FREQUENTLY ASKED QUESTIONS

“Remember, if you ever need a helping hand, you'll find one at the end of your arm... As you grow older you will discover that you have two hands. One for helping yourself, the other for helping others.”
Audrey Hepburn

ANSWERS TO FREQUENTLY ASKED QUESTIONS
Have More Questions After Reading the FAQs?

WHO WE ARE
Why Invest with Eagle Talon?

  • We are passionate and disciplined investors who are devoted to our mission of helping our partners grow and protect their capital. We have built our expertise over decades working with top investors and firms. We love the intellectual challenge of finding predictive insights and building an investment mosaic. What we learn through our research process is like compound interest – our knowledge and insights grow exponentially over time. See the team and their backgrounds. You can also see what we are reading.

    Working with an investment manager is not for everyone. There is a special cadre of people who share our values and mindset to build a long-term relationship. If our differentiated approach resonates with you, please get in touch. You can book a meeting, email us at info@eagletalonpartners.com, or phone us at (646) 450-1670.

  • We predict which senior leadership teams will create and destroy value, aided by our unique lens and comprehensive research process. Karim Mawji has employed this strategy for two decades, most recently as the Founder and Head of Research of a research boutique and financial technology firm that counts 80 of the smartest and most prominent hedge funds globally as clients. Explore our investment strategies.

  • Numerous studies show that, on average, emerging managers like Eagle Talon have a performance advantage relative to established managers. One of the most recent and comprehensive of these studies was produced by Preqin/50 South Capital and concluded that early lifecycle managers have outperformed established managers by 3.7% and 4.6% on a three-and five-year annualized basis, respectively. Read the study.

    We also offer a separately managed account structure that removes many of the operational risks inherent in traditional fund structures.

  • Our strategies are managed for absolute returns. Our targeted returns over a market cycle are:

    CEO Change and Quantamental Event: 12-15%. We view our benchmarks to be the HFR Event Driven Index and the HFR Equity Hedge Index, twoHedge Fund Research (HFR) institutional hedge fund indices.

    Diversified Alpha: 8-12%. We view our benchmarks to be a blend of the S&P 500, NASDAQ, and HFR Yield Alternative Index.

INVESTMENT PHILOSOPHY
How Does Eagle Talon Invest?

  • We approach investing from an event-driven perspective and have a value-oriented mindset, meaning we identify catalysts that unlock or reduce value. We have refined our approach over 20 years while investing on behalf of hedge funds. View our investment principles.

  • Each of our strategies is focused on a niche. Within each of those niches we construct portfolios that are diversified by various characteristics such as growth, value, market capitalization, and sectors. Exposure to each of these factors may change rapidly based on our assessment of investment opportunities and market conditions. Explore our investment strategies.

  • Each investment strategy has a different targeted holding period and we actively manage all accounts in each strategy pari passu. We monetize gains and losses based on the attractiveness of underlying investments and adjust portfolio gross and net exposures to manage risk. Explore our investment strategies or request a summary deck.

  • No. All investments entail risk. We have three strategies with varying risk levels and we can customize an approach that meets your needs. We take risk when we are being adequately compensated by markets. With few exceptions, if someone offers you a guaranteed return you should be very careful. Do deep diligence on the investment and the person.

FEES, TERMS, AND MINIMUMS
How Much Does It Cost to Invest with Eagle Talon?

  • Our minimum aggregate account value is $1,000,000 for institutions and $250,000 for individuals. However, our mission includes increasing access to sophisticated investment managers. If our approach resonates with you but you do not meet our minimums, please reach out to explore a way forward.

  • We are aligned with you and our fee structure follows industry standards. We charge a standard 2% management fee based on the amount of assets we manage for you. This provides us with an incentive to grow and protect your account balance. Management fees are paid monthly in arrears based on the average daily balance, and the frequency of payments mirrors the monthly liquidity terms. You will pay these fees whether you make or lose money on your investments.

    Our early partners may be eligible for the Founders’ class, which offers a reduction in the management fee to 1% in perpetuity plus capacity rights at these same terms as we grow.

    We also share in the profits we produce and charge a performance fee equal to 10-20% of profits, depending on the strategy. Performance fees are paid quarterly in arrears based on your quarter-end balance. You will pay these fees only if your investments are profitable.

    For additional information, please see Form ADV, Parts 2A and 2B.

  • No. We are investing directly on your behalf, so there are no additional layers of fees. As part of our service we may also provide financial advice at no additional charge to you.

    You will be charged nominal trading commissions, a part of which may be used to pay for research costs. To the extent that we buy or short ETFs, there may be a nominal additional management fee paid to the manager of the ETF.

  • Yes. Our high-water mark policy prevents you from paying performance fees twice. Performance fees are only paid if your investments are profitable.

  • No. You are not charged a fee to redeem your investment.

  • The arrangements depend on the custodian, which in all cases is an independent, established third party.

    Interactive Brokers: Fees are calculated by the custodian and paid directly from your account to Eagle Talon. If you wish to pay the fees from a different brokerage or bank account, it can be arranged.

    BTIG and Northern Trust: Fees are invoiced and paid from a different account.

  • Liquidity terms are monthly with 30 days’ notice.

ETHICS AND SCOPE OF SERVICE
What is Eagle Talon?

  • Karim Mawji is a Chartered Financial Analyst (CFA) Charterholder and qualified as a Chartered Accountant in Canada. He also earned his Master’s in Business Administration with a specialization in Finance and Accounting. His 30+ years of investment experience includes managing money at New York-based hedge funds for almost two decades, founding a research boutique whose clients are prominent hedge funds, and for 5+ years as a research analyst and investment banker at Morgan Stanley and Deloitte respectively. Meet the team and see our backgrounds.

  • Yes. We are a small firm and each of our clients is important to us. To enhance investment returns and continuously improve our research methodologies, we employ multiple service providers, outsourced resources, quantitative processes, and technology solutions.

  • Yes. A financial advisor is a professional who provides financial advice to clients based on their financial situations. As investment managers, the financial service we provide is investing clients’ taxable and non-taxable securities’ accounts on a discretionary basis. This means we have your permission to make investments without consulting you in advance, allowing us the flexibility to immediately take advantage of investment opportunities as they arise. We may also discuss with you how you can achieve your financial goals and live your best life financially, as part of our service to you.

  • Yes. We are registered as an Investment Adviser in the State of New York. This means we are certified to directly advise institutions and individuals regarding their investments. We accept clients domiciled in all US states and territories as well as international residents.

  • Yes. We are fiduciaries, which means we are legally required to act in your best interest. As a fiduciary, we have a strict code of conduct including ethics and compliance in areas such as objectivity, competence, and integrity. We must always act in the best interests of our clients and not put our interests ahead of yours. This includes avoiding conflicts of interest, disclosing potential conflicts of interest, and providing relevant facts to clients. For additional information, please see Form ADV, Parts 2A and 2B.

    We are a Registered Investment Adviser (RIA) and Karim Mawji holds the Chartered Financial Analyst (CFA) designation. As such, we comply with the CFA Institute Code of Ethics and Standards of Professional Conduct and the CFA Institute Asset Manager Code of Professional Conduct.

  • We are an independent investment manager and are not affiliated with a brokerage firm or bank. We work directly for you and have a fiduciary duty to act in your best interests. We receive no incentives or commissions from other firms. Transparency is one of our core values. Read more about our values here.

  • No. Never, for any employee at our firm.

  • We take your privacy seriously and do not share your information with others. View our privacy policy.

  • Although Karim Mawji qualified as a Chartered Accountant in Canada, we do not provide tax advice. If you do not have a valued tax advisor, we are happy to recommend someone based on your personal situation.

  • Yes, within the scope of our engagement as your investment manager.

DECISION PROCESS
What Do the Decision and Onboarding Processes Look Like?

  • There is no financial cost for an introductory call. If you are an individual investor, the goal of our first meeting will be to understand your current situation and objectives. We will then share our high level conclusions, ensure that there is a cultural fit, and evaluate how we can add value to you long-term.

    If it is mutually beneficial, we will schedule a follow-up meeting for deeper diligence. For individuals, this may include a Portfolio Review to determine if your investment strategy and allocation is aligned with your goals. Click here to book an appointment.

  • Simply bring clear goals for what you would like to accomplish in the conversation. If you are an individual investor who would like to discuss your financial situation holistically, we will also send you a checklist of financial accounts and statements for you to prepare in advance.

  • A Portfolio Review is when we review your current investments and provide an opinion on how aligned they are with your financial and life goals. We also calculate your current fees, so you understand the true all-in cost you are paying for your financial advice. We respect your privacy and handle all information you share with us with confidentiality.

  • To thoroughly assess which strategy is the best fit for you, we need to understand your financial goals and current financial position. This will help us provide an answer that is most suited to your return expectations and risk profile. Click here to schedule an appointment.

  • The length of the process depends on how long it takes for us to be comfortable with each other. Some of our clients immediately decided to partner with us while others decided over the course of several months.

  • A big part of the diligence process is the connection between client and investment manager. Trust your intuition. If we are not the right match, we will strive to introduce you to someone who is.

GLOSSARY
What Industry Terms Should I Know and Why Are They Important?

  • Alpha represents the value an investment manager contributes to your investment returns and is a measure of skill and active management. Specifically, it refers to the excess return of an investment relative to a benchmark index, such as the S&P 500, and it may be positive or negative. To measure returns relative to the risk taken, returns should be risk-adjusted based on the strategy’s net exposures. We seek to generate alpha and construct diversified portfolios to mitigate unsystematic risk.

  • The answer to this question depends on your financial goals and risk tolerance. We can discuss this when you book an appointment. Concentrated portfolios make fewer, bigger bets on investments where there is high conviction. As a result, investment returns are typically higher though this comes with more volatility. Diversified portfolios consist of a larger number of investments in smaller sizes, so the impact of each individual investment on the overall portfolio is smaller.

  • Low correlation means our strategies move independently vs. overall markets and dampens the effects of volatility and losses. It reduces portfolio risk and the number of instances of extreme losses. As a result, over the long-term growth in capital will be steadier. High correlation means the assets move in lockstep and the value of the manager is reduced because they can be replaced by simple index funds. Negative correlation means assets move in opposite directions.

  • Discretionary trading authority assigns permission to Eagle Talon to make investments without consulting you in advance. This flexibility allows us to take advantage of investment opportunities immediately as they arise. Under no circumstance may Eagle Talon move money in or out of your account. Only the client is able to do this based on the account structure.

  • Diversification reduces risk by investing in assets that react differently to the same event. We accomplish this by allocating investments across a range of industries, themes, characteristics, geographic regions, asset classes and other categories. Systematic or market risk is difficult to eliminate, but unsystematic risk is specific to the investment and may be reduced through diversification.

  • A fiduciary is a person or organization that is legally and ethically bound to act on behalf of clients, put their clients’ interests ahead of their own, and to be dedicated to preserving good faith and trust. Eagle Talon is a fiduciary and has a strict code of conduct including ethics and compliance with respect to objectivity, competence, integrity, and other areas. This includes avoiding conflicts of interest, disclosing potential conflicts of interest, and providing relevant facts to clients. For additional information, please see Form ADV, Parts 2A and 2B.

  • Financial advisors help you make decisions about what you should do with your money, including investment decisions. As an investment manager, we are financial advisors who invest clients’ accounts on a discretionary basis and may also provide general financial advice.

  • An investment mosaic refers to the wide collection of information that we gather and analyze about companies and their senior leaders in order to evaluate their probabilities of success and failure. We utilize public information available to all investors, our own proprietary research, and data from our vendors including interviews, surveys, and research.

  • Pari passu is Latin for equal footing. Each account within every investment strategy receives equal treatment. Within each strategy, we trade securities at the same time without preference for one account over another, regardless of size. As a result, each account buys and sells the securities at the same price.

  • A Registered Investment Advisor (RIA) is a legal designation given by the Securities and Exchange Commission (SEC) to firms that manage the assets of high-net-worth individuals and institutional investors. We are registered as an Investment Adviser in the State of New York and accept clients domiciled in all US states and territories as well as international residents.

  • Our Special Purpose Vehicles (SPVs) are investment structures that focus on one trade, which may consist of one security or group of securities that relate to a single company or micro-theme. Think about it like a one stock or one micro-theme fund. Our SPVs are currently structured as SMAs.

  • Systematic risk refers to risk inherent in the overall market; it is unpredictable and difficult to avoid. Diversification among asset classes and industry sectors can mitigate this risk to a degree, but it cannot be eliminated. Market hedges can be expensive and must be well timed.

    In contrast, unsystematic risk refers to the risk borne by investing in a specific industry or security and can be mitigated through diversification and hedging. We construct diversified portfolios and employ various hedging mechanisms.