Item 5 - Fees and Compensation
I. Fund Management Services
Fee Schedule
The Funds charge a performance-based fee to qualified clients and a management
fee. In addition, the Real Estate Fund and Opportunity Zone Fund charge an acquisition
fee and disposition fee.
At the end of each month, we will receive a management fee of 1/6 of 1.0% (2.0%
annually) of the net assets, as defined, of each Fund as of the end of the month
(before any redemptions as of such month-end) in consideration for providing the
trading, record keeping, and administrative services required in connection with such
Fund's activities. A management fee will also be paid upon termination of a Fund
other than at a month-end, calculated as though the effective date of the termination
was the end of a month.
For the Income Fund and Total Return Fund, at the end of each limited partner's
Investment Year, as defined, we will be entitled to receive an investment performance
allocation pursuant to which an amount equal to 20% of any cumulative Above-
Market Investment Profit, as defined, as of the end of the limited partner's Investment
Year shall be reallocated from the limited partner to us; provided, however, that this
reallocation will be subject to a loss carry-forward provision such that the amount so
reallocated from such limited partner's capital account to us for the Investment Year
may not exceed 20% of the Above-Market Investment Profit over such limited
partner's loss carry-forward amount applicable to the investment year.
A limited partner’s Above-Market Investment Profit means all New Investment Profit in
excess of the Market Hurdle, as defined, as allocated to such limited partner as of the
end of the limited partner’s Investment Year. The Market Hurdle is equal to the profits
that would have been generated by investing the limited partner’s capital for the
duration of the limited partner’s investment year in a security that had a rate of return
2% in excess of the rate of return on 90-day U.S. Treasury Bills over such period. A
Limited Partner’s “Investment Year” shall be the 12-month period ending on December
31 of each year; provided, however, that a Limited Partner’s first Investment Year shall
be the period beginning on the day as of which such limited partner is admitted to the
Fund and ending on December 31 of such year. The New Investment Profit for any
Investment Year is the aggregate amount by which net profits credited to a limited
partner’s capital account during an Investment Year (including interest earned or
credited on the Fund’s assets, and before deduction of any investment performance
allocation payable in respect of such Investment Year) exceeds the net losses charged
to such limited partner’s capital account.
For the Real Estate Fund and Opportunity Zone Fund, we will be entitled to receive, on
an annual basis, 20% of the positive sum of (i) any distributions made to the limited
partner and (ii) changes in such limited partner’s capital account of the annual net
increase, subject to any loss carryforward and the application of the Market Hurdle.
In connection with the purchase or acquisition of any real property, we shall receive an
amount in cash equal to 1% of the aggregate purchase price paid by either the Real
Estate Fund or Opportunity Zone Fund for such real property. Additionally, in
connection with the sale or other disposition of any real property asset, we shall receive
an amount in cash equal to 1% of the aggregate consideration received by either Fund
for such real property asset. The market hurdle and loss carryforward shall not affect
any disposition fee or acquisition fee due, and we shall receive such fees whether or
not we are entitled to any performance allocation and whether or not the Fund NAV
has increased in any fiscal year.
We, in our sole discretion, may waive or modify the investment performance
reallocation and management fee in whole or in part from time to time with respect to
any limited partner; it is anticipated that we may waive the investment performance
allocation fee, management fee, acquisition fee, and disposition fee in its entirety with
respect to limited partners who are also members, managers, or employees of ours.
We may reduce or waive the fees charged to any limited partner without the consent
of any other limited partner and without offering the same reduction or waiver to any
other limited partner.
Fee Deduction/Billing Process
Upon written consent from clients, we have the authority to deduct the advisory fees
directly from their accounts.
Redemptions
We will cause the Funds to redeem part or all of a limited partner's interest in a Fund
for an amount equal to the balance of such limited partner's capital account relating to
the portion of the interest to be redeemed at the close of business on the redemption
date (after taking into account the allocations to capital accounts provided for in the
Fund's limited partnership agreement), less any amount owed by such partner (and his
or her assignee, if any) to the Fund. The redemption date shall occur as of the last day
of any calendar month after a request for redemption in proper form has been delivered
to us; provided, however, a request for redemption must be submitted in writing and
received by us at least 45 days in advance of the redemption date for the Income Fund
and Total Return Fund, or 30 days in advance of the redemption date for the Real
Estate Fund. We are not obligated to grant any request for redemption made by a
limited partner in the Opportunity Zone Fund and therefore do not require any amount
of advanced notice for this Fund. In such request, the limited partner must represent
and warrant that he or she is the true, lawful, and beneficial owner of the interest with
full power and authority to request the redemption and must further represent that such
interest is not subject to any encumbrances. The signature of the limited partner
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