September 2016 Commentary

Reflecting on our first quarter of activity, the team and I are fairly positive about how we have done so far. We certainly have a few areas in which we need to grow, but given the challenges inherent with a new launch, coupled with the difficulty of the overall market environment, we are pleased with how we have continued to problem solve and identify the best opportunities for the Fund. By now, all of you should have received updated NAV statements for the first 2 months, along with a letter explaining the issue surrounding the necessity of a recalculation. Once again we apologize that there was an issue in the first place, and want to reiterate that we have communicated with the fund administrator to ensure we have a suitable plan going forward. In terms of performance, our entire team had expectations we would get out to a better start in the first quarter than we did. While we felt the first two months were solid reflections of our expectations, September’s performance left a lot to be desired.

Several good things to come out of the first quarter would first and foremost be that we have continued to bring in new investors and more capital which is vital to the future success of the fund. It has been an enjoyable experience for all the members of our team to be able to meet new and interested parties, and to share with them our vision and track record thus far. Another positive was our identification of the SEC investigation of our former administrator. While we had not experienced any problems in the relationship we had with them prior to their termination, we felt it was in the best interest of our credibility and our investors’ confidence to end our association with them.

Looking forward to the fourth quarter and our second quarter of investing, there are three points of emphasis that come to mind. The first is continuing to refine and perfect our investment processes. There is no denying we have hit some bumps early on, but identifying those areas of weakness and correcting them early on is only continuing to lay the groundwork for future success. The next area of emphasis will be the continuation of our capital raising efforts. This is important because not only with more assets under management will the fixed costs of operating the fund be spread a little thinner across the fund, improving the net returns to investors, but it will also contribute to a snowball effect to help raise even more capital. While we keep a regular schedule of potential investor meetings, networking events, and conferences, the best sources of new investors can come from you, our current family of investors. The last point of emphasis is the handful of headline events as the year comes to a close that could be sources of high volatility for the market. Highest on our list is the election here at home coming in November, but the risk to the market from that event is closely followed by the two remaining FED meetings for this year coming in November and December. Slightly less risky high profile events also include the remainder of the OPEC meetings for the year, as well as the Italian referendum which, if approved, has the potential to send shockwaves across Europe. We are monitoring these and other economic and political events that could affect the condition of the market, so that we are ready to take advantage of whatever activity they might bring.

 
 

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