Item 5 - Fees and Compensation
Fees
The Adviser typically charges fees that are based upon a set percentage of assets under management
(“AUM”) and/or performance for the Funds, and percentage of AUM/AUM Equivalent for the Sub-Advised
Accounts. Set forth below are summaries of the fees payable by investors in the Funds and Sub-Advised
Accounts. It should be noted that detailed disclosure about the fees and other expenses applicable to an
investment in the Funds are provided in the respective operative documents. Those documents should
be carefully reviewed prior to making an investment in a Fund.
The Funds are structured such that the Adviser receives compensation commensurate with the respective
class or series of interest in which an investor is invested. Generally, in consideration for investment
management services provided to the Funds, North Reef receives a management fee calculated at an
annual rate dependent upon the aggregate amount of fee-paying assets of the class or series of the
respective Fund. The management fee is typically paid quarterly in advance, calculated and payable based
on the value of the investor’s capital account(s) as of the end of the immediately preceding quarter plus
any new subscriptions or on the date of a contribution if other than the beginning of a quarter. North
Reef in its sole discretion reserves the right to waive, modify or calculate differently the management fee
for certain investors, including for investors that are members, principals, employees or affiliates of the
Adviser or for certain large or strategic investors. Management fees may be refunded for funds withdrawn
at any time other than at the end of a calendar quarter, subject to the discretion of the respective General
Partner to waive quarterly redemption requirements, based on pro rata portion based on the actual
number of days remaining in such partial quarter.
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In addition, with respect to the Funds, the Adviser is eligible to receive an annual performance allocation
reallocated from the capital accounts of each investor to the Adviser. The performance allocation is
calculated based upon an individual investor’s realized and unrealized return over a particular period of
time compared to a “high-water mark” as set forth I the relevant offering documents. Performance
allocations are generally made at the end of each calendar year and as of any date on which a limited
partner makes a withdrawal from a particular Fund. When calculating the performance allocation, the
management fee and all items of income, loss and expense incurred by the Fund will be taken into
account. North Reef in its sole discretion reserves the right to waive, modify or calculate differently the
performance allocation for certain investors, including for investors that are members, principals,
employees or affiliates of the Adviser or for certain large or strategic investors.
Investors in the Funds are generally limited in their ability to terminate their participation in the Funds. In
addition to other redemption and transfer restrictions that are described in the respective Fund's offering
materials, the Funds imposes a “lock-up” period during which investors may not withdraw capital. In
processing withdrawal requests, the Adviser may elect to hold back the investor’s pro rata share of any
capital reserved to fulfill Fund expenses, liabilities or any unpaid management fees.
Neither North Reef nor any of its affiliates or related persons receive commission or transaction-based
compensation related to the sale of interests in the Funds.
With respect to Sub-Advised Accounts, the fees for services paid to North Reef and its affiliates are
established by, and negotiated between, North Reef and each respective sponsor of the Sub-Advised
Accounts (the “Primary Adviser”), who appoints North Reef as the Sub-Adviser. For the discretionary
services provided by North Reef, the Primary Adviser typically pays North Reef a quarterly management
fee in arrears calculated as a negotiated percentage of AUM/AUM Equivalent. In addition to the
management fee, North Reef is eligible to receive a significant percentage of the appreciation of Sub-
Advised Accounts’ assets paid as performance-based/incentive fees or allocations as negotiated, and
where applicable, subject to loss carryforward. Such fee is paid after the removal of allowable income and
expenses calculated in accordance with the terms negotiated between North Reef and the Primary
Adviser.
North Reef negotiates fee waivers and management fee provisions separately with each Primary Adviser.
It is very important that investors refer to the respective Fund’s governing documents for a complete
understanding of how the Adviser is compensated for its advisory services. The information contained
herein is a summary only and is qualified in its entirety by the relevant Fund governing documents.
Other Fees and Expenses
The Funds typically pay their own expenses, as set forth in the respective offering materials. The Funds
will incur other expenses in connection with North Reef’s advisory services that are not included in North
Reef’s fees, including without limitation:
• all general investment expenses (i.e., exchange commissions and expenses, brokerage
commissions, research expenses, data processing costs and expenses, bank service fees,
interest expenses, borrowing charges, custodial expenses, outsourced risk management
advisory and software, investment-related consultants and travel costs that are research-
related and other investment expenses);
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• all administrative, legal, accounting, auditing, record-keeping, tax form preparation,
compliance, and consulting costs and expenses;
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