General Risks of Investing in the Crestline Summit Funds
An investment in a Crestline Summit fund or funds (the “Fund” or “Funds” respectively) is speculative and involves a substantial degree of risk. There can be no assurance that the investment or risk management objectives of the Fund will be achieved or that the Fund will be profitable. In fact, the practice of short selling and the use of leverage, derivatives, futures and forward contracts, and other investment techniques employed by the Fund, in certain circumstances, increase the adverse impact to which the Fund's investment portfolio is subject.
The Fund may not be suitable for all investors and is intended for sophisticated investors who can accept the risks associated with its investments. An investment in the Fund does not constitute a complete investment program. Investors will not have recourse except with respect to the assets of the Fund. Prospective investors should consider, among others, the risk factors and potential conflicts of interest described in this section. All investors in the Fund should consult their own legal, tax and financial advisors prior to investing in the Fund.
An investor should not invest in the Funds unless it is prepared to lose all or a substantial portion of its investment.
General Performance Disclosures
Past performance as well as third-party awards and ratings are not a guarantee of future results. Current and prospective investors should not assume that the future performance of any Crestline fund will equal its prior performance results or the results of any previous fund with a similar strategy, and investors risk loss of their entire investment. Each fund’s performance results portrayed reflect the deduction of that fund’s advisory fees, brokerage commissions and other expenses. The performance results also include the reinvestment of income and dividends, in investment vehicles where such are applicable. For each Crestline fund, an individual investor’s returns will vary from the historical performance due to restrictions on participation in certain types of investments and due to the timing of subscriptions, withdrawals, and redemptions.
Within a particular strategy, Crestline may offer a domestic fund and an offshore fund (“Funds”) that are managed pari passu. In such cases the Funds managed by Crestline will have investment objectives that are identical or substantially similar. It is not anticipated, however, that the Funds managed by Crestline having identical or substantially similar investment objectives will have identical or substantially similar investment portfolios. Differing investment portfolios can be expected to result from several factors, including, without limitation, the following:
As a result of factors such as these, Funds that are managed pari passu may have a different investment portfolio (and, as a result, different performance results) even though the Funds may have identical or substantially similar investment objectives.
Targeted Return and Hypothetical Performance Disclosures
Crestline is an institutional investment adviser who markets to sophisticated investors who are able to understand the limitations and risks associated with the use of hypothetical performance. Upon request, Crestline will provide information on the criterial used and assumptions made in calculating hypothetical performance.
The targeted returns are hypothetical returns and are forward-looking statements that are subject to uncertainties described further in the relevant offering memorandum. The targeted returns are based on research conducted by Crestline and the conclusions are Crestline’s opinions based on its own independent study. The return targets are supported by various quantitative measures including one or more of the following: 1) the actual track record of the Funds, 2) back-tested returns of a pro-forma portfolio using the Fund’s current asset allocation and/or 3) a forecast return calculated using a third-party risk model.
While Crestline believes that the return targets are supportable, there is no guarantee that the Funds will achieve the targeted returns. The targeted rates of return included in this presentation are hypothetical returns, and are for illustrative purposes only. Accordingly, no assumptions or comparisons should be made based upon these returns. Targeted returns are subject to inherent limitations, including but not limited to the fact that the returns do not take into account the impact that market and economic risks may have on investment decision trading. In no circumstances should the targeted returns be regarded as a representation, warranty or prediction that the Fund will reflect any particular performance or that it will achieve or is likely to achieve any particular result or that investors will be able to avoid losses, including total losses of their investment.
The proposed allocations, proforma illustrations and/or back-tested performance are hypothetical and are shown for illustrative purposes only and do not represent actual performance of any client account. Crestline does not represent that the hypothetical returns would be similar to actual performance had the firm actually managed the accounts in this manner.
Hypothetical, back-tested or simulated performances have many inherent limitations only some of which are described as follows: (i) It is designed with the benefit of hindsight, based on historical data, and does not reflect the impact that certain economic and market factors might have had on the decision-making process. No hypothetical, back-tested or simulated performance can completely account for the impact of financial risk in actual performance. Therefore, it will invariably show positive rates of return. (ii) It does not reflect actual client asset trading and cannot accurately account for the ability to withstand losses. (iii) The information is based, in part, on hypothetical assumptions made for modeling purposes that may not be realized in the actual management of indices or accounts. No representation or warranty is made as to the reasonableness of the assumptions made or that all assumptions used in achieving the returns have been stated or fully considered. Assumption changes may have a material impact on the model returns presented. This material is not representative of any particular client’s experience. Investors should not assume that they will have an investment experience similar to the hypothetical, back-tested or simulated performance shown. There are frequently material differences between hypothetical, back-tested or simulated performance results and actual results subsequently achieved by any investment strategy.
Unlike an actual performance record based on trading actual client portfolios, hypothetical, back-tested or simulated results are achieved by means of the retroactive application of a back-tested model itself designed with the benefit of hindsight. Hypothetical, back-tested or simulated performance does not reflect the impact that material economic or market factors might have on an adviser's decision making process if the adviser were actually managing a client’s portfolio. The back-testing of performance differs from actual account performance because the investment strategy may be adjusted at any time, for any reason and can continue to be changed until desired or better performance results are achieved. The back-tested performance includes hypothetical results that do not reflect the reinvestment of dividends and other earnings or the deduction of advisory fees, brokerage or other commissions, and any other expenses that a client would have paid or actually paid. No representation is made that any index or account will or is likely to achieve profits or losses similar to those shown. Alternative modeling techniques or assumptions might produce significantly different results and prove to be more appropriate. Past hypothetical, back-test or simulated results are neither indicators nor guarantees of future returns. In fact, there are frequently sharp differences between hypothetical, back-tested and simulated performance results and the actual results subsequently achieved. As a sophisticated investor, you accept and agree to use such information only for the purpose of discussing with Crestline your preliminary interest in investing in the strategy described herein.
Standard deviation is a statistical measure of the dispersion of a fund's monthly returns. The greater the standard deviation, the greater a fund's volatility. The indices presented herein (including, but not limited to the Russell 2000, S&P 500, and NASDAQ 100) indices are diversified indices of equity securities, while the Funds managed by Crestline invest in other private investment funds. Due to the differences between the Funds’ portfolios and the composition of the aforementioned indices, Crestline cautions investors that no such index is directly comparable to the Funds. The indices provided herein have not been selected to represent an appropriate benchmark but rather are used to allow for comparison of standard deviations to that of well-known and widely recognized indices.
Correlations to the performance of the indices presented herein (including, but not limited to the Crestline Capital Aggregate Index, S&P 500 Index, and HFR Fund of Fund Conservative Index) are shown for comparison purposes only. The securities included in those indices are not necessarily included in the portfolios of the investment funds in which Crestline funds invest and criteria for inclusion in those indices are different and not limited to particular investment strategies. In addition, investors may not invest directly in an index. Therefore, the returns of Crestline funds and the returns of such indices may not be comparable.
Some material herein may include charts and graphs depicting the performance of various indices and highlighting market conditions. Such charts and graphs are shown for informational purposes only. The securities included in those indices are not necessarily included in the portfolios of the investment funds in which Crestline funds invest and criteria for inclusion in those indices are different and not limited to particular investment strategies. In addition, investors may not invest directly in an index. Therefore, the returns of Crestline funds and the returns of such indices may not be comparable.
For further information on targeted returns including input data and calculation methodology please contact Scott Nelson, Head of Client Partnership Group, Summit Strategies (snelson@crestlineinc.com).
Performance History & Comparison
Beginning January 2017 the hypothetical composite returns are calculated on equity, net of account expenses, net of all manager fees, net of stated Crestline Summit fees consisting of a 1% management fee and a 10% performance fee; for the period July 2015 - December 2016 hypothetical composite returns are calculated on equity, net of account expenses, net of manager performance fees, net of stated Crestline Summit fees consisting of a 2% management fee and 10% performance fee.
Correlations to the performance of the indices presented in this report (including, but not limited to the S&P 500 Index and the HFRI Equity Market Neutral Index) are shown for comparison purposes only. The securities included in those indices are not necessarily included in the portfolios of the Crestline funds and criteria for inclusion in those indices are different and not limited to particular investment strategies. In addition, investors may not invest directly in an index. Therefore, the returns of Crestline funds and the returns of such indices may not be comparable.
Gross performance figures do not include the deduction of fund level fees and expenses and do not represent the performance of any investor. An individual investor’s returns will be reduced by advisory fees and other expenses incurred in the management of its account.
The estimated net asset value (“NAV”), monthly return and the statistics derived therefrom are estimates of the NAV and other information based on information available to Crestline at the time of calculation. This is only an estimate and the actual performance results will vary from this estimate. No responsibility or liability is or will be accepted by Crestline as to the accuracy or completeness of the estimated NAV and monthly return information and Crestline expressly disclaims any liability therefore.
