Shaked Opportunity Fund
Strategy
A fund of funds, which allocates capital dynamically and optimally to a portfolio of high performing, emerging (generally with an operating history of several years and/or assets under management of less than $1 billion) hedge funds, with complementary diversification among:
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strategies including long/short fundamental, event driven, relative value, arbitrage and statistical
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assets including equity, debt, commodities, currencies and derivatives
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markets including developed and emerging
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betas [1] including positive and negative
Objectives
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Superior capital appreciation in bull, bear, inclining, declining and directionless markets
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Reasonable volatility and drawdown (peak to trough decline in value)
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High Sharpe Ratio [2] and low beta [1] relative to the S&P 500
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Capital preservation
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Acceptable liquidity and withdrawal provision
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Maximum security against malfeasance and fraudulent mishandling of funds via services of reputable custodians, administrators, prime brokers, tax accountants, auditors and legal counsel
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Beta (correlated relative volatility) = covariance of asset return and benchmark return / variance of benchmark return
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Sharpe Ratio (return relative to volatility) = excess of asset return over benchmark return / square root of variance of excess of asset return over benchmark return
Emerging Hedge Funds
Hedge Versus Mutual Funds
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Tendency for superior performance with higher return, lower volatility, lower drawdown, higher Sharpe Ratio, lower beta relative to the S&P 500 and capital preservation
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Possible capital appreciation in bull, bear, inclining, declining and directionless markets due to more flexible beta, with long exposure (expected capital appreciation when a market inclines) and short exposure (expected capital appreciation when a market declines) as well as exposure to positively and negatively correlated assets (assets expected to appreciate and depreciate in same market conditions)
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Absolute instead of relative benchmark objectives, avoiding justification of poor or negative performance because it is higher or less negative than the performance of a market or an index
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Fee structure more dependent on performance success due to reliance on incentive fee (annual percentage of net profits) instead of management fee (annual percentage of assets), front load fee (upfront entry fee charged by mutual funds, generally up to 8.5% of assets invested) and back load fee (deferred exit fee charged by mutual funds, generally up to 6% of assets redeemed)
Emerging Versus Mature Hedge Funds
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Tendency for exceptional performance due to shorter operating history related critical importance of performance success and smaller assets under management related agility
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Higher transparency due to greater incentive to create credibility
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Greater capital preservation, risk management and accountability due to significant co-investment by principal, family and friends
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Less restrictive withdrawal provision due to higher liquidity
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Fee structure heavily dependent on performance success due to substantial reliance on incentive fee because management fee tends to be small
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Possibly discounted or negotiable management and incentive fee structure due to greater need and desire to attract investors
Management
Amir Shaked
Chief Investment Officer
Mr. Shaked has over three decades of investment experience as a public and private markets investor with several leading investment firms and hedge funds and as an investment banker with Bear, Stearns & Co. Mr. Shaked graduated in 1991 from the Wharton School of the University of Pennsylvania with a B.S. in Economics, magna cum laude.
