SCM - Background SCM is an investment advisory firm which was founded August 1, 2002. SCM is organized as a limited partnership under the laws of the State of Delaware. It is located at 225 Avenue I, Suite 205, Redondo Beach, CA 90277. SCM provides investment management and advisory services on a discretionary and non-discretionary basis to pooled investment vehicles (“PIVs”) and, from time to time, separately-managed accounts (“SMAs”) for specific investors.

Discretionary Investment Management Services for SCM-Sponsored Funds

SCM provides investment management services on a discretionary basis regarding U.S. and non-U.S. securities, primarily to U.S. and non-U.S. PIVs structured as hedge funds.1 Such PIVs are structured to be exempt from registration under the Investment Company Act. Interests in the PIVs are offered on a non-public basis pursuant to exemption from registration under the Securities Act of 1933 and Regulation D promulgated thereunder. SCM provides investment management services subject to the terms and conditions contained in the offering and governing documents for each such PIV. Typically, each PIV’s offering and governance documents grant SCM exclusive power and authority with respect to the management of the PIV, including discretionary authority over their assets and responsibility for managing their securities portfolios on a daily basis.

At the present time, SCM serves as the general partner or investment manager on a discretionary basis for the following PIVs, with approximately $188,972,293 in assets under management as of December 31, 2018:


• Spectrum Fund, L.P., f/k/a Rimrock Spectrum Fund, L.P., a Delaware limited partnership formerly known as Tranquility Fund, L.P. (“Onshore Fund”);


• Spectrum (Cayman) Fund, Ltd., a Cayman Islands exempted company formerly known as Rimrock Spectrum (Cayman) Fund, Ltd., and formerly known as Tranquility Fund, Ltd., a related offshore fund for foreign investors and certain tax- exempt U.S. investors (“Offshore Fund”); and


• Spectrum Master Fund, Ltd., a Cayman Islands exempted company formerly known as Rimrock Spectrum Master Fund, Ltd, and formerly known as Tranquility Master Fund, Ltd., a master fund related to the Onshore and Offshore Funds (“Master Fund” and, together with the Onshore Fund and the Offshore Fund, the “Funds”). 1 For purposes of this brochure and consistent with Investment Advisers Act jurisprudence, each PIV for which SCM provides investment management services constitutes a single “client” of SCM, separate and apart from investors in such PIV. These Funds seek to generate high risk-adjusted returns with low correlation to traditional asset classes through a portfolio of mostly credit securities. These Funds have also invested from time to time in certain U.S. commercial property assets. Information about these Funds, including about fees and other material information, is contained in each Fund’s offering documents. Fund offering documents are available to clients and prospective clients, and to investors and prospective investors in the Funds, upon request, subject to certain restrictions pursuant to Regulation D. SCM may in the future provide similar investment management services on a discretionary basis to other SCM and non- SCM sponsored PIVs and SMAs.

Non-Discretionary Investment Management Services

SCM has provided from time to time investment advisory services on a non- discretionary basis to clients advised by other investment advisers, such as pursuant to a sub-advisory agreement with the other investment adviser. Currently SCM does not provide any non-discretionary advisory services and is not party to any sub-advisory agreement, although it reserves the right to do so in the future.

SCM’s Principals and Management

SCM is principally owned by Mr. Jeff Saye. He is currently a Portfolio Manager and President of SCM. Jeff began his investment career in 1994 at Pacific Investment Management Company (“PIMCO”), where he was a Vice President in the Portfolio Management group and traded adjustable rate mortgages, commercial-mortgage backed securities (“CMBS”) and credit sensitive residential and commercial products. He then worked at Goldman Sachs, where he was a Vice President and traded CMBS and co- managed a $2 billion portfolio of un-securitized commercial real estate whole loans. Subsequent to Goldman Sachs, Jeff worked at American Commercial Capital, Inc. and Fortress Investment Group prior to becoming a shareholder and Portfolio Manager at Old Hill Partners, where he managed the bond portfolios of the Footbridge Funds and the FLT Opportunity Funds. Jeff graduated Phi Beta Kappa with a BA in Physics from Pomona College and received his MBA from the Stanford Graduate School of Business. Mr. Saye owns 64% of the partnership interests of SCM directly, and 1% indirectly through SCM’s general partner, Saye Capital, Inc.

Mr. Greg Miller, CFA, joined SCM in August 2005 and is currently Portfolio Manager & Chief Compliance Officer. Greg began his investment career in 1998 at PIMCO, where he was a Vice President and trader. Greg started as a Portfolio Associate for generalist portfolios and trading assistant for the mortgage-backed securities (“MBS”) and asset-backed securities (“ABS”) specialists. He then worked as a structured finance Credit Analyst in the MBS and ABS group with a focus on collateralized debt obligations (“CDO”) and home equity ABS. He most recently worked in the High Yield group with a focus on bank loan trading, collateralized loan obligations (“CLO”) and floating rate corporate fund products. Greg graduated with a BA in Economics from Trinity College in Connecticut. Mr. Miller owns 35% of the partnership interests of SCM. SCM’s History as a Registered Investment Adviser SCM most recently registered as an investment adviser with the SEC in March 2012. SCM had also been an SEC-registered investment adviser previously, and prior to that time it was registered with the State of California. SCM withdrew its prior registration on or about September 25, 2009. SCM did so in connection with certain agreements entered into effective June 30, 2009, pursuant to which SCM’s principals joined Rimrock Capital Management, LLC. Pursuant to these agreements, SCM transferred to Rimrock its general partner interest in the Onshore Fund, the Offshore Fund and the Master Fund (the “Transaction”). On or about August 2010, SCM’s principals and Rimrock determined to unwind the Transaction. As a result thereof, SCM once again became the general partner or investment manager as applicable to the Onshore Fund, the Offshore Fund and the Master Fund, and these Funds filed amendments to their governing documents, changing their names to Spectrum Fund, L.P., Spectrum (Cayman) Fund, Ltd., and Spectrum Master Fund, L.P., respectively. please register to get more info

SCM does not have a standardized fee schedule and may charge management fees based on AUM, fixed fees and/or performance-based compensation in accordance with the terms of the offering and governing documents for the Funds. SCM typically charges a management fee (“Management Fee”) consisting of 0.125% per month (or 1.5% per year), payable to SCM in advance on the date of each such investor’s admission to the applicable Fund and on the first business day of each calendar month thereafter. In addition, at the end of each calendar year, SCM typically receives an annual aggregate profit allocation or carried interest equal to 20% of the net profit allocated (“Profit Allocation”) to each capital account of each investor in the Fund for that period (or shorter period until any withdrawal).

SCM may, from time-to-time in its sole discretion, negotiate, reduce or waive the Management Fee or Profit Allocation in whole or in part for any individual investor in a Fund. SCM also deducts Management Fees and Profit Allocations due from each investor’s respective capital account in accordance with the terms of the Funds’ offering and governing documents. If an investor is allowed or required to withdraw all or a portion of its interest in a Fund other than at the end of a calendar month, a pro-rated portion of the Management Fee paid by such investor will be refunded in accordance with the terms of the applicable Fund’s offering documents. Each Fund typically pays all costs and expenses incurred by or on behalf of the Fund or by or on behalf of SCM as general partner or investment manager in connection with the formation of the offer and sale of interests, and the management and operation of the Fund, including brokerage costs, legal fees and other transaction costs. The Funds will incur other investment-related fees such as brokerage commissions, transaction costs and other related costs and expenses. The Funds also incur certain charges imposed by custodians, brokers, custodial fees, deferred sales charges, odd-lot differentials, transfer taxes, wire transfer and electronic fund fees, and other fees and taxes on brokerage accounts and securities transactions. For additional information regarding fees, please see Item 12. Net profit or loss of the applicable Fund is allocated at the end of each calendar month (or at other times when a valuation is performed in accordance with the terms of a Fund’s governing documents) among each investor’s capital accounts in proportion to the relative values of such capital accounts. For more detailed information regarding fee structures and other material information with respect to the Funds, please see the offering documents for the applicable Fund. With respect to separately-managed accounts and sub-advisory relationships, SCM will also receive management fees and profit allocations, although the exact amounts will typically depend on the level of services provided, market practice, and the amount and type of assets being managed. please register to get more info

SCM receives performance-based fees, defined as fees based on a share of capital gains on or capital appreciation of the assets of a client, in the form of Profit Allocations with respect to the capital accounts of investors in the Funds. For additional information regarding SCM’s Profit Allocations, please see Item 5.

Such fee arrangements create an incentive to favor performance-based fee paying accounts over other accounts in the allocation of investment opportunities. SCM has procedures designed and implemented to ensure that all clients are treated fairly and equally, and to prevent this conflict from influencing the allocation of investment opportunities among clients. please register to get more info

SCM provides investment management services on a discretionary basis primarily to U.S. and non-U.S. PIVs and, from time to time, to SMAs. SCM may also provide from time to time investment advisory services on a non-discretionary basis. For additional information regarding the types of clients to whom SCM provides investment management services, please see Item 4. please register to get more info

The Funds seek to generate high risk-adjusted returns with low correlation to traditional asset classes through a portfolio of mostly credit securities with a focus on securitized assets. The Funds are designed to exploit what SCM believes to be asset pricing inefficiencies consistently found in capital markets due to structural and technical factors as well as institutional biases. The Partnership primarily exploits these inefficiencies through the monetization of the credit premium, liquidity premium and complexity premium. Investments will be primarily focused on niche and out of favor sectors backed by real assets, including smaller and less liquid securities. Specifically, the General Partner will concentrate on (i) secondary positions in asset-backed, mortgage-backed and corporate credit securities, (ii) providing liquidity to sellers of smaller bond positions of less than $5 million, (iii) securities issued by small or one-time issuers, (iv) securities in which the underlying collateral may be unusual and (v) securities with complex structural characteristics. The General Partner believes it has particular skill and experience in analyzing, valuing and trading these complex and less liquid securities. The Funds typically employ active trading (buying and selling of bonds) and leverage as a means of capturing the value in these types of securities. The Funds will seek to mitigate funding risk by diversifying across counterparties using term and rolling financing (which involves periodic refinancing through short-term instruments). Other risks in the portfolio, including credit and duration (interest rate) risk will be regularly monitored and may be hedged using a variety of instruments designed to offset said risks, including, but not limited to, swaps, caps and floors, futures and forward contracts. Changes in market conditions, such as interest rates, or an investment’s specific situation could nevertheless involve significant losses. In addition, frequent trading can reduce investment performance through higher brokerage fees and other transaction costs and taxes. Many Fund investments are illiquid and subject to the risk of severe market disruption, which may make it difficult for the Funds to value these assets or exchange them for cash in order to fund investor withdrawals. Investors and potential investors in the Funds are strongly encouraged to note that SCM is granted exclusive and discretionary control with respect to the management of the Funds and their portfolios. Fund offering and governing documents do not impose limits on the types of positions, securities, or instruments the Funds may invest in or take; the sectors or markets (domestic or foreign) within which investments may be made; the investment or trading strategies they may use; their ability to borrow or use other types of leverage; or, the concentration of the Funds’ investments. The Funds’ portfolios, therefore, may be subject to swings in value and could involve significant losses. In addition, credit markets have also experienced significant disruption in recent years, and evolving regulation in response thereto, and may continue to experience changing conditions in the future.

Investors and prospective investors are also strongly encouraged to note that investing in securities involves risk of loss that clients should be prepared to bear. This includes the Funds which entail substantial risk and are designed for sophisticated investors. For additional information regarding potential risks associated with investing in the Funds and their investment strategies, please see each respective Fund’s offering documents. please register to get more info

Neither SCM nor any of its management persons has had or has pending any legal or disciplinary events, or fines, penalties or awards levied against it or them, or which would implicate wrongdoing or reflect on SCM’s advisory business or the integrity of its management. please register to get more info

Neither SCM nor any of its management persons are registered, or have an application pending to register, as a broker-dealer, a registered representative of a broker- dealer, or as a futures commission merchant, commodity pool operator, commodity trading advisor, or as an associated person of any of the foregoing entities. However, SCM is an exempt commodity pool operator, and all of the Funds are currently relying on the exemption offered under Rule 4.13(a)(3).

For further information regarding SCM’s investment management and advisory services and clients, please see Item 4. Neither SCM, its affiliates, nor any of their respective principals or management is required to devote their time exclusively to any one client; they currently provide investment management and advisory services to multiple clients; and they may provide similar services to other clients in the future. The provision of services to multiple clients does and may in the future present conflicts of interest, including but not limited to the selection, allocation, negotiation, and administration of investments among clients, as well as conflicting demands on the time, attention, and incentives for SCM’s provision of services. SCM attempts to address such conflicts to the maximum possible extent on a basis that is fair and equitable to each client pursuant to the terms of the offering and governing documents or other governing contracts with respect to each client. For a more detailed discussion of potential conflicts of interests associated with the Funds, please see each Fund’s offering documents. please register to get more info

Interest in Client Transactions and Personal Trading
SCM has adopted a Code of Ethics (the “Code”), which declares its fiduciary duties and those of its personnel (“Employees”). Mr. Greg Miller serves as Chief Compliance Officer of SCM with primary responsibility for administration of the Code. The Code requires Employees to promptly report potential violations to the Chief Compliance Officer for investigation and corrective action if necessary. The Code contains policies and procedures, which among other things:


• Requires Employees to act in compliance with applicable securities law, rules and regulations;
• Prohibits trading on the basis of material nonpublic information;
• Requires maintenance of the confidentiality of client information;
• Places certain restrictions with respect to giving and receiving of gifts, entertainment, political contributions, and outside Employee business activities;
• Prohibits Employees from taking personal advantage of opportunities belonging to clients;
• Requires SCM’s Access Persons, as that term is used in Rule 204A-1 of the Investment Advisers Act, to provide certain periodic reports of their personal securities holdings and transactions for review, and to obtain preclearance for certain personal securities transactions. Subject to the Code, Employees are permitted to buy, sell, or hold for their own personal accounts, securities that SCM may also buy, sell, or hold. To help address potential conflicts between the interests of clients and those of Employees, the Code generally requires Employees to submit a list of their securities holdings to SCM’s Chief Compliance Officer, both upon employment and annually. On no less than a quarterly basis, Employees are also required to provide the Chief Compliance Officer with a complete list of transactions in certain securities that occurred during the preceding quarter. Employee investment in many types of securities is also subject to pre-clearance by the Chief Compliance Officer, although this is not required with most U.S. Government securities, mutual funds and certain other types of securities that SCM believes to present relatively less risk of conflict.

SCM’s Code is available upon request to clients and prospective clients, and to investors and prospective investors in the Funds for which SCM provides investment management and advisory services. please register to get more info

SCM places all orders for the purchase and sale of securities in such markets and through such broker-dealers as in SCM’s best judgment offer the most favorable price and market for the execution of each transaction. In selecting a broker or dealer for a transaction SCM may consider a number of factors, including, for example, net price, reputation, financial strength and stability, efficiency of execution, block trading and block positioning capabilities, willingness to execute related or unrelated difficult transactions in the future, research services provided to SCM, and other matters ordinarily involved in the receipt of brokerage services generally. Pursuant to the Funds’ offering and governing documents, SCM is not required to obtain the lowest commission or best net price for a Fund on any particular transaction, and SCM may effect securities transactions which may cause the Fund to pay an amount of commission in excess of the amount another broker would have charged; provided, however, that SCM determines in good faith that such amount of commission is reasonable in relation to the value of brokerage and research services provided by such broker, viewed in terms of either the specific transaction or SCM’s overall responsibilities to the accounts for which SCM exercises investment discretion. Pursuant to the terms of the applicable Fund’s offering documents, investors are advised that the receipt and use of such services will not reduce SCM’s customary and normal research activities. SCM does not intend to use “soft dollars” to pay for third party research products. Pursuant to the terms of the offering and governing documents of the Funds, SCM may nevertheless pay brokerage commissions in excess of that which another broker might have charged for effecting the same transaction, including in recognition of the value of brokerage and research services provided, or the supply or payment or rebate a portion of the Fund’s brokerage commission, or the cost of brokerage, research, property or services, which may inure to the benefit of the Fund, SCM’s operations, or other SCM clients. Notwithstanding the foregoing, the use of soft dollar arrangements in brokerage transactions can create conflicts of interest including because: (i) SCM would not have to pay to obtain such research, products or services; (ii) SCM may be incentivized to select brokers or dealers, in whole or in part, on the basis of the receipt of soft dollar benefits, rather than the Fund’s interest in receiving most favorable execution; (iii) in the event SCM were to cause clients to pay commissions (or markups or markdowns) in return for soft dollar benefits, such commissions, markups or markdowns may be higher than brokerage services that do not include the provision of soft dollar benefits; and (iv) the benefit of any such research, products, or services may or may not be shared with and inure to the benefit of the Funds or other SCM clients or prospective clients. SCM tries to avoid these conflicts by having a general policy against the use of soft dollar arrangements.

SCM does not consider, in selecting or recommending broker-dealers, whether it or a related person receives client referrals from a broker dealer or a third party.

For further information regarding brokerage issues with respect to the Funds, please see the offering documents of for each Fund.

SCM, as general partner or investment manager of the Funds may also aggregate sale and purchase orders of securities held by a Fund with similar orders being made simultaneously for other accounts managed by SCM if, in SCM’s reasonable judgment, such aggregation is reasonably likely to result in an overall economic benefit to the Fund based on an evaluation that the Fund is benefitted by relatively better purchase or sale prices or beneficial timing of transactions, or a combination of these and other factors. In many instances, the purchase or sale of securities for a Fund will be affected simultaneously with the purchase or sale of like securities for other accounts. Such transactions may be made at different prices, because of the volume of securities purchased or sold. In that event, the average price of all securities purchased or sold in those transactions may be determined, and at SCM’s sole discretion, the Fund may be charged or credited the average transaction price. Transaction costs charged to a Fund may differ from those charged to other clients as a result of those clients’ specific brokerage account arrangements. For additional information regarding trade aggregation issues with respect to the Funds, please see the offering documents of such Fund. SCM generally does not provide for brokerage arrangements for PIVs for which it provides investment advisory services on a non-discretionary basis. SCM does not currently provide non-discretionary investment advisory services, however. please register to get more info

SCM manages each Fund’s securities portfolio on a daily basis. Analysis and review is conducted by SCM’s management, Messrs. Jeff Saye and Greg Miller. Each investor in a Fund will receive monthly capital account statements, including Fund performance. Each investor will also receive annual audited financial statements for their applicable Fund and, in the case of the Onshore Fund, certain tax-related information including a Schedule K-1. please register to get more info

Not applicable to SCM. please register to get more info

Custody of the assets of the Funds and their investors is maintained with qualified custodians. With respect to SCM’s currently sponsored Funds, SCM has selected The Northern Trust Company (“Northern Trust”), and J.P. Morgan Securities LLC (“J.P. Morgan”) and Interactive Brokers LLC (“Interactive Brokers”) as the custodians (each a “Custodian” and collectively “Custodians”), pursuant to agreements between the Funds and Custodians. SCM may in its discretion appoint other brokers and custodians.

The Funds have entered into an administration agreement with Northern Trust International Fund Administration Services (Ireland) Limited (the “Administrator”), which serves as the Funds’ Administrator. Pursuant to the administration agreement between the Funds and the Administrator, the Administrator performs the services necessary for the Funds’ administration (other than making investment decisions), including:


• communicating with investors;
• communicating with the general public relating to the Funds;
• processing subscriptions, withdrawals and redemptions;
• calculating net asset values and Capital Account balances;
• coordinating with the independent auditors for the annual audit of the financial statements and the preparation by the auditors of statutory and tax filings; and
• disbursing redemption and withdrawal proceeds with respect to the Funds and making distributions. The Administrator sends to each investor annual audited financial statements for the relevant Fund and, in the case of the Onshore Fund, certain tax-related information including a Schedule K-1. please register to get more info

SCM provides investment management services to the Funds on a discretionary basis. The Funds’ offering and governing documents vest exclusive power and authority with SCM, as general partner or investment manager, over the management of the Funds, including discretionary authority with respect to the Funds’ assets and portfolio. Investors do not take part in the management or operation of the Funds, and have no opportunity to select or evaluate in advance the Funds’ investments or strategies. The Funds’ governing documents grant SCM power of attorney as may be necessary or advisable to carry out the business of each Fund. For additional information, please see each Fund’s respective offering documents. please register to get more info

Generally, with respect to the Funds, SCM has authority to vote its clients’ proxies. SCM has adopted a formal written proxy policy. SCM will provide its proxy policy to clients and to prospective clients, and investors and prospective investors, upon request. SCM will also provide clients information on how the client’s proxies have been voted upon the client’s request. SCM’s policy is that all decisions be made solely in the best interest of the client. SCM will act in a prudent and diligent manner intended to enhance the economic value of the assets of the client’s account.

SCM’s Chief Compliance Officer is responsible for ensuring that all proxies received are voted in a timely manner and in a manner consistent with SCM’s determination of the client’s best interests. SCM maintains a set of voting guidelines categorized by subject matter listing common types of issues presented by a proxy request, and indicate whether for a given issue SCM’s default position is to oppose or approve a proxy proposing such issue. SCM will generally vote all proxies in accordance with its guidelines. SCM recognizes, however, that some proxy proposals require special consideration which may dictate that SCM make an exception.

When voting proxies on behalf of the Funds, SCM will seek to avoid possible conflicts of interest as follows in accordance with its proxy policy:


• Where SCM identifies a potential conflict of interest, SCM will initially determine whether such potential conflict is material;


• If a potential conflict is determined to be material, SCM will inform the client of the conflict and SCM’s voting decision, discuss the proxy vote, fully disclose the material facts and seek the applicable Funds’ underlying investors’ consent to vote as intended, and/or seek the recommendation of an independent third party. For additional information regarding SCM’s proxy voting policies and procedures, please see SCM’s proxy policy. please register to get more info

SCM does not require or solicit payment of $1,200 in fees per client, six months or more in advance. SCM is not aware of any financial condition that is reasonably likely to impair SCM’s ability to meet its contractual commitment to its clients. SCM has not been the subject of a bankruptcy petition at any time during the past ten years. please register to get more info