Item 5 Fees and Compensation
Investment Management Fees
We may charge the Fund investors a management fee for investment management services. The fees,
which may be subject to negotiation, generally range from 1.00% to 1.5% annually, based primarily on
the invested capital or aggregate unreturned capital contributions. Refer to PPM/LPA.
Performance Allocation
The General Partners may also receive performance allocations (“Carried Interest”) from Fund
investors, which generally range from 10% to 20% of profits from all qualified investors in an investor’s
capital account. Carried Interest is allocated after the application of the Fund’s preferred return and
return of capital, as set forth in the relevant Fund documents. We typically do not earn performance-
based fees on the Managed Accounts.
Co-investment Fees
RCF3 shall be entitled to receive from each co-investor in a co-investment (i) an origination fee of 1.0%
of such co-investor’s invested capital in such co-investment and (ii) an asset management fee of
1.00% of such co-investor’s invested capital in such co-investment.
Finance Fees
We may receive from Sponsors a finance fee of up to 2.0%, subject to a minimum, of the equity
investment made by the Funds for new investments.
General
Management fees and/or performance allocations are established at the time of organization of a Fund
and may vary among the Funds, among each Fund investor within a Fund. Specific details of such
compensation and method of calculation are set out in the offering materials, disclosure documents,
investment management agreements, and governing documents of the relevant Funds. We may also
enter into strategic partnerships, side letter agreements, or other arrangements with specific investors
in a Fund whereby such investors receive reductions of management fees and/or performance-based
fees otherwise payable to us and the General Partners with respect to their investments.
Billing Method
Management Fees
Subject to any applicable Fund documents and/or investment management agreements, our
management fees are generally payable quarterly in advance at the beginning of each calendar
quarter. We currently charge one fourth of the annual fee rate each quarter based on the invested
capital value (less management fees paid to date) of a client’s portfolio as of the first day of the current
calendar quarter. We may charge management fees on committed capital in the future for new Funds
and Managed Accounts. For new Fund investors (subject to any applicable Fund documents) and
Managed Accounts, management fees are calculated based on the capital called from the first call
date of the Fund or Managed Account. For management fee calculation purposes, a calendar quarter
is a period beginning on January 1, April 1, July 1, or October 1 and ending on the day before the next
quarter. A day is any calendar day including weekends and holidays.
Management fees charged to the Funds are paid directly from each Fund in accordance with the Fund
documents. We will calculate the management fees for the quarter and initiate a wire or transfer from
each Fund and Managed Account. The Funds and Managed Accounts receive bank statements from
the custodian monthly, and investors receive monthly unaudited account statements. The bank
statement will show the deduction of the management fee and be reflected in the investor’s capital
account statement.
Any performance-based allocations to the General Partners will be paid after the preferred return and
all capital has been returned to investors. The formulas used for the calculation, as well as for any
adjustments for contributions, withdrawals or terminations, are set forth in the applicable Fund
documents.
Other Fees and Expenses
Each Fund bears all fees, costs, and expenses of its organization formation (up to certain amount as
stated in the offering documents), operation, and maintenance, including legal, audit, tax, and
accounting expenses; fees payable for administration, and other professional or expert services; all
expenses and costs of liquidation, all expenses in connection with the identifying, structuring,
negotiating, acquiring, disposing and valuation of assets/investments (regardless of whether or not
such investments are consummated), as determined by RCF3. All clients pay expenses from the
assets in the account. Other Fund expenses can include, but are not limited to: brokers’ fees and
commissions, travel (which may include expense for first class or business travel) and entertainment
expenses, attending research conferences (including airfare, hotel accommodations, and meals), costs
and expenses related to the monitoring of completed investments and broken deal expenses, U.S.
federal, state, and local taxes, filing, and registration fees, fees related to investor communications,
relations, and the preparation of financial, tax, and performance information to investors.
The above charges are in addition to the fees clients pay to RCF3. See Item 12 - Brokerage
Practices below for more information.