Hunter / Eric,

Apologies for the delay in getting back to you….things have been busy on this end….but a good kind on busy.

I remain very hopeful that we can find a way to work together as I am confident that our approach to investing will be compelling to your contacts.

As an update, our recent performance has been outstanding.  Year-to-date (thru 07/21/11) BMPEX  (the Beck, Mack & Oliver Partners Fund on which I am the lead portfolio manager) is up 13.8% and is ranked in the top 1% of the Large / Blend Category by Morningstar and over the past 12 months BMPEX also is in the top 2% relative to its peer group of almost 2,000 mutual funds.  This Fund is a proxy for our separate account portfolios.

As you know our long term equity investing track record is exceptional (see attached).  Over the past 24 rolling 5 year periods we have outperformed the S&P 500 18 times (11 straight years ending 12/31/10) and had zero negative 5 year periods vs. the S&P 500 which has had 4 negative rolling 5 year periods.  Our batting average is better over rolling 10 year periods, having outperformed the S&P 500 17 out of 19 years (our two years of underperformance coming during the peak of the internet bubble).  Our lowest rolling 10 year return is up 42% vs. the S&P 500 which is down 13%. 

After having done some research on payout structures for marketing professionals I have learned that the industry standard is 20% of the first year revenue, 10% of the second year revenue and 5% for each year following, as long as the account remains.  Clearly, this is a departure from our originally discussed $300,000 annual flat fee. 

While I’m not going to be able to sell a flat fee structure here amongst my partners, I’m willing to meaningfully increase the incentive based compensation after an account is earned.  Meaning, I would advocate for a 30%, 20% and then 10% into perpetuity structure on the revenue from all assets raised.

I feel confident that we can have success working together and I would expect that your contacts will appreciate our fundamental approach to allocating capital. 

Let me know if this structure is agreeable to you both…..I’m hopeful that we will have an opportunity to work together.

Best,

Zac