IMPORTANT DISCLOSURES
THIS PRESENTATION HAS BEEN PREPARED BY [COASTAL SIGMA MANAGEMENT LP] (THE “INVESTMENT MANAGER”) AND IS FOR INFORMATIONAL PURPOSES ONLY. UNDER NO CIRCUMSTANCES SHOULD THIS PRESENTATION OR ANY INFORMATION HEREIN BE CONSTRUED AS INVESTMENT ADVICE, OR AS AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OR OTHER FINANCIAL INSTRUMENTS. FURTHER, THIS PRESENTATION IS NOT AND SHALL NOT BE CONSTRUED AS AN ADVERTISEMENT, OR AN OFFER OR SOLICITATION FOR ANY BROKERAGE OR INVESTMENT ADVISORY SERVICES, BY THE INVESTMENT MANAGER OR ANY OF ITS AFFILIATES.
The Investment Manager is a newly-formed entity and has no operating history. The information contained herein is presented solely to illustrate the Investment Manager’s anticipated investment process and strategies, which is based on the strategy implemented for a proprietary account of the Investment Manager’s principals (the “Account”). The Account is managed by Andrew Kirk, the portfolio manager of the Investment Manager. The particular investments identified do not represent securities purchased, sold or recommended for any advisory clients of the Investment Manager or its affiliates. The investment strategies implemented for the Account and expected to be pursued by the Investment Manager for the Fund (as defined below) are speculative and involve a high degree of risk, and may employ certain strategies and techniques, such as short selling and the use of leverage and derivatives, which may increase the risk of investment loss.
The information contained herein describes certain proposed terms of investment associated with [Coastal Sigma Fund LP], a private investment fund that has yet to be formed (the “Fund”), and does not constitute an offer to sell or a solicitation of an offer to buy a security in the Fund. A private offering of securities in the Fund will only be made pursuant to definitive versions of a confidential offering memorandum (the “Memorandum”), subscription documents and other applicable offering documents for the Fund, which will be furnished to qualified investors on a confidential basis for their consideration in connection with such an offering, and only to qualified investors in jurisdictions where permitted by law. Any summary of terms of the Fund presented herein describes the status of discussions to date with respect to the proposed structure of the Fund and will not be binding upon any party, unless and until definitive written agreements are executed by that party.
The development of an investment strategy, portfolio construction guidelines and risk management techniques for the Fund is an ongoing process. The strategies, techniques and methods described herein, and the securities in which the Fund may invest, will therefore be modified by the Investment Manager from time to time and over time. Nothing in this document shall in any way be deemed to limit the strategies, techniques, methods or processes which the Investment Manager may adopt for the Fund, the factors that the Investment Manager may take into account in analyzing investments for the Fund or the securities in which the Fund may invest. Depending on conditions and trends in securities markets and the economy generally, the Investment Manager may pursue other objectives, or employ other strategies, techniques, methods or processes and/or invest in different types of securities, in each case, that it considers appropriate and in the best interest of the Fund without notice to, or the consent of, investors.
The Fund is not intended to be a complete investment program. The Investment Manager’s investment program involves substantial risk, including the loss of principal, and no assurance can be given that the Fund’s investment objectives will be achieved. As a result, the Fund’s performance may be volatile, and an investor could lose all or a substantial amount of his or her investment. The Fund’s fees and expenses may offset trading profits. There can be no assurances that the Fund will have a return on invested capital similar to the returns of the Account or any other account with which the Principals were associated, due to differences in investment policies, risk parameters, economic conditions, regulatory climate, portfolio size, leverage, fee structure and expenses. The fact that the Account may have realized gains in the past is not an indication that the Fund will realize any gains in the future. Past performance is not a guarantee of, and is not necessarily indicative of, future results.
Performance returns compared against benchmark indices is provided to allow for certain comparisons of the Investment Manager’s performance to that of well-known and widely-recognized indices. Such information is included to show the general trend in the markets during the periods indicated and is not intended to imply that the holdings of any of the applicable accounts were similar to an index, either in composition or risk profile. Such indices are not actively managed and therefore do not have transaction costs, management or performance fees or other operational expenses. The Investment Manager’s trading strategy is not restricted to the instruments comprising such indices. An account’s portfolio may not be as diversified as such indices and the volatility of an index may be materially different from the volatility of such account. The indices represented herein are the S&P 500, MSCI (EAFE) and the CBOE Volatility Index (“VIX”). The S&P 500 is a free-float weighted/capitalization-weighted stock market equity index maintained by S&P Dow Jones Indices, which tracks the performance of 500 large companies listed on U.S. stock exchanges. The MSCI (EAFE) Index is designed to represent the performance of large and mid-cap securities across 21 developed markets, including countries in Europe, Australasia and the Far East (excluding the U.S. and Canada), and covers approximately 85% of the free float-adjusted market capitalization in each of the 21 countries. VIX, maintained by Cboe Global Markets, is a real-time index that represents the market’s expectations for the relative strength of near-term price changes of the S&P 500, and generates a 30-day forward projection of volatility.
All performance reflected herein is only that of the Account for the periods shown; neither the Fund nor any other client or investor achieved any of the performance reflected herein. Additionally, the performance stated herein is stated net of expenses, and the Account was not subject to any management fees or performance fees or allocations. Accordingly, the performance of the Account would be lower had the Account been subject to the fees, allocations and expenses to which the Fund is expected to be subject.
The Fund will have substantial limitations on investors’ ability to withdraw or transfer their interests therein, and no secondary market for the Fund’s interests exists or is expected to develop, so investors may not have access to capital when needed. All of these risks, and other important risks, are described in detail in the Fund’s Memorandum. Prospective investors are strongly urged to review the Fund’s Memorandum carefully and consult with their own financial, legal and tax advisors before investing.
The information presented in this document is confidential and proprietary, and neither this document nor any portion thereof may be (i) used by, or on behalf of, you for any purpose other than evaluating an initial or continued investment in the Fund, or (ii) reproduced, copied, published, distributed or otherwise disclosed or made available to others by, or on behalf of, you, in each case without the express prior written consent of the Investment Manager.
The information in this investor presentation is current as of the date listed on the cover page and is subject to change or amendment. The delivery of this investor presentation at any time does not imply that the information contained herein is correct at any time subsequent to such date.
The statements and views expressed herein are subject to change and may not express current views or positions. Such views (i) may be historic or forward-looking in nature, (ii) may reflect significant assumptions and subjective judgments, and (iii) are subject to change without notice. While the information herein was obtained from or based upon sources believed by the Investment Manager to be reliable, the Investment Manager has not independently verified the information and provides no assurance as to its accuracy, reliability, suitability or completeness. The Investment Manager may have market views or opinions that materially differ from the information set forth in this presentation and may have a significant financial interest in (or against) one or more of the positions or theses and/or related financial instruments discussed herein.
In some circumstances, this presentation may employ data derived from third-party sources. No representation is made as to the accuracy of such information and the use of such information in no way implies an endorsement of the source of such information or its validity. All information is provided as of the date of this document unless specifically stated otherwise herein, and the Investment Manager undertakes no obligation to update the information herein.
This investor presentation does not constitute an offer of interests or shares in the Fund to investors domiciled or with a registered office in the European Economic Area (“EEA”). None of the Fund, the Investment Manager or any of their respective affiliates currently intends to engage in any marketing (as defined in the Alternative Investment Fund Managers Directive) in the EEA with respect to interests or shares in the Fund. Receipt of this investor presentation by an EEA investor is solely in response to a request for information about the Fund which was initiated by such investor. Any other receipt of this investor presentation is in error and the recipient thereof shall immediately return to the Fund, or destroy, this investor presentation without any use, dissemination, distribution or copying of the information set forth herein.
Digital Asset Derivatives may be entered into on an exchange (and cleared through one or more “futures commission merchants”(FCM’s)) or entered into with a counterparty on a bilateral “over-the-counter” basis. Digital Asset Derivatives pose unique risks given that the related underlying Digital Assets may experience significant price volatility for some of the reasons described above, among others. Moreover, since the valuation of Digital Asset Derivatives typically depends on a reference to a spot Digital Asset market, rate, or contract, the disruption of the Digital Asset spot market could result in significant pricing delays or wider disruptions to the related Digital Asset Derivatives. In addition, margin and other collateral requirements for Digital Asset Derivatives are significantly higher than similar derivative products that do not reference underlying Digital Assets. Such increased margin requirements, coupled with the pricing volatility of Digital Assets, could require the Partnership to post significant amounts of initial and variation margin in a short time frame. In addition, some Digital Asset exchanges and/or FCMs have created rigid contract requirements and trading standards for certain Digital Asset Derivatives, such as hard and soft price fluctuation limits, position limits, and prohibitions against naked shorting and give-in transactions. In particular, the price fluctuation limits present unique liquidity challenges for Digital Asset Derivatives and could significantly delay the Partnership’s exit or offset of a position in periods of increased trading volatility.