PDT Partners, LLC is a Delaware limited liability company that was formed in September 2010 and commenced its investment advisory activities on July 1, 2012. PDT Partners, LLC, together with its affiliates, (collectively, “PDT”, “our”, or “we”) is the successor to the Process Driven Trading group of Morgan Stanley (the “PDT Group”), which was founded in 1993 as a proprietary quantitative trading group within Morgan Stanley & Co. LLC (together with its affiliates, “Morgan Stanley”). The principal owner of PDT Partners, LLC is an entity with a number of equity partners (PDT Capital Group, L.P.) that is ultimately controlled by Peter Muller, our Chief Executive Officer. Morgan Stanley holds special, non-voting membership interests in PDT Partners, LLC, but is not an “advisory affiliate” or “related person” of PDT for purposes of the Investment Advisers Act of 1940 (the “Advisers Act”). Morgan Stanley does not have any responsibility for the management of PDT and does not provide any liquidity or other support to PDT or our clients, except to the extent provided through non-exclusive arm’s-length services, such as prime brokerage, for which PDT or our clients engage Morgan Stanley as a significant counterparty. PDT develops and deploys quantitative strategies to trade liquid assets globally. We provide investment advisory services to a group of pooled investment vehicles (the “Funds”) on a discretionary basis using quantitative investment strategies. Each Fund generally comprises a number of related and/or unrelated entities, for example, in a “master-feeder” structure or a “parallel fund” arrangement. Using quantitative models developed by PDT, including models that were developed from those originally created by the PDT Group, we trade a broad range of liquid, publicly traded U.S. and non-U.S. securities and other instruments, including equities, futures contracts, foreign exchange, and derivatives thereon. In limited circumstances, we will invest in private securities or other instruments. Each Fund is managed according to the investment objectives and policies set forth in its offering materials and other governing documents. PDT does not generally tailor the Funds’ investment programs for any particular Fund investor, but has in some cases accommodated investor requests with respect to how a particular portfolio is managed or restrictions on instruments that are permitted to be acquired (see Item 8 – Methods of Analysis, Investment Strategies, and Risk of Loss – Material Risks – Exercising Discretion in Non-Model Driven Trading Decisions). As of December 31, 2018, PDT managed, on a discretionary basis, approximately $11,529,900,000 in regulatory assets under management. We do not manage any assets on a non-discretionary basis. please register to get more info

Fee Schedules; Calculation and Deduction of Fees
PDT does not have a general fee schedule. We generally receive a management fee based on the assets under management of each Fund, up to 3.5% per annum, and performance-based compensation (which is generally allocated to an affiliated entity), ranging from 20% to 50% and subject to a high-watermark. Such performance-based compensation is based on absolute performance (in some cases, subject to a hurdle rate) or performance relative to a benchmark (i.e., performance-based compensation is due even when the Fund experiences negative overall performance). Information relating to the actual fees charged to any Fund is set forth in the offering materials for that Fund. Management fees are generally paid monthly in advance and performance-based compensation is generally paid or allocated annually or semi- annually. PDT deducts fees directly from the assets of the Funds. Partners, employees, and affiliates of PDT, as well as investors in the Funds who have negotiated separate written agreements with PDT or the Funds, are subject to different fees and other terms than those described in the Funds’ offering materials, and we may waive, reduce, or modify fees or agree to other terms with respect to any investor in a Fund in the future.
Other Fees and Expenses
In addition to the management fees and performance-based compensation described above, the Funds incur other expenses. Other expenses borne by some or all of the Funds, whether incurred directly or indirectly, include, but are not limited to: offering and organizational expenses (including costs relating to the preparation and modification of governing documents, counterparty agreements, offering memoranda, marketing materials, questionnaires, subscription agreements, side letters or other agreements entered into with any investor, and payments made for historical market data); third-party fund administration expenses; external accounting, auditing, and tax preparation, filing, and consulting fees; fees of professional consultants and experts relating to investments; fees of external legal or regulatory service providers (including fees relating to statutory representation, fees incurred in connection with obtaining trading and other advice, and fees associated with (i) updating the Funds’ disclosure documents, (ii) negotiating counterparty agreements, (iii) obtaining marketing advice, and (iv) negotiating side letters); brokerage, clearing, and settlement fees (see Item 12 – Brokerage Practices); taxes and regulatory fees; custodial fees; market data and other data costs (whether or not the data is used and whether the data is used for research or other purposes); costs attributable to hardware used in support of production trading; costs attributable to technology used for processing market data and other data (including software and hardware (e.g., circuits) used for collecting, distributing, and storing such data); co-located data center costs (including hardware costs and third party technology service costs); technology costs (including hardware costs and third-party technology service costs) associated with connecting to trading venues, trading counterparties, prime brokers, and similar service providers; expenses of preparing and distributing reports, financial statements, and documents to investors and prospective investors; certain insurance premiums covering the Funds, PDT, its affiliates, and/or their employees, officers, directors, principals, and partners with regard to losses, claims, damages, liabilities, and expenses; fees and expenses of a board of directors and/or any external advisory board; expenses relating to redemptions or transfers; interest and financing expenses; expenses relating to short sales; expenses related to making corporate, tax, or regulatory filings, including filings made by PDT with respect to investments made by the Funds; proxy service provider fees (if such services are used); fees (including, potentially, contingency fees) paid to third-party service providers to file class-action settlement claims (if such services are used); costs of investor meetings; costs and expenses related to the reorganization, dissolution, winding-up, or termination of a Fund; costs and expenses of acquiring and maintaining exchange or other memberships and/or licenses that are directly or indirectly assets of a Fund; and costs and expenses associated with litigation, arbitration, regulatory examinations, governmental investigations, and other extraordinary expenses. Any sales, use, value-added, and other taxes, levies, and fees associated with PDT’s purchase and/or use of the particular products or services described above will also be borne by the Funds. Certain of these expenses are subject to an expense cap. Each Fund has different policies with respect to which expenses are borne by such Fund and the level of the expense cap (if any), and certain investors in the PDT Partners Fund family have negotiated expense caps that are lower than the expense caps specified in the applicable Fund’s offering materials. None of the fees and expenses described in this section reduce the management fee or performance-based compensation described above. Many of the expenses are paid by PDT or its agents on behalf of the Funds, with such parties subsequently being reimbursed by the Funds. In addition, many of the expenses are incurred for the benefit of multiple Funds. Pursuant to its expense allocation policies and procedures, PDT generally allocates such shared expenses among the Funds based on the relative assets under management (or a similar measure), relative investment portfolio gross market value, or relative global trading volume of the relevant Funds, but at any time may choose another methodology we deem appropriate. While some expenses may relate more to one Fund than another, for administrative ease, PDT generally applies a single cost allocation methodology to all similar types of expenses (for example, allocating all exchange data costs among Funds based on relative global trading volume, as opposed to allocating a particular exchange data cost only to a Fund that consumes that particular data). Moreover, from time to time, we are likely to change a methodology we use for allocating expenses either because we deem a different methodology more appropriate or we deem a methodology too operationally burdensome to implement. Furthermore, PDT may decide not to allocate certain permissible expenses to the Funds, but any such decision may be reversed at a later point in time. Expense allocation decisions involve subjective determinations, which involve conflicts of interest, as described in more detail in Item 6 – Performance- Based Fees and Side-By-Side Management. With respect to any expense allocation decision, it is likely that there are several other reasonable (and potentially more precise) methodologies that we could have chosen instead. An allocation decision by PDT may result in a Fund bearing more or less in expenses than it would have had a different methodology been applied. In addition to the fees and expenses enumerated above, when we invest a portion of a Fund’s assets in investment vehicles managed by third parties (e.g., money market funds or exchange-traded funds), the Fund bears the fees and expenses charged by such investment vehicles and/or third party managers. please register to get more info

PDT receives performance-based compensation with respect to the Funds we manage which creates an incentive for us to make riskier or more speculative investments than would be the case in the absence of such performance-based compensation arrangements. One of the Funds only pays performance-based compensation (i.e., it does not pay any asset-based fees), which exacerbates this conflict. On the other hand, in certain circumstances, Funds that pay performance-based compensation relative to a benchmark have incentives to take fewer risks than would be the case in the absence of such performance-based compensation arrangements. We have established a Risk & Capital Committee, comprised of certain PDT partners and employees, which is responsible for overseeing the allocation of the capital and risk of the Funds. As previously noted, we simultaneously manage multiple Funds, some of which employ trading strategies directly (the “Trading Funds”) and others of which allocate capital to the Trading Funds (the “Allocating Funds”). Certain of the Trading Funds trade separate instances of the same strategy (the “Mosaic Trading Funds”). The Funds do not have the same fees and have different levels of internal capital. Management of multiple Funds at the same time with different fees and differing levels of internal capital gives rise to certain conflicts of interest, as described in more detail below and in the Funds’ offering materials, which we strongly encourage investors to review carefully. To help address these conflicts, we have established a Conflicts Committee, comprised of certain PDT partners and employees, which is responsible for reviewing and analyzing potential conflicts of interest. We have also adopted trade allocation and other policies and procedures that we believe are reasonably designed to address conflicts of interest, which are described in greater detail in the offering materials of the relevant Funds. Conflicts Relating to Allocation of Time, Resources, and Investment Opportunities Because the PDT Partners Fund family has significantly higher management fees and performance-based compensation than other Funds and because our partners and employees have significantly more capital invested (both on an absolute dollar and percentage basis) in the PDT Partners Fund family than in other Funds, we have an incentive to favor (and do in fact favor) the PDT Partners Fund family over other Funds, including in the allocation of management time, resources, and investment opportunities (for example, a substantial number of our partners and employees are engaged in activities for the PDT Partners Fund family rather than in activities that could benefit other Funds). The PDT Partners Fund family utilizes shorter-term signals that are not made available to other Trading Funds because the signals are believed to be capacity constrained, and their capacity has been reserved for the PDT Partners Fund family. Over time, historical data has shown that strategies that use shorter-term signals tend to produce portfolios with higher Sharpe ratios and higher gross returns than those that utilize longer-term signals. Consistent with the foregoing, the PDT Partners Fund family has experienced, and is expected to continue to experience, higher Sharpe ratios and higher gross returns than the other Funds. The PDT Partners Fund family also has priority with respect to new strategies, methods, signals, and other opportunities (including order working opportunities) going forward. Even where we ultimately determine to use a new strategy, method, or signal for the benefit of other Trading Funds, we are likely to first use the strategy, method, or signals for the benefit of the PDT Partners Fund family, as we generally test new strategies, methods, and signals in the PDT Partners Fund family. From time to time, we permit the Mosaic Trading Funds to use a trade execution strategy, method, or signal generally reserved for the PDT Partners Fund family on a temporary and/or limited basis (generally as to minimize the potential impact on the PDT Partners Fund family). If we ultimately determine that sharing such trade execution strategy, method, or signal is detrimental to the PDT Partners Fund family, we will likely discontinue using such trade execution strategy, method, or signal for the benefit of the Mosaic Trading Funds, even if such discontinuance is expected to have a material adverse effect on the Mosaic Trading Funds. Many of the Allocating Funds have less, and often significantly less, capital allocated to the PDT Partners Fund family than other Trading Funds and therefore face similar conflicts to those faced by the other Trading Funds. In addition, partners and employees of PDT generally invest in only one of the Mosaic Trading Funds and not in any of the others. Another of the Mosaic Trading Funds has higher performance-based compensation and trades using higher leverage than the others. As a result, we face conflicts of interest in the allocation of management time, resources, and investment opportunities even in the management of Mosaic Trading Funds. Conflicts Relating to Trading As described in more detail in Item 12 – Brokerage Practices, PDT’s policy is to generally work orders on behalf of each Fund independently or, in the case of equity orders by Mosaic Trading Funds, separately but in a coordinated fashion (i.e., not to aggregate trades even where one Trading Fund proposes to trade the same instrument in the same direction at approximately the same time as another Trading Fund). When one Trading Fund purchases (or sells) a security or other instrument before another Trading Fund’s buy (or sell) order is filled, such purchase (or sale) puts upward (or downward) pressure on the price of the security or other instrument, so that the second Trading Fund has its order filled at a less favorable price than it would have in the absence of the trading by the first Trading Fund. It is likely that working orders independently causes the Trading Funds to have a greater impact on each other than they would have if their trading were aggregated. Moreover, from time to time, one or more Trading Funds seeks to trade an instrument via a swap at the same time another Fund seeks to trade the same instrument directly (in the cash markets). In such instances, due to increased latency and other reasons described in more detail in Item 8 – Methods of Analysis, Investment Strategies, and Risk of Loss – Material Risks – Swap Agreements, the reference price for the swap will, on occasion, be less favorable than the price received on the cash order. From time to time, particularly in those markets where the PDT Partners Fund family trades on a lower latency infrastructure than the Mosaic Trading Funds, the PDT Partners Fund family will trade ahead of the Mosaic Trading Funds. This is likely to result in the Mosaic Trading Funds having their orders filled at less favorable prices than they would have in the absence of the trading by the PDT Partners Fund family. Furthermore, trading by certain Trading Funds is correlated (and, in the case of Mosaic Trading Funds, highly correlated) with trading by other Trading Funds. As a result, the Trading Funds negatively impact each other’s performance. In the case of highly correlated Trading Funds, the impact is material. If the correlation among Trading Funds increases and/or the amount of capital invested in correlated Trading Funds increases, the negative impact of the Trading Funds on each other will increase. In addition, PDT does not always purchase (or sell) the same securities at the same time, or in the same proportionate amounts, for all Trading Funds (even all Mosaic Trading Funds). Often, the PDT Partners Fund family has a different view from the other Trading Funds as to whether to buy or sell a particular security at a particular time. From time to time, Mosaic Trading Funds even have opposing views as to whether to buy or sell a particular security at a particular time. As a result, one Trading Fund may experience a loss on a security while another Trading Fund experiences a gain on the same security. PDT must manage the supply of shares available for borrowing by the Trading Funds with short positions and/or PDT’s remaining position or risk limit capacity across multiple Trading Funds (including the Mosaic Trading Funds). In general, PDT has separate (not shared) pools of locates for different strategies. Trading using a shared locate pool can be advantageous in that it reduces instances where one Fund is blocked from trading because it does not have access to a locate that is available, but not being used, by another Fund. Where multiple Funds trade using the same strategy (i.e., the Mosaic Trading Funds), PDT uses a shared locate pool and generally allocates locates on a first-come, first-served basis, which can be detrimental to a Fund that trades after another during periods when locates are scarce. As described in more detail in Item 8 – Methods of Analysis, Investment Strategies, and Risk of Loss (Material Risks – Exercising Discretion in Non-Model Driven Trading Decisions), from time to time, PDT executes trades (or restricts trading) on behalf of the Funds or trades in particular form (e.g., cash or swap) or with a particular counterparty for reasons not directly related to its quantitative models. PDT is conflicted in making tax-related interventions or decisions, since a majority of PDT partners and employees are U.S. persons and therefore benefit from interventions or decisions that have tax benefits for U.S. taxable investors or PDT and its affiliates. See also Item 8 – Methods of Analysis, Investment Strategies, and Risk of Loss (Material Risks – Differing Tax Positions). PDT is also conflicted in deciding to address specific investor environmental, social, and governance (“ESG”) or other concerns, since such actions allow PDT to increase the fees it receives from the Funds (e.g., by increasing the Funds’ assets under management). Conflicts Relating to Capacity Decisions As described in more detail in Item 8 – Methods of Analysis, Investment Strategies, and Risk of Loss (Material Risks – Limited Capacity; Mandatory Redemptions), PDT periodically reviews and assesses the amount of capital that it believes can be allocated to a particular strategy. The amount of third-party capital invested in our Funds, particularly the PDT Partners Fund family, is constrained by the limited capacity of such Funds and the continued and more rapid growth of internal capital in our Funds, which results in PDT lowering the amount of third party capital we are willing to accept and/or increasing the amount of third party capital we elect to return to investors. PDT is conflicted in making decisions relating to capacity and in determining whether (and how much) external capital to return to investors (and therefore how much internal capital may remain invested in the Funds), and generally makes such decisions based on its own interests. Conflicts Relating to Expense Allocation As described in Item 5 – Fees and Compensation, certain expenses are incurred for the benefit of multiple Funds and therefore deemed “shared” expenses. While PDT seeks to allocate these shared expenses among Funds in a manner that is fair and reasonable over time, PDT faces conflicts of interest in making these allocations for a variety of reasons, including because more expenses are permitted to be charged to the PDT Partners Fund family than to other Funds, the PDT Partners Fund family is subject to higher management fees and performance-based compensation than the other Funds, and PDT and our partners and employees have substantially more capital invested in the PDT Partners Fund family than in the other Funds. Conflicts Relating to Selection of Prime Brokers and Other Service Providers Many service providers determine what fees to charge the Funds based on the overall level of business that PDT directs to them and the profitability of that business to such service provider. As a result, we tend to concentrate business with certain service providers in order to obtain more favorable fees and better service for all Funds we manage. While we generally believe concentration is in the best interests of all the Funds we manage, there will be certain circumstances where it is not in the best interest of a particular Fund or Funds.
ITEM 7 - TYPES OF CLIENTS Our only clients are the Funds, which are private pooled investment vehicles. As described above, certain of our Funds are Trading Funds and others are Allocating Funds. Investors in our Funds are generally required to make a minimum initial investment of $5,000,000. Fund investors are also generally required to be both “accredited investors” and “qualified purchasers” or “knowledgeable employees” and meet other investor qualification criteria required by applicable securities and commodities laws and regulations. please register to get more info

Methods of Analysis and Investment Strategies
PDT uses a quantitative investment approach. Our researchers, many of whom hold advanced degrees in mathematics and/or science, seek to identify indicators with predictive value, using mathematical techniques. The indicators are primarily technical (e.g., price or volume) or fundamental (information relating to companies, industries, or markets) in nature. The research results are incorporated into proprietary models that analyze large amounts of real-time and historical data to generate buy or sell orders in equities, futures contracts, foreign exchange, and derivatives thereon. PDT’s investment strategies vary by assets traded, forecasting technique, predictive horizon, risk profile, and other characteristics. Some of our strategies aim to be market neutral while others take directional market exposure, including long-biased market exposure. In addition, certain strategies are tailored for particular types of investors (e.g., U.S. taxpayers). All of our quantitative strategies are designed to systematically identify, and take advantage of, pricing anomalies and discrepancies in various related and unrelated securities and financial instruments. The orders generated by PDT’s investment strategies are primarily executed through our proprietary trading algorithms, though we also use third party broker algorithms and trade some orders manually. PDT’s trading algorithms seek to optimize performance by managing market impact and by responding to changing market conditions. For certain Funds or types of trading, we almost exclusively trade using third party broker algorithms (i.e., not using PDT’s trading algorithms).

We monitor the strategies we trade on behalf of the Funds throughout the day and intervene from time to time to reduce perceived risks (e.g., by hedging certain exposures, not trading particular securities or instruments, or turning off or adjusting the trading of a model). On occasion, we also effect opportunistic trades on behalf of the Funds that are not the result of any particular quantitative model.
Material Risks

The following is a summary of material risks for PDT’s investment strategies and methods of analysis. This summary does not describe every risk, and not all of the risks described are equally relevant for each Fund. Investors should understand that all of PDT’s investment strategies involve substantial risk of loss, including the potential loss of their entire investment. No guarantee or representation is made that a Fund’s investment objective will be achieved. Fund investors should carefully review the offering materials of the relevant Fund for additional information on the risks associated with an investment in such Fund and be prepared to bear any and all such risks. Quantitative Strategies; Model Risk PDT’s research and modeling process is extremely complex. While PDT utilizes back-testing and other statistical tests to evaluate research results, such tests do not insulate PDT from all design and conceptual flaws. The complexity of the components of PDT’s strategies, and the interactions among such components, often makes it difficult or impossible to detect the source of any weakness or failure in such strategies before material losses are incurred. Fund investors should not expect to be made aware of any weaknesses or errors discovered by PDT (regardless of whether or not such weaknesses or errors are corrected by PDT). Even if all of the assumptions underlying the models used by PDT are correct, prices will not always move as the models predict. The models used by PDT use historical data to make future predictions about the securities and other instruments in their respective portfolios, and the actual performance of those securities and other instruments will not always match the model’s predictions. The risk of divergence between actual and predicted performance is greatest when PDT launches models in markets where PDT has not traded before or in markets that have undergone substantial market structure changes in the recent past. Even markets that PDT has traded for an extended period of time and that are relatively stable can act in unpredictable ways. The models utilized by PDT are not able to take into account all of the complexities of the financial markets, including events or circumstances that are not readily foreseeable, such as natural disasters, accounting fraud, litigation, or regulatory developments. In unforeseen or low-probability scenarios, and when deployed in markets where PDT does not fully understand all the trading nuances (e.g., markets where PDT has not previously traded), predictive models are more likely to produce unexpected results. Investment decisions, including hedging decisions, made on information that the models fail to understand completely could have a material adverse impact on the Funds. As a result, PDT’s models may perform substantially worse than expected, resulting in losses. The performance of quantitative models generally decays over time. Models must be constantly reevaluated in light of, and, in some cases, adjusted to account for, rapidly changing market conditions. All changes to models, including incremental improvements to current models, expose the Funds to the possibility of unforeseen losses from a variety of factors, including conceptual failures and implementation failures. The determination as to when to turn over a model change is complicated and involves balancing the implementation and modeling risks associated with turning over new code with the expected benefits of the change. If PDT turns over a model change too quickly or too slowly, the performance of a Fund will be negatively impacted, and the Fund could incur material losses. While certain Funds incorporate all or some of the same signals (e.g., the Mosaic Trading Funds), PDT may roll out changes to such signals on different schedules across Funds, or choose not to make the same changes to the correlated signals across Funds. In either of these scenarios, certain Funds may be disadvantaged relative to certain other Funds. Dependence on Technology; Cybersecurity PDT’s investment processes, including research, production trading, risk management, and trade coordination and allocation, are highly automated and rely heavily on technology, including proprietary and third-party hardware and software. We believe that technology is critical to our success, and any failure on the part of PDT to anticipate or respond adequately to industry best practices or applicable technological advancements (including by being slow to adopt new technologies or inadequately resourcing efforts to onboard new technologies) could have a material adverse effect on the Funds. The performance of a Fund, as well as various critical processes of PDT, could be severely compromised by coding errors (including design and implementation errors), computer viruses, cybersecurity (including ransomware) or physical security breaches, and software related “system crashes.” Any event that interrupts or compromises PDT’s computer and telecommunications operations could result in, among other things, the inability of PDT to establish, modify, liquidate, hedge, or monitor a Fund’s investments or the permanent loss or degradation of some or all of PDT’s critical data and systems. These events could cause a Fund to lose trading connectivity or to trade in unintended ways or cause PDT to expose confidential information (see Disclosure of Intellectual Property below). They could also result in regulatory intervention or cause PDT to suffer reputational harm, which could result in substantial redemptions from the Funds. While PDT generally takes into account the above risks in designing its systems, certain of its systems have been in place for an extended period of time and have certain known exposures to these risks. The tactics, techniques, and procedures used by unauthorized parties to obtain access to data, disable or degrade service, or sabotage systems change frequently, so monitoring needs to be constantly adjusted to be effective. While PDT has resources dedicated to security monitoring and incident response, any failure by PDT to implement or adjust its monitoring of a particular system or software or to respond appropriately to a notification could result in PDT failing to detect unusual activity for an extended period of time. Funds have been, and will continue to be, negatively impacted by power outages, hardware failures, disk failures, inadequate capacity planning, and other similar circumstances, only some of which are within our control to prevent. While PDT has business continuity procedures and regularly monitors its trading equipment, its procedures and monitoring are likely not as robust as they could be. We generally seek to improve our business continuity capabilities; however, from time to time, PDT makes business decisions that negatively impact our business continuity capabilities (for example, ceasing to be authorized and regulated by the U.K. Financial Conduct Authority, as described in Item 10 – Other Financial Industry Activities and Affiliations). In addition, our operations are subject to known points of failure with respect to certain data, technology, products, and markets. Even where PDT believes we have established full redundancy with respect to a particular system, unexpected and multiple failures have been known to occur. In the case of severe business disruptions, PDT may not be able to resume its activities for many days, weeks, or even longer depending on the severity of the outage and the systems impacted. Because many of PDT’s investment strategies trade on a frequent basis (as opposed to holding positions for long periods of time), failures in the trading or other systems, which occur from time to time, could have significant adverse effects on the performance of a Fund. PDT relies on a number of third-party vendors for critical services, including cloud computing providers, data providers, telecommunication providers, software and hardware vendors, the Funds’ administrator, and certain executing and prime brokers. In particular, the Trading Funds currently rely on a single counterparty to access certain products and certain markets outside the U.S. Interruptions of the services provided by third party vendors occur with some regularity and disrupt our ability to effectively trade and manage the Funds and otherwise operate our business. A prolonged interruption of any such services could have a material adverse impact on our Funds, including by rendering the Funds unable to trade certain products or access certain markets for weeks and possibly even months while connectivity to an alternate counterparty is established. Furthermore, the use of third-party vendors exposes PDT to additional information security risks. Hardware or software acquired from third parties may contain defects in design or manufacture or other problems that could unexpectedly compromise PDT’s information security. In addition, network connected services provided by third parties are susceptible to compromise, which could lead to a breach of PDT’s network. A third-party vendor’s failure to adopt or adhere to adequate data security policies may result in a breach of its networks that hold confidential information about PDT or the Funds, resulting in the improper use or disclosure of such information (see Disclosure of Intellectual Property below). PDT also relies on automated processes to assist it in its compliance and risk management functions, including monitoring its compliance with short sale restrictions and position limits. If such automated processes do not function correctly, including as a result of not being properly coded, PDT and the Funds may become subject to adverse regulatory outcomes, such as fines and other sanctions (including, potentially, a ban on trading) and/or unwanted reporting obligations. Most of the models used by the Funds generally operate independently from one another. Therefore, even if an issue impacts multiple strategies, it could impact them differently. As a result, a Fund may incur a loss as a result of its automated investment processes that does not result in a loss to another Fund. In addition, if an issue is identified (e.g., a hardware vulnerability) or occurs (e.g., a system outage), PDT often remediates the issue at different times for different Funds depending on competing priorities, the availability of resources, as well as PDT’s perception of the relative risk of the issue and/or the relative difficulty of remediating the issue for each Fund. With respect to any issue that impacts multiple Funds, no assurance can be given that the issue will be remediated for a Fund before (or even shortly after) it is remediated for another Fund managed by PDT or that the issue will be remediated for the Fund that is most impacted by the issue before it is remediated for another Fund. PDT is conflicted in making such decisions (see Item 6 – Performance-Based Fees and Side-by-Side Management). Coding Errors Software is prone to coding errors and, given the manner in which PDT trades, a single software coding error can result in the execution of thousands of unwanted trades or, alternatively, the failure to place thousands of wanted orders. While PDT has change management procedures and tools (which include review and approval procedures), those procedures and tools are not infallible and can be circumvented by malicious or negligent employees. For many of PDT’s systems, the deployment process is complex, with many different steps that need to be deployed in a particular order. If PDT misses a step or fails to sequence the steps in the correct order, which does happen from time to time as a result of human error (see Human Error below), the Funds may be materially adversely effected. In addition, PDT does not have a comprehensive or fully isolated quality assurance (“QA”) or development environment. As a result, compared to firms with fully built-out and isolated QA environments, PDT is more vulnerable to the risk of unintended changes being made to the production environment. The decision as to when to turn over new software involves balancing the expected benefits of any change (which would call for turning over the change quickly) with the risks that the software contains errors (which would call for exhaustive testing). Despite PDT’s efforts to strike the right balance, PDT will, from time to time, turn over new software too quickly or too slowly, which will negatively impact a Fund. From time to time, PDT will also deploy new code with errors that could have been detected with more exhaustive or independent testing (and it should be noted that certain models have less exhaustive test suites than others). In addition, where PDT believes that the benefit of rolling out a change outweighs the risk of not addressing (or even diagnosing the precise cause of) a known weakness, PDT will deploy new code with known weaknesses. In such cases, it is possible that PDT’s decision to deploy the change without addressing the known weakness will prove wrong in hindsight, and a Fund could be negatively impacted. Detecting coding errors is often extremely difficult, particularly where, as is the case with most of PDT’s proprietary software, there are no design specifications for the software. Given the difficulty of detecting coding errors, some errors have gone, and will continue to go, undetected for long periods of time and some will never be detected. Moreover, some coding errors will be detected but not fixed by PDT immediately, or, possibly, at all, due to competing priorities and/or the perception that the impact of the error is not material. Although PDT will make judgments about the perceived impact of discovered errors so as to try to appropriately prioritize the remediation of the errors relative to new business initiatives, in the vast majority of cases, PDT will not perform a quantitative impact analysis on discovered coding errors. Moreover, PDT’s judgment could prove to be wrong, and a software error that PDT chooses not to fix immediately or at all, or chooses to fix at different times for different Funds, could have a material impact on one or more of PDT’s Funds. The occurrence of coding errors is inevitable given PDT’s complicated and highly technical trading processes, and coding errors are not considered “trade errors” under PDT’s policies. Investors should understand that they are assuming the risks, including any losses, associated with these errors by investing with PDT. PDT does not expect to disclose discovered coding errors to investors and losses arising from coding errors will be borne by the relevant Fund and not reimbursed by PDT. Reliance on Data The quantitative models that are utilized by PDT to trade and manage risk for the Funds’ portfolios rely on historical and current market and other data provided by third parties. Any interruption in the flow of data, or an inability to appropriately process, clean, analyze, or use such data, which happens from time to time, disrupts PDT’s ability to effectively trade and manage the portfolios. In addition, from time to time, data supplied by third parties is inaccurate or PDT fails to fully understand a new data set or account for changes to an existing data set. Investment decisions (including hedging decisions) made and programming code developed on the basis of inaccurate or incomplete data or data that PDT has not sufficiently understood or processed have had, and are expected to continue to have, an adverse impact on the Funds’ portfolios, including by causing one or more of the Funds to liquidate positions it would not have sought to liquidate with better data or information and/or to accumulate positions it would not have sought to accumulate with better data or information. Investors should not expect to be notified when such issues occur. Further, PDT makes subjective decisions regarding what data sets to explore and which to integrate into the models used by the Funds. In making such determinations, PDT considers such factors as it deems relevant in its sole discretion, which generally include the cost of obtaining such data, other priorities of the data team and research teams, the legal, compliance, or reputational risks associated with the data, the technology cost of incorporating such data into PDT’s research and trading infrastructure, and the reliability of the third party providing such data. No assurance can be provided that PDT’s selections will result in the Funds achieving their investment objective. Data costs are generally Fund expenses as described in more detail in Item 5 – Fees and Compensation – Other Fees and Expenses. Many data providers charge based on how many users can view the data, which means that failure by PDT to appropriately restrict access to the data could result in additional expenses to the Funds. In addition, many data sources PDT uses on behalf of the Funds come from providers with significant pricing power, which permits such providers to charge prices which may not be commensurate with the value such data provides the Funds and to increase such prices indiscriminately. Noncompliance with contractual data terms could also result in vendors terminating our data licenses, which could have a material adverse effect on our Funds. In addition, data sources are potentially a source of material nonpublic information and/or personally identifiable information. PDT’s failure to properly vet or limit access to data sources could therefore cause the Funds to be prohibited from trading and PDT or the Funds to be subject to adverse regulatory action. The acquisition and processing of data from third parties are significant components of the modeling utilized by PDT, and PDT has limited experience in these activities as an independent investment adviser. Operational Errors Although PDT has adopted procedures to manage operational risk, operational errors occur from time to time. Errors made in the confirmation or settlement of transactions, management of data feeds, accrual of expenses, preparation or delivery of investor or regulatory reports, and similar issues may cause PDT or the Funds to suffer financial loss, liability to third parties, regulatory sanctions, or reputational damage. Human Error While PDT’s trading strategies primarily utilize quantitative models and automated processes, the activities and decisions of PDT’s personnel play a vital role in PDT’s investment approach. PDT’s personnel make subjective decisions that impact the Funds, including decisions relating to the design, testing, and implementation of models (e.g., what level of testing is required before turning over a new model into production); the management and monitoring of the Funds’ portfolios (e.g., what leverage to target, what portfolio and other risk constraints to apply, what automatic alerts to configure, and how to respond to those alerts); the processing of data and data notices (e.g., how to process a corporate action and whether to adjust systems in response to a vendor data change); and the execution of trades (e.g., how quickly to liquidate a position). Subjective decisions by individuals could prove to be wrong, which could result in losses. For example, a decision to increase a risk limit or not to turn off or modify trading in response to an automated alert could cause a strategy to trade more than intended. Similarly, a decision to change risk parameters or reduce risk limits in times of unexpected market conditions could cause a Fund’s results to suffer, including by limiting the ability of such Fund to recoup previous losses. Because most orders are traded algorithmically and most of the individuals who engage in manual trading on behalf of the Funds have other core responsibilities, there is a heightened risk of human error occurring in connection with any orders that are traded manually. The research and modeling processes utilized by PDT rely on theories and research being translated into computer code. Any errors made by individuals in such translation to computer code or with respect to the input of data are often difficult to detect and could result in errors in the models that result in losses (see Coding Errors above). It is not expected that investors will be made aware of human errors, and losses arising from human error generally will be borne by the relevant Fund. From time to time, changes made to models or signals utilized by one Fund that should also be made to models or signals utilized by other Funds are not effectuated as a result of human oversight. As a result, coding errors sometimes have a disparate impact on different Trading Funds (including, different Mosaic Trading Funds). Electronic Trading PDT Funds trade on electronic exchanges and other trading venues through executing brokers and also enter into derivative contracts electronically with swap counterparties. Each venue and counterparty carries its own inherent risks relating to system access, security, response times, and its use of service providers. Trading venues and counterparties are not immune from software failures and system outages. Any software failure or system outage in a venue or at a counterparty could impede the ability of such Fund to trade in a timely fashion or hedge its risk, which could have a material adverse effect on the Fund’s performance. In addition, various market structure changes are being discussed globally that could impact electronic trading. Any such changes will likely impact quantitative investment strategies, like those developed and deployed by PDT, and the impact could be material. Frequent Trading and Financial Transaction Taxes The Funds trade frequently. Consequently, they bear significant brokerage, clearing, and trading fees and other transaction costs and taxes. In addition, new financial transaction and similar taxes and higher exchange fees (for placing and/or cancelling orders) have been proposed, including by a number of European countries. Even de minimis taxes or a small increase in exchange fees could have a substantial negative impact on the returns of investment funds that trade frequently. Benchmark Relative Strategy While most of the equity strategies that PDT manages are designed to be “market neutral,” one Fund is designed to take directional, long equity market risk, and pays performance-based compensation relative to a benchmark index, making this Fund materially different from all other Funds managed by PDT. As the investment objective of this Fund is to provide long-biased market exposure, PDT does not seek to hedge against any downturn in the relevant equity markets or otherwise protect the Fund’s investment portfolio in periods where the benchmark index declines or underperforms other assets or markets, thereby subjecting these Funds to the overall risks of the relevant equity markets (see Equity Securities and Equity-Related Securities below). Though this Fund is benchmarked to an equity index, PDT does not significantly constrain the Fund’s portfolio by reference to the benchmark index (e.g., it may not hold all securities in the index or at their index weightings and may hold securities that are not included in the index). In addition to these risks, Funds taking directional, long equity market risk are still subject to the other risks described in this Brochure. Volatility of Markets The strategies traded for the Funds are impacted by market volatility. Decreased volatility, which tends to correlate with lower trading volumes, can adversely affect the strategies’ performance, as it reduces the opportunities available to the strategies. Conversely, increased volatility, while it generally results in increased opportunities for the strategies, also increases the “value-at-risk” of their portfolios. Volatility is 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. Volatility resulting from unexpected or novel events can be particularly harmful to the Funds, as we cannot use historical data to predict how the models will behave in such events. In such events, PDT may take no action, reduce positions, or limit trading, any of which could have material adverse effect on a Fund’s performance. Examples of unforeseen events include the Swiss National Bank’s decision in January 2015 to unpeg the Swiss Franc from the Euro and the June 2016 decision in the United Kingdom referendum to leave the European Union, both of which caused unexpected turmoil in European equity markets. Illiquidity of Markets or Positions While the Funds generally trade in highly liquid instruments, there are times when the markets for even relatively widely traded instruments may not be able to absorb, without price disruptions, a significant increase in trading volume or trades of a size customarily undertaken by institutional investors in those markets. The Funds (particularly, the Mosaic Trading Funds) have in the past held, and will in the future hold, positions in such size as to render it difficult to liquidate the securities quickly without price disruptions. No assurance can be given that markets that are expected to be liquid will not become illiquid as a result of unexpected market events. In addition, though these generally do not consist of a significant portion of the Funds’ portfolios, the Funds often hold positions that are illiquid (e.g., as a result of a corporate action or because a previously liquid position has become illiquid). The Funds may be unable to accurately price their illiquid holdings or to dispose of them at the times determined by PDT to be appropriate. No Fixed Diversification Policies and Concentration Risk Although diversification is an important part of PDT’s portfolio management process, we do not have any formal diversification policy or any fixed limits, guidelines, or requirements for diversifying the investments of the Funds and, from time to time the Funds have had, and likely will in the future have, relatively concentrated exposure to certain issuers or types of issuers. As a result of the foregoing and the fact that risks associated with different assets may be correlated in unexpected ways, the Funds could become subject to concentrated issuer, industry, market, sector, or other exposures. Most of PDT’s portfolio management activities are done on a strategy-by-strategy basis, despite the fact that many Funds employ more than one strategy. Therefore, the overall portfolio of a particular Fund will at times have more exposure to a particular asset, asset class, market factor, or risk scenario than would be expected had those portfolio management activities occurred at such Fund’s overall portfolio level. If PDT fails to identify or chooses not to manage these risks (wholly or partially), which will happen from time to time, the Funds could suffer losses. In particular, one Fund deploys a single strategy that has long-biased equity market exposure to a single country. This Fund is likely to be more volatile than a broad-based fund, such as a global or regional equity fund, or a fund that invests in other asset classes or strategies, as the Fund is more susceptible to fluctuations in value resulting from adverse conditions in the relevant country. Differing Tax Positions We take into account the U.S. tax status of investors (or a subset of investors) in making trading decisions on behalf of certain Funds, however, we have no obligation to continue to do so. In the event that we do not take into account the U.S. tax status of any (or a subset) of investors in such a Fund, such investors may have adverse tax consequences. For example, from time to time, non-U.S. and/or U.S. tax-exempt investors invest in Funds that are tailored for U.S. taxable investors. The actions that PDT takes to tailor such a Fund’s after-tax returns for a U.S. taxable investor (e.g., by causing the Fund to hold a position longer than it would otherwise in order to benefit from the preferential U.S. federal income tax rate applicable to long-term capital gains) may negatively impact the pre-tax return of the Fund for all investors (including non-U.S. and U.S. tax- exempt investors). PDT is conflicted in making tax-related modifications or interventions since most partners and employees who have substantial capital invested in the Funds are U.S. taxpayers and therefore disproportionately benefit from decisions and interventions that disproportionately affect U.S. taxpayers. Testing and Refining Strategies PDT seeks to develop new strategies (including new execution strategies) and signals and refine our existing strategies, signals, and trading methods in an effort to achieve the Funds’ investment objectives and to increase the Funds’ investment capacity. PDT engages in these activities utilizing the capital of the Funds, as opposed to engaging in such activities utilizing the capital of PDT directly or other third parties. The PDT Partners Fund family generally has priority with respect to such new strategies and signals, which could be detrimental (possibly materially detrimental), to the other Trading Funds, particularly if the new strategies or opportunities adversely impact the other Trading Funds. PDT cannot necessarily predict how new strategies or investment signals will perform, and as a result, the Funds that trade them may suffer losses (which could be significant). Furthermore, it is likely that, despite having tested a strategy or signal utilizing the capital of one Fund, PDT will, from time to time, ultimately decide to employ such strategy or signal in one of its other Funds. PDT also often performs certain operational tests on one Fund (with the attending costs accruing to that Fund) though the benefits of such tests may accrue to the other Funds. From time to time, PDT also effects trades on behalf of the Funds in an effort to acquire information used to improve or refine our strategies, signals and trading methods. Although such efforts will be performed in an effort to improve the strategies and performance of the Funds on a long-term basis, such trading activity are likely to have adverse effects on the Funds on a short-term basis (e.g., by increasing the transaction costs borne by the Funds or causing the Funds to suffer losses). In addition, no assurance can be provided that any such efforts will in fact result in improvements to PDT’s strategies, signals, or trading methods that accrete to the benefit of the Funds Exercising Discretion in Non-Model Driven Trading Decisions PDT, from time to time, executes trades (or restricts trading) on behalf of the Funds for reasons not directly related to its quantitative investment models. For example, PDT intervenes, from time to time, if we believe there are significant tax or other advantages for certain investors if the fund holds certain securities (or swaps thereon) longer or liquidates them earlier than the model would have done otherwise. PDT is also likely to cause certain Funds to trade a particular instrument in a particular form (e.g., swap or cash) or with a particular counterparty because doing so has tax benefits for PDT or its affiliates and is not expected to have a material adverse impact on its Funds. Interventions PDT makes based on the tax characteristics of particular investors and/or PDT do not always (or even often) benefit all (or even a majority of) investors in the particular Fund with respect to which the intervention occurs. In addition, PDT intervenes from time to time (either by modifying universe selection criteria, blocking trading of certain issuers, or capping or liquidating positions of certain issuers) to address specific investor ESG concerns. While PDT only takes such actions if we believe (which belief may be based on intuition as opposed to research) that the actions will not have a material impact on the applicable Fund and its strategy, PDT’s judgement could prove wrong in hindsight. Moreover, PDT is conflicted in making ESG-related interventions, as such interventions allow it to increase its assets under management and therefore the fees it receive from the Funds. Open Source Software PDT uses software and development tools governed, directly or indirectly, by open source licenses and at times incorporates such software or tools into its proprietary systems. Given the nature of open source licenses, third parties may assert intellectual property claims against PDT in connection with such open source licenses. If any of these claims materialize, PDT may be forced to: (i) re-engineer its proprietary systems and/or software; (ii) release certain proprietary software code; or (iii) make its proprietary software available under the terms of any open source license – any of which could materially and adversely affect PDT’s operations and as a result, negatively impact the performance of the Funds. Competition among Quantitative Managers; Correlated Trading There are a large number of investment managers that utilize quantitative models in their trading strategies. There may be attempts by other participants in the market to duplicate PDT’s models or trading strategies. To the extent that such persons are utilizing models that are similar to those utilized by PDT, a Fund is competing for investment or arbitrage opportunities with such participants, and the trading by such other persons will likely impact the opportunities and profitability of the Fund. In addition, if such participants take the same action with respect to a particular position as a Fund, the ability of the Fund to acquire or dispose of its investments at attractive prices will likely be adversely affected. During the summer of 2007, there was a widespread de-levering by investment managers using similar quantitative models that created a feedback loop, resulting in high volatility, unexpected correlations, and imbalanced liquidity. The liquidation of positions during this period resulted in material losses for many funds using quantitative models, including those funds that did not initiate the de-levering. Any market circumstance similar to the foregoing could have a material adverse effect on the Funds. Disclosure of Intellectual Property The intellectual property developed by PDT for its trading activities could be copied or stolen by third parties (including, potentially, by rogue partners or employees or through failures in PDT’s security systems or processes) who may provide such intellectual property to competitors of PDT. PDT generally encourages cross-collaboration (and therefore information sharing) among research and technology teams. As a result, the number of individuals with access to intellectual property is likely greater at PDT than at other quantitative investment firms, and PDT’s exposure to theft of intellectual property is also likely greater. Even absent a security breach, public disclosure of sensitive information could occur as a result of inadvertent disclosure by PDT or a public disclosure request to an investor in a Fund that is a governmental entity. In addition, existing regulations require PDT to disclose certain information about the Funds’ positions to governmental agencies and the general public. New regulations or additional scrutiny by regulators may require additional transparency with respect to the trading strategies used by firms (such as PDT) deploying quantitative or algorithmic strategies. For example, additional position-level disclosure obligations have been proposed, as has the tagging of model-driven orders. Even if the regulations require reporting only to governmental agencies, it is possible that the information will leak out to the public. Finally, PDT may also be forced to make involuntary disclosure of proprietary information as a result of our use of open source governed software and development tools (see Open Source Software above). Disclosure of PDT’s intellectual property to PDT’s competitors could cause funds or accounts managed by those competitors to have correlated trading with the Funds, which could have a material adverse impact on the Funds’ trading results (see Competition among Quantitative Managers; Correlated Trading above). Regulatory Focus on Algorithmic Trading Algorithmic trading is the subject of ongoing regulatory attention. The Securities and Exchange Commission (“SEC”), the Commodity Futures Trading Commission (“CFTC”), and the European Securities and Markets Authority (“ESMA”), among other regulators and exchanges, have undertaken efforts to review the impact of algorithmic trading on the functioning of markets and to suggest systems and controls for trading participants to ameliorate any adverse impact. For example, the Japanese Finance Services Agency has adopted a new requirement for “high speed trading,” which, among other things, requires persons connecting to Japanese exchanges via certain electronic means to register with the Japanese regulator and adhere to an operational control framework and certain business operation requirements. While the impact of such regulatory focus on PDT and algorithmic trading firms in general is not entirely clear, it is likely that new regulations will require PDT to implement additional technology and other controls, and that compliance with these new rules will consume limited internal resources, thereby impeding PDT’s ability to pursue other initiatives, including improvements to its strategies. High frequency trading, in particular, is the subject of intense regulatory focus. Minimum resting periods, higher fees for cancelled trades, and circuit breakers have been proposed. Such restrictions could also have a significant impact on the liquidity of instruments traded by PDT, which would likely materially diminish the profitability of our investment strategies, even those that have longer-term forecasting horizons. Moreover, it is possible that PDT becomes subject to inquiries and/or examinations by regulators in connection with any investigation into the practices of trading firms that employ algorithmic or high frequency trading strategies. Any such inquiry or examination would likely be distracting for PDT and consume limited internal resources, and could result in additional expenses that would impact the performance of the Funds. Key Personnel; Retention The performance of the Funds depends to a large degree on the efforts of the individuals employed by PDT. Competition among alternative investment managers and technology companies is intense for the most highly skilled individuals. If Peter Muller or any PDT partner or employee with unique or special skills or knowledge ceases to remain part of PDT, no assurance can be given that PDT would be able to find and recruit a replacement with similar experience or ability or as to the length of time the search for a replacement would take. Limited Capacity; Mandatory Redemptions PDT periodically reviews and assesses the amount of capital that it believes can be allocated to a particular strategy. In making capacity decisions, we generally consider several different factors, including projected strategy performance, anticipated market conditions, risk factors, and overall profitability to PDT and its partners and employees (i.e., the profit that accrues to PDT and related parties from management fees, performance-based compensation, and return on capital invested in the Funds). PDT is conflicted in making decisions on capacity because, while expanding on the capital base of a Fund will increase the amount of management fees PDT can expect to receive from the Fund, it also risks diluting the returns of the Fund (which could lower the returns PDT partners and employees earn on their investments in the Fund). The performance of a Fund may be materially adversely impacted by the capacity decisions made by PDT. We have determined that the PDT Partners Fund family is capacity constrained. As a result, we have, and expect to regularly in the future, reduce the size of those Funds by mandatorily redeeming certain investors from the PDT Partners Fund family. Historically, mandatory redemptions have not been made on a pro rata basis and we do not expect that they will be made on a pro rata basis in the future. Certain investors have been, and likely will continue to be, mandatorily redeemed before other investors (for example, PDT does not expect to mandatorily redeem PDT partners, employees, affiliates, and certain friends and family and, in fact, has in the past and may in the future accept subscriptions from existing and new investors, including from PDT partners, employees, affiliates, and friends and family during times when other investors are being mandatorily redeemed). Even among investors in the same general category (e.g., friends and family) redemptions have not been made, and will likely not be made in the future, on a pro rata basis. In considering which investors to mandatorily redeem and in what amounts, we reserve the right to be subjective and consider only the interests and factors we desire (including, our own interests and those of our partners and employees). Factors we have taken into account in the past, and are likely to take into account in the future, in deciding which investors to mandatorily redeem, in what amounts, and whether to accept new investments from existing or new investors include our (or our partners’ or employees’) relationship and/or experience with the investor (or the investor’s manager), the investor’s (or manager’s) history of prior redemptions from our Funds, whether the investor (or manager) has investments in multiple Funds, any information disclosure concerns we have with respect to the investor (or manager), any contractual rights the investor (or manager) has with respect to capacity, and the size of an investor’s (or its advisor’s) investments in the particular Fund. Within a few years (and possibly sooner), we expect that all or almost all external investors in the PDT Partners Fund family (with the possible exception of certain friends and family investors) will be mandatorily redeemed in full. Leverage While the Funds utilize different amounts of leverage, most (but not all) of the Funds utilize a significant amount of leverage as part of their investment program. The Funds obtain leverage by trading on margin and by trading derivative instruments that are inherently leveraged (including, among other things, futures contracts and swaps). Leverage exaggerates the effect on the value of interests in a Fund of any increase or decrease in the market value of its securities, thus increasing the volatility of a Fund. In addition, monies borrowed are subject to interest costs that may or may not be recovered through appreciation of the securities purchased or the yield from such securities.

To raise cash to meet a margin call or other payment requirement (including as a result of a sudden precipitous drop in the value of a Fund’s portfolio), a Fund may be required to liquidate assets in its portfolio that it otherwise would not liquidate or liquidate assets at a sub-optimal time. In addition, a Fund may be required or PDT may determine to de-lever its portfolio, which would likely result in the liquidation of portfolio positions at a different time than would otherwise be optimal.

Counterparty Risk and Counterparty Concentration Risk The Funds are exposed to the credit risk of the banks, brokers, dealers, exchanges, and other counterparties through which they trade, particularly Morgan Stanley. The Funds’ prime brokers or other counterparties hold Fund assets, including assets held as collateral for margin loans or other financing provided to the Funds, and may otherwise have payment obligations and other liabilities to the Funds. If a prime broker or counterparty becomes insolvent, the claims, assets and/or collateral of the Funds held by or due from such prime broker or counterparty may not be recoverable by the Funds. Further, even if the Funds are able to recover a portion of such claims, assets, or collateral, such recovery could entail significant costs and could take a significant period of time. The Funds are also subject to risk of loss of their assets on deposit with a sub-custodian in the event of the sub-custodian’s bankruptcy, the bankruptcy of any clearing broker (through which a broker executes and clears transactions on behalf of the Funds), or the bankruptcy of an exchange clearing house. The Funds are also subject to risk of loss of their funds on deposit with non-U.S. brokers because non-U.S. regulatory bodies do not uniformly require such brokers to segregate customer funds. Certain swap counterparties that are financial institutions subject to European regulatory requirements have required, or are expected to continue to require, the Funds to agree to the application of a “bail in” regime in the event of the counterparty’s insolvency pursuant to which the Funds’ unsecured claims against the counterparty are subject to reduction by the relevant regulatory authority. Additionally, regulatory requirements in the United States and Europe require the Funds to wait a specified period of time before exercising contractual termination rights based on the insolvency of certain swap counterparties or their affiliates, which could result in losses for the Funds. The Funds rely on one or more broker-dealers for exchange connectivity and other services. In the event of the insolvency of any such broker-dealer, PDT may not be able to resume trading for the Fund for an extended period of time. For example, in certain markets and for certain products, the Funds currently rely on a single counterparty for trade execution and financing services. Even if a counterparty remains solvent, a Fund is likely to be materially adversely impacted if the counterparty fails to adequately perform its duties and obligations. Each Fund relies on service providers for certain key activities (including trading, market data, and reconciliation) and, in many cases, a Fund’s reliance is concentrated in a particular service provider or group of service providers. Failure of one of these key service providers to perform as expected could negatively impact the Funds. Effect of Substantial Redemptions and Subscriptions Substantial redemptions by investors in a Fund within a short period of time could require us to liquidate positions more rapidly than would otherwise be desirable, which would cause the Fund to incur transaction costs relating to the sale of assets to raise cash for redemptions and adversely affect the value of the Fund’s remaining assets. Redemptions could cause a Fund to run at higher than desired leverage which would likely impact risk and returns. Substantial redemptions by investors in a Mosaic Trading Fund within a short period of time would also likely adversely affect the value of the other Mosaic Trading Funds, given the high correlation among the Mosaic Trading Funds. Any reduction in a Fund’s assets would also cause remaining investors in such Fund or a Mosaic Trading Fund to bear a larger portion of the operating expenses of the Fund or Mosaic Trading Fund than they would otherwise. If a substantial number of investors were to redeem all or a portion of their investment from a Fund, we may also elect to liquidate the Fund. Similarly, substantial subscriptions to a Fund could cause PDT to enter into positions more rapidly than would otherwise be desirable, which would cause the Fund to incur substantial transaction costs, or to otherwise alter the Fund’s exposure to account for the expected increase in the size of the Fund. On the other hand, PDT could fail to appropriately adjust the Fund’s portfolio to reflect such a subscription, in which case the Fund would have lower gross exposures than would otherwise be desirable. Differential Terms for Certain Investors We have allowed, and from time to time in the future expect to allow, certain investors (including PDT- related parties) to invest in a Fund on different terms than other investors. Such different terms include different information rights, different minimum investment amounts, different transfer and liquidity rights, different expense caps, different restrictions on transfer, pledging and hypothecation, and different fees and allocations. The specific terms of any such arrangement, which may be detrimental to other investors in the Fund, likely will not be disclosed to such other investors unless we determine that disclosure is required by law or contractual requirements. Equity Securities and Equity-Related Securities The Funds invest in equity securities and certain derivatives thereon and may, in the future, invest in other equity-related instruments, such as stock options and individual stock futures. The value of equity securities varies in response to many factors. Factors specific to an issuer, such as certain decisions by management, lower demand for the issuer’s products or services, exposure to currency volatility as a result of global operations, or even the loss of a key executive, could result in a decrease in the value of an issuer’s securities. Factors specific to the industry in which an issuer participates, such as increased competition or costs of production or negative consumer or investor perception, can have a similar effect. The value of an issuer’s stock can also be adversely affected by changes in financial markets generally, such as movement in interest rates or consumer confidence, which are unrelated to the issuer itself or its industry. These and other factors cause significant fluctuations in the prices of the securities in which a Fund invests and therefore are likely to result in significant losses to the Funds from time to time. PDT does not perform due diligence on the fundamental soundness of the business model or management of the issuers in which the Funds invest. PDT’s models do not take into account all, or potentially any, of the factors that contribute to the value of a particular company’s equity securities. Foreign Investments and Emerging Markets The Funds invest in non-U.S. securities and derivatives thereon, and PDT expects to continue to expand the number of markets where certain of the Funds trade. As a result, PDT expects those Funds’ foreign investments (and therefore exposure to foreign investment risks) to generally increase over time. International investing and trading involves special risks not typically associated with investing in and trading U.S. securities and derivatives, including: changes in exchange rate and exchange control regulation; the imposition of non-U.S. withholding or other taxes; political, social, or economic instability; increased risk of government intervention; less liquid markets; less rigorous (or no) accounting and financial reporting standards; higher transaction costs; greater difficulty in enforcing contractual rights; and more uncertain procedures (if any) for bankruptcy or other reorganization or liquidation proceedings. In addition, in many non-U.S. markets, there is less government supervision of exchanges, brokers, dealers, and issuers than in the United States, which may make such entities more likely to fail or experience substantial issues than their U.S. counterparts. In the case of emerging market securities and derivatives thereon, the foregoing risks are even more pronounced. The Funds also invest in certain developing or less-developed markets (and one Fund only invests in such markets). With respect to such investments, the Funds encounter risks not generally associated with developed markets, including those related to heightened legal, political and economic uncertainty, difficulties regarding the conversion into U.S. dollars and/or repatriation of funds, general social, political, and economic instability, the risk of nationalization or expropriation of assets, adverse diplomatic developments, accounting risk, tax risk, regulatory risk, and the lack of robust regulation in such markets. Securities and other financial instruments traded in certain emerging markets are subject to additional risks due to, among other factors, the inexperience of financial intermediaries, a lack of modern technology, and the possibility of temporary or permanent termination of trading. As compared to exchanges in developed markets, the exchanges on which certain emerging market securities trade generally have less stringent listing requirements, lower trading volumes and liquidity, and may be at greater risk of market manipulation. Government involvement in the private sector varies in degree among the emerging market countries in which the Funds invest. Such involvement, in some cases, includes government ownership of companies in certain sectors, wage and price controls, imposition of trade barriers and other protectionist measures, or confiscatory taxation. With respect to any emerging market country, there is no assurance that some future economic or political crisis will not lead to price controls, forced mergers of companies, expropriation, or creation of government monopolies, to the possible detriment of the Funds’ investments. Short Sale Transactions Short selling is a critical part of many of PDT’s strategies. Short selling involves selling securities that may or may not be owned by the seller and borrowing the same securities for delivery to the purchaser, with an obligation to replace the borrowed securities at a later date. Short selling allows the investor to profit from declines in the value of securities. In addition, positions that are economically similar to short sales can be established through derivatives trading. In most jurisdictions, a party is required to borrow or locate shares before selling securities short. From time to time, shares will be unavailable for borrowing (including as a result of PDT’s activities on behalf of other Funds), and consequently, PDT will be unable to carry out intended trades on behalf of one or more of its Funds. There is also a risk that the securities borrowed in connection with a short sale will be required to be returned to the lender of such securities on short notice. If a request for the return of borrowed securities occurs at a time when other short sellers of the securities are receiving similar requests, a “short squeeze” can occur, and the Funds would be forced to replace borrowed securities previously sold short by purchasing the relevant securities on the open market at a disadvantageous time, possibly at prices significantly in excess of the proceeds received from originally selling the securities short. As more and more short sellers purchase back the relevant securities, the price of such securities will continue to increase, to the detriment of those market participants (including, potentially, the Funds) with open short positions. Where PDT is able to effect a short sale on behalf of a Fund, such Fund faces the risk of a theoretically unlimited loss, in that the price of the underlying security could theoretically increase without limit, exposing the short seller to the theoretically unlimited cost of buying those securities to cover the short position. There can be no assurance that the security necessary to cover a short position will be available for purchase (including as a result of a “short squeeze,” as described above). Purchasing securities to close out the short position can itself cause the price of the securities to rise further, thereby exacerbating the loss. Similarly, a short position established synthetically through a derivative could also result in a substantial loss if the value of the underlying asset or index actually increases rather than decreases. In recent history, many jurisdictions have imposed restrictions and reporting requirements on short selling. For example, in 2008, the SEC suspended short selling on over 900 public companies (including issuers in the financial services industry) and, in 2010, the SEC adopted a short sale price test rule, which limits short selling a security following a 10% decline in its trading price. These restrictions and reporting requirements, and any restrictions and reporting requirements enacted in the future, may change the manner in which a Fund trades and may prevent a Fund from successfully implementing its investment strategies. In addition, reporting requirements related to short selling provides transparency to a Fund’s competitors as to its short positions, which may have a detrimental impact on the Fund’s returns (see Disclosure of Intellectual Property above). Hedging Transactions Many of the strategies employed by the Funds seek to limit their exposure to certain risks by employing hedging techniques, including by using a variety of derivative transactions. There can be no assurance regarding the effectiveness of these techniques or that they will result in increased or more stable returns than would have been achieved had they not been employed. Hedging techniques involve risks different from those of underlying investments. In particular, the variable degree of correlation between price movements of hedging instruments and price movements of the position being hedged creates the possibility that losses on the hedge may be greater than gains in the value of a Fund’s positions. If PDT incorrectly assesses the degree of correlation between the positions in a Fund and the instruments used to hedge such positions or fails to recalculate or readjust the hedges as markets please register to get more info

This section is not applicable to PDT. please register to get more info

PDT Partners, LLC is registered with the Commodity Futures Trading Commission (“CFTC”) as a commodity pool operator. We are a member of the National Futures Association (“NFA”). Certain of our partners and employees are registered with the NFA as associated persons and/or principals of PDT Partners, LLC. In addition, PDT Partners, LLC is in the process of registering with the Japanese Financial Services Agency as a “high speed trade operator” under the new regulatory framework introduced by amendments to the Financials Instruments and Exchange Act which became effective in April 2018. PDT Partners GP, LLC, PDT Partners One GP, LLC, and 1818 I GP, LLC are each under common control with PDT and act as managing member or general partner of certain Funds. PDT Partners UK, LLP, a subsidiary of PDT Partners, LLC, previously provided sub-advisory services to PDT in connection with our management of certain Funds, but ceased to provide such services in 2016. PDT Partners UK, LLP cancelled its permissions with the U.K. Financial Conduct Authority in 2017 and is no longer authorized and regulated by the U.K. Financial Conduct Authority. Peter Muller, a principal owner of PDT, is a co-founder and control person of Chalkstream Capital Group, L.P. (“Chalkstream”), which is registered as an investment adviser with the SEC, where he participates in regularly scheduled meetings with the investment team of Chalkstream. Furthermore, some of our partners and employees, including Mr. Muller, have made personal investments in investment funds managed by Chalkstream. Certain potential conflicts of interest arise in connection with Mr. Muller’s involvement with the investment management of Chalkstream and our partners and employees’ personal investments with Chalkstream, on the one hand, and the Funds, on the other hand. Chalkstream has engaged, and may in the future engage, in quantitative trading strategies directly and has from time to time provided, and may in the future provide, capital to firms that pursue quantitative trading strategies, including firms that trade the same products in the same markets as PDT. Mr. Muller is not obligated to inform PDT of investment opportunities, relationships, or specific investments he becomes aware of in his role at Chalkstream, including certain opportunities related to quantitative trading. Mr. Muller’s involvement in Chalkstream requires substantial time and effort, which time and effort he might otherwise expend on managing the Funds. In addition, even if activities of PDT on behalf of the Funds are conducted separately from the activities of Chalkstream and its affiliates, it is possible that the CFTC and certain exchanges will require aggregation of the Funds’ positions in futures contracts with positions held by Chalkstream and its affiliates for purposes of complying with applicable position limits or other rules. Finally, Chalkstream has invested in a PDT Fund. Given the overlapping ownership of Chalkstream and PDT, we are incentivized to favor Chalkstream over other investors (e.g., in providing information about our strategies or Funds, granting access to management, and not mandatorily redeeming them from our Funds). Both we and Chalkstream have adopted policies and procedures in connection with such activities in order to address and monitor these potential conflicts of interest. In addition, Mr. Muller is an Index Committee Observer to the Quincy Jones Streaming Music, Media & Entertainment Index (also known as the QJ Index or the QUINCY100). The QUINCY100 is overseen by an Index Committee managed by Solactive AG (“Solactive”), Solactive is responsible for decisions regarding the composition of the QUINCY100 as well as any amendments to the rules governing the QUINCY100. As an Index Committee Observer, Mr. Muller’s role is limited to observe and comment on the QUINCY100 methodology and he does not have any voting rights or other authority on the Index Committee or with respect to changes to the Index methodology or the calculation or maintenance of the QUINCY100. PDT has adopted procedures in connection with such activities in order to address and monitor any potential conflicts of interest. please register to get more info

TRANSACTIONS, AND PERSONAL TRADING
PDT has adopted a Code of Ethics (the “Code”) pursuant to Rule 204A-1 under the Advisers Act. Each of our permanent employees, officers, directors, partners, and members and most temporary employees and consultants who have worked for PDT for more than six months (collectively, “partners and employees”) receive training in the Code and are required to acknowledge the Code. The Code requires employees to act in the best interests of our clients and to refrain from putting their personal interests above the interests of our clients. The Code requires partners and employees to disclose all of their covered accounts (which include brokerage accounts controlled by them and their spouses and minor children) to PDT’s Compliance department. Under the Code, partners and employees must pre-clear with our Compliance department non-exempt transactions, which include purchases and sales of most equities and futures, and cannot transact any non-exempt buy followed by a sell (or any non-exempt sell followed by a buy) within a period of less than 90 days between the two transactions. Trading on material non-public information is also prohibited by the Code. Investments in private placements, participation in an outside business activity, and political contributions require pre-approval from the Chief Compliance Officer or his designee. The Code also places limits on the value of gifts and entertainment that may be received and/or given by partners and employees. Exceptions may be granted only with approval from the Chief Compliance Officer or his designee. Partners and employees who violate the Code may be subject to sanction. Fund investors and prospective Fund investors may obtain a copy of the Code upon request. Our partners and employees buy or sell securities or other instruments that we also recommend to the Funds. Moreover, we recommend to the Funds the purchase or sale of securities in which we, our partners, employees, and/or related persons have a financial interest. To address any potential conflicts of interest, these transactions are subject to our policies and procedures regarding personal securities trading described above, as well as to the requirements of the Advisers Act and other applicable laws. Peter Muller and certain of our partners and employees have levered exposure to the PDT Partners Fund family. Such investments represent a significant portion of the net worth of such persons and are likely to increase over time. The use of leverage exaggerates the impact of the performance of the Funds. In addition, under the terms of the leverage facility, during periods of poor performance of the PDT Partners Fund family, and upon the occurrence of certain other events, certain PDT-related parties are required to post additional collateral to the provider of the leverage facility. Therefore, from time to time, PDT is likely to be incentivized to manage the assets of the Funds in a manner that is more risk averse than it would have otherwise. In addition, if any Funds suffer negative performance, our partners and employees invested in such Funds will be more negatively impacted than unlevered investors in such Fund and may redeem their investment in order to satisfy margin calls, to diversify their holdings, or for any other reasons. Any such redemptions could be substantial and could adversely affect the Fund subject to the redemptions or a Mosaic Trading Fund (see Item 8 – Methods of Analysis, Investment Strategies, and Risk of Loss – Material Risks – Effect of Substantial Redemptions and Subscriptions). PDT directly or certain PDT personnel and their related entities (including Chalkstream) have relationships with broker-dealers utilized (or expected to be utilized) by the Funds. For example, PDT, its affiliates, and PDT personnel invest in the PDT Partners Fund family on a levered basis using capital provided by one such broker-dealer. Such relationships incentivize PDT to select these broker-dealers to provide services to the Funds and less likely to replace these broker-dealers with other broker-dealers with whom PDT personnel do not have a pre-existing relationship. In deciding to select and retain Morgan Stanley to provide prime brokerage or other services to the Funds and in negotiating the terms of such services, PDT is particularly conflicted. Due to PDT’s affiliation with Morgan Stanley prior its separation from Morgan Stanley on January 1, 2013 (the “Separation”), the fact that partners and employees of PDT were employed by Morgan Stanley prior to the Separation, Morgan Stanley’s ownership of special, non-voting membership interests in PDT, and PDT’s reliance on Morgan Stanley for “co-location” and data center resources in an Asian financial center (see Item 12 – Brokerage Practices), PDT is conflicted in our decision to select and retain Morgan Stanley over other parties and to provide Morgan Stanley with favorable terms in its role as service provider. In addition, in light of Morgan Stanley’s ownership of such membership interests, it is possible that certain conflicts arise between Morgan Stanley, its affiliates and their employees, officers, directors, principals, partners, or members, on the one hand, and the Funds, on the other hand. All of the transactions described above involve the potential for conflicts of interest between PDT or its related persons and the Funds. The Advisers Act imposes certain requirements designed to decrease the possibility of conflicts of interest between an investment adviser and its clients. In some cases, transactions may be permitted subject to fulfillment of certain conditions. Certain other transactions may be prohibited. In addition, PDT has in some cases, and will in other cases, institute policies and procedures designed to mitigate and resolve conflicts of interest when they do arise, and in a manner that is consistent with PDT’s fiduciary duty to its clients and complies with applicable law. please register to get more info

PDT’s best execution policies and procedures and our selection of broker-dealers and other counterparties is overseen by our Brokerage Committee. Currently, Morgan Stanley provides custody for a significant portion of the Funds’ assets and provides a significant portion of the Funds’ trading and financing services (including being the sole counterparty for certain products, in certain markets, and for certain Funds). When selecting trading and financing counterparties, and evaluating the performance of those counterparties, in accordance with our obligation to seek “best execution,” the Brokerage Committee takes into account a number of factors, including commission and financing rates, execution quality, trading and technology infrastructure (including speed and reliability of execution and the ability to provide technology solutions), stock lending supply and rates, ability to execute and process transactions with appropriate levels of confidentiality, operational processes, and the financial strength, integrity, and stability of the broker or counterparty. PDT does not in all cases solicit competitive bids and does not have an obligation to seek the lowest available commission costs. If PDT determines that the amount of commissions charged by a broker-dealer are reasonable in relation to the value of the brokerage and products and services provided by such broker-dealer, the Funds will pay commissions or other fees to such broker-dealer in an amount greater than the amount another broker-dealer might charge. PDT’s choice of trading and financing counterparties often differs among Funds and even differs among Mosaic Trading Funds. From time to time, PDT trades through new executing brokers in an effort to improve our execution quality over the long-term, which can result in Fund orders being filled at worse prices (or the Funds being subject to higher commissions) than if PDT continued to trade only through executing brokers through which we have traded in the past. Morgan Stanley has furnished PDT with “co-location” and data center resources in an Asian financial center. The cost of establishing a comparable technological solution with a different counterparty would be substantial, both in terms of the absolute dollar cost to PDT and the required time and effort of PDT to implement such a solution. Although Morgan Stanley provides these services at no cost to the Funds and we do not believe that the commissions or financing charges paid on transactions with Morgan Stanley exceed the amount another comparable counterparty would charge for effecting such transactions, these arrangements do create an incentive for PDT to select and retain Morgan Stanley as a broker-dealer for the Funds (see Item 11 – Code of Ethics, Participation or Interest in Client Transactions, and Personal Trading). In addition to providing the Funds trading and financing services, the Funds’ broker-dealers and related persons from time to time furnish PDT directly or through correspondent relationships with research (including third-party research) and technology solutions (e.g., circuits to facilitate connectivity between PDT and such persons), and other advisory services. To date, we have not caused the Funds to pay higher commissions or financing charges than would otherwise be paid as a means of remunerating broker- dealers for services that benefit, in whole or part, PDT, but in the future we may do so but only to the extent that such payments are consistent with the safe harbor provisions of Section 28(e) of the Exchange Act. Other than for Mosaic Trading Funds, PDT’s policy is to generally work orders independently (i.e., not aggregating trades). However, under certain limited circumstances, purchases and sales of securities are generally aggregated or bunched (e.g., when subscribing for or liquidating securities acquired in initial public offerings). We generally only aggregate orders when we deem such aggregation to be appropriate under the circumstances and operationally and/or technically feasible given our and our trading counterparties’ infrastructure and capabilities at the time. Positions purchased or sold in an aggregated transaction are allocated to the participating Funds pursuant to our trade aggregation and allocation policies, which generally require allocation according to a predetermined methodology. With respect to Mosaic Trading Funds, we generally work orders with respect to equity instruments in a coordinated fashion (but not aggregated or bunched). Where Mosaic Trading Funds trade the same equity instrument, in the same direction, and through the same counterparty, we also generally allocate the resulting fills to the participating Funds at the average price of all the fills received on such related orders over the course of the day. While we believe that coordinating equity trades for the Mosaic Trading Funds is appropriate for such Funds overall, the effect of such coordination will operate on some occasions to a particular Fund’s disadvantage (for example, by resulting in a Fund receiving a worse price than it would have received had it been allowed to trade without consideration of other Mosaic Trading Funds’ orders). PDT is permitted to, but does not generally, effect internal “cross” transactions between Funds, in which one Fund will purchase securities held by another Fund. PDT generally does not cross those trades internally and instead incurs trading commissions on both the purchase and the sale, resulting in higher transaction costs for the Funds. Under certain circumstances, PDT may effect “cross” transactions between Funds, if permitted by applicable law. Any such “cross” transaction will be entered into generally only when we deem the transaction to be in the best interests of both Funds and at a price we have determined by reference to independent market indicators and which we believe to constitute “best execution” for both parties. Neither PDT nor any related party will receive any compensation in connection with such “cross” transactions. PDT’s Trade Errors Policy defines “trade errors” as “unintended” trades, e.g., purchasing or selling the wrong securities, or purchasing or selling the wrong amount of securities. As with all financial gains and losses attributable to trading activity, any gains or losses resulting from trade errors are generally borne by the relevant Fund. Losses to Funds will only be reimbursed to the extent PDT determines that the trade error resulted from PDT’s fraud, willful misfeasance, or gross negligence. Trades proposed or executed by an algorithm or automated process (even if such trade is based on a bad input, including a bad input resulting from human error) are not considered “trade errors” under PDT’s Trade Errors Policy. Accordingly, all such errors will be charged to the relevant Fund(s) in the same way as any other trading gains or losses. It should be noted that, given the manner in which PDT trades, losses caused by coding errors (and therefore not considered trade errors) are likely to greatly exceed losses caused by trade errors as defined by PDT’s Trade Errors Policy (see Item 8 – Methods of Analysis, Investment Strategies, and Risk of Loss – Material Risks – Coding Errors). please register to get more info

Our portfolio managers and/or strategy heads are primarily responsible for reviewing Fund investment portfolios. In addition, risk reports that are generated frequently (typically daily) for senior management contain strategy performance and portfolio characteristics. Performance and portfolio breakdown are also reviewed by senior management during regularly scheduled (typically monthly) committee meetings.
Reports
PDT and/or the Funds’ administrator provide investors in each Fund with monthly written reports setting forth each investor’s investment in the Fund and certain other information. Each Fund investor is also furnished with a set of audited financial statements for each relevant fiscal year and, where applicable, a Schedule K-1 or other IRS Form indicating such investor’s share of the Fund’s income, gain, loss, deductions, and credits relevant for U.S. federal income tax purposes. please register to get more info

We receive certain services (including technology, research, capital introduction, hedge fund consulting, and other advisory services) from prime brokers or other counterparties with whom we conduct business at no additional cost. This presents a conflict of interest with respect to our selection of such counterparties, though we understand that the benefits received through these relationships generally do not depend on the volume of transactions directed to a particular counterparty. PDT does not currently compensate any person for client referrals, although in accordance with Canadian law, we have engaged a placement agent for assistance with the placement of Fund interests to Canadian investors. please register to get more info

Fund assets are generally held in custody by third-party qualified custodians; however, PDT is deemed to have “custody,” as defined under Rule 206(4)-2 under the Advisers Act, of the assets for the Funds because PDT serves as general partner or managing member of the Funds and because PDT has authority to withdraw assets from the Funds. In those cases, the Funds will provide audited financial statements to Fund investors on an annual basis in accordance with applicable law. please register to get more info

PDT has discretionary authority to manage the assets of the Funds. Our discretion is exercised in a manner consistent with the stated investment objectives and guidelines of each Fund. The procedures we follow in assuming this authority are outlined in each Fund’s governing documents. please register to get more info

Due to their quantitative nature, in particular their generally market-neutral and highly diversified portfolios, PDT’s investment strategies generally will not hold significant voting power with respect to any particular issuer, while the cost of voting proxies is generally fixed. In addition, given the relatively high turnover of certain of the Funds, it is unlikely that securities held on a particular record date would be held by that Fund on the date of the vote or when the effect of the matter voted upon was realized, which significantly reduces the relevance of the proxies that PDT might vote on behalf of those Funds. Finally, certain Funds generally hold relatively few instruments which entitle them to vote proxies. PDT has determined that the costs associated with voting proxies outweigh the potential benefit, if any, that would accrue to the Funds from proxy voting. Therefore, it is PDT’s policy not to vote proxies on behalf of the Funds. Notwithstanding the foregoing, PDT may vote proxies with the approval of the Chief Compliance Officer or his designee.

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This section is not applicable to PDT. please register to get more info