6. Would the PABF be open to a separate account vehicle held at the Fund s custodian? A separate account is acceptable.

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1 The originally posted minimum qualifications for this RFP listed that firms must be familiar with and willing to adhere to Articles 1 and 11 of the Illinois Pension Code. Please note that this was stated in error and the following is how it should have been stated firms must be familiar with and willing to adhere to Articles 1 and 5 of the Illinois Pension Code. In the cover letter requested, please reference your firm s familiarity and willingness to comply with Article 5 of the Illinois Pension Code, not Article Can you provide further clarification on how you/the client defines cash yield. Also, is it 3 calendar years or the total 3 year period? Cash yield is defined as a dividend, interest or coupon payment that is actually distributed in cash on a regular basis throughout the year (see question 7 below). The three year period can be interpreted as calendar years, or the trailing three year period ending as of the date of your latest audited track record. 2. We are interested in submitting a product that doesn t have the required track record or AUM, however it is an extension of an existing strategy which does meet the criteria for the RFP, would you be willing to consider this product?, but this product may not compare favorably to strategies with such a track record. The proposed fund must have a strategy which is substantially similar to those funds whose track record is used. 3. Can an underlying portion of the proposed strategy contain potential allocations to the excluded strategies, such as MLP s?, but only as a sub-strategy, they should not be a meaningful part of the returns (we deem underlying sub-strategies of >10% of assets to be meaningful) and any inherent volatility that they provide may lead to the overall risk/reward of the product being viewed as less attractive relative to other products. 4. Will a closed-end Fund targeting a cash yield of 4-6% with a Fund term of less than 7 years, be acceptable to meet the minimum requirements?, although historical returns will be analyzed to assess how likely it is that our hurdle of a 5% cash yield is likely to be met. 5. Will a closed-end Fund targeting approximately 8% cash yield (of total 9-10% target net IRR) meet the minimum requirements if the Fund term is more than 7 years? No, our hurdle return is 10% for funds with longer dated liquidity structures and a target of 8% is unlikely to meet this in normal circumstances. 6. Would the PABF be open to a separate account vehicle held at the Fund s custodian? A separate account is acceptable. 7. Under the minimum qualifications (item l), the RFP requests that proposed funds have the ability for Chicago PABF to select quarterly distributions. Would Chicago PABF consider funds that distribute income on a semi-annual basis instead of quarterly? Funds submitting a semiannual distribution will be considered, however preference will be given to funds with quarterly distributions.

2 8. Is there a minimum track record of previous, same strategy, closed end funds?, 3 years. 9. Would you consider an opportunistic co-investment fund that is focused on income generation? 10. Is there a specific cap or threshold for exposure to excluded strategies? What would be considered meaningful part of returns? 10% 11. The fund we are considering proposing, while similar to other strategies currently run, is a first vintage of a focused income generating strategy. Would you consider this fund which would not have a predecessor track record to show an achieved hurdle of 5% cash yield?, but this product may not compare favorably to strategies with such a track record. The proposed fund must have a strategy which is substantially similar to those funds whose track record is used. 12. Given the size of the firm, would it be possible to provide track records for the closed-end funds managed by the strategy team managing the proposed Fund, instead of all closed end funds managed by the firm? 13. Would PABF consider a strategy that invests in preferred securities, given their higher yielding attributes?, provided the submitted product(s) meet the minimum qualifications. 14. Our proposed fund has a total term which exceeds 7 years, with an annual cash coupon which will likely be slightly less than 10%. The fund will target a 9-10% net return to investors, 90% of which is paid current. At this time we cannot state that there will be a minimum cash coupon of 10%. Should we continue to fill out the RFP or is that a hard line?? If the product you are proposing does not have a cash coupon of 10%, it would be deemed to not meet the minimum criteria. 15. The RFP has sections for open and closed end funds. We are offering a separately managed account. How should we proceed to complete the RFP? Should we complete the section titled Competing Funds / Vehicles for our proposed separately managed account? this is suitable. 16. Our strategy assets under management are managed in either a separately managed account or a commingled fund for UK or Australian investors. We currently have no commingled fund for US investors. If the Chicago PABF requires a fund, we would be happy to create a commingled vehicle. Would Chicago PABF seed such a fund? If so, we would agree to invest our own capital in the same fund. A separate account is suitable. If it were cost effect, relative to a separate account, Chicago Police would consider seeding a commingled fund.

3 17. How are niche you defining strategies? If we have no commingled fund, would Chicago PABF look at the total AUM under the strategy and if so, would the assets assigned be limited not to exceed 10% of the strategy s AUM? Niche strategies are strategies that are typically narrower in their areas of focus or approach and are unique in relation to traditional investment solutions. We are searching for income oriented solutions and are not afraid to think outside the box for strategies that will meet our needs. We would look to the total AUM under the strategy and also look to this body of assets for a meaningful track record. 18. The RFP asked for a signed cover letter acknowledging the minimum qualifications. The minimum qualifications section discusses open and closed ended funds. How do we respond if we are only offering a separately managed account/vehicle? In the cover letter please describe the proposed separate account in terms of cash coupon and liquidity, which should still meet our minimum criteria. 19. Is the mandate AUM a maximum of $40 million for one manager? Or is the total pool of assets up to $120 million (potentially three managers each being allocated $40 million)? These amounts were provided for guidance only but we would be highly unlikely to award more than $40M to an individual manager. 20. Is it your expectation that more than one manager will be selected? We seek clarification given our asset minimums for more custom, segregated mandates., we expect to select up to 3 managers. 21. Please provide further details in regard to your definition of "contractual cash-flows". We do have cash producing strategies; however, their terms have not been contractual. We have stated that our preference is for cash flows to be locked in, e.g. via scheduled interest payments, or other annuity streams such as in the case of an infrastructure asset. We also consider dividends that are paid in the regular course to be suitable. We are seeking strategies that provide steady cash flows with minimal variation according to the market environment. 22. Would a 4% yield on an open-ended mutual fund (daily valued and daily liquidity) that pays quarterly dividends be acceptable for this mandate? The minimum qualification for this mandate is RFP is 5%. 23. Could the underlying strategies have long track records (8 to 15 years) though the fund itself has a two-year track record? We would consider the underlying strategies as part of the track record. 24. With regards to minimum qualification (k) audited track record of at least three years; does this apply at the strategy level or would you consider the track record of an investment team s broader platform? We would need a similar track record, not necessarily of the strategy itself but it must be something comparable. 25. Since there are various ways to account for income, we want to get a better understanding of how Chicago Police are defining income. For example, SEC

4 Yield, an industry standard in the mutual fund world that calculates dividends and interest earned after expenses; or a distribution or payout via dividends, interest and capital gains. Can income be distributed from 1) just dividends and interest, or 2) dividends, interest, and capital gains? Our goal is to generate income while preserving the principal of our investment and to have access to a repeatable return stream that is steady. The hurdle distribution rate that we have identified should comprise income and or dividends and only capital gains to the extent that such gains would be deemed to be repeatable and regular. We will consider strategies that distribute capital gains where the distribution has been consistent and has met or exceeded our hurdle rate. 26. Fiduciary Duties: Would an investment manager / commingled investment fund be eligible for this RFP if such investment manager is subject to fiduciary duties under applicable U.S. Federal securities laws with respect to the commingled fund, but does not serve as a fiduciary in respect of any individual investor in such fund? We are asking investment managers to acknowledge that they are a fiduciary to CPABF under the Illinois Pension Code. This does not mean that it has to be to the exclusion, or in priority, of duties owed to other investors under U.S. Federal or other States securities laws. 27. Contractual Annual Cash Coupon: Would a commingled fund be eligible for this RFP if such fund does not have contractual cash flow payments, but has a targeted current income return below (but near) the minimum annual cash coupon rate? Based on this description, your proposed product would not meet the minimum qualifications of this search. 28. Investment Certification: Would amendment to Exhibit G disqualify an investment manager from being eligible for this RFP? No, not necessarily. Non-substantive and non-material amendments to the form of the language we can likely work with. Other types of amendments may vary, but the less they vary the substance of certification the better. If there is something in the certification that the investment manager can t do, we want to find out now, so we do not waste anyone s time. 29. Can a subordinated debt strategy, specifically infrastructure debt be considered? as long as the minimum requirements are meet. 30. Under the Minimum Qualifications, a question on the following subsection: h) The team being proposed must have been working together for at least 7 years. Our strategy is managed by an Investment Committee comprised of four individuals, the first three of the four listed have worked together for over 7 years. One joined our firm in Given this persons tenure and experience in the industry and in combination with the other three senior members, would this serve to meet subsection (h) minimum qualification? In your cover letter, please state the members of your team and the length of time that they have worked together. 31. Would you consider a CLO equity strategy for this mandate?, provided the product meets the minimum criteria.

5 32. Does Chicago PABF have a preference for on- or off-shore funds? We will invest in either fund structure, as long as it can accommodate our taxexempt status. 33. The RFP explicitly states that mezzanine is excluded. While we have no plans to invest in dedicated mezz strategies, mezz may represent a small percentage of some of our underlying managers strategies. Is that okay for the purposes of this search?, excluded strategies will be tolerated as long as exposure to them does not exceed 10%. 34. All of the underlying funds that we would propose are currently open, and we expect them to remain open until March 31, However, some managers may reach capacity limits before that date and close. We address this issue by constantly being in the market and having a robust pipeline. Does that address the requirement? 35. Our firm would propose a fund of one for this mandate. As this would be a customized fund, Chicago PABF would represent 100% of the vehicle. However, the Chicago PABF would not account for a 10 % position of our overall private credit assets. Further, with our investment model, Chicago PABF would not constitute a 10% position with any of the underlying manager strategies in the solution we have scoped. Does this meet the requirement of not exceeding 10% of the Fund s AUM? 36. As it pertains to your Income Generating RFP, the qualifications exclude the following: dedicated direct lending strategies; MLPs; dedicated real estate equity funds; mezzanine funds; and traditional fixed income strategies (i.e. bank loan portfolios, high yield portfolios, emerging market debt portfolios, etc.). Would a subordinated debt strategy, specifically infrastructure debt, might be appropriate provided it meets the other general requirements?