CapAcuity, a limited liability company organized in the state of Florida, was formed in December 2017 and
became registered with the SEC in 2018. Peter S. Cahall is the sole owner of CapAcuity.
As used in this brochure, the words “we,” “our,” and “us” refer to CapAcuity, and the words “you,” “your,” and
“Client” refer to you as either a client or prospective client of our firm.
Investment Advisory
CapAcuity provides institutional-only, non-discretionary investment advisory services to non-qualified
executive retirement plans, defined benefit plans, and defined contribution plans. Services are provided pursuant
to the terms of the respective investment advisory agreements and the specifications defined by each client.
Each agreement is customized for the specific plan sponsor’s needs.
Generally, the investment advisory activities we provide to Clients include the following:
• Participant menu construction for retirement plans
• Asset allocation is designed to hedge corporate benefit liabilities or special purpose pooled
investment vehicles
• The risk tolerance of portfolios is designed to fund corporate benefit plan liabilities or special purpose
pooled investment vehicles.
• Regular portfolio monitoring, including investment manager selection and ongoing evaluation
• Analysis of fund performance relative to defined benchmarks
• Fund/product—Corporate-Owned Life Insurance (COLI), mutual funds, etc.—expense analytics
• Tax efficiency analysis (whether funded with COLI, mutual funds, or ETFs)
CapAcuity limits its investment advice to the following securities:
• Mutual funds
• Exchange-traded funds (ETFs)
• Fixed income securities
• Treasury inflation-protected/inflation-linked bonds
• Real estate funds (including REITs)
• Insurance products including:
o registered variable life insurance
o private placement variable life insurance
o general account life insurance
CapAcuity offers the following Total Return Swap (TRS) services:
• Perform financial modeling to evaluate cash flow and P&L impact of deferred compensation plan
(DCP) funding and hedging alternatives (mutual funds, COLI, TRS)
• Develop a TRS investment hedge (i.e., the hedge “basket”) designed to be highly correlated with the
new plan participant investment menu offering (i.e., the plan liabilities) to minimize asset/liability
“tracking error.”
• Coordinate with the swap facilitator for the implementation, administration, and reporting of the TRS.
• Monitor and report on the asset/liability correlation/ “tracking error” and re-weight the TRS hedge, as
appropriate.
CapAcuity also offers consulting and asset management services related to our investment advisory services.
Consulting
We analyze non-qualified deferred compensation plans, and make recommendations to maximize funding
efficiency, mitigate risk, and improve financial performance.
CapAcuity enables plan sponsors to evaluate non-qualified plan funding and hedging strategies to determine
which ones meets their specific financial objectives. Using our proprietary financial models, we evaluate and
compare different funding and hedging approaches to minimize risk and optimize financial performance.
We
work directly with each plan sponsor and service provider to proactively implement these recommendations.
There are four main aspects to our consulting services1:
• Analyzing the Plan. We conduct a thorough analysis of each plan sponsor’s executive benefit plan—
including plan design, peer benchmarking, investment options, pricing, regulatory compliance, funding and
hedging strategies, and tax efficiency.
• Funding Optimization. Whatever the funding or hedging strategy, we strive to optimize its financial impact
for the benefit of the plan sponsor.
• Risk Management. We offer comprehensive solutions to manage financial exposure due to market volatility,
including effective hedging and corporate tax strategies.
• Transparency. We strive to ensure that plan sponsors fully understand what they are paying for.
CapAcuity and its associates do not provide legal or tax advice.
Limited Discretionary Investment Consulting Services
• Upon receipt of an ongoing authorization, limited power of attorney, or other such documents from
the client, we will submit buy-and-sell instructions on our institutional client’s behalf for mutual
funds, Exchange Traded Funds (ETFs) insurance series funds, or at times designated company stock,
directly to the client’s insurance, trust or custodial platform for execution based on pre-defined
instructions as outlined in our Investment Advisory and Administrative Services Agreement
(“Agreement”).
• We may prepare asset investment allocation instructions to complete the investment of wire transfer
amounts submitted by the client.
• We may provide a summary statement of all rebalance orders as submitted to the appropriate entity
(i.e., trustee, custodian, insurance carriers) based on the Client’s written instructions.
Asset Management
At CapAcuity, our asset management services are designed to enhance financial outcomes for executive benefit
plan sponsors. Our tax-efficient asset/liability management is designed to optimize the correlation of assets and
liabilities while minimizing fund expenses, trading costs, and corporate tax. We develop a highly tailored asset
management plan for each Client designed to meet their specific financial objectives.
There are four main components to our asset management services:
• a proprietary approach to daily asset/liability management designed to optimize asset/liability
correlation
• minimize taxes through tax-optimized approaches to trading
• manage funding and hedging strategies to enhance financial performance
• enabling plan sponsors to continue to meet their objectives based on our ongoing monitoring,
reporting, and analytics
We may, at our discretion, employ a third-party SEC-registered investment advisor to act as a sub-advisor to us
to assist in the performance of any or all the services outlined in any Agreement we may have with you.
Currently, the firm does not utilize third parties as sub-advisors. If it does in the future, it will update ADV as
needed.
Wrap Fee Programs
We do not participate in wrap-fee programs.
Assets Managed
As of January 31, 2024, we manage $2,040,916,531 on a discretionary basis and $5,073,081,819 on a non-
discretionary basis, for a total of $7,113,998,350.