Dear Partner:

We’re disappointed to report that in the 1 st quarter of 2018, Dane Capital Management (the “Fund”) generated a loss of 14.7%, net of fees and expenses. We certainly hoped to continue the momentum the Fund enjoyed last year, in which it produced a 50.2% return, net of fees and expenses. However, as we’ve stated, both when results have been disappointing or strong, Dane’s performance should be judged over years and not months or quarters.

Our 1Q performance reflects the decline in a large number of our holdings for non-fundamental reasons. To be more precise, the decline was not due to companies missing numbers, lowering expectations, experiencing deteriorating fundamentals, or seeing increasing competition. A number of temporary, exogenous, and hard to foresee factors impacted our stocks. These include things like major holders distributing shares to LPs in lieu of selling in an orderly fashion (i.e. a secondary or a block trade), a botched follow-on offering, and a SPAC closing that was delayed multiple times.

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