Item 5. Fees and Compensation
Brightside Partners offers services on a fee basis, which includes fixed and/or hourly fees, as well as
fees based upon Assets Under Management and/or Assets Under Advisement. See Item 4, above,
for definitions of Assets Under Management and Assets Under Advisement.
Wealth Advisory Fees
Brightside Partners offers wealth advisory services for an annual fee based on the amount of assets
under the Firm’s management and advisement. This fee varies in accordance with the following fee
schedule:
Portfolio Value Base Fee
First $10,000,000 0.87%
Next $10,000,000 0.70%
Above $20,000,000 0.50%
These are marginal rates. For example, an account valued at $15,000,000 would pay, under the fee
schedule above, 0.87% on the first $10,000,000, plus 0.70% on the remaining $5,000,000. One-
fourth of the annual fee is charged each quarter, in advance, based upon the market value of the
assets being managed by Brightside Partners on the first day of the previous quarter (due to the
timing of private investment managers’ distribution of capital account statements). The portfolio
value includes Private Investments for which the Firm provides advice on an ongoing basis, even if
the assets are not held with the Client’s primary custodian. Valuations are determined by third
parties, including the Client’s custodian, the mutual funds, and the managers, issuers, or
administrators for the private investments.
In lieu of the asset-based fee, the Firm also offers its wealth management services to certain Clients
for a fixed fee. The fixed fee is negotiable, but generally ranges from $75,000 to $200,000 per year,
depending upon the scope and complexity of the services and the professionals rendering the wealth
management services.
For the initial period of an engagement, the fee is calculated on a pro rata basis. If the advisory
agreement is terminated, the fee for the final billing period is calculated on a pro rata basis through
(and including) the effective date of the termination; the outstanding or unearned portion of the fee
is charged or refunded to the Client, as appropriate.
Finally, for certain services, including bill paying or other administrative support, Brightside Partners
charges an hourly fee that ranges from $100 to $250, depending on the person providing the service.
Private Investment Advisory Fees
For Clients who engage Brightside Partners for Private Investment Advisory services, the Firm
charges an initial, one-time fee of 0.75% of the commitment amount if the commitment is between
$1,000,000 and $10,000,000, or 0.60% if it is greater than $10,000,000, to invest in Private
Investments through the Firm. If the commitment amount is for less than $1,000,000 this initial,
one-time fee is the greater of 0.80% or $2,000.00. This portion of the investment management fee is
charged to partially compensate the Firm for the initial work of investment sourcing and due
diligence provided by the Firm related to a Client’s initial investment in a Private Investment, as well
as the analysis of the asset allocation for that Client. This initial fee is charged in a single payment
upon the signing of an engagement agreement.
Thereafter, Brightside Partners charges an annual investment management fee of 0.60%. This annual
fee is charged quarterly, in advance, based upon the net asset value (“NAV”) of the Private
Investments recommended by the Firm as of the first day of the previous quarter (due to the delay
in capital account statements from private investment managers). This portion of the investment
management fee is charged for the investment monitoring, investment reporting, and cash flow
administration provided by the Firm. If the invested amount increases or decreases after the
inception of a billing period, the annual fee payable with respect to such assets is not adjusted to
reflect the interim change in invested amount. The annual fee with respect to new Private
Investment is initially charged during the first full quarter of service following a Client agreeing to an
initial investment for that Private Investment.
Although the fee payment for these services is spread out over time, a large volume of the work is
done during the initial due diligence and analysis of the asset allocation under this type of
engagement. The initial fee does not fully cover the cost of this work. Accordingly, if the advisory
agreement is terminated within five years from the Client’s initial investment in each Private
Investment, the Firm charges a service fee based on the current invested amount of the Private
Investments in the portfolio managed by the Firm as of the date of termination. This service fee
shall be equal to 50% of the annual fee which would have been payable to the Firm for five years
from the Client’s initial investment in each Private Investment, as calculated on the date of
termination. This is not a penalty for termination; the service fee is to compensate the Firm for the
larger volume of work performed at the beginning of the Private Investment process.
Fee Discretion
Brightside Partners may, in its sole discretion, negotiate to charge a lesser fee based upon certain
criteria, such as anticipated future earning capacity, anticipated future additional assets, dollar
amount of assets to be managed, related accounts, account composition, pre-existing/legacy client
relationship, account retention and pro bono activities. For asset management services the Firm
provides with respect to certain Client holdings (e.g., held-away assets, accommodation accounts,
private investments, etc.), Brightside Partners may negotiate a fee rate that differs from the range set
forth above. Also, certain legacy clients are subject to a different (lower) fee schedule. This means
that some Clients will pay greater or lesser fees than other Clients for similar services.
Additional Fees and Expenses
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