Fees and Compensation
The Adviser provides investment advisory services to the Funds pursuant to each Fund’s respective
Governing Documents. The Governing Documents for each Fund set forth, in detail, the fee structure
relevant to each Fund.
As outlined in greater detail in each Fund’s Governing Documents, the Adviser receives the fees described
generally below:
Management Fees.
Management Fees for SCA Funds: SCA deducts fees from the relevant Fund’s account held at a qualified
custodian, based on a percentage of capital the Fund’s investors have committed or contributed to the Fund,
as applicable (“Management Fee”). The Management Fees for each SCA Fund are generally 1.5% per
annum of capital commitments during the relevant Fund’s investment period, and 1.5% per annum of
contributed capital thereafter. For investors who have committed over $1 million, Management Fees for
each Fund generally are 1.0% per annum of capital commitments during the relevant Fund’s investment
period, and 1.0% per annum of contributed capital thereafter. SCA deducts an SCA Fund’s Management
Fees directly from the Fund’s account held at a qualified custodian in advance, on, or promptly after the
first day of each fiscal quarter. Each Fund’s Management Fees payable to SCA are prorated for any period
of less than a full fiscal quarter, provided that no Management Fees, once paid, will be refunded by SCA.
Management Fees for Ventures Funds: Ventures may likewise deduct fees from the relevant Fund’s
account held at a qualified custodian. The Ventures Funds are subject to a Management Fee that is generally
an asset-based fee ranging from 0% to 1.0% per annum of capital commitments during the relevant Fund’s
investment period, but can also take the form of a fixed fee. In addition, other fees may be assessed on the
Ventures Funds, as outlined in each Fund’s Governing Documents.
Performance-Based Fees/Carried Interest:
As discussed in greater detail below, and as described more fully in the relevant Fund’s Governing
Documents, the Adviser or an affiliate may also receive performance-based compensation (“Carried
Interest”) as a percentage (generally 20%) of the Funds’ net realized profits in excess of specified
investment returns.
The Adviser reserves the right to negotiate, waive, reduce, or calculate differently the Management Fee and
Carried Interest for certain Fund investors, including members, employees and affiliates of the Adviser.
Neither the Funds’ General Partner nor the Adviser, its affiliates, principals, employees or immediate family
members are charged the Management Fee or Carried Interest. Investors in a Fund should refer to the
applicable Governing Documents for specific information regarding the fees associated with their
investment.
Other Fees and Expenses.
In certain instances, SCA will select a property manager to perform the day-to-day management of real
estate properties in which an SCA Fund invests, including maintenance, repair, and operation of the
portfolio properties. SCA also expects to select development partners that will be responsible for any
construction coordination, development, or other special services with respect to a SCA Fund’s real estate
investment. As compensation for their services, such property managers and development partners will be
entitled to a fee aligned with the prevailing market rate for comparable services. These property manager
and development partner fees are payable by the SCA Funds that invest in the applicable properties
receiving management/development services.
From time to time, SCA expects to select a property manager that is affiliated with SCA. SCA’s affiliates
may also be entitled to a portion of the fee paid to development partners, provided that such overall fees
will be in line with market rates for comparable services. In such circumstances, SCA and the SCA
Principals have a financial incentive to select an affiliated property manager or a development partner that
causes SCA’s affiliates to receive direct or indirect compensation, rather than an unaffiliated property
manager or a development partner that does not entitle SCA’s affiliates to a portion of the development
fees. To address these conflicts of interest, SCA has developed policies and procedures to ensure that
appropriate property managers and development partners are selected for any portfolio properties, and that
such selection process is consistent with SCA’s fiduciary duty to its clients.
The Funds generally bear all offering, organizational and start-up expenses (“Organizational Expenses”),
which may be subject to certain limits as detailed in each Fund’s Governing Documents. To the extent that
Organizational Expenses exceed a Fund’s limit, the General Partner of the Fund bears the expenses, or the
expenses will be offset against the Fund’s Management Fee. Organizational Expenses include, but are not
limited to, legal, travel, accounting, filing and capital raising (excluding placement fees or commissions),
and other expenses incurred in connection with the offering and formation of the Fund.
The Funds also generally pay all costs and expenses relating to the operation and administration of the
Funds, any subsidiaries of the Funds, and any other investment vehicles created for the purpose of investing
directly or indirectly in the Fund (“Fund Expenses”). With SCA, such Fund Expenses include, without
limitation: (i) legal, auditing, consulting and accounting expenses; (ii) third party administrative and Fund
administration fees and expenses; (iii) costs associated with the preparation and delivery of reports,
financial statements and any tax reporting (including tax returns and Schedule K-1s to Partners); (iv)
valuation expenses; (v) expenses of meetings of the Partners; (vi) expenses of the Advisory Committee
(defined below); (vii) all expenses associated with the acquisition, holding and disposition of actual and
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