hedge fund pitch book - terebellum investment group

Jeff Williams

Deep Value Investing.

FOR ACCREDITED INVESTORS ONLY

Managing Partner [email protected]

March 2015

TEREBELLUM!INVESTMENT GROUP!

Helping Others Reach for the Stars

© 2015 Terebellum Investment Group, LLC 281-898-1486

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Jeff Williams CO-FOUNDER, PRINCIPAL, MANAGING PARTNER FINRA Series 3 (Commodity Futures Examination) and Series 34 (Retail Off-Exchange Forex Examination) examination qualified IT services project manager for 12 years Managed some of my employer’s largest projects with teams of 25 people and $1 million+ labor costs Specialized in rescuing failing projects from other service providers

TEREBELLUM INVESTMENT GROUP 2

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Wes Cooper CO-FOUNDER, PRINCIPAL, MANAGING PARTNER FINRA Series 3 (Commodity Futures Examination) and Series 34 (Retail Off-Exchange Forex Examination) examination qualified Studied Economics at the University of Missouri Actively traded since 1989 (27 years) through all market conditions Finished 6th in a 3-month national trading contest hosted by Technical Analysis of Stocks and Commodities magazine. Results were published in the November 1995 issue.


TEREBELLUM INVESTMENT GROUP, LLC

S&P 500 Index JANUARY 1, 2009 – FEBRUARY 28, 2015

5 TEREBELLUM INVESTMENT GROUP 4

5 TEREBELLUM INVESTMENT GROUP, LLC

Greece is drowning in Eurodebt.


Changes in the United States




Quantitative Easing Has Ended


TEREBELLUM INVESTMENT GROUP, LLC 6 TEREBELLUM INVESTMENT GROUP 8

The U.S has historic levels of debt

TERREBELLUM INVESTMENT GROUP, LLC 7 TEREBELLUM INVESTMENT GROUP

The price of oil has plummeted.

It’s down 50% from historic

highs a year ago

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International Changes

8 10 TEREBELLUM INVESTMENT GROUP

TEREBELLUM INVESTMENT GROUP, LLC 9 TEREBELLUM INVESTMENT GROUP

Oil bust + sanctions over Ukraine = Russian instability

11


Greece is Drowning in Euro debt


11 TEREBELLUM INVESTMENT GROUP

The Swiss manipulated their currency for three years, until…

EUR/CHF Euro Swiss Franc Exchange Rate

August 4, 2014 – January 10, 2015

13



EUR/CHF Euro Swiss Franc Exchange Rate

November 4, 2014 – March 10, 2015

…they changed policy in January 2015

14


Do not be lured by safe havens

Do not ignore the fundamental changes

in the world



Why us?

8 16 TEREBELLUM INVESTMENT GROUP

TEREBELLUM INVESTMENT GROUP, LLC 8 17 TEREBELLUM INVESTMENT GROUP

Risk Management…Adaptability…Experience


FOCUS


Futures as a risk management tool

19

We focus on risk management

Futures have historically outperformed equities during crisis


Performance History NEGATIVE CORRELATION

PERIOD EVENT S&P 500

Index Barclay

BTOP 50 DIFFERENCE

4th Quarter 1987 Black Monday Global Stock Market Crash -22.53% 16.88% 39.41%

4th Quarter 2008 Banking Crises -21.95% 9.14% 31.08%

3rd Quarter 2002 WorldCom Scandal -17.28% 9.41% 26.69%

3rd Quarter 2001 Attack on World Trade Center & Pentagon -14.68% 4.12% 18.79%

3rd Quarter 1990 Iraq invades Kuwait -13.75% 11.22% 24.97%

2nd Quarter 2002 Continuing Aftermath of Technology Bubble -13.39% 8.52% 21.92%

1st Quarter 2001 Bear Market in U.S. Technology -11.86% 5.97% 17.83%

An index of managed futures and commodities outperformed the S&P 500 Index after the seven most volatile periods of the stock market in the last 25 years.

Source: CME Group. Lintner Revisited: A Quantitative Analysis of Managed Futures. The S&P 500 Index is an unmanaged market-weighted barometer of U.S. stock market performance; as index of leading companies and industries, it dominated by large-capitalization companies. The Barclay BTOP 50 Index seeks to replicate the overall composition of the managed futures industry in trading style and market exposure.


Futures Exchanges Traded

AMERICAS Symbol Exchanges

Atlanta ICE Intercontinental Exchange

Chicago CBOT, CME Chicago Board of Trade, Chicago Mercantile Exchange

Kansas City KCBT Kansas City Board of Trade

Minneapolis MGE Minneapolis Grain Exchange

Montreal ME Montreal Exchange

New York City NYSE et al. Comex, EuroNext, New York Board of Trade, NYMEX

Toronto TMX Toronto Stock Exchange

Winnipeg ICE Winnipeg Commodity Exchange

EUROPE

London LIFFE et al. Eurex, London Metal Exchange, LIFFE

Madrid MEFF Madrid Futures Exchange

Milan FTSI Milan Futures Exchange

Paris MIF Euronext

Stockholm OMX Stockholm Options Market

Zurich SMI Swiss Market Index

ASIA / AUSTRALIA

Busan KOSPI Korea Exchange

Hong Kong HKFE Hong Kong Exchange

Mumbai BSE Bombay Stock Exchange

Singapore SGX Singapore International Monetary Exchange (SIMEX)

Sydney ASX, SFE Australia Securities Exchange; Sydney Futures Exchange

Tokyo TIFFE, TSE Tokyo Financial Exchange, Tokyo Stock Exchange

DIVERSIFICATION OPPORTUNITIES


Futures Contracts Traded

SECTOR FUTURES CONTRACTS

Currencies Aust. Dollar, Braz. Real, British Pound, Can. Dollar, Euro Dollar, Euro FX, Japanese Yen, Korean Won, Malaysian Ringgit, Mex. Peso, NZ Dollar, Russian Ruble, S. African Rand, Swiss Franc, U.S. $ Index, Thai Baht, Turkish Lira

Interest Rates Aust. 90-Day, 3-Yr. 10-Yr.Govt. Bonds; Can. 10-Year Bonds, 3-Month Euribor; Euro: Bobl, Bund, Schatze; Eurodollar; Jap. Govt. 20-Yr. Bond; Long Gilt; Short Sterling: U.S. T-bonds: 30-Year, Ultrabond; US T-notes: 2-3-5-10 Years

Indices and Stocks CAC 40, DAX, DJIA, EURO Stoxx, FTSI MIB Index, Hang Seng, MSCI Singapore Index, MSCI Taiwan, NASDAQ 100, Nikkei, Nikkei 225, Emini S&P 500, S&P 500, Topix, VIX

International Indices Amsterdam Exchanges Index; FTSI MIB (Italy), IBEX 35 Index (Spain), OMX 30 Index (Sweden), S&P CNX Nifty Index (India), S&P TSE Index (Canada), KOSPI Index (South Korea), NIKKEI (Japan)

Grains, Oilseeds Canola, Corn, Oats, Rough Rice, Soybean Meal, Soybean Oil, Soybeans, Wheat, Wheat Spring

Energy Coal, Brent Crude Oil, WTI Crude Oil, ICE Gas-Oil, Gasoline RBOB, Heating Oil, Henry Hub Nat. Gas

Food and Fiber Cocoa, Coffee, Coffee C, Coffee Robusta, Cotton, Milk, Orange Juice, Sugar #11, White Sugar #5

Metals High Grade Aluminum, Copper, Gold, Lead, Nickel, Palladium, Platinum, Silver, Tin, Zinc

Livestock and Meat Live Cattle, Feeder Cattle, Lean Hogs

Wood and Rubber Lumber, Rubber

DIVERSIFICATION OPPORTUNITIES




Shorter timeframes = higher liquidity

24



Our road to risk management

is paved with discipline

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Risk Analysis BENCHMARK COMAPARISON - SINCE FUND INCEPITION

Risk Analysis S&P 500 Index EAFE Terebellum Fund

Ending VAMI $1,089.87 $993.12 $1,792.92

Maximum Drawdown 3.45% 10.15% 14.27%

Peak to Valley Nov 14 – Jan 15 Jun 14 – Dec 14 Nov 14 – Dec 14

Recovery 1 Month Ongoing 2 months

Sharpe Ratio 0.92 -0.02 1.07

Sortino Ratio 0.09 -0.97 2.77

Calmar Ratio 2.40 -0.06 5.01

Standard Deviation 2.61% 2.99% 19.44%

Downside Deviation 1.73% 2.37% 6.69%

Mean Return 0.70% -0.01% 5.59%

Positive Periods 8 (61.54%) 6 (46.15%) 7 (53.85%)

Negative Periods 5 38.46%) 6 (46.15%) 6 (46.15%)

Source: PortfolioAnalyst. VAMI is an index that tracks the monthly performance of a hypothetical $1000 investment. EAFA is the MSCI EAF (ETF) - Morgan Stanley Capital International /Europe, Australasia, Far East. See Disclosure pages for definitions of risk analysis terms. Past performance is not necessarily indicative of future results.

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Data as of March 11, 2015, from Fund inception March 2014


Risk Analysis BENCHMARK COMAPARISON – JANUARY 1 – MARCH 11, 2015

Risk Analysis S&P 500 Index EAFE Terebellum Fund

Ending VAMI $990.94 $1,030.24 $1,323.27

Maximum Drawdown 3.64% 4.18% 8.98%

Peak to Valley March 3-11 Feb 2 - Mar 10 Feb 20 – Mar 3 5

Recovery Ongoing Ongoing 6 Days

Sharpe Ratio -2.33 1.30 4.17

Sortino Ratio -3.11 1.20 7.31

Calmar Ratio -1.80 5.94 78.55

Standard Deviation 0.87% 0.96% 2.78%

Downside Deviation 0.62% 0.69% 1.53%

Mean Return -0.01% 0.07% 0615%

Positive Periods 23 (46.94%) 30 (61.22%) 29 (59.18%)

Negative Periods 26 (53.06%) 19 (38.78%) 20 (40.82%)



Adaptability


MARKET BEHAVIOR

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We trade for range and trend.


Why limit yourself to choosing from this bunch?

MARKET BEHAVIOR

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We trade for range and trend. We invest in

“fresh apples”


MARKET BEHAVIOR

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We trade for range and trend.


Multi-strategy = best of the best

SYSTEMATIC

70% DISCRETIONARY

30%


Our trading systems are 70% systematic and 30% discretionary

Experience



Wes has traded for more than 27 years in all markets

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0

1

2

3

4

5

6

7

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1 2 3 4 5 6 7 8 9 10 11 12 13

Series2 Series3 Series4 Series5 Series6

Pockets of Predictability



Positive Expectations



Risk Management, Adaptability, Experience| Produce Results


0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

S&P 500 Credit Suisse Hedge Fund Index

Vanguard REIT Index Admiral Shares

Terebellum

13.80%

4.84%

29.35%

61.00%

RATE OF RETURN COMPARISON – 2014

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Terebellum will seek to fund a Charitable Donation account which will give 5% of the firm’s excess net profits each quarter.


Fund Terms And Summary


Fund Terms

FUND FACTS

Minimum Investment $1,000,000

Management Fee 2.00% annually

Incentive Allocation 25% charged annually (Only on High Water Mark)

Redemptions Quarterly withdrawals with 60 days notice

Liquidity 90 Days

High Water Mark Yes (Losses must be fully recovered before performance incentive fee earned)

Reports Audited quarterly


Service Providers

SERVICE PROVIDERS

Administrator Opus Fund Services San Francisco, CA

Auditor Kaplan & Company Northbrook, IL

Compliance Administrator National Regulatory Services Chicago, IL

Prime Broker Wells Fargo Prime San Francisco, CA

EXPERIENCED TEAM


Partner Reporting Schedule

MONTHLY QUARTERLY ANNUALLY

Performance Results

Investment Appraisal Report

Investment Update

Tax Return K-1

Audited Financial Statements

Partner Meeting

REGULAR REPORTING

Audited financials and partner K‐1s are completed and sent to limited partners generally before April 15th. Partner one-on-one meetings with the investment team are always available and encouraged in person/ and or phone.



Terebellum Investment Group, LLC is for accredited investors who are both aware of,

and able to sustain, the financial risks involved in exposure to equities investing.

An accredited investor is an individual with a net worth, or joint net worth with the

person's spouse, that exceeds $1 million (excluding primary residence) at the time of

the purchase, or an individual income in excess of $250,000, or in excess of $300,000

with his or her spouse, in each of the two most recent years, and who has a reasonable

expectation of an income in excess of $250,000 individually, or in excess of $300,000

with his or her spouse in the current year.

Accredited Investors Only

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Disclosure RISK DISCLOSURE

The Fund’s historical performance is net of all fees and expenses. Current year returns are preliminary and subject to change due to any revisions from the year‐end audit. Net returns have been calculated after all costs and expenses, including any incentive performance fee. A partner’s net return may vary from other partners’ net returns due to timing of capital additions and withdrawals in the Funds. Past performance is not necessarily indicative of future results. All investments involve risk, including the loss of principal. Investors should be aware that the referenced benchmarked indexes may have a different composition, volatility, risk, investment philosophy, holding times, and/or other investment‐related factors that may affect the benchmark indexes ultimate performance results. Therefore, an investor's individual returns may vary significantly from the benchmark's performance. The Funds have the ability to use margin, leverage, options, shorts and other strategies that are not used by or reflected by the indexes provided for comparison purposes. This and/or the accompanying information was prepared by or obtained from sources which TERREBELUM INVESTMENT GROUP, LLC believes to be reliable but does not guarantee its accuracy. This report contains only summary information about the fund and should be read in conjunction with the more detailed information contained in the confidential private placement memorandums for the fund. This document may only be distributed to persons who are accredited investors as defined by U.S. securities laws. It is intended solely for the use of the person to whom it is given and may not be reproduced or distributed to any other person. The fund has not, and will not, be registered under the Securities Act of 1933, as amended, and may only be offered in private placement transactions. Investors should consider the investment objectives, risks, charges and expenses of the strategy carefully before investing. Aggressive growth stocks may be more susceptible to earnings disappointments, and the market may not favor aggressive growth-style investing. Investments in small and/or midsize companies increase the risk of greater price fluctuations. Stock prices may fall or fail to rise over time for several reasons, including general financial market conditions and factors related to a specific issuer or industry. Investors can lose money by investing in the strategy. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a client's investment portfolio. The Funds may be subject to greater price volatility than less concentrated portfolios. An investment in the Fund involves a high degree of risk. An investor may lose all or a significant portion of its investment. This presentation does not take into account the investment objectives, financial situation or particular needs of any recipient hereof and should not be construed as legal, tax or investment advice. Investors should carefully review the Memorandum and Fund definitive documents and consult with independent legal, tax and business advisors concerning any potential investment in the Fund. This transmission is confidential and may not be redistributed without the express written consent of TERREBELUM INVESTMENT GROUP, LLC and does not constitute an offer to sell or the solicitation of an offer to purchase any security or investment product. Any such offer or solicitation may only be made by means of delivery of an approved confidential offering memorandum. It is the Policy of TEREBELLUM INVESTMENT GROUP, LLC to keep confidential non-public personal information pertaining to each current and former client and or investor (i.e., information and records pertaining to personal background, investment objectives, financial situation, investment holdings, account numbers, account balances and the like) unless the TEREBELLUM INVESTMENT GROUP, LLC is: Previously authorized to disclose information to individuals and/or entities not affiliated with the investment advisor, including, but not limited to the client's and or investor 's other professional advisors and/or service providers (i.e., attorneys, accountants, insurance agents, broker/dealers, investment advisors, account custodians,); or, Required to do so by judicial or regulatory process; or, otherwise permitted to do so in accordance with the parameters of Regulation S-P. The disclosure of such information contained in any document completed by the client and or investor for processing and/or transmittal by the investment advisor, investment manager or related entity in order to facilitate the commencement, continuation, or termination of any business relationship between the client, investor and/or non-affiliated third party service provider (i.e., broker/dealer, investment advisor, account custodian, insurance company, and the like), including information contained in any document completed and/or executed by the client and/or investor for the investment advisor/investment manager or related entity (i.e., advisory agreement, client and/or investor information form, and the like), shall be deemed as having been automatically authorized by the client and/or investor with respect to the corresponding non-affiliated third party service provider. Each individual and/or entity affiliated with the investment advisor or investment manager or related entity is aware of the aforesaid privacy policy and has acknowledged his or her or its requirement to comply with same. In accordance with this privacy policy, each such affiliated individual and/or entity shall have access to information to the extent reasonably necessary for the performance of its service for the client and/or investor and to comply with regulatory procedures and requirements.


Disclosure NOT A SOLICITATION

This presentation has been designed for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any security, which may be referenced upon the site. Such offers can only be made where lawful under applicable law. The services and information provided through this site are for personal, non-commercial use and display. TEREBELLUM INVESTMENT GROUP, LLC does not intend to provide investment advice through this site and does not represent that the securities or services discussed are suitable for any investor. Investors are advised not to rely on any information contained in the site in the process of making a fully informed investment decision. TEREBELLUM INVESTMENT GROUP, LLC does not, and this site does not intend to render tax or legal advice. This presentation has been published in the United States for residents of the United States. This site in not intended for use by, or to provide any information to, investors, outside of the United States. Investors outside of the United States are subject to securities and tax regulations within their applicable jurisdictions that are not addressed on this site. No security, investment advisory service, or other product or service will be offered or sold in any jurisdiction in which such offer or solicitation, purchase or sale, would be contrary to the securities laws or other local laws and regulation. U.S. investors should be advised that not all investments discussed on this site might be available in all states. News, views, opinions, recommendations and other information obtained from sources outside of TEREBELLUM INVESTMENT GROUP, LLC are believed to be reliable, but we cannot guarantee their accuracy or completeness. All such information is subject to change at any time without notice. The accuracy, completeness and timeliness of the information contained cannot be guaranteed. TEREBELLUM INVESTMENT GROUP, LLC does not warrant, guarantee or make any representations, or assume any liability with regard to financial results based on the use of the information. TEREBELLUM INVESTMENT GROUP, LLC is not liable for any harm caused by the transmission, through accessing the services or information here, of a computer virus, or other computer code or programming device that might be used to access, delete, damage, disable, disrupt or otherwise impede in any manner, the operation of the site or of any user's software, hardware, data or property. The use of this material is at your own risk. TEREBELLUM INVESTMENT GROUP, LLC believes that it offers customers a practical and usable brokerage system over the Internet. Customers accept at their own risk that the Internet communications medium may not perform as intended despite the best efforts of Preferred, including their network service providers, the customer's Internet service provider, and the customer. TEREBELLUM INVESTMENT GROUP, LLC presents information, pricing data and customer account information that are thought to be reliable and accurate. TEREBELLUM INVESTMENT GROUP, LLC does not guarantee the timeliness, sequence or accuracy of the data or any other information available through this service. In addition, the customer agrees to immediately notify TEREBELLUM INVESTMENT GROUP, LLC if they become aware of any loss, theft or unauthorized use of their access number(s), password(s), and/or account number(s). All securities business with TEREBELLUM INVESTMENT GROUP, LLC is conducted based on written agreements between the customer and TEREBELLUM INVESTMENT GROUP, LLC These agreements are the only contractual relationship between TEREBELLUM INVESTMENT GROUP, LLC and its customers and the terms of those agreements are binding on both parties. No other representation, whether made in person, verbally, written or on-line electronically in written, graphical or verbal communication may change the terms of those agreements. All customer orders accepted by TEREBELLUM INVESTMENT GROUP, LLC are considered unsolicited. TEREBELLUM INVESTMENT GROUP, LLC reserves the right to decline accounts and orders at its discretion.


Disclosure FOR SLIDE 18: PERFORMANCE

Maximum Drawdown is he peak-to-trough decline during a specific record period of an investment, fund or commodity. A drawdown is usually quoted as the percentage between the peak and the trough. Peak to Valley. A fund or money manager's largest cumulative percentage decline in net asset value. It is defined as the percentage decline from the fund's highest net asset value (peak) to the lowest net asset value (trough) after the peak. Funds that have been in existence for long periods of time may have a number of peak-to-valley drawdowns over various time periods. Sharpe Ratio uses standard deviation to measure a portfolio’s risk-adjusted returns. The higher a portfolio’s Sharpe Ratio, the better the portfolio’s returns have been relative to the risk it has taken. Sortino Raito is a modification of the Sharpe ratio that differentiates harmful volatility from general volatility by taking into account the standard deviation of negative asset returns, called downside deviation. The Sortino ratio subtracts the risk-free rate of return from the portfolio’s return, and then divides that by the downside deviation. A large Sortino ratio indicates there is a low probability of a large loss. Calmar Ratio is a comparison of the average annual compounded rate of return and the maximum drawdown risk of commodity trading advisors and hedge funds. The lower the Calmar Ratio, the worse the investment performed on a risk-adjusted basis over the specified time period; the higher the Calmar Ratio, the better it performed. Generally speaking, the time period used is three years, but this can be higher or lower based on the investment in question Standard Deviation measures the volatility of the fund’s returns. Higher deviation represents higher volatility. Downside deviation considers only returns that fall below a defined minimum acceptable return rather than arithmetic mean. R Squared values range from 0 to 100. A fund with a low R Squared (70 or less) does not act much like the Index. Mean Return Mea attempts to quantify the relationship between the risk of a portfolio of securities and its return. It assumes that while investors have different risk tolerances, rational investors will always seek the maximum rate of return for every level of acceptable risk. It is the mean, or expected, return that investors try to maximize at each level of risk. Source: Investopeida


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Terebellum Capital 11531 Lawson Cypress Drive Tomball, TX 77377 281-898-1486

Jeff Williams

Managing Partner 832-453-5010 Cell

[email protected]


Executive Summary

Objective

  Terebellum Capital’s investment objective is to provide superior absolute returns

  The Partnership seeks to diversify investment portfolios due to the low correlation expected between the Partnership’s performance and the equity and fixed income markets

Portfolio Management

  Jeff Williams – Co-responsible for the firm management; Principal of the Managing Partner with NFA; Associated Person with the CFTC; and a Forex Associated Person of the GP

  Wesley Cooper – Co-responsible for the management of the firm; has traded in the futures markets since 1988

Investment Summary

  Minimum investment - $1,000,000 (Waiver available from General Partner)

  Quarterly redemptions with 30 days notice

  Managers have substantial personal assets invested in Fund

THE TEREBELLUM ADVANTAGE

4 50 TEREBELLUM INVESTMENT GROUP 48


4.84% Credit Suisse Hedge Fund Index

49

hedge fund pitch book - terebellum investment group

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