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From: Neal Berger To: [email protected] Subject: Eagle's View Capital Management, LLC- May 2015 Performance Update... Date: Wed, 10 Jun 2015 13:19:20 +0000 Eagles View Capital Management, LLC May 2015 Performance Update June 10. 2015 Eagle's View domestic Funds best monthly performance to date- The X Factor Click here to view our most recent monthly investor tearsheet Dear Partners/Friends, Performance of Eagle's View Capital Partners, L.P. is estimated at +3.25% for May with YTD performance estimated at +2.87% net of all fees and expenses. Performance of Eagle's View Offshore Fund, Ltd. Class G is estimated at +0.05% for May with YTD performance estimated at -1.42% net of all fees and expenses. Performance of Eagle's View Offshore Fund, Ltd. Class B ("High Alpha") is estimated at +0.37% for May with YTD performance estimated at -1.76% net of all fees and expenses. This Share Class seeks to generate substantially higher returns through a more concentrated portfolio of some of our historically higher return opportunities. Investors in this Class should have a willingness to accept increased volatility and risk in exchange for the potential of higher returns. The divergence between our onshore and offshore Funds for the MTD and YTD is attributable to certain Funds we allocate to that have US domestic Partnerships, however, they do not have an offshore counterpart. As a result, we are not invested in those Funds on behalf of our offshore offerings. While this was largely the story for May, both onshore and offshore Funds share a similar mandate, philosophy, and approach. We expect that while short-term variations will exist, over time, we expect these variations will even out, offshore will outperform domestic on occasion, and we believe the performance differences between onshore and offshore to even out in the long-run. EFTA01207825 We are pleased with the performance of Eagle's View Capital Partners, L.P. during the month of May. May was our strongest monthly performance for the Fund since its inception in June, 2010. Ironically, this performance comes off the back of our worst monthly performance since inception during April which was -1.75%. Importantly, the skew between our best monthly performance versus worst monthly performance, is just under 2:1. While we have repeatedly told investors that we are making a concerted effort to increase the monthly performance swing (with positive skew) in an effort to enhance our overall returns, it is important to note that we believe months such as May with a 3% handle are going to be rather rare. Our Fund is not expected to deliver monthly swings of this magnitude with regularity going forward. Our current annualized volatility is 3.13% and we expect it to remain rather modest. The core tenets of wealth preservation, substantial diversification, lack of correlation to the direction of broader markets, low volatility, and the power of compounding returns with minimal drawdowns remain firmly in place. While May was shaping up to be a decent month overall, we saw outlier upside performance from one of our Managers which helped in adding to our monthly gains. We believed that this Manager possessed the potential for asymmetric upside returns, and, our expectations came to fruition during May. As we analyze and invest in strategies and Managers, we consider this factor (which we term the X factor) which we will discuss a bit below. What is the X factor? The X factor is a term we use loosely at Eagle's View to refer to the non-mathematically quantifiable risk or, "hidden" asymmetric potential upside of an investment opportunity based upon our own qualitative analysis. The X factor can be both positive as well as negative. Often, this X factor has never shown up within a Manager's track record and it is quite possible that it never will. However, regardless of that fact, it does not mean that this factor does not exist. As such, we have to determine if an X factor exists using qualitative analysis and our experience. Examples of a negative X factor would be the risk of a major drawdown due to short-optionality, the potential for outsized losses due to embedded credit risk assumed within the Fund's concentrated counterparty exposure, lack of cash movement controls, liquidity changes of a strategy's underlying securities, etc. In short, a negative X factor is a risk that the Fund may experience a large drawdown, or full blow-up, should certain rare, but possible events occur. As mentioned, often, this will not show up in any prior track record and can only be determined through a qualitative assessment of the Manager's business and strategy. Eagle's View takes these risks very seriously and seeks to avoid Funds that may have risks that are not readily apparent on the surface, but, nonetheless does not negate their presence. Conversely, Eagle's View seeks to maximize positive X factors and considers this in our investment process. These opportunities have the potential, although not necessarily the likelihood, of large outsized asymmetric gains as a by-product of their core business activities. The most obvious example is some form of long optionality and substantial gamma embedded within a strategy. Again, this may never have shown up in prior track records, and, it may never come to fruition, however, once again, it does not negate its existence. We seek strategies that own this upside optionality often obtained at minimal or no-cost as a by-product of a Fund's core activities. During the month of May, one of Eagle's View's underlying Managers experienced an outsized gain due to the existence of a positive X factor within the strategy. Certain circumstances aligned and this Fund had a very substantial month relative to any month in its prior history. We knew this was a possibility when we invested with this Manager, EFTA01207826 and, we were hopeful we'd see an outsized gain someday. During May, we were lucky that this occurred which added to an already favorable monthly outcome. We are pleased to take the credit for this luck since we are held accountable for the unlucky situations that we suffer. Over time, luck evens itself out. Broadly speaking, Eagle's View is in the business of seeking to capitalize upon market inefficiencies without regard to the overall direction of markets. We are accepting new investment within our Fund of Funds products as well as within our Advisory business. Please contact me with further interest in our products/services. Disclaimer: Past performance is not indicative of future results. This newsletter is provided for informational uses only and should not be used or considered an offer to sell, buy or subscribe for securities, or other financial instruments. Prospective investors may not construe the contents of this newsletter or any prior or subsequent communication from us, as legal, tax or investment advice. Each prospective investor should consult his/her personal Counsel, Accountant, and other Advisors as to the legal, tax, economic and other consequences of hedge fund investing and the suitability of such investing for him/her. Further, the contents of this newsletter should not be relied upon in substitution of the exercise of independent judgment. The information contained herein has been obtained from sources generally deemed by us to be reliable, however, all or portions of such information may be uniquely within the knowledge of parties which are unaffiliated with us or our affiliates and, therefore, may not be amenable to independent investigation or confirmation. In such cases, we have not undertaken to independently investigate or confirm the accuracy or adequacy of such information, but we have no reason to believe that such information was not accurate and adequate, to the best of our knowledge, when given. The index comparisons herein are provided for informational purposes only and should not be used as the basis for making an investment decision. There are significant differences between client accounts and the indices referenced including, but not limited to, risk profile, liquidity, volatility and asset composition. Funds included in the HFRI Monthly Indices must report monthly returns; report net of all fees retums; report assets in US Dollars, and have at least $50 million under management or have been actively trading for at least twelve (12) months. Fund of Funds invest with multiple managers through funds or managed accounts. The strategy designs a diversified portfolio of managers with the objective of significantly lowering the risk (volatility) of investing with an individual manager. The Fund of Funds manager has discretion in choosing which strategies to invest in for the portfolio. A manager may allocate funds to numerous managers within a single strategy, or with numerous managers in multiple strategies. The minimum investment in a Fund of Funds may be lower than an investment in an individual hedge fund or managed account. The investor has the advantage of diversification among managers and styles with significantly less capital than investing with separate managers. PLEASE NOTE: The HFRI Fund of Funds Index is not included in the HFRI Fund Weighted Composite Index. It is important to note that investing in hedge funds involves risks. Please request and read the Private Placement Memorandum for a complete description of the risks of hedge fund investing. Hedge fund investing may involve, in addition to others, the following risks: the vehicles often engage in leveraging and other speculative investments which may increase the risk of investment loss; they can be highly illiquid; hedge funds are not required to provide periodic pricing or valuation information to investors; they may involve complex tax structures and thus delays in distributing important tax information may occur; hedge funds are not subject to the same regulatory requirements as mutual funds and they often charge high fees. Opinions contained in this Newsletter reflect the judgment as of the day and time of the publication and are subject to change without notice. Eagle's View Capital Management, LLC provides investment advisory services to clients other than the Funds, and results between clients may differ materially. Eagle's View Capital Management, LLC believes that such differences are attributable to different investment objectives and strategies between clients. Past performance is not a guarantee of future results. If you are not the intended recipient or have received this communication in error please notify the sender immediately and destroy this communication. Any unauthorized copying, disclosure or distribution of the material in this communication is strictly forbidden. EFTA01207827  Kindest regards. Neal Berger President Eagles View Capital Management LLC Forward email Ili This email was sent to [email protected] by Rapid removal with SafeUnsubscriberm Privacy Policy. Eagles View Capital Management LLC 135 East 57th St. 123rd Floor I New York I NY 10022 EFTA01207828