Pretium Mortgage Credit Management, LLC (“PMCM” or the “Firm”), a Delaware limited liability company, is an investment adviser founded in 2014. PMCM provides discretionary investment management services to pooled investment vehicles and, from time to time, provides investment management services to institutions or other investors that have separately managed accounts (each pooled investment vehicle or separately managed account client, a “Client” and, collectively, the “Clients”). References to the Firm or PMCM in this Brochure also include reference to its affiliate, the general partner (the “General Partner”) of the Fund as defined below. The Firm is primarily owned by Donald R. Mullen Jr.

PMCM currently provides discretionary investment advisory services to Pretium Mortgage Credit Partners I, L.P. (the “Fund”), a residential housing credit investment vehicle.

The Fund invests principally in the United States residential housing credit market through purchases of pools consisting of nonperforming, reperforming and subperforming residential mortgage loans and, from time to time, residential real property (“REO”). The Fund participates in the current market opportunity in mortgage loans by seeking (i) to earn capital gains by acquiring mortgage loans at discounted prices and executing loss mitigation strategies to enhance their value, (ii) to earn long-term yield and capital gains by selectively retaining desirable reperforming loans until there is a final or negotiated payoff by the borrowers or divestment of such loans, and (iii) to generate rental income and capture home price appreciation by selectively retaining desirable REO-to-rental assets. The Fund works with borrowers to implement certain loss mitigation strategies, and, where applicable, to convert nonperforming mortgage loans into reperforming mortgage loans through loan modifications. In certain situations, the Fund permits a short sale or converts acquired mortgage loans into REO and generates income through an REO- to-rental strategy or immediate sale. The Fund is not registered or required to be registered under the U.S. Investment Company Act of 1940, as amended (the “Investment Company Act”) or the U.S. Securities Act of 1933, as amended (the “Securities Act”), and was privately placed to qualified investors in the United States and elsewhere in accordance with applicable laws. The Fund is closed for investment and no longer accepts new investors.

PMCM advises the Fund in an attempt to achieve the Fund’s investment objectives (consistent with any relevant guidelines or restrictions) and does not tailor its advice to the individual needs of any investor in the Fund. Fund investors generally may not impose any restrictions on the way in which PMCM provides advice to the Fund. PMCM’s management of the Fund is subject to, and the terms of any investor’s investment in the Fund and all other terms of the Fund are governed by, the terms of the Fund’s offering memorandum, limited partnership agreement, investment management agreement and subscription agreement, as each may be amended, supplemented or modified from time to time (collectively, “Governing Documents”). PMCM has entered into side letters or other writings with individual investors, which have had the effect of establishing rights under, or altering or supplementing the terms of, the limited partnership agreement. Investors and other recipients should be aware that, while this Brochure includes information about the Fund, it is not a complete description of the terms, risks or conflicts associated with an investment in the Fund. More complete information about the Fund is included in the Fund’s Governing Documents, which has been provided to eligible prospective investors by PMCM or another authorized party. The information contained in this Brochure is qualified in its entirety by reference to disclosures made in the Fund’s offering memorandum and other Governing Documents, which should be carefully reviewed prior to making an investment decision. In no event should this Brochure be considered an offer to sell or a solicitation of an offer to buy interests in the Fund or relied upon in determining to invest in the Fund. This Brochure is designed solely to provide information about PMCM for purposes of complying with certain obligations under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), and, as such, responds to relevant regulatory requirements under the Advisers Act that may differ from the information required to be provided in the Fund’s offering memorandum and Governing Documents. In the event of any inconsistency between the Governing Documents and this Brochure, the Governing Documents shall control. As of December 31, 2018, PMCM managed approximately $3,712,956,916 of regulatory assets under management, all on a discretionary basis. please register to get more info

The Fund
PMCM generally charges an annual management fee (the “Management Fee”) (i) during the commitment period, on committed capital of the Fund, and (ii) upon expiration of the commitment period, on the aggregate amount of invested capital. The Management Fee is payable quarterly in advance, based on committed or invested capital, as applicable, and will be due to PMCM even if the fair value of the relevant remaining investments is below cost or even zero. The General Partner generally will call capital from investors in the Fund for the amount of Management Fees payable by the General Partner to PMCM and then pay such amounts received from the investors to PMCM, consistent with the Fund’s Governing Documents. In some cases, Management Fees due to PMCM may be deducted from proceeds otherwise distributable to investors in the Fund. In the unlikely event PMCM does not provide services for a full period, the Management Fee is typically required to be returned to Fund investors. In general, the amount of fees returned is calculated based on the number of days remaining in the applicable period.

An affiliate of PMCM shall be entitled to a performance-based profits allocation (the “Profits Interest Distribution”) with respect to the Fund based on distributions in excess of the investors’ invested capital, allocable fees and expenses (including Management Fees paid), a preferred return and catch-up allocations, as specified in the Fund’s offering documents.

The Fund (and therefore investors in the Fund) will bear and be charged with all costs and expenses relating to the activities and operations of the Fund, including, but not limited to: (i) administrative fees, costs and expenses related to the operation of the Fund; (ii) fees, costs and expenses related to the acquisition, servicing, management, development, financing, hedging, refinancing and sale or other disposition of investments and the evaluation of potential investments, including any travel, financing, legal, accounting, advisory and consulting expenses in connection therewith, and including the fees, costs and expenses of affiliated servicers and managers; (iii) brokerage commissions, custodial expenses and other investment costs actually incurred in connection with investments; (iv) fees, costs and expenses related to making temporary investments and any interest or hedging expenses; (v) principal, interest on and fees and expenses arising out of all borrowings made by the Fund (including any costs related to arranging, establishing or maintaining any subscription facility); (vi) expenses of liquidating the Fund; (vii) any taxes, fees or other governmental charges levied against the Fund and all expenses incurred in connection with any tax audit, investigation, settlement or review of the Fund (other than those imposed on the Fund or any of its subsidiaries by virtue of an investor’s failure to comply with the Foreign Account Tax Compliance Act (“FATCA”)); (viii) fees, costs and expenses related to litigation, director and officer liability, other insurance and indemnification obligations; (ix) the expenses of the Fund’s investor advisory committee (the “Investor Advisory Committee”); (x) expenses related to organizing persons through or in which investments may be made; (xi) extraordinary administrative or operating fees or expenses, including litigation and indemnification expenses; and (xii) amounts contributed or advanced to any entity or investment for the purpose of such entity or investment paying any cost of the type described in the foregoing clauses (i) through (xi). PMCM and the General Partner will bear their own overhead associated with the Fund’s activities (including compensation of officers and employees of PMCM and the General Partner and general office overhead).
Other Fees; Impact on Management Fee
From time to time, PMCM or its affiliates will receive compensation in connection with transactions structured by PMCM or its affiliates, which may reduce all or a portion of the Management Fees payable to PMCM with respect to the Fund. To the extent that PMCM, the General Partner or their respective affiliates receive from third parties any sourcing, acquisition, holding, disposition, structuring or similar fees in connection with the acquisition or sale of investments by the Fund, one hundred percent (100%) of such fees received that are allocable to the Fund’s investment in such investments shall be offset, on a dollar-for-dollar basis by a reduction in Management Fees. Other compensation that may result in a reduction in the Management Fee may include, for example, break-up and directors’ fees and other similar fees. The extent of all such offsets, the timing of offsets and the types of compensation resulting in such an offset, is specified in the Fund’s Governing Documents. For additional information concerning PMCM’s brokerage practices, please refer to Item 12 of this Brochure. please register to get more info

As noted in Item 5 above, an affiliate of PMCM may be entitled to a Profits Interest Distribution based on the performance of Fund investments. PMCM also may be entitled to performance-based compensation in connection with managed account clients. Such performance-based compensation creates an incentive for PMCM to recommend investments that may be riskier or more speculative than would be the case if such arrangement were not in effect. In addition, performance-based arrangements create an incentive to favor higher fee paying clients in the allocation of investment opportunities. PMCM believes that it has reasonable controls in place to mitigate such potential conflicts of interest. These controls include trade allocation procedures that generally require accounts with similar investment strategies to be managed in a similar fashion, subject to a variety of exceptions, such as particular investment restrictions or policies applicable only to certain accounts, differences in cash flows, exposure guidelines, account sizes and similar factors. please register to get more info

PMCM provides investment management services on a discretionary basis to the Fund. Investors in the Fund and managed account clients may include pension plans, foundations, funds of funds, charitable organizations, trusts, estates, corporations, sovereign wealth funds, other institutional investors, and high net worth individuals. Investors in the Fund must be “accredited investors” as determined under Regulation D under the Securities Act of 1933, as amended, “qualified clients” as defined for purposes of Rule 205-3 under the Advisers Act, and “qualified purchasers” or “knowledgeable employees” as defined and interpreted for purposes of Section 3(c)(7) of the Investment Company Act. The minimum capital commitment for investing in the Fund is $2 million, which minimum may be waived by the Fund’s General Partner. The minimum capital commitment for opening a managed account, if applicable, shall be described in the written investment management agreement entered into by and between PMCM and the managed account client, and is subject to negotiation. please register to get more info

PMCM generally seeks to acquire nonperforming, reperforming and subperforming loans at a discount and to enhance their value through the execution of various loss mitigation strategies. PMCM may also seek to acquire newly originated loans and “fix and flip” loans. With acquired assets, PMCM may seek to retain desirable reperforming loans and REO assets resulting from the execution of loss mitigation strategies to capture current income and additional increases in value due to anticipated home price appreciation.

By applying the operational expertise of the management team on a loan-by-loan basis and directing servicing and loss mitigation decisions on a case-by-case basis, PMCM believes it will be better able to achieve the Clients’ objectives. PMCM collaborates with its special servicers to formulate asset-level resolution strategies that take into account the methodical approach used to evaluate each loan pool when considered for acquisition. Loss mitigation strategies for acquired mortgage loans include, but are not limited to, loan modification, collateral resolution and collateral disposition. The manner in which a subperforming or nonperforming loan is resolved will impact the amount and timing of revenue received. The Firm, or a servicer on behalf of the Firm, may negotiate with a sub or non-performing borrower to modify the terms of his or her mortgage loan, and once the modification has occurred, the mortgage loan will become a reperforming loan as the borrower resumes payments. A Client may hold onto select reperforming loans to earn long-term yield and cash flow. In certain circumstances, a borrower may choose to refinance his or her loan or a Client may also consider selling the modified loans. A portion of the mortgage loans will enter into foreclosure or similar proceedings, ultimately becoming REO. REO property can be converted into single-family rental properties that may generate long-term returns for a Client or they may be sold through REO liquidation and short sale processes.

Risk Factors Relating to Mortgage-Related Strategies
Investors should be aware that PMCM’s investment program is speculative and entails substantial risks, including risk of loss of the entire investment. There can be no assurance that a Client’s investment objectives will be achieved, and actual investment results may vary substantially. Investors should be prepared to bear these risks.

The following is a brief summary of certain of the more significant risks associated with PMCM’s investment strategies. The risks inherent to the strategies employed by PMCM, including those listed below, are described in further detail in the Clients’ offering documents.

Unproven Industry

Large-scale institutional investment in distressed residential mortgage loans where the borrower has failed to make timely payments is a relatively recent phenomenon that has emerged out of the mortgage and housing crisis that began in late 2007. Prior to that time, mortgage loans secured by single-family rental homes were generally not viewed as viable assets for investment on a large scale by institutional investors. Consequently, the long-term viability of mortgage loans as an investment strategy on an institutional scale has not yet been proven. Thus, investing in nonperforming and reperforming mortgage loans may not prove to be a viable long-term investment strategy on an institutional scale. If it turns out that this investment strategy is not a viable one, investors in such loans may be materially and adversely affected.
Investors May Be Negatively Affected by Downturns in the U.S. Economy and Residential Real Estate
Markets.
There was a significant decline in economic growth, both in the U.S. and globally, that began in 2008 and continued through 2009. Although the real estate development industry and the U.S. economy have seen gradual improvement since 2010, there can be no assurance that market conditions will remain or improve further in the near future. Negative trends in the real estate market may materially and adversely affect revenues from investments in mortgage loans. The effects of the ongoing correction in real estate market prices and reduced levels of real estate sales could result in further price reductions in real estate values, potentially adversely affecting the value of the property securing mortgage loans. Continued declines in real estate values, sales volumes or other factors could have further adverse effects on buyers and sellers of real estate. Conversely, to the extent that mortgage loans are converted to REO and there is an increase in real estate market prices and sales, this could result in lower demand for REO assets as rental properties.

The ability to lease certain properties following conversion of mortgage loans to REO is also dependent upon the overall level of consumer spending, which is affected by, among other things, employment levels, recession, personal debt levels, and conditions in the housing market, stock market volatility and uncertainty about the future. The rental of excess single-family homes in an already competitive market may also reduce the ability to lease rental units and depress rental rates in certain markets.
Deterioration of Credit Markets May Affect Ability to Finance and Consummate Investments

Events in the sub-prime mortgage market and other areas of the fixed income markets in the past caused significant dislocations, illiquidity and volatility in the structured credit, leveraged loan and high-yield bond markets, as well as in the wider global financial markets. These forces resulted in the bankruptcy or acquisition of, or government-sponsored assistance to, several major domestic and international financial institutions and sovereign governments. These factors, combined with volatile commodity prices and foreign exchange rates, contributed to recessionary economic conditions globally and a resultant loss of investor confidence in the financial system, which resulted in a lack of liquidity and decline in asset values. The deterioration of the global credit markets may make it more difficult for investors to obtain favorable financing for their investments. While the dislocation in the sub-prime mortgage market presents certain opportunities, the ability to generate attractive investment returns may be adversely affected to the extent an investor is unable to obtain favorable financing terms for its investments. These conditions have had an adverse impact on the availability of credit to businesses generally and have led to an overall weakening of the U.S. and global economies. A global recession could adversely affect the financial resources of an investor (including the Fund or any other Client), its investments and its ability to make principal and interest payments on, or refinance, outstanding debt when due. Similarly, a global recession could also adversely affect the financial resources and ability of both obligors with respect to mortgage loans and, when applicable, tenants of the real properties underlying investments to make payments when due. In the event of such circumstances, an investor (including the Fund or any other Client) could lose both invested capital in and anticipated profits from the affected investments.
Accelerated Recovery of the Housing Market May Adversely Affect Investment Opportunities and
Returns
The implementation of mortgage investing depends on the availability of mortgage loan acquisition opportunities in target markets at attractive pricing levels. Various factors and market conditions have made mortgage loans available for purchase at prices that are below replacement cost in many markets. However, housing prices will likely stabilize and return to more normalized levels, which likely will make future mortgage loan acquisitions more costly and result in lower yields. There are many factors that may cause a recovery (or other change) in the housing market that would result in future acquisitions becoming more expensive and possibly less attractive than recent past and present opportunities, including:
• improvements in the overall economy and job market;
• a resumption of consumer lending activity and greater availability of consumer credit;
• improvements in the pricing and terms of mortgage-backed securities; and
• increasing competition for single-family assets from private investors, entities with similar investment objectives and owner-occupants.
Investments May Be Illiquid

Real estate investments, including investments in mortgage loans, are relatively illiquid. Such illiquidity may limit the Firm’s ability to vary the portfolio of investments of a Client in response to changes in economic and other conditions. In addition, illiquidity may result from changes in the capital markets or the decline in value of a property securing one or more of a Client’s investments. There can be no assurances that either the capital market conditions will change from their current state or that the fair market value of any of the real property serving as security will not decrease in the future, leaving a Client’s mortgage loans undercollateralized or not collateralized at all.
An Investment Portfolio May Lack Diversification of Investments

While PMCM’s investment strategy for each of its Clients is intended to be diversified by number of assets and geographic location, the investments made by or on behalf of a Client may be concentrated in a small number of local market areas and in a particular asset class (i.e., mortgage loan pools and related assets). As a consequence, the aggregate return on a Client’s investments may be adversely affected by the geographic concentration and the asset class concentration or by the unfavorable performance of a particular market and will be at a greater risk to overall changes in the economy than if less concentrated in a particular location or asset class. This lack of diversification may have a negative impact on the ability of a Client to achieve its investment objectives.
A Client May Be Subject to the Risks of Holding Leveraged Investments
Leverage creates an opportunity for increased return on equity, but at the same time creates an additional and significant risk of loss. For example, leveraging magnifies changes in an account’s net worth. Increases in credit spreads in the market generally may adversely affect the market value of a Client’s investments. Moreover, the use of leverage triggers certain debt service obligations and, to the extent such obligations are not met, there is a risk of loss of some or all investments through foreclosure or a financial loss if liquidation of assets is required, the impact of which could be magnified if such a liquidation is at a commercially inopportune time.
Creditor Risks
Investments in mortgage loans generally are subject to various creditor risks, including, for instance, (i) the possible invalidation of an investment transaction as a “fraudulent conveyance” under the relevant creditors’ rights laws, (ii) so-called lender liability claims by the issuer of the obligations and (iii) environmental liabilities that may arise with respect to collateral securing the obligations. Additionally, adverse credit events with respect to mortgage loans and any underlying property, such as missed or delayed payment of interest and/or principal, bankruptcy, receivership or distressed exchange, can significantly diminish the value of an investment in distressed residential mortgage loans. In this case, the risk of loss of principal in the investment will be exacerbated.
Interest Rate Changes May Adversely Affect Value

The market value of investments in mortgage loans may be affected by changes in interest rates. In general, the market value of a debt investment will change in inverse relation to an interest rate change where a debt investment has a fixed interest rate or only limited interest rate adjustments. Accordingly, in a period of declining interest rates, debt investments without adequate call protection may benefit less than other fixed income securities due to accelerated prepayments. Interest rate changes may also affect returns on new mortgage loan investments. If there is a period of declining interest rates, the amounts becoming available for investment due to repayment of mortgage loan investments may be re-invested at lower rates than a Client had been able to obtain in prior investments. Increases in the interest rates on debt incurred in acquiring debt investments may not be reflected in increased rates of return on the related investments, adversely affecting a Client’s return on those investments. Accordingly, interest rate changes may adversely affect the total return on a Client’s portfolio of mortgage loans.
Investment in Distressed Assets

PMCM intends to acquire mortgage loans for the Fund that are primarily nonperforming mortgage loans (although pools acquired may also include performing, subperforming and reperforming residential mortgage loans). These investments may experience financial difficulties that may never be overcome. Investments in mortgage loans that are secured by properties operating under the close supervision of a mortgage lender or under certain bankruptcy laws are, in certain circumstances, subject to certain additional potential liabilities, which may exceed the value of a Client’s original investment. In addition, lenders that have inappropriately exercised control over 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. In addition, under certain circumstances, payments to a Client may be required to be returned if any such payment or distribution is later determined to have been a fraudulent conveyance or a preferential payment. Finally, a Client may become the owner of a property that is the subject of a mortgage if the Client forecloses on its collateral.
Dependence upon Third-Party Mortgage Service Providers May Negatively Impact Results or Reputation
if the Third Parties Fail to Perform
Third-party vendors and service providers will provide certain services for mortgage loans purchased by Clients. For example, third-party mortgage servicers will be relied upon to collect payments and exercise legal remedies in connection with such mortgage loans. Notwithstanding efforts to implement and enforce strong policies and practices regarding service providers, PMCM may not successfully detect and prevent fraud, incompetence or theft by such service providers. In addition, any removal or termination of third-party service providers would require PMCM to seek new vendors or providers, which would create delays and adversely affect operations. In the event of fraud or misconduct by a third party, a Client could also be exposed to material liability and be held responsible for damages, fines and/or penalties.
Clients May Rely on Third Parties to Value the Properties Underlying the Mortgage Loans

Clients may not be provided physical access to any units or properties securing the mortgage loans. As a result, Clients (and PMCM) may be reliant on valuation reports of third-party companies for each property. Such third-party reports made available are generally for informational purposes only. Accordingly, there is a risk that the valuation of properties securing the mortgage loans may be inaccurate. For example, there may be defects or damage to the property inaccurately reported or not reported at all, which reduces the value of the property underlying the mortgage loans, reducing the total return to a Client below the forecast return.
Nonperforming, Subperforming or Reperforming Loans

A Client may acquire distressed residential mortgage loans where the borrower has failed to make timely payments of principal and/or interest. As part of the residential mortgage loan portfolios purchased, a Client may also acquire performing loans that are or subsequently become subperforming, nonperforming, reperforming. Under current market conditions, it is possible that many of these loans will have current loan-to-value ratios in excess of 100%, meaning the amount owed on the loan exceeds the value of the underlying real estate. Further, the borrowers on such loans may be in economic distress and/or may have become unemployed, bankrupt or otherwise unable or unwilling to make payments when due. Even though it is anticipated that a Client will pay less than the amount owed on these loans to acquire them, if actual results are different from PMCM’s assumptions in determining the price for such loans, such Client may incur significant losses. There may not be any limits on the percentage of subperforming, nonperforming or reperforming loans that a Client may hold. Any loss incurred may be significant.

Mortgage loans that become subperforming, nonperforming or reperforming after they are purchased may require loss mitigation strategies and related workout tools, which may entail, among other things, a substantial reduction in the interest rate and a substantial write-down of the principal of such loan. However, even if a restructuring were successfully accomplished, a risk exists that, upon maturity of such loan, replacement “takeout” financing will not be available. In certain cases, it may be necessary or desirable to foreclose on collateral securing one or more real estate loans. The foreclosure process can be lengthy and expensive. Borrowers often resist foreclosure actions by asserting numerous claims, counterclaims and defenses against the holder of a real estate loan, including lender liability claims and defenses, even when such assertions may have no basis in fact, in an effort to prolong the foreclosure action. In some states, foreclosure actions can take up to several years or more to conclude. At any time during the foreclosure proceedings, the borrower may file for bankruptcy, staying the foreclosure action and further delaying the foreclosure process. Foreclosure litigation tends to create a negative public image of the collateral property and may result in disrupting ongoing leasing and management of the property. Pursuant to customary provisions in purchase agreements governing loan acquisitions, a Client generally may have the right to cause the sellers to repurchase certain loans if they do not provide proper documentation to evidence ownership or first lien status with respect to such loans within a specified time period. Any delay or inability to obtain such documentation could adversely affect a Client’s ability to leverage such loans, and any such repurchases by the sellers would decrease the size of a Client’s mortgage loan portfolio.
Investments in Residential Properties Are Subject to Particular Risks

If mortgage loans are converted to REO, a Client may face a large number of risk factors that may affect the value and successful operation of such properties, including: the physical attributes of the property, such as its age, condition, design, appearance, access to transportation and construction quality; the location of the property; ability of property managers to provide adequate maintenance and insurance; the property’s reputation; the level of mortgage interest rates and availability of government incentives, which may encourage tenants to ultimately purchase rather than lease the homes, if possible; the presence of competing properties; the tenant mix, such as the tenant population being heavily dependent on workers from a particular business or personnel from a local industrial unit; adverse local or national economic conditions, which may limit the amount of rent that may be charged and may result in a reduction of timely rent payments or a reduction in occupancy levels; state and local regulations, which may govern a Client’s ability to increase rent; government assistance/rent subsidy programs available in competing homes; and the inventory of unsold homes in the local market that are being rented until economic conditions in the single-family residential market improve. If any of such risk factors are heightened or the conditions associated with such risk factors deteriorate in the continuing economic crisis, a Client’s investments in its targeted residential properties may incur losses.

In addition, certain jurisdictions regulate the relationship between an owner and its tenants. Commonly, these laws require a written lease, good cause for eviction, disclosure of fees and notification to residents of changed land use, while prohibiting unreasonable rules and retaliatory evictions. Clients may incur additional expenses and spend extended periods of time complying with such regulations, which may negatively impact the performance of such Client’s portfolio.
Inability to Promptly Foreclose Upon Defaulted Residential Mortgage Loans

A Client’s ability to promptly foreclose upon defaulted residential mortgage loans and, in certain cases, where appropriate, seek alternative resolutions for the underlying properties plays a critical role in the valuation of the assets in which Clients invest and expected return on those investments. PMCM expects the timeline to convert acquired loans into single-family rental properties will vary significantly by loan. Certain loans may already be in foreclosure proceedings at the time of acquisition, in which case conversion could be as soon as three to six months following acquisition, but in other cases conversion could take up to 24 months or longer. There are a variety of factors that may inhibit a Client’s ability to foreclose upon a residential mortgage loan and get access to the real property within the time frames modeled as part of the valuation process. These factors include, without limitation: state foreclosure timelines and deferrals associated therewith (including with respect to litigation); unauthorized occupants living in the property; federal, state or local legislative action or initiatives designed to provide homeowners with assistance in avoiding residential mortgage loan foreclosures and that serve to delay the foreclosure process; HAMP and similar programs that require specific procedures to be followed to explore the refinancing of a residential mortgage loan prior to the commencement of a foreclosure proceeding; and continued declines in real estate values and sustained high levels of unemployment that increase the number of foreclosures and place additional pressure on the already overburdened judicial and administrative systems. In addition, certain issues, including “robo-signing,” have been identified throughout the mortgage industry that relate to affidavits used in connection with the residential mortgage loan foreclosure process. A substantial portion of Clients’ investments may be reperforming, subperforming and nonperforming residential mortgage loans, many of which are already subject to foreclosure proceedings at the time of purchase. There can be no assurance that similar practices have not been followed in connection with residential mortgage loans that are already subject to foreclosure proceedings at the time of purchase. To the extent PMCM determines that any of the loans acquired by Clients are impacted by these issues, the Client may be required to re-commence the foreclosure proceedings relating to such loans, thereby resulting in additional delay that could have the effect of increasing the Client’s costs and/or diminishing its expected return on its investments. The uncertainty surrounding these issues could also result in legal, regulatory or industry changes to the foreclosure process as a whole, any or all of which could lengthen the foreclosure process and negatively impact Clients’ business.
The foregoing list of risk factors does not purport to be a complete analysis or explanation of the risks
associated with PMCM’s investment strategies and, as applicable, with an investment in the Fund. The
Fund is closed for investment and no longer accepting new investors. please register to get more info

Not applicable. please register to get more info

Progress Residential East, LLC, Progress Residential West, LLC and Alta Residential Solutions, LLC, affiliates of PMCM and the General Partner and certain related entities (collectively, the “Servicer Affiliates”), provide REO management services to the Fund. Among other things, certain Servicer Affiliates oversee, coordinate, organize, manage, direct and facilitate the leasing, management, advertising and disposition of properties, and carry out administration, management and ongoing maintenance functions with respect to properties, including, without limitation, tenant approvals, lease negotiations, collecting rent and other amounts payable by tenants thereof, collecting and segregating deposits under leases, paying all operational expenses relating to properties, and enforcing regulations and obligations. Other affiliates of the General Partner may provide other services to the Fund, including certain valuation and other consulting services in connection with PMCM’s due diligence of underlying mortgage loans. Such services will be performed on terms that are determined by the General Partner to be fair and reasonable to the Fund.

The Servicer Affiliates and other affiliates of the General Partner will earn fees for performing the services referenced above (which may include employee costs and related overhead expenses allocable thereto, as reasonably determined by the General Partner based on the time expended by the employees who render such services, number of homes or such other fair and reasonable basis for allocation). PMCM faces a conflict of interest in retaining these affiliated entities to perform services for Clients because PMCM’s principals stand to benefit from any profits earned by these affiliates. However, PMCM has adopted policies and procedures to address these conflicts and to ensure that these affiliated services are provided on an arms’ length basis (e.g., PMCM compares the services and costs of its affiliated service providers with those of third parties so that Clients receive adequate services at prices comparable to those prevailing in the current market).
Other Relationships
Certain officers and employees of PMCM also serve as officers and/or employees of another SEC- registered investment adviser, Pretium Credit Management LLC (“PCM”), which is an affiliate of PMCM. PMCM and PCM do not invest in the same types of assets, and it is therefore unlikely that a conflict of interest in allocating investment opportunities between Clients of PMCM and clients of PCM will arise. Nevertheless, PMCM is committed to fulfilling its fiduciary duty to its Clients and will implement appropriate internal controls to address potential conflicts of interest should any arise or become foreseeable with respect to PCM and/or its clients.

PMCM, PCM and the Servicer Affiliates are all under the common control of their parent company, Pretium Partners, LLC (“Pretium Partners”). Certain officers and employees of PMCM serve as officers and/or employees of Pretium Partners and/or Pretium Partners’ other subsidiaries, which, in each case, are neither expected to invest in the same types of assets as PMCM nor present a conflict of interest in allocating investment opportunities between Clients of PMCM and clients of such other firms. PMCM will implement appropriate internal controls to address potential conflicts of interest should any arise or become foreseeable with respect to Pretium Partners, its other subsidiaries and/or their respective clients. It is anticipated that officers and employees of Pretium Partners and/or its subsidiaries, including PMCM, will provide certain centralized back office support services to all of Pretium Partners’ investment adviser and investment management company subsidiaries, including with respect to accounting, human resources, legal and compliance, and may provide support for business development. With respect to reimbursement under PMCM’s existing Client agreements, expenses and overhead associated with the provision of services: (a) to PMCM by officers and employees of Pretium Partners or its other subsidiaries will be treated the same as those associated with the provision such services to PMCM by its own personnel; and (b) by PMCM officers and employees to Pretium Partners or its other subsidiaries will be treated the same as those associated with the provision of such services by such entities’ own personnel and will not be borne by PMCM or its Clients. please register to get more info

PMCM has adopted a Code of Ethics (the “Code”), which describes the Firm’s fiduciary duties and responsibilities to its Clients, requires that the Firm’s employees act in the best interests of Clients, act in good faith and in an ethical manner, avoid conflicts of interest with Clients to the extent reasonably possible, and identify and manage conflicts of interest to the extent that they arise. PMCM’s employees are also required to comply with applicable provisions of the federal securities laws and make prompt reports to the Firm or other appropriate party of any actual or suspected violations of such laws by PMCM or its employees. In addition, the Code sets forth formal policies and procedures with respect to the personal securities trading activities of PMCM’s employees deemed to be “access persons.” The Code prohibits personal securities transactions of issuers who have been placed on the Firm’s restricted list, requires pre-clearance for all initial-public offerings and private placements, as well as issuers who have been placed on the Firm’s watch list, requires employees to report all securities transactions on at least a quarterly basis and provide a summary of securities holdings on at least an annual basis. The Code also addresses outside activities of employees, conflicts of interest, policies and procedures concerning the prevention of insider trading, restrictions on the acceptance of significant gifts and the reporting of certain gifts and business entertainment items, and the pre-clearance and reporting of political contributions. PMCM will provide a complete copy of its Code to any Client upon request to [email protected].

In connection with its management of the Fund, PMCM may acquire assets from, and sell or transfer Fund investments to, the General Partner and its affiliates. Such transactions (i) will be made on terms (including the consideration to be paid) that are determined by the General Partner to be fair and reasonable to the Fund and which are no less favorable than terms that could have been obtained from an unaffiliated third party on an arms’ length basis and (ii) will require the consent of the Investor Advisory Committee or a majority in interest of the limited partners of the Fund (other than affiliates of the General Partner). The Fund also may, with the prior consent of such Investor Advisory Committee or a majority- in-interest of the limited partners (other than affiliates of the General Partner), co-invest in investments with affiliates of the General Partner or entities advised or managed by affiliates of the General Partner. Such transactions will be on terms that are determined by the General Partner to be fair and reasonable to the Fund (provided that the economic terms and conditions on which each of the Fund and any such affiliate of the General Partner co-invest in an Investment will be substantially the same).

The Fund may, from time to time, enter into other transactions with PMCM or its affiliates, shareholders, partners, officers, managers, members, employees, agents and representatives or other accounts established by key principals of PMCM prior to their joining PMCM, including regional operating teams or property managers that may be affiliated with or owned (in whole or in part) by PMCM or its affiliates. These transactions will be no less favorable to the Fund than would be received in independent, arm’s- length transactions, will be supported by independent third-party appraisals of any assets to be acquired in such transactions and, except as expressly contemplated by the Fund’s Governing Documents, will be subject to the approval of the Investor Advisory Committee. please register to get more info

Due to the nature of its strategies, PMCM does not generally trade in public securities and, therefore, does not generally utilize broker-dealers for transactions contemplated by this section. In the event PMCM executes a brokerage transaction for its Clients (e.g., trades in public securities or enters into hedging transactions), it will generally consider qualitative factors including, but not limited to, the broker’s reliability and execution capabilities for the transaction, the commissions charged by the broker, and the broker’s reputation and responsiveness to requests for trade data and other financial information. Given the various factors that PMCM considers in allocating investment opportunities among its Clients and the difficulties in arranging “pro rata” trades in the types of asset classes for which PMCM provides investment advice (including, among other things, due to the size or complexity of the investment opportunity or due to tax, regulatory or other structural considerations) it is generally impractical or impossible to aggregate orders for multiple Clients in any given trade. Accordingly, PMCM does not aggregate the purchase or sale of securities for various Client accounts. It should be noted that if it were possible, aggregating the purchase or sale of securities may be less expensive for Client accounts. please register to get more info

The Fund’s accounts and investment positions are monitored by PMCM personnel on a regular basis. PMCM’s investment committee meets as necessary to review general portfolio composition, investment opportunities, market conditions, potential conflicts, and recent investment activities. Following a significant event in the financial industry or market generally, PMCM may determine to review the assets of the Fund on a more frequent basis.

Within 120 days after the Fund’s fiscal year-end, audited financial statements are mailed to each investor in the Fund. Investors also receive unaudited performance information for the Fund after each calendar quarter-end, as well as a quarterly report providing additional detail on the Funds’ investments. Such reports include the value of such investor’s interest in the Fund as determined based on the unaudited fair market value of the holdings in the Fund. Certain investors in the Fund may request additional information relating to the Fund and, to the extent such information is readily available or may be obtained without unreasonable effort or expense, PMCM generally will seek to provide such investors with the information requested. Investors that request and receive such information will consequently possess information regarding the business and affairs of the Fund that may not be known to other investors. As a result, certain investors may be able to take actions on the basis of such information which, in the absence of such information, other investors do not take. please register to get more info

PMCM may enter into distribution/placement arrangements with a number of unaffiliated third parties. Typically, third‐party solicitors will receive a portion of the Management Fee and/or performance-based compensation paid to PMCM or its affiliates (although other payment arrangements could exist). If third‐ party solicitors are engaged, prospective investors who are solicited by such third parties will be informed of (and may be asked to acknowledge in writing their understanding of) any such arrangement. All fees for such solicitation services will be ultimately paid/borne by a corresponding reduction in the Management Fees paid to PMCM and none of the investors in the Fund will be subject to any increased or additional fees or charges. please register to get more info

Although PMCM does not maintain physical custody of the Fund’s assets, PMCM would be deemed to have custody of the assets of the Fund for purposes of Rule 206(4)-2 of the Advisers Act (the “Custody Rule”). PMCM will deliver the Fund’s audited financial statements to investors within 120 days of the Fund’s fiscal year end, as required under the Custody Rule. please register to get more info

PMCM maintains the authority to manage the Fund on a discretionary basis, subject to the overall supervision of the General Partner, in accordance with the investment guidelines, objectives, limitations, other provisions and terms set forth in the Fund’s Governing Documents. This means that PMCM is given full authority under the Governing Documents to select the timing, size, and identity of assets to buy and sell for the Fund. please register to get more info

PMCM’s investment strategy does not involve the acquisition of public securities with voting authority. In the unlikely event that the Fund comes into possession of securities with voting rights, the Firm will generally have the authority to vote proxies without additional direction from the Fund. In such instances, PMCM’s policy is to vote proxies solely in the interests of the Fund. Generally, PMCM will vote proxies in line with management. However, under certain circumstances when PMCM believes that management’s proposal is not designed to maximize value for a Fund, PMCM will vote against management. If a proxy vote presents a conflict of interest between PMCM and the Fund (or a Client generally), our procedures require us to seek to ensure that any actions taken are in the best interest of the Client. Investors may obtain information about how proxies were voted by contacting [email protected]. Investors may obtain a copy of PMCM’s proxy voting policies and procedures upon request by contacting [email protected]. please register to get more info

PMCM does not have any financial condition that impairs its ability to meet contractual and fiduciary commitments to its Clients. please register to get more info