Item 5: Fees & Compensation
RDC receives fees for investment advisory services based on the amount of assets under
management and as disclosed in the respective Fund offering documents and investment
management agreements. The management fee is payable quarterly in advance and
calculated based on the balance in each investor’s capital account (or net asset value of
shares, in the case of the Offshore Feeder Fund), in an amount equal to 0.500% (2.0%
annualized) for Class A Interests, and 0.375% (1.5% annualized) for Class B and Class F
Interests. Management fees are calculated by a third party administrator and are paid by
the Master Fund. Investors in the Funds who withdraw at any time, other than at the end
of a calendar quarter, may not be reimbursed a portion of the management fee.
The Management Fee with respect to certain investors, including, without limitation,
affiliates of the Investment Manager and/or the General Partner, may be waived, reduced
or otherwise modified by the Investment Manager in its sole discretion. RDC has
discretion to waive, reduce or rebate the Management Fee with respect to the investment
of one or more investors without notifying the other investors in the applicable Fund,
provided that no such waiver or reduction will adversely impact any other Limited
Partner or cause an increase in the Management Fee borne by a Limited Partner as a result
of such waiver, reduction or modification.
Expenses
Pursuant to the offering documents, the Funds bear all expenses associated with their
investments and operations. These include, without limitation, all transaction costs
relating to the Funds’ investments (including expenses related to the investments of the
Funds’ assets such as brokerage commissions and other transaction costs, research, due
diligence and negotiation expenses (whether or not the related investment is
consummated); fees for data and software providers, clearing and settlement charges,
custodial fees, margin and interest expenses and commitment fees on debit balances or
borrowings and any issue or transfer taxes chargeable in connection with any securities
transactions); consulting, legal and other professional fees relating to potential and actual
investments, expenses of professionals providing services to the Funds, including legal,
audit and tax preparation expenses; directors’ fees; the fees and expenses of Advisory
Committee; accounting fees; administration fees and expenses (including fees and
expenses of the Administrator); fees and expenses for risk management services;
insurance expenses, including costs of any liability insurance obtained on behalf of the
Funds (including, without limitation, directors and officers of insurance), directors’ fees
and expenses, organizational expenses, fees and expenses related to compliance with the
rules of any self-regulatory organization or applicable law in connection with the
activities of the Funds, including, without limitation, any governmental, regulatory,
licensing, filing or registration fees or taxes (including, without limitation, fees and
expenses incurred in connection with the preparation and filing of Form PF, Form D
notice filings, and Commodity Pool Operator filings), costs of reporting and providing
information to investors, Management Fees, Performance Fees (as defined below), any
entity-level taxes, costs of any litigation or investigation involving Fund activities,
indemnification expenses, any extraordinary expenses, and all other costs and expenses
related to the Funds’ business and operations.
It is anticipated that most investment related expenses and certain other expenses,
including without limitation, the Management Fee, will be incurred by the Master Fund,
and the U.S. Feeder Fund and Offshore Feeder Fund will be responsible for its’ pro rata
portion of such expenses. A portion of the Funds’ operating expenses may be shared with
other investment entities or accounts managed by the General Partner, Investment
Manager or any of their respective affiliates on an equitable basis. Organizational costs
of the Funds and the costs incurred in connection with the initial issuance of Interests,
including legal and accounting fees, ISDA agreement negotiation, document production
and printing costs, federal and state filing fees, and other related expenses, have been
paid for by the Funds and are expected to be amortized over a period of 60 months.
The Funds will incur brokerage and other transaction costs. Item 12 further describes the
factors that RDC considers in selecting or recommending broker-dealers for transactions
and determining the reasonableness of their compensation.
The General Partner also receives from each Fund an annual performance-based fee (refer
to “Item 6 - Performance Based Fees and Side-by-Side Management” below for additional
information).
Item 6: Performance Fees & Side-by-Side Management
The General Partner receives an annual performance fee from the Master Fund (the
“Performance Fee”) equal to a percentage of the excess net realized and unrealized profits
over net realized and unrealized losses attributable to the Master Fund during each fiscal
year (subject to a “high water mark”). The Performance Fee is equal to 20% for the Class
A and Class B Interests and 15% for the Class F Interests. If an investor is permitted or
required to withdraw capital from the Fund other than at the end of a fiscal year, the
Performance Fee with respect to the portion being withdrawn will be determined
through the applicable withdrawal date.
In general, a "high-water mark" means that the General Partner will receive Performance
Fees on an investor's aggregate investment in a Fund only when the value of the
investment, at the time of determination, is higher than the investment's highest value as
of the date of the most immediately preceding determination of whether a Performance
...