, Citi Alternatives’ affiliated
placement agents will also receive an incentive fee or allocation from the Portfolio Manager which
represents a portion of the management fees and incentive fees or allocation, respectively, paid to
such Portfolio Manager (“Incentive Payments”). In addition, affiliated placement agents typically
will also receive from the Portfolio Manager a one-time distribution fee based on the amounts
invested by the Custom PERE Portfolios, Feeders and clients who invest directly in the relevant
Underlying PERE Fund, Master Company or Co-investment SPV Vehicle (“Upfront Fees”). In
certain cases, Citi Alternatives’ affiliated placement agents will receive a non-solicitation fee from
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