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PERFORMANCE CALCULATION |
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Performance Overview - All performance is passed through to the partners at the percentage of their equity interest when a position is initiated. This is done to most accurately report performance and to protect partner's profits from being diluted by new capital. All performance for the Fund and the partners are maintained in their respective capital accounts. At any given time, total performance is the summation of the weighted average of all capital accounts.
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Advantages - No dilution of profits for existing partners. To alleviate the risk of dilution of an open-end fund, we employ "Capital Accounts" which maintains the interest of each partner in all positions. When new capital is added, it does not have any interest in any existing positions and, therefore, does not share any existing profits. 
For example, when new money comes in from either new or existing partners, it will not be accounted towards past and existing trading positions for the fund. Rather, new money will be utilized when the fund enters a new trading position. Investor's performance is determined by the annualized percentage growth of the Capital Account balance(s).
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Capital Accounts - Unicorn Capital Partners uses Annualized Capital Accounts and a Yearly Capital Account to track each investor's performance in the fund. Management Fees and Performance Fees are determined on an annualized basis and calculated for each capital account for each investor. At the end of the year, an investor's total return on investment ("ROI") is the summation of all capital accounts, net-of-fees. Annualized Capital Accounts are created in the months when Subscription/Addition or Withdrawals/Redemptions occurs. Yearly Capital Account is created at the beginning of each fiscal year combining yearly capital account and all annualized capital accounts from the previous year. |
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Federal Regulations -
our performance calculations are pursuant to IRS code Title 26 → Chapter 1 → Subchapter A → Part 1 → Subsection
§1.704-1 Partner's distributive share and
pursuant to §1.704-1(b)(2)(iv) Maintenance of capital accounts,
all performance for the Fund and the partners are maintained in their respective capital accounts.
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Pass through Performance -
When a new position is entered, we use the Net-Asset-Value ("NAV") of the fund at the moment to determine how much capital to invest into the new position.
Since the NAV of the Fund represents all the partner's equity interest, the performance for each partner's interest is recorded in each of their Capital accounts.
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FEE CALCULATION: Graduated 10% Hurdle Rate ("gR") |
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Monthly Management Fee = (0.5% / 12) x Monthly Ending Balance During the year, on the last day of the month, Unicorn Capital Partners charges 0.042% management fee on the ending balance of each partner's capital account(s). |
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Management Fee = 2% x gR x Ending Balance - Monthly Management Fee On the last day of the fiscal year, or on a withdrawal or redemption, Unicorn Capital Partners charges a management fee based on the Graduated 10% Hurdle Rate less the monthly management fees already charged. If the management fee is less than the monthly management Fees already charged, we will return the difference. |
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Performance Fee = 20% x gR x (Performance - Highwatermark - Management Fee) On the last day of the fiscal year, or on a withdrawal or redemption, Unicorn Capital Partners charges a performance fee based on the Graduated 10% Hurdle Rate attributed to each partner's performance minus high water mark and management fee. |
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Fee Strcture - the Graduated 10% Hurdle Rate ensures that our interests are aligned with our partners by charging fees based only on performance. The Graduated 10% Hurdle Rate ("gR") is derived from a limited function that scales from 0% to 100% when annualized Performance is between 0% - 10%. To calculate fees, this "gR" is applied to the 2% management fee and 20% performance fee. For example, for annualized performance greater than 10%, the full 2% management fee and 20% performance fees fees are charged, for an annualized performance between 0% and 10%, only a portion of management and performance fees are charged and for annualized performance below 0%, no fees are charged. |
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REAL-TIME PROOF-OF-CONCEPT |
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All our funds go through a "Real-time Proof-of-Concept" and time stamp each trade by sending a text-message when a trade is executed to a managing member of Unicorn Capital Partners.
This insures both the strategy and portfolio manager are tested in real-time.
It takes 12 months or longer before Unicorn Capital Partners can assess the portfolio manager's skills and the methodology's profitability.
Though this process can take years to complete, the results insure accuracy rather than fabrication.
Only by doing "Real-time Proof-of-Concept", can we feel confident all our funds will perform as expected.
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Real-time Proof-of-Concept is NOTHING like Backtesting -
the hedge fund industry typically relies on backtesting to validate the legitimacy of a new fund's strategy.
Many times these new funds even disclose the backtesting is curve fitting and hindsight trading.
The reality is backtesting does not accurately reflect the performance of the portfolio manager or the strategy under real-time market conditions.
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CHARITABLE GIVING |
| Unicorn Capital Partners' mission is to create value not only for its partners but also make a difference by contributing to society. We believe we should contribute by supporting charitable non-profit organizations. In order to create this win-win scenario, after surpassing $5 million Asset Under Management, Unicorn Capital Partners, LLC will begin donating 20% of its annual fee-revenue to charity. Unicorn Capital Partners will publish the organizations it is donating to on an annual basis. |
