hedge fund pitch book - equitypro capital

EQUITYPRO CAPITAL Trust, Transparency, Accountability 1

Joshua D. Knaup Founder, Chief Investment Officer

© 2014 EquityPro Capital

EquityPro Capital, LLC

EQUITYPRO CAPITAL Trust, Transparency, Accountability

Table of Contents

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PAGE

3 The Strategy

4 Execu<ve Summary

5 Why Invest Now?

6 About Pairs Trading

7 Market Neutral Inves<ng

8 Why Invest with Us?

9 Our Values

10 The EPC Advantage

11 Philanthropy

PAGE

12 PorSolio Selec<on

13 Josh Knaup

14 Execu<ve Leadership

15 Fund Terms

16 Service Providers

17 Sophis<cated Investors

18 Disclosure

19 Contact Informa<on

20 High Ethical Standards

EQUITYPRO CAPITAL: THE F2 FUND

CONTENT CONTENT


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EquityPro Capital LLC employs a series of proprietary trading strategies that seek to generate net positive returns in both rising and falling equity markets.

The Strategy EQUITYPRO CAPITAL LLC


Executive Summary

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Objective   The Fund seeks superior long-term capital appreciation by investing in both long and short stocks.

Management

  Josh Knaup, Founder, Chief Executive Officer, Chief Investment Officer.

  10+ years of business development, ROI, trading, risk management, and client loyalty experience.

Market Neutral Investing

  Pairs trading may exploit market swings for gain.   Lower potential volatility than a long-only strategy.   Downside protection during volatile markets.

Investment Summary

  Minimum investment: $100,000.   6 month lock up.   Quarterly redemptions with 45 days notice.

DISCIPLINED AND DILIGENT


Why Invest Now? THE MARKET NEUTRAL SECTOR

Market-neutral strategies seek to help investors diversify portfolio risk, and to find profit regardless of economic, interest rate, stock, or bond market performance. __________________________________________________________________________________________________________________________________________________

LOW CORRELATION TO THE S&P 500 INDEX The correlation of the S&P 500 to the Morningstar Market Neutral category was 0.06% for the five years ended June 30, 2014. The closer the correlation is to 1, the more a security moves in lockstep with the S&P 500. __________________________________________________________________________________________________________________________________________________ LOWER VOLATILITY THAN A LONG- ONLY INVESTMENT STRATEGY By combining offsetting long and short positions, market-neutral funds may provide less long-term volatility than a long-only portfolio. __________________________________________________________________________________________________________________________________________________

MARKET AND SECTOR NEUTRALITY Market-neutral funds seek to balance dollars invested in long and short positions to achieve market and sector neutrality, and to avoid being over-weighted in any one market or sector.


About Pairs Trading TRADING TWO HIGHLY CORRELATED STOCKS

Paired trading involves trading two highly correlated stocks. The Fund looks for deviations in the relationship between the two. __________________________________________________________________________________________________________________________________________________

PAIRED TRADING MAY EXPLOIT MARKET SWINGS FOR GAIN If one stock increases as the other drops, management typically takes a short position in the first stock and a long position in the second stock. Generally, the Fund invests the same amount in a stock’s long position as in its short position. __________________________________________________________________________________________________________________________________________________ SYSTEMATIC RISK MANAGEMENT A stock must pass through several disciplined investment layers to be considered for the portfolio. _________________________________________________________________________________________________________________________________________________

EXPERIENCED MANAGER The Fund’s managers have more than 10 years as an hands-on, experienced investment specialists.


Market-Neutral Investing

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Category Correlation

Standard & Poor’s 500 Index 0.06

Barclays U.S. Aggregate Bond Index 0.27

HISTORICAL PERFORMANCE - LOW CORRELATION TO STOCKS

While past is not prologue, market-neutral investing has historically provided little correlation vs. major stock and bond categories. Data below is as of June 30, 2014 for market-neutral funds vs. stocks and bonds.

Source: Morningstar. The S&P 500 Index is an unmanaged market-‐weighted index of leading companies and industries, dominated by large-‐capitaliza<on firms. The Barclays US Aggregate Bond Index is a broad-‐based benchmark that measures the investment grade, US dollar-‐denominated, fixed-‐rate taxable bond market. Downside devia<on considers only returns that fall below a defined minimum acceptable return rather than arithme<c mean. Correla<on is a sta<s<cal measure of how two securi<es move in rela<on to each other. Perfect posi<ve cor-‐rela<on (a correla<on co-‐efficient of +1) implies that as one security moves, either up or down, the other security will move in lockstep, in the same direc<on. Past performance does not guarantee similar future results.


Why Invest with Us?

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1 Pairs Trading The Fund’s paired trading strategy provides appreciation opportunities in virtually all markets.

2 Diversification The Fund’s market-neutral strategy may produce returns uncorrelated with stocks and bonds.

3 Self Funding Proceeds from the sale of short positions can fund paired long positions.

4 Sell Discipline The Fund seeks to execute trades at maximum loss percentages and stop loss orders.

5 Income The Fund may generate interest income from the sale of short positions.

FIVE REASONS


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EquityPro Capital LLC intentionally seeks to carve out a unique place in alternative investments, where mutual trust, transparency, and accountability are valued and sustained.

Our Values EQUITYPRO CAPITAL LLC


Why Invest with Us?

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1 Lower Manage- ment Fees

An annual management fee lower than industry average.

2 Lower Incentive Fees

An incentive fee lower than industry average.

3 Lower Expenses

Avoidance of unnecessary promotional or planning expenses.

4 More Transparency

Upgraded transparency on all investor statements. External bookkeeping and auditing.

5 Friendly Support

Friendly and courteous phone support.

THE EPC ADVANTAGE


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We seek to aid in the care and well being of orphans and widows. Each of our clients is strongly encouraged to give 10% of their high water mark gains to NGOs with which we partner, including American Red Cross, World Food Programme, and World Vision International.

Philanthropy EQUITYPRO CAPITAL LLC


Portfolio Selection

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PORTFOLIO SELECTION PROCESS

$2 Billion

Market

Capitalization

Less Than

1.95

Greater Than

400,000 Shares

Daily

Market Cap Trading Volume

Beta

The Fund invests in NYSE and NASDAQ stocks with the following characteristics:


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Josh Knaup FOUNDER, GENERAL PARTNER, CHIEF INVESTMENT OFFICER

Josh Knaup is the Founder, General Partner, and Chief Investment Officer of EquityPro Capital, LLC. Mr. Knaup is the development manager of the trading program used by EquityPro Capital, and oversees the management of the Fund’s portfolios. In 2012, Mr. Knaup founded EquityPro Systems, LLC, an

investment research firm. Previously, Mr. Knaup was IC Logistics Manager for FedEx; an investment analyst with Target Investments, and a Loan Officer with Approved Mortgages. From 1995 to 1997, Mr. Knaup was a Tactical Fighter Crew Chief for the United States Air Force. Josh is a native of Michigan, and lives in San Diego with his Doberman, Kiera. His brother is a police officer in northern California, and his sister, Grace L. Williams, is a reporter for The Wall Street Journal in New York City.


Executive Leadership

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Kevin McGreevy is the Financial Controller for EquityPro Capital. Mr. McGreevy oversees all monetary operations of the company. Kevin studied at the University of California, San Diego for his Bachelor’s of Science in Mathematics and Economics, and has finished his minor in Engineering Mechanics. In his spare time, Kevin surfs and spends time with his fiancée; and with his puppy, Bill Murray.

Elliot Boatey is the Operations Manager for EquityPro Capital. Mr. Boatey supervises the overall activity of EquityPro Capital, and continuously constructs novel procedures to advance the company. Elliot oversees the staff’s activity and assists them in achieving their goals. Elliot has a Bachelors in Economics and Mathematics from the University of Ghana, Ghana Africa, and is currently completing his MBA degree at Coleman University. Elliot is passionate about soccer.

Clayton Benway, head trader at EquityPro, is responsible for the execution of our proprietary strategy, as well as the positions, risk, and firm profitability. Mr. Benway earned a BD degree in Business Administration from California State University, Chico, and an MBA from Keller Graduate School of Management at San Diego. He is an associate member of the CFA Institute and the CFA Society San Diego. He enjoys reading, golfing, surfing, skiing, and family time.

Brittany Arrigo is the Executive Assistant at EquityPro, with responsibility for maintaining communications throughout the company and establishing professional relationships between clients and vendors. Brittany also organizes records, edits and prepares company documents, and coordinates projects and events. Brittany was a Graphic design major and Communications minor at Northeastern University in Boston, MA.

BRITTANY ARRIGO

KEVIN MCGREEVY

ELLIOT BOATEY

CLAYTON BENWAY


Fund Terms

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FUND FACTS

Fund Inception March 2014

Minimum Investment $100,000

Management Fee 1.95% annually

Incentive Fee 19% charged quarterly (Only on High Water Mark)

Redemptions Quarterly withdrawals with 45 days notice

Lock Up Six months

High Water Mark Yes

Reports Audited quarterly

FIRST FRUITS TO INVESTORS


Service Providers

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SERVICE PROVIDERS

Administrator Atlas Fund Services Newport Beach, CA

Auditor RRBB Accountants + Advisors Somerset, NJ

Custodian MG Stover Denver, CO

Legal Advisor Pillsbury Winthrop Shaw Pitmann New York City, NY

Marketing Serebrin Capital Marketing Austin, TX

Prime Broker Maxim Group New York City, NY

EXPERIENCED TEAM


Sophisticated Investors Only

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EQUITYPRO CAPITAL LLC

EquityPro Capital, LLC is for non-accredited “sophisticated” investors who are

both aware of, and able to sustain, the financial risks involved in exposure to

equities investing. The Fund may also be appropriate for accredited investors. An

accredited investor is an individual with a net worth, or joint net worth with the

person's spouse, that exceeds $1 million (excluding primary residence) at the

time of the purchase, or an individual income in excess of $250,000, or in

excess of $300,000 with his or her spouse, in each of the two most recent years,

and who has a reasonable expectation of an income in excess of $250,000

individually, or in excess of $300,000 with his or her spouse in the current year.

EquityPro Capital, LLC is an “Exempt Reporting Adviser” (ERA) and is therefore

not required to register with the Securities and Exchange Commission. The Fund

operates under a “safe harbor” exemption to Regulation D (Rule 506) as allowed

by section 4(2) of the Securities Act.


Disclosure

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Investors should consider the investment objec<ves, risks, charges and expenses of the strategy carefully before inves<ng. Aggressive growth stocks may be more suscep<ble to earnings disappointments, and the market may not favor aggressive growth-‐style inves<ng. Investments in small and/or midsize companies increase the risk of greater price fluctua<ons. Stock prices may fall or fail to rise over <me for several reasons, including general financial market condi<ons and factors related to a specific issuer or industry. Investors can lose money by inves<ng in the strategy. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a client's investment porSolio. The Strategy may be subject to greater price vola<lity than less concentrated porSolios. An investment in the Fund involves a high degree of risk. An investor may lose all or a significant por<on of its investment. Other substan<al risks affec<ng an investment in the Fund include: the specula<ve nature of an investment in the Fund; the lack of opera<ng history of the Fund and the General Partner and their dependence upon the Principal; changes in economic condi<ons; a lack of liquidity, given the substan<al restric<ons on transfer of Fund interests and the absence of a secondary market for such interests; other poten<al conflicts of interest; and the other risks described in the Memorandum under “Risk Factors.” This presenta<on does not take into account the investment objec<ves, financial situa<on or par<cular needs of any recipient hereof and should not be construed as legal, tax or investment advice. Investors should carefully review the Memorandum and Fund defini<ve documents and consult with independent legal, tax and business advisors concerning any poten<al investment in the Fund. In making an investment decision, investors must rely solely on their own review and analysis of the Fund and the terms of the Memorandum and defini<ve Fund documents, including the merits and risks involved, and not on any informa<on or representa<on made or alleged to have been made herein or otherwise. An investor may make less money on a long posi<on that performs well than they would have without the pair due to the offset of the an<cipated loss on the pair short posi<on as well as the costs of margin and fees incurred to purchase two posi<ons. An investor could also lose money on both the long posi<on (up to the en<re amount invested) and on the short posi<on (theore<cally unlimited loss). There is no guarantee that a pair will trade in tandem or that the Fund will be able to select stocks that result in a profit or be able to implement appropriate loss control measures, and an investor may in fact lose significant amounts on the investment in spite of any loss control measures. Pairs trading does not provide a hedge for a specific stock. Execu<on may be adversely affected by market disrup<on, including broad market declines, among other factors. The risk of loss is increased by the use of margin, which is necessary to maintain the short posi<on. Further, by limi<ng the amount that is invested in a pair posi<on at any <me accounts may be overinvested in cash, thereby poten<ally limi<ng possible returns. The strategy also requires rela<vely frequent trading, which increases costs and reduces overall return. Because stocks are shorted, margin (borrowing of stock) is required, and there are related margin fees and addi<onal fees associated with the ini<a<on of two posi<ons instead of one. An investor is also subject to liquida<on of posi<ons at a loss and without consent to sa<sfy margin calls should the value of the short posi<on rise or the value of the long posi<on used as collateral decline.


Contact Information

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OFFICE EquityPro Capital 475 10th Avenue San Diego, CA 92101 P: 619-232-1580 F: 619-232-1581 [email protected]

CONTACT Josh Knaup Chief Investment Officer 734-330-3903 Cell [email protected] www.equityprocapital.com



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It’s our mission to create a unique niche in the hedge fund world: a capital management company known for high ethical standards and generosity toward its investor partners. JOSH KNAUP, CHIEF INVESTMENT OFFICER

High Ethical Standards EQUITYPRO CAPITAL, LP.

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