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e(V) Advisors and e(V) Opportunity Fund 1 Investigation
Veach Law is analyzing e(V) Opportunity Fund I for Possible Claims Against e(V) Advisors. Veach Law represents investors on a contingency basis. We do not charge any legal fees and are only compensated if our clients receive an award. We do not charge any fee to review potential cases.
e(V) Advisors (“e(V)”) sought investors for its new Opportunity Fund (the “Fund”) through a private placement vehicle. In connection with this, e(V) provided investors with a brochure outlining the Fund strategies. Representations in the brochure stress that volatility, uncertainty, and disruptive change can and should work to the investors’ benefit; and that the option strategies being used are such that the investor's potential profit accelerates at an increasing rate as the investor wins, and the potential risk of loss decelerates as the investor loses, thus, creating what E(V) sees as a very attractive risk/return profile. The brochure further states that investors can expect “symmetric risk/reward & potential for exponential returns” and the Fund offers the “potential for positive returns across the gamut of macro scenarios (both left & right tails of the distribution) while maintaining limited downside.”
Statements in the brochure concerning the strategies the Fund would employ included those set out below:
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- The Fund would be an “actively managed alternative approach focused on volatility strategies and positive convexity.” (emphasis in the original)
- “Volatility: friend, not foe”
- “We believe that the volatility that has rocked markets in the past year isn’t going away. In fact, we anticipate it will define the next decade:
- In the face of this systemic instability, the traditional stocks and bonds allocation - which for the last forty years has served the average investor well - may no longer be a viable option for investors.
- Volatility, uncertainty, disruptive change - we believe all of these can and should work to your benefit.”
- “Most “diversified portfolios” fail to help when the stock market is in crisis mode. … We believe the only truly uncorrelated assets in today’s macro-universe are volatility & convexity.”
- “Expected real return for the traditional 60/40 portfolio is now only 2.1%
- Negative or flat real returns are expected for most fixed-income assets
- Volatility strategies and positive convexity offer negative correlations to stocks with the potential for outsized returns.” (“Emphasis added)
- “Simply owning outright volatility (e.g.VIX futures, VIX ETFs, index puts) is in our opinion, a costly and limited investment strategy, which causes unnecessary drag on returns.”
- “Positive convexity is structuring an option strategy, or trade, where your potential profit accelerates at an increasing rate as you win, and your potential risk of loss decelerates as you lose. Thus, creating what we see as a very attractive risk/return profile.”
- “We’re a team of experienced volatility trading professionals. We’re here to use our experience maneuvering multi-billion dollar notional portfolios for some of the largest derivatives books on Wall Street to build out a new piece of your portfolio - one that thrives on the “unknown unknowns.”
- Volatility products, such as options, present unique opportunities in terms of customizability and leverage
- Pure diversification: lack of correlation with conventional assets, which are increasingly correlated
- Asymmetric risk/reward & potential for exponential returns
- Monetize and maintain: realize gains while maintaining exposure to further escalations in volatility
- Liquidity in times of crisis: trade from a position of strength, especially when others are fearful. (emphasis added).
- Convexity capture through options strategies that capitalize on large-scale market moves with minimal cost of carry
- Potential for positive returns across the gamut of macro scenarios (both left & right tails of the distribution), whilemaintaining limited downside
- Creative, dynamic management in real-time: Our trades are structured so we can seek to realize profits while still monetizing follow-through volatility.” (Emphasis added)
The Opportunities Fund has lost 65% of its value from inception. This does not represent a limited downside risk. Consequently, Veach Law is reviewing the information provided to our clients by e(V) and the losses in their portfolios related to the Opportunity Fund to determine if investors have claims against e(V) Advisors for the losses they have sustained.