Introduction Lloyd Crescendo Advisors LLC (“LCA” or “we”) is a Delaware limited liability company founded in 2016.
We are based in Miami, FL and have a branch office in New York, NY. The 90% owner of LCA is FinPar
Investments LLC. FinPar is an affiliate of Crescendo Advisors International Limited (“CAIL”). The other
owner is Lloyd Crescendo Member LLC which is 100% owned by Philip Carey. LCA provides investment
management services to individuals, high net worth individuals (“HNWIs”), their families, corporations,
trusts, foundations, endowments, and pooled investment vehicles.
As of January 31, 2019, we have approximately $359.7mm in regulatory assets under management
(“RAUM”) and approximately $119mm in assets under advisement.
Our Services Separately Managed Accounts LCA is dedicated to serving the long‐term financial, and, where appropriate, environmental and social
goals of our clients, including U.S. residents and non‐U.S. residents. Our services are discretionary and
non‐discretionary investment management for separately managed accounts.
Discretionary or non‐discretionary clients in a separately managed account choose one or more of the
following strategies offered by LCA:
1. Traditional;
2. Multi Asset Class Strategy;
3. International; and
4. Sustainable and Responsible Investing incorporating Environmental Social and Governance
criteria.
Discretionary separately managed account clients will grant a limited power of attorney to LCA, solely
with investment power over the account. This power includes the right to manage client portfolios and
effect, on a discretionary basis, transactions in securities, currencies or precious metals, mutual funds,
hedge funds, time deposits and bank deposits, as well as the right to carry out any steps of
administrative procedures necessary to the performance of these transactions. LCA may initiate forward
foreign exchange transactions, provided they serve to hedge an existing investment and if such activity
does not subject LCA to having to register with the National Futures Association under the Commodity
Exchange Act as a Commodity Trading Adviser.
Under a non‐discretionary mandate, we interact with the client and, at the client’s request, discuss and
provide views, advice and recommendations concerning securities, currencies, financial market trends
and related investment options, strategies and opportunities. We provide the client with advice and
recommendations that are appropriate for it and its investment objectives.
There is no account minimum. However, LCA recommends a minimum investment amount of $1m to
provide for proper diversification. Fees are negotiable.
Separately managed account client servicing includes the following steps.
Investment and Risk Profile: Client’s short‐term and long‐term needs, familiarity with capital
market history and expectations.
Agree Objective: Propose appropriate investment strategy to be constructed and managed.
Examine current and projected financial, economic and social conditions: short‐term and
intermediate‐term expected conditions to use in constructing a specific portfolio.
Implement the plan by constructing the portfolio and provide non‐discretionary investment
management advice or, in the exercise of discretion, trade the portfolio: Meet client needs at
minimum risk levels.
Feedback: Monitor and update investor needs, environmental conditions, evaluate portfolio
performance.
Tailored Relationships We tailor advisory services to the individual needs of our clients. Client objectives are documented in
the Investment Management Agreement (“IMA”) as amended from time to time. Clients are allowed to
impose restrictions on the investments in their account. We accept any reasonable limitation or
restriction by the client to the extent that these restrictions do not impair our ability to effectively
manage an account.
Family Office Offering For certain clients we provide a family service offering. It is based on a threefold solution of individual
family strategy, organization and management. We first seek to define and formalize a family strategy
which includes establishing the family members, key advisers and their levels of involvement, the family
structure, the family’s objectives, and creating an investment policy statement (IPS). In the second step,
we implement the client’s strategy and assign a manager and platform to carry out the client’s
objectives. On an ongoing basis, we would oversee and manage the strategy.
Pooled Investment Vehicles: We provide discretionary investment advice, both in an advisory and sub‐advisory capacity to pooled
investment vehicles.
We currently act as the primary advisor to the PMOF Funds:
1. PMOF Special Situations Private Credit Fund, LLC – this fund has a master‐feeder structure. For
more information about the fund, please consult the offering documents.
2. PMOF Emerging Markets Private Credit Fund, LP
We also act as a subadvisor to certain funds (“the CAIL Funds”) for which the primary advisor is an affiliate
of CAIL as referenced above.
For all the funds we advise, the Firm seeks investment opportunities in private debt. Generally, the
Firm’s investment strategy is to seek consistent, uncorrelated returns predominately based on current
income generated from senior secured, direct originated loans and debt instruments.
Wrap Fee Programs We do not sponsor or manage a Wrap Fee Program or manage client assets via Wrap Fee programs.
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For discretionary and non‐discretionary investment management services in a separately managed
account, LCA will charge a fee based upon assets under management and will not charge a
performance fee.
The fee schedule for separately managed accounts, discretionary and non‐discretionary, is as follows:
Assets under management in USD or equivalent Management Fee Marginal Rate Effective rate (Calculated on the maximum amount in the corresponding range.) From 0 to 2.5M 1.50% 1.50%
From 2.5 to 5M 1.25% 1.37%
From 5 to 10M 1% 1.19%
From 10 to 20M 0.85% 1.02%
From 20 to 50M 0.75% 0.86%
50M and higher Negotiable
Depending on the billing parameters as outlined in the IMA, quarterly fees are either payable in
advance or in arrears. Fees are calculated in US Dollars and charged on the first business day of each
calendar quarter based upon the fair market value of the assets under management in the client’s
account on the last business day of the previous quarter, as valued by the custodian. Clients are also
provided the option to have their fees calculated on a quarterly average. The client authorizes the
custodian, acting as the agent of the client, to withdraw from the client’s account any fees that are
due to LCA.
Either party may terminate the client IMA at any time and with immediate effect. LCA does not charge a
termination fee. Clients remain responsible for investment advisory fees up to and including, but not
after, the effective date of termination. Termination of an IMA does not affect any transaction initiated
but not yet settled at the time of termination. Fees are returned pro rata for any unused portion over a
quarter.
Our separately managed account clients are responsible for other fees and charges incurred as we
manage their assets. These include brokerage commissions/transaction fees, custodian fees, stamp
duty, taxes, exchanges and other trading‐ or custodial‐related fees. Clients are responsible for third‐
party fees.
We will invest discretionary client assets in unaffiliated mutual funds and exchange‐traded funds. When
this happens, clients will be responsible for the fees that are disclosed in each fund’s prospectus or
private placement memorandum. Such fees are exclusive of and in addition to our management fee.
Fees are negotiable depending on the circumstances.
Only where appropriate, suitable and within objectives, we may exercise discretion and place client
assets in the PMOF Funds or in the CAIL Funds. To address the conflicts of interest that arise from this,
we obtain client consent on an investment by investment basis and do not “double charge” a fee (fees
charged by the funds and a fee directly to us investment advisory services). Clients will only be charged
a fee by the funds
We do not accept compensation for the sale of securities or other investments. We do not receive
transaction‐based compensation, including fund subscription fees.
For the PMOF Special Situations Private Credit Fund, we charge an investment management fee of 1.5%
and a performance fee of 15% of returns that exceed a hurdle of 7%. For the Emerging Markets Fund,
we charge an investment management fee of 2% and a performance fee of 20%. Fees may be
negotiable under certain limited circumstances. For more information, regarding fees for the funds we
advise, please consult the offering documents for the respective funds.
Aside from the fees mentioned above, the investors in the PMOF Funds, are responsible for additional
fees such as legal and audit. In addition, certain investors in the offshore feeder funds will pay initial
share creation fees of 2% and ongoing fees of 0.5%. These fees are paid to non‐affiliated third parties.
In addition, certain investors in the feeder funds will pay a service fee of 0.5% to CAIL or its affiliates.
For those investors the fee paid to LCA will be only 1%.
For the CAIL Funds, LCA charges a management fee charged (typically 1‐2% of assets under
management) plus an incentive fee charged on profits generated (15‐20%) to a fixed per cent charged
on a one‐off transaction (i.e. we charge the borrower a specific interest rate and deduct a portion of it
for management).
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Separately managed accounts do not pay a performance fee.
The PMOF Funds and the CAIL Funds charge a performance‐ based fee. As a result, there may be a conflict
when the opportunity arises for us to recommend or advise our separately managed account clients to
invest in the funds we manage. To address this conflict of interest, we manage our separately managed
accounts based on the risk profile and suitability and any decisions or recommendations regarding a
particular investment for our clients is arrived at irrespective of any fee differential that we may earn.
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LCA provides separate account investment management to individuals, HNWIs and their families,
corporations, trusts, foundations and endowments. As noted above, LCA acts as the primary advisor to
the PMOF Funds and manages the CAIL Funds in a sub advisory capacity.
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Investment process and strategies
Portfolio allocations and performance will differ between U.S. person clients and non‐U.S. clients due to
relevant tax and regulatory issues. Clients must seek their own tax and legal advice. LCA does not provide
tax or legal advice.
LCA analysis includes fundamental, charting, cyclical and technical methodologies. The main sources of
external information include third party research, corporate rating services, annual reports,
prospectuses, financial newspapers and magazines and company press releases.
The investment strategies used to achieve investment objectives include long term purchases (securities
held for at least a year), short term purchases (securities sold within a year), trading (securities sold
within 30 days) and option writing, including covered options, uncovered options and spread strategies.
Macro changes may imply changes in currency and asset allocations. Market fluctuations may create
buying or selling opportunities.
All investment decisions/recommendations are based on a client’s profile and investment strategy to
ensure that appropriate investments are made for the client within its needs. As the cornerstone of the
portfolio management process, every client completes an Investment and Risk Profile (“Profile”) that
documents investment objectives and restrictions or sets any benchmarks (indices or otherwise) against
which portfolio assets will be managed/advised. In the process of managing assets and to achieve the
objectives, LCA will examine current and projected financial, economic and social conditions. We will
propose an investment strategy and construct and manage the portfolio. This will be based one or more
of the following “Strategies.”
Traditional:
o Conservative: For clients who seek to maintain capital in real terms. Investment returns
are mainly generated in the form of interest/dividend income. This includes a below‐
average risk tolerance with minimum possible capital fluctuations. The Assets shall be
invested in cash, bonds, money market instruments, fiduciary placements or collective
investment funds whose assets are invested in aforesaid kind of financial instruments.
o Balanced: For clients who seek to maintain capital in real terms and achieve long‐term
capital gains. Investment returns are mainly generated in the form of interest/dividend
income as well as capital gains. This strategy may have foreign currency exposure. This
is average risk tolerance with capital fluctuations. The Assets shall be invested for about
one half in cash, bonds, money market instruments, fiduciary placements and for about
another half in equities and other equity securities. The investments shall likewise be
carried out via collective investment funds whose assets are invested in aforesaid kind
of financial instruments.
o Growth: For clients who seek to generate long‐term growth. Investment returns are
mainly generated in the form of capital gains. This strategy may have foreign currency
exposure. This is above‐average risk tolerance with higher capital fluctuations. A major
part of the Assets shall be invested in equities and other equity securities or in collective
investment funds whose assets are invested in equities and other equity securities.
Multi Asset Class Strategy: For clients, whose aims are to preserve and grow capital over the
long‐term with low volatility. It seeks diversification across a wide range of asset classes,
including non‐traditional investments such as hedge funds, private equity, private lending and
real estate. Having a portfolio exposure to these alternative asset classes provides an attractive
annual return over the long‐term and generates a stable recurring income. Through our network
and due diligence process, LCA strives to create high quality multi‐ asset class portfolios
represented by a careful selection of fund managers with cost‐efficient investments such as ETFs
or securities. This strategy is offered with the following two sub‐ strategies:
o Moderate Growth: The client is expecting their portfolio to achieve capital appreciation
on a 1 to 3‐year investment cycle, with strong focus on capital preservation, knowing
capital losses may occur on shorter periods of time. The Assets shall be mainly invested
in cash equivalent and fixed income asset classes, diversified to a lesser extent in
equities, alternatives investments and real assets, as well as derivatives for hedging
purposes.
o Long‐Term Growth: The client is expecting capital appreciation on a three to eight‐ year
investment cycle, knowing capital losses may occur on shorter periods of time. Assets
are mainly invested in equities, alternatives investments and real assets, and to a lesser
extent in cash equivalent and fixed income asset classes, as well as derivatives for
hedging purposes.
International: For clients looking for international diversification in terms of currency and
geographic exposure. This mandate invests in equities and bonds outside the U.S. markets and
would complement a client’s domestic U.S. investment portfolio. Investment returns are
mainly generated in the form of interest/dividend income as well as capital gains. The Assets
shall be invested for about one half in cash, bonds, money market instruments, fiduciary
placements and for about another half in equities and other equity securities. The Assets shall
be invested in equities and bonds outside of the U.S. markets or through ADRs where
necessary. The investments shall likewise be carried out via private funds whose assets are
invested in aforesaid kind of financial instruments.
Sustainable, Responsible and Impact Investing (“SRI”): incorporating Environmental, Social and
Governance (“ESG”) criteria. For clients wishing to invest for social as well as financial gains in
situations where it is deemed possible, prudent and not too costly. While SRI investing is
generally not expected to significantly detract from portfolio performance, the client recognizes
this possibility. To this end, we engage in the following:
o positive screening: proactively investing in companies with good ESG practices;
o exclusionary screening: avoiding or divesting from companies with poor ESG
practices;
o thematic investing: targeting specific themes such as climate change, water or
human rights;
o shareholder advocacy, including actively voting proxies; and/or
o investing a portion of cash holdings in programs for community development.
Discretionary private funds: these funds will provide financing solutions by lending,
secured by collateral, throughout the capital structure of the borrower. They will provide
qualified investors with attractive credit‐oriented investment strategies emphasizing low
volatility and preservation of capital. Targeted industries for loans will be those that are
underserved by traditional sources of capital including consumer finance, litigation, trade
finance, factoring, and life insurance, while continuously seeking new asset types with
appropriate risk/reward profiles. Loans will be transactions that self‐liquidate and do not
depend on a balloon payment or refinancing at maturity.
LCA monitors account activity on a quarterly basis to ensure that investment management and trading is
consistent with the objectives.
Investment Committees The LCA Investment Committee (“IC”) has overall responsibility for the management and allocation of
investments and objectives. The IC meets monthly or as necessary given changes in market and
economic conditions. The IC establishes medium to long‐term strategic views as well as short‐term
tactical decisions leveraging our network and in‐house multidisciplinary knowledge. The IC reviews and
approves new investments to broaden client investment opportunities.
For the PMOF Funds, LCA maintains investment committees. The Investment Committee will be
responsible for approving the origination of all loans issued, and the acquisition of any other investments
as well as other material transactions regarding loans or other investments held by the fund.
Discretionary mandates LCA will manage client assets on a fully discretionary basis.
Non‐discretionary mandates Under a non‐discretionary mandate, we will interact with the client and, at the client’s request, discuss
views, advice and recommendations concerning securities, currencies, financial market trends and
related investment options, strategies and opportunities. LCA may provide the client with advice and
recommendations that may be appropriate for the client and its objectives.
Risk of Loss Investing in securities involves the risk of loss that clients should be prepared to bear. All investment programs have certain risks. Our investment approach constantly keeps the risk of loss in
mind. The list below details some of the risks investors may face when investing. The factors noted
below are not the only risks faced by investors, rather the risk factors determined by us to have the
greatest bearing on investment performance. Depending on the strategy employed, certain factors may
be more prevalent than others in an investment portfolio.
Market Risk ‐ The price of a security, bond, or mutual fund may drop in reaction to tangible and
intangible events and conditions. This type of risk is caused by external factors independent of a
security’s particular underlying circumstances. For example, political, economic and social
conditions may trigger market events.
Interest‐rate Risk ‐ Fluctuations in interest rates may cause investment prices to fluctuate. For
example, when interest rates rise, yields on existing bonds become less attractive, causing their
market values to decline.
Inflation Risk ‐ When any type of inflation is present, a dollar today will not buy as much as a
dollar next year, because purchasing power is eroding at the rate of inflation.
Currency Risk ‐ Overseas investments are subject to fluctuations in the value of the dollar against
the currency of the investment’s originating country. This is also referred to as exchange rate risk.
Reinvestment Risk ‐ This is the risk that future proceeds from investments may have to be
reinvested at a potentially lower rate of return (i.e. interest rate). This primarily relates to fixed
income securities.
Liquidity Risk ‐ Liquidity is the ability to readily convert an investment into cash. Generally,
assets are more liquid if many traders are interested in a standardized product. For example,
Treasury Bills are highly liquid, while real estate properties are not.
Option Risk ‐ Certain investment strategies offered may make use of options. These options run the
risk of losing value in a relatively short period of time. Option contracts are leveraged instruments
that allow the holder of a single contract to control many shares of the underlying stock. This
imbedded leverage in the option contract may compound gains and losses.
Credit Risk ‐ Excessive borrowing to finance a business’s operations increases the risk to
profitability and solvency, because the company must meet the terms of its obligations in good
times and bad. During periods of financial stress, the inability to meet loan obligations may result
in principal losses, bankruptcy and/or a declining market value.
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Mr. Carey, an indirect owner of LCA, owns a Geneva‐based SEC registered investment adviser, Lloyd
Capital LLC (“Lloyd Cap”) whose formation predated the existence of the Firm. While Mr. Carey is
affiliated with both the Firm and Lloyd Cap, any conflicts are mitigated by virtue of the fact that Lloyd
Cap is closed to new clients and it is the ultimate intention for Lloyd Cap clients to become Firm clients.
Any conflicts regarding limited investment opportunities are resolved in a fair and equitable manner.
Any clients that migrate to us from Lloyd Cap will be managed solely by us and not by Lloyd Cap.
As noted above, Crescendo Advisors International Limited (“CAIL”) is an affiliate of LCA.
The following affiliated entities act as General Partner. Managing Member or Manager of the PMOF
Funds (including its feeder funds):
1. PMOF Special Situations Private Credit GP Limited is the General Partner of PMOF Special
Situations Private Credit Fund TE, LP
2. PMOF Special Situations Private Credit Fund Manager, LLC is the Managing Member of
PMOF Special Situations Private Credit Fund, LLC and PMOF Special Situations Private
Credit Fund, Parent LLC
PMOF Emerging Markets Private Credit Fund GP, LLC is the General Partner of PMOF Emerging
Markets Private Credit Fund, LP. From time to time, CAIL will provide the Firm with market insight
into the European markets and persons at the Firm will provide similar information regarding the US
markets to CAIL. No fees are exchanged for these services and such activities by the Firm are
incidental to the Firm’s business and information regarding the Firm’s clients is kept strictly
confidential.
We require all officers, LLC managers and employees, and anyone associated with us in a related person
capacity, to declare all conflicts of interest and outside interests and activities and we take steps to
address the conflicts arising from these activities. Outside interests or activities may be subject to
compliance clearance and may have conditions imposed, or may not be approved.
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and Personal Trading Code of Ethics We have a Code of Ethics (“Code”) that defines our fiduciary commitment to each client and as a means
to prevent the misuse of “confidential client information”. This Code applies to all persons associated
with us – “supervised persons” (defined in Code, as are other terms used in this Item). Supervised
persons must acknowledge receipt of the Code (when joining us, annually and for Code amendments)
and comply with its requirements, including standards of behavior the requirement to report Code
violations. Our “access persons” and their “connected persons” (defined in our Code) must comply with
the Code’s personal securities transaction requirements (pre‐clearance, holdings reporting and
transactions reporting). Any individual not in compliance with the Code of Ethics may be subject to
discipline up to and including termination.
Access persons may buy or sell securities for their own accounts but may not buy securities identical to
those recommended to or held by Clients without pre‐clearance and subject to compliance with controls
(including monitoring and testing). The Code, described above, is designed to ensure that personal
securities transactions, activities and interests of access persons will not interfere with (i) making
decisions or giving advice in the best interests of clients and (ii) implementing such decisions or giving
such advice while, at the same time, allowing personal investing. Under the Code, certain classes of
securities have been designated as exempt transactions, based upon a determination that these would
not interfere with the best interest of our clients. In addition, the Code requires pre‐clearance of many
transactions. Nonetheless, because the Code in some circumstances would permit employees to invest
in the same securities as clients, there is a possibility that employees might benefit from market activity
by a client in a security held by an employee. Pre‐clearance is designed to prevent “front‐running” and
“trading with” Clients. Employee trading is monitored under the Code to address conflicts of interest.
In order to monitor compliance by our personnel with the Code and applicable law, each employee is
required to provide LCA with copies of the confirmation of each transaction.
We do not recommend to clients, or buy or sell for client accounts, securities in which our supervised
persons, access persons or connected persons have a material financial interest.
Compliance We do not engage in principal transactions or trade with clients.
We will send you a copy of our Code if you contact us at +1 305 850 6105 or
[email protected].
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Trading Practices For clients with non‐discretionary mandates, we only provide research, investment advice
and recommendations.
We do not make referrals for brokerage or accept referrals from brokers. We do not engage in directed
brokerage.
We place orders to trade with the trading desk of a custodian holding client assets or, if not required to
do this, with executing brokers.
Best Execution Best execution is seeking the best transaction available and the execution of this in such a manner that
the total cost or proceeds in each transaction is the most favorable under the circumstances.
Where we are required to place orders with the trading desk of a custodian, we require that trading
desk to provide us with best execution and the analysis and data that they have used to establish
whether they have received best execution.
In seeking best execution and selecting brokers with which LCA will execute trades and placing orders,
and seeking best execution, we consider these factors:
price;
transaction net costs;
clearance and settlement practices;
ease of execution;
executing broker‐custodian relationships and extended credit lines;
firm commitment to regulatory compliance;
industry reputation;
general financial strength and stability;
breadth of products and services;
research capabilities; and
other factors relevant to a specific type of trade.
Research and brokerage service received may be used to service some, or in certain circumstances, all
clients, subject to compliance with applicable law.
We may affect a cross for two discretionary clients and no fee will be taken by us. Such transactions will
be subject to the best execution requirement.
Research and Soft Commissions Brokers we use for our separately managed accounts offers other services intended to help us manage
and further develop our advisory services. Such services include (but are not limited to) performance
reporting, financial planning, contact management systems, third party research, publications, access to
educational conferences, roundtables and webinars, practice management resources, access to
consultants and other third‐party service providers who provide a wide array of business‐related
services and technology with whom we may contract directly. Some of these services may benefit
certain clients and not others.
We do not have any soft dollar arrangements
Aggregation and Allocation With regard to discretionary mandates, we have the authority and discretion to determine the securities
and the amounts of the securities to be bought or sold for Clients’ accounts. We have a policy and
procedures for the allocation and aggregation of orders, including IPOs. We allocate on a pre‐trade basis
that is fair and consistently applied, save for limiting factors such as available cash and investment
overweighting. We do not change allocations after execution, save for an error made in the pre‐
allocation (this would be treated as a trade error). Post‐trade changes to pre‐trade allocations require
the prior written approval of the IC.
Trade Errors A trade error is an unintended action or omission in the course of trading. Once a trade error is
recognized, the person responsible for the error, or discovering it, must immediately notify the CEO. If it
is possible to cancel the trade prior to settlement, the person responsible for placing the trade should
attempt to do this, in a manner to minimize risk or financial loss. If it is not possible to cancel the trade,
the transaction is reversed as soon as possible. If it is not possible or not prudent in the best interests of
the client to reverse the trade immediately, the CEO will determine whether the reversal of the trade
should be delayed and what other course of action to take. We will correct the trade error promptly and
efficiently protecting the interests of the client. Any gain will accrue solely to a client. We bear losses.
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Separately Managed Accounts We review accounts each quarter and monitor activity on a continuous basis to help ensure,
inter alia,
that advice given or acted upon, and trading is consistent with client objectives.
Additional reviews may also be triggered by market events, political changes, changes in the economy,
or changes in interest rate. Reviews could also occur at the time of new deposits, material changes in
client’s financial information, changes in economic cycles, market, political or economic conditions,
changes in tax laws or new investment information, at our discretion, or as often as the client directs.
We encourage frequent client contact. Clients are obligated to promptly notify us of any changes in the
client’s financial status to ensure that investment strategies continue to meet their objectives and
changing needs.
Clients receive statements from their custodians, quarterly or monthly, which include account activity,
beginning and ending balances and current values. In addition, we receive trade confirmations for each
position bought and sold.
Client meetings are encouraged and are scheduled quarterly, or less frequently as specific situations
dictate. Supplemental written reports, with more detailed information including investment
performance, may be provided to Clients upon request.
Pooled Investment Vehicles For the PMOF funds a third‐party administrator performs the accounting closing of the funds activity by
recording transactions, reconciling balances, and compiling the financial performance. The LCA team
performs its review process of the funds’ financial balances and performance of the period and provides
final approval for distribution. Investors receive a quarterly statement of their balances and fund activity
along with a newsletter prepared by the LCA portfolio team that provides current updates regarding the
performance of the transactions within the portfolio as well as other pertinent fund information. Annual
audited financial statements are provided to investors as well. For the CAIL Funds, LCA’s key persons
report to the primary advisor on a regular basis regarding fund investments and performance.
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Other than as disclosed herein, we do not receive economic benefits or compensation from any firm or
individual for providing investment advice. We are compensated exclusively by our clients.
We have solicitation agreements in place. All such arrangements are in compliance with SEC Rule
206(4)‐3.
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We do not have custody of our separately managed account clients’ assets.
For the two pooled investment vehicles we advise, for purposes of Rule 206(4)‐2 under the Advisers Act
(the “Custody Rule”), LCA is considered to have custody over the cash and marketable securities held for
those vehicles, as an affiliate of the Firm acts as the general partner.
Accordingly, those two vehicles are subject to an annual audit.
LCA will ensure that the audited financials are delivered to all fund investors within 120 days of the
Funds’ fiscal year end.
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When we manage assets on a discretionary basis, we accept a limited power of attorney to act on a
discretionary basis. This allows us to execute trades on behalf of clients. We have the authority to
determine, without obtaining specific client consent, both the amount and type of securities to be
bought to satisfy client objectives. Additionally, we may accept any reasonable limitation or restriction
to such authority on the account placed by the client.
With regard to non‐discretionary account management, we provide investment advice, formulate
strategies, evaluate performance of positions taken or held and gain access to analysis, commensurate
with the investment objectives and restrictions set forth in the IMA. This will involve materials being
provided to the client, as well as telephone call briefings.
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For discretionary mandates, we exercise voting authority over client securities according to our proxy
voting policies and procedures.
We may vote all proxies on behalf of each client over which we have proxy voting authority, as agreed in
the IMA. All proxy votes are based on our determination of such client’s best interests, both in terms of
their financial interest and where appropriate, in line with their values, in the discharge of our fiduciary
duties.
We abstain from voting proxies when we believe that it is appropriate to do so. If a material conflict of
interest over proxy voting arises between us and a client, we will vote all proxies in accordance with our
policy described above. If we determine that this policy does not adequately address the conflict of
interest, we will notify the client of the conflict and request that the client consent to the intended
response to the proxy solicitation. If the client consents to the intended response or fails to respond to
the notice within a reasonable time specified in the notice, we would vote the proxy as described in the
notice. If the Client objects, we would vote the proxy as the Client directs. In these circumstances, a
client’s consent to a proposal will be obtained from either investors holding a majority of the interests in
the client or from a committee of investors appointed by the client.
For non‐discretionary mandates, we may discuss corporate actions with its clients prior to the event, but
only the client takes the decision and votes or exercises the proxy.
We will provide our proxy voting policies and procedures and information on how we voted on request.
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