Item 5. Fees and Compensation
Fees – Pooled Investment Vehicles
We are generally entitled to two types of fees from the Fund: (i) an asset-based management fee; and (ii) an
incentive allocation based upon the performance of the Fund.
We offer a single class of limited partnership interests (“Partnership Interests”) in the Fund.
The management fee is 1.00% per year of the Fund’s net assets and is determined and payable quarterly in
advance.
The incentive allocation is 20% of the net profits of the Funds that are in excess of a “hurdle amount” (as
described below) for the relevant period attributable to an investor’s Partnership Interest in the Fund. The
incentive allocation is determined and allocated on an annual basis but will be determined and allocated for
shorter periods under certain circumstances (such as with respect to amounts withdrawn from the Fund).
The incentive allocation is subject to a relative high water mark provision that generally requires that any
underperformance suffered by the Funds (adjusted to reflect withdrawals) be offset by subsequent
outperformance before we are entitled to subsequent incentive allocations from the Fund. The “hurdle
amount” is equal to the net asset value of an investor’s Partnership Interest in the Funds multiplied by the
performance of the S&P 500 Total Return Index.
The details of how the fees are calculated for the Funds can be found in the Governing Documents of the
Funds, which are provided to prospective and current investors. RDST, in its sole discretion, may waive or
modify the management fee or redemption terms. From time to time, certain investors negotiate fee or
liquidity terms that differ from the general terms summarized in this Brochure, as permitted by the Fund’s
governing documents.
The management fees payable by the Funds are deducted from the assets of the Funds and paid to RDST or,
in the case of investment allocations, are reallocated from the capital accounts of investors and into our
capital account.
As noted above, management fees payable by the Funds are payable quarterly in advance. Fund Investors
will be subject to a pro rata management fee with respect to any subscription to the Funds made other than
at the beginning of a quarter based upon the portion of the quarter for which the assets were invested. If an
Investor makes a withdrawal request that would return any portion of his or her capital account on a date
that is not quarter end, and such withdrawal request is granted by the Firm, the Investor will not be entitled
to reimbursement of any portion of the management fee paid in advance from such Investor’s capital account
in respect of the calendar quarter during which such withdrawal occurs.
Investments in the Funds are subject to an aggregate 36-month lock-up period following the date of an
Investor’s initial investment in the Funds (the “Lock-up Period”), after which the Investor may withdraw
all or a portion of any investment on not less than 60 days’ prior written notice, as of the last business day
of any calendar quarter. Payment shall be made to an Investor withdrawing over 95% of the balance of his
or her capital account (as of the date of the withdrawal) in the following manner: (i) 95% of the amount of
his or her capital account withdrawn, within 30 days of the effective date of the withdrawal; and (ii) the
balance of the amount of his or her capital account withdrawn, within 30 days following delivery of the
audited financial statements of the Funds for the fiscal year in which such withdrawal date occurs. At the
option of the Firm, the amount of the withdrawal may be paid in whole in cash, in whole in kind, or in part
cash and part in kind.
Notwithstanding the previous paragraph, Investors have a right to terminate their subscription in our Funds
without penalty within five business days after executing the subscription documents if RDST Capital
LLC’s ADV Part 2 was not delivered at least 48 hours prior to such execution.
Expenses – Pooled Investment Vehicles
The Funds pay, or reimburses us or the Funds’ administrator for, all reasonable operating expenses and other
costs of the Funds that we are not required to bear including, but not limited to:
• accounting, bookkeeping, tax and auditing fees and expenses (including the allocable share of the
costs, fees and expenses relating to accounting and tax preparation);
• legal fees and expenses, including, but not limited to, fees and expenses incurred in connection with
any offering of interests in the Funds, Fund contracts and investments;
• all fees and disbursements of the Funds’ and the Firm’s attorneys, consultants and other third parties
performing work benefiting the Funds or otherwise in connection with the Funds’ investment
activities (including, without limitation, the legal and other fees, costs and expenses of such parties
in or related to any proxy contest or other shareholder initiative or proceeding and in any threatened
or actual litigation or governmental investigation or proceeding, and the amount of any judgments or
settlements paid in connection with such proxy contest, shareholder initiative or litigation, or fines
or penalties levied as a result of any such investigation or proceeding);
• insurance and bonding costs;
• all trading expenses and transaction costs, including, but not limited to, brokerage commissions,
clearing and settlement charges, expenses relating to short sales, interest on loans and debit
balances, margin interest, broker service fees and other clearing and custodial expenses;
• fees or assessments in connection with any regulatory registrations, qualifications and/or approvals
of the Funds or the Firm, and related compliance fees and expenses, deemed appropriate by the
Firm including, without limitation, Form PF (Reporting Form for Investment Advisers to Private
...