I would ask to see a 1-paragraph synopsis on ALL of their equity positions, not just five. If the stocks they are selecting intuitively make sense to you, then that’s a good sign. Of the five equity positions they profiled, I liked their explanations and logic behind their positions. It was easy to understand and made sense to me.
Arbitrage trading is simply mathematical gaming and making money for money’s sake. It has nothing to do with investing in the value of a company’s technology and products. If they’re only doing a small percentage of trades using an arbitrage strategy, it may not be a big issue.
Can they show a graph of the growth of the total $size of fund?
Have they been successful in building their base of investors? What is the current number of investors? Have any investors dropped out? Why?
I would ask for a few callable references so that you could get a current investor perspective on SC’s performance and the investors’ perspective on the quality of reporting and customer service. I would also ask to see a sample quarterly report.
The 2% management fee + 20% performance fee is standard. You need to make sure that the performance fee only applies to the net profits, i.e., profits after losses in previous years have been recovered.
It is also reasonable to require that the performance fees include a “hurdle,” so that a fee is only paid on the fund’s performance in excess of a benchmark rate or a fixed percentage. That is to say, the manager is only rewarded if the fund generates returns in excess of the returns you would’ve received if you had invested your money elsewhere.
What protections does SC provide in the event of fraud or breach of any of the provisions of the Subscription Agreement? I see none. There should be a reciprocal indemnification by SC to the one you would be expected to sign to in section D of the Subscription Agreement.
The Memorandum indicates that you can liquidate and withdraw your account with a 90-day notice, but the Subscription Agreement does not mention this.
In section E, “Power of Attorney,” the LLC should be required to notify investor of any substantive changes made to the LLC on investor’s behalf.
- I would not make any kind of decision on this investment until you receive good answers to these due diligence questions and issues.
- The documentation is very sloppy, and that is concerning. I wouldn’t sign the Subscription Agreement until some of these errors are corrected.
- If there is one SC, there are hundreds if not thousands to choose from. By comparison to the pool of equivalent investment funds you could choose from, they are very inexperienced. And with inexperience comes higher risk.
Imagine H2O is a nonprofit organization with a mission to inspire and empower people to solve water problems.
Will the rise of Bitcoin bring a monetary paradigm shift that will forever change the world?
The looming bankruptcy red flags continue to mount for Illinois as individuals and companies exit the state in search of good jobs, lower taxes, and to escape the entrenched cronyism, corruption and dysfunctionality of its politicians and unions.
“Our short-sightedness has led to major challenges — dependence on oil, climate change, health care, and national security — that threaten our economy and quality of life. Each challenge also brings opportunities — if we give innovation the attention it deserves.”
Science for the people, by the people.
by Scott Pickard
Sarah, very interesting article and your recommendations are well-intentioned and truthful, but, I give them a slim chance of making a dent in the sprawling, dense and calcified GM cultural fabric which has deeply embedded within it the familiar dysfunctional qualities of a massive bureaucratic organization. In this regard, human nature repeats itself with disappointing consistency. In very large corporations, universities, government units, and military, this is what we face and deal with every day.
It confirms to me that GM was probably not “too big to fail.” Failure could have been the disruptive event necessary to purge the dysfunction and clear a path for renewal — a “corporate reboot” if you will. Bankruptcy would have provided the platform and mandate for sweeping away all the dead wood, political toxicity, cronyism, greed, and staleness that builds up over time inside society’s largest institutions.
Had that happened, then “creating opportunities for collegiality to take root….encouraging questions that create context….. helping employees to feel safe by reshaping the work environment…,” might have been introduced into a clean, fear-free, accepting cultural landscape.
But, it didn’t happen, so best of luck to Mary Barra.
Don’t get me wrong, I’m all-in for capitalism with its faults, but we all know the aggressive pursuit of profit in BIG BUSINESS (with power and greed lurking in the headquarters’ shadows) has its dark side.