Item 5 – Fees and Compensation
TRG receives asset-based fees in consideration for its rendition of investment advisory services to
Funds and SMAs (“Management Fees”). Management Fees charged to the Funds are generally
charged quarterly or semi-annually, may be charged in arrears or in advance, and typically range
between 0.55% and 2.0% per annum of (i) the net asset value of the applicable Fund attributable to
a particular class or series of the Fund’s shares or interests, or (ii) the particular investor’s
investment in/capital commitment to the applicable Fund. Management Fees charged to SMAs are
subject to individualized negotiation with each such client. From time to time TRG also may agree
with a client to an advisory fee set at fixed dollar amounts.
Most Funds and SMAs that pursue public market strategies also pay performance-based fees or
make performance-based allocations to TRG (“Public Markets Performance Compensation”). Public
Markets Performance Compensation is generally calculated based on a percentage of the net profits
of a Fund attributable to each investor’s investment in the Fund, or on the net profits of an SMA, as
applicable, as measured at the end of each fiscal year (or, in the case of redemptions or withdrawals
from the Fund or the SMA, at the time of such redemption or withdrawal, as applicable). Public
Markets Performance Compensation is also generally subject to a loss carry forward provision and
in some cases may be subject to a hurdle rate. Public Markets Performance Compensation
percentages typically range between 10% and 25%. In measuring an investor’s net profits for the
calculation of Public Markets Performance Compensation during the relevant period, both realized
and unrealized gains and losses are typically included, except to the extent that the governing
documents and/or management agreement of a Fund or SMA may provide that, in the case of
certain investments designated as “side pocket” investments by TRG, only realized gains and/or
realized losses are taken into account in measuring net profits for Public Markets Performance
Compensation purposes.
Funds and SMAs that pursue infrastructure, renewable energy, private equity or private credit
strategies generally utilize detailed waterfalls for the apportionment of proceeds from dispositions
of Fund or SMA investments, or income from Fund or SMA Investments, as set forth in each such
Fund’s or SMA’s governing documents and/or management agreement. Typically, after providing
for the return of invested capital to investors, such waterfalls provide for the allocation and
distribution to TRG of a portion of the realized net profits, which portion may range between
approximately 4% and 30% (“Private Equity Carried Interest”). In some cases, the waterfall may
first distribute a preferred return to investors before distributing any Private Equity Carried
Interest to TRG.
Funds and SMAs that focus on forestry and agriculture investments generally calculate and pay
performance-based compensation to TRG (any such compensation, together with the Public
Markets Performance Compensation and the Private Equity Carried Interest, the “Performance
Compensation”) in a manner similar to that of Private Equity Carried Interest, but in some cases
such compensation may be based upon the value of unrealized (as well as realized) appreciation of
the underlying assets, and the rate of such compensation is typically 15% of the applicable profit
amount.
The calculation and payment of the Performance Compensation applicable to a particular interest
in a Fund or to an SMA is described in detail in the governing documents and/or management
agreement of the applicable Fund or SMA. All Fund investors should refer to the applicable Fund’s
offering documents and governing documents for a full description of the Management Fees and
Performance Compensation to be charged to the different interests/shares offered by the Fund, as
well as any applicable lock-up periods and early redemption/withdrawal fees.
Please refer to Item 6 for a discussion as to how Performance Compensation may create an
incentive for TRG to favor certain clients over other clients in the allocation of investment
opportunities, and may create an incentive for TRG to cause the Funds and SMAs to make
investments that may be riskier or more speculative than those that would be made in the absence
of performance-based compensation arrangements.
Additional Information Relating to Fees and Compensation
Payment of Fees: The Management Fees and Performance Compensation payable to TRG by each
Fund are deducted directly from such Fund. SMA clients are typically billed for Management Fees
and Performance Compensation but, subject to TRG’s approval, may direct TRG to debit
Management Fees or Performance Compensation from their SMA.
Negotiability of Fees: In certain circumstances, fees may be negotiable, both in terms of their rates
and the metrics upon which they are based. For example, TRG may, as agreed on a case-by-case
basis with Fund investors or SMA clients, charge a Management Fee and/or Performance
Compensation that is lower than, or otherwise on different terms than, those described above.
Termination of Advisory Relationship: Upon termination of any account, any prepaid, unearned
Management Fees will be promptly refunded. Investors in each Fund should refer to the applicable
Confidential Memorandum and other offering documents of the applicable Fund for complete
information on the applicable redemption/withdrawal terms and any applicable “lock-up” periods
and related fees.
Brokerage Fees and Expenses: TRG’s Management Fees and Performance Compensation are in
addition to brokerage commissions, transaction fees, and other related costs and expenses that are
incurred by the applicable SMA or Fund. Such charges are generally imposed on the applicable SMA
or Fund by custodians, brokers and other applicable service providers, and include, among other
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