ADVISORY BUSINESS
A. General Description of Advisory Firm. The Adviser is a Delaware limited partnership founded in 1992. The Adviser is headquartered in New York City and has eighteen affiliated advisory offices located in the United States (“U.S.”), Europe, Asia, Africa, South America and Australia. The principal owner is Stephen A. Feinberg, who owns his interests in the Adviser indirectly through one or more intermediate entities. The Adviser and its affiliates (the “Affiliates”) (the Adviser and the Affiliates are sometimes collectively referred to as the “Advisers”) provide investment management and administrative services to privately placed pooled investment vehicles (collectively, the “Private Funds”), single investment special purpose investment vehicles and managed accounts (collectively, with the Private Funds, the “Clients”) based on their respective investment objectives. An Affiliate of the Adviser, Cerberus Sub-Advisory I, LLC, became a U.S. Securities and Exchange Commission (the “SEC”) registered investment adviser on June 19, 2013. Cerberus Sub-Advisory I, LLC serves as an inactive sub-adviser to one fund registered as an investment company with the SEC under the Investment Company Act of 1940, as amended (the “1940 Act”). Although separately registered as an investment adviser with the SEC, Cerberus Sub-Advisory I, LLC is effectively part of the single advisory business of the Advisers. The Advisers tailor their advisory services as described in the investment program of the relevant Client’s private placement memorandum, as set forth in such Client’s organizational documents and/or as set forth in the investment management agreement with such Client. Please refer to Item 8 for a more detailed description of Advisers’ investment strategies as well as the securities and other instruments purchased by Clients under the management of the Advisers. Four affiliates of the Adviser, Partridge Hill Overseas Management, LLC (“Partridge Hill”), Cerberus Capital Management II, L.P. (“CCM II”), Cerberus Institutional Management II, LLC (“CIM II”) and Cerberus Real Estate Capital Management, LLC (“CRECM” and, collectively with Partridge Hill, CCM II and CIM II, the “CPO Managers”), have registered as Commodity Pool Operators (“CPOs”) with the Commodity Futures Trading Commission (“CFTC”) and have become members of the National Futures Association (“NFA”). Certain management persons of the Adviser are registered as principals and/or associated persons of such entities. Since the filing of the Adviser’s last Brochure through March 25, 2020, several new Clients have been launched. For a complete list of all Clients that the Advisers provide administrative and/or investment management services, see Section 7.B. of Schedule D to the Advisers’ Form ADV Part 1. The Advisers provide investment management services to the Clients on a discretionary basis. With respect to one Private Fund, an Affiliate serves as co-manager to such Private Fund with a third party as set forth and described in the organizational and offering documents of such Private Fund. B. Description of Advisory Services . Advisory Services The Adviser is a global alternative investment firm founded in 1992. Headquartered in New York City with affiliated advisory offices located in the U.S., Europe, Africa, South America and Asia, the Advisers generally have a long-term investment horizon and focus on value creation globally in private equity, real estate and global credit strategies as outlined below. The Advisers’ investment and operations professionals are integrated across all three of the Advisers’ primary investment strategies, bringing considerable expertise in assessing and managing all of the Advisers’ investments.  Private Equity, including acquisitions of companies with operational problems or significant cost reduction opportunities, subsidiaries of companies where the business is viewed as non-core and/or under-performing divisions and companies undergoing reorganization under U.S. bankruptcy law or similar laws;  Real Estate, including investments in distressed debt securities and assets, special situations, direct equity, mortgage loans and bridge financings, mezzanine debt and preferred equity and non-performing loans (“NPLs”) secured by real estate; and  Global Credit, including corporate credit and distressed debt, corporate middle-market direct lending and residential and commercial mortgage securities and assets. Philosophy The Advisers’ investment philosophy is centered on integrity, patience and a unique business model that applies significant financial and operational resources across the Advisers’ investment strategies. The Advisers focus on opportunities that offer the potential for superior risk-adjusted returns. The Advisers also focus on growing business, recruiting and retaining top executives, proactively managing risks and ensuring the highest standards of corporate governance. The Advisers require disciplined due diligence, strict compliance, a team approach between investment and operations professionals and the use of efficient, creative and customized solutions. Please see Item 8 for additional information related to methods of analysis, investment strategies and risk of loss. C. Availability of Customized Services for Individual Clients . The Advisers tailor their advisory services as described in the investment program of the relevant Client’s private placement memorandum or as set forth in such Client’s organizational documents, the subscription documents related to an investment in such Client and/or the investment management agreement with such Client. In addition, the Advisers have the right to enter and have entered into agreements, such as side letters, with certain investors in the Private Funds that may in each case provide for terms of investment that are more favorable than the terms provided to other investors in the Private Funds. Such terms typically include, among other things, the waiver or reduction of management and/or incentive fees/allocations, the provision of additional information or reports, rights related to specific regulatory requests or requirements of certain clients, more favorable transfer rights, and more favorable liquidity rights. Certain Clients (and/or underlying investors) also negotiate for investment exposure (or investment limitations) with respect to specific industries, sectors, geographic regions or investments. Persons reviewing this Form ADV Part 2A should not construe this as an offering of any of the Private Funds described herein, which will only be made pursuant to the delivery of a private placement memorandum, subscription agreement and/or similar documentation to prospective investors. D. Wrap Fee Programs . The Adviser does not participate in wrap fee programs. E. Assets Under Management. As of January 1, 2020, the Adviser had approximately $61.3 billion of regulatory assets under management, all of which was managed on a discretionary basis. Cerberus Sub- Advisory I, LLC, is an inactive sub-adviser to one fund registered as an investment company with the SEC under the 1940 Act, and is not currently managing any assets of the fund but allocations may change at any time without notice. please register to get more info

FEES AND COMPENSATION
A. Advisory Fees. Management Fees With respect to Clients that are structured as hedge or liquid funds, the Adviser or one of its Affiliates is generally paid a quarterly management fee of 1% to 2% per annum of the aggregate net asset value of each investor’s capital account or series of shares, as applicable. With respect to Clients that are structured as private equity or commitment funds, the Adviser or one of its Affiliates is generally paid a quarterly management fee of 1% to 2% per annum of total committed capital, called capital invested (at cost), total assets under management or net asset value. Management fees are generally paid quarterly in advance, but may be paid quarterly in arrears. Performance-Based Allocations or Fees With respect to Clients that are structured as hedge or liquid funds, an Affiliate of the Adviser is generally allocated or paid an annual performance-based allocation or fee of 15% to 20% of the net gain earned by each investor subject to a high water mark and, in certain cases, a hurdle rate of 6% to 8%. Certain Clients structured as hedge or liquid funds subject this performance-based allocation or fee to a preferred return to investors and a catch up allocation to the Affiliate. With respect to Clients that are structured as private equity or commitment funds, an Affiliate of the Adviser is generally allocated or paid a performance - based allocation or fee of 15% to 20% of the proceeds realized upon the disposition of the assets of such Client; subject to the return of capital contributions to investors and, often, subject to a preferred return to investors (often 6% to 8%), catch-up distributions to the Affiliate and/or other performance hurdles. In certain cases, a Client structured as a private equity or commitment fund pays an Affiliate a portion of its performance-based allocation or fee prior to the disposition of the assets of such Client. Collateralized Loan Obligations With respect to Clients structured as collateralized loan obligations (“CLOs”), an Affiliate of the Adviser is generally paid a quarterly management fee of 1% per annum. For any Private Fund investing directly or indirectly in one or more Clients structured as CLOs, each such Private Fund’s total management fees payable do not exceed the management fee set forth in such Private Fund’s offering documents, organizational documents and/or investment management agreement. Compensation Waivers or Reductions Compensation to the Advisers is negotiable, and is set forth and described in each Client’s offering documents, organizational documents and/or investment management agreement. Certain investors in the Private Funds have negotiated for and pay reduced performance - based allocations or fees and/or reduced management fees. Certain Clients in liquidation may pay either (i) no fees or compensation or (ii) pay, in advance, a quarterly management fee at a reduced rate. B. Payment of Fees. Management fees, incentive allocations, incentive fees and carried interests are generally deducted directly from Client accounts. If an advisory contract is terminated before the end of a billing period, unearned, pre-paid fees (prorated for the remaining portion of the billing period) will be refunded directly to the Client or underlying investor in accordance with the terms of the Client’s offering documents, organizational documents and/or investment management agreement. C. Additional Expenses and Fees. As more particularly set forth or described in the offering documents, organizational documents, investment management agreement of a particular Client and/or the Advisers’ expense-related policies and procedures, a Client may bear some or all of the following costs and expenses: (i) operating and administrative costs and expenses of the Clients; (ii) organizational and offering costs and expenses of the Clients (including, without limitation, all, or a portion, of the costs and expenses incurred in connection with a Client’s formation and qualification and the offering and sale of interests in the Client, including, without limitation, legal and accounting fees and expenses, registration and qualification fees and expenses, fees and expenses of distribution, filing fees, printing costs and all costs and expenses incurred in connection with the preparation of offering documents, marketing materials, organizational documents, operating documents and similar materials and the costs of qualifying, reproducing, amending, supplementing, mailing and distributing offering materials, including telephone and other communications and transmittal costs); (iii) expenses associated with all investments and transactions considered, evaluated and/or consummated by the Clients, including, without limitation, expenses associated with sourcing, negotiating, investigating, researching, financing, structuring, acquisition and due diligence of investments and potential investments, whether or not consummated (including third-party research, data, analytics, modeling, structuring, pricing, execution and other third-party information systems, software and service fees (including data feeds, subscriptions, reports and similar items)); (iv) expenses associated with the holding, financing, construction, leasing, monitoring, hedging, maintaining and disposing of all investments of the Clients (including, to the extent a Client owns any real estate, asset and property management expenses of third parties, local operators and certain Affiliates as described herein) and all transaction and other costs associated therewith; (v) travel and related expenses associated with investments and potential investments; (vi) professional fees associated with investments and potential investments, including, without limitation, accounting, consulting, investment banking, legal and other advisory fees and expenses (including, for the avoidance of any doubt, any third-party consultants engaged through Cerberus Global Investment Advisors, LLC and Cerberus Operations (as defined in Item 10) and any other Advisers, whether now existing or hereafter created, in respect of the Clients and/or their portfolio investments); (vii) transaction fees, brokerage commissions, clearing and settlement charges and similar fees and expenses associated with the acquisition, disposition and settling of investments and potential investments; (viii) administrative, custodial, appraisal, valuation, legal, consulting, advisory and similar fees and expenses associated with the Clients’ operations, investments and transactions, including fees and expenses of any administrator; (ix) management fees; (x) costs, fees and expenses of any Affiliates engaged to provide services by or on behalf of the Clients as described in Item 10, “Material Relationships or Arrangements with Industry Participants and Affiliated Advisers – Affiliated Service Providers”, including, without limitation, the fees and expenses of each of (a) Cerberus Operations (as defined in Item 10) (including associated overhead, including, without limitation, all occupancy costs such as rent, utilities, HVAC, water, cleaning and all other occupancy and administrative expenses incurred in connection with the services provided by Cerberus Operations as set forth and described in such Client’s offering documents, organizational documents and/or investment management agreement), (b) the Portfolio Company Servicers (as defined in Item 10), (c) FirstKey Homes (as defined in Item 10), (d) FirstKey Mortgage (as defined in Item 10), (e) Cerberus Servicing (as defined in Item 10), (f) Cerberus Technology Solutions (as defined in Item 10), and (g) certain other Affiliates; (xi) the Dutch and Other Expenses (as defined in Item 10); (xii) broken-deal, failed transaction, break-up and similar fees, costs and expenses (including any portion thereof attributable to actual or potential Co-Investors (as defined herein) and to the extent not paid by the sponsor of a potential borrower and/or from the borrower itself, whether through good faith deposits or otherwise); (xiii) costs and expenses of leverage and/or financing of the Clients utilized or proposed to be utilized by the Clients (including, without limitation, any subscription facilities) including interest charges and fees; (xiv) auditing and accounting expenses of the Clients, including expenses associated with the preparation of the Clients’ financial statements, tax returns and Schedules K-1; (xv) costs and expenses associated with investor communications and reports and the delivery thereof to investors, including, without limitation, any costs and expenses related to disclosure of any other agreements by investors or any election by investors or any relevant terms and any reporting pursuant to any other agreements; (xvi) costs and expenses associated with any special investor meetings and all meetings of the Clients’ advisory boards and the meetings of any other committees of the Clients, including any committees formed for the purpose of approving principal transactions as described in Item 11, “Securities That the Adviser or a Related Person Has a Material Financial Interest”;

(xvii) reasonable costs and expenses related to the Clients’ boards of directors and their meetings and certain Clients’ investment committee members and/or conflicts committee and/or their meetings; (xviii) insurance expenses, including, without limitation, those relating to property, title, directors’ and officers’ liability, errors and omissions and other insurance policies; (xix) expenses incurred in the collection of monies owed to the Clients; (xx) costs and expenses (including taxes, fees or other governmental charges) associated with the formation, organization and operation of any subsidiary, special purpose vehicle (“SPV”), alternative investment vehicle, holding company or similar entity formed with respect to investments, credit facilities or arrangements (including, without limitation, any subscription facilities or CLO issuances or term debt securitizations) or other transactions entered into for the benefit of the Clients; (xxi) wind-up, liquidation, termination and dissolution expenses; (xxii) costs, fees and expenses related to registration, qualification and/or exemption under any applicable U.S federal, state, local or non-U.S. laws, rules or regulations, including blue sky fees and other securities and/or investment- related filing expenses; (xxiii) costs related to any transfers of interests in the Private Funds, unless otherwise charged to or borne by the applicable transferor and/or transferee; (xxiv) any extraordinary expenses (including all litigation-related, indemnification and contribution expenses, including the amount of any judgment or settlement paid in connection therewith); (xxv) any investment and transaction expenses of the Clients or any other affiliated investment originator attributable, as determined by the Adviser, to securities or other assets considered for investment by such Clients, including, to the extent not paid by the sponsor of a potential borrower and/or from the borrower itself (whether through good faith deposits or otherwise), the costs and expenses of any securities or other assets (or interests therein) purchased by or transferred to the Clients and any “broken-deal” or failed transaction expenses (including in certain cases, the share of such expenses attributable to a prospective Co- Investor (as defined herein)) incurred by the Clients or any other affiliated investment originator in respect of contemplated securities or other assets that would have been originated or invested in by such Clients, and these expenses generally will not be borne or shared by potential syndicate partners, transferees or offerees; (xxvi) expenses incurred in connection with the performance of loan origination, servicing, management and due diligence services for the Clients, including without limitation, any investment and transaction expenses of any affiliated loan originator or service provider attributable, as determined by the Advisers, to loans or other assets considered for investment by the Clients, including, to the extent not paid by the sponsor of a potential borrower and/or from the borrower itself (whether through good faith deposits or otherwise), the costs and expenses of any loans or other assets (or interests therein) purchased by or transferred to the Clients and any broken-deal or failed transaction expenses incurred by any affiliated loan originator or service provider in respect of contemplated loan or other assets that would have been originated or invested in by the investors; (xxvii) expenses incurred in connection with the performance of loan and asset servicing and settlement activities, collateral management, loan administration, due diligence and property management services for the Clients; and (xxviii) all other fees, costs, charges and expenses associated with the business, affairs and/or operations of the Clients and the sourcing, acquisition, management and exit of rental properties owned by the Clients. The Advisers may from time to time also receive good faith deposits from the sponsors of potential borrowers or from borrowers themselves, which will be used to pay investment due diligence expenses (including broken-deal or failed transaction expenses) and will offset expenses that would otherwise be expenses of the Clients in respect of such investment. The Clients will reimburse the Advisers or their affiliates, as applicable, for any expenses paid by the Advisers or any such affiliates that are expenses to be properly borne by the Clients. The Advisers will provide office space for themselves and on behalf of the Clients, and will pay for all rent, utilities, HVAC, water, cleaning, office furniture, fixtures and equipment, computer equipment (excluding any third-party data, analytics or other information systems as described above, which are expenses of the Clients), office supplies and all other reasonable and customary occupancy costs, as well as reception, secretarial, clerical and other administrative personnel and the salaries, bonuses and benefits paid to investment professionals and support personnel of the Advisers (excluding the COAC Expenses (as defined in Item 10), the Dutch and Other Expenses, and the costs, fees and expenses of Cerberus Servicing, Cerberus Technology Solutions, the Portfolio Company Servicers, FirstKey Homes, FirstKey Mortgage and other Affiliates engaged to provide services as described in such Client’s offering documents, organizational documents and/or investment management agreement, in each case, which are expenses of the Clients). Due to the fact that the Advisers manage investments on behalf of a number of Clients, certain expenses may be shared by more than one Client. The Adviser has adopted policies and procedures for the allocation of such fees and expenses among the Clients, although the policies and procedures may change from time to time and may differ materially from those described below. Subject to the policies and procedures described below with respect to co- investment opportunities, any investment-related or strategy-related expenses shared by more than one Client will generally be allocated pro rata based on each such Client’s participation or anticipated participation in such investment or strategy. Participation is typically determined by reference to actual or anticipated allocations of investments, by reference to the Client’s investments in the applicable strategy or another methodology determined to be fair and equitable by the Adviser, in its sole discretion. The Adviser will seek to allocate non- investment-related expenses shared by more than one Client to such Clients in a manner that is fair and equitable taking into consideration all relevant factors, including, without limitation, the relevant benefit to each such Client derived from such expenses. With respect to expenses attributable to one or more of the Clients and one or more of the Advisers (or the Private Feinberg Entities (as defined and described herein)), the Adviser seeks to allocate such expenses fairly, taking into consideration (i) the extent of the utilization of the services associated with the expense, (ii) the relative benefit that is derived from the expense and (iii) the association of the expense with a legal, contractual or other obligation. The Adviser has established an Expense Allocation Policy and Procedures (the “Expense Allocation Policy”) that, among other things, may allow persons and/or entities that invest (or propose to invest) in the same investment (or proposed investment) as the Clients, whether directly or indirectly through one or more persons and/or entities (including but not limited to SPVs controlled by the Advisers or one or more other persons and/or entities) (collectively, “Co-Investors”) that are not Clients to participate in particular investments alongside one or more Clients from time to time. Where Co-Investors have been permitted to participate in consummated or potential investments, the costs, fees and expenses of such consummated or potential investments shall, whenever practicable, be allocated to such Co- Investors and among the Clients in accordance with such factors set forth in the Expense Allocation Policy from time to time. The amount of such costs, fees and expenses allocated to the Clients with respect to such investments (or proposed investments) shall be further allocated among the Clients as described in the Expense Allocation Policy. However, it is not always possible or reasonable to allocate expenses to a Co-Investor due to the circumstances surrounding the applicable co-investment and the financial and other terms (including the timing of the investment) governing the relationship of the Co-Investor to the Clients with respect to the investment, and, as a result, there are occasions where Co- Investors do not bear a proportionate share of such expenses. For example, in certain circumstances, a Co-Investor may have limitations on the amount of expenses that may be borne by such Co-Investor in respect of an applicable co-investment, or may in certain circumstances negotiate the terms regarding expense allocations, if any, as a condition to its co-investment. In addition, where a co-investment was contemplated but ultimately not consummated, including with respect to proposed transactions that are not consummated by the Clients, the proposed or potential Co-Investor generally does not share in the expenses borne by the Clients with respect to such potential co-investment or proposed transaction opportunity (including, without limitation, broken-deal expenses, failed transaction expenses, and break-up and/or other similar costs, fees and expenses of unconsummated transactions). Expenses generally cannot be, and therefore are not, allocated to, charged to or paid by third party investors, including but not limited to shareholders and other holders of equity interests, in portfolio companies and other corporations, companies, partnerships and/or others businesses that are (i) not controlled by the Advisers but in which the Clients have investments (including but not limited to public corporations and private companies in which the Clients have investments) or (ii) controlled by the Advisers but which have third party investors other than the Clients. In these circumstances, the applicable expenses generally will be allocated to, charged to and paid by the respective Clients, and not the respective portfolio company or other entity, unless a separate agreement has been entered into between the Advisers and such portfolio company or other entity. Further, new Clients may be required to bear broken-deal expenses related to potential investments that are not consummated to the extent that (i) such potential investments become broken deals during the 45 day period prior to the initial closing of such Client and (ii) such Clients would have been allocated a portion of such investments, even if such expenses were borne by other Clients prior to the time such Clients were formed and/or had their initial closing. Accordingly, new Clients may bear some of such broken deal expenses. With respect to certain Lending Funds (as defined in Item 11), operating expenses of such Clients will include any investment and transaction expenses of CBF (as defined in Item 10) attributable, as determined by the Advisers, to loans or other assets considered for investment by a Client, including, to the extent not paid by the sponsor of a potential borrower and/or from the borrower itself (whether through good faith deposits or otherwise), the costs and expenses of any loans or other assets (or interests therein) purchased by or transferred to a Client and any “broken-deal” or failed transaction expenses incurred by CBF in respect of contemplated loans or other assets that would have been originated by or invested in by a Client, and these expenses generally will not be borne or shared by Clients. D. Prepayment of Fees . Please see responses to Item 5A. above. E. Additional Compensation and Conflicts of Interest. Neither the Advisers nor any of their supervised persons accept compensation for the sale of securities or other investment products. please register to get more info

PERFORMANCE-BASED FEES AND SIDE-BY-SIDE MANAGEMENT
The Affiliates receive performance-based compensation in the form of an incentive allocation, an incentive fee and/or performance distributions with respect to most Clients. Certain Clients that are in liquidation and/or are not making new investments (other than follow-on investments) are either charged no compensation or only a management fee. Many of the Clients have investment programs that are similar to or overlap with each other, and may, therefore, participate with each other in investments. In the allocation of investment opportunities, performance-based fee/allocation arrangements could create an incentive to favor Clients that have greater performance fee/allocation arrangements over other Clients that have lesser or no performance fee/allocation arrangements. Investment decisions and allocations are made in accordance with the Advisers’ Investment Allocation Policy and Procedures (“Investment Allocation Policy”), as such Investment Allocation Policy is in effect at the time of such decision or allocation. The Investment Allocation Policy is designed to ensure that all Clients are treated fairly and equitably to prevent this form of potential conflict from influencing the allocation of investment opportunities among them. please register to get more info

TYPES OF CLIENTS
The Advisers provide investment management services and advice to the Clients (including CLOs), single investment SPVs and managed accounts and certain Co-Investors. Underlying investors in Clients include high net-worth individuals, financial institutions, corporations, sovereign wealth funds, endowment funds, charitable organizations, public and private pension funds and other investment funds. Generally, each underlying investor in a Client must be an “accredited investor” as defined in Regulation D under the Securities Act of 1933, as amended (the “Securities Act”), and a “qualified purchaser” as defined in the 1940 Act. Certain employees of the Adviser who qualify as “knowledgeable employees” under Rule 3c- 5 of the 1940 Act may be permitted to invest directly or indirectly in the Private Funds. With respect to one Private Fund, each underlying investor in such Private Fund must also be a “qualified institutional buyer” as defined in Rule 144A under the Securities Act, as set forth and described in the organizational and offering documents of such Private Fund. The offering documents of each Client may set minimum amounts for investment by prospective investors in such Clients. These minimum amounts may be waived by the Adviser or an Affiliate. One Affiliate, Cerberus Sub-Advisory I, LLC, serves as an inactive sub-adviser to one fund registered as an investment company with the SEC under the 1940 Act. please register to get more info

METHODS OF ANALYSIS, INVESTMENT STRATEGIES AND RISK OF LOSS
Methods of Analysis and Investment Strategies. Set forth below are summaries of the different asset categories and strategies primarily employed by the Advisers. Each Client’s investment portfolio may participate in one or more of such asset categories and strategies as described in such Client’s offering documents, organizational documents and/or investment management agreement. Clients’ investment portfolios may differ based on whether they concentrate their investments in a single one of the strategies, all of the strategies or less than all of the strategies. Clients’ investment portfolios may also differ based on geographical focus, liquidity needs and other considerations. The Adviser generally pursues, or has pursued, on behalf of its Clients, investments in the following three categories: (i) Private Equity, including acquisitions of companies with operational problems or significant cost reduction opportunities, subsidiaries of companies where the business is viewed as non-core and/or under-performing divisions and companies undergoing reorganization under U.S. bankruptcy law or similar laws; (ii) Real Estate, including investments in distressed debt securities and assets, special situations, direct equity, mortgage loans and bridge financings, mezzanine debt and preferred equity and NPLs; and (iii) Global Credit Opportunities, including direct lending, stressed and distressed corporate debt, and residential and commercial mortgage securities and assets. Investments within these categories may involve any part of the capital structure of an issuer. Investments may be passive or active (including control) investments in a wide range of industries and countries. At present, no new investments, other than follow-on investments, are being made by certain Clients as the Advisers liquidate the existing investment portfolio of each of these Clients. Private Equity. The Advisers will generally target private equity investments where they can implement an operational approach to private equity by driving portfolio investment value through operational and strategic change. Pursuant to this strategy, the Advisers se ek to make control equity investments, minority equity investments, structured equity and structured debt investments, asset purchases and platform investments across a broad array of industries where the Advisers believe there is an opportunity to create value through purchase price, organizational and infrastructure improvement, efficiency and productivity gains and platform creation or asset repositioning. The Advisers will make investments where they have identified opportunities or dynamics which enable them to drive near-term value or that they believe are not appreciated by the market, augmented by opportunities for longer-term strategic growth and value creation. This approach manifests itself in a variety of overlapping ways across; however, investments typically derive value through four core value-creation areas: (i) value-oriented and complex acquisitions; (ii) organizational and infrastructure development; (iii) efficiency and productivity initiatives; and (iv) platform creation opportunities. Real Estate . The Advisers invest opportunistically in a wide range of investments, primarily falling into five main categories: (i) real estate credit, including debt instruments, NPLs, performing and re-performing loans (“RPL”) (as well as the underlying collateral for such loans) and mortgage backed-securities (“MBS”); (ii) direct equity, including controlling equity interests in direct property investments, joint ventures, corporate real estate holdings, private equity and select development opportunities; (iii) special situations, including public or private real estate investment trusts (“REITs”), secondary limited partnership interests, real estate operating companies constrained by management inefficiencies or lack of liquidity, other operating companies with material real estate or real estate-related investments as well as various other customized structured transactions; (iv) mortgage loans and bridge financings; and (v) mezzanine debt and preferred equity. It is anticipated that a portion of the investments may be in the form of debt or preferred equity that will be relatively senior in the capital structure and often secured. Global Credit Opportunities . The Advisers, on behalf of certain Clients, invest in NPLs, pools of NPLs and the underlying collateral for such loans. In connection with the NPL investment strategy, the Advisers may also invest in other assets, including, without limitation, performing loans, structured products, real estate owned (“REO”) and other real estate-related assets, and other assets purchased from financial institutions and distressed sellers (including those looking to de-lever their balance sheets or divest of non-core assets). The NPL investment strategy may also involve investments in the public or private debt and equity of operating companies (e.g., loan servicers that specialize in the management, collection and recovery of distressed assets, operating partners, banks, or asset management companies) that the Advisers believe would be beneficial and/or accretive to the NPL investment program, including if such investments may produce additional deal flow, servicing alternatives and/or other market expertise in respect of investments that certain Clients may make (e.g., data on borrowers and geographic trends). Advisers may also invest in banks and other financial institutions and operating companies that have loan books, including, without limitation, in an effort to acquire the underlying assets owned by such company or for other reasons related to the investment strategy. The loans targeted will have varying terms with respect to collateral, relative seniority or subordination, purchase price, convertibility, interest requirements and maturity. Such loans may consist of a large and diverse spectrum of loans, including small to-medium enterprise and other corporate loans, real estate secured loans (including residential, commercial and multi-family loans), loans secured by assets other than real estate (e.g., ships), unsecured loans and consumer loans. In addition, the Advisers make investments on behalf of Clients in debt of underlying issuers that are, or face the prospect of becoming, financially distressed, are or may become subject to a reorganization or insolvency proceeding, such as, but not limited to, a bankruptcy proceeding, or are or may become engaged in other extraordinary transactions, such as debt restructuring, reorganization and liquidation outside of bankruptcy. Corporate credit investment opportunities are expected to focus primarily on stressed and distressed market opportunities in senior secured bonds and loans in the high-yield bond and leveraged loan markets but may also include a variety of other debt instruments with varying terms with respect to collateral, relative seniority or subordination, purchase price, convertibility, interest rate and maturity (e.g., bonds, debentures and notes, trust certificates and commercial paper and trade claims). Debt investments may be coupled with equity investments or “kickers” and the Advisers may also invest in public and/or privately traded stand-alone equity and equity-related securities of stressed or distressed companies, including preferred stock, convertible preferred stock, common stock and warrants. The Advisers may also invest in debt that they believe is undervalued because of operational inefficiencies or market dislocations, even when the market generally does not view such debt, or its issuer, as distressed. Furthermore, the Advisers make investments on behalf of Clients in debt and equity securities of MBS (including, without limitation, MBS backed by prime, Alt-A, Alt-B, subprime mortgages and commercial mortgages), asset-backed securities (“ABS”), collateralized debt obligations (“CDOs”), CLOs, synthetic indices, mortgage servicing rights (“MSRs”) and other forms of asset-backed securities and other pools of distressed assets. In addition, in connection with the residential strategy, the Advisers may purchase U.S. and non-U.S. performing loans, RPLs and NPLs and pools of performing loans, RPLs and NPLs that are consistent with the Advisers’ investment programs. Such loans may include, without limitation, loans secured by residential and commercial properties (which include, without limitation, multifamily properties, land, hotels, offices and condominiums), small-to-large- balance commercial loans and loans related to rental finance and similar businesses. Leverage and Hedging. The Advisers may use leverage for liquidity and investment purposes, subject to the Client’s offering documents, organizational documents and investment management agreement. Leverage, including subscription financing, may be achieved through, among other methods, direct borrowing, purchases of securities on margin and the use of options, futures, forward contracts, repurchase and reverse repurchase agreements and swaps. The Advisers may (but need not) employ various hedging techniques to reduce actual or potential risks to which the Client’s portfolio may be exposed. The Advisers may invest in various securities, derivatives, indexes and cash equivalents and related instruments both to hedge the Clients’ portfolio positions and currency risk and to opportunistically seek to meet the Clients’ investment objectives, including (i) futures and forward contracts, (ii) swaps, including, without limitation, credit default swaps, baskets of credit default swaps, total return swaps, index swaps and interest rate swaps, (iii) options, warrants, caps, collars, floors, swaptions and forward rate agreements and (iv) other synthetic opportunities (e.g., ABX, IOS, PRIMEX and CMBX); (v) other securities (including equities), indexes, exchange traded funds and REITS; and (vi) cash (including U.S. treasuries and agency MBS). The Advisers may, from time to time, adopt a temporary defensive investment strategy for the Clients by investing in investment grade and/or U.S. government securities, money market funds, commercial paper, certificates of deposit and other money market instruments and interest-bearing accounts and other similar interim investments for cash management. Risks Relating to Investment Strategies. The investment programs for each of the Clients involve a substantial degree of risk. The Adviser has listed certain risks below; however, the list of risks is not comprehensive or complete. Clients and investors are strongly encouraged to review the risks of their investment program, as contained in the Client’s private placement memorandum, the Client’s organizational documents, the subscription documents related to an investment in the Client and/or as set forth in the Client’s investment management agreement. In addition, while certain risks may be more important for certain investment strategies, certain risks may overlap and apply to multiple investment strategies. Risks Associated with Private Equity Control Issues . A Client may have control positions in addition to advisory roles in portfolio companies, along with certain contractual rights to protect its investments (including shareholder agreements, redemption rights and/or the right to place a designee of the Adviser or an Affiliate on the boards of directors or as a board observer of portfolio companies); however, such Clients may not always have control over its portfolio companies. A Client runs the risk of refusal of management or shareholders of portfolio companies to adopt the recommendations of such Client, disagreement with existing management and any investment losses resulting from such refusal or disagreement. Although the Adviser or an Affiliate may seek protective positions, including possible board representation, in connection with its private equity investments, to the extent a Client takes minority positions in companies in which it invests, the Advisers may not be in a position to exercise control over the management of such companies, and, accordingly, may have a limited ability to protect such Client’s position in such companies. Furthermore, in certain circumstances in which the Clients do not own 100% of the equity of a portfolio company, but have a controlling interest, the Adviser’s or its Affiliate’s actions may be limited by its fiduciary obligations to minority equity holders.

Highly Leveraged Companies . Private investments in highly leveraged companies involve a high degree of risk. Some of a Client’s investments in companies will likely involve leverage, which in turn will increase the exposure of such companies to adverse economic factors such as downturns in the economy or deterioration in the conditions of such companies or their respective industries. In the event that any such company cannot generate adequate cash flow to meet debt service, a Client may suffer a partial or total loss of capital invested in the company, which, depending on the size of such Client’s investments, could adversely affect the return on the capital of such Client.

Follow-On Investments . A Client may have the opportunity or be called upon to provide follow-on funding for a portfolio investment or may have the opportunity to increase its investment in a portfolio investment. For a variety of reasons, the Advisers may decide not to make additional investments in the financial instruments of companies in which a Client already has an investment. The Advisers may elect not to make such additional investments because, among other reasons, the Client lacks available capital to do so or the Advisers does not want to increase the concentration of the Client’s investments. Declining to invest in such additional investments could have a substantial negative impact on a portfolio company in need of capital, may diminish a Client’s ability to influence the portfolio company’s future development, may result in dilution of a Client’s investment in the portfolio company and could impair the value of such underlying company and, in turn, the value of the instruments pertaining to such company that are owned by a Client. In the event a Client elects to participate in follow-on funding for a portfolio investment, there is a risk that the follow-on funding does not preserve, protect or enhance the existing investment, and a Client may lose both its initial investment and the follow-on investment. Risks Associated with Investments in Real Estate General Real Estate Risks . Certain Client investment strategies involve direct investments in real property as well as investments in financial instruments and assets secured by real estate and other real estate-related investments. Real estate and real estate-related investments generally will be subject to the risks incident to the ownership and operation of real estate and/or risks incident to the making of nonrecourse mortgage loans secured by real estate, including risks associated with: (i) the domestic and international general economic climate (for example, market fluctuations that cause plant closings, military base closings, industry slowdowns and unemployment rates to rise); (ii) demographic factors; (iii) changes in interest rates and foreign exchange rates; (iv) changes in the availability of debt financing and/or mortgage funds which may render the sale or refinancing of properties difficult or impracticable; (v) increased mortgage defaults; (vi) increases in borrowing rates; (vii) dependence on cash flow; (viii) the financial resources of issuers and borrowers; (ix) local real estate conditions (such as, decreases in property values, changes in supply and demand for competing properties in an area (as a result, for instance, of over-building)) and fluctuations in real estate fundamentals (such as average occupancy and room rates for hotel properties); (x) real estate development and construction risks, including operating costs and time projection; (xi) the ability of a Client or third-party borrowers to manage, maintain and operate the real properties (for example, problems arising out of energy and supply shortages); (xii) the financial condition of tenants, buyers and sellers of properties; (xiii) regulatory limitations on rents; (xiv) changes in certain regulations and laws (such as zoning, environmental and building laws); (xv) changes in real property tax rates and/or tax credits; (xvi) various uninsured or uninsurable risks; and (xvii) natural disasters. With respect to investments in the form of real property owned by a Client, such Client will incur the burdens of ownership of real property, which include the paying of expenses and taxes, maintaining such property and any improvements thereon and ultimately disposing of such property.

With respect to investments in equity securities, debt securities or other financial instruments, including REITs, the securities generally will be subject to the risks incident to the ownership and operation of real estate and/or risks incident to the making of nonrecourse mortgage loans secured by real estate. The Clients will also in large part be dependent on the ability of third parties to successfully operate the underlying real estate assets. In addition, Clients may invest in mortgage loans that are structured so that all or a substantial portion of the principal will not be paid until maturity, which increases the risk of default at that time. A Client’s investment strategy, which may involve the acquisition of distressed or underperforming assets in a leveraged capital structure, will involve a high degree of legal and financial risk, and there can be no assurance that such Client’s rate of return objectives will be realized or that there will be any return of capital. There is no assurance that there will be a ready market for resale of investments because investments in real-estate-related assets generally are not liquid. Illiquidity may result from the absence of an established market for the investments, as well as from legal or contractual restrictions on their resale by the Clients. The possibility of partial or total loss of capital exists. Real Estate Development and Construction Risks . A Client may acquire equity and/or debt interests in real estate developments and/or in businesses that engage in real estate development. To the extent that a Client invests in such development activities, it will be subject to the risks normally associated with such activities. Such risks include, without limitation, risks relating to the availability and timely receipt of zoning and other regulatory approvals, the cost and timely completion of construction (including risks beyond the control of such Client or the Advisers, such as weather or labor conditions or material shortages) and the availability of both construction and permanent financing on favorable terms. These risks could result in substantial unanticipated delays or expenses and, under certain circumstances, could prevent completion of development activities once undertaken, any of which could have an adverse effect on the financial condition and results of operations of the Clients. Single -Family Homes. At present, the institutional single-family rental industry is still evolving, with few participants, and its long-term viability has not yet been fully demonstrated. Rental housing properties are part of a market that, in general, is characterized by low barriers to entry. Thus, a particular rental housing property market with historically low vacancies could experience substantial new construction and a resultant oversupply of rental units within a relatively short period of time. Because rental housing properties are typically leased on a short-term basis, the tenants residing at a particular property may easily move to alternative properties with more desirable amenities or locations, or available for lower rent. Risks Associated with Investments in Global Credit Opportunities

Bank Loans, Participations and Other Indirect Economic Interests . Certain Clients’ investment programs include investments in bank loans, participation interests, or other indirect economic interests in loans or other debt obligations. In such circumstances, the Clients will not directly own the debt obligations underlying such participation or other economic interests and/or have custody thereof. These obligations are subject to unique risks, including: (i) the possible invalidation of an investment transaction as a fraudulent conveyance under relevant creditors’ rights laws; (ii) so-called lender-liability claims by the issuer of the obligations; (iii) environmental liabilities that may arise with respect to collateral securing the obligations; (iv) limitations on the ability of the Clients to directly enforce their rights with respect to participations; and (v) possible claims for the return of some or all payments made within a certain time frame under the bankruptcy and creditor rights laws of the United States, its states, and other jurisdictions. In analyzing each bank loan or participation, the Advisers compare the relative significance of the risks against the expected benefits of the investment. The costs of claims by third parties arising from these and other risks will be borne by the Clients. As an owner of participation interests or other indirect economic interests (including as a member of a loan syndicate), a Client may not be able to assert any rights against borrowers of the underlying indebtedness, and may need to rely on the holder/custodian (or other financial institution) issuing the participation interests or such other entity charged with the responsibility for asserting such rights, if any. Such holders/custodians and financial institutions or other entities may have reasons not to assert their rights, whether due to a limited financial interest in the outcome, other relationships with the underlying defaulting borrowers, the threat of potential counterclaims or other reasons, that may diverge from the interests of a Client. The failure of such holders/custodians and financial institutions or other entities to assert their rights (on behalf of a Client) or the insolvency of such entities could materially adversely affect the value of the assets of a Client.

As secondary market trading volume increases, new loans are frequently adopting standardized documentation to facilitate loan trading, which may improve market liquidity. There can be no assurance, however, that future levels of supply and demand in loan trading will provide an adequate degree of liquidity or that the current level of liquidity will continue. Because of the provision to holders of such loans of confidential information relating to the borrower, the unique and customized nature of the loan agreement, and private syndication of the loan, such loans are not as easily purchased or sold as publicly traded securities, and historically the trading volume in the loan market has been small relative to other markets.

Risks Associate d with NPLs. Certain loans purchased by the Advisers for certain Clients will be non-performing and possibly in default. Furthermore, the obligor and/or relevant guarantor may also be in bankruptcy or liquidation. There can be no assurance as to the amount and timing of payments with respect to the loans. By their nature, these investments will involve a high degree of risk. Such NPLs may require substantial workout negotiations or restructuring that may entail, among other things, a substantial reduction in the interest rate, a substantial write-down of the principal of the loan and/or the deferral of payments. Commercial and industrial loans in workout and/or restructuring modes and the bankruptcy or insolvency laws of non-U.S. jurisdictions are subject to additional potential liabilities, which may exceed the value of a Client’s original investment. Even assuming that the collateral securing each loan provides adequate security for the loans, substantial delays could be encountered in connection with the restructuring, foreclosure or liquidation of NPLs. In the event of a default by a borrower, these restrictions, as well as the ability of the borrower to file for bankruptcy protection, among other things, may impede the ability to foreclose on or sell the collateral or to obtain net liquidation proceeds sufficient to repay all amounts due on the related loan. In addition, under certain circumstances, lenders who have inappropriately exercised control of the management and policies of a debtor may have their claims subordinated or disallowed or may be found liable for damages suffered by parties as a result of such actions. Under certain circumstances, payments to a Client and distributions by a Client to its investors may be reclaimed if any such payment or distribution is later determined to have been a fraudulent conveyance or a preferential payment. Bankruptcy laws may delay the ability of a Client to realize on collateral for loan positions held by it or may adversely affect the priority of such loans through doctrines such as equitable subordination or may result in a restructure of the debt through principles such as the “cramdown” provisions of the bankruptcy laws. General Credit Risks . Although the Advisers generally intend to primarily invest on behalf of Clients in loans and other debt instruments or obligations that are secured by collateral, Clients may be exposed to losses resulting from default and foreclosure of any such loans or interests in loans or other debt instruments in which it has invested. Therefore, the value of underlying collateral, the creditworthiness of borrowers and the priority of liens are each of great importance in determining the value of a Client’s investments. No guarantee can be made regarding the adequacy of the protection of a Client’s security in the loans or other debt instruments in which it invests. Moreover, in the event of foreclosure, a Client or an affiliate thereof may assume direct ownership of any assets collateralizing such foreclosed loans. The liquidation proceeds upon the sale of such assets may not satisfy the entire outstanding balance of principal and interest on such foreclosed loans or other debt, resulting in a loss to such Client. Any costs or delays involved in the effectuation of loan foreclosures or liquidation of the assets collateralizing such foreclosed loans will further reduce proceeds associated therewith and, consequently, increase possible losses to such Client. In addition, no assurances can be made that borrowers or third parties (which may include other creditors) will not assert claims in connection with foreclosure proceedings or otherwise, or that such claims will not interfere with the enforcement of a Client’s rights with respect to its investments.

Ability to Lend on Advantageous Terms; Competition and Supply. A Client may originate loans and may also invest in loans originated by other parties (including, without limitation, debt that trades on the secondary market). Success in this area will depend in part on the ability of a Client to originate and obtain loans, and the Advisers’ or such other parties’ ability to originate or source loans, on advantageous terms. In making loans, the Clients will compete with a broad spectrum of lenders, some of which may be willing to lend money on terms more favorable to borrowers. Such competing lenders may include private investment funds, public funds, commercial and investment banks, commercial financing companies and other entities. Some competitors may have a lower cost of funds and/or access to funding sources that are not available to the Clients or the Advisers. In addition, some competitors may have higher risk tolerances or different risk assessments, which could allow them to consider a wider variety of investments and establish more relationships than the Clients and the Advisers. The Clients and the Advisers may also choose not to compete for investment opportunities based on interest rates. Ultimately, increased competition for, or a diminution in the available supply of, qualifying borrowers may result in lower yields on loans to such borrowers, which could reduce returns to the Clients and their investors.

Equitable Subordination. Under the laws of certain jurisdictions, a court may use its equitable powers to subordinate the claim of a lender to some or all of the other claims against a borrower under certain circumstances. The concept of equitable subordination is that a claim may normally be subordinated only if its holder is guilty of some misconduct. The remedy is intended to be remedial, and not penal. In determining whether equitable subordination of a claim is appropriate in any given circumstance, courts may look to whether the following conditions have been satisfied: (i) whether the claimant has engaged in some type of inequitable conduct; (ii) whether the misconduct has resulted in injury to the creditors of the bankrupt company or conferred an unfair advantage on the claimant; and (iii) whether equitable subordination would be inconsistent with other applicable provisions of the bankruptcy code. While the stated test could be interpreted broadly, equitable subordination is usually confined to three general paradigms: (x) when a fiduciary of the debtor (who is also a creditor) misuses its position to the detriment of other creditors; (y) when a third party (which can include a lender) controls the debtor to the disadvantage of other creditors; and (z) when a third party actually defrauds other creditors. A Client may be subject to claims from creditors of an obligor that debt assets of such obligor which are held by such Client should be equitably subordinated. The concept of equitable subordination (or the equivalent thereof) may vary from jurisdiction to jurisdiction.

Recharacterization. Under the laws of certain jurisdictions, a court may use its equitable powers to “recharacterize” the claim of a lender, i.e., notwithstanding the characterization by the lender and borrower of a loan advance as a “debt,” to find that the advance was in fact a contribution in exchange for equity. Typically, recharacterization occurs when an equity holder asserts a claim based on a loan made by the equity holder to the borrower at a time when the borrower was in such poor financial condition that other lenders would not make such a loan. In effect, a court that recharacterizes a claim makes a determination that the original circumstance of the contribution warrants treating the holder’s advance not as debt but rather as equity. In determining whether recharacterization is warranted in any given circumstance, courts may look at the following factors: (i) the names given to the instruments (if any) evidencing the indebtedness; (ii) the presence or absence of a fixed maturity or scheduled payment; (iii) the presence or absence of a fixed rate of interest and interest payments; (iv) the source of repayments; (v) the adequacy or inadequacy of capital; (vi) the identity of interest between the creditor and the equity holders; (vii) the security (if any) for the advances; (viii) the borrower’s ability to obtain financing from outside lending institutions; (ix) the extent to which the advances were subordinated to the claims of outside creditors; (x) the extent to which the assets were used to acquire capital assets; and (xi) the presence or absence of a sinking fund to provide for repayment. These factors are reviewed under the circumstances of each case, and no one factor is controlling. A Client may be subject to claims from creditors of an obligor that debt obligations of such obligor held by the Client should be recharacterized.

Fraud. Clients could be adversely affected by material misrepresentations or omissions on the part of a borrower or counterparty or by fraudulent behavior by a joint venture partner, manager or other service provider. Inaccuracies or incompleteness of representations may adversely affect the valuation of collateral underlying loans and may adversely affect the ability of a Client to perfect or effectuate a lien on the collateral securing a loan. Fraudulent behavior by a counterparty could result in the misappropriation of a Client’s funds or otherwise reduce the value of one or more of a Client’s investments. Clients will rely upon due diligence by the Advisers and the accuracy and completeness of representations made by borrowers, other counterparties, joint venture partners, managers and other service providers and cannot guarantee that it will detect occurrences of fraud. In addition, under certain circumstances, payments by borrowers to a Client may be reclaimed if any such payment is later determined to have been a fraudulent conveyance or a preferential distribution. Risks Associated with Foreclosure on Real Estate and Physical Assets . Certain loans made by Clients are secured by real estate or other physical assets. To the extent a Client needs to foreclose on such loans such Client may, directly or indirectly, own such real estate or other physical assets and may be subject to the risks incident to the ownership and operation of real estate or other physical assets, including the risks identified in “General Real Estate Risks”, below. In addition, a Client may, directly or indirectly, incur the burdens of ownership of real property, which include the paying of expenses and taxes, maintaining such property and any improvements thereon and ultimately disposing of such property. There is no assurance that there will be a ready market for resale of real estate or such other assets or that such real estate collateral will be sufficient to satisfy such defaulted loan obligation.

Investments May Be Volatile . A principal risk in investing in distressed investments is the traditional volatility in the market prices of such investments. Price movements of the instruments in which a Client’s assets may be invested may be influenced by, among other things, interest rates, changing supply and demand relationships, trade, fiscal, monetary and exchange control programs and policies of governments, a national or international health crisis (e.g., COVID-19) and national and international political and economic events and policies. Fluctuations or prolonged changes in the volatility of such instruments, therefore, can adversely affect the value of investments held by a Client. Many non‐U.S. financial markets are not as developed or as efficient as those in the U.S., and as a result, price volatility may be higher for a Client’s non-U.S. investments. In addition, governments from time to time intervene in certain markets. Such intervention often is intended directly to influence prices and may cause or contribute to rapid fluctuations in asset prices, which may adversely affect a Client’s returns.

Unrated or Below Investment Grade Loans and Debt Instruments . Subject to the specific terms of a Client as set forth in such Client’s private placement memorandum, such Client’s organizational documents, the subscription documents related to an investment in such Client and/or the investment management agreement with such Client, there are generally no restrictions on the credit quality of loans and debt instruments that may be invested in by a Client. Certain of these investments may be unrated and whether or not rated, such debt instruments may have speculative characteristics. The market values of certain of these lower-rated and unrated loans and debt instruments tend to reflect individual corporate developments and changes in economic conditions to a greater extent than do higher-rated debt instruments. As a result, the market prices of such loans and debt instruments may be subject to abrupt and erratic movements in price and liquidity. Borrowers that are the subject of such loans and that issue such debt instruments are often highly leveraged and may not have available to them more traditional methods of financing. Illiquid Nature of Investments and Loans . A Client may hold a significant portion of its loans and other debt investments until redeemed or maturity and that many of its investments may be illiquid. Additionally, investments (including investments in Risk Retention Entities) may not be readily disposable and, in some cases, may be subject to contractual, statutory or regulatory prohibitions on disposition for a specified period of time. Should the Advisers determine it to be advisable to earlier dispose of any illiquid investments, a Client may have difficulty doing so. Alternatively, a Client may only be able to sell such investments or loans at substantial discounts to face value. In certain circumstances, a Client may be prohibited by contract from selling investments for defined periods of time. Depending on the type of investments or loans held by a Client, such investments and loans may require a substantial period of time to liquidate. There can be no assurances that there will be a liquid market for resale of such investments or loans, and illiquidity may result from the absence of an established market for certain investments and loans as well as from legal or contractual restrictions. Investments in Private Middle -Market Companies . In addition to limited liquidity, investments in loans issued to, and debt instruments of, private middle-market companies may involve a number of additional risks. Generally, little public information exists about such companies, and a Client will rely on the ability of the Advisers to obtain adequate information to evaluate the potential returns from investing in such loans or debt instruments. If a Client is unable to uncover all material information about such companies, it may not make a fully-informed investment decision, and may lose money. Private middle-market companies typically have shorter operating histories, less predictable operating results, narrower product lines, and smaller market shares than larger businesses, which characteristics tend to render them more vulnerable to competitors’ actions and market conditions, as well as general economic downturns. Private middle-market companies are also more likely to depend on the management talents and efforts of a small group of persons, the loss of which could have a material adverse impact. In addition, private middle - market companies may be engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence, and may require substantial additional capital to support their operations, finance expansion or maintain their competitive position. As a consequence, certain loans invested in by a Client could be or become NPLs and borrowers could default with respect to such loans.

Syndication and/or Transfer of Debt Instruments . A Client, directly or through the use of one or more SPVs, may originate and/or purchase senior secured loans and other assets. A Client may also purchase loans or other assets (including, participation interests or other indirect economic interests) that have been originated by one or more of the Clients or from other parties and/or trading on the secondary market. A Client may in certain circumstances, originate or purchase such secured debt assets with the intent of syndicating and/or otherwise transferring or offering for transfer a significant portion thereof (including, without limitation, corresponding portions of outstanding principal and future interest, and a corresponding amount of unamortized fees, but excluding any service fees), including to one or more other Clients. In such instances, such Client will bear the risk of any decline in value prior to any syndication and/or other transfer to other Clients or third parties, as well as the risk of any inability to syndicate or otherwise transfer such loans or other assets or such amount thereof as originally intended (and including as a result of any such loans not being approved by such established independent committee of certain Clients to which they are offered), which could result in such Client owning a greater interest therein than originally anticipated. Investments in Loans Originated by Affiliates . Non-Originating Funds (as defined in Item 11) may purchase secured loans originated by the Originating Funds (as defined in Item 11) and offered to Non-Originating Funds for purchase in accordance with the Investment Allocation Policy. All investment decisions made by such Originating Funds are made by the Adviser. Any such purchases of loans by a Non-Originating Fund from such Originating Lending Fund (excluding any 45 day “look back” allocation adjustments of secondary loan purchases made in accordance with the Investment Allocation Policy) will be subject to the approval of such Non-Originating Fund’s independent investment committee, which may accept or reject the offer of such loans in its discretion, and such purchases will be effected at the fair market value thereof at such time. Any such purchase of loans by the Non- Originating Funds from one or more Originating Funds will include the corresponding portions of outstanding principal and future interest, as well as certain unamortized loan fees as described below, but the Non-Originating Funds will not be entitled to any fees paid by a borrower for services rendered or to be rendered, including, but not limited to, agency fees, assignment fees, management fees, servicing fees, sub-advisory fees or other fees for services earned by the loan seller or loan originator or by an underwriter, placement agent, lender, arranger, agent or similar person in connection with the issuance or funding of a loan (such fees paid by a borrower, collectively, “Service Fees”). Any such Service Fees received by an affiliate of the Adviser from a portfolio borrower will be applied for the benefit of the Originating Funds invested in such borrower and will not be shared by any Non-Originating Funds, nor will any such Service Fees offset any management fees of any Non-Originating Funds. Commitment fees, upfront fees, anniversary fees, facility maintenance fees, discounts or any other similar “fees” that provide the borrower the “option” to borrow under a loan where such fees operate for tax purposes like option premium, original issue discount or an interest-like return are not treated as Service Fees and may be received by both Originating Funds and Non-Originating Funds. Performance Variation Across Clients in the CBF Platform. Performance results among the Lending Funds are expected to vary as a result of numerous factors, including differences with respect to, among other things, fund investment limitations, the use of fund leverage (if any), fund vintage and investment period, fund expenses and other capital activity, as well as differing tax, regulatory, legal and other considerations. Additionally, since Non-Originating Funds do not participate in the origination of loans, their performance is expected to differ from Originating Funds for several additional reasons, including the following: first, the Non-Originating Funds will not share in the interest income accrued from the date of origination in which the Originating Funds hold originated loan investments until the date of any such transfer to such Non-Originating Funds; second, the Non-Originating Funds will share in the unamortized component of closing fees with respect to loans originated by the Originating Funds and will not share in any Service Fees in respect of such loans; third, if a targeted loan origination by the Originating Funds does not ultimately close, the Non-Originating Funds will not share in any broken-deal or failed transaction expenses (for the avoidance of any doubt, unless stated otherwise in the governing documents of a Client, Non-Originating Funds do not share in broken-deal and failed transaction expenses for non-Adviser originated loans); fourth, the Non-Originating Funds are expected to hold the underlying originated loan investments for a shorter duration (or ultimately may not acquire such loan), which may result in a different internal rate of return relative to the Originating Funds; fifth, during the period prior to any transfer of an originated loan to the Non-Originating Funds, the valuation of such loan may change; sixth, due to certain legal, tax or regulatory considerations, certain loans originated by Originating Funds may not be transferred to certain Non-Originating Funds (or may be transferred in smaller amounts than otherwise would be the case) and the portfolios of the Non-Originating Funds are expected to consist of a greater amount of loans originated by third parties relative to the Originating Funds, some of which secondary loans may be allocated only to such Non- Originating Funds due to the applicable tax structure or other requirements; lastly, the portfolios of the Originating Funds and the Non-Originating Funds may also differ as a result of approval determinations made by the established independent committees of such Non- Originating Funds with respect to proposed transfers of loans originated by the Originating Funds.

Participations and other Indirect Economic Interests . A portion of the assets of a Client may consist of participation interests or other indirect economic interests in loans or other assets. In such circumstances, such Client will not directly own the loans or other assets underlying such participation or other economic interests and/or have custody thereof. As a result, such Client will be exposed to the risk that the assets of the holder/custodian of any such underlying loans or other assets may be subject to the claims of third-party creditors or other parties. In addition, as an owner of participation interests or other indirect economic interests (including as a member of a loan syndicate), such Client may not be able to assert any rights against borrowers of the underlying indebtedness, and may need to rely on the holder/custodian (or other financial institution) issuing the participation interests or such other entity charged with the responsibility for asserting such rights, if any. Such holders/custodians and financial institutions or other entities may have reasons not to assert their rights, whether due to a limited financial interest in the outcome, other relationships with the underlying defaulting borrowers, the threat of potential counterclaims or other reasons, that may diverge from the interests of such Client. The failure of such holders/custodians and financial institutions or other entities to assert their rights (on behalf of such Client) or the insolvency of such entities could materially adversely affect the value of the assets of such Client.

Distressed Borrowers; Bankruptcy Risks . A Client may invest in loans and debt instruments of companies that are experiencing significant financial or business difficulties, including companies involved in bankruptcy or other reorganization and liquidation proceedings. Although such investments may result in significant returns to a Client, they involve a substantial degree of risk. Distressed borrowers may be less likely to meet their obligations in connection with such loans or debt instruments, and the inability to meet such obligations may result in certain loans of a Client becoming nonperforming. The level of legal and financial sophistication necessary for successful investment in the loans issued to, or the debt instruments of, companies experiencing significant business and financial difficulties is unusually high. There is no assurance that the Advisers will correctly evaluate the value of the assets collateralizing the loans invested in by a Client or the prospects for a successful reorganization or similar action, if any, or the general performance of such loans. In addition, to the extent that a Client invests in loans or debt instruments with respect to companies that subsequently undergo bankruptcy or similar liquidation proceedings, such investments may be subject to additional risks. Many of the events within a bankruptcy case are adversarial and often beyond the control of creditors. Although creditors generally are afforded an opportunity to object to significant actions, there is the possibility that a bankruptcy court could approve actions that may be contrary to the interests of a Client. The duration of bankruptcy proceedings is often difficult to accurately predict, and such proceedings may be lengthy. The administrative costs in connection with bankruptcy proceedings are frequently high and will be paid out of the debtor’s estate (other than out of assets or proceeds thereof that are subject to valid and enforceable liens and other security interests) prior to any return to unsecured creditors and equity holders. In connection with a bankruptcy proceeding, the Advisers, on behalf of a Client, may seek representation on creditors’ committees or other groups to ensure preservation or enhancement of a Client’s position as a creditor. If a Client is represented on a committee or group, it may be restricted or prohibited under applicable law from disposing of its investments in such company while it continues to be represented on such committee or group. In addition, a Client’s return on investment can be adversely affected by the passage of time during which the plan of reorganization of a bankrupt debtor is being negotiated, approved by the creditors and confirmed by the bankruptcy court. Reorganizations outside of bankruptcy are also subject to unpredictable and potentially lengthy delays. Priority of Debt Instruments and Loans . A Client may originate or invest in secured debt issued by companies that have or may incur additional debt that is senior to the secured debt owned by such Client. In many instances, loans made by a Client may be part of a unitranche structure in which a single lien on behalf of all the lenders in the structure will be filed against the assets of the company if the lenders holding the different tranches of debt (including such Client) will contractually agree to their respective priorities in those assets. In the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of any such company, the owners of senior secured debt (i.e., the owners of first priority liens), including in a unitranche structure through the contractual agreements between the lenders, generally will be entitled to receive proceeds from any realization of the secured collateral until they have been reimbursed. At such time, the owners of junior secured debt (including, in certain circumstances, a Client) will be entitled to receive proceeds from the realization of the collateral securing such debt and only thereafter would the owners of unsecured debt be entitled to any recovery. There can be no assurances that the proceeds, if any, from the sale of such collateral would be sufficient to satisfy the loan obligations secured by subordinate debt instruments. To the extent that a Client owns secured debt that is junior to other secured debt, such Client may lose the value of its entire investment in such secured debt.

Interest Rate Risk; Prepayment. A Client may invest in fixed interest rate debt instruments. The value of fixed interest rate debt instruments generally has an inverse relationship with future interest rates. Accordingly, if interest rates rise, the value of such instruments may decline. In addition, to the extent that the receivables or loans underlying specific financial instruments may be prepaid without penalty or premium, the value of such financial instruments may be negatively affected by increasing prepayments. Such prepayments tend to occur more frequently as interest rates decline. Fluctuations in Receipt of Proceeds . The Adviser expects to experience fluctuations in the timing and amount of proceeds a Client may receive in the form of interest and fee income and in connection with the realization of investments in loans and other debt instruments in which such Client has invested. Such fluctuations are due to, among other things, changes in the interest rates payable on the debt instruments acquired by a Client, the default rate on such debt instruments, the level of a Client’s expenses (including the interest rates payable on a Client’s borrowings), variations in and the timing of the realization of investments, the degree to which a Client encounters competition in the markets and general economic conditions. As a result of these factors, the amounts of distributions to a Client’s investors may fluctuate substantially. General Risks
Risks Associated with Investments in Stressed and Distressed Securitie s and Assets.
Certain Clients typically invest in securities, debt and assets of U.S. and non-U.S. companies that are experiencing significant financial or business difficulties, including companies involved in bankruptcy or other reorganization and liquidation proceedings. Although such investments may result in significant returns to such Clients, they involve a substantial degree of risk. Any one or all of the issuers of the securities or debt in which such Clients may invest may be unsuccessful or not show any return for a considerable period of time. The level of analytical sophistication, both financial and legal, necessary for successful investment in entities experiencing significant business and financial difficulties is unusually high.

Investments in assets operating in workout mode or bankruptcy, or the equivalent in foreign jurisdictions, are, in certain circumstances, subject to certain additional potential liabilities which may reduce the value of a Client’s investment.

Furthermore, with respect to a Client’s investments in secured loans and ABS, there is no assurance that the Advisers will correctly evaluate the value of the assets collateralizing such Client’s loans or securities or the prospects for a successful reorganization or similar action. In any reorganization or liquidation proceeding relating to a company in which the Client invests, the Client may lose its entire investment, may be required to accept cash or securities with a value less than the Client’s original investment and/or may be required to accept payment over an extended period of time. Under such circumstances, the returns generated from the Client’s investments may not compensate the Client adequately for the risks assumed. Investments in troubled companies, their sub-performing or non-performing loans and other investments require active monitoring and may, at times, require participation in business strategy or reorganization proceedings by the Advisers. To the extent that the Advisers become involved in such proceedings, Clients may have a more active participation in the affairs of the issuer than that assumed generally by an investor. In addition, involvement by the Advisers in an issuer’s reorganization proceedings could result in the imposition of restrictions limiting a Client’s ability to liquidate its position in the issuer. Investments for Clients may be made in bonds or other fixed-income securities, including, without limitation, higher yielding (and, therefore, higher risk) debt securities that are below investment grade and face ongoing uncertainties and exposure to adverse business, financial or economic conditions that could lead to the issuer’s inability to meet timely interest and principal payments. The market values of certain of these lower-rated debt securities tend to reflect individual corporate developments to a greater extent than do higher-rated securities, which react primarily to fluctuations in the general level of interest rates. It is likely that a major economic recession could have a materially adverse impact on the value of such securities. In addition, adverse publicity and investor perceptions, whether or not based on fundamental analysis, may also decrease the value and liquidity of securities rated below investment grade. A Client may purchase loans that may be in default or are from issuers in financial distress or bankruptcy proceedings. As with other types of debt instruments, loans involve the risk of loss in case of default or insolvency of the borrower. Such loans are also less liquid than are the debt instruments of publicly traded companies

Investments May Be Volatile . A principal risk in investing in distressed investments is the traditional volatility in the market prices of such investments. Price movements of the instruments in which Clients’ assets may be invested may be influenced by, among other things, interest rates, changing supply and demand relationships, trade, fiscal, monetary and exchange control programs and policies of governments, a national or international health crisis (e.g., COVID-19) and natio please register to get more info

DISCIPLINARY INFORMATION
There are no legal or disciplinary events that are material to a Client’s (or investor’s) or a prospective Client’s (or prospective investor’s) evaluation of the Adviser’s advisory business or the integrity of the Adviser’s management. please register to get more info

OTHER FINANCIAL INDUSTRY ACTIVITIES AND AFFILIATIONS
A. Broker-Dealer Registration Status . The Adviser and its management persons are not registered as broker-dealers and do not have any application pending to register with the SEC as a broker-dealer or registered representative of a broker-dealer. B. Futures Commission Merchant, Commodity Pool Operator or Commodity
Trading Advisor Registration Status .
The Adviser is not registered as, and does not have any application to register as, a futures commission merchant, CPO, Commodity Trading Advisor (“CTA”) or an associated person of the foregoing entities, but the CPO Managers have registered as CPOs with the CFTC and have become members of the NFA. Certain management persons of the Adviser are registered as principals and/or associated persons of the CPO Managers. Other Affiliates rely upon the exemption from registration provided pursuant to CFTC Rule 4.13(a)(3). Certain of the Adviser’s management persons, Stephen Feinberg, Alex Benjamin, Frank Bruno, William Richter, Andrew Kandel, Jeffrey Lomasky, Mark Neporent, Joshua Weintraub and Matthew Zames are registered with the NFA as principals, but not associated persons, of certain of the CPO Managers. Seth Plattus, and Scott Stelzer, both management persons of the Adviser, are registered with the NFA as both a principal and an associated person of certain of the CPO Managers. Other personnel are also registered as associated persons of the CPO Managers. Each of the CPO Managers is a member of the NFA and plans to avail itself of an exemption from certain heightened disclosure and recordkeeping requirements provided by CFTC Regulation 4.7. The CPO Managers’ activities as CPOs enable them to use commodity products as part of their investment strategies and do not conflict with their investment advisory business. C. Material Relationships or Arrangements with Industry Participants and
Affiliated Advisers.
For a complete list of Affiliates that serve as the general partner or managing member of a Private Fund, see Section 7.A. of Schedule D to the Adviser’s Form ADV Part 1. One Affiliate, Cerberus Sub-Advisory I, LLC, serves as an inactive sub-adviser to one fund registered as an investment company with the SEC under the 1940 Act. Although separately registered as an investment adviser with the SEC, Cerberus Sub-Advisory I, LLC is effectively part of the single advisory business of the Adviser. Another Affiliate, Cerberus Business Finance, LLC, a relying adviser (and together with other Affiliates including certain Clients involved in the Adviser’s direct lending business, (“CBF”)), was formed to, among other things, act as a loan asset agent on behalf of one or more of the Private Funds in connection with the issuance of CLOs. In March 2017, Cerberus Business Finance, LLC was converted into a series limited liability company in order to serve as the sponsor of certain CLOs, and raise the necessary risk retention capital from qualified employees of the Advisers, in satisfaction of the requirements of the credit risk retention rules, promulgated as part of the Dodd-Frank Act, relevant to CLOs. Several Affiliates currently serve as management companies to the Clients and provide certain administrative and managerial services to the Clients. In addition to the above affiliated general partners, investment managers and management companies, the Adviser retains and provides compensation to the following affiliated advisers:  Cerberus Japan K.K., a Tokyo-based affiliate;  Cerberus Asia Pacific Advisors Limited, a Hong Kong-based affiliate;  Cerberus Asia Pacific Advisors II Limited, a Hong Kong-based affiliate;  Cerberus Beijing Advisors Limited, a Beijing-based affiliate;  Cerberus Deutschland Beteiligungsberatung GmbH, a Frankfurt-based affiliate;  Cerberus European Capital Advisors, LLP, a London-based affiliate which is registered with the U.K. Financial Conduct Authority;  Cerberus Iberia Advisors, S.L., a Madrid-based affiliate;  Cerberus Global Investment Advisors, LLC, an affiliate with offices in New York and Baarn, The Netherlands;  Cerberus Frontier, an affiliate with offices in Ethiopia, Georgia, Mongolia and Singapore;  Cerberus Brasil Consultoria De Negocios Ltda, a São Paulo-based affiliate;  Cerberus Australia Advisors Pty Ltd, a Sydney-based affiliate;  Cerberus Capital Services Private Limited, a Mumbai-based affiliate; and  Cerberus Middle East Management Limited, a Dubai-based affiliate. Certain affiliated Advisers provide advice on Asian, European, African, South American and other non-U.S. investment opportunities. For the past 18 years, the Adviser has maintained offices in the Netherlands, which have been integral to the Adviser’s non-U.S. investment platform. The Dutch offices in Amsterdam and Baarn currently have 62 employees, which includes resident Dutch directors (the “Dutch Directors”) who make investment and disposition decisions in conjunction with the Adviser’s New York office with respect to a significant portion of the Clients’ non-U.S. investments. The Dutch Directors generally receive the same information provided to the Adviser’s investment committee in New York, and their approval is required for acquisitions, dispositions and restructuring transactions for a significant portion of the Clients’ non-U.S. investments. The Dutch Directors regularly conduct meetings and review background materials on potential investments, including descriptions of potential transactions and draft transaction documents. The Dutch Directors also approve annual business plans, significant contracts and financing and refinancing transactions relating to such non-U.S. investments. Further, the Dutch Directors regularly consult with the Adviser’s advisory offices on the performance of and ongoing strategy with respect to a significant portion of the Clients’ non- U.S. investments. In addition, with respect to certain European trades, the approval of the relevant Dutch Directors is generally required. To the extent that Clients originate or acquire non-U.S. investments, they may be structured through investment vehicles established in the Netherlands (the “Dutch Companies”) and in certain other foreign jurisdictions, and it is expected that the Netherlands will be involved in the ownership of future investments, for legal, regulatory and tax reasons. The costs and expenses of the Dutch Directors and the Dutch Companies generally are borne by the Clients. The expenses related to the Dutch Companies (the “Dutch Company Expenses”) that are borne by the Clients, include all expenses associated with the formation, organization, structure, administration, operation, accounting and reporting with respect to the Dutch Companies and their investments, and include, among other things, the costs of all of the Advisers’ employees working in the Netherlands who devote their time to the formation, organization, structure, administration, operation, accounting and reporting of the Dutch Companies and their investments including, for the avoidance of any doubt, and without limitation (i) associated personnel costs such as salaries, benefits, payroll taxes, holiday and vacation time and all other associated compensation and personnel costs, (ii) associated overhead, including, without limitation, all occupancy costs such as rent, utilities, HVAC, water, cleaning and all other occupancy and administrative expenses incurred in connection with the services provided by the Dutch Company personnel, and (iii) all out of pocket costs incurred by the Dutch Companies or Dutch offices in connection with the provision of such services by the Dutch Company personnel). The legal, regulatory and tax landscape is changing quickly in Europe and throughout the world, and it is likely that one or more additional offices will be established for similar purposes as the Dutch Companies or other legal, tax or regulatory purposes and similar personnel will be retained in other jurisdictions (collectively, “Additional Non-U.S. Offices”) for the benefit of the Clients. For example, the Advisers recently organized and commenced managing certain Irish NPLs and, therefore, have established an Additional Non-U.S. Office in Ireland. The Advisers currently anticipate that Additional Non-U.S. Offices may be established in Luxembourg and other international locations in order to respond to changes in law and policy. The Additional Non-U.S. Offices are expected to provide functions that are similar to those currently provided at the Dutch office by the Dutch Directors. The costs and expenses of any Additional Non-U.S. Office and its personnel (“Additional Non-U.S. Office Expenses” and, together with the Dutch Company Expenses, the “Dutch and Other Expenses”) would also be borne by the Clients similar to and consistent with the foregoing treatment of Dutch Company Expenses with respect to the Dutch offices. In November 2018, the Adviser acquired SGI Frontier Capital, a private equity firm focused on frontier markets in Asia and Africa, which now operates as Cerberus Frontier. Cerberus Frontier, headquartered in Singapore, has five additional locations and a team of over twenty dedicated professionals with a track record of direct investment in frontier markets, including Ethiopia, Georgia and Mongolia. Based on a decade of investing in frontier markets, the Cerberus Frontier team has completed more than thirty transactions and currently manages a diversified portfolio of investments in a variety of sectors, including consumer goods, clean energy, real estate, healthcare and building materials. Cerberus Frontier also works closely with the Adviser’s investment and operating platforms, including Cerberus Operations, to evaluate opportunities and bring industry knowledge and operating resources to investments. The Adviser’s proprietary operating capabilities provide the Cerberus Frontier team with the ability to enhance a company’s strategy and operations and drive significant growth and value creation. With respect to U.S. investment opportunities, the Adviser retains the following affiliated Advisers: (i) Cerberus California, LLC, an affiliate with offices in Los Angeles and San Francisco; and (ii) Cerberus Capital Chicago LLC, a Chicago-based affiliate. For a complete list of all related advisers of the Adviser, see Section 7.A. of Schedule D to the Advisers’ Form ADV Part 1.
Cerberus Operations and Advisory Companies
The Adviser has established (i) Cerberus Operations and Advisory Company, LLC, a New York- and Chicago-based affiliate (“Cerberus U.S. Operations”), (ii) Cerberus Asia Operations and Advisory Limited, a Hong Kong-based affiliate (“Cerberus Asia Operations”), (iii) Cerberus Operations and Advisory Company UK Limited, a London-based affiliate (“Cerberus U.K. Operations”), (iv) Cerberus Operations & Advisory Company Australia Pty Ltd (“Cerberus Australia Operations”) and (v) Cerberus Operations and Advisory Company Deutschland GmbH (“Cerberus D.E. Operations” and, together with Cerberus U.S. Operations, Cerberus Asia Operations, Cerberus U.K. Operations and Cerberus Australia Operations, “Cerberus Operations”) to employ a team of operating advisors for the purpose of providing services to the Clients as well as their portfolio companies. Though the number of Cerberus Operations operating executives fluctuates from time to time, Cerberus Operations currently includes approximately 100 operating executives directly as employees of Cerberus Operations or through an operating executive’s employment at a portfolio company, and other personnel to (i) support the Advisers’ investment teams with respect to, among other things, due diligence (including, without limitation, evaluating prospective investments, pre-qualification of transactions (including participating in meetings with target companies), industry networking, and market evaluation) with respect to proposed investments and/or transactions and (ii) support the Clients’ portfolio investments with respect to all aspects of their operations. The Clients and/or their portfolio investments reimburse Cerberus Operations (or any other Affiliate) for the cost of providing such services as described below. The entities comprising Cerberus Operations are not intended to operate as profit centers, but instead are operated substantially as pass-through companies on an at-cost or near-cost basis, or where minimum profits are required by tax laws or the laws or regulations of particular jurisdictions, are operated with the intention of generating solely such minimum profits. For the avoidance of any doubt, the cost of providing the services attributable to Cerberus Operations team members include, without limitation (i) associated personnel costs such as salaries, benefits, payroll taxes, holiday and vacation time and all other associated compensation and personnel costs, (ii) associated overhead, including, without limitation, all occupancy costs such as rent, utilities, HVAC, water, cleaning and all other occupancy and administrative expenses incurred in connection with the services provided by Cerberus Operations, (iii) the cost of accounting, software and other systems (including Thomson Reuters Elite 3E) used to record and allocate the time and expenses associated with such services provided by Cerberus Operations, and (iv) all out of pocket costs incurred by Cerberus Operations in connection with the provision of such services by Cerberus Operations team members (all of the foregoing, collectively, the “COAC Expenses”). To the extent that a team member of Cerberus Operations is (i) primarily involved in due diligence for a proposed investment or transaction, (ii) actively working at or with one or more of the Clients’ portfolio companies as an operating executive or consultant, (iii) providing material assistance to the management of one or more of the portfolio companies or (iv) providing material assistance to the Clients in connection with the surveillance and monitoring of one or more investments, the COAC Expenses associated with such person are generally borne by the Clients invested in the relevant investment or transaction (or, in the case of an investment that is not consummated, by the Clients that would have been allocated the proposed investment or transaction, where applicable) or directly by the relevant portfolio company. To the extent that a Cerberus Operations team member performs both services payable by the Clients (and/or one or more portfolio companies) and services payable by the Advisers, the COAC Expenses associated with such person will be allocated among the Clients (and/or the relevant portfolio companies) and the Advisers in proportion to the percentage of time spent by the Cerberus Operations team member with respect to such services. From time to time, certain Cerberus Operations personnel that are actively working at or with one or more of the Clients’ portfolio companies as an operating executive or consultant may participate in such portfolio companies’ management equity programs, if any. Certain employees of the Adviser and members of the Cerberus Operations team serve as directors and/or officers of portfolio companies of one or more Clients. Accordingly, such employees and members may have a conflict where their fiduciary duty to the portfolio company conflicts with their fiduciary duty to one or more Clients. In such circumstances, any such employee or member will act in accordance with his or her fiduciary duty to the portfolio company rather than any fiduciary duty such person may have to one or more Clients. In addition, certain directors, officers or employees of portfolio companies (i) are Co- Investors with a Client, (ii) have affiliations with third parties who provide professional or other services to a Client’s other portfolio companies, that Client, portfolio companies of other Clients or other Clients or (iii) have other business relationships or affiliations with the Advisers. In instances where the Advisers, on behalf of the Clients, appoint or retain (or influence the appointment or retention of) such directors, officers or employees, the Advisers will make determinations with respect to the qualifications and appropriateness of such persons in their sole discretion.
Engagement of Third-Party Consultants and Service Providers
The Advisers often retain a variety of third-parties to provide consulting, advisory, regulatory, legal, transaction, operational, tax, underwriting, investment banking, sourcing and a wide variety of other services to the Clients, including to then-current or prospective portfolio companies and/or other investments in which certain Clients invest or may invest (all such retained parties, the “Consultants”). Consultants often provide services in sourcing investment and transaction opportunities, facilitating and structuring transactions, performing due diligence, supporting ongoing operations, and providing such other services that may from time to time be requested by the Advisers, the Clients and/or their portfolio companies (“Consultant Services”). Consultant Services may be provided on a short-term or long-term basis. All such Consultants will be engaged based on a variety of factors including the perceived quality of service, expertise, reputation and the ability to provide current and future services to the Clients and their portfolio companies and other investments. Such future services may from time to time benefit certain Clients, while not being of any value to others. Consultants may be engaged by any Client or affiliated service provider (including, without limitation, Cerberus Operations, Cerberus Technology Solutions, and Cerberus Global Investment Advisors, LLC and/or any other advisers). The nature of the relationship with each Consultant and the time and devotion requirements (if any) of each Consultant likely will vary significantly. The retention of Consultants and the terms thereof generally are negotiated by the Adviser separately with each Consultant and may be memorialized in one or more formal written agreements with such Consultant, or may be informal, depending upon a variety of factors, including but not limited to the anticipated Consultant Services to be provided by each such Consultant. All Consultants are engaged for the benefit of the applicable Client and/or their portfolio companies or other investments, and all compensation, fees, expenses and other remuneration paid to the Consultants are and at all times will be paid (or reimbursed to the Adviser) by the Clients and/or their portfolio companies or other investments for which the Consultant has been engaged. Such compensation, fees, expenses and other remuneration that Consultants have in the past received, and likely in the future will receive, include but are not limited to retainers, cash consulting fees, performance or other bonuses, expense reimbursements (including reimbursements for travel and other costs in connection with their services), profits or equity interests in a portfolio company or other investment, options granted by a portfolio company or other investment, a share of proceeds upon the sale of a portfolio company or other investment and/or a variety of other types of cash and non-cash compensation (collectively, “Consultant Compensation”). To the extent Consultants receive equity or profit interests (or similar interests) in a portfolio company or other investment, the costs, amounts and dilution resulting therefrom will be borne by the investors invested in such portfolio company or other investment, including the Clients. Certain Consultants are provided opportunities to invest in portfolio companies or other investments with respect to which they are engaged. Consultant Compensation will not offset the management fees paid by the Clients. Consultants generally do not work exclusively for the Clients (including their portfolio companies and/or other investments), although in certain cases and from time to time, work relating to the Adviser, or the Clients (including their portfolio companies and/or other investments) may comprise all or a majority of the working time of such Consultants (and for protective and commercial purposes, the applicable documentation may include exclusivity provisions in favor of the Clients (including their portfolio companies and/or other investments)). The Consultants may be subject to conflicts of interest resulting from a number of situations, including, but not limited to conflicts resulting from affiliations with or engagements by entities unaffiliated with the Adviser and/or the Clients. The Adviser is not always aware of the conflicts that may exist in connection with the Consultants; however, whenever the Adviser is aware of such conflicts, it will use reasonable efforts to ensure that such conflicts are addressed in an appropriate manner to the extent practicable in its good faith discretion. Certain existing and former employees of the Adviser, Cerberus Operations, Cerberus Technology Solutions and/or its other affiliated service providers have in the past, and may in the future, cease their employment with the Adviser and subsequently be engaged as a Consultant for a variety of reasons. To the extent any such former employee is subsequently engaged as a Consultant, the Consultant Compensation of such person with respect to such Consultant Services would be borne by the applicable Clients and/or portfolio companies or other investments and would not offset management fees. In addition, certain Consultants who may or may not have formerly been employees of the Adviser or its affiliated service providers may in the future become employees of the Adviser, Cerberus Operations, Cerberus Technology Solutions and/or other affiliated service providers, and the fact that such individuals become employees will not impact the application of the management fee offset provisions to any Consultant Compensation they received in connection with their Consultant Services prior to becoming an employee of the Adviser. To the extent any conflicts arise between the interests of any Clients (and/or their portfolio companies or other investments) with respect to the retention and use of Consultants, the Adviser will use all reasonable efforts to resolve such conflicts reasonably, fairly and equitably.
Affiliated Service Providers
Certain Clients engage Cerberus European Servicing, Ltd. (“Cerberus European Servicing”), a U.K.-based company owned by Affiliates with offices in London, Amsterdam, Dublin and Madrid, to oversee and provide certain asset management and property management services, as well as loan and asset servicing and settlement activities and related loan administration services and due diligence services in respect of a Client’s European assets. In connection with a Client’s European real estate holdings, Cerberus European Servicing will also oversee and provide certain asset management and property management services. The Adviser established Cerberus US Servicing, LLC (“Cerberus U.S. Servicing”), an affiliate in the U.S., to provide similar services with respect to assets of certain Clients located in North America, Cerberus Global Asset Management & Servicing, Ltd. (“Cerberus Global Servicing”) to provide similar services with respect to assets of certain Clients located in Asia, South America and other regions, and Promentoria Servicing Ireland Ltd. (“Promentoria Servicing”) to provide similar services with respect to assets of certain Clients located in Ireland and other regions. The Adviser may open additional affiliated offices to provide such services in respect of the assets of certain Clients in the future (such affiliated offices, together with Cerberus European Servicing, Cerberus U.S. Servicing, Cerberus Global Servicing and Promentoria Servicing, “Cerberus Servicing”). All Cerberus Servicing entities are commonly held by Cerberus Global Servicing Holdings, Ltd. Cerberus Servicing will oversee other third-party servicers, asset managers and property managers that will be servicing certain Clients’ North American and European assets, and other affiliated entities may provide such services and/or oversee such services with respect to assets located in other regions. The Adviser has established Cerberus Technology Solutions, LLC and Cerberus Technology Solutions UK Limited (collectively “Cerberus Technology Solutions”), subsidiaries with expertise in technology, data and advanced analytics. Cerberus Technology Solutions has a team of professionals that provides technological consulting services to Clients, their portfolio companies and other third parties. Cerberus Technology Solutions focuses on driving efficiencies at such portfolio companies by applying technology solutions, realizing new sources of revenue and value creation, and accelerating technological transformation and differentiation. It is anticipated that Cerberus Technology Solutions will provide valuable contributions through initiatives targeted at improving systems and generating value from data, with a focus on domains that include, but are not limited to, digital and e-commerce; cloud enablement and infrastructure optimization; pattern design, architecture, and engineering; agile development and application refactoring; data operations, including data as an asset and data monetization; advanced analytics, including artificial intelligence and machine learning; and cyber security. Cerberus Technology Solutions will also be engaged to provide sourcing and due diligence services in connection with certain investments made by Clients, as well as to identify and staff key talent to build or transform technology departments of portfolio companies. Cerberus Technology Solutions expects to generate a profit from its business relationships with the Clients and/or their portfolio companies (and third parties), and such profit may be material. The fees and expenses of members of the Cerberus Technology Solutions team that are employed by, and provide services to, Cerberus Technology Solutions in respect of the Clients and/or their investments will be borne by the Clients and/or their portfolio companies, and will not offset any management fee payable by a Client. Certain members of the Adviser’s leadership team, the Adviser’s Affiliates and together with members of the Cerberus Technology Solutions team, will be granted equity interests, profits interests, bonuses and/or other compensation with respect to Cerberus Technology Solutions, and such equity interests, profits interests, bonuses and/or other compensation may be material. Subject to the limitations set forth in the governing documents of the Clients, the fees and expenses of members of the Cerberus Technology Solutions team that are employed by, and provide services to, Cerberus Technology Solutions in respect of the Clients and/or their investments will be borne by the Clients and/or their portfolio companies, and will not offset the management fee; provided, however, that the Advisers will offset the management fee in respect of certain CTS Profits (as defined below). It is anticipated that, whenever a portfolio company, the issuer or borrower of a portfolio investment of a Client or other third party retains Cerberus Technology Solutions, Cerberus Technology Solutions may be provided with and may otherwise collect and analyze data and information about that portfolio company, issuer or borrower and/or other third party. Subject to any agreements with such portfolio company, issuer or borrower and/or other third party, Cerberus Technology Solutions may (i) use such data and information in providing services to the Clients, other portfolio companies, issuers or borrowers and/or other third parties and/or (ii) sell, license or otherwise provide such data and information to other portfolio companies, issuers, borrowers and/or other third parties; provided that in the case of portfolio companies, such activities do not adversely affect such portfolio companies and such issuers or borrowers of a portfolio investment. Cerberus Technology Solutions generates a profit through such use, sale, licensing or other provision of such data and information. In addition, the Adviser has retained Haya Real Estate, S.A.U, Haya Titulizacion S.G.F.T., S.A., Gescobro Collection Services, S.L., Capital Home Loans Limited, Landmark Mortgages Limited, Inmo Homes, S.L., Officine CST S.p.A., Divarian Propiedad, S.A., Promontoria MACC Opco, S.L., Renovalia O&M, S.L., Renovalia Energy Group and Landmark Mortgages Plc (each of which are portfolio companies of several of the Clients) and/or other servicers and similar companies, whether now existing or hereafter created, in Europe, Asia, Africa, South America and other geographic regions that may be acquired in the future by the Clients to facilitate the investment platform (collectively, the “Portfolio Company Servicers”). To the extent the Clients retain any of the Portfolio Company Servicers, such company will provide local market knowledge and servicing, diligence, reporting and related services in respect of such Client’s assets and loan portfolios. The Advisers have retained (i) FirstKey Mortgage, LLC (“FirstKey Mortgage”); (ii) FirstKey Homes, LLC (“FirstKey Homes”) and/or (iii) one or more other related entities, whether now existing or hereafter created, to provide a variety of services to the Clients with respect to their mortgage businesses and assets in the U.S. and outside of the U.S. FirstKey Mortgage specifically, is a multi-faceted operating platform consisting of specialty finance businesses in the U.S. and non-U.S. residential mortgage, residential, chattel, home equity lines of credit (“HELOCs”), consumer and credit card debt, student loans and structured product industries and is owned by several of the Clients. FirstKey Mortgage is a licensed mortgage residential lender and servicer in multiple states in the U.S. and provides asset management services and servicing oversight for various residential and chattel mortgage loans, commercial loans, HELOCs, student loans and other consumer assets held by Clients and accounts managed by Affiliates. In February 2016, FirstKey Mortgage added a Global Structured Finance Group and expanded its role to serve as securitization sponsor and asset manager for U.S. securitization activities, and structuring agent and “co-sponsor” for non-U.S. securitization activities. FirstKey Mortgage may acquire servicing rights to Fannie Mae, Ginnie Mae and Freddie Mac conforming loans and Federal Housing Administration-insured and U.S. Department of Veterans Affairs-guaranteed loans. As part of its services, FirstKey Mortgage may provide sourcing, capital markets and transaction management services to the Clients to identify U.S. and non-U.S. mortgage- related, other commercial and residential, consumer and other structured assets and facilitate the acquisition and sale of such assets through (i) conducting due diligence with respect to the target assets that certain Clients are seeking to purchase or sell, (ii) negotiating the terms of purchase or sale with a Client’s counterparties and (iii) closing the purchase or sale. FirstKey Mortgage may provide certain asset management and/or data analysis services in respect of a Client’s U.S. and non-U.S. mortgage-related, other commercial and residential, consumer and structured products businesses and assets and oversees other third-party servicers that service such assets. FirstKey Mortgage may sell certain Clients residential mortgage loans or other consumer products that FirstKey Mortgage originates or acquires through its investor mortgage loan conduit. In addition, FirstKey Mortgage may be retained to perform both U.S. and non-U.S. securitization activities with respect to a Client’s mortgage-related, consumer and other structured product assets. One or more of FirstKey Mortgage’s affiliates may also serve as a securitization conduit for the mortgage or consumer assets of one or more of the Clients, and FirstKey Mortgage serves as the “sponsor” (as defined in the Dodd-Frank Act) for U.S. securitizations of mortgage loans, consumer debt and other structured products. In connection therewith and in order to comply with the credit risk retention rules of the Dodd- Frank Act, FirstKey Mortgage, or a majority-owned affiliate thereof, holds a portion of the securities issued in the securitizations in accordance with the Dodd-Frank Act. FirstKey Mortgage also may act as a designated “co-sponsor” and structuring agent for non-U.S. securitizations. FirstKey Mortgage is wholly owned, through one or more intermediate entities, by several Private Funds. Additionally, given the specialized knowledge and expertise of certain FirstKey Mortgage personnel, the Advisers will have the flexibility to utilize such personnel in a targeted capacity as the situation requires with respect to the Client’s residential mortgage investments, structured assets and other investments. For example, and without limitation, FirstKey Mortgage personnel have specialized expertise in asset acquisitions, structured finance and securitization transactions and are expected to be utilized to provide legal support to the Clients as needed on various asset-related matters. In addition, certain specialized FirstKey Mortgage personnel may be engaged to develop systems, software programs and other technologies that aggregate, analyze or report certain material data points or metrics with respect to a portfolio of assets on behalf of certain Clients (all servic es being provided by such FirstKey Mortgage personnel in this paragraph being referred to collectively as, “Bespoke FKM Advisory Services”). In all instances, the Adviser will seek to ensure transactions are effected at the market prices and that the terms of any transactions and arrangements between the Clients, on the one hand, and FirstKey Mortgage (including, without limitation, Bespoke FKM Advisory Services) and FirstKey Homes, on the other, will contain terms at least as favorable to the Clients as are generally obtainable on an arm’s-length basis from unrelated third parties and will provide for compensation to FirstKey Mortgage and FirstKey Homes that is competitive with the compensation paid to third parties for comparable services which could reasonably be made available to the Clients. The fees paid to FirstKey Mortgage and FirstKey Homes, as applicable, in respect of services provided to the Clients and their mortgage-related assets, commercial assets, HELOCs, consumer and credit card debt, student loans, residential rental assets, structured products and other businesses are borne by the Clients and will not offset management fees. FirstKey Homes is expected to provide a variety of property and asset management services, including, among others, leasing, rental collection, credit screening, quality control, property repairs and maintenance and construction and renovation oversight services, and acquisition services with respect to the Clients’ residential rental assets (i.e., single-family and multi- family residential properties). FirstKey Homes was created by the Adviser in 2015 and currently has approximately 765 employees and manages homes in 24 regional markets in the U.S. A special purpose vehicle owned by the SFR REIT (as defined in Item 11) has acquired an interest in FirstKey Homes, LLC from a separate, foreign-controlled REIT owned by another Client, through one or more intermediate entities, at fair market value. The Clients, to the extent they invest in the SFR REIT, will own an interest in FirstKey Homes and its subsidiaries. The arrangement between a Client, on the one hand, and Cerberus Servicing, Cerberus Technology Services, a Portfolio Company Servicer, FirstKey Homes or FirstKey Mortgage, on the other, contains terms at least as favorable to the Client as are generally obtainable on an arm’s-length basis from unrelated third parties and provides for compensation to Cerberus Servicing, such Portfolio Company Servicer, FirstKey Homes or FirstKey Mortgage, as applicable, that is competitive with the compensation paid to third parties for comparable services which could reasonably be made available to the Client. The fees paid to Cerberus Servicing, Cerberus Technology Services, a Portfolio Company Servicer, FirstKey Homes or FirstKey Mortgage, as applicable, in respect of services provided to a Client and its portfolio investments will be borne by the Client. FirstKey Homes, FirstKey Mortgage and the Portfolio Company Servicers are owned by one or more of the Clients. The fact that FirstKey Homes, FirstKey Mortgage and the Portfolio Company Servicers are owned by one or more of the Clients and provide services to one or more of the Clients that do not own FirstKey Homes, FirstKey Mortgage or one or more of the Portfolio Company Servicers, creates a variety of potential and actual conflict situations. Each such conflict situation is carefully evaluated by the Cerberus Compliance and Risk Management Committee to ensure that all necessary and proper procedures are implemented so that the transactions between FirstKey Homes, FirstKey Mortgage or one or more of the Portfolio Company Servicers, on the one hand, and one or more of the Clients, on the other are fair and appropriate to, and in the best interests of, each of the parties thereto; howeve r, there can be no assurances that similar services cannot be procured at a lower cost from other market participants. The Adviser, the Clients and their portfolio companies may also engage in similar arrangements with other affiliated entities (whether now existing or hereafter created) in order to facilitate loan servicing, technology services, administration, management, asset and property management, due diligence and related businesses in one or more geographic areas, or for one or more other purposes or services, to the extent applicable, subject to the restrictions in the Clients’ governing documents. In addition, certain other Affiliates (whether now existing or hereafter created) are engaged by, or on behalf of, the investments of the Clients, as a consultant, agent or in a similar role and receive fees, or are reimbursed for such expenses, in connection with such services (e.g., an affiliated servicer, broker-dealer, finance company, Cerberus Operations or Cerberus Technology Solutions). Except with respect to the COAC Expenses and the Dutch and Other Expenses, which are on an at-cost or near-cost basis (as described more fully herein), these affiliate engagements likely will be based on a variety of factors, including perceived quality of service, expertise and reputation, and will provide for compensation to such Affiliate that is competitive with the compensation paid to third parties for comparable services which could reasonably be made available to the Clients.
Allocation of Resources
Allocation of Adviser resources, including the Adviser’s personnel and employees and consultants of Cerberus Operations and similar resources, among Clients will be made in the sole discretion of the Adviser. As discussed above, many members of the Cerberus Operations team work exclusively for the Adviser, but some members may not be exclusively engaged by the Adviser. Members of the Cerberus Operations team may be subject to conflicts of interest resulting from a number of situations, including conflicts resulting from affiliations with entities unaffiliated with the Adviser, familial relationships, multiple assignments within the Adviser and ownership of interests in portfolio companies and other issuers, including, potentially, borrowers. The Adviser is not always aware of conflicts arising in connection with members or employees of Cerberus Operations or Cerberus Technology Solutions, as well as consultants retained by these and other Affiliates. Whenever the Adviser becomes aware of conflicts arising in connection with members or employees of Cerberus Operations, it will use reasonable efforts to ensure that such conflicts are addressed in an appropriate manner to the extent practicable in its discretion. In addition, as discussed above, third-party consultants and advisors generally do not work exclusively for the Adviser or Clients and may be subject to conflicts of interests resulting from a number of situations, including conflicts resulting from affiliations with entities unaffiliated with the Adviser, familial relationships, multiple assignments within the Adviser and ownership of interests in portfolio companies and other issuers, including, potentially, borrowers. The Adviser is not always aware of conflicts arising in connection with such consultants and advisors. Whenever the Adviser is aware of such conflicts, however, it will use reasonable efforts to ensure that such conflicts are addressed in an appropriate manner to the extent reasonably practicable. Furthermore, certain personnel of the Advisers devote a portion of their time and attention to their own outside investment activities and the outside investment activities of the Private Feinberg Entities, as well as to philanthropic, charitable, civic, educational, political and similar endeavors.
Additional Investment Rights Obtained in Connection with Clients’ Investments and
Benefits Resulting from Portfolio Company Information and/or Other Investments
In certain circumstances, the Adviser seeks to obtain future investment rights (including co- investment rights, rights of first offer, rights of first refusal, participation rights or similar rights) in connection with investments made by the Clients to provide further investment opportunities. The Adviser generally intends to allocate these opportunities in accordance with the Investment Allocation Policy, as opposed to allocating such opportunities in proportion to the amount invested in the investment that generated such investment rights. Accordingly, an investment that one or more Clients make may produce future investment rights for a number of different Clients, including Clients that may not have participated in the original investment. A Client may participate in an investment that produces investment rights that do not benefit such Client (e.g., if an investment opportunity is not appropriate for such Client) or that may not benefit such Client in proportion to the amount invested in the investment that provided such investment rights. Conversely, a Client may benefit from investment rights provided by investments made by the other Clients in which such Client does not participate. From time to time, one or more of the Clients may acquire portfolio companies, make investments or otherwise enter into transactions that provide information, knowledge and insight to the Adviser that may benefit the Clients participating therein and may, in the future, provide certain benefits to other Clients that have not participated in the acquisition, investment or transaction. For example, certain Clients may acquire an operating business that provides the Adviser with industry, sector or other information, knowledge and/or insight that the Adviser may then use in connection with its future investment activities on behalf of the Clients, including on behalf of Clients that do not have any interest in the acquired operating business that is the source of such information.
Ancillary Fees; Management Fee Offsets
The management fee payable to by a Client generally will be reduced, but not below zero, dollar-for-dollar by such Client’s pro rata share of (x) the net amount (or, if other Clients, Co-Investors and/or other third parties have invested or, in the case of a break-up fee, proposed to invest, in the relevant portfolio investment, such Client’s pro rata share of the amount, multiplied by a fraction (i) the numerator of which is the amount invested (or anticipated to be invested in the case of a break-up fee) in the relevant portfolio investment by such Client and (ii) the denominator of which is the aggregate of all amounts invested (or anticipated to be invested in the case of a break-up fee) in the portfolio investment by such Client, all other Clients, all Co-Investors and all other third parties), of transaction fees, break-up fees, commitment fees, underwriting fees, amendment fees, waiver fees, modification fees, monitoring or management fees, directors’ fees, consulting fees, advisory fees, closing fees and similar fees, payments or compensation (whether in the form of cash, options, warrants, stock or otherwise) (“Transaction Fees”), if any, received and retained by the Advisers from any third parties or portfolio companies (other than any other Client or Co- Investors) in connection with portfolio investments (or anticipated portfolio investments in the case of a break-up fee) in which such Client participated (or would have participated in the case of a break-up fee) and (y) the Client’s pro rata share of CTS Profits, which pro rata share will generally be determined based on the amount of fees paid directly or indirectly by the Advisers and other Market-Based Funds (as defined below), Co-Investors (excluding Co- Investors invested through a Legacy Fund (as defined below)) and their portfolio investments to Cerberus Technology Solutions giving rise to such CTS Profits in the applicable year(s) to which such offset relates (such amounts under clauses (x)-(y), collectively, the “Fee Offset Amounts”); provided, however, that the Fee Offset Amounts attributable to CTS Profits pursuant to clause (y) will be calculated and applied on an annual, as opposed to quarterly, basis; provided, further, that there will be no reduction to a Client’s management fees in respect of any of the following, which will not be deemed to be Fee Offset Amounts: (i) any management fees or other asset-based or commitment-based compensation, incentive or performance allocations or distributions or fees or other performance-based compensation, or Transaction Fees or similar fees, paid by or received in respect of any other Client, any Co- Investor and/or any other third party; (ii) any fees and expenses of the Advisers engaged to provide services by or on behalf of the Client as described or permitted elsewhere in the governing documents of the Client, including, without limitation, (a) the COAC Expenses, (b) the Dutch and Other Expenses and (c) the costs, fees and expenses of other affiliates (whether now existing or hereafter created), including, without limitation, affiliated service providers such as Cerberus Technology Solutions (other than CTS Profits), Cerberus Servicing, FirstKey Mortgage and FirstKey Homes that are engaged to provide services by or on behalf of the Advisers; or (iii) any fees or compensation paid to third parties, including, without limitation, third-party advisors, consultants, operating partners, asset managers and similar third parties. “CTS Profits” means the 50% share (or such other share of Cerberus Technology Solutions owned by the Adviser from time to time) of any net profits generated by Cerberus Technology Solutions in respect of the Market-Based Funds, as more fully described in the CTS Letter. For purposes of calculating CTS Profits, the Adviser will separately calculate the financial performance of Cerberus Technology Solutions’ businesses attributable to Market-Based Funds (and portfolio investments of such funds), other Clients that are Legacy Funds (and portfolio investments of such funds) and third-party clients that are not other Clients. Accordingly, the calculation of CTS Profits will exclude (i) revenue, costs, expenses, net loss and/or net profit of Cerberus Technology Solutions attributable to services provided by Cerberus Technology Solutions to third parties and to the Adviser, and (ii) revenue, costs, expenses, net loss attributable to services provided by Cerberus Technology Solutions to the Legacy Funds, as more fully described in the CTS Letter. “Market-Based Funds” includes the Clients, Co-Investors and any funds that bear Cerberus Technology Solutions’ fees at market-based rates. “Legacy Funds” means certain Clients (excluding the Market-Based Funds) that existed prior to the date on which Cerberus Technology Solutions formally launched that do not bear Cerberus Technology Solutions’ fees at market rates like a Client, but, rather, bear Cerberus Technology Solutions’ fees at rates generally consistent with the cost- based fee structure charged to such Legacy Funds in respect of Cerberus Operations. “CTS Letter” means the letter to investors in other Clients, dated May 22, 2019.

Fee Offset Amounts received in any calendar quarter will reduce the management fees for the following period as set forth above. If the Fee Offset Amounts exceed the management fees payable for a given quarter, such excess amounts will be carried forward to one or more subsequent periods and applied to reduce the future payments of the management fee in such future periods until such excess amounts have been fully offset. Generally, Fee Offset Amounts will not be applied to reduce any previously paid management fee amounts and if such fees are greater than the aggregate amount of future management fees that would otherwise be payable to the Advisers, the Advisers may receive more income than they otherwise would have received from Clients.

In addition, from time to time and in certain circumstances, one or more portfolio companies pay a management, monitoring and/or similar fee to the Advisers that is accelerated upon the occurrence of certain events (such as, for example, the sale of substantially all of the assets or securities of such portfolio company to a third party, the merger or consolidation of such portfolio company with or into a third party, the public offering of securities of such portfolio company and/or one or more similar transactions). As noted above, generally such fees (including accelerated fees) will reduce future management fees otherwise payable to the Advisers by the Clients. With respect to investments of the Clients in which there are Co- Investors, the portion of such fees, including any accelerated fees, that relate to the investments by such Co-Investors may be paid to such Co-Investors or retained by the Advisers (as agreed-upon compensation payable to the Advisers in respect of such Co- Investors’ investment) in such amounts and on such terms that generally are negotiated with and agreed to between the Advisers and such Co-Investors on a transaction-by-transaction basis. For purposes of calculating the Fee Offset Amount, any compensation received in a form other than cash will be deemed earned and paid, and will be valued in good faith by the Advisers, at one of the following dates, as set forth in the relevant Client’s private placement memorandum or as set forth in such Client’s organizational documents and/or as set forth in the investment management agreement with such Client: (i) the date of the disposition of such non-cash compensation, in which case the value of such non-cash fees will be equal to the net proceeds received by the Advisers in connection with such disposition; (ii) the date of the disposition of the underlying investment in connection with which such non-cash compensation was received; (iii) the date of dissolution of a Private Fund or termination of an account; or (iv) a specified anniversary date of the receipt of such non-cash compensation. As noted above, management fees, incentive fees, incentive allocations and performance distributions received by the Advisers from Co-Investors, as well as any Transaction Fees or other fees in connection with such Co-Investors or their respective co-investments, are not shared by the Advisers with any of the Clients, will not be part of the Fee Offset Amounts and will not reduce any management fees, incentive fees, incentive allocations or performance distributions to be received by the Advisers from any of the Clients. As a result, the Fee Offset Amounts will be calculated solely based upon the respective economic interest (or, in the case of a break-up fee, anticipated economic interest) of the Clients in a relevant investment as a percentage of the amount invested (or, in the case of a break-up fee, anticipated to be invested) in such investment by such Clients, all other Clients and all Co- Investors in the aggregate. Accordingly, the Fee Offset Amounts with respect to a Client will be lower than they otherwise would be if the calculation of the Fee Offset Amounts did not include in the denominator thereof the investments made by Co-Investors and third-party investors.
Receipt of Other Benefits
The Advisers and their personnel from time to time receive certain benefits and/or perquisites in connection with or resulting from their activities on behalf of Clients which are not shared with Clients, their investors and/or their portfolio companies and are not included in the Fee Offset Amounts (as defined below). These benefits and/or perquisites generally are de minimis in value and generally include, among other things, reward program points, reward program credits, miles program credits and other similar benefits generally included as part of airline, hotel and other similar loyalty, affinity or status programs. Any value associated with such reward program points, credits, miles and other similar items inure to the benefit of the Advisers and/or their personnel, and not to the benefit of any Clients, their investors and/or their portfolio companies, notwithstanding that the cost of the services which resulted in such points, credits, miles and/or other benefits may have been borne by the Clients and/or one or more of their portfolio companies. For the avoidance of doubt, the benefits and perquisites discussed in this paragraph are not Fee Offset Amounts that reduce management fees.
Management of Multiple Clients
As indicated above, the Advisers manage a number of Clients, some of which have or are expected to have investment programs that are similar and/or overlap. The organizational documents and investment management agreements of Clients generally do not curtail the Advisers’ ability to create successor funds to the Advisers’ other existing platforms, as well as separate accounts or other investment funds or vehicles relating or complementary to the Advisers’ other existing platforms or new investment strategies and platforms. In addition, the Advisers may in the future establish, sponsor and/or otherwise become affiliated with other pooled investment vehicles, companies, investors and accounts that have investment programs that are similar to and/or overlap with the investment programs of its curre nt Clients or that may engage in the same or similar business as such current Clients using the same or similar investment and/or business strategies. For example, an Adviser could establish a fund that focuses on investing in a single industry or geographic region or of a certain investment type, such as European NPLs or MBS, which could invest side-by-side with an existing Client in deals in that industry or geographic region or of that investment type. The Adviser anticipates that new pooled investment vehicles (or additional classes or series of interests in its current Clients), single-investor funds and/or managed accounts, each with investment programs that are similar to and/or overlap with the investment programs of current Clients, will be created in the future. The investment allocations and performance results of all other Clients may differ from the performance results of a Client’s as a result of, among other things, differing tax, regulatory, legal, leverage and other considerations. Each of the Advisers will devote so much of its time, and the Advisers will allocate so much of the time and resources of the Cerberus Operations team members, to the affairs of each Client as in their judgment the conduct of each Client’s business reasonably requires, and none of the Advisers will be obligated to do or perform any act or thing in connection with the business of any Client not expressly set forth in such Client’s governing documents. Generally, the Advisers exercise investment responsibility on behalf of, or directly or indirectly purchase, sell, hold or otherwise deal with, any portfolio investment for the account of multiple Clients and multiple businesses. In addition, as described herein, Mr. Feinberg and other personnel of the Advisers devote time and effort to the investment and other activities of the Private Feinberg Entities. No Client will and no investor will, solely by reason of being an investor in a Client, have any right to participate in any manner in any profits or income earned or derived by or accruing to the Advisers from the conduct of any business (including the business and investment activities of the Private Feinberg Entities and other personnel of the Advisers) other than the busi please register to get more info

CODE OF ETHICS, PARTICIPATION OR INTEREST IN CLIENT TRANSACTIONS
AND PERSONAL TRADING
A. Code of Ethics. The Advisers have implemented a personal securities trading policy, which is incorporated by reference to the Advisers’ Code of Ethics and Business Conduct (the “Code of Ethics”), that prohibits employees from engaging in transactions with respect to the securities of any issuer, public or private, subject to certain limited exceptions. One of the exceptions to the prohibition on personal trading of certain types of securities (generally, governmental securities, money market instruments, money market funds, open-end mutual funds, exchange-traded funds and unit investment trusts) where employees do not have any opportunity to benefit from any of the private, proprietary or confidential information of the Advisers or the Clients. In addition, employees and the Private Feinberg Entities may participate in private investments and make certain other investments upon advance written notice to and written approval from, in the case of all employees, the Securities Compliance Committee of the Advisers, and in the case of the Private Feinberg Entities, both the Securities Compliance Committee and the Compliance and Risk Management Committee. Consistent with the foregoing policies, it is possible that employees of the Advisers will purchase or sell securities or other instruments of the type or kind of securities or other instruments also purchased and sold for Clients. The Advisers are committed to the highest standards of ethical conduct. In furtherance thereof, the Advisers’ Code of Ethics designates a Compliance and Risk Management Committee (the “Compliance and Risk Management Committee”) charged with the implementation of the Code of Ethics. The Code of Ethics specifies and prohibits certain types of transactions deemed to create actual conflicts of interest, the potential for conflicts or the appearance of conflicts, and establishes general guidelines for the conduct of the Advisers’ personnel as well as clearance and/or reporting requirements and enforcement procedures. With respect to the Private Feinberg Entities in particular, the investments made by such entities are investments that, at the time of investment, are opportunities that are determined by the Cerberus Compliance and Risk Management Committee and the Cerberus Securities Compliance Committee to be not appropriate for investment by any Client (although such investments may have originally been considered for investment by one or more Clients and subsequently determined to be not appropriate for investment by such Clients). In making determinations about the investment activities of the Private Feinberg Entities, the Cerberus Compliance and Risk Management Committee and the Cerberus Securities Compliance Committee consider a number of factors, including, without limitation, the investment strategies of the Clients, the return parameters of the Clients, and the Advisers’ fiduciary duties to their Private Funds (and the investors therein) and their other Clients. In recognition of the trust and confidence placed in the Advisers by the investors in the Private Funds, and by managed accounts, and to give effect to the Advisers’ belief that their operations should be directed to the benefit of the Clients, the Advisers adopted the following general principles to guide the actions of their employees: (i) The interests of the Clients are paramount. All employees must conduct themselves and their operations to give maximum effect to this tenet by assiduously placing the interests of the Clients before their own. (ii) All permitted personal transactions in securities by employees must be accomplished so as to avoid the appearance of a conflict of interest on the part of such personnel with the interests of the Clients. (iii) All employees must avoid actions or activities that allow a person to profit or benefit from his or her position with respect to the Clients or that otherwise improperly bring into question the person’s independence or judgment. (iv) All employees must report any violation(s) of the Code of Ethics or inappropriate conduct to the Compliance and Risk Management Committee. (v) All employees must comply with all applicable laws, rules and regulations, including U.S. federal securities law. The Advisers require that all Adviser personnel avoid any relationship or activity that might impair, or even appear to impair, such individual’s ability to make objective and fair decisions when performing job functions. The Code of Ethics prohibits Adviser personnel from using Adviser property or information for personal gain or personally taking for themselves any opportunity that is discovered through their Adviser position without the express written consent of the Compliance and Risk Management Committee. The Code of Ethics further requires that employees disclose any situation, including situations pertaining to the employee’s family members, which reasonably could be expected to give rise to a conflict of interest. The Code of Ethics also contains general prohibitions against fraud, deceit and manipulation, as well as additional restrictions and requirements regarding gifts, entertainment and outside activities. The Advisers have adopted a Securities Compliance Policy and have designated a Securities Compliance Committee charged with the implementation of such policy. The Securities Compliance Policy sets forth, among other things, policies and procedures regarding material nonpublic information and proprietary Adviser information, and employee accounts and trading. The policies and procedures contained in the Securities Compliance Policy are designed to (i) provide for the proper handling of both material nonpublic information about companies or other issuers and proprietary information of the Advisers, (ii) prevent violations of laws and regulations prohibiting the misuse of material nonpublic information about companies or other issuers and/or proprietary information of the Advisers and (iii) avoid situations that might create an appearance that material nonpublic information about companies or other issuers or proprietary information of the Advisers has been misused. In furtherance thereof, the Securities Compliance Policy prohibits employees from misusing material nonpublic information and/or nonpublic proprietary information, and sets forth general and specific procedures to restrict the flow of material nonpublic information from employees performing investment, transactional, lending, finance, private research and/or private analysis activities of the Advisers to employees responsible for or involved in the securities trading activities of the Advisers. Notwithstanding the internal screening procedures set forth in the Securities Compliance Policy, there may be certain instances where the Advisers receive material nonpublic information due to their various activities on behalf of the Clients and are restricted from purchasing or selling securities or other instruments for the Clients. The Advisers seek to minimize those cases whenever possible, consistent with applicable law and the Securities Compliance Policy, but there can be no assurance that such efforts will be successful and that such restrictions will not occur. The Securities Compliance Policy is incorporated by reference to the Code of Ethics. The Adviser will provide a copy of the Code of Ethics to any Client or investor in a Private Fund or prospective client or investor in a Private Fund upon request. Adviser personnel are required to certify to their compliance with the Code of Ethics, including the Securities Compliance Policy, on an annual basis. Subject to applicable regulatory restrictions, certain employees of the Advisers are permitted to invest directly or indirectly in the Private Funds. Such investors may be in possession of information relating to the Private Funds that is not available to other investors and prospective investors. It is expected that, if such investments are made, the size and nature of these investments will change over time without notice to investors and it is possible that such employees may withdraw on the basis of information that is not available to the other investors and prospective investors. Investments by the senior management and key employees of the Advisers in the Private Funds could incentivize such employees to increase or decrease the risk profile of such Private Funds. B. Securities That the Adviser or a Related Person Has a Material Financial
Interest.
A Client may (i) make a loan to, (ii) purchase a security or other instrument or asset (including participations in loans or other investments) from, (iii) sell a security, instrument or other asset (including participations in loans or other investments) to, or otherwise engage in cross trades with, another Client; provided that, with respect to certain Clients and certain material transactions described in such Client’s organizational documents, the Adviser receives approval to do so from such Client’s advisory board or other committee. Notwithstanding the foregoing, and subject to the Client’s organizational documents, such advisory board approval is generally not required with respect to (i) any loan to, (ii) purchase of a security or other instrument or asset from or (iii) sale of a security or other instrument or asset to an Affiliate or another Client if such transaction (x) is between the Client and any SPV, securitization vehicle, pooled investment vehicle or other alternative investment vehicle (provided that the Adviser believes in good faith that such transaction does not present a conflict of interest), (y) is an allocation adjustment effected at cost plus a use of funds charge made in accordance with the Investment Allocation Policy (including, for example, a final allocation of an investment made within 45 days of the date of origination or acquisition) or (z) is made for tax or regulatory purposes. For the avoidance of doubt, any transaction with a portfolio company of any Clients that is effected in compliance with law, on terms at least as favorable to such Clients as are generally obtainable on an arm’s-length basis from unrelated third parties for transactions of such nature, shall not be deemed a material transaction with another Client that requires the approval of such advisory board, subject to such Clients’ organizational documents. In particular, and subject to the Client’s organizational documents, advisory board approval is generally not required with respect to (i) any transaction whereby the Client contributes assets to a securitization vehicle together with similar assets contributed by other Clients, in each case at fair market value, in exchange for securities issued from such securitization vehicle and (ii) any transaction where a Client contributes capital and/or other assets to a pooled investment vehicle (e.g., a REIT), in exchange for equity in such pooled investment vehicle (issued at the then-current net asset value of such pooled investment vehicle, by reference to the amount of capital and/or the fair market value of the other assets contributed, as applicable), which equity interest gives certain Clients a pro rata interest in the assets of the pooled investment vehicle (including assets that existed prior to such Client investing therein), in each case, will not be a transaction that requires approval of the Advisory Board. Certain Clients may participate, in the manner set forth in clause (ii) above, in the following vehicles: (a) a REIT or other holding company that invests in single-family rental properties or to acquire multi-family homes and single- family homes (an “SFR REIT”); (b) a vehicle that invests in cold storage real estate properties; (c) a vehicle that invests in development properties in Europe; (d) a vehicle that invests in logistics investments globally; and/or (e) any other vehicles structured in a similar manner. For the avoidance of doubt, the admission of another Client into any such vehicle in the manner described above will similarly not give rise to the need for Advisory Board approval. Further, any transaction whereby certain Clients, redeem or make a distribution from any of the aforementioned vehicles described pursuant to clauses (x) and (y) above, will not require approval of the Advisory Board. The Adviser has implemented policies and procedures intended to ensure that the foregoing transactions described in this Item 11(B) be, in the reasonable determination of the Adviser, in the best interests of each Client participating therein. Such transactions will be executed at market price (or fair value), measured in accordance with the Adviser’s valuation policies and procedures, and will comply with all fiduciary requirements and any legal or other requirements established by the Adviser for the benefit of each of the Clients which participate in such transaction. The Adviser will receive no transaction-based compensation in connection with such transactions (other than the management fees and incentive allocations/fees otherwise payable by the Clients participating in such transactions). Clients’ assets and liabilities are valued in accordance with the Adviser’s valuation policy and procedures. In making valuation determinations, the Advisers may be deemed subject to a conflict of interest, especially with respect to illiquid assets and securities, as the valuation of such assets and liabilities may affect the compensation of certain employees of the Advisers. There is no guarantee that the value determined with respect to a particular asset or liability by the Advisers will represent the value that will be realized by the Client on the eventual disposition of the related investment or that would, in fact, be realized upon an immediate disposition of the investment. Additionally, a Client’s portfolio of investments will, at any given time, include securities or other financial instruments or obligations that are very thinly traded or for which no market exists or which are restricted as to their transferability under applicable securities laws. These investments may be extremely difficult to value accurately. Pursuant to organizational documents of certain Clients, the Adviser is authorized, on behalf of the investors, to select one or more persons, who shall not be an Affiliate of the Adviser, to serve on a committee, the purpose of which is to consider and, on behalf of the investors, approve or disapprove, to the extent required by applicable law or deemed advisable by the Adviser, principal transactions, certain other related-party transactions and certain other transactions and matters. The person(s) so selected may be exculpated and indemnified by such Client in the same manner and to the same extent as the Adviser is so exculpated and indemnified. To the extent such person or committee is asked to approve any matter, its decision will be binding on all investors. The decision to seek consent for a transaction or other matter from the person or committee described in this paragraph will be made by the Adviser, at its sole discretion. In no event will any cross trade, principal transaction or other transaction described in this Item 11(B) be entered into unless it complies with applicable law. C. Investing in Securities That the Adviser or a Related Person Recommends to
Clients.
See response to Item 11(A). D. Conflicts of Interest Created by Contemporaneous Trading. The Advisers continuously examine and modify their policies and procedures, including, without limitation, those governing investment allocations and other policies and procedures described in the Adviser’s Brochure, to best achieve the Adviser’s goal of fair and equitable treatment of all advisory clients (and investors therein) in light of the Advisers’ then current operations and market environment. The Adviser manages investments on behalf of a number of Clients. Certain Clients have investment programs that are similar to or overlap with each other, and, therefore, such Clients may participate with each other in investments.
Investment Allocation Policies
The Adviser manages investments on behalf of a number of Clients. Certain Clients have, or are expected to have, investment programs that are the same as, similar to or overlap with the investment program of certain other Clients, and may, therefore, participate with the Clients in investments or otherwise be invested in the same portfolio investments or borrower. All investment decisions and allocations will be made in accordance with the Investment Allocation Policy, as such policy and procedures are in effect and as may be amended from time to time. A summary overview of the Investment Allocation Policy with regard to the Clients’ investment strategy as in effect on the date hereof is included below. Investment decisions and allocations are not necessarily made in parallel among all Clients. If an investment is appropriate for one or more of the Clients, the investment generally is allocated among such Clients pro rata based upon (i) the target portfolio holdings of that type of investment for each of such Clients and (ii) the available investment capital of each of such Clients, except that, (A) for certain specified securities, instruments and assets generally sourced by the Advisers and/or mortgage-backed securities (and other closely related securities) generally sourced by the Advisers (collectively, the “RMBS/CMBS Related Securities/Assets”), the investments generally are allocated among such Clients pro rata based upon the Fill-Up Amount for each of such Clients (as described below); (B) for certain single-family residences or single-family rental properties and/or mortgages purchased with the intent to own such residences and/or properties (and other closely-related assets) (“SFR Assets”) acquired pursuant to the Adviser’s single-family rental strategy, the Adviser may create one or more groups of Clients participating in such strategy (each, an “SFR Group”) and allocate the SFR Assets among such SFR Groups as described below; and (C) subject to certain exceptions, hedging transactions, follow-on investments, re-securitization transactions and similar investments generally are allocated pro rata in accordance with the holdings of each Client of the underlying investment to which such hedge, follow-on investment or re- securitization transaction relates. For investment allocation purposes, available investment capital of the Clients generally is determined as follows with respect to investments other than certain RMBS/CMBS Related Securities/Assets: (a) with respect to any Client where investors make capital commitments that are drawn over time (rather than making periodic capital contributions and withdrawals) and that is not a Hybrid Fund (as defined below) or Lending Fund (as defined below) (a “Commitment Fund”), available investment capital generally is the aggregate capital commitments of such Commitment Fund; (b) with respect to any Client where investors make capital contributions and withdrawals periodically during the existence of the fund (rather than having a fixed commitment and draw down period) and that is not a Hybrid Fund or Lending Fund (a “Liquid Fund”), available investment capital generally is the net asset value of such Liquid Fund; (c) with respect to any Client that has as part of its primary investment objective and/or primary investment activity the origination of loans or the investment in loans originated by one or more other Lending Funds or Adviser affiliates (a “Lending Fund”)1, available investment capital generally is the sum of the available cash plus the undrawn capital commitments of each of such Lending Funds; and (d) with respect to any Client that otherwise would be a Liquid Fund but where one or more investors make 1 Certain Lending Funds (including, without limitation, certain offshore Lending Funds) do not originate lo a n s but invest in such loans (the “Non-Originating Funds” and the Lending Fu nds t h a t d o o rig in at e lo a n s, t h e “Originating Funds”). Clients that have as their primary investment objective and/or primary investment activity the origination of and/or investment in loans primarily related to and/or secured by re a l e s ta te a sse ts generally are not considered Lending Funds for purposes of the Investment Allocation Policy, but, rather, s h all be considered a Commitment Fund, Liquid Fund or Hybrid Fund, as applicable. commitments for future capital contributions on a delayed-draw or other future-funding basis (a “Hybrid Fund”), available investment capital generally is the sum of the net asset value plus the uncalled capital of such Hybrid Fund. For investments that are RMBS/CMBS Related Securities/Assets, available investment capital for all Clients (whether Commitment Funds, Liquid Funds, Lending Funds or Hybrid Funds) generally is the sum of the net asset value, plus the uncalled capital, if applicable and if any, of each of such Clients, respectively, and the “Fill-Up Amount” used to allocate such RMBS/CMBS Related Securities/Assets is the product obtained by multiplying (i) the target holdings for each of the Clients with respect to such RMBS/CMBS Related Securities/Assets by (ii) such available investment capital of such Clients, and then subtracting therefrom the then-current holdings of each of such Clients in such RMBS/CMBS Related Securities/Assets strategy or sub-strategy. The RMBS/CMBS Related Securities/Assets generally include, but are not limited to, investments sourced by and/or managed by the Advisers and/or commercial mortgage- backed (and other closely related) securities, instruments and assets sourced by and/or managed by the Advisers, including, but not limited to, (i) residential mortgage-backed bonds or other residential mortgage-backed securities; real estate whole loans acquired with the intention of being securitized, including home equity lines of credit, liens of mortgages or similar instruments; single family residence bonds or other evidences of indebtedness with respect to single family residence debt; originally issued or secondary purchased residential and/or commercial mortgage debt; other loans, bonds and/or evidences of indebtedness; student loans and related student debt instruments; consumer loans and related consumer loan debt instruments, including but not limited to credit card receivables and other asset loans and receivables; commercial loans and related commercial loan debt instruments; derivative instruments with respect to any of the foregoing; and any other related assets or instrume nts as determined by the Adviser’s “Allocation Committee,” but excluding single family residences acquired pursuant to the Advisers’ single family rental strategy and any other investments not otherwise contemplated to be included as part of the RMBS/CMBS Related Securities/Assets as a result of their characteristics, terms and/or other factors; and (ii) commercial mortgage-backed securities and other securities, instruments and assets closely related thereto, as well as any other securities, instruments and/or assets determined by the Adviser’s Allocation Committee to be RMBS/CMBS Related Securities/Assets as a result of their characteristics, terms and/or other factors. In addition, for the purposes of determining the amount of an investment to be allocated to the Lending Funds, such Lending Funds’ available investment capital generally includes the financing available to such Lending Funds pursuant to financing arrangements in place with respect to their investment strategy (such as a line of credit or other financing facility), but excludes any subscription facilities related to investor commitments to such Lending Funds. Because the available investment capital for Lending Funds generally includes such amounts available under financing arrangements, while the available investment capital for Clients that are not Lending Funds generally does not include such amounts, and because such differences in the calculation of available investment capital could create disproportionate or inequitable results to the extent that one or more Lending Funds participate in an investment opportunity along with one or more Clients that are not Lending Funds, in such circumstances the Adviser determines the appropriate basis for allocation of such investment opportunity among such Lending Funds and such other Clients that are not Lending Funds in order to most accurately reflect the purpose, spirit and intent of the Investment Allocation Policy and the relevant facts and circumstances. Notwithstanding the foregoing, with respect to allocations of SFR Assets, the Adviser may determine that it is necessary or beneficial to create one or more SFR Groups (e.g., due to different investment periods, asset holding timelines, levels of leverage, financing and collateral requirements, exit strategies, regulatory requirements, structuring requirements and/or other factors with respect to their investments in SFR Assets), and that due to the differences among such SFR Groups, it is advisable and/or appropriate that certain separate SFR Groups not invest together in the same SFR Asset (e.g., the same house). In such circumstances, and to the extent such SFR Asset is not readily severable or divisible prior to the allocation thereof, the Adviser may allocate individual SFR Assets to individual SFR Groups based on (i) the aggregate available investment capital and (ii) the target portfolio holdings, in each case, for the particular type of SFR Asset attributable to the Clients that comprise each such SFR Group (the “Target SFR Group Holdings Amount” (and then within each such SFR Group, to the Clients in such SFR Group based on (i) their respective available investment capital and (ii) their respective target portfolio holdings of that type of SFR Asset), provided that the Adviser generally will allocate each SFR Asset in each applicable real estate market to the SFR Groups in a manner such that over the relevant measurement period each SFR Group has received a number of SFR Assets (though not the same SFR Assets) in such market approximately equal to such SFR Group’s SFR Group Allocation Percentage. The “SFR Group Allocation Percentage” with respect to an SFR Group is determined by dividing the Target SFR Group Holdings Amount for such SFR Group by the total Target SFR Group Holdings Amount of all SFR Groups for such SFR Asset. The Adviser may use one or more methods2 to give effect to the foregoing as it will reasonably determine, and will periodically review the allocation of SFR Assets across each SFR Group to ensure that the separate allocations of SFR Assets have not resulted in unintended or undesired concentrations to one or more SFR Groups. In the event the Adviser determines that such a discrepancy exists, it will use commercially reasonable efforts to adjust the allocation of SFR Assets on a going-forward basis in a fair and equitable manner until the Adviser determines that such discrepancy has been resolved on an aggregate basis of holdings of SFR Assets among each of the SFR Groups.

2 In particular, the Adviser may use a random number generator methodology that involves assign ing e a ch SFR Asset purchased in each applicable real estate market a randomly generated number between ze ro a n d o ne a n d allocating SFR Assets to each SFR Group based on assigned numbers that correspond to such SFR Gro u p ’s SFR Group Allocation Percentage. For example, if there are two SFR Groups – the first having an SFR Group Allocation Percentage of 66.66% with respect to an SFR Asset and the second having an SFR Group A llo c a t io n Percentage of 33.33% with respect to such SFR Asset – the first SFR Group would be allocated SFR Assets with a random assigned number greater than 0.3333 and the second SFR Group would be allocated SFR A s se ts wit h a random assigned number less than or equal to 0.3333, and the result of that process will be that the first SFR Group should be allocated approximately 66.66% of all SFR Assets purchased in each applicable real estate market the second SFR Group should be allocated approximately 33.33% of all SFR Assets in each applicable real estate market. Currently, the Adviser has created one SFR Group consisting of several Clients that invest in a portfolio of SFR Assets (the “Pre-Existing SFR Portfolio”). The Adviser expects to create an additional SFR Group that will invest in SFR Assets with a longer expected duration than the SFR Assets comprising the Pre-Existing SFR Portfolio. Although the Adviser believes its methods of allocating SFR Assets accurately reflects the purpose, spirit and intent of the Investment Allocation Policy, it is possible that one or more SFR Groups may receive a disproportionate allocation of SFR Assets in an applicable real estate market, and/or that one or more SFR Groups may have performance results that are materially different from those of other SFR Groups. To the extent any Client does not have sufficient capital available to fund its pro rata allocation of any particular investment (whether as a result of such Client’s existing investments, commitments for future investments, reserves for anticipated future cash needs or otherwise), such Client participates in such investment only to the extent of its capital available to do so, and any excess amounts that would have been allocated to such Client for such investment are instead allocated to the other Clients participating in such investment, as applicable, otherwise in the same manner as the rest of such investment was allocated. Notwithstanding the foregoing, hedging transactions, follow-on investments, re-securitization transactions and similar investments generally will be allocated pro rata in accordance with the holdings of each Client of the underlying investment to which such hedge, follow-on investment or re-securitization transaction relates, subject to certain exceptions. The Adviser, in its sole discretion, also may make non-pro rata allocations among the Clients based upon a wide variety of factors including, among other things, tax and regulatory considerations, including but not limited to, the potential restrictions and/or other conditions that may be imposed as a result of the participation by a Client that is subject to the AIFM Directive, the overall portfolio composition of such Clients, different terms governing the Clients and the risk profile and investment restrictions (including limitations with respect to leverage) for such Clients. For example, to the extent that a secondary investment that was sourced by an Adviser may also be appropriate for investment by a Client that is not a Lending Fund (as determined by the Adviser’s Allocation Committee), there may be circumstances where, due to the applicable tax, structure or other requirements of one or more non-originating Lending Funds (“Relevant Lending Funds”), the Adviser may allocate such investment opportunity to the Relevant Lending Fund(s) in priority to such other Clients that are not Lending Funds and which, therefore, may result in such Clients that are not Lending Funds receiving no (or a significantly smaller) allocation of such investment opportunity and Lending Funds receiving a larger allocation of such investment opportunity. In addition, the Clients have the ability to make investments that are above certain Clients’ portfolio concentration limits, to the extent that such amounts are expected to be syndicated within a certain time period. The Clients with the ability to exceed concentration limits in connection with syndication activities may receive outsized allocations relative to other Clients. The Adviser may also determine to make allocations that are below the prescribed concentration limits for a given Client. For instance, certain Clients are subject to the single issuer investment limitation. Notwithstanding such limitation, the Adviser expects that portfolio investments of certain Clients may be substantially below the single issuer investment limitation based on a number of considerations, including, without limitation, expected returns, portfolio diversification, and the risk profile of the investment, and that the single issuer investment limitation, as noted in various fund governing documents, is to be considered an upper bound as opposed to a prescribed allocation percentage. In addition, the initial allocation of any investment among the Clients may be subject to subsequent adjustment within the 45-day period immediately following such investment to reflect any adjustments in the Clients during such period (such as the launch of one or more new Clients) that would normally be taken into consideration at the time of such investment allocation. Any Client, that did not participate in the initial allocation of an investment that is subsequently allocated a portion of such investment will be charged an amount representing the cost of the capital invested by the Clients that received the initial allocation of such investment, and such amount will be paid to each of the Clients that received the initial allocation of the investment and from which a portion of the investment is reallocated. The cost of capital charge will be paid with respect to the reallocated portion of each investment only, and will be at a rate determined by the Adviser in its reasonable discretion representing the prevailing market rate at which the Clients could reasonably borrow cash at the time of the investment reallocation. Such cost of capital charge will be calculated from the date of the initial deployment of capital with respect to such investment by the Clients that received the initial allocation of such investment through the date of payment for such deployed capital by the respective Clients that received the subsequent reallocation. The reallocation and cost of funds charge will be based on the cost of the investment regardless of whether the value of the investment increases or decreases after its purchase. Although sales of investments held by multiple Clients generally are expected to be sold by the Clients on a pari passu basis, the Adviser, in its sole discretion may sell investments from various Clients on a non-pro rata basis based on a wide variety of factors including those described above in respect of allocations of investment opportunities including, for the avoidance of doubt, in consideration of potential restrictions and/or conditions that may be imposed on a Client that is subject to the AIFM Directive. In addition, to the extent a Client has been allocated an investment opportunity that exceeds such Client’s single investment concentration limits (pursuant to an intended syndication with respect to the excess amounts, as permitted under the governing documents of such Client), the Client will generally sell amounts in excess of such Client’s single investment concentration limits (as part of a syndication) prior to selling amounts held by other Clients (to the extent such Clients will participate in the relevant sale) that are not similarly held as part of a syndication effort. Accordingly, it is possible that one Client may be selling an investment, while another Client is retaining or investing more capital in the same investment. The Client could be disadvantaged by the investment activities of other Clients and by redemption or withdrawal requests by investors in other Clients that offer their investor redemption or withdrawal rights (including the Liquid Funds). For example, the sale of an investment by another Client could increase the concentration of certain investment holdings of the Client and could possibly lead to situations where the Client either has to, or conversely, cannot, enter into a transaction or capitalize on an investment opportunity. In the event that a Liquid Fund participates with the Client in an investment, if such Liquid Fund experiences a substantial level of redemptions, the need to satisfy such redemption requests may result in the sale of such investment. Certain Clients could be disadvantaged by the investment activities of other Clients and by redemption or withdrawal requests by investors in other Clients that offer their investors redemption or withdrawal rights (including the Liquid Funds). For example, the sale of an investment by another Client could increase the concentration of certain investment holdings of certain Clients and could possibly lead to situations where the certain Clients either have to, or conversely, cannot, enter into a transaction or capitalize on an investment opportunity. In the event that a Liquid Fund participates with certain Clients in an investment, if such Liquid Fund experiences a substantial level of redemptions, the need to satisfy such redemption requests may result in the sale of such investment by such Clients. Because the Adviser may make non-pro rata allocations, other Clients with the same, similar or overlapping investment programs may produce results that are materially different from those experienced by the Client. Additionally, other Clients may have different investment programs from the Client and make investments that are different as a result of such differing investment programs, which may also produce results that are materially different from those experienced by the Client. For certain Clients, the goal is to allocate a portion of every real estate and real estate-related investment originated and consummated by the Adviser to certain Clients; however, certain follow-on investments and investments with lower expected returns and/or for which real estate is not the primary focus, may be fully allocated to other Clients. Allocations to a Client are subject to the terms and limitations set forth in the governance documents of such Client.

The Adviser reserves the right to modify its Investment Allocation Policy from time to time. A copy of the current Investment Allocation Policy is available upon request to existing or potential Clients (or existing or potential underlying investors in Clients).
Tax Issues Impacting Investment Allocations
Certain Clients have tax considerations that limit the types of investments such Clients may make and that impact the method by which investments are structured. As a result, these Clients may have different allocations of investment opportunities than they might otherwise have in the absence of such tax considerations. In addition, as a result of tax considerations, certain Clients end up investing in different levels of the capital structure of a portfolio company. For example, investments may be structured so that one Client receives loans from, or makes loans to, another Client; provided that the Adviser acts in the best interests of the Clients in structuring such loans. In structuring such investments, the Adviser will weigh the conflicting interests of the different Clients in determining the amount to allocate to debt and equity and the terms of these loans. please register to get more info

BROKERAGE PRACTICES
A. Factors Considered in Selecting or Recommending Broker-Dealers for Client
Transactions.
The Adviser or one or more of its Affiliates has complete discretion, without obtaining specific client consent, to (i) buy or sell securities, (ii) determine the amount of the securities to be bought or sold, (iii) select the broker or dealer to be used in such purchase or sale a nd (iv) agree to the commission rates paid in connection with such purchase or sale. The Advisers will generally effect transactions with brokers that (with respect to U.S. securities) are registered with the SEC and are members of the Financial Industry Regulatory Authority. The Advisers will select brokers on the basis of their ability to provide best execution (including both the trade price and commission and a variety of other factors). Investors in the Clients may include investors affiliated with brokers or, possibly, brokerage firms themselves. The fact that any such investor has invested in a Client will not be taken into consideration in selecting brokers (including prime brokers). 1. Research and Other Soft Dollar Benefits. The Advisers have not entered into written soft dollar arrangements. The Advisers will attempt to negotiate the lowest available commission rates commensurate with the assurance of reliable, high quality brokerage services; however, the Advisers may select brokers that charge a higher commission or fee than another broker would have charged for effecting the same transaction; provided, that the selection of a broker will be made on the basis of best execution, taking into consideration various factors, including commission rates, reliability, financial responsibility, strength of the broker and the ability of the broker to efficiently execute transactions, the broker’s facilities, and the broker’s provision or payment of the costs of research and other services or property that are of benefit to the Adviser or other Clients to which the Advisers provide investment services; provided, further, that the Advisers may be influenced in their selection of brokers by their provision of other services, including, without limitation, capital introduction, marketing assistance, consulting with respect to technology, operations, equipment and office space, and other services or items. Such execution services, research, investment opportunities or other services may be deemed to be soft dollars. As noted above, however, the Advisers have not entered into written soft dollar arrangements. The Advisers do not generate soft dollar credits that may be applied to goods or services through the trading or other activities of the Clients. The provision by a broker of research and other services and property to the Adviser creates an incentive for the Advisers to select such broker since the Advisers would not have to pay for such research and other services and property as opposed to solely seeking the most favorable execution for a Client. Any research, services or property provided by a broker may benefit any Client and such benefits may not be proportionate to commission dollars related to the provision of such research, services or property. 2. Brokerage for Client Referrals. As discussed above, subject to best execution, the Advisers may consider, among other things, capital introduction, marketing assistance, consulting with respect to technology, operations, equipment and office space, and other services or items in selecting broker- dealers for Client transactions. The Advisers do not receive Client or investor referrals in exchange for brokerage business. 3. Directed Brokerage. The Adviser does not recommend, request or require that a Client direct the Adviser to execute transactions through a specified broker-dealer. B. Aggregated Orders for Various Client Accounts . If the Adviser determines that the purchase or sale of the same security is appropriate for more than one Client, the Adviser may, but is not obligated to, aggregate orders in order to reduce transaction costs to the extent permitted by applicable law. When an aggregated order is filled through multiple trades at different prices on the same day, each participating Client will receive the average price with transaction costs allocated pro rata based on the size of each Client’s participation in the order as determined by the Adviser. In the event of a partial fill, allocations generally will be made on a pro rata basis on the initial order but may be modified on a basis the Adviser deems appropriate, including for example, in order to avoid odd lots or de minimis allocations. C. Trade Errors. The Adviser has adopted a trade error policy and related trade error procedures to facilitate the prompt and appropriate resolution of trade errors. Trade errors may occur as a result of mistakes made on the part of an executing broker, or mistakes on the part of Adviser personnel, including, but not limited to, portfolio managers, traders and/or operations staff. Trade errors may include, for example, keystroke errors that occur when entering transactions into electronic trading systems, failures of oral or other communications between and among the Advisers’ investment staff, trading staff and operations staff, or between the Advisers’ personnel and the third parties, such as executing brokers, with whom the Adviser conducts trading activities or typographical or drafting errors related to purchase contracts or similar agreements. In accordance with the Adviser’s trade error policies and procedures, all trade errors, if any, are promptly and appropriately reviewed, evaluated and resolved, and any gains or losses resulting therefrom are allocated properly between the Adviser, the applicable Clients and, where applicable, third parties. Gains and losses from multiple trade errors, if any, generally are not netted. Rather, each trade error generally is separately resolved in accordance with the policy and procedures described herein. The Adviser strives to correct all trade errors prior to the settlement of any transaction, and to minimize gains and losses resulting from trade errors. Trade errors caused by third parties, such as executing brokers, are the responsibility of the third party and the Adviser endeavors to have the affected Clients reimbursed for such trade errors by such third parties. Such reimbursements generally are in accordance with the agreements in effect from time to time between the Adviser and such third parties, such third parties’ customer policies and procedures and governing law. The Adviser does not absorb and is not otherwise responsible for losses resulting from trade errors caused by third parties and the Adviser does not utilize soft dollar arrangements in resolving trade errors. To the extent that a trade error may occur on the part of the Advisers’ personnel, it almost always would occur as part of the business of the Advisers in effecting transactions for Clients in the ordinary course of their businesses. Thus, to the extent of any trade errors with respect to a Client, (i) all gains in such Client’s account resulting from such trade errors will remain in such Client’s account for the benefit of such Client and (ii) in accordance with the exculpation and indemnification provisions between such Client and the Advisers, all losses resulting from such trade errors (that are not reimbursed by third parties, such as executing brokers) will be borne by such Client, and not the Advisers, unless (a) such trade error was caused by the Advisers or their personnel acting (or failing to act) in violation of the standards of care applicable to the exculpation and indemnification protections afforded to the Advisers in any applicable governing documents or agreements with respect to Clients or (b) reimbursement by the Advisers to such Client is otherwise required by applicable law. The Adviser generally will not notify investors in any Client that a trade error has occurred unless a determination has been made that the trade error has or will have a material adverse impact on the investors and/or the Client. The Adviser maintains a record of trade errors which includes, among other things, the date that the trade error occurred, a description of the persons and entities involved in and the circumstances surrounding the trade error, and the means by which the trade error was addressed and/or resolved. Such record is maintained in accordance with the Adviser’s recordkeeping policies. D. Allocation Errors . The Advisers seek to confirm that the proper allocations are made across the Clients for all investment opportunities. However, should an error be made with respect to the allocation of a particular investment opportunity, the Advisers will seek to correct such error, where possible, to put each Client involved in such allocation error in the same place as it would be if such error had not occurred. please register to get more info

REVIEW OF ACCOUNTS
A. Frequency and Nature of Review of Client Accounts or Financial Plans . The Adviser performs various daily, monthly, quarterly and other periodic reviews of the Clients’ portfolios. Daily reviews include account liquidity monitoring by the Adviser’s risk personnel and members of the Financial Risk Management Sub-Committee, as well as trade reviews by the Adviser’s Chief Compliance Officer and various personnel in Operations, Trading and Compliance. Monthly reviews include portfolio valuation, price validations and account concentration monitoring by the Adviser’s Chief Financial Officer and risk personnel. Quarterly reviews include portfolio valuation reviews by the Adviser’s Valuation Committee. Periodic reviews include portfolio monitoring by the Adviser’s Chief Administrative Officer/Senior Legal Officer. B. Factors Prompting Review of Client Accounts Other Than a Periodic Review. A review of a Client account may be triggered by any suspicious or unusual activity or special circumstances. C. Content and Frequency of Account Reports to Clients . Investors in the Private Funds and managed account Clients receive from the Advisers, typically in an electronic format, unaudited quarterly reports providing summary financial and other information on their Private Fund or account. The Advisers may provide certain investors with information on a more frequent and detailed basis if agreed to by the Advisers. In addition, the Advisers provide to investors of the Private Funds, typically in an electronic format, audited financial statements concerning their respective Private Fund and tax information necessary for the completion of such investor’s return within 120 days of the end of the Private Fund’s fiscal year. Investors are also provided with performance and other detailed information so that each investor can monitor its investment in the Clients. The Advisers welcome inquiries from investors in the event any investor desires information not contained in the Advisers’ Form ADV Part 1, Form ADV Part 2 or other relevant offering material or Client reports. The Advisers will endeavor to answer all reasonable and appropriate questions in a timely fashion, while maintaining the confidentiality of sensitive nonpublic and proprietary information related to the operations and investments of the Advisers and the Clients. The Advisers do not publish investor questions and answers and generally do not otherwise disseminate such answers to all investors of the relevant Client. In addition, with respect to certain Clients, the Advisers will hold an annual or semi-annual meeting for their respective investors. please register to get more info

CLIENT REFERRALS AND OTHER COMPENSATION
A. Economic Bene fits for Providing Services to Clients. Other than described herein, the Adviser does not receive economic benefits from non- Clients for providing investment advice and other advisory services. B. Compensation to Non-Supervised Persons for Client Referrals . Neither the Adviser nor any related person directly or indirectly compensates any person for Client referrals. The Adviser has engaged placement agents to solicit certain types of prospective investors for investments in the Private Funds. The Adviser may in the future enter into additional arrangements with third party placement agents, distributors or others to solicit investors in the Private Funds and such arrangements will generally provide for the compensation of such persons for their services at the Adviser’s expense. please register to get more info

CUSTODY
Rule 206(4)-2 promulgated under the Advisers Act (the “Custody Rule”) (and certain related rules and regulations under the Advisers Act) imposes certain obligations on registered investment advisers that have custody or possession of any funds or securities in which any client has any beneficial interest. An investment adviser is deemed to have custody or possession of client funds or securities if the adviser directly or indirectly holds client funds or securities or has the authority to obtain possession of them (regardless of whether the exercise of that authority or ability would be lawful). The Advisers are required to maintain the funds and securities (except for securities that meet the privately offered securities exemption in the Custody Rule) over which they have custody with a qualified custodian. Qualified custodians include banks, brokers, futures commission merchants and certain foreign financial institutions. Rule 206(4)-2 imposes on advisers with custody of clients’ funds or securities certain requirements concerning reports to such clients (including underlying investors) and surprise examinations relating to such clients’ funds or securities. However, an adviser need not comply with such requirements with respect to pooled investment vehicles subject to audit and delivery if each pooled investment vehicle (i) is audited at least annually by an independent public accountant and (ii) distributes its audited financial statements prepared in accordance with generally accepted accounting principles to their investors, all limited partners, members or other beneficial owners within 120 days (180 days in the applicable case of a fund of fund adviser) of its fiscal year-end. The Advisers rely upon this audit exception with respect to the Clients. please register to get more info

INVESTMENT DISCRETION
The Adviser or an Affiliate has been appointed as the investment manager, management company, manager or general partner of the Clients with discretionary trading and investment authorization. The Adviser or an Affiliate has full discretionary authority with respect to investment decisions, and its advice with respect to the Clients is made in accordance with the investment objectives and guidelines as set forth in such Client’s respective private placement memorandum, if any, investment management agreement or other organizational document. The Adviser or an Affiliate assumes discretionary authority to manage the Clients through the execution of investment management agreements or through the organizational documents of Clients. As described above, with respect to one Private Fund, an Affiliate serves as co-manager to such Private Fund with a third party as set forth and described in the organizational and offering documents of such Private Fund. please register to get more info

VOTING CLIENT SECURITIES
The SEC adopted Rule 206(4)-6 under the Advisers Act, which requires registered investment advisers that exercise voting authority over client securities to implement proxy voting policies. In compliance with such rules, the Advisers have adopted proxy voting policies and procedures (the “Policies”). To the extent practicable in light of their other duties to multiple Clients, the Advisers will seek to vote proxies in a manner consistent with the best interests of each relevant Client. While the decision whether or not to vote a proxy must be made on a case-by-case basis, the Adviser generally does not vote a proxy if it believes the proposal is not adverse to the best interest of the Clients, or, if adverse, the outcome of the vote is not in doubt. In the situations where the Adviser does vote a proxy, the Adviser generally votes the proxy in accordance with specified guidelines. A copy of the Policies and the proxy voting record relating to a Client may be obtained by contacting the Adviser. please register to get more info

FINANCIAL INFORMATION
The Adviser is not required to include a balance sheet for its most recent financial year, is not aware of any financial condition reasonably likely to impair its ability to meet contractual commitments to Clients and has not been the subject of a bankruptcy petition at any time during the past ten years. please register to get more info