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If we can run reasonable expenses through the vehicle I see it as a further value add. Maybe its the first $25mm non fee'd. I also think it should be strictly hedge fund populated and we're going to need to add another manager or two even at this level.

And especially if Casey can help round up the capital it makes sense.

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-----Original Message-----
From: [email protected]
Date: Tue, 27 Apr 2010 14:34:59
To: <[email protected]>; Eric Schwerin<[email protected]>
Cc: Devon Archer<[email protected]>
Subject: Re: Our FOFs pro-forma

Only reason to do it is to move our alt inv advisory business into a investment mgmt business- avoid conflict when approaching investors and give Arlene a home she is comfortable and competent running.

As a FoFs we can approach institutional and high net worth on our own terms and not on behalf of a "client." It would simply be another high value arrow in our quiver.

Aside from that it relieves the pressure of me busting my ass for 20K p/m clients with close relationships for no more than what we are getting on a retainer basis.

The way I look at it is this: Arlene runs the FoFs business- she has commitments for first 50M- we develop track record and raise more if we see real potential. The fund charges no I.m. Fee and no incentive fee for first 50M. We DO charge expenses which include Arlene's salary. After first 50 and a few years of real progress we raise more and charge typical 1 and 10.

One of the realities we have come up against is raising from Taft Hartley is more complicated than I thought. If we were raising for co-invest 2 or Matador I'd be able to put it all on the line as my own. Doing it as a pseudo 3rd party is hard to explain.
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-----Original Message-----
From: [email protected]
Date: Tue, 27 Apr 2010 03:25:42
To: Eric Schwerin<[email protected]>
Cc: Hunter Biden<[email protected]>; Devon Archer<[email protected]>
Subject: Re: Our FOFs pro-forma

Agreed. Once I have the concept draft outlining the opportunity (tomorrow AM), I will attach this page of "considerations" for us to discuss. I still don't fully understand why we'd do this, but need to see it fully laid out.


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-----Original Message-----
From: Eric Schwerin <[email protected]>
Date: Mon, 26 Apr 2010 18:32:27
To: Neil Callahan<[email protected]>
Cc: Hunter Biden<[email protected]>; Devon Archer<[email protected]>
Subject: Re: Our FOFs pro-forma

Neil-

Per our conversation today, it would be helpful to evaluate this FOFs
on a variety of levels.

1) Do we agree that we should take no management fee/performance fee?
2) Do we think the money could be raised if we did take either fees?
3) If we think the money can be raised, how much time would be
required from the principals to do so? Arlene believes she can raise
all of the money if we had no fees. But is it worth others' time to
try and raise money if we were to charge a fee?
4) What is the purpose of this if we are getting no income from it?
5) Do we develop a model where the first $50m is fee-free, but
anything after that involves a fee? How much would we make from this
and at what point would we have the ability to jettison our Fund
clients?
6) What would having the FOF be "woman-owned" by Arlene mean?
7) Would we charge fees for legal and regulatory work at least? It
shouldn't cost us anything, right?

Just some questions how I am framing this.

Eric


Eric D. Schwerin
Rosemont Seneca Partners, LLC
1010 Wisconsin Ave., NW
Suite 705
Washington, DC 20007
(202) 333-1880
[email protected]
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