Pretium Partners, LLC (“Pretium” or the “Firm”), founded in 2012, is an Investment Adviser
focused on real estate, mortgage finance, corporate and structured credit and specialty finance.
Pretium conducts its mortgage finance business through Pretium Residential Credit Management,
LLC, a Delaware limited liability company, and Pretium SMA Manager, LLC, a relying adviser
under common control and also a Delaware limited liability company. For ease of reference, the term
“PRCM” or “Investment Adviser” is used throughout this Brochure and should be understood to
include the registrant and where applicable, its relying adviser. The Investment Adviser is primarily
owned by Donald R. Mullen, Jr. and is an indirect subsidiary of Pretium.
PRCM currently provides discretionary investment advisory services to:
• Pretium Residential Credit Fund II, L.P., a Delaware limited partnership (and its parallel
vehicles, “RCF II”), and Pretium Residential Credit Annex Fund, L.P. (and its parallel
vehicles, “RCAF”), which invest 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”). RCF II and RCAF participate 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 acquiring non-QM, non-performing, reperforming and
sub-performing residential credit loans at a discount and to enhance their value through
the execution of various loss mitigation strategies, and (iii) to generate rental income and
capture home price appreciation by selectively retaining desirable REO-to-rental assets.
RCF II and RCAF work 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 funds permit a short
sale or converts acquired mortgage loans into REO and generates income through an
REO-to-rental strategy or immediate sale;
• Multiple separately managed accounts and a fund of one pursuing parallel strategies to
RCF II and RCAF;
• Pretium Residential Opportunities Fund I, L.P., a Delaware limited partnership (and its
parallel vehicles, “ROF I”), which seeks to make private equity or equity-related
investments in businesses primarily involved in the origination of loans; and
• A separately managed account that invests in mortgage loans secured by mortgages or
deeds of trust on residential real property, the servicing rights relating to the mortgage
loans, and one-to-four family residential real properties which have been acquired by
foreclosure or similar proceedings
(RCF II, RCAF and ROF I, collectively the “Funds,” and the Funds together with the separately
managed accounts, collectively, the “Clients”).
The Clients are 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 the Funds were privately placed to qualified investors
in the United States and elsewhere in accordance with applicable laws. The Funds rely upon the
exclusion from the definition of investment company provided by Sections 3(c)(1) and 3(c)(7) of
the Investment Company Act. Likewise, securities issued by the Funds generally rely on the offering
exemptions provided by Section 4(a)(2) of the U.S. Securities Act of 1933, as amended (the
“Securities Act”) and Regulation D thereunder.
PRCM advises the Clients in an attempt to achieve their respective investment objectives
(consistent with any relevant guidelines or restrictions) and does not tailor its advice to the individual
needs of any investor in the Funds. Fund investors generally cannot impose any restrictions on the
way in which the Investment Adviser provides advice to the Fund. PRCM’s management of the
Clients is subject to the terms the offering memorandum, limited partnership agreement or
investment
management agreement and subscription agreement, as each can be amended,
supplemented, or modified from time to time (collectively, the “Governing Documents”). The
Investment Adviser generally expects to enter into agreements (“Side Letters”) with one or more of
their investors whereby, in consideration for agreeing to invest certain amounts in a Client and/or
providing other consideration, such investors may be granted favorable rights not afforded other
investors in such Client. Such rights typically include one or more of the following: rights to receive
reports from the Client on a more frequent basis or that include information not typically provided
to other investors; rights to receive reduced rates of performance fees/allocations and/or management
fees earned by PRCM, each Client’s general partner and/or other affiliates; excuse rights;
information rights; co-investment rights; rights to transfer interests in a Fund; and such other rights
as may be negotiated between the Client, PRCM and such investors. Side Letters may be entered
into by the Client and PRCM without the consent of other investors in such Client. Additionally,
except as required by “most-favored-nations” clauses or under the relevant Governing Documents,
Side Letters will not be disclosed to other investors in such Client.
Investors and other recipients should be aware that while this Brochure includes information
about the Clients, it is not a complete description of the terms, risks or conflicts associated with an
investment in the Clients. More complete information about the Clients is included in the relevant
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 Funds or relied upon in determining to invest in the Funds. This Brochure is
designed solely to provide information about PRCM 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 can differ from the
information required to be provided in the Funds’ respective offering memoranda and Governing
Documents. In the event of any inconsistency between the Governing Documents and this
Brochure, the Governing Documents shall control.
The Investment Adviser does not participate in wrap fee programs.
As of December 31, 2023, PRCM managed approximately $15,286,757,829 of regulatory
assets under management. Such amount is preliminary and unaudited.
This Brochure generally includes information about the Investment Adviser and its
relationships with its Clients and affiliates. While much of this Brochure applies to all such Clients
and affiliates, certain information included herein applies to specific Clients or affiliates only. This
Brochure does not constitute an offer to sell or solicitation of an offer to buy any securities. The
securities of the Clients are offered and sold on a private placement basis under exemptions
promulgated under the Securities Act of 1933, as amended, and other exemptions of similar import
under U.S. state laws and the laws of other jurisdictions where any offering may be made.
The descriptions set forth in this Brochure of specific advisory services that the Investment
Adviser offers to Clients, and investment strategies pursued and investments made by the Investment
Adviser on behalf of its Clients, should not be understood to limit in any way the Investment
Adviser’s investment activities. The Investment Adviser may offer any advisory services, engage in
any investment strategy and make any investment, including any not described in this Brochure,
that the Investment Adviser considers appropriate, subject to each Client’s investment objectives
and guidelines. The investment strategies the Investment Adviser pursues are speculative and entail
substantial risks. Clients should be prepared to bear a substantial loss of any invested capital. There
can be no assurance that the investment objectives of any Client will be achieved.