Cypress Capital Partners, (“CCP”) is a professional investment advisor, founded in 2006,
specializing in municipal bond portfolio management. From our office in Chicago,
Illinois, Cypress Capital Partners is positioned to serve a diverse national client base,
such as corporate executives, small business owners and commercial banks.
Our mission is to create customized municipal bond portfolios based upon each client’s
objectives, goals, liquidity, income and tax status while maximizing after-tax returns.
Using a systematic, proactive approach, our goal is to produce taxable or tax-exempt
income, preserve capital and reduce the client’s overall portfolio risk. Cypress Capital
Partners will identify customized solutions designated to meet the client’s investment
needs, while emphasizing the maximization of after-tax returns.
Cypress Capital Partners, LLC was established in 2006 and is wholly owned by
management. The principal owners of Cypress Capital Partners, LLC are Cheryl
Laughridge (50%), Andrea Hosbein (25%) and William Laughridge (25%).
As of January 1, 2019 Cypress Capital Partners managed approximately $334,720,000 in
regulatory assets under management on a discretionary basis.
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Cypress Capital Partners, LLC charges the client a fee based upon the assets under
management.
The fee structure based upon assets under management is as follows:
$2,000,000 to $14,999,999 0.32%
$15,000,000 to $49,999,999 0.27%
$50,000,000 to $99,999,999 0.24%
The services included with the fee are as follows:
• The fee includes professional investment management, including research and security
selection.
• Custody of securities at a national custodial firm
• Regular comprehensive reporting
• Access to accounts via the custodian’s website
• Tax reporting and monitoring of capital gains and losses
The fee is billed quarterly and payable at the end of the quarter for the management
services provided (in arrears). The fee is calculated on the market value of the assets
under management and is adjusted to reflect additional funds contributed or withdrawn
during the quarter. CCP allows the client to decide whether the fee is automatically
deducted from their account at the safekeeping firm or whether they would prefer to remit
a check for their fee.
On occasion, special requirements of the client result in advisory contracts with terms or
fee arrangements differing from those set forth in CCP’s standard fee arrangement. This
includes situations in which the fee may be negotiated.
CCP’s fees are exclusive of transaction fees, and other related costs and expenses which
shall be incurred by the client. In addition to CCP’s fees, clients may incur certain
charges imposed by custodians such as wire transfer fees.
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AND RISK OF LOSS
Research Process
CCP’s investment philosophy emphasizes the selection of securities for client portfolios
by means of fundamental analysis. Based on the nature of the prospects for the issuing
municipality, which may be assessed by reference to its prior financial history and CCP’s
knowledge of the region, CCP will reach a judgment on the value of the municipal
relative to its current price.
Municipal Fixed Income
CCP’s fixed income philosophy is founded on the belief that excess returns are achieved
by investing in municipalities that offer relative value within the context of current
pricing and CCP’s top-down forecast. For municipal bond portfolios, CCP’s emphasis is
on segments of the yield curve that offer strong risk/reward characteristics and capture
trading inefficiencies unique to the municipal bond market.
Investment Restrictions
Concentration limits on investments may be imposed to maintain a desired level of
diversification in client portfolios. These limits include security‐specific limits, state
concentration limits.
Principal Investment Risks
Investing in securities involves risk of loss that clients should be prepared to bear. While
CCP’s investment approaches are designed to mitigate risk, there is no guarantee that
clients will not lose money. Following are the various types of risk that may be present
depending on the level of exposure the strategy has to a particular type of investment:
Market Risk
The price of a bond 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.
Issuer Risk
The price of any security issued by a municipality may drop in reaction to events and
conditions that impact the finances of a particular credit, state or region. For example,
changes in elected officials or tax structure.
Interest-rate Risk
Fluctuations in interest rates may cause prices of fixed income securities to fluctuate. For
example, when interest rates rise, yields on existing bonds become less attractive, causing
their market values to decline.
Credit (Default) Risk
The owner of a fixed income security may lose money if the issuer is unable or unwilling
to make timely principal and/or interest payments or to otherwise honor its payment
obligations. Further, when an issuer suffers adverse changes in its financial condition or
credit rating, the price of its debt obligations may decline and/or experience greater
volatility. These adverse changes can also affect the liquidity of an issuer’s debt securities
and make them more difficult to sell.
Prepayment Risk
When the issuer of a fixed income security has the right to prepay principal, if it exercises
that right earlier or at a higher rate than expected, an investor may incur losses from
being unable to recoup the initial investment and/or from having to reinvest in lower-
yielding securities. This can have an adverse effect on income, total return and/or price of
the security. Prepayment risk tends to be highest in periods of declining interest rates.
Housing bonds and BABs are subject to prepayment risk.
Reinvestment Risk
This is the risk that future proceeds from investments may have to be reinvested at a
potentially lower rate of return (e.g., interest rate).
Liquidity Risk
Liquidity is the ability to readily convert an investment into cash. The less liquid an asset
is, the greater the risk that, if circumstances require an investor to sell the asset quickly, it
will be sold at a price below fair value. Generally, an asset is more liquid if it represents a
standardized product or security and there are many traders interested in making a market
in that product or security.
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.
Counterparty Risk
The institutions (such as banks) and prime brokers with which a manager do business, or
to which securities have been entrusted for custodial purposes, could encounter financial
difficulties. This could impair the operational capabilities or the capital position of a
manager or create unanticipated trading risks.
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AFFILIATIONS
No persons employed at Cypress Capital Partners, LLC are registered representatives of a
broker-dealer nor are they registered as a futures commission merchant, commodity pool
operator or a commodity trading advisor or an associated person with any such entities.
No conflicting relationships exist between CCP and any other financial entity or person.
CCP does not select or recommend other financial advisors for its clients.
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CLIENT TRANSACTIONS AND PERSONAL TRADING
Cypress Capital Partners, LLC has a Code of Ethics in place to which all employees are
subject. The objective of the Code of Ethics is to assure that employees do not engage in
insider trading or purchase or sell securities in their personal accounts that would in any
way conflict with transactions executed on behalf of the Firm’s clients. All employees are
required to submit copies of brokerage and any other investment accounts in which they
have a beneficial for review by the Firm’s Chief Compliance Officer.
All municipal securities transactions must be reviewed by Bill Laughridge, Chief
Compliance Officer to assure that appropriate priority and consideration has been given
to client accounts and that no conflict exists in regard to employee personal investments.
Our Code of Ethics is available upon request from Bill Laughridge at
[email protected]
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CCP seeks best execution in all securities transactions executed through the network of
municipal brokers and dealers with which the Firm has relationships. Generally, the price
at which a security is purchased or sold and the charges associated with transactions are
indicative, but not determinative, of best execution.
A broker or dealer that offers the lowest cost securities is not necessarily the broker or
dealer that provides best execution. CCP seeks to execute securities transactions for
clients in such a manner that clients’ total cost in each transaction is most favorable and,
in selecting brokers or dealers, considers the factors it deems relevant including:
• Availability of suitable securities.
• The nature and character of the security or instrument being traded and the existing and
expected activity in the markets in which the security or instrument is purchased or sold.
• The desired timing of the transaction.
• The Firm’s knowledge of market levels of comparable securities and prevailing bid/ask
spreads.
• A broker’s or dealer’s capital strength and stability, its execution, clearance and
settlement capabilities, and the reasonableness of the prices offered for specific securities.
• The quality and extent of the research services provided by the broker or dealer.
• A broker’s or dealer’s responsiveness and the full range of services provided are also
factors considered in selecting transaction counterparties.
CCP does not engage in any soft dollar arrangements (i.e. using commissions or markups
as payment for investment related products). CCP does not engage in any arrangements
where commissions or any transaction related charges are used to compensate brokers or
dealers or any other entities for client referrals. CCP generally does not accept accounts
requiring directed brokerage arrangements. The disparate nature of the municipal market
requires that the Firm have the flexibility to utilize any broker or dealer that offers
securities suitable for use in client accounts and the ability to seek to attain most
favorable pricing when securities are purchased or sold.
In the unlikely event a client directs the use of a particular broker-dealer, there can be no
assurance that the desired securities will be available or the most favorable price or
execution will be achieved. Newly purchased securities are allocated at the Firm’s
discretion among accounts with the objective of attaining equitable allocations on an
overall basis. Individual portfolio characteristics such as duration relative to target level,
representation in strategies utilized by the Firm, existing holdings of an issuer’s securities
and state and alternative minimum tax considerations are considered when making
allocations. If a portion of a block of bonds held in several accounts is sold, accounts
chosen to participate in the sale will be based on account portfolio structures relative to
target levels, capital gains considerations and state tax implications.
The Firm does not swap bonds between non-related accounts.
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All accounts are reviewed at least quarterly on a holding by holding basis to assure that
portfolios are adequately diversified and structured in accord with the Firm’s duration
targets for the accounts. Reviews of credit are ongoing. All clients are asked at least
annually regarding account beneficiaries’ state of residence, whether they are subject to
the alternative minimum tax and whether long and short-term capital gains and losses
have been realized in other components of their overall portfolios that might influence the
Firm’s trading strategies.
Cypress Capital Partners, LLC sends clients quarterly reports that provide listings of
assets managed at quarter end, average purchase yield to maturity, investment
performance and investment management fees charged.
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CCP does not custody any client assets. All client assets are held by a qualified custodian.
Accordingly, clients should be receiving monthly statements from a qualified custodian.
CCP prepares and delivers to all clients valuations of their accounts quarterly, showing
cash and all currently held investments categorized by maturity market value and unit
cost. Clients may request more frequent or detailed reports in accordance with their
individual needs. CCP has a reasonable belief that the custodian is sending statements in
accordance with SEC’s Custody Rule. Reports or statements produced by the Firm are
provided to clients. The client is urged to compare the information provided by CCP with
the statements provided by the custodian.
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Accounts are only accepted on a discretionary basis on behalf of clients. Authority to act
on clients’ behalf is granted through the Firm’s investment advisory agreement.
Reasonable client restrictions regarding credit quality, liquidity parameters or types of
securities can be incorporated into the Firm’s investment process.
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Proxies are not applicable to securities issued by municipal entities or by the U.S.
government or its agencies. Therefore, the Firm does not vote proxies and does not have
a policy regarding proxies.
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CCP has no financial commitment that impairs its ability to meet contractual and
fiduciary commitments to clients, and has not been the subject of a bankruptcy
proceeding.
ITEM 19 – REQUIREMENTS FOR STATE REGISTERED ADVISERS Not applicable.
Part 2B of Form ADV
Brochure Supplement
March 30, 2018
Cypress Capital Partners, LLC
Chicago, IL 60611
312-397-9090
www.cypresscapitalpartners.com
This brochure supplement provides information about William Laughridge, Andrea
Hosbein and Cheryl Laughridge that supplements the attached Cypress Capital
Partners, LLC Brochure.
Please contact William Laughridge, Chief Compliance Officer, if you have any
questions about the contents of this supplement.
William Laughridge
Educational Background and Business Experience Disciplinary Information
William Laughridge is not a party to any legal action or subject to any regulatory
proceedings.
Other Business Activities
Mr. Laughridge is not engaged in other investment related businesses or occupations.
Additional Compensation Mr. Laughridge receives no additional compensation for providing advisory services
beyond that provided by Cypress Capital Partners, LLC.
Supervision of Investment Professionals All investment professionals are supervised by William Laughridge, the Chief
Complaince Officier. Mr. Laughridge determines the advice that is provided to clients
and instructs the investment professionals accordingly. He also monitors employee
compliance with the Firm’s Policies & Procedures, Code of Ethics and Privacy Policy.
Mr. Laughridge may be reached at 312-397-9090
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Open Brochure from SEC website