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EntrepreneurShares, LLC 470 Atlantic Avenue • Suite 400 • Boston, MA 02210o. (617) 273.8218 • f. (617) 273.8118 • www.ershares.com
Entrepreneur US All Cap Strategy
EntrepreneurShares, LLC 470 Atlantic Ave • Suite 400 • Boston, MA 02210 • o. (617) 273-8218 • f. (617) 273-8118 • www.ershares.com
EntrepreneurShares is an institutional asset management firm and is registered with the SEC as an investment advisor. The Entrepreneur All Cap Strategy (the Strategy) contains portfolios invested in equities with market capitalizations above 200MM exclusively within the US. The benchmark is the Russell 3000 index. The index measures the performance of the largest 3000 U.S. companies representing approximately 98% of the investable U.S. equity market. Performance data of the index was obtained from publicly available sources.
From inception through September 2013, the Strategy represents the US long only performance extracted from the EntrepreneurShares Global Equities composite as well as cash allocation of 2% based on the intention to be fully invested. The document has been prepared solely for the informational purposes of prospective advisory clients. By accepting this document, the recipient acknowledges that all of the information contained herein is confidential and may not be used for any purpose other than for discussions with EntrepreneurShares regarding its advisory services. The information contained in this document is provided as of specified dates. EntrepreneurShares has no obligation to update, supplement or correct any information in this document, although it reserves the rights to do so. This document does not purport to be all-inclusive or to contain all of the information that a prospective advisory client may deem necessary to make its decision to engage EntrepreneurShares as an investment advisor.
Investment in the Fund will result in certain risks which are detailed in the Prospectus. These risks include manager risk, market risk, common stock risk, risk of no prior experience of managing a registered mutual fund, small and medium sized companies risk, technology company investing risk and quantitative investment approach risk. Investors should consider carefully the investment objectives, risks, and charges and expenses before investing. For a full prospectus which contains this and other information about the funds offered by EntrepreneurShares, call us at (617) 273-8218 or email Jared Shulman at [email protected].
DISCLAIMER PAGE
OBJECTIVE:Our investment objective is to outperform the Russell 3000 throughout all market cycles. In doing so, we strive to consistently generate superior risk-adjusted Alpha and Up-Capture ratio by investing in entrepreneurial companies. We maintain a commitment to meet the financial goals of every client.
PHILOSOPHY:Entrepreneurial leaders have economic and non-economic incentives to create value in their organizations. Their compensation packages are heavily weighted based on company performance and they have considerable assets invested in the business. Ultimately, these benefits are reflected in earnings growth, stock price appreciation and above average employment growth. Our academic research shows that companies led by entrepreneurs outperform non-entrepreneurs over a long period.
DIFFERENTIATING FACTORS:We employ a proprietary set of quantitative and qualitative filters, developed over twenty years of academic research. We are constantly seeking refinements and new applications of our models. Our approach enables us to create unique portfolios of companies led by entrepreneurs that generate significant absolute and risk-adjusted performance. We can assemble a subset of our holdings that will track our desirable Entrepreneur characteristics without disrupting our clients’ targeted risk parameters (e.g. by market cap, geographic region, sector, etc.). Our 8+ year track record of performance ranks well against our peer benchmarks over the comparable time period. We also employ a proprietary sector and style rotational overlay that allows us to enter and exit global markets efficiently based on dynamic changes to economic conditions.
OVERVIEW
EntrepreneurShares, LLC 470 Atlantic Ave • Suite 400 • Boston, MA 02210 • o. (617) 273-8218 • f. (617) 273-8118 • www.ershares.com
JOEL M. SHULMAN Ph.D., CFAManaging Director & Chief Investment Officer
Joel Shulman is the managing director and CIO of EntrepreneurShares. In addition, Dr. Shulman has managed an offshore private fund for over 8 years. Dr. Shulman is a Professor of Entrepreneurship at Babson College (the number one ranked graduate and undergraduate program in entrepreneurship, according to BusinessWeek and U.S. News & World Report’s for the last 15 years). He holds a Ph.D. in Finance and is a CFA charter holder. Dr. Shulman also holds an MPA from the JFK School of Government at Harvard University. Dr. Shulman was the founder of Shulman Review that trained over 10,000 investment professionals in over 110 countries for the CFA designation.
DAVID R. CRAGGChief Financial Officer
David Cragg serves as the CFO & CCO of EntrepreneurShares Global Fund. Prior to EntrepreneurShares, David served as Chief Operating Officer and Chief Financial Officer of Leuthold Weeden Capital Management a Minneapolis based investment management firm with $5.2 billion assets under management. In addition to his roles as COO and CFO, David assisted portfolio managers in the day to day management of accounts. Prior to joining Leuthold Weeden Capital Management, David held a variety of positions within Piper Trust Company from 1993 to January 1999, most recently as Operations Manager. David graduated in 1991 from Westmont College with a BA in Economics.
MANAGEMENT TEAM
EntrepreneurShares, LLC 470 Atlantic Ave • Suite 400 • Boston, MA 02210 • o. (617) 273-8218 • f. (617) 273-8118 • www.ershares.com
MANAGEMENT TEAM
ALICE J. THOMPSONChief Administrative Officer
Alice Thompson was previously an executive at Thompson Guitars, where she led marketing and administrative operations. She brings a fresh, hip edge to EntrepreneurShares and handles all administrative, communication and day-to-day operations. In addition, she assists with front-end sales and marketing efforts. She spearheads the image and spirit of our entity and champions our social conscience efforts. She earned her BS from Babson College.
JARED I. SHULMANAssociate
Jared Shulman joins the EntrepreneurShares team after serving as the leading Account Director at Blue Wolf Group. As the newest addition to the team, Shulman brings experience surrounding sales processes and customer life cycle. His main responsibilities include sales and marketing efforts. Shulman graduated from Babson College with a degree in Entrepreneurship with focused research in raising capital.
EntrepreneurShares, LLC 470 Atlantic Ave • Suite 400 • Boston, MA 02210 • o. (617) 273-8218 • f. (617) 273-8118 • www.ershares.com
STRATEGIC PARTNERS | Pentegra Retirement Services
SCOTT STONESVP, Chief Investment Officer
Scott serves as the Chief Investment Officer at Pentegra Retirement Services, where his duties include the management and oversight of the investment processes governing approximately $7.5 Billion in assets comprised of both public and private holdings of fixed income, equity, real estate and hedge fund investments. Scott previously worked at Reinsurance Group of America (RGA) and served in a number of roles beginning in 2003 as Senior Portfolio Manager. He was soon after named Head of Fixed Income Investments, and led the company's effort to create its own trading operation and in-source U.S. fixed income investment management. He later served as VP and Director of Investment Strategy and Credit research, where he managed the company's credit, structured asset, and real estate research associates through the credit downturn between 2007 and 2009. By 2010, Scott held primary responsibility for management of the company's non-traditional investment vehicles, including Private Equity partnerships, Mezzanine Debt funds, Commercial Real Estate holdings, and Distressed Securities markets.
MICHAEL RANDAZZOVP Investments
BIO GOES HERE
EntrepreneurShares, LLC 470 Atlantic Ave • Suite 400 • Boston, MA 02210 • o. (617) 273-8218 • f. (617) 273-8118 • www.ershares.com
AQuantitative Analysis
Companies are selected using our proprietary filters to assess
their entrepreneurial profile.We narrow our Universe of
55,000 publicly traded companies down to
approximately 1,000 firms.
BQualitative Analysis
After our quantitative filters we then apply our proprietary analysis
to arrive at approximately 400 “Global Entrepreneurs”. Our
Global 400 represent our Universe of SMA, UMA and licensing
products. We then make a further refinement to arrive at our
Entrepreneur US All Cap Strategy. Our Strategy holds more than 100 of our US Domestic Entrepreneurs.
CPerform monthlymonitoring and
rebalancing The Strategy holdings are
reviewed and rebalanced monthly and quarterly based on changesto our 15 proprietary attributes.
We employ a sector and style rotational overlay based on a
proprietary model of 12 macro economic variables.
INVESTMENT PROCESS
Entrepreneur US All Cap Strategy
EntrepreneurShares, LLC 470 Atlantic Ave • Suite 400 • Boston, MA 02210 • o. (617) 273-8218 • f. (617) 273-8118 • www.ershares.com
55,000+
All Major Exchanges
100+
ER US All Cap
1,000+
Broad Marketability
and Capitalization
Entrepreneur US All Cap MODEL Filtering Process
INVESTMENT PROCESS
400+
EntrepreneurShares
Global Index
EntrepreneurShares, LLC 470 Atlantic Ave • Suite 400 • Boston, MA 02210 • o. (617) 273-8218 • f. (617) 273-8118 • www.ershares.com
Organic growth opportunities1
Above average ownership
stake among key stakeholders2
Low SG&A3
Above average return
on invested capital4
Sustainable growth5
Manageable debt6
Active strategic alliances/
partnerships/licensing7
Aligned executive
compensation packages8
Low executive turnover9
Transparent governance10
Long duration of
key managers11
Low or no dividends12
Family involvement13
High EBITDA Margin %14
Other significant
stakeholder relationship15
15 KEY ENTREPRENUERIAL TRAITS
EntrepreneurShares, LLC 470 Atlantic Ave • Suite 400 • Boston, MA 02210 • o. (617) 273-8218 • f. (617) 273-8118 • www.ershares.com
33,000+
All Major Exchanges
400+
Global Index
200+
9,000+
Broad Marketability
and Capitalization
INVESTMENT PROCESS
Entrepreneur US All Cap Strategy
EntrepreneurShares, LLC 470 Atlantic Ave • Suite 400 • Boston, MA 02210 • o. (617) 273-8218 • f. (617) 273-8118 • www.ershares.com
33,000+
All Major Exchanges
400+
Global Index
200+
9,000+
Broad Marketability
and Capitalization
INVESTMENT PROCESS
When Do We Rebalance the Portfolio?
There are 7 times on the clock when we adjust the portfolio. Rules have been determined for each time. Only when those rules are met, do we consider it to be
that “time”.
To tell the “time,” we analyze objective measures such as:Macroeconomic factorsSector and style performanceOverall market trends
As each time is struck, the Fund Manager will opportunistically pursue those stocks, styles and sectors which should be rewarded.
EntrepreneurShares, LLC 470 Atlantic Ave • Suite 400 • Boston, MA 02210 • o. (617) 273-8218 • f. (617) 273-8118 • www.ershares.com
INVESTMENT CHARACTERISTICS
ENTREPRENEURS BY SECTOR PORTFOLIO BY INVESTMENT STYLE (%)
EntrepreneurShares, LLC 470 Atlantic Ave • Suite 400 • Boston, MA 02210 • o. (617) 273-8218 • f. (617) 273-8118 • www.ershares.com
Entrepreneur US All Cap Fund (IMPAX):The fund will be launched within the near future. It is an actively managed Mutual Fund comprised of the Domestic subset of our Global 400 Entrepreneurs. We have scheduled maintenance on a monthly and quarterly basis.
SMA/UMA Opportunities:We compile a subset of our Global Entrepreneursfor SMA/UMA investment purposes. We can structure portfolios based on market cap, geographic region and industrial sector. Other customized composites are created to ensure the desired risk classification for our clients. (Note: Minimum investment and holding requirements may apply.)
INVESTMENT PRODUCTS
Licensing Opportunities:Entrepreneur Indices may be allowed for licensing purposes. (Note: significant investment requirements and holding restrictions will apply.)
EntrepreneurShares, LLC 470 Atlantic Ave • Suite 400 • Boston, MA 02210 • o. (617) 273-8218 • f. (617) 273-8118 • www.ershares.com
Entrepreneurial Composite Creates Risk Management (Index) Opportunities
SMA/UMA LICENSING SUMMARY
Our Entrepreneur Index composites offer client investors opportunity to customize desired risk exposure without sacrificing alpha generation or up capture performance.
EntrepreneurShares has created a new style of investment in entrepreneurial companies.
The Entrepreneur Index can be applied to a variety of investment strategies including: large cap, mid cap, small cap, as well as different sectors, industries and countries.
The indices are easily replicated and are statistically significant compared to relevant benchmarks.
Hedge funds and other institutional investors could use Entrepreneur Index to isolate specific risk/return characteristics for benefit of their clients.
Entrepreneur Index potentially reduces downside risk by investing side-by-side with motivated owner/managers.
EntrepreneurShares, LLC 470 Atlantic Ave • Suite 400 • Boston, MA 02210 • o. (617) 273-8218 • f. (617) 273-8118 • www.ershares.com
Our Entrepreneur US All Cap Difference
ENTREPRENEUR US ALL CAP SUMMARY
This Strategy has created a new style of investment in entrepreneurial companies.
Entrepreneurs tend to outperform their peers over a period of time (they have strong economic incentives and non financial motivators to deliver strong performance).
The strategy uses proprietary filters that the portfolio manager and his team have developed over the past twenty years of academic research.
This strategy provides significant Up Capture benefits
Entrepreneur US All Cap Strategy provides significant risk-adjusted (Alpha) benefits compared to its peer benchmarks
Entrepreneur US All Cap Strategy provides significant absolute returns over an extended period of time
EntrepreneurShares, LLC 470 Atlantic Ave • Suite 400 • Boston, MA 02210 • o. (617) 273-8218 • f. (617) 273-8118 • www.ershares.com
TERMS AND CONDITIONS
Investment Advisor—Weston Capital, LLC
Investment Manager – EntrepreneurShares, LLC
Fund Type –SMA, UMA and licensing structures.
Entry Load – N/A
Subscription – Daily
Redemption – Varying for SMA, UMA & Licensing
Lock up period – 5 days, varying for SMA, UMA & Licensing
Management Fee – .80%; varying for SMA, UMA & Licensing
Minimum Application amount – Institutional - $2,500; different restrictions apply for SMA, UMA & Licensing
Benchmark – Russell 3000
Custodian – US Bank
Auditor – McGladrey
Legal Advisors – Clearspire
EntrepreneurShares, LLC 470 Atlantic Ave • Suite 400 • Boston, MA 02210 • o. (617) 273-8218 • f. (617) 273-8118 • www.ershares.com
DIRECTORS & ADVISORS
GEORGE R. BERBECO Director
Mr. Berbeco is the President of The Devon Group, Inc., a commodity trading advisor, and General Partner of Devon Capital Partners, LP. He has founded several technical companies, including Charleswater Products, Xytest, Syon, Adhesivesmart.com, and successfully exited by sale to Armstrong World Industries and ITW, as well as private funds. Mr. Berbeco is the author of over twenty publications in technical journals relating to electronics, ESD control, adhesives, and industrial applications of ionizing radiation. He has made over fifty presentations, and is the author of fifteen U.S. and foreign patents. Mr. Berbeco is Chairman of Bay Colony Development Corporation, one the largest SBA 504 lenders in the country. He is an Overseer of WGBH Public Television, and on the board of the New Rep Theatre. His past affiliations have included chairman of the NE Chapter of the MS Society, International Board of Governors-Technion, Haifa, Israel. Mr. Berbeco is a graduate of M.I.T, M.S. and B.S. Chemical Engineering, National Merit Scholar, Sigma Xi Honorary. He is registered as a Commodity Trading Advisor, and Commodity Pool Operator.
STEPHEN SOHN, MD Director
Dr. Sohn holds an A.B. from Harvard College, an MD from Duke University, and an MBA (Summa Cum Laude) from Babson College. He has been a faculty member of the Harvard Medical School, written two medical textbooks, and has had multiple research interests including cardiovascular surgery (heart bypass and cardiac assist devices) reconstructive surgery (cartilage regeneration and joint reconstruction) and drug development (wound healing and snoring). He founded the first ambulatory surgery center in Massachusetts, started a consolidation of dental practices in New England, and built a high-end nationwide group of aesthetic medical practices that he sold to Sprout capital. He has advised equity research companies and Wall Street Investment firms, and has volunteered his medical services in Africa and Pakistan/ Afghanistan.
EntrepreneurShares, LLC 470 Atlantic Ave • Suite 400 • Boston, MA 02210 • o. (617) 273-8218 • f. (617) 273-8118 • www.ershares.com
DIRECTORS & ADVISORS
THOMAS T. STALLKAMP Director
Mr. Stallkamp is Founder/Principal of Collaboration Management, a private consultancy specializing in helping businesses implement collaboration; and Industrial Partner at Ripplewood Holdings, LLC, a NY-based private equity firm. Formerly CEO/Chairman of MSX International, he is best known as former President and Vice Chairman of DaimlerChrysler. During almost 20 years at Chrysler Corporation, Stallkamp helped lead the company tonew stability and growth in the uncommonly competitive auto-motive industry. As President there, his supplier relationship strategies drove major improvementsin both quality and cost, helping make Chrysler the world’s most profitable automaker. Stallkamp serves on several corporate boards and on the advisory board of Georgetown University’s McDonough School of Business, and is the chairman of the Trustees at Babson College aswell as an adjunct faculty member in Entrepreneurship.
EntrepreneurShares, LLC 470 Atlantic Ave • Suite 400 • Boston, MA 02210 • o. (617) 273-8218 • f. (617) 273-8118 • www.ershares.com
DIRECTORS & ADVISORS
LEONARD C. GREEN Advisor
Leonard C. Green is a CPA, MBA, and Entrepreneur. He is CEO of the Green Group, which consists of 14 different businesses including accounting, consulting, financial, real estate, thoroughbred horses, sports teams, a dog food and cat food company, and three charities. Len is also a member of the Board of Directors of a number of companies and foundations. Len teaches two entrepreneurial courses, one structured similar to Donald Trump’s ApprenticeTV series and a Family Business course.
CRAIG R. BENSON Advisor
Craig Benson served as governor of the State of New Hampshire from 2002 to 2005. A founder of Collingsworth Company, Mr. Benson is currently reviewing strategic investments and potential turnaround targets. Mr.Benson co-founded Cabletron Systems in 1983 andserved as president and CEO, growing annual revenueto $1.6 billion. He was inducted into the Babson College Academy of Distinguished Entrepreneurs in 1995 and formerly served on the ITSD Advisory Board.
EntrepreneurShares, LLC 470 Atlantic Ave • Suite 400 • Boston, MA 02210 • o. (617) 273-8218 • f. (617) 273-8118 • www.ershares.com
DIRECTORS & ADVISORS
NORMAN MALOAdvisor
Norman Malo was president and chief executive officerof National Financial, a Fidelity Investments company. Fidelity Investments is the largest mutual fund companyin the United States, the No. 1 provider of workplace retirement savings plans and a leading online brokerage firm Mr. Malo also was chief executive officer of National Financial Services LLC. Prior to assuming his current position in March 2003, Mr. Malo was president andchief operating officer of National Financial Services LLC.
SANDRA METRAUX Advisor
Sandra Metraux was executive vice president of marketing for National Financial, a provider of Integrated Brokerage Solutions and a division of Fidelity Investments. In this role, she oversaw National Financial’s marketing strategy and program development functions, including creating and building the company’s Integrated Brokerage Solutions positioning in the marketplace. Ms. Metraux first joined Fidelity Investments in 1986 and as an officer of the firm led the development and delivery of new business strategies, innovative products and marketing.
EntrepreneurShares, LLC 470 Atlantic Ave • Suite 400 • Boston, MA 02210 • o. (617) 273-8218 • f. (617) 273-8118 • www.ershares.com
DIRECTORS & ADVISORS
SIAMAK TAGHADDOSAdvisor
Siamak Taghaddos is the co-founder and CEO of Grasshopper Group, a technology incubator with multiple products that have empowered over100,000 entrepreneurs to start and grow theirsmall businesses. A lifelong student of marketing, Siamak is one of the youngest CEOs to be named to Inc. Magazine’s list of the 500 fastest-growing private companies in America, is the founding supporter of National Entrepreneurs’ Day, and has been featured in various publications including the Wall Street Journal, Boston Globe, CNN, FOX News, and other media.
EntrepreneurShares, LLC 470 Atlantic Ave • Suite 400 • Boston, MA 02210 • o. (617) 273-8218 • f. (617) 273-8118 • www.ershares.com