Altium Capital Growth Report

Altium Capital out of New York reports impressive numbers pushing toward the New Year

Transcript

1. Altium Growth Fund November 2018
2. Altium Growth Fund |November 2018| 1 CONFIDENTIAL – NOT FOR DISTRIBUTION FIRM Altium Capital Management, LP is an alternative investment firm dedicated to generating returns in a variety of equity focused products in the healthcare industry. Altium emphasizes deep fundamental research and a focus on creating positive expected‐ value trades by exploiting asymmetric risk‐reward opportunities. The firm was founded in 2017 by Jacob Gottlieb, Managing Partner and Chief Executive Officer. PRODUCTS INFRASTRUCTURE Altium has implemented modern, robust technology platforms to provide efficient and accurate operational performance. We are fully committed to continually scaling and enhancing our infrastructure to meet future needs. Altium Growth Fund, LP A Delaware limited partnership, primarily focusing on mid‐ and small‐cap equities and equities‐linked products. The fund primarily invests in the US and international healthcare sub‐sectors, including biotech, services, major and specialty pharma, life science tools, medical technology and medical devices. Financial instruments include equities and options with convertible bonds. Swaps and other derivatives are utilized on a selective basis. EXECUTIVE SUMMARY TEAM Seasoned professionals with successful track records in large hedge fund investment firms, small/specialty investments, deal structuring and the commercial healthcare industry.
3. Altium Growth Fund |November 2018| 2 CONFIDENTIAL – NOT FOR DISTRIBUTION ALTIUM GROWTH FUND The Altium Growth Fund is a long/short equity fund focused on the healthcare industry. The fund invests in companies across the healthcare sector, utilizing a rigorous investment research process, and seeks to capitalize on pricing inefficiencies within the mid‐ and small‐cap sectors. The fund is managed by senior investment professionals with experience in the healthcare sector, both within healthcare industry, and within hedge funds. OBJECTIVE EXECUTIVE SUMMARY To generate attractive risk‐adjusted returns with low correlation to traditional equity investments. Long/short investing with an investment mandate allowing the team to explore misunderstood issuers, especially those undergoing transformations or advancements through new financings, catalysts in clinical and business development, and improved communication with the investor community. STRATEGY Altium identifies fundamentally driven, single‐name ideas within the global healthcare arena. Our investment process is based on a disciplined bottom‐up analysis for individual security selection, designed to generate returns on both long and short positions combined with intelligent exposure hedging. Each investment is judged on its individual merits, and evaluated based on risk‐reward and expected‐value characteristics. The Altium team works hard to find investment trading strategies around complex and misunderstood stories, including small‐cap public issuers which lack significant institutional ownership of broker‐driven research. The team has a vast network comprised of industry contacts and service providers to help source investment ideas and perform due diligence to develop the investment thesis. ADVANTAGE Our team’s investment and industry experience focuses on the healthcare industry. The depth and quality of our fundamental research are our differentiating characteristics, along with a history of successfully investing in these companies and supporting their growth.
4. Altium Growth Fund |November 2018| 3 CONFIDENTIAL – NOT FOR DISTRIBUTION IDEA GENERATION STOCK SELECTION PORTFOLIO CONSTRUCTION • Leverage relationships • Identify key catalysts • Industry trends/driving factors • Scientific/medical conferences • Buy‐side and sell‐side research • Management meetings • Rigorous modeling • Absolute and relative valuation analysis • Competitive market position • Input from management, industry contacts • Risk/reward profile with expected probability • Investment summary by analyst and team • Trading perspective – timing, liquidity • Determine sub‐sector exposure • Assess individual idea exposure • Scale into positions • Optimize timing of risk‐taking • Sizing based on conviction level • Pre‐determine an exit strategy before entering • Minimize thesis drift • Realization of expected catalysts • Technical analysis of supply/demand characteristics • Changing multiples • Constant re‐evaluation • Review and resize as appropriate TRADE EXECUTION AND EXIT STRATEGY OVERVIEW INVESTMENT PROCESS
5. Altium Growth Fund |November 2018| 4 CONFIDENTIAL – NOT FOR DISTRIBUTION PORTFOLIO MANAGEMENT INVESTMENT PROCESS • Undervalued Assets • Solid Scientific/Clinical Development Plan • Commercial Development and Market Acceptance • M&A Activities • Expansion of Business Plan • Corporate Actions • Special Situations & Turnarounds • Novel Products and Services • Deteriorating Business Fundamentals • Increased Competitive Environment • Management Turnover • Poor Earnings Quality • Inability to Meet Business Goals • Unrealistic Guidance/Consensus • Regulatory Actions • Scientific/Clinical Risks L O N G S H O R T
6. Altium Growth Fund |November 2018| 5 CONFIDENTIAL – NOT FOR DISTRIBUTION Track Record Track record of Altium Growth Fund, LP Inception: June 2018 The information presented is estimated, unaudited and is subject to adjustment. Your returns may vary from the returns of other investors due to the timing of subscriptions, withdrawals, redemptions and participation in "new issues.“ This update is strictly confidential and may not be reproduced or redistributed in whole or in part nor may its contents be disclosed to any other person or entity. This update represents performance gross of applicable fees. Past performance is not indicative of future results. There can be no assurances that investors will have returns on invested capital similar to the returns presented because of, among other reasons, differences in economic conditions, regulatory climate, portfolio size, leverage, expenses and structure, as well as investment policies and techniques. An investment in the funds is speculative and involves a high degree of risk. The Fund and/or manager may employ certain trading techniques, such as short selling and the use of leverage, which may increase the risk of investment loss. As a result, performance may be volatile, and an investor could lose all or a substantial amount of his or her investment. Further, the funds have substantial limitations on an investor’s ability to redeem or transfer their shares, and there is no secondary market for an interest in the funds and none is expected to develop. Finally, the funds’ fees and expenses may offset trading profits. These risks and other important risks are described in detail in a Confidential Private Offering Memorandum available for each of the funds. Prospective investors are urged to review the relevant Confidential Private Offering Memorandum and consult with their own financial, legal and tax advisors before making an investment in the funds. Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD 2018 0.54% ‐2.39% 0.60% 5.59% 3.03% 7.37%
7. Altium Growth Fund |November 2018| 6 CONFIDENTIAL – NOT FOR DISTRIBUTION TERMS & STRUCTURE Fund Incentive Allocation Management Fee Minimum Investment Subscriptions Redemptions Gate Prime Broker Altium Growth Fund, LP, Delaware Limited Partnership 20% Annual 0% Annual, with Operating Expense Reimbursement $1 Million Initial Investment | $500K Subsequent Investments Monthly Monthly with 30 Days Notice None Jefferies Please refer to the Fund’s final explanatory memorandum or confidential private placement memorandum for final terms. Fiscal Year‐End December 31
8. Altium Growth Fund |November 2018| 7 CONFIDENTIAL – NOT FOR DISTRIBUTION JACOB GOTTLIEB MD, CFA, PRM Jacob Gottlieb is the Managing Partner and Chief Investment Officer of Altium Capital Management. Jacob has over 15 years of hedge fund investing experience and he led a team of more than 85 investment professionals focused primarily on fundamental equity long/short strategies. Jacob founded Visium in 2005 after working as a Partner and Portfolio Manager at Balyasny Asset Management, LP, where he led a team of more than 20 investment professionals. Prior to Balyasny, Jacob was a Portfolio Manager at Merlin, and began his career as a buy‐side equity analyst at Sanford C. Bernstein. Jacob holds a Bachelor of Arts in Economics from Brown University (magna cum laude) and a medical degree from New York University. He obtained his CFA charter in 2001, and his PRM designation from the Professional Risk Managers' International Association in 2010. CHIEF INVESTMENT OFFICER KEY TEAM MEMBERS | BIOGRAPHIES MARK GOTTLIEB CFA, CAIA Prior to Altium, Mark was Partner & Chief Administrative Officer of Visium Asset Management, a New York‐based hedge fund manager which evolved into a global multi‐strategy hedge fund, private equity, and mutual fund company at its peak, with over 175 staff among NY, San Francisco and London offices. He led development of the firm from inception (successful spin‐out of Visium from Balyasny Asset Management), including operations and accounting infrastructure, corporate development, recruiting, and various expansion efforts. Prior to Visium, Mark was on the investment team at Balyasny, primarily focused on negotiating private investments in public companies in development‐stage healthcare (biotech, pharmaceuticals, devices). Mark started his career in corporate finance investment banking at UBS. Mark holds a MBA from Cornell University in Entrepreneurship & Venture Capital and a BA from Vassar College in Economics. He is a CFA charterholder, and a CAIA charterholder. CHIEF OPERATING OFFICER
9. Altium Growth Fund |November 2018| 8 CONFIDENTIAL – NOT FOR DISTRIBUTION CONTACTS Altium Capital Management, LP 551 Fifth Avenue, 19th Floor New York, NY 10176 Main: (212) 259‐8400 investor@altiumcap.com JACOB GOTTLIEB CHIEF EXECUTIVE OFFICER 212.474.8810 jgottlieb@altiumcap.com MARK GOTTLIEB CHIEF OPERATING OFFICER 212.484.2711 mgottlieb@altiumcap.com
10. Altium Growth Fund |November 2018| 9 CONFIDENTIAL – NOT FOR DISTRIBUTION Past performance is not indicative of future results. NOTE: The table and chart above combine a composite summary of performance of the Visium Balanced Fund, LP (from November 1, 2005 to present) with (in shaded cells) the pro forma performance from accounts managed by Jacob Gottlieb for Balyasny Asset Management, LP (from January 1, 2002 to October 31, 2005) and Schonfeld Securities LLC (from April 16, 2001 to December 31, 2001). The 2005 annual return of 24.14% links returns for the Fund net of actual fees and expenses with returns adjusted for model management fees, incentive allocations and expenses from a portfolio in a master feeder hedge fund managed by Mr. Gottlieb’s former employer Balyasny Asset Management, LP. This information is being provided as a convenience to investors, as an indication of the history of the management team of Altium. There are substantial differences with regards to the strategy, securities traded, investment and support staff, assets under management, and other materials factors. Further, this information is incomplete with regard to the funds/products under management, and the total history in terms of time under management, omits performance 2016‐onwards, subsequent events, etc. As such, the information is not meant to imply a relationship between this performance and the prospects of generating future returns. HISTORICAL TRACK RECORD OF MANAGEMENT Addendum P1:
11. Altium Growth Fund |November 2018| 10 CONFIDENTIAL – NOT FOR DISTRIBUTION DISCLOSURE | COMPOSITE PERFORMANCE HISTORY The information presented is a composite summary of performance of the Visium Balanced Fund, LP (from November 2005 to December 2015) and pro forma performance from accounts managed by Jacob Gottlieb for Balyasny Asset Management, LP (from January 1, 2002 to October 31, 2005) and Schonfeld Securities LLC (from April 16, 2001 to December 31, 2001). Other funds were under management during this time period, and this/other funds were managed beyond the time period presented. For the period November 1, 2005 onwards, the information presented is based on the actual result of a Class A, Limited Partner, new issue eligible investor in the Visium Balanced Fund, LP. As explained in greater detail below, the 2005 YTD returns link returns net of actual fees and expenses with returns, adjusted for model management fees, incentive allocations and expenses, from a portfolio in a master feeder hedge fund managed by Balyasny Asset Management, LP ("BAM"). For the period April 16, 2001 to October 31, 2005, all composite return data regarding Mr. Gottlieb’s investment performance presented here is hypothetical although the information is based on the actual dollar profit and loss (the “Gross Profit and Loss”) of Mr. Gottlieb’s accounts that he managed for BAM and that he managed while employed at Schonfeld Securities LLC (“Schonfeld”). The Gross Profit and Loss has been obtained from the brokerage account statements for the BAM accounts from January 1, 2002 – May 31, 2005 and from Schonfeld’s internal records for the Schonfeld account from April 16, 2001 – December 31, 2001. The Schonfeld account was a proprietary trading account; the BAM accounts were proprietary trading accounts until January 21, 2004, at which time they became a portfolio in a master‐feeder hedge fund. The pro forma net performance presented is calculated by applying model management fees, incentive allocations, and expenses to the Gross Profit and Loss. The model adjustments include a 2% management fee payable monthly, an operating expense assumption of 0.15% to 0.30% per annum and a 20% incentive allocation. These fees, allocations and expenses were not the actual fees, allocations and expenses charged to the investors in the BAM accounts or the Schonfeld account. The BAM accounts were charged an average annual implied fee of 57% of gross profits, consisting of a direct allocation of operating expenses, traders’ compensation and a performance fee from January 1, 2002 to January 20, 2004. The BAM accounts had their expenses passed through including portfolio manager compensation and a performance fee of 0% to 30% from January 21, 2004 to December 31, 2004 and 20% in 2005. For the period from January 1, 2002 to October 31, 2005 the pro forma net performance was calculated using Mr. Gottlieb’s estimated notional capital base that was allocated to the BAM accounts (the “Capital Base”). There are limited records in respect to the Capital Base in 2002 and for that time frame a good faith estimate of capital allocation was used. The Capital Base represents the notional or leverage capital that Mr. Gottlieb was allocated to manage the BAM accounts and this Capital Base exceeded the actual equity of the BAM accounts. For the period from April 16, 2001 to December 31, 2001, pro forma net performance was calculated using the monthly average gross market value of the Schonfeld account (the “Gross Market Value”). The Gross Market Value represents the value of all long and all short positions in the Schonfeld account and this Gross Market Value exceeded the actual equity of the Schonfeld account. Since the performance was being calculated using the Capital Base or Gross Market Value, as if it were equity, the interest charges associated with the BAM accounts and Schonfeld account have been reversed where that information is available. Furthermore, by utilizing the Gross Market Value or Capital Base rather than the equity base for calculating returns, the performance results may be unrepresentative; positive performance would have been better and negative performance would have been worse. The annual returns are presented using compounding which assumes the reinvestment of earnings and dividends whereas for these accounts the gross profit and loss was not reinvested and the Capital Base remained fixed excepting for changes in the allocation of the Capital Base. Past performance is not indicative of future results. Addendum P2:
12. Altium Growth Fund |November 2018| 11 CONFIDENTIAL – NOT FOR DISTRIBUTION DISCLOSURE This document is intended only for the person or entity to which it has been delivered; it is strictly confidential and has been prepared solely as a means to determine investor interest in Altium Growth Fund, LP (the “fund”). This document does not constitute an offering. An offering will be made only by means of a final confidential explanatory memorandum or confidential private placement memorandum and only in those jurisdictions where permitted by law. Any decision to invest in the fund must be based solely upon the information set forth in the confidential explanatory memorandum or the confidential private placement memorandum and the exhibits thereto, each of which should be read carefully by prospective investors prior to investment. Fund returns are inclusive of the reinvestment of dividends and other earnings, if any, including income from new issues. Fund returns may vary for investors who are restricted from participating in new issues. Fund returns reported herein are net of expenses and fees, including the following: a management fee of 2.0% per annum, payable monthly; an annual incentive allocation of 20% with a high watermark; and expenses. Past performance is not indicative of future results. This document may not be reproduced or distributed by the recipient, in whole or in part, except that this document may be provided to the recipient’s advisers in connection with an evaluation of a potential investment. Prospective investors should be aware that an investment in the fund is speculative and involves a high degree of risk, including, without limitation, risk relating to complex tax considerations, a performance‐based compensation structure, a lack of regulatory oversight, limited reporting to investors, and the use of investment practices and techniques, such as short selling, derivatives and leverage, that increase the risk of loss. There can be no assurance that the fund’s investment objectives will be achieved or that an investor will receive a return of or on its capital. The fund’s fees and expenses will reduce any trading profits. There may be occasions when the fund’s investment manager, its affiliates and/or its members or employees may encounter potential conflicts of interest in connection with the fund. An investment in the fund is subject to restrictions on transfer and withdrawal. There is no secondary market for an interest in the fund and none is expected to develop. The confidential explanatory memorandum or confidential private offering memorandum discusses these and other important risk factors and considerations that should be carefully evaluated before making an investment in the fund. Prospective investors should consult with their own legal, tax and financial advisers as to the consequences of an investment in the fund. This document may contain forward‐looking statements within the meaning of the United States federal securities laws. Forward‐looking statements are those that predict or describe future events or trends and that do not relate solely to historical matters. For example, forward‐looking statements may predict future economic performance, describe plans and objectives of management for future operations and make projections of revenue, investment returns or other financial items. A prospective investor can generally identify forward‐looking statements as statements containing the words “will,” “believe,” “expect,” “anticipate,” “intend,” “contemplate,” “estimate,” “assume” or other similar expressions. Such forward‐looking statements are inherently uncertain, because the matters they describe are subject to known (and unknown) risks, uncertainties and other unpredictable factors, many of which are beyond the fund’s control. No representations or warranties are made as to the accuracy of such forward‐looking statements. This document is being provided by the investment manager, Altium Capital Management, LP (“Altium”), for informational purposes only and should not be construed as investment advice. It is not a recommendation of, or an offer to sell or solicitation of an offer to buy, any particular security, strategy or investment product. Altium’s research for this report is based on current public information that Altium considers reliable, but Altium does not represent that the research or the report is accurate or complete, and it should not be relied on as such. Altium’s views and opinions expressed in this document are current as of the date of this document and are subject to change. Information herein (if any) about indices is provided to allow for comparison of the performance of the fund to that of certain well‐known and widely recognized indices. There is no representation that any such index is an appropriate benchmark for such comparison. It is not possible to invest directly in an index, which also does not take into account trading commissions and costs. The volatility of indices may be materially different from the performance of the fund. In addition, securities in the fund’s portfolio may differ significantly from the securities that comprise the indices. Past specific recommendations (if any) referenced in this document constitute only a subset of all recommendations made by Altium on behalf of the fund in respect of the purchase and sale of securities. The recipient of this document should not assume that any past specific recommendation constituted one of the largest holdings of the fund or that the trades identified and discussed in any past specific recommendation were or will be profitable. For more information, please contact Altium’s investor relations department. Past performance is not indicative of future results.