Core Alternatives Fund
|Performance for||(as of 03/31/2013)|
|Fund||Mth %||YTD %||1 Yr %||2 Yrs %||3 Yrs %||5 Yrs %||Since Inception %|
|Core Alternatives Fund, L.P.||0.54||1.68||4.09||0.21||2.04||-0.77||2.06|
|HFRX Global Hedge Fund Index||0.70||3.13||3.50||-1.56||0.23||-1.74||0.65|
|S&P 500 TR Index||3.75||10.61||13.96||11.22||12.67||5.81||5.83|
|Fund||Qtr %||YTD %||1 Yr %||2 Yrs %||3 Yrs %||5 Yrs %||Since
|Core Alternatives Fund, L.P.||1.68||1.68||4.09||0.21||2.04||-0.77||2.06|
|HFRX Global Hedge Fund Index||3.13||3.13||3.50||-1.56||0.23||-1.74||0.65|
|S&P 500 TR Index||10.61||10.61||13.96||11.22||12.67||5.81||5.83|
Average Annual Total Returns. Periods less than 1 year are not annualized. Inception Date 04/01/2005
Growth of $10,0003
|Historical Data||Fund||HFRXGL||S&P 500|
|Corrlation (vs. S&P 500 Index)||0.69||0.72||1|
|Annualized Alpha (vs S&P 500 TR Index)9||0.31||-1.20|
|Beta (vs S&P 500 TR Index)10||0.28||0.30||1|
Core Alternatives Fund, L.P. vs. HFRX Global Hedge Fund Index
|Enhanced Fixed Income||1.43||3.89||9.81|
|Enhanced Fixed Income||0.14||0.38||4.07|
|Fund Structure16||1933 and 1940 Act Registered|
|Investor Qualifications17||> $2,000,000 net worth|
|Lock-Up Period18||1 Year|
|Performance Allocation||10% of profits above 90-day U.S. T-Bills|
|Total Net Assets||$193.43 Million|
|Net Asset Value (NAV)||$92.23|
|Year||Jan %||Feb %||Mar %||Apr %||May %||Jun %||Jul %||Aug %||Sep %||Oct %||Nov %||Dec %||Year %|
This is not an offering to subscribe for units in any fund and is intended for informational purposes only. An offering can only be made by delivery of the Prospectus to “qualified clients” within the meaning of U.S. securities laws. The Hatteras Core Alternatives Fund, L.P.; the Hatteras Core Alternatives TEI Fund, L.P; the Hatteras Core Alternatives Institutional Fund, L.P.; and the Hatteras Core Alternatives TEI Institutional Fund, L.P. (collectively referred to herein as the “Hatteras Core Alternatives Fund” or the “Fund”) are Delaware limited partnerships that are registered under the Investment Company Act of 1940 (the “1940 Act”), as amended, as non-diversified, closed-end management investment companies whose units are registered under the Securities Act of 1933, as amended. The Hatteras Core Alternatives Fund is a fund of alternative investments. As such, the Fund invests in private hedge funds and private equity investments. Hedge funds are speculative investments and are not suitable for all investors, nor do they represent a complete investment program. A hedge fund can be described generally as a private and unregistered investment pool that accepts investors’ money and employs hedging and arbitrage techniques using long and short positions, leverage and derivatives, and investments in many markets.
Key Risk Factors
The Fund, through an investment in the Master Fund, will invest substantially all of its assets in underlying funds that are generally not registered as investment companies under the 1940 Act and, therefore, the Fund will not have the benefit of various protections provided under the 1940 Act with respect to an investment in those underlying funds. The Fund can be highly volatile, carry substantial fees, and involve complex tax structures. Investments in the Fund involves a high degree of risk, including loss of entire capital. The underlying funds may engage in speculative investment strategies and practices, such as the use of leverage, short sales, and derivatives transactions, which can increase the risk of investment loss. The Fund provides limited liquidity, and units in the Funds are not transferable. Liquidity will be provided only through repurchase offers made by the Fund from time to time, generally on a quarterly basis upon prior written notice.
The success of the Fund is highly dependent on the financial and managerial expertise of its principals and key personnel of the Fund’s investment manager. Although the investment manager for the Fund expects to receive detailed information from each underlying fund on a regular basis regarding its valuation, investment performance, and strategy, in most cases the investment manager has little or no means of independently verifying this information. The underlying funds are not required to provide transparency with respect to their respective investments. By investing in the underlying funds indirectly through the Fund, investors will be subject to a dual layer of fees, both at the Fund and underlying fund levels. Certain underlying funds will not provide final Schedule K-1s for any fiscal year before April 15th of the following year. Those funds, however, will endeavor to provide estimates of taxable income or losses with respect to their investments. Please see the Prospectus for a detailed discussion of the specific risks disclosed here and other important risks and considerations.
The Fund is a Feeder Fund in a Master/Feeder fund complex. Partners are unable to invest directly in the Master Fund. Fund Assets and Master Fund Assets do not include pending subscriptions and redemptions, which are effective as of the first day of the following calendar month.
Performance results and calculations after the Fund’s most recent fiscal year are unaudited. The principal value of the Fund will fluctuate so that an investor’s units, when redeemed, may be worth more or less than the original cost. Returns are net of all expenses of the Fund, including the management fee and incentive allocations, and reflect reinvestment of all distributions, if applicable. Returns do not reflect payment of the 5% redemption fee or up-front placement fees, if applicable, which could be up to 2%, which would reduce returns shown above. Past performance does not guarantee future results and current performance may be lower or higher than the figures shown. To obtain performance information current to the most recent month-end, please call 866.388.6292. The net expense ratio and total expense ratio for the Fund are 2.33% and 7.69%, respectively. The total expense ratio includes Acquired Fund Fees and Expenses of 5.36%. The Investment Manager has contractually agreed to waive fees and/or reimburse certain expenses until July 31, 2013 so that the total annual expenses will not exceed 2.35%. Please see the current Prospectus for detailed information regarding the expenses of the Fund.
The chart illustrates a hypothetical investment made at the Fund’s inception date and assumes reinvestment of capital gains and dividends, if applicable. Returns do not reflect payment of the 5% redemption fee or upfront placement fees, if applicable, which could be up to 2%, which would reduce returns shown above. This chart is not intended to imply any future performance.
The HFRX Global Hedge Fund Index data is sourced from Hedge Funds Research, Inc. and is designed to be representative of the overall composition of the hedge fund universe. It is comprised of all eligible hedge fund strategies; including but not limited to convertible arbitrage, distressed securities, equity hedge, equity market neutral, event driven, macro, merger arbitrage, and relative value arbitrage. The strategies are asset weighted based on the distribution of assets in the hedge fund industry.
Standard & Poor´s (S&P) 500 Total Return Index consists of 500 stocks chosen for market size, liquidity and industry group representation. It is a market value weighted index, with each stock´s weight in the index proportionate to its market value. You cannot invest directly in an index. Benchmark performance should not be considered reflective of Fund performance.
Cumulative Return. Returns are net of all expenses of the Fund, including the management fee and incentive allocations, and reflect reinvestment of all distributions, if applicable. Returns do not reflect payment of placement fees, if applicable, which would reduce returns noted above.
Standard deviation is a measurement of the investment’s volatility.
Correlation is a statistical measure of how two securities move in relation to each other.
Alpha measures excess return relative to the market; often referred to as a measurement of “manager skill”.
Beta is a measure of a fund’s risk relative to the benchmark
Sharpe ratio measures the risk-adjusted performance. Calculated by subtracting the risk-free rate (90 day U.S. T-bill yield as of the previous year-end) from the rate of return and dividing the result by the standard deviation of returns.
Sortino ratio differentiates between good and bad volatility in the Sharpe ratio. Differs from the Sharpe ratio by dividing by downside deviation instead of standard deviation.
Downside deviation is a measurement of the potential loss that may arise from risk.
The above illustration attempts to break down the pro-rata contribution of the Fund (in other words, its contribution to the Fund’s overall return) by strategy, and is intended to allocate the portion of the (past) performance that is attributable to the particular strategy. It is not meant to predict or project results into the future, nor is it intended to portray performance of the Fund. Calculations exclude cash allocations.
The above illustration offers historical performance for each individual strategy as a composite of the actual underlying advisory funds. The historical performance shown indicates how each strategy (composite) performed on a stand-alone basis, net of all fees. However, none of the (composite) strategies shown above are offered as stand-alone investments. This is not meant to predict or project results into the future, nor is it intended to portray performance of the Fund. Performance calculations exclude cash allocations.
Registration does not imply that the SEC or any other regulatory authority has approved or disapproved the securities or passed upon the accuracy of the offering materials or merits of an investment in the securities. However, registered closed-end investment companies such as the Funds are required by SEC rules and regulations to meet certain standards typically not required of non-registered funds. Registration requirements include: existence of an independent Board of Directors, and that all holdings be reported to the SEC and made publicly available on a quarterly basis.
Any prospective investor will be required to certify he/she is a “qualified client” as defined by federal securities laws.
A Partner may be subject to a repurchase fee equal to 5% of the amount requested if such Partner has been a Partner for less than 12 months prior to the valuation date.
The Funds generally intend to make quarterly offers to repurchase no more than 20% of the units of a Fund at the sole discretion of the Board of Directors as described in the Funds’ Prospectus.
Investors in the Funds will bear their pro-rata share of the management fee, fund servicing fee, and other expenses as set forth in the applicable prospectus (including insurance costs, director fees and the applicable portion of the Funds’ total expenses). Such fees do not include other fees and expenses that may be borne by shareholders, such as placement fees, which could be up to 2.00%, if applicable, at the Fund level, and indirectly, similar fees, expenses and incentive-based fees/allocations of the investments in which the Master Fund invests. Please see the applicable prospectus for a more detailed discussion of the costs and expenses investors will bear, directly or indirectly, by investing in the Fund or the Master Fund.