Brightstone Capital Management, LLC (“Brightstone”) is an alternative asset manager
headquartered in Trinidad and Tobago. Brightstone was organized as a Limited Liability Company
organized in the State of Delaware on June 28, 2017.
Brightstone is owned and controlled by Mr. Andy Jogie and was founded to pursue investment
opportunities on behalf of its clients globally. Brightstone, taking an active approach to investment,
forges financial acumen, independent analysis with hands-on operational expertise to deliver
investment returns to its clients.
Brightstone offers portfolio management services based on the individual goals, objectives, time
horizon, and risk tolerance of each client. Brightstone requires discretionary authority from clients
in order to select securities and execute transactions without permission from the client prior to
each transaction. Brightstone seeks to provide that investment decisions are made in accordance
with its fiduciary obligations owed to its clients and without consideration of Brightstone’s
economic, investment or other financial interests. To meet its fiduciary obligations, Brightstone
attempts to avoid, among other things, investment or trading practices that systematically
advantage or disadvantage any client portfolios. It is Brightstone’s policy to allocate investment
opportunities and transactions it identifies as being appropriate and prudent among all of its clients
on a fair and equitable basis over time.
Prior to engaging Brightstone to provide investment advisory services, each client is required to
enter into an Investment Advisor Contract (“IAC”) with Brightstone that defines the terms,
conditions, authority and responsibilities of Brightstone and the Client. Clients may terminate the
IAC at any time and immediately upon written notice to Brightstone. These services include the
following:
• Establishing an Investment Policy Statement – Brightstone, in connection with the
client, will develop a statement that summarizes the client’s investment goals and
objectives along with the strategy[ies] to be employed to meet the objectives.
Brightstone then creates an Investment Policy Statement (“IPS”) for each client. Risk
tolerance levels are documented in the IPS, which is given to each client. An IPS
generally includes specific information on the client’s stated goals, time horizon for
achieving the goals, investment strategies, client risk tolerance and any restrictions
imposed by the client.
• Asset Allocation – Brightstone will develop a strategic asset allocation that is targeted
to meet the client’s investment objectives, time horizon, financial situation and risk
tolerance.
• Portfolio Construction – Brightstone will construct a portfolio for the client that is
intended to meet the stated goals and objectives of the client.
• Investment Management and Supervision – Brightstone will provide investment
management and ongoing oversight of the client’s investment portfolio.
Brightstone is required to disclose the assets under management as of December 31,
2019. As of December 31, 2019, Brightstone had $10,636,557.00 of assets under
management.
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The Management Fee equals one percent (1%) annually and is calculated monthly as 1/12th of
1%. The computation of the Management Fee is to be made as of the end of each calendar month
and one hundred percent (100%) of the Management Fee shall be paid immediately thereafter. A
pro rata Management Fee is charged to Clients on any amounts permitted to be invested or
withdrawn during any calendar month. The Management Fee is automatically charged to the
Client's account by the Custodian, provided that the Client has signed and returned written Client
authorization, as soon as practicable following the end of each applicable period.
The Custodian delivers an account statement to the Client at least quarterly, showing all
disbursements, including advisory fees, deducted from the account. The Client is encouraged to
review all account statements for accuracy. It is the responsibility of the Client and not the
Custodian to ensure the fees are calculated correctly.
The average daily balance of assets value is used for the monthly billing period. The average daily
balance is calculated by taking the sum of a client’s account balance at the end of each day of the
billing cycle divided by the number of days in the billing cycle. Brightstone maintains and/or has
access to, a record of a client’s account balance for each day in the billing cycle. These fees are
generally negotiable and the final fee schedule is attached as Exhibit II of the IAC.
Please see Item 15 of this brochure for more information regarding the deduction of the
Management Fee from client accounts.
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Brightstone generally provides advisory services to the following types of clients:
High-Net-Worth Individuals
Individuals
Institutional Clients
Corporations or Other Businesses
Insurance Companies
The minimum account size that shall be accepted by Brightstone is two hundred and fifty thousand
U.S. dollars (USD $250,000) and the Client may add to or withdraw funds from its investment
account in increments of twenty-five thousand U.S. dollars (USD $25,000) at any time, with no
minimum subsequent investment amount. Brightstone can waive the minimum account size in its
sole discretion.
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Brightstone’s core strategy involves the construction of a “Smart Beta Portfolio” on behalf of its
clients. This is accomplished through strategically timed investments in exchange traded funds
(ETFs). Leverage is used sparingly and from time to time options spreads are used to hedge
positions. Brightstone looks to identify times when the broad market is undervalued and the
potential for upward moves is greater than normal. Various macro and technical indicators are
used set to manage entry and exits from portfolio positions.
Accuracy of Public Information Risk. Brightstone selects investments, in part, on the basis of information and data filed by issuers with various government regulators or made publicly
available by the issuers or through sources other than the issuers. Although Brightstone evaluates
this information and data and ordinarily seeks independent corroboration as appropriate and
reasonably available, Brightstone is not in a position to confirm the completeness, genuineness or
accuracy of such information and data, and in some cases, complete and accurate information is
not available.
Short Selling. Brightstone’s investment strategy will involve seeking to profit from securities believed to be overvalued by entering into short sale positions, both directly and indirectly through
the use options, ETFs, and other trading instruments. When Brightstone effects a short sale in a
client’s account, the client may be obligated to leave the proceeds thereof with the custodian and
also deposit with the custodian an amount of cash or other securities that is sufficient under any
applicable margin or similar regulations to collateralize its obligation to replace the borrowed
securities that have been sold. Short selling involves selling securities which are not owned by the
short seller and borrowing them for delivery to the purchaser, with an obligation to replace the
borrowed securities. Short selling allows the client to profit from a decline in market price to the
extent such decline exceeds the transaction costs and the costs of borrowing the securities. In
certain cases, a short sale creates the risk of a theoretically unlimited loss, in that the price of the
underlying security could theoretically increase without limit, thus increasing the cost to the client
of buying those securities to cover the short position. There can be no assurance that the client will
be able to maintain the ability to borrow securities. In such cases, the client can be “bought in”
(i.e., forced to repurchase securities in the open market to return to the lender). There also can be
no assurance that the securities necessary to cover a short position will be available for purchase
at or near prices quoted in the market. Purchasing securities to close out a short position can itself
cause the price of the securities to rise further, thereby exacerbating the loss. Any gain resulting
from a short sale will be decreased (and any loss will be increased) by the transaction costs incurred
in connection with the short sale.
Leverage and Financing Risk. Brightstone believes that the use of leverage may enable the client to achieve a higher rate of return. While leverage presents opportunities for increasing the client’s
total return, it has the effect of potentially increasing losses as well. Accordingly, any event which
adversely affects the value of an investment by the client would be magnified to the extent the
client is leveraged. The cumulative effect of the use of leverage by Brightstone in a client’s account
in a market that moves adversely to the client’s investments could result in a substantial loss to the
client which would be greater than if the client were not leveraged. The use of leverage may create
interest expenses for the client, which can exceed the investment return from the borrowed funds.
To the extent the investment return derived from securities purchased with borrowed funds exceeds
the interest the client will have to pay, the client’s investment return will be greater than if leverage
were not used. Conversely, if the investment returns from the assets acquired with borrowed funds
is not sufficient to cover the cost of leveraging, the investment return of the client will be less than
if leverage were not used.
In general, the anticipated use of short-term margin borrowings results in certain additional risks
to the client. For example, should the securities pledged to brokers to secure the client’s margin
accounts decline in value, the client could be subject to a “margin call,” pursuant to which the
client must either deposit additional funds or securities with the broker, or suffer mandatory
liquidation of the pledged Securities to compensate for the decline in value, which could result in
substantial losses. In the event of a sudden drop in the value of the client’s assets, the client might
not be able to liquidate assets quickly enough to satisfy its margin requirements.
Uninvested Assets. Assets not invested in securities or deposited as margin or paid as premiums generally will be invested in money market instruments, including, without limitation, Treasury
notes and bills, certificates of deposit, commercial paper, broker balances, bankers’ acceptances,
repurchase agreements or mutual funds that invest in such securities. For temporary defensive
purposes, a client’s account may consist of cash or other money market instruments.
Portfolio Turnover. Brightstone will actively manage client accounts. Brightstone may make adjustments to the client’s portfolio if it believes that market conditions or research opinions
affecting the market or individual issues warrant such action or as a result of changes in
Brightstone’s risk tolerance or to take advantage of short-term trading opportunities. Accordingly,
a client’s account may be expected to turn over frequently during the course of a year. In such
circumstances, the client may have a higher portfolio turnover rate and pay greater brokerage
commissions than portfolios with a lower portfolio turnover rate.
Risks Associated with Investments. Any investment carries certain market risks. Investments may decline in value for any number of reasons over which Brightstone may have no control,
including changes in the overall market for equity and/or debt securities, and factors pertaining to
particular portfolio securities, such as management, the market for the issuer’s products or
services, sources of supply, technological changes within the issuer’s industry, the availability of
additional capital and labor, and other similar conditions. The value of a client’s portfolio will
fluctuate, and there is no assurance of capital growth. The profit (or loss) derived from investment
transactions consists of the price differential between the price of the securities purchased and the
value ultimately realized from their disposition, plus any dividends or interest received during the
period that the securities are held, less transaction costs (consisting mainly of brokerage
commissions). If investment held long (held short) do not increase (decrease) in value as
anticipated, Brightstone may sell them without a gain or at a loss.
Performance Fees. Brightstone does not charge Clients a performance-based incentive fee. Securities. A security investment generally refers to buying shares of stocks in return for receiving a future payment of dividends and/or capital gains if the value of the stock increases. The value of
equity securities may fluctuate in response to specific situations for each company, industry
conditions and the general economic environments.
Exchange Traded Funds (ETFs). An ETF is an investment fund traded on stock exchanges, similar to stocks. Investing in ETFs carries the risk of capital loss (sometimes up to a 100% loss
in the case of a stock holding bankruptcy). Areas of concern include the lack of transparency in
products and increasing complexity, conflicts of interest and the possibility of inadequate
regulatory compliance. Precious Metal ETFs (e.g., Gold, Silver, or Palladium Bullion backed
“electronic shares” not physical metal) specifically may be negatively impacted by several unique
factors, among them (1) large sales by the official sector which own a significant portion of
aggregate world holdings in gold and other precious metals, (2) a significant increase in hedging
activities by producers of gold or other precious metals, (3) a significant change in the attitude of
speculators and investors.
Past performance is not indicative of future results. Investing in securities involves a risk of loss that you, as a client, should be prepared to bear.
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Neither Brightstone nor Mr. Andy Jogie is registered as, or have pending applications to become,
a broker/dealer or a representative of a broker/dealer. Moreover, neither are registered as or have
pending applications to become either a Futures Commission Merchant, Commodity Pool
Operator, or Commodity Trading Advisor or an associated person of the foregoing entities.
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Trading
Brightstone has a written Code of Ethics that covers the following areas: Prohibited Purchases and
Sales, Insider Trading, Personal Securities Transactions, Exempted Transactions, Prohibited
Activities, Conflicts of Interest, Gifts and Entertainment, Confidentiality, Service on a Board of
Directors, Compliance Procedures, Compliance with Laws and Regulations, Procedures and
Reporting, Certification of Compliance, Reporting Violations, Compliance Officer Duties,
Training and Education, Recordkeeping, Annual Review, and Sanctions. Brightstone's Code of
Ethics is available free upon request to any client or prospective client.
Brightstone does not recommend that clients buy or sell any security in which a related person to
Brightstone or Brightstone has a material financial interest. From time to time, representatives of
Brightstone may make trades and investments for their own accounts. In these accounts, they may
use trading and investment methods that are similar to, or substantially different from, the methods
used by them to direct client accounts. The records of these personal accounts will not be made
available to clients. From time to time, representatives (i.e., Mr. Andy Jogie) of Brightstone may
buy or sell securities for themselves at or around the same time as clients. This may provide an
opportunity for representatives of Brightstone to buy or sell securities before or after
recommending securities to clients resulting in representatives profiting off the recommendations
they provide to clients. Such transactions may create a conflict of interest; however, Brightstone
will never engage in trading that operates to the client’s disadvantage if representatives of
Brightstone buy or sell securities at or around the same time as clients.
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Custodians/broker-dealers will be recommended based on Brightstone’s duty to seek “best
execution,” which is the obligation to seek execution of securities transactions for a client on the
most favorable terms for the client under the circumstances. Clients will not necessarily pay the
lowest commission or commission equivalent, and Brightstone may also consider the market
expertise and research access provided by the broker-dealer/custodian, including but not limited
to access to written research, oral communication with analysts, admittance to research
conferences and other resources provided by the brokers that may aid in Brightstone's research
efforts. Brightstone will never charge a premium or commission on transactions, beyond the actual
cost imposed by the broker-dealer/custodian.
Brightstone’ objective in selecting brokers to effect portfolio transactions is to seek the best
combination of price and execution for Clients. The best net price, giving effect to brokerage
commissions, spreads and other costs, is normally an important factor in this decision, but a
number of other judgmental factors are considered as they are deemed relevant. In applying these
factors, Brightstone recognizes that different broker-dealers may have different execution
capabilities with respect to different types of securities. In determining whether a particular
broker-dealer is likely to provide best execution, Brightstone takes into account all factors that it
deems relevant to the broker-dealer’s execution capability.
Soft Dollar Arrangements. While Brightstone has no formal soft dollars’ program in which soft dollars are used to pay for services, Brightstone receives at no charge, research, products, and/or
other services from Interactive Brokers and these are classified as “soft dollar benefits” received
in connection with client securities transactions. This results simply from the robust and extensive
software platform offered via the Internet to all retail and institutional customers by all online
brokerage services, all of which (i.e., the Internet and standardized software platforms) predate the
Securities Exchange Act of 1934. Such soft-dollar arrangements are consistent with and not
outside of the scope of the safe harbor contained in Section 28(e) of the Securities Exchange Act
of 1934, as amended. There can be no assurance that any particular client will benefit from soft
dollar benefits and Brightstone does not seek to allocate any benefits to client accounts in
proportion to any soft dollar benefits generated by client accounts. Brightstone benefits by not
having to produce or pay for the research, products or services (whether Brightstone uses the soft
dollars’ benefits or not) and Brightstone is deemed to have an incentive to recommend a custodian
such as Interactive Brokers based on receiving soft dollar benefits. Clients should be aware that
the deemed acceptance of soft dollar benefits may result in higher commissions charged to the
client by the custodian. The availability of soft dollar benefits (i.e., the robust and extensive
software platform offered via the Internet to all retail and institutional customers by all online
brokerage services creates a conflict of interest for Brightstone. Stated again, Brightstone has no
formal soft dollars’ program in which soft dollars are used to pay for services.
Brightstone permits clients to direct it to execute transactions through a specified broker-dealer. If
a client directs brokerage, then the client will be required to acknowledge in writing that the client’s
direction with respect to the use of brokers supersedes any authority granted to Brightstone to
select brokers; this direction may result in higher commissions, which may result in a disparity
between free and directed accounts; and trades for the client and other directed accounts may be
executed after trades for free accounts, which may result in less favorable prices, particularly for
illiquid securities or during volatile market conditions. Not all advisors require or allow clients to
direct brokerage. If client’s direct brokerages, then most favorable execution may not be achieved,
which may cost the client more.
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All client accounts are reviewed at least monthly by Brightstone through Mr. Andy Jogie with
regard to a client’s IPS. Other than monthly reviews may be triggered by material market,
economic or political events, or by changes in client's financial situations (such as retirement,
termination of employment, physical move, or inheritance). Clients receive at least quarterly an
account statement from the custodian detailing the client’s account, including assets held, asset
value, and fees deducted. Brightstone does not provide additional written reports. All account
statements will be sent by the custodian and clients should carefully review those account
statements for accuracy.
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Brightstone does not receive any economic benefit, directly or indirectly from any third party for
advice rendered to Brightstone's clients. Brightstone does not directly or indirectly compensate
any person who is not advisory personnel for client referrals.
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When advisory fees are deducted directly from client accounts by the custodian, Brightstone is
deemed to have constructive custody of client's funds and securities. As a result of this type of
custody, Brightstone is required to have written authorization from the client to deduct applicable
fees. Clients will receive invoices from Brightstone and clients should carefully review those
invoices for accuracy. Further, due solely by having fees directly deducted from the client
accounts, Brightstone is required to comply with and meet the following safeguard requirements:
a. Written Authorization. The investment adviser must have written authorization from the
client to deduct fees from the account held with the qualified custodian;
b. Notice of fee deduction. Each time a fee is directly deducted from a client account, the
investment adviser must concurrently:
i. Send the custodian an invoice specifying the amount of the fee to be deducted
from the client’s account; and
ii. Send the client an invoice specifying and itemizing the fee. Itemization includes
the formula used to calculate the fee, the amount of assets under management the
fee is based on, and the time period covered by the fee;
c. The custodian sends statements to the clients showing all disbursements for the custodian
account, including the amount of the advisory fee. Statements should coincide with the
investment adviser or investment adviser representative billing period.
d. The investment adviser notifies the regulator in writing that the investment adviser intends
to use the safeguards provided above. Such notification is required to be given on Form
ADV.
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Brightstone only provides discretionary investment advisory services to clients. The IAC
established with each client sets forth the discretionary authority for trading. Brightstone manages
the client’s account and makes investment decisions without consultation with the client as to when
the securities are to be bought or sold for the account, the total amount of the securities to be
bought/sold, what securities to buy or sell, or the price per share. Client will execute a limited
power of attorney to evidence discretionary authority.
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Brightstone will not ask for, nor accept voting authority for client securities. Clients will receive
proxies directly from the issuer of the security or the custodian. Clients should direct all proxy
questions to the issuer of the security.
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Brightstone neither requires nor solicits prepayment of more than $500 in fees per client, six
months or more in advance, and therefore is not required to include a balance sheet with this
brochure. Neither Brightstone nor Mr. Andy Jogie has any financial condition that is likely to
reasonably impair Brightstone’s ability to meet contractual commitments to clients. Brightstone
has not been the subject of a bankruptcy petition in the last ten years.
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Open Brochure from SEC website