Item 4.A.
Daemon Investment and Asset Management, LLC (“DIAM” or “we” or the “Firm”)
is a Florida Limited Liability Company based in Miami, Florida that was organized
in May 2016 for the purpose of providing investment advice to its Clients. The
controlling members of DIAM are Sergio Rhein Schirato and Edson Queiroz. Mr.
Schirato owns 44% and Mr. Queiroz owns 34% of the membership interests in DIAM.
DIAM is an investment management firm that provides advisory services to
privately offered pooled investment vehicles (each a “Fund” and collectively, the
“Funds” or the “Clients”) including Daemon Investment Fund (“DIF”), Daemon
Kratos Master Fund (the “Master Fund”), Daemon Kratos International Feeder
Fund (the “Offshore Fund”), Daemon Kratos US Feeder LP (“the Onshore Fund”),
Daemon Nous-Kratos Fund (the “Nous-Kratos Fund” and together with the Master
Fund, Offshore Fund and Onshore Fund, the “Kratos Funds”).For the avoidance
of doubt, while the Nous-Kratos Fund deploys the same strategy of the Master
Fund, the Nous-Kratos Fund is a standalone fund and not part of the
master/feeder structure.
DIF, a fund incorporated in the Cayman Islands, is an investment management
strategy that focuses primarily on instruments relating to Brazilian export finance
and Brazilian public debt. In particular, as described in more detail in “Methods
of Analysis, Investment Strategies and Risk of Loss” in Item 8 below, DIAM provides
investment advice to DIF in connection with Programa de Financiamento às
Exportações, also known as the Export Financing Program (“PROEX”), a Brazilian
government program designed to stimulate investment in the export of Brazilian
products. The PROEX program, managed by Banco do Brasil, seeks to equalize
interest rates available to importers of Brazilian capital goods such that they
receive financing with similar terms to those provided by Export Credit Agencies
of other exporting countries. This interest rate equalization is carried out by the
Brazilian Government by delivering certain Brazilian government bonds
denominated in US Dollars to lenders that finance Brazilian
exports.
With respect to the Kratos Funds, DIAM’s investment algorithm is based on years
of proprietary research in quantitative factor investing. The algorithm aims to
capture risk factors that deliver superior risk-adjusted returns. According to
proprietary research and academic finance literature, factors such as time series
momentum (a/k/a, trend-following), cross-section momentum and carry, deliver
superior risk-adjusted returns. These strategies are applied to highly liquid futures
instruments in asset classes such as equity indexes, interest rates, currencies and
commodities in international global markets. The investment strategies that DIAM
applies to the Kratos Funds are explained in further detail in Item 8 below.
Each Fund is intended for investment by certain investors (collectively the
“Investors” and each an “Investor”) that meet the definition of “accredited
investor” as defined under Regulation D of the securities Act of 1933, as
amended, “qualified clients” as defined under Section 205-3 of the Investment
Company Act of 1940, as amended (the “Company Act”) and/or “qualified
purchasers” under Section 2(a)(51) of the Company Act so as to comply with the
exemptions under Section 3(c)(1) or Section 3(c)(7) of the Company Act, as
applicable to each Client.
DIAM tailors specific investment advice to its Clients based on the Clients’
investment objectives, characteristics and any Client-imposed investment
restrictions, as established by DIAM and the Clients and generally set out in a
separate investment management agreement, limited liability company
agreement, offering memorandum and/or other governing documents
(collectively, the “Governing Documents”). Additional information regarding
DIAM’s investment process and how it addresses the needs of its Clients is
contained throughout this Brochure.
DIAM does not participate in any wrap fee programs.
As of December 31, 2022, DIAM manages approximately $4,603,315,186 in
regulatory assets under management on a discretionary basis. DIAM does not
intend to manage any Advisory Client assets on a non-discretionary basis.