Target
To provide strong long-term assets growth in absolute terms with reasonable risk.
Strategy
The investment objectives and strategies summarized herein represent the Investment Managers current intentions. Depending on conditions and trends in the securities markets and the economy in general, the Investment Manager may pursue any strategies, employ any investment techniques or purchase any type of security that it considers appropriate to achieve the investment objective of the Fund, whether or not described in this section, subject to any applicable law or regulation. The discussion herein includes and is based upon numerous assumptions and opinions of the Investment Manager concerning world financial markets and other matters, the accuracy of which cannot be assured.
Investment decisions
Investment decisions are made based on a deep fundamental analysis of numerous parameters, which have an impact on the Russian stock market:
Evaluation of cash-flows
• Liquidity within Russia
• Subscriptions/redemptions in mutual and hedge funds
• Strategic purchases of foreign and state companies
• New placements (IPO, fixed income)
• Privatisation
• Annual profit of all the companies
Future capitalisation forecast and estimated return after fundamental analysis of the industry and the company
• Based on the financial results (DCF model)
• Based on valuation ratios and multiples
Company activities forecast after substantial events
• Exchange rate changes
• Commodities price movements (oil, metals)
• Changing in a law regulation
• Companies news
Investments Vehicles
Geography
Investment in companies incorporated outside Russia but deriving a considerable percentage of their business from within the Russia.
Instruments:
• Equities
• Fixed income
• Derivatives
• Currencies
• Leverage
Positions
Long and short
General Risk Factors
Dependence on Key Individuals .
Investors have no authority to make decisions on behalf of the Fund. The success of the Fund depends upon the ability of the Investment Advisor to develop and implement investment strategies that achieve the Fund's investment objective. If the Fund were to lose the services of the Investment Advisor, the consequence to the Fund could be material and adverse and could lead to the premature termination of the Fund.
Absence of Regulatory Oversight.
Although the Fund is a regulated mutual fund under the Mutual Funds Law (2003 Revision) of the Cayman Islands, the Fund is not required to, and does not intend to, register under the laws of any other jurisdiction, and, accordingly, the provisions of statutes of certain jurisdiction (which may provide certain regulatory safeguards to investors) are not applicable.
Limited Liquidity.
An investment in the Fund is suitable only for certain sophisticated investors that have no need for immediate liquidity in their investment. Such an investment provides limited liquidity because Participating Shares in the Fund are not freely transferable. Redemption of Participating Shares may only be made on the last Business Day of each month and, furthermore, the Directors may in certain circumstances suspend redemption rights, in whole or in part. Such limitations on liquidity must be considered significant.
Valuation of the Funds Investments.
Valuation of the Funds securities and other investments may involve uncertainties and judgmental determinations, and if such valuations should prove to be incorrect, the Net Asset Value per Participating Share could be adversely affected. Independent pricing information may not at times be available regarding certain of the Funds securities and other investments.
Business and Regulatory Risks of Hedge Funds.
Legal, tax and regulatory changes could occur during the term of the Fund that may adversely affect the Fund.
Effect of Redemptions.
A significant redemption of capital from the Fund may cause a temporary imbalance in the Fund's portfolio which may adversely affect the remaining investors.
Risk Management
Investment restrictions
• Both short and long positions but although the portfolio is likely to be net long at all times
• The Fund may use hedging strategies
• The Fund may borrow money to invest and/or to pay for Redemptions of Participating Shares. Such borrowing shall not exceed 30% of the NAV of the Fund.
Operational risk
• Limitation on each counterparties
• Two independent directors of the Fund
