Item 5: Fees and Compensation
The Companies are compensated for their services in accordance with the terms of the liability company agreement(s)
or limited partnership agreement(s), as the case may be, of each Fund Client and, in some instances, a management
agreement (collectively, the “Fund Agreements”) and any service management or other agreement each may enter
into with Institutional Clients (the “Services Agreement”; together with the Fund Agreements, the “Agreements”).
The following briefly describes the types of fees to which the Companies may be entitled under the Agreements.
• Fees & Compensation: Depending on the Agreement, the Companies may be entitled to: (i)
organizational and operational expenses 2; (ii) management fees; and (iii) a carried interest distribution.
With respect to organizational and offering expenses, the Agreements may provide for a fee equal to
reimbursement of expenses up to a percentage of a Fund Client investor’s capital commitment or a fixed amount.
Unless specifically identified in an Agreement, the Companies do not impose a uniform schedule of management
fees or carried interest for all Clients. Management fees for Fund Clients typically range from .97% to 1.5% of capital
On behalf of its Fund Clients, RPEP made investments in other private equity funds and a certain number of direct investments.
As of the date of this Brochure, RPEP does not anticipate making any further investments on behalf of its Fund Clients.
Commissions & Placement Agent fees: Ridgewood Securities Corporation (“Securities”), an affiliate of RPEP received
commissions and/or placement agent fees pursuant to the terms of the Fund Agreement with an RPEP Fund Client. In addition,
that same RPEP Fund Client also paid commissions to independent broker-dealers that participated in such Fund Client’s
offering. All such fees were paid in accordance with the applicable Fund Agreement. As of the date of this Brochure, neither
RPEP nor RI anticipate sponsoring any new private investment vehicles through independent broker-dealers. Securities ceased
to do business in 2019 and withdrew from registration with FINRA effective Dec. 23, 2019.
commitments during the Fund Client’s investment period. Some Fund Client Agreements provide management fees
as low as .67% for certain anchor investors depending on the size of their commitment to such Fund Client. After
the investment period the fee is typically reduced and calculated on the capital remaining in investments (or
committed or reserved for investment) which have not been disposed of net of permanent write-downs or write-offs.
If employees of RPEP, RI or their affiliates, invest in a Fund Client, such investments do not pay management
fees or carried interest.
The Companies may enter into side letters or other written understandings with investors that have the effect
of establishing rights under, or altering or supplementing, the terms of a particular Fund Client’s Fund Agreement.
RPEP’s compensation is subject to waiver (in whole or in part) or reduction.
• Operational expenses: The Agreements generally provide the terms of the fees and expenses
payable to the Companies. The Fund Agreements generally provide for Fund Clients to reimburse the
Companies for all actual and necessary direct expenses paid or incurred in connection with Fund Clients’
operations to the extent that those expenses (a) were incurred in carrying out the responsibilities assigned to
the Companies by the Fund Agreement and any applicable management agreement and (b) do not constitute
expenses that are paid out of the management fee or organizational and offering expenses (if any) paid by
such Fund Clients. Operational expenses generally include: (i) those of third-party contractors who provide
services to the Fund Clients (such as outside legal counsel, auditors/accountants, engineers, insurance
experts, finders, brokers, consultants) and insurance costs, bank fees, airfare and other similar items; (ii)
direct expenses (e.g. travel expenses) of the Companies’ employees actually incurred with respect to
investment and management activities (including but not limited to locating, investigating, evaluating,
negotiating and completing potential investments of the Fund Clients) to the extent that such charges do not
exceed customary and reasonable amounts and the investment itself does not reimburse such direct expenses;
(iii) expenses incurred in connection with legal and regulatory compliance with applicable laws and
regulations in connection with Fund Client activities, including the investments the Companies manage; (iv)
costs and expenses related to annual meetings of limited partners and advisory committees of Fund Clients;
(v) costs and expenses incurred in connection with investments and other transactions that are not
consummated; (vi) expenses related to limited partner defaults or restructuring or amending Agreements;
(vii) during the investment period of a Fund Client, compensation up to an annual maximum described in
the Fund Agreements of a water-focused operating partner employed by the Companies or an affiliate; and
(viii) other extraordinary expenses. Except in connection with an operating partner, other expenses do not
generally include the costs of the Companies’ internal employees (e.g. wages, bonuses, benefits) or its
overhead (e.g. rent, utilities, office equipment and furnishings).
Service Agreements with Institutional Clients may also provide for the reimbursement of expenses depending
on the services being provided by RPEP or RI, as the case may be.
• Timing of Payments: Offering and organizational expenses, when payable, were generally paid at
...