Item 5. Fees and Compensation
Management Fee
Eighteen48 Partners charges most of its clients an annual investment management fee from 0.30% to
0.90% depending on the size of assets under management and as specified in the agreement with a client.
Eighteen48 Partners has waived or negotiated lower fees for certain clients, which may include charitable
organizations, founding clients or employees’ family members.
Eighteen48 Partners generally charges fees monthly in arrears based on the account value at the end of
the prior month. Most clients authorize Eighteen48 Partners to deduct fees automatically from their
brokerage accounts, but clients may request that Eighteen48 Partners send quarterly invoices to be paid
by bank transfer.
If a client terminates the investment management agreement with Eighteen48 Partners in the middle of
a billing period, Eighteen48 Partners will invoice the client for an amount that is pro-rated based on the
number of days that the account was managed.
If a client contributes more than $100,000 during a quarter Eighteen48 Partners will prorate the fees on
this contribution. However, should a client invest after the 25th day of the calendar month, the firm will
not charge pro rata fees for the relevant month.
Performance Fee
Investors in private funds may pay an incentive fee based upon their investment account’s pre-incentive
fee net investment income. The calculation of the incentive fee is intended to provide Eighteen48
Partners with an incentive fee as specified in the relevant fund’s offering documentation.
Co-Investment Fees
Eighteen48 Partners charges each Advisory Client or investor in a private fund, as the case may be, who
participates in a co-investment an annual fee of 1% of their committed capital. In addition, the Firm
generally receives Carried Interest equal to a maximum of 10% of the client’s or the fund’s distributed
capital pursuant to the detailed terms as described in agreement with the client, or pursuant to relevant
private fund offering documentation, as the case may be. Investors in co-investments whether through
the Firm’s discretionary portfolio management services or through private funds will be charged co-
investment fees in addition to any applicable management fees and performance fees as described above.
Other Fees and Expenses
In addition to applicable Eighteen48 Partners investment management fees, performance fees, and co-
investment fees, Advisory Clients bear trading costs; custodial fees; any taxes, fees or other governmental
charges levied against the client or their investment portfolio; out-of-pocket expenses incurred in
connection with the client's or their investment portfolio's legal and regulatory compliance, principal, and
interest on and fees and expenses arising out of all borrowings made on behalf of their investment
portfolio; expenses associated with portfolio and risk management including currency hedging, currency
conversion, and expenses of liquidating their investment portfolio; expenses incurred in connection with
any tax audit or investigation of the client or their investment portfolio; and expenses associated with
external administrative costs relating to their investment portfolio, financial statements and tax returns
(including the cost of a third-party administrator that provides accounting and administrative services for
the benefit of the client’s investment portfolio).
Eighteen48 Partners may receive a fee from Advisory Clients for reporting on the client’s investment
portfolio that includes assets not advised by the Firm. The amount of the fee varies and is based on
factors including but not limited to the number of accounts and complexity of the assets in the accounts.
Reporting fees charged are pursuant to detailed terms as described in the agreement with a client. The
frequency of charging is agreed on a case-by-case basis with the client.
Fees Related to Funds
To the extent that clients’ accounts are invested in collective investment vehicles, these funds pay a
separate layer of management, trading, custodial, and administrative expenses. Certain funds may bear
co-investment fees which will ultimately be borne by investors as described above under Co-Investment
Fees. Eighteen48 Partners provides investment advisory services to certain funds that the Firm
recommends to Advisory Clients. As such, Eighteen48 Partners or their affiliate are paid management
fees and performance fees by such fund. A fund’s layered structure of fees will involve a material level
of fees being directly and indirectly borne by the fund, which would not be the case if the fund were
making direct investments. The overall fees and costs borne directly and indirectly by the fund will be
material and may have a detrimental effect on the performance of the fund and the return of shareholders
of the fund.