Item 5: Fees and Compensation
5A. Two Fish collects fees on a monthly basis in arrears for investment management services
rendered unless another billing arrangement has been made or an adviser to whom Two Fish
provides sub-advisory services has a different pre-existing relationship with their clients.
Monthly fees billed in arrears are based upon the net value of assets under Two Fish’s
management as of the last day of the billing period, adjusted on a prorated basis for account
deposits and withdrawals made during the billing period. All investment management fees are
negotiable and determined based upon scope of work with the baseline fee schedule as follows:
First $500,000 - $1,000,000 1.50%
$1,000,001 - $2,500,000 1.00%
$2,500,001 - $5,000,000 0.75%
$5,000,001 - $10,000,000 0.50%
$10,000,001 and up 0.35%
Management fees charged to Two Fish Partners, L.P. are no more than 1.50% per annum of
assets under management payable monthly in arrears. Two Fish may also collect an incentive
fee of 20% once the annual hurdle rate of 8% is met, subject to a high water mark. All terms are
defined in the Partnership's Private Placement Memorandum (“PPM”).
For client assets managed outside the Fund, there is a minimum asset level of $100,000 and a
minimum fee level of 1.50%. However, we have full discretion to accept or decline accounts of
any size. Two Fish, in its sole discretion, may charge a lesser investment management fee and/or
reduce/waive its aggregate account minimum based upon certain criteria (i.e., anticipated future
earning capacity, anticipated future additional assets, dollar amount of assets to be managed,
related accounts, account composition, negotiations with client, etc.).
Two Fish, in its discretion, may charge a lesser or higher investment advisory fee, charge a flat
fee, waive appliable minimum asset or minimum fee levels, waive its fee entirely, or charge fee
on a different interval, based upon certain criteria (i.e., anticipated future earning capacity,
anticipated future additional assets, dollar amount of assets to be managed, related accounts,
account composition, complexity of the engagement, anticipated services to be rendered,
grandfathered fee schedules, employees and family members, courtesy accounts, competition,
negotiations with client, etc.). As a result of the above, similarly situated clients could pay
different fees. In addition, similar advisory services may be available from other investment
advisers for similar or lower fees.
5B. Clients may select to have fees deducted from their assets managed by Two Fish or be billed
separately for fees incurred.
5C. As discussed below, unless the client directs otherwise or an individual client’s
circumstances require, Two Fish shall generally recommend that Charles Schwab & Co., Inc.
(“Schwab”) serve as the broker-dealer/custodian for client investment management assets.
Two Fish Management, LLC
Form ADV Part 2 - Firm Brochure
Broker-dealers such as Schwab charge brokerage commissions, transaction, and/or other type
fees for effecting certain types of securities transactions (i.e., including transaction fees for
certain mutual funds, and mark-ups and mark-downs charged for fixed income transactions,
etc.). The types of securities for which transaction fees, commissions, and/or other type fees (as
well as the amount of those fees) shall differ depending upon the broker-dealer/custodian. While
certain custodians, including Schwab, generally (with the potential exception for large orders)
do not currently charge fees on individual equity transactions (including ETFs), others do.
There can be no assurance that Schwab will not change their transaction fee pricing in the future.
Schwab may also assess fees to clients who elect to receive trade confirmations and account
statements by regular mail rather than electronically.
Clients will incur, in addition to Two Fish’s investment management fee, brokerage
commissions and/or transaction fees, and, relative to all mutual fund and exchange traded fund
purchases, charges imposed at the fund level (e.g., management fees and other fund expenses).
5D. Clients do not pay in advance of services rendered unless they do so to an adviser that uses
Two Fish to provide sub-advisory services.
5E. Neither Two Fish, nor any of its investment advisers receive any compensation for the sale
of securities or other investment products.