What does the investment process look like?

Exos meets with each management team and reviews their public filings prior to the IPO. Exos evaluates each team on the characteristics that will make them attractive to the best private companies looking to go public, and which can ultimately make the embedded equity options in the SPAC more valuable.

  • Industry Focus

  • Expertise and Experience

  • Network

  • Access to Capital

The investment team also evaluates the offering documents of each deal to understand the make up each underlying security. Some important things to look for are:

  • 1

    Amount of money to be placed in t-bills in trust

  • 2

    Amount of options embedded in the securities

  • 3

    Any unique legal language

Attributes like these are key factors in evaluating the underlying protections and options embedded in the securities.

We implement a structured framework to evaluate each SPAC relative to its underlying collateral and relative to every other SPAC, taking into account our assessment of the quality of the issuer.

Example of CSH lifecycle and its investing periods

CSH Focus: The Fund seeks preservation of capital by only holding units or shares during their pre-combination phase, where the underlying cash-equivalent collateral is expected to support the Fund’s ability to redeem its investment – through portfolio selection and monitoring, the Fund will seek to minimize risk of delays relating to redemptions

CSH Strategy by SPAC Stage

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    Carefully consider the Fund's investment objectives, risk factors, charges and expenses before investing. This and additional information can be found in the Fund's prospectus and summary prospectus, which may be obtained by calling (855) 857-2677. Read the prospectus carefully before investing.

    Investing involves risk, including the possible loss of principal. Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. Past performance is no guarantee of future results.

    The Fund invests in equity securities, warrants and rights of SPACs, which raise funds to seek potential Combination opportunities. Unless and until a Combination is completed, a SPAC generally invests its assets in U.S. government securities, money market securities, and cash. If a Combination that meets the requirements for the SPAC is not completed within a pre-established period of time (e.g., 18-24 months), the invested funds are generally returned to the entity’s shareholders (less any applicable taxes, fees, and administrative expenses); however, in certain cases, the SPAC may extend its period of operations beyond the initial pre-established period of time. If this occurs, a fund investing in the SPAC may have difficulty redeeming its holdings, or may not be able to do so at a desirable time. Because SPACs have no operating history or ongoing business other than seeking Combinations, the value of their securities is particularly dependent on the ability of the entity’s management to identify and complete a profitable Combination. There is no guarantee that the SPACs in which the Fund invests will complete a Combination or that any Combination that is completed will be profitable.

    Borrowing magnifies the potential for gain or loss by the Fund and, therefore, increases the possibility of fluctuation in the Fund’s NAV. This is the speculative factor known as leverage. Because the Fund’s investments will fluctuate in value, while the interest on borrowed amounts may be fixed, the Fund’s NAV may tend to increase more as the value of its investments increases, or to decrease more as the value of its investments decreases, during times of borrowing. Unless profits on investments acquired with borrowed funds exceed the costs of borrowing, the use of borrowing will cause the Fund’s investment performance to decrease.

    Post-Combination SPAC Warrants. Although the Fund generally will not hold the common stock of a Post-Combination SPAC, the Fund may hold warrants to buy the stock of companies that are derived from a SPAC. Post-Combination SPACs may be unseasoned and lack a trading history, a track record of reporting to investors, and widely available research coverage. Post-Combination SPACs are thus often subject to extreme price volatility and speculative trading. The stocks underlying the warrants may have above average price appreciation that may not continue and the performance of these stocks may not replicate the performance exhibited in the past, which could adversely affect the value of the warrants the Fund holds.

    Because the Fund is “non-diversified,” it may invest a greater percentage of its assets in the securities of a single issuer or a lesser number of issuers than if it was a diversified fund. As a result, a decline in the value of an investment in a single issuer or a small number of issuers could cause the Fund’s overall value to decline to a great degree than if the Fund held a more diversified portfolio. The fund is new and has a limited operating history.

    Glossary: “Pre-Combination” SPACs are SPACs that are either seeking a target for Combination or have not yet completed a Combination with an identified target.
    “Post-Combination” SPACs are operating companies that have completed a Combination with a SPAC within the last three calendar years.

    Opinions expressed are subject to change at any time, are not guaranteed and should not be considered investment advice.

    Foreside Fund Services, LLC distributor