OBJECTIVES: To provide capital appreciation consistent with the return characteristic of the alternative investment portfolios of larger endowments through investments in the six asset classes of: Opportunistic Equity, Enhanced Fixed Income, Absolute Return, Real Estate, Private Equity and Energy & Natural Resources. The secondary objective is to achieve capital appreciation with less volatility than that of the equity markets.
Fund Highlights:
Hedge Funds and Private Investments in one fund
Experienced alternative investment team
Institutional-quality portfolio in a registered fund1
Fund Inception Date: Apr 1, 2005
Fund Assets2: (in millions) $224.59
Annualized Return (since inception): 1.45%
Master Fund Inception Date: Jan 1, 2005
Master Fund Assets:2 (in millions) $1,421.33
NAV (net asset value): 85.56
Minimum Investment* : $50,000
*minimums may vary
Additional Investment: $5,000
Liquidity3: Expected quarterly, with 65 days notice
Quarter-end performance: As of 6/30/10, the 1-year, 3-year, 5-year, and Since Inception annualized return is 6.42%, -4.86%, 1.45%, and 1.41% respectively.
Time Window Analysis - Fund
Months
1
3
12
24
Best Period12
3.69%
6.82%
15.53%
25.61%
Worst Period13
-8.28%
-18.83%
-23.79%
-20.40%
Average Period Return14
0.14%
0.56%
2.00%
-0.08%
Time Window Analysis - S&P 5006
Months
1
3
12
24
Best Period12
9.57%
25.83%
53.62%
33.40%
Worst Period13
-16.79%
-29.65%
-43.32%
-45.36%
Average Period Return14
0.18%
0.56%
2.35%
-6.10%
Performance vs. the S&P 500
The chart illustrates the performance of a hypothetical $100,000 investment made at the Fund's inception date. It 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.
Strategy Performance:
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.
Strategy Contribution:
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.
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. Please carefully consider the investment objectives, risks, and charges and expenses of the Funds before investing. Please read the Prospectus carefully before investing as it contains important information on the investment objectives, composition, fees, charges and expenses, risks, suitability, and tax obligations of investing in the Funds.Copies of the Prospectus and performance data current to the most recent month-end may be obtained online at www.hatterasfunds.com or by contacting Hatteras at 1-866-388-6292. Past performance does not guarantee future results.
The Hatteras Multi-Strategy Fund, L.P.; the Hatteras Multi-Strategy TEI Fund, L.P; the Hatteras Multi-Strategy Institutional Fund, L.P.; and the Hatteras Multi-Strategy TEI Institutional Fund, L.P. (collectively referred to herein as the "Hatteras Multi-Strategy Funds" or the "Funds") 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 Multi-Strategy Funds are funds of alternative investments. As such, the Funds invest 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 Funds, through an investment in the Master Fund, will invest substantially all of their assets in underlying funds that are generally not registered as investment companies under the 1940 Act and, therefore, the Funds will not have the benefit of various protections provided under the 1940 Act with respect to an investment in those underlying funds. The Funds can be highly volatile, carry substantial fees, and involve complex tax structures. Investments in the Funds involve 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 Funds provide limited liquidity, and units in the Funds are not transferable. Liquidity will be provided only through repurchase offers made by the Funds from time to time, generally on a quarterly basis upon prior written notice.
The success of the Funds is highly dependent on the financial and managerial expertise of its principals and key personnel of the Funds' investment managers. Although the investment managers for the Funds expect to receive detailed information from each underlying fund on a regular basis regarding its valuation, investment performance, and strategy, in most cases the investment managers have 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 Funds, investors will be subject to a dual layer of fees, both at the Funds 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.
Securities offered through Hatteras Capital Distributors, LLC, member FINRA/SIPC. Hatteras Capital Distributors, LLC is affiliated with Hatteras Investment Partners, LLC by virtue of common control/ownership. This document is not an offering to subscribe for units of any fund and is intended for informational purposes only.
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.
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.
The Fund intends to hold quarterly tender offers subject to the sole discretion of the Board of Directors as described in the Prospectus. If the units were held less than 12 consecutive months, a 5% redemption fee may apply.
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. The net expense ratio and total expense ratio for the Fund are 2.39% and 7.38%, respectively. The total expense ratio includes Acquired Fund Fees and Expenses of 5.03%. The Investment Manager has contractually agreed to waive fees and/or reimburse certain expenses 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.
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.
S&P 500 Index is sourced from Bloomberg. The index is an unmanaged portfolio of securities. Performance results do not reflect the deduction of management fees, incentive compensation, commissions or other expenses. An investor cannot invest directly in an index. The S&P 500 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.
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.
Measurement of the investment's volatility.
The peak to trough decline of an investment.
Number of months of a peak to trough decline of an investment.
Number of months to recover from a drawdown.
The best performance during the given period.
The worst performance during the given period.
This is a simple average return (arithmetic mean), which is calculated by summing the returns for each period and dividing the total by the number of periods.
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.
Differentiates between good and bad volatility in the Sharpe ratio. Differs from the Sharpe ratio by dividing by downside deviation instead of standard deviation.
Potential loss that may arise from risk.
Alpha measures excess return relative to the market; often referred to as a measurement of "manager skill."
Measure of a fund's risk relative to the benchmark.
The Coefficient of Determination is a measure of how well the regression line fits the data (variation explained by the regression line).
Percentages are based on total portfolio investments exclusive of cash, cash equivalents, money market funds, and short-term investments.
Securities offered through Hatteras Capital Distributors, LLC, member of FINRA / SIPC. Hatteras Capital Distributors, LLC is affiliated with Hatteras Investment Partners, LLC, and Hatteras Capital Investment Management, LLC by virtue of common control/ownership.
