The Adviser is an investment advisory firm organized as a company under the laws of the province of British Columbia. Pavel Volfbeyn (“Principal”) founded NumerixSQuant (formerly known as Pacad Investments Ltd) in 2014. The Adviser specializes in process-driven, systematic investment management generally by performing quantitative analysis to build mathematical strategies that rely on patterns inferred from historical prices and other data in evaluating prospective investments. The Adviser provides investment advisory services to two (2) Delaware series private investment funds (collectively the “Accounts”). In the future, the Adviser may provide investment management services for other such similar private funds or other types of clients. The Adviser manages the Accounts’ assets in accordance with the terms of the applicable agreement (the “Investment Management Agreement”) including in respect of investment objectives, limitations and restrictions. The Investment Management Agreement may be amended, supplemented, or modified from time to time.

Please see Item 8 (Methods of Analysis, Investment Strategies, and Risk of Loss) for more information.

As of the date of this brochure, the Adviser has $508,238,039 of discretionary assets under management as at December 31, 2019. please register to get more info

The Adviser receives compensation from the Accounts in the form of fees based on a percentage of the performance of the Accounts less a specified proportion of certain reimbursed Accounts’ expenses (the “Performance Fee”). All Accounts are qualified purchasers as defined in section 2(a)(51)(A) of the Investment Company Act of 1940.

Expense reimbursement by the Accounts is intended to cover the Adviser’s overhead expenses, including, but not limited to the following: office rent, computer equipment and software, data, administrative services, employee and consultant salaries, and other similar such expenses.

The Performance Fee calculation is based on the net profits (realized and unrealized gains and losses) attributable to the Accounts’ capital account value of the Accounts as reduced by the account expenses. The Performance Fee is calculated and paid annually. please register to get more info

As described above, the Adviser anticipates receiving performance-based compensation in the form of the Performance Fee. Investors should be aware that performance-based compensation may create an incentive for the Adviser to make investments that are riskier or more speculative than would be the case in the absence of such arrangement. As of the date of this Brochure, both Accounts are subject to a Performance Fee. please register to get more info

The Adviser provides discretionary management and advisory services to a portfolio of two (2) Delaware series private investment funds. In the future, the Adviser may also provide investment management services for other similar such private investment funds or other clients. please register to get more info

Methods of Analysis and Investment Strategies The Adviser’s strategy is a fundamental long/short equities and statistical arbitrage focused on equities within the universe of the MSCI Barra US Equity Model and the MSCI Barra Japan Equity Model. Summary of Certain Risk Factors Investing in securities and other instruments either directly or indirectly including by way of swaps (collectively, “Instruments”) involves risk of loss that clients should be prepared to bear. The management style offered by the Adviser is not intended as a complete investment program, and may not be suitable for all investors. It is designed for sophisticated investors who fully understand and are capable of bearing the risk of such an investment. No guarantee or representation is made that the Adviser will achieve its investment objectives.

The following is a brief summary of certain significant risks associated with the Adviser’s investment strategies.

General – The Adviser’s investment strategies are speculative and entail a significant degree of risk and, therefore, should be undertaken only by investors capable of evaluating the merits and risks of the investment strategies and bearing the risks they represent, including the potential loss of their entire investment. There can be no assurance that the Adviser will be able to achieve the investment objectives or that significant losses will not be incurred.

Market Risk – The Adviser invests in and actively trades Instruments using strategies and investment techniques with significant risk characteristics, including risks arising from the volatility of the markets. The prices of the Instruments in which the Adviser invests can be highly volatile. Price movements of Instruments in which the Adviser invests are influenced by, among other things, interest rates, foreign exchange rates, changing supply and demand relationships, trade, fiscal, monetary and exchange control programs and national and international political and economic events and policies. Moreover, war, political or economic crisis, or other events may occur which can be highly disruptive to the markets, regardless of the strategies being employed. In addition, governments from time to time intervene, directly and by regulation, in certain markets, particularly those in currencies, financial instruments and derivative instruments. Such intervention often is intended to directly influence prices and may, together with other factors, cause all of such markets to move rapidly in the same direction, because of, among other things, interest rate fluctuations. Further, sustained cyclical market declines and periods of unusual market volatility make it more difficult to produce positive trading results. There can be no assurance that the Adviser’s strategies will be successful in any market (see headings titled Strategy Risk, Quantitative Strategies and Trading and Statistical Measurement Error below). The Adviser may incur major losses in the event of disrupted and/or illiquid markets and other extraordinary events in which historical pricing relationships (on which the Adviser may base a number of its strategies) become distorted. The risk of loss from pricing distortions is compounded by the fact that in disrupted markets many positions become illiquid, making it difficult or impossible to close out positions against which the markets are moving. Market disruptions caused by unexpected or other types of events including, without limitation, political, military and terrorist events, government regulation, government intervention in the markets and the decline or rise of certain industry segments may from time to time cause dramatic losses for accounts managed by the Adviser and can result in otherwise historically low risk strategies performing with unprecedented volatility and risk. There are also significant risks associated with the failure of any of the exchanges as well as associated organizations, market participants and traders. Risk may also arise through a default by one of several large institutions that are dependent on one another to meet their liquidity or operational needs, such that a default by one institution causes a series of defaults by other institutions. This is sometimes referred to as systemic risk. Systemic risk may adversely affect financial intermediaries, such as clearinghouses, banks, securities firms and exchanges. The clients are also exposed to the risk that a counterparty will not settle a transaction in accordance with its terms and conditions because of a dispute over the terms of the contract or because of a credit or liquidity problem, thus causing the Accounts to suffer a loss. Such “counterparty risk” is accentuated where the Accounts have concentrated transactions with a single counterparty or small group of counterparties.

Highly Volatile and Changes in the Market. The prices of Instruments can be highly volatile and markets continuously change and evolve, which could negatively affect the Adviser’s quantitate strategies even if they have been successful in the past. Price movements of Instruments in which the Adviser trades are influenced by, among other things, interest rates, changing supply and demand relationships, trade, fiscal, monetary and exchange control programs and policies of governments, and national and international political and economic events and policies. In addition, governments from time to time intervene, directly and by regulation, in certain markets. Such intervention often is intended directly to influence prices and may, together with other factors, cause all of such markets to move rapidly in the same direction because of, among other things, interest rate fluctuations.

Strategy Risk – Statistical arbitrage using quantitative computer driven strategies relies on a number of components including, without limitation, sophisticated analytical models and statistical calculations, computer systems, significant processing capacity, rapid speeds for processing data, telecommunications infrastructure and data (including, without limitation, third party data). There is no assurance that the Adviser’s investment strategy will be successful or that the use of these models, calculations, systems and data will not expose the Accounts to the risk of significant loss.

Statistical arbitrage strategies may rely on historical price correlations of stocks or securities. The Adviser’s investment strategy may include a model that relies upon such historical correlations between securities prices or a similar model by executing appropriate transactions when a change or deviation occurs. There are inherent risks associated with such strategies, since stocks may not behave according to the historical model’s predictions and because of inherent volatility and inaccuracy of such models.

Quantitative Strategies and Trading. Quantitative strategies cannot fully match the complexity of the financial markets and therefore sudden unanticipated changes in underlying market conditions can significantly impact their performance. Further, as market dynamics shift over time, strategies that were previously successful tend to become outdated— on occasion without the Adviser recognizing that fact before substantial losses are incurred. Even without becoming a completely outdated strategy, a given strategy’s effectiveness may decay in an unpredictable fashion for any number of reasons including, but not limited to, an increase in the amount of assets managed, the sharing of such strategy with other clients or affiliates, the use of similar strategies by other market participants and/or market dynamic shifts over time. Moreover, in time, there are likely to be an increasing number of market participants who rely on strategies that are similar to those used by the Adviser, which may result in a substantial number of market participants taking the same action with respect to an investment and some of these market participants may be substantially larger than the Accounts. Should one or more of these other market participants begin to divest themselves of one or more positions, a “crisis correlation”, independent of any fundamentals and similar to the crises that occurred, for example, in September 1998 and August 2007, could occur, thereby causing material, or even total, losses. Although the Adviser generally will attempt to deploy relative value strategies, this does not mean that investors will not be affected by adverse market conditions similar to those described above and/or others. There can be no assurances that the strategies pursued or implemented will be profitable, and various market conditions will be materially less favorable to certain strategies than others. Mispricings, even if correctly identified, may not be corrected by the market, at least within a time frame over which it is feasible for the Adviser to maintain a position. In the event that the perceived mispricings underlying the Adviser’s relative value trading positions were to fail to converge toward, or were to diverge further from, relationships expected by the Adviser, investors would incur a loss. Statistical Measurement Error. Many of the strategies employed by the Adviser rely on patterns inferred from the historical series of prices and other data. Even if all of the assumptions underlying the strategies were met exactly, the strategies can only make a statistical prediction, not afford certainty. There can be no assurance that the future performance will match the prediction. Further, most statistical procedures cannot fully match the complexity of the financial markets and as such, results of their application are uncertain. In addition, changes in underlying market conditions can adversely affect the performance of a statistical strategy.

Reliance on Technology. The Adviser’s strategies are fundamentally dependent on technology, including hardware, software and telecommunications systems. The data gathering, research, order execution, trade allocation, risk management, operational, back office and accounting systems, among others, utilized by the Adviser are all highly automated and computerized. Such automation and computerization is dependent upon an extensive amount of proprietary software, software created by affiliates and contractors of the Adviser, third-party hardware and software and client technology, infrastructure, software and hardware. The Adviser typically does not utilize design documents or specifications when building its proprietary software. The proprietary software code thus typically serves as the only definitive documentation and specification for how such software should perform. This proprietary software and third-party hardware and software are known to have errors, omissions, imperfections and malfunctions (collectively, “Coding Errors”). Coding Errors in third party hardware and software are generally entirely outside of the control of the Adviser. The Adviser seeks to reduce the incidence and impact of Coding Errors through a certain degree of internal testing and real-time monitoring, and the use of limitations and restrictions in the overall portfolio management system and often, with respect to proprietary software, in the software code itself. Despite such testing, monitoring and safeguards, Coding Errors will result in, among other things, the execution of unanticipated trades, the failure to execute anticipated trades, the failure to properly allocate trades, the failure to properly gather and organize available data, the failure to take certain risk reducing actions and/or the taking of actions which increase certain risk(s) all of which can and do have adverse (and potentially materially adverse) effects on investors and/or their returns. Coding Errors are often extremely difficult to detect, and, in the case of proprietary software, the difficulty of detecting Coding Errors is exacerbated by the lack of design documents or specifications. Regardless of how difficult their detection appears in retrospect, some of these Coding Errors will go undetected for long periods of time and some will never be detected. The degradation or impact caused by these Coding Errors can compound over time. Moreover, the Adviser will detect certain Coding Errors that it chooses, in its sole discretion, not to address or fix. The Adviser will not perform a materiality analysis on many of the Coding Errors it discovers in its software code. It should be assumed that Coding Errors and their ensuing risks and impact are an inherent part of investing with a process-driven, systematic investment manager such as the Adviser. Accordingly, the Adviser does not expect to disclose discovered Coding Errors to the Accounts or their investors. For the avoidance of doubt, Coding Errors are generally not considered trade errors under the Adviser’s trade errors policy. See “Trade Errors” below. The Adviser seeks, on an ongoing basis, to create adequate backups of software and hardware where possible but there is no guarantee that such efforts will be successful. Further, to the extent that an unforeseeable software or hardware malfunction or problem is caused by a defect, security breach, virus or other outside force, investors may be materially adversely affected. Reliance on Data. The Adviser’s strategies are highly reliant on the gathering, analyzing, using and manipulating large amounts of data from third-party and other external sources. The data is known to have errors, omissions and imperfections. The Adviser seeks to reduce the incidence and impact of data errors through a certain degree of internal testing and monitoring. Despite such testing and monitoring data errors will result in, among other things, the execution of unanticipated trades, the failure to execute anticipated trades, the failure to properly allocate trades, the failure to properly gather and organize available data, the failure to take certain risk reducing actions and/or the taking of actions which increase certain risk(s) all of which can and do have adverse (and potentially materially adverse) effects on investors and/or their returns. Further, it is not possible or practicable, however, to factor all relevant, available data into trading decisions. The Adviser will use its discretion to determine what data to gather with respect to any strategy and what subset of that data the Adviser’s strategies take into account on trading decisions. In addition, due to the automated nature of such data gathering and the fact that much of this data comes from third-party sources, it is inevitable that not all desired and/or relevant data will be available to, or processed by, the Adviser at all times. In such cases, the Adviser often will continue to make investment and trading decisions based on the data available to it. Additionally, the Adviser may determine that certain available data, while potentially useful in making investment and trading decisions, is not cost effective to gather due to either the technology costs or third-party vendor costs and, in such cases, the Adviser will not utilize such data. For all of the foregoing reasons and more, there is no guarantee that any specific data or type of data will be utilized in making investment and trading decisions on behalf of investors, nor is there any guarantee that the data actually utilized in making investment and trading decisions on behalf of investors will be (i) the most accurate data available or (ii) free of errors. It should be assumed that the foregoing limitations and risks associated with gathering, cleaning, culling and analyzing large amounts of data from third-party and other external sources are an inherent part of investing with a process driven, systematic investment manager.

Cybersecurity Risk. The information and technology systems of the Adviser and of its service providers to the Accounts are vulnerable to potential damage or interruption from computer viruses, network failures, computer and telecommunication failures, infiltration by unauthorized persons and security breaches, usage errors by their respective professionals, power outages and catastrophic events such as fires, tornadoes, floods, hurricanes and earthquakes. Although the Adviser has implemented various measures designed to seek to manage risks relating to these types of events, if these systems are compromised, become inoperable for extended periods of time or cease to function properly, it may be necessary for the Adviser or its service provider to make a significant investment to fix or replace them and to seek to remedy the effect of such issues. The failure of these systems and/or of disaster recovery plans for any reason could cause significant interruptions in the operations of the Accounts and result in a failure to maintain the security, confidentiality or privacy of sensitive data, including personal information. While many investment advisers are subject to the same or similar risks in respect of their operations, these risks are particularly acute with respect to an investment in the Accounts due to the Adviser’s and the Accounts’ fundamental dependence on technology and data (see headings titled Reliance on Technology and Reliance on Data).

Trade Errors. As the Adviser’s trading program is entirely computer driven, the Adviser will not be subject to traditional trade errors (as defined in the Adviser’s trade error policy). Losses resulting from any trade errors will generally be borne by the Accounts except to the extent provided in the Investment Management Agreement. Accordingly, to the extent any trade errors occur, the Accounts and/or their returns may be materially adversely affected. Unless otherwise required by agreement, the Adviser will not notify the Accounts that a trade error has occurred. Risk of Process Changes. As an evolving company, there can be no guarantee that any of the numerous processes developed by the Adviser to perform various functions (including, without limitation, processes related to data gathering, research, order execution, trade allocation, risk management, compliance, operations and accounting) will not change over time or, in some cases, cease altogether (such changes or cessations, “Process Changes”). Except as restricted by rule, regulation, requirement or law, the Adviser reserves the right to make Process Changes in its sole and absolute discretion. The Adviser may make Process Changes due to: (i) external factors such as, without limitation, changes in law or legal/regulatory guidance, changes to industry practice, market factors or changes to external costs; (ii) internal factors such as, without limitation, personnel changes, changes to proprietary technology, security concerns or updated cost/benefit analyses; or (iii) any combination of the foregoing. Effects of Process Changes are inherently unpredictable and may lead to unexpected outcomes which ultimately have an adverse impact on one or more investors. In addition, certain Process Changes, for example certain Process Changes made due to changes in law or legal/regulatory guidance, may be made despite the Adviser’s belief that such Process Changes will have an adverse impact on one or more Accounts or investors. Finally, while the Adviser may notify the Accounts about certain of its Process Changes, the vast majority will be made without any such notification.

Execution Risk. Even if the Adviser identifies correct securities, the success of the strategy also depends on the ability of brokers to execute orders timely. Many trades will require almost immediate execution in order to profit from statistical deviations in the price of a security. There is a possibility that a broker may not be able to fill the Adviser’s trade. This may result the Accounts holding a short position in one security without a proper long order filled. This could lead to significant losses for the Accounts.

Price Limits (so-called “Circuit Breakers”). Certain exchanges do not permit trading at prices that represent a fluctuation in price during a single day’s trading beyond certain set limits. If prices fluctuate during a single day’s trading beyond those limits, which conditions have in the past sometimes lasted for several days in certain Instruments, the Adviser could be prevented from promptly liquidating unfavorable positions and thus be subject to substantial losses.

Short Selling Risk. The Adviser’s investment strategy involves entering into short sale positions, both directly and indirectly (including through the use of swaps). In certain cases, a short sale creates the potential risk of an unlimited loss, in that the price of the underlying security could theoretically increase without limit, thus increasing the cost to the Accounts of buying that security to cover the short position. If the Accounts is not able to maintain the ability to borrow securities sold short, it 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 or at prices quoted in the market. There is the risk that the Instruments borrowed by the Adviser in connection with a short sale would need to be returned to the lender on short notice. If such request for return of Instruments occurs at a time when other short sellers of the subject Instrument are receiving similar requests, a “short squeeze” can occur, which would reduce the available supply, and thus increase the cost, of the borrowing of such securities and availability (if at all) such securities. Purchasing securities to close out a short position can itself cause the price of the securities to rise further, thereby exacerbating the loss.

Leverage – In the event the investors of the Accounts borrows funds or otherwise leverages the Accounts, the amount of borrowings which the Accounts may have outstanding at any time may be substantial in relation to its capital. Any event which adversely affects the value of an investment by the Accounts would be magnified to the extent that the Accounts are leveraged. The cumulative effect of the use of leverage in a market that moves adversely to the Accounts’ investments could result in a substantial loss to the Accounts which would be greater than if the Accounts were not leveraged. The use of leverage may create interest expenses for the Accounts, which can exceed the investment return from the borrowed funds. Turnover and Transactions Costs – The turnover rate of the Accounts’ investment portfolio may be significant, potentially involving substantial brokerage commissions and fees and other transactions costs. Lack of Diversification – The Accounts’ portfolios will be comprised only of equities (except to the extent equities within the Account convert to other securities as a result of a corporate transaction) and are not diversified as they do not hold any other asset classes. Except as provided for in an agreement, the Accounts’ portfolio may not be widely diversified among sectors, industries, issuers, types of securities or geographic areas. Accordingly, the Accounts’ portfolios may be subject to more rapid change in value than would be the case if the Accounts were required to maintain a wide diversification. Instrument Risk – The Adviser’s investment strategies also face certain risks associated with the types of instruments in which they invest. The value of Instruments fluctuates in response to issuer, political, market, and economic developments. Changes in the financial condition of a single issuer can impact the market as a whole. Terrorism and related geo-political risks have led, and may in the future lead, to increased short- term volatility and may have adverse long-term effects on world economies and markets generally. Fluctuations can be dramatic over the short as well as over the long term and different parts of the market and different types of securities can react differently to these developments. As a result of a corporate action, or otherwise, certain of the investments made by the Adviser may become illiquid that could result in substantial losses.

Conflicts of Interest – Potential conflicts of interest may arise between the Adviser and its affiliates, on the one hand, and the Accounts on the other. Except to the extent restricted in any agreement, the Adviser and its affiliates may manage other accounts with objectives that may differ from the Accounts, or accounts with objectives that are similar to or overlap with the Accounts. Other conflicts of interest may arise with respect to (i) the compensation paid to the Adviser and its affiliates by the Accounts, (ii) the allocation of time and resources by the Adviser and its affiliates and their employees among the Accounts, and to other business, (iii) the allocation of investment opportunities in the event the Adviser manages more than one account, and (iv) valuation of assets.

Conflicts of Interest Relating to the Performance Fee – The allocation and calculation of the percentage of the Accounts’ net profits to the Adviser from the Accounts may create an incentive for the Adviser to cause the Accounts to make investments that are riskier or more speculative than would be the case if this allocation were not made.

Legal, Regulatory and Tax Risk – Legal, regulatory and tax developments that may adversely affect the Accounts could occur at any time. Securities are subject to comprehensive statutes, regulations and margin requirements enforced by the SEC, other regulators and self-regulatory organizations and exchanges authorized to take extraordinary actions in the event of market emergencies.

THE FOREGOING LIST OF RISK FACTORS DOES NOT PURPORT TO BE A COMPLETE ENUMERATION OR EXPLANATION OF THE RISKS INVOLVED IN THE ADVISER’S METHODS OF ANALYSIS AND INVESTMENT STRATEGIES USED IN FORMULATING INVESTMENT ADVICE OR MANAGING ASSETS. please register to get more info

Registered investment advisers are required to disclose all material facts regarding any legal or disciplinary events that would be material to a client’s or prospective client’s evaluation of the Adviser or the integrity of the Adviser’s management. There are no legal or disciplinary events that would require disclosure in response to this Item. please register to get more info

None. please register to get more info

Personal Trading Code of Ethics and Personal Trading Pursuant to Rule 204A-1 of the Advisers Act, the Adviser has adopted a written Regulatory Compliance Manual and Code of Ethics (the “Code”) predicated on the principle that the Adviser owes a fiduciary duty to its clients. The Code is designed to address and avoid potential conflicts of interest and is applicable to all officers, directors, members, partners or employees of the Adviser, its affiliates and certain of its/their consultants (the “Employees”). The Adviser requires its Employees to act in its clients’ best interests, abide by all applicable regulations and avoid any action that is legally or ethically improper.

A copy of the Adviser’s Code is available upon written request to: Cheryl Slusarchuk, Chief Compliance Officer, NumerixS Investment Technologies Inc, 1055 West Georgia St, 24th Floor, Vancouver, British Columbia, Canada, V6E 3P3.

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General

The brokerage arrangement utilized by the Accounts is prescribed by the Accounts. Generally, these directed brokerage arrangements are less flexible and as a result, the Adviser may not achieve the most favorable execution on client securities transaction. Furthermore, directed brokerage arrangements may result in higher fees for clients.

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The Adviser reviews trading data and other reports for each Account on a regular basis. The Adviser serves as the sub-adviser to the Accounts and the primary adviser to the Accounts, who has direct access to the Accounts trading data and performance, is responsible to providing reports to investors in the Accounts.

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The Adviser does not currently compensate any person for referrals of clients. However, the Adviser may enter into such arrangements in the future. please register to get more info

The Adviser does not have access to or custody of the Account’s assets within the meaning of Rule 206(4)- 2 of the Investment Advisers Act of 1940. The Accounts receives monthly statements directly from the custodian and have an ability to independently verify the value of the Accounts assets. please register to get more info

Subject to the limitations and restrictions in the Investment Management Agreement, the Adviser has sole discretion to determine, policies and strategies, the securities to be purchased or sold and in what amounts. please register to get more info

The Adviser does not vote client securities. please register to get more info

This item does not apply to the Adviser. Item 19: Requirement for State-Registered Advisers This item does not apply to the Adviser. please register to get more info