Hedge funds are financial partnerships that establish alternative investments using pooled funds that employ different strategies to earn active return, or alpha, for their investors. The pool of capital is contributed by sophisticated high net worth accredited investors and institutional investors. In short, it is the marriage of a professional fund manager (General Partner) and the investors (Limited Partner).
The fund strategy is derived from Cabana’s signature Target Drawdown Series, which is a family of tactical, risk-based portfolios. The foundation of all Cabana portfolios and funds is our proprietary Cyclical Asset Reallocation Algorithm (CARA). CARA evaluates the economic cycle and signals reallocation as perceived conditions change.
As of Dec. 31, 2019, Cabana’s Target Drawdown 7, 10, 13 and 16 are each rated five stars overall by Morningstar Inc. Target Drawdown portfolios are in Morningstar’s Tactical Allocation Category, which is made up of 326 total funds. A five-star rating puts these portfolios in the top 10% of their category.
While Cabana’s signature Target Drawdown Series concentrates primarily on loss prevention, Cabana Black emphasizes return maximization. The portfolio is made up of highly liquid asset class ETFs, consistent with Cabana’s underlying philosophy.
Cabana Black utilizes portfolio leverage, in coordination with Cabana’s tactical risk-based process. The objective is to achieve excess return while still targeting downside loss. Cabana believes that this synergy will facilitate outsized gains during favorable market conditions and incremental reduction of risk as conditions deteriorate.
Investors must qualify as an “accredited investor” as defined in Regulation D under the Securities Act of 1933 and meet the “qualified client” test of Rule 205-3 under the Investment Advisers Act of 1940. The “qualified client” test of Rule 205-3 requires investors to have a net worth in excess of $2,100,000 or make an investment of not less than $1,000,000. In addition, entity investors may be required to
submit a financial statement to satisfy this requirement.
Cabana charges a 1.5% management fee in addition to an Incentive Allocation. Incentive Allocation is 20%, subject to a “High Water Mark” and only charged when clients make money.
The minimum investment is $250,000. Cabana Black, LLC has the right to waive the minimum investment amount at its discretion.
There are no restrictions, gates, or “lockups” to exit the fund beyond a quarterly withdrawal with 30 days’ notice.
The partnership is newly formed. An Investment in the fund is an investment in the more than 25 years of experienced investment management, an SEC registered firm that claims compliance with the Global Investment Performance Standards, the Cabana investment philosophy, and the professional expertise of G. CHADD MASON, LOUIS SHAFF, DANIEL IPPOLITO and CHRIS CARNS. Please visit www.thecabanagroup.com for detailed information about the partnership’s investment adviser, Cabana Asset Management, the Target Drawdown Series of Portfolios, and its principals.
Contact us to receive 2019 pilot performance.
Contact your financial advisor for more information about the fund, including accredited investor certification requirements, and to request the private offering memorandum binder. If you do not have a financial advisor, email us at email@example.com.