EFTA00697374.pdf

From: Neal Berger To: jeevacation@gmail.com Subject: Eagle's View Capital Management, LLC- May 2017 Performance Update... Date: Mon, 19 Jun 2017 14:58:45 +0000 Eagles View Capital Management, LLC May 2017 Performance Update June 19, 2017 Quant Strategies Getting Crowded Dear Partners/Friends, Click here to view our most recently updated investor tearsheet Performance of Eagle's View Capital Partners, L.P. is estimated at -1.15% for May with YTD performance estimated at +3.33% net of all fees and expenses. Performance of Eagle's View Offshore Fund, Ltd. Class G is estimated at -1.20% for May with YTD performance estimated at +2.35% net of all fees and expenses. Performance of Eagle's View Offshore Fund, Ltd. Class B ("High Alpha") is estimated at -2.64% for May with YTD performance estimated at +1.72% net of all fees and expenses. This Share Class seeks to generate substantially higher returns through a more concentrated portfolio of some of our historically higher return opportunities. Investors in this Class should have a willingness to accept increased volatility and risk in exchange for the potential for higher returns. Performance of Spearhead Insurance Solutions IDF Series E/Eagle's View Insurance Dedicated Fund is estimated at -1.12% for May with YTD performance estimated at +3.19% net of all fees and expenses. Performance of Eagle's View Partners, Ltd. is estimated at +0.10% for May with YTD performance estimated at +2.65% net of all fees and expenses. Eagle's View Partners, Ltd. is our 'niche-oriented', multi-strategy hedge fund which is focused on strategies that have positive expectancy, lack correlation to broader markets, and, take advantage of the structural alpha in terms of the efficiency of capital usage inherent within the multi- strategy hedge fund model. Eagle's View Partners, Ltd. has been profitable in 100% of all months after fees and expenses since inception on Nov. I, 2016. EFTA00697374 The Fund does not attempt to compete against the larger multi-strategy hedge funds. Rather, the Fund seeks to hire traders/strategies that focus on more niche-oriented and capacity constrained opportunities that are too small for the larger multi-strats to care about. Currently, we are deploying Electricity Trading (non-directional congestion trading in California and the Midwest US), Natural Gas Basis Trading, Closed-End Fund Arbitrage, Dual-Share Class Arbitrage, Option Volatility trading, Quantitative Equity and Event (commodity index rebalance trades, seasonal tendencies, etc.). I read the hedge fund press every day. Not a day goes by that there isn't a story on Artificial Intelligence, Big Data, Machine Learning, etc. More so, quantitative hedge funds seem to be more the norm than the exception these days. While this has been a gradual process, it has accelerated over these past 1-2 years. Hedge funds are searching to hire programmers, developers, coders, software developers, mathematicians, etc. To be sure, many quant Funds have put up fantastic returns over the years. This has attracted attention among Fund Managers and investors in a world that is starved for alpha creation. Furthermore, advances in information availability and storage have led to new opportunities. While this is a fact, we believe that extracting alpha from the data is quite difficult particularly with increased competition. We believe increased quantitative trading coupled with low levels of realized and implied volatility may be creating a feedback loop that has caused unusual price movements in a variety of securities that have challenged trading oriented strategies. The month of May set records in terms of lowest levels of one-month implied and realized volatility. We think trading is largely machines trading against machines. The internal dynamics of the market has been trading in a very unusual manner for a while now. We believe some of this has to do with an increase in computer driven, quantitative trading coupled with banks selling options to offer "yield enhancement" vehicles to investors who are starving for this yield. This feedback loop, the increase in assets run by hedge funds, and, the rise of quants, has created unusual patterns, dislocations, and low levels of volatility. It is our belief that these factors have created a challenging mix for trading oriented strategies. It won't last forever. Eagle's View has responded by gradually and selectively reducing allocation to certain of the more pedestrian quantitative strategies. We will continue this reduction in more traditional quant strategies (such as basic statistical arbitrage) over the coming month or two. We have no intention of abandoning quantitative strategies in general, however, we have evolved in our thinking as to which quant strategies have positive expectancy these days versus those that have become outdated and more pedestrian. In general, we feel that unless a Manager is taking advantage of a very specific specialty within quant, or, a more capacity constrained opportunity, capitalizing upon the trend of big data, machine learning, and artificial intelligence will largely be the domain of those Funds who have the scale to support expensive infrastructure, talent, and continuous evolution. We want to emphasize that we are not abandoning quantitative strategies, rather, we are being very selective in this environment as we believe quant strategies are getting crowded, the possibility of a problem in quant strategies is increasing, and, robots trading against robots is not our idea of robust edge. Of course, as always, we continue to spend our time and energy looking ahead to find absolute return opportunities that are becoming more robust as well as evaluating those strategies which are degrading in positive expectancy. As mentioned, May was the lowest level of 1-month volatility on record. According to Bloomberg, since 2009, perhaps the single month profitable trading has been selling short equity index volatility. It has returned a compounded 60% return, but at the continuous risk of total loss. Eagle's View continues to seek to avoid crowded trades and "risk on" exposure in an effort to EFTA00697375 generate acceptable levels of absolute returns over time. We continue to be one of the market leaders investing in 'niche-oriented', non-correlated strategies. A sampling of the strategies we are invested in are Electricity Congestion trading, Shipping Derivatives, IPO flipping, Muni-Bond trading, Volatility Arbitrage, First-Loss strategies, and Natural Gas Basis trading. This is simply a sampling out of 30+ Funds Eagle's View Capital Partners, L.P. is invested in. Our Fund is designed to provide investors with true diversification in a world where this is very hard to come by, although, much needed. We are confident that our continued focus on non-correlated, niche-oriented strategies will provide the sustained results we all desire. What is required to survive and prosper is patience and discipline, which we have. Eagle's View is not in the prediction business. However, one thing that we will predict is that the world and consequently the markets will not be as rosy and serene as they are today. To that end, we are pleased to be able to provide investors a product that offers a diversified return stream of non-correlated alpha. Disclaimer: Past performance is not indicative of future results. This newsletter is provided for informational uses only and should not be used or considered an offer to sell, buy or subscribe for securities, or other financial instruments. Prospective investors may not construe the contents of this newsletter or any prior or subsequent communication from us, as legal, tax or investment advice. Each prospective investor should consult his/her personal Counsel, Accountant, and other Advisors as to the legal, tax, economic and other consequences of hedge fund investing and the suitability of such investing for him/her. Further, the contents of this newsletter should not be relied upon in substitution of the exercise of independent judgment. The information contained herein has been obtained from sources generally deemed by us to be reliable, however, all or portions of such information may be uniquely within the knowledge of parties which are unaffiliated with us or our affiliates and, therefore, may not be amenable to independent investigation or confirmation. In such cases, we have not undertaken to independently investigate or confirm the accuracy or adequacy of such information, but we have no reason to believe that such information was not accurate and adequate, to the best of our knowledge, when given. The index comparisons herein are provided for informational purposes only and should not be used as the basis for making an investment decision. There are significant differences between client accounts and the indices referenced including, but not limited to, risk profile, liquidity, volatility and asset composition. Funds included in the HFRI Monthly Indices must report monthly returns; report net of all fees retums; report assets in US Dollars, and have at least $50 million under management or have been actively trading for at least twelve (12) months. Fund of Funds invest with multiple managers through funds or managed accounts. The strategy designs a diversified portfolio of managers with the objective of significantly lowering the risk (volatility) of investing with an individual manager. The Fund of Funds manager has discretion in choosing which strategies to invest in for the portfolio. A manager may allocate funds to numerous managers within a single strategy, or with numerous managers in multiple strategies. The minimum investment in a Fund of Funds may be lower than an investment in an individual hedge fund or managed account. The investor has the advantage of diversification among managers and styles with significantly less capital than investing with separate managers. PLEASE NOTE: The HFRI Fund of Funds Index is not included in the HFRI Fund Weighted Composite Index. It is important to note that investing in hedge funds involves risks. Please request and read the Private Placement Memorandum for a complete description of the risks of hedge fund investing. Hedge fund investing may involve, in addition to others, the following risks: the vehicles often engage in leveraging and other speculative investments which may increase the risk of investment loss; they can be highly illiquid; hedge funds are not required to provide periodic pricing or valuation information to investors; they may involve complex tax structures and thus delays in distributing important tax information may occur; hedge funds are not subject to the same regulatory requirements as mutual funds and they often charge high fees. Opinions contained in this Newsletter reflect the judgment as of the day and time of the publication and are subject to change without notice. Eagle's View Capital Management, LLC provides investment advisory services to clients other than the Funds, and results between clients may differ materially. Eagle's View Capital Management, LLC believes EFTA00697376 that such differences are attributable to different investment objectives and strategies between clients. Past performance is not a guarantee of future results. If you are not the intended recipient or have received this communication in error please notify the sender immediately and destroy this communication. Any unauthorized copying, disclosure or distribution of the material in this communication is strictly forbidden. Kindest regards, Neal Berger President Eagles View Capital Management LLC 212.421.7300 Eagles View Capital Management LLC, 135 East 57th St., 23rd Floor, New York, NY 10022 SafeUnsubscriberm jeevacation@gmail.com Forward email I About our service provider Sent by EFTA00697377