Item 5 – Fees and Compensation
Ranger Private Funds
Investors in the Private Funds are generally charged advisory fees in accordance with the advisory
fee schedule set forth in the applicable offering documents of such Private Fund. However, at
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Ranger’s sole discretion, advisory fees between the Private Funds and investors of the Private
Funds may be negotiable based on specific circumstances and on a case by case basis, including
without limitation due to the relative size of an investor’s account, an investor’s affiliation to
Ranger, and/or an investor’s status as a seed investor. Accordingly, advisory fees incurred by
investors may vary substantially.
Advisory Fees are generally deducted from investor assets, with the exception of certain Separate
Accounts, which may request that fees be billed to and paid directly by the investor.
Investors in Private Funds may be subject to two forms of advisory fees: (i) fees which are charged
as a fixed percentage of assets under management by the Firm (“Management Fees”), and (ii) fees
which are charged as a percentage of the appreciation of the net asset value of an investor’s account
(“Performance Fees” and together with Management Fees, the “Advisory Fees”).
Management Fees are generally referenced at an annual rate, but are calculated and charged in
advance on a quarterly basis, based on the assets under management attributable to the investor as
of the first day of such applicable quarter. Management Fees with respect to the Enhanced Classes
are charged as a percentage of (i) the net asset value of such Enhanced Classes, and (ii) any capital
attributable to leverage on behalf of such Enhanced Classes, and (iii) the notional value of
derivatives and/or structured products employed by the Enhanced Classes. As such, Management
Fees will correlate to gross assets under management by the Firm, the amount of which is increased
in proportion to the leverage employed by the Enhanced Classes and/or the notional value of any
structured product. To the extent that an investor in a Separate Account or Private Fund redeems
its investment, all fees paid in advance for dates subsequent to such applicable redemption date
shall be promptly refunded by Ranger.
Performance Fees are generally referenced, calculated and charged on an annual basis (or upon the
full or partial redemption of an investor’s account). Performance Fees may be subject to “high
water marks”, which only permit the payment of Performance Fees to the extent that appreciation
in an account’s net asset value exceeds the net asset value of such account as of such time as when
a prior Performance Fee was charged (or the date in which an investor’s account was opened).
Performance Fee calculations may also be subject to a “Performance Hurdle Rate” whereby a
Performance Fee percentage or the underlying appreciation of an investor’s account appreciation
may be reduced by a variable percentage correlating to a benchmark such as 3-Month Libor.
With respect to Private Funds, the Firm generally charges (i) an annual Management Fee of
between one percent (1%) and one and one half percent (1.5%), and (ii) an annual Performance
Fee in an amount between five percent (5%) and fifteen percent (15%). Advisory Fees are
generally calculated and withdrawn from a Private Fund on a quarterly basis by the Firm.
Standard Fee Schedule for Ranger Private Funds
Private Fund Annual Management Fee Performance Allocation or Fee
Ranger Multi-Strategy Fund, Ltd.
Class A One Percent (1.00%) Ten Percent (10.00%) above Hurdle
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Class B One Percent (1.00%) Five Percent (5.00%)
Class A Enhanced One Percent (1.00%) Ten Percent (10.00%) above Hurdle
Class B Enhanced One Percent (1.00%) Five Percent (5.00%)
* Subscriptions to Ranger Private Funds are subject to material terms and conditions, each of which is
detailed in each Private Fund’s private placement memorandum and operative agreements (the “Operative
Documents”). A copy of the Operative Documents for each Private Fund (on a class by class basis) may
be obtained by contacting the Firm at (214) 871-5200.
Enhanced Interests or Shares
When leverage is employed on behalf of the Enhanced Interests and Shares, assets under
management attributable to the Enhanced Interests and Shares increase, thereby increasing the
Management Fees to which an investor is subject in direct proportion to the amount of leverage
employed, including any leverage embedded in the notional value of structured products. For
example, the Firm’s use of 100% leverage on a $1,000 investment increases the amount of capital
invested to $2,000. Accordingly, Management Fees are charged on the $2,000 leveraged capital
amount instead of the original $1,000 investment. With respect to structured products, if the
Enhanced Interests or Shares are invested in a structured product with $1,000 in margin but with
a $2,000 notional value, Management Fees are charged on the $2,000 notional value of the
structured product.
While the Firm has discretionary use of leverage on behalf of the Enhanced Interests and Shares
ranging up to 200%, it is currently not employing leverage and generally targets leverage of up to
100% or below. To the extent that the Firm employs Leverage on behalf of limited partnership
interests or shares, or on behalf of a separately managed account, it shall do so upon the instructions
of such client and indicated within the applicable subscription agreement or separately managed
account agreement.
Multiple Layers of Fees and Expense
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