Item 5: Fees and Compensation
A. 1623 Capital Compensation for Advisory Services
Fund Advisory Services
Unless provided otherwise in the applicable Fund’s Governing Documents, the following discussion
describes how 1623 Capital is generally compensated in connection with providing advisory services to a
Fund. However, the particular compensation arrangements can vary from Fund to Fund and we can (and
expect to from time to time) enter into different fee arrangements with particular Fund investors.
Furthermore, this Brochure does not maintain or disclose a “fee schedule.” As a result, any potential
investor in a Fund should read and review all Fund Governing Documents in their entirety before making
any decision to invest in a Fund.
1. Management Fees. In consideration for the advisory services it provides to a Fund, 1623 Capital is
entitled to a management fee (the “Management Fee”), which is paid by Fund investors and may
vary depending on the series of interests or shares held by the applicable Fund investors (at an
annual rate ranging from 0.75% to 1.5% of each Fund investor’s capital account net asset value).
The Management Fee is paid on a monthly basis, in arrears, and is directly deducted from each
Fund investor’s capital account.
To the extent permitted under applicable law (including, if applicable, the U.S. Employee
Retirement Income Security Act of 1974 or “ERISA,” as amended), 1623 Capital may, in its sole
discretion for any reason, waive, modify, reduce or calculate differently the Management Fee to be
borne directly or indirectly by a Fund investor, including to reflect matters such as the amount of
such investor’s investment, its commitment to maintain its investment in the Fund and its overall
relationship with 1623 Capital and its affiliates. 1623 Capital may, in its sole discretion, share the
Management Fee, in whole or in part, with any other person or entity, including its affiliates.
Interests or shares held by 1623 Capital, its affiliates and their employees are not subject to the
Management Fee. In addition, Management Fees are generally non-refundable.
2. Incentive Allocation (Performance-Based Fees). With respect to each Fund investor and subject to
a high-watermark, for every Performance Period (as defined below) after such Fund investor was
admitted to the Fund, 1623 Capital will receive a performance fee or “incentive allocation” (the
“Incentive Allocation”) equal to 15% or 20%, depending on the series of interests or shares held
by the applicable investors, of the Net Profits allocated to such Fund Investor’s notional capital
account. At the close of each Performance Period, the Incentive Allocation shall be debited against
the notional capital account of such Fund investors and the amount so debited shall simultaneously
be credited to the capital account of 1623 Capital or an affiliate.
To the extent permitted under applicable law (including, if applicable, ERISA), 1623 Capital has
the ability to modify, reduce, waive or calculate differently the Incentive Allocation of any Fund
investors (or series of Fund investors) at the time such Fund Investor is admitted to a Fund or at
any subsequent time, in 1623 Capital’s sole discretion. Furthermore, to the extent permitted under
applicable law (including, if applicable, ERISA), 1623 Capital may, in its sole discretion, share the
Incentive Allocation, in whole or in part, with any other person or entity, including its affiliates.
PLEASE CAREFULLY REVIEW ITEM 6 – PERFORMANCE-BASED FEES AND SIDE-BY-
SIDE MANAGEMENT BELOW FOR A DISCUSSION REGARDING CERTAIN CONFLICTS
OF INTEREST AND RISKS THAT MAY ARISE WHEN AN ADVISER RECEIVES SUCH
COMPENSATION, INCLUDING AN INCENTIVE ALLOCATION.
B. Deduction and Frequency of Fees
As stated above, Management Fees and Incentive Allocations are directly deducted or debited from Fund
investor notional capital accounts. Management Fees are charged monthly in arrears and Incentive
Allocations are debited for each “Performance Period.”
Unless provided otherwise in the applicable Fund’s Governing Documents, a “Performance Period” will
commence, with respect to each Fund investor, on the date a notional capital account was established for a
Fund investor and thereafter, immediately following the close of the preceding Performance Period. A
Performance Period shall end: (i) on each fiscal year end; (ii) with respect to a Fund investor making a total
or partial withdrawal or redemption (with respect to such withdrawn or redeemed amount), on the
withdrawal or redemption date; (iii) at 1623 Capital’s sole discretion, with respect to a Fund investor
transferring all or a portion of its investment (with respect to such transferred amount), on the effective date
of the transfer; (iv) on the effective date that 1623 Capital or its affiliated Fund general partner ceases to be
the general partner of the Fund (as applicable); and (v) on the date when the Fund dissolves or terminates;
provided that 1623 Capital may in its sole discretion also declare such other days or dates as the end of a
Performance Period.
C. Other Fees and Expenses
The following is a general description of other fees and expenses associated with the Funds, but is not
intended to be a complete description of such fees and expenses for any particular Fund. Investors should
carefully review the Governing Documents of any Fund in which an investment is being considered to
understand the fees and expenses that the investors will bear prior to making an investment.
With respect to certain Funds, 1623 Capital or an affiliate could elect to assume some or all of the
organizational costs of the Fund and the costs incurred in connection with the initial issuance of the interests
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