Newsletter Volume 1, Issue 3

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Volume 1, Issue 3: July 11th, 2018
Published Privately to Accredited Investors Only Prior to Filing Form D for 506c with Securities And Exchange Commission

MACH 100 LP

INVESTMENT RETURN SUMMARY

Mach 100 LP Investment Performance Results are presented gross and net. Net results are for an investor since inception, net of 1% management fee and 25% performance allocation with a “high watermark” threshold. Individual investor’s performance may vary based on time of investment and class of investment. Since inception returns are from fund inception 4/2018.

See Important Performance Disclosures

PERFORMANCE DESCRIPTION

May, 2018, was Mach 100 LP’s second month of investing. For the month ending May 31, 2018, Mach 100 LP was Up 2.23%. This compares to the S&P 500 that was up 2.16%, the NASDAQ Composite up 5.32% and the Russell Microcap which was up 7.22%. Year to date (YTD) through May, the S&P 500 is up 1.18%, NASDAQ Composite up 7.80% and Russell Microcap is up 9.30%. This compares with Mach 100 LP which YTD is Up 17.24%. Beginning with the quarter ending June 30, 2018 (when we will then possess a full quarter of performance), we will begin reporting quarterly returns, as well as monthly; and then with more performance data, annual returns. May was a month filled with significant upside volatility across the board as the major indices’ performance reflect. As Mach 100 LP’s investment strategy is a non-correlated, long/short, strategy that is a concentrated fund capitalizing on discovery premium and information arbitrage, it is expected that our positions in the fund often trade based upon their own fundamentals and the supply demand situation of the security or event that is fact specific to the respective portfolio securitiues (e.g. stock, bond, metal, etc.); not based upon the performance of the broad financial markets. While our investment performance in May was positive, we possess a meaningful cash position as Mach 100 LP continues to slowly build its investment portfolio along with our growth in assets under management (aum).

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SECTOR ALLOCATION

Currently (approximately as of this writing) the Fund has positions (which are always subject to change without notice or obligation),long and short, in the following industry sectors and subsectors: aerospace/defense (photon based energy for manufacturing and defense); education (school supplies); leisure (transaction processing for sports betting); medical device (fertility, home infusion and disposables); nutraceuticals; software (cloud based marketing automation, data security, mobile gaming and social apps); and uranium processing.

LONG/SHORT PORTFOLIO EXPOSURE

Currently, (approximately as of this writing) the Fund’s long/short portfolio exposure (which is always subject to change without notice or obligation), the Fund’s is 85% Long, 0% short and 15% in cash. Therefore 85% Net Long.

PORTFOLIO COMPOSITION

Another core position in our portfolio (also a conviction position-as we have strong conviction that this investment will be successful), is a mobile gaming and mobile social application company. For the moment, this company is completely off the radar to most investors, globally; but we think not for too long. The Company is based in Helsinki, Finland and trades on one of the Canadian exchanges. While Canada’s stock exchanges do not possess the same level of liquidity, as major U.S. exchanges, it is a first world country security market, which is important to us. Additionally, we believe the Company is receptive to continue to increase its investment community visibility and as a subset of that, a future U.S. exchange listing. Investment community visibility activities are critical for small and micro-cap companies. Several things we like about the Company: It is addressing a large total available market; its strategy is to acquire existing games and social apps and through the Company’s expertise apply its marketing and distribution prowess, thereby limiting development risk; it has a growing list of mobile and social apps (some with a strong niche-e.g. home decorating social app for teenage girls) and is expecting to release 4 new games/apps within the next 12 months; targeting international geographies such as India (not only the U.S.); experienced management team in the games and social app industry; and we believe with further success in the intermediate term, the Company is a target for acquisition. We have been buying this Company at just under 1X forward revenues. As a reference point, in March of this year, social game developer Zynga, purchased Gram Games for 8X revenues. Accordingly, our return/risk profile is compelling.

Mach 100 LP is a small and micro-cap, non-correlated, equity focused hedge fund possessing concentrated positions and capitalizing on discovery premium and information arbitrage (disparities from publicly available information). The Fund’s investment objective is to generate absolute returns that are largely alpha (the active component of investment returns that are in excess of the financial markets’ movement as a whole). The Fund utilizes fundamental quantitative and qualitative analysis, assessment of securities and broad market behavior, trading psychology and return risk profiling to determine portfolio exposure and select investments across asset classes, instrument types, industry sectors and geographies. Managed by industry veterans, the Fund is designed to generate consistent, positive investment returns with low net portfolio exposure and lower correlations than typical equity market benchmarks. As a pooled investment vehicle, the Fund may employ a diverse combination of equity, equity arbitrage, equity linked derivatives, debt and other investment and hedging instruments (including cash) in order to achieve its objectives. The Fund’s long portfolio focuses upon emerging growth companies across the small and micro-capitalization tiers (~$50 million to $2 billion). Its short portfolio focuses upon fundamentally flawed companies. This strategy presents both the opportunity to achieve higher gains, as well as creating unique challenges that require significant skill, as well as deep and broad experiences within these volatile capitalization tiers; and of paramount importance, the right trading psychology. Mach 100 LP believes it has the right team to successfully capitalize on these opportunities to produce superior investment returns.

David N. Baker

Managing Principal

Mercadyne Fund Management LLC

6565 Spencer St., Suite 205

Las Vegas NV 89119 

dnb@mercadyne.com

415.297.4749

By |2019-04-17T09:28:18+00:00August 30th, 2018|Unaccredited Newsletters, Uncategorized|0 Comments