Chiron Investment Management, · PDF fileAIM TRUE February 2018 For Investment Professional Use Only Chiron (Kai-Ron) In ancient Greece, Chiron tutored heroes on human nature and the

Chiron Investment Management

Quantamental Investment Process

1Q 2018

For Investment Professional Use Only 1

To determine if the Fund is an appropriate investment for you, carefully consider the

fund investment objectives, risk, and charges and expenses. This and other information

can be found in the fund (full and summary) prospectus which can be obtained by calling

1-877-9-CHIRON or by visiting www.chironfunds.com. Please read the prospectus

carefully before investing.


Executive Summary – Chiron

Ryan Caldwell Co-Founder

Chief Investment Officer

Enrico Gaglioti Co-Founder

Chief Executive Officer

• Founded in 2015 by Ryan Caldwell (formerly at Waddell & Reed,

co-managing $45 billion in AUM) and Enrico Gaglioti (former

partner at Goldman Sachs).

• Our firm is driven by innovative thinkers and world-class

investment experts. We combine distinguished investment talent

with time-tested business leadership, focused on institutional-

quality oversight and controls.

• Our unique “Quantamental” approach is an integrated combination

of rigorous Quantitative Analytics and deep Fundamental

Research.

• 100% Partner and Employee Owned. We treat our clients as

partners and engage with our investors in a way that is direct and

transparent. Our only business is managing money on behalf of

our clients.

• Our actively managed approach to investment management is:

Flexible, Disciplined, and Transparent.


2015 2016 2017

Executive Summary – Chiron History

July, 2015: Chiron IM established

Aug, 2015: SEC Registered

Nov 30, 2015: CCAPX Fund Launch $25mm

Sep, 2016: US Mutual Fund Approved on 3 Major Wires

Dec, 2016: CCAPX Fund AuM: 350mm

Mar, 2017: UCITS Launch AuM: 100mm

Aug, 2017: CCAPX Fund AuM: 1.0B

Oct, 2017: SMid Equity Fund Launch

Dec, 2017: UCITS Fund AuM: 475mm

2018

Dec, 2017: CCAPX Fund AuM: 1.8B

Feb 2018: Chiron Firm AuM: 2.4B


Jan, 2016 CCAPX available on all RIA custodian platforms

Chiron’s management team has over 175 years of financial services experience - with

proven track records and success as investors, risk managers and business builders.

Scott Prince Vice Chairman Former Partner, Goldman Sachs

Co-Founder, Eton Park Capital Management

32 Years of Experience

Eton Park MS

Enrico Gaglioti Co-Founder and CEO Former Partner, Goldman Sachs


Goldman Sachs

Ryan Caldwell Co-Founder and CIO Former Senior Vice President, Waddell & Reed

Former Co-Portfolio Manager, Ivy Asset Strategy Fund


Waddell & Reed / Ivy Funds

Kristen Richards Chief Compliance Officer Former SVP & Chief Compliance Officer, Waddell & Reed


Waddell & Reed / Ivy Funds

JP Armenio Chief Administrative Officer Former Managing Director, Morgan Stanley

Former CEO, Mizuho Securities Asia


Morgan Stanley Mizuho

SkyBridge

Kirsten Pickens Head of Distribution Former Head of National Accounts & Retirement Sales,

Waddell & Reed


Waddell & Reed / Ivy Funds ING

Leadership

Marc Spilker Chairman Former Co-Head, Goldman Sachs Investment Management, Former President, Apollo Global Management 31 Years of Experience

Apollo Goldman Sachs

Shailendra Panchal Chief Risk Officer Former VP / Securities Division Risk, Goldman Sachs


Goldman Sachs

Goldman Sachs


Organizational Structure & Governance

Chief Admin Officer

JP

Armenio

Chief Compliance

Officer

Kristen Richards

Chief Risk

Officer

Shailendra Panchal

Head of

Distribution

Kirsten Pickens

Head of Fundamental

Research

Grant Sarris

Head of Quantitative Research

Brian Cho

Enrico Gaglioti, CEO Ryan Caldwell, CIO

Head of

Trading

Peter Bianco

Non-Investment Business Operations

Investment & Portfolio Management

The Chiron Team has great depth and breadth of industry experience, from an array of established institutions.

The investment process and business operations are closely coordinated, but managed separately by design.

1 Finance 1 Analyst 9 Sales 2 Research 2 Analysts 1 Trader

Operating Committee

Chairs: Enrico Gaglioti, CEO Ryan Caldwell, CIO Compliance Operations Distribution Technology Trading Finance Human Resources Administration Media / PR Firm Strategy

Investment Committee

Chairs: Enrico Gaglioti, CEO Ryan Caldwell, CIO Investment Views Asset Allocation Portfolio Positioning Performance Investment Process Opportunities Trading Issues Research Analytics / Data

Risk Committee

Chairs: Marc Spilker, Chairman Scott Prince, Vice-Chairman Portfolio Level Security Level Counterparty Exposure Market Risk Sector Concentration Liquidity Region Concentration Cash Flow Technology Risk Operation Risk

1 Prod Dev Total Team: 26


Ryan Caldwell Chief Investment Officer

• 2000 – 2014: Ryan helped lead decision-

making and served as Co-Portfolio Manager

for 40-Act Funds

• 2005 – 2014: Co-Managed Waddell & Reed’s

flagship Ivy Asset Strategy Fund (WASAX),

Waddell & Reed Asset Strategy Fund

(UNASX), Ivy Funds VIP; $45B+ at 2014

peak. (2005 – 2007, Assistant PM)

• 2009: Named to Institutional Investors list of

“Rising Star of Mutual Funds”

• 2007: Was a finalist for “Morningstar Manager

of the Year”

Grant Sarris Portfolio Manager:

Fundamental Research

• 2003 – 2013: Grant served as a Portfolio

Manager at Kornitzer Capital Management,

where he co-managed a number of equity

mutual funds, including the Buffalo Small

Cap Fund, Buffalo Mid Cap Fund, and

Buffalo Emerging Opportunities Fund.

• 1991 – 2003: Grant was with Waddell &

Reed, and served as PM on multiple Small

Cap funds.

• 2013 – 2015: Grant managed his personal

portfolio

Brian Cho Portfolio Manager:

Quantitative Strategies

• 2002 – 2015: Brian co-founded Empirical

Research Partners LLC, an independent

research boutique. As Partner and Director

of Quantitative Research, he managed all

quantitative research efforts for the firm.

• Achieved the highest two rankings in the

Institutional Investor All-American Research

Team each year from 2003 through 2014 in

both the Portfolio Strategy and Quantitative

Research categories.

• 1993 – 2002: Brian was with SC Bernstein,

where he was a Principal and served as

Senior Analyst.

Grant Sarris: Waddell & Reed

Ryan Caldwell: Waddell & Reed

Brian Cho: Empirical Research Partners

2000 2003 2005

~$200mm

AuM

$45B+

AuM

Investment Team

2014



• Equity

Developed Market

Emerging Market

• Fixed Income

Developed Market

Emerging Market

Government

Municipal

Corporate

High Yield

• Cash

• Commodities

• Currencies

• Stocks

• Bonds

• Futures

• ETFs

Portfolio Construction & Guardrails

Our investment process is an actively managed framework that allows us to quantify fundamental factors, systematize our approach, and apply judgment to asset allocation and security selection.

The fund may use derivatives contracts both to seek returns, or more frequently to protect the value of its assets against adverse

movement across markets.

Asset Category % Range

Equities 25-80%

Fixed Income 10-50%

Emerging Markets 0-25%

Cash 0-50%

Market Capitalization

Large Cap ($15B+)

Mid Cap ($2.5B - $15B)

Small Cap (<$2.5B)

Capital Structure

Senior Debt

Junior Debt

Mezzanine / High Yield

Convertible Bonds

Preferred Equity

Equity

Guardrails Asset Classes Instruments

• Listed Options

• Structured Notes

• OTCs

Swaps

Forwards

Credit Default

Protection

Hedge


In a “Core and Satellite” portfolio, the strategy can be implemented in different ways. With its flexible style and liquid profile, it can fit as an allocation in Tactical, Satellite, or Core.

As a highly dynamic strategy, it can fit in these various ways as part of an overall risk or active budget.

The investment process described herein is included as a general illustration of

the process the investment team follows and may change over time.

Chiron Capital Allocation Fund

C

Portfolio Positioning

• Global

• Multi Asset Class

• Cross Market Cap

• All Sector

• Up / Down Cap

Structure

• Style Agnostic

Tactical

Liquid

Opportunistic

Dynamic

Satellite

Flexible

Active, Alpha-Seeking

Liquid Alternative

Core

Multi Asset

Globally Diverse

Full Cycle

For Investment Professional Use Only

9

Deep Market

& Company Research

1. Gather / Process Data 2. Analyze Data 3.Interpret Data & Implement

Quantitative Analytics Fundamental Research

Proprietary Quantitative Models

At Chiron, we have a unique investment process that combines rigorous quantitative modeling with deep fundamental research. Our quantitative work helps guide our fundamental research team in both asset allocation and security selection, across market capitalization, capital structure, and investing styles.

Data Sets

45+ Global Markets

Factor Framework

Quantitative Fundamental

The investment process described herein is included as a general illustration of the

process the investment team follows and may change over time.

Quantamental Investment Process

Quantamental Investing

4000+ Companies ~100

Companies

Portfolio

Domain Dispersion

Dispute Core

Top Down

~400 Companies


Bottom Up

10

Market Reaction Valuation

Capital Spending

+

Share Buy-backs

Dividends

Earnings Quality

+

+

Revenues

+

Free Cash Flow

Earnings

+

+

ROE, ROA

Price Trend

+

Turnover

Momentum

+

+

Volatility

Cash Flow Yield

+

Dividend Yield

Earnings Yield

+

+

Price Multiple

Total: 30 Factors Total: 16 Factors Total: 13 Factors

Super Factors

75 Individual Factors

Total: 16 Factors

Our Factor Framework takes in and processes large quantities of data to feed into our proprietary quantitative models. Four Super Factor categories comprise a wide array of individual factors.

The investment process described

herein is included as a general

illustration of the process the

investment team follows and may

change over time.

Price Multiple



1. Process Data – Factor Framework

4000+ Companies

45+ Global Markets


Capital Deployment

Our Domain and Dispersion models represent the initial steps in our top down asset allocation – in terms of asset class mix as well as regional and sector focus. They serve to create the “wireframe” of the portfolio.

2. Analyze Data – Domain & Dispersion

Domain Model

The Domain Model measures on a global and regional basis

what style is being rewarded: Value or Growth. It is an anchor

point for our top-down allocation and allows our strategy to

adapt to different phases of the market.

Top Down – Asset Allocation

Dispersion Model

The Dispersion Model measures “cheapness” or “richness” of

securities within industry sectors and geographical regions and

directs us to where the growth and value opportunities are.



Dispersion

Yield Curve

Market Dynamics

Management Behavior &

Investor Reaction


Our Core and Dispute models then deliver the bottom up analytics that drive security selection. Their granular company level insights identify the candidates that will populate the key components of the portfolio.

2. Analyze Data – Core & Dispute

Core Model

The Core Model ranks companies by potential for outperformance and

is a key driver of alpha. Used for both equity and credit selection – we

take the highest ranking decile and apply deep-dive fundamental

research to find the highest conviction ideas.

Bottom Up – Security Selection

Dispute Model

The Dispute Model identifies characteristics that commonly lead to

underperformance, such as high valuation, high cash burn, low

profitability, and poor momentum. We not only use this model to

identify companies to avoid, but to construct our proprietary hedge.



Underperformance

Characteristics

Earnings Quality

Capital Deployment

Valuation

Market Reaction

Earnings Quality

Capital Deployment

Valuation

Market Reaction


Outperformance

Characteristics

Unattractive Companies

Portfolio

The final step of our Quantamental process takes the outputs from our proprietary quantitative framework, which represent rigorous, disciplined, and non-emotional guideposts for our Fundamental Research team. Combined with their human judgment and intellectual interpretation, the process culminates in portfolio construction, implementation, and results.

3. Interpret Data & Implement



The investment process described herein is included as a general illustration of the

process the investment team follows and may change over time.

Fundamental Research

Capital Structure

Position Sizing

Instrument Selection

Portfolio Implementation

~400 Companies

~100 Companies

Sell-Side Research

Corporate Access

Management Meetings / Calls

Analyst Meetings

Earnings Reports

Financial Modeling

Dispute Model

Attractive Companies

Core Model

Target Markets

Dispersion Model

Target Sectors

Style

Domain Model

Asset Mix


0

1

2

3

4

5

1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017

Our proprietary Chiron Market Domain Indicator is a measure of the market’s condition, which we observe on both a global and

regional basis. It defines the style being rewarded (Value or Growth), and in essence tells us “what game the market is playing”.

This “big picture” understanding of the market creates a valuable Anchor Point for top-down allocation decisions – which is key to our

style-agnostic and full market cycle approach. This foundation allows our strategy to adapt to different phases of the market, and in

essence tells us “how to play the game”.

5 - Full Growth

4 - Growth

3 - Neutral

2 -Value

1 - Deep Value

Chiron Domain – Anchor Point


Growth

15

•

•

•

•

•

•

•

•

•

•

Chiron Domain – Asset Allocation Framework


(3)

(2)

(1)

0

1

2

3

4

5

6

7

8

U.S. Canada U.K. ContinentalEurope

Japan Asia(ex-Japan)

LatinAmerica

China SouthAsia

Korea& Taiwan

EMEA World

Sta

ndard

Devia

tions

Range Current Level Year Ago

Source: Chiron Investment Management, LLC. 1Emerging markets regional data since 1992.

Developed Markets Emerging Markets

The Chiron Dispersion Indicator measures how we believe investors are valuing equities. When Dispersion is

wide (above 1 standard deviation), we believe investors are valuing the most expensive stocks very differently

than the market average. When Dispersion is narrow (0 to -1 standard deviations), investors are valuing all

equities relatively the same. Similar to bond spreads, when the indicator is narrow and rising, distress is building.

When the indicator is wide and falling, valuations are narrowing and distress is falling.

Chiron Dispersion Model – By Region


$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Dispute Basket Equity Universe (Developed Market*)

*The Chiron Equity Universe for the Developed Market consists of Large and Mid-Cap Developed Market Stocks in all developed countries within MSCI All Country World Index. Dispute Basket refers to the worst 10% of the Chiron Dispute Model

Growth of Dollar

Time

Period

Equity

Universe

Dispute

Basket

Spread

(Difference)

Spread

Annualized

YTD -2.1% -1.0% 1.1% 1.1%

1 Year 11.4% 10.5% -0.9% -0.9%

5 Years 74.8% 25.5% -49.3% -7.2%

10 Years 121.8% 5.4% -116.4% -7.8%

20 Years 432.8% -67.7% -500.4% -14.2%

Our Dispute Model measures likelihood of failure (or underperformance). Historically, over short and long periods,

its negative performance versus our broader universe is both meaningful and consistent.

Equity Universe 10 Yrs: 121.8%

Spread: 10 Yrs: -116.4% Annual: -7.8%

Dispute 10 Yrs: 5.4%

Dispute Model – Spotting Underperformers

The investment process described herein is included as a general illustration of the process the investment team follows and may change over time. The statements herein are based on the beliefs and

assumptions of our portfolio management team and on the information currently available to our team at the time of such statements. Although we believe that the expectations reflected in these

statements are reasonable, we can give no assurance that these expectations will prove to be correct. The information contained in this presentation does not, in any way, constitute investment advice.

Opinions, forecasts, assumptions, estimates and commentary or other discussions of potential future events and their impact on any investment strategy are based solely on the opinion of Chiron and

may change without notice at any time. Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher.

The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original cost.


18

Marc Spilker, Chairman • Former President of Apollo Global Management and a member of the firm’s Executive

Committee (December 2010 to March 2014)

• 20-year career at Goldman Sachs, serving as co-head of Investment Management Division

(IMD) and a member of firm-wide Management and Risk Committees.

• Previously served on the Investment Advisory Committee at Google, was a member of the

American Stock Exchange, and on the boards of the Chicago Mercantile Exchange, the

Philadelphia Stock Exchange, the Stone and Bridge Street Funds, BrokerTec, and

Bondbook, LLC.

Kirsten Pickens, Partner, Head of Distribution • Former Senior Vice President and Head of National Accounts and Retirement Sales for Ivy

Funds Distributor, Inc., a subsidiary of Waddell & Reed, having joined in 2003.

• Awarded “Rising Star of Mutual Funds” by Institutional Investor (2010).

• Previously VP, National Account Director for the Independent/Regional Channel with ING

Funds and at Seligman funds in various distribution roles.

• Member of the Sales Force Marketing Committee of the Investment Company Institute, and a

Member of Money Management Institute. She holds her Series 24, Series 7, Series 6, and

Series 63 FINRA securities licenses.

Scott Prince, Vice Chairman • Vice Chairman of Chiron Investment Management, LLC and co-founder of GPS

Investment Partners.

• Former Co-Managing Partner of Skybridge Capital from 2007 to 2012

• Partner at Eton Park Capital Management from launch in 2004 until 2007, heading global

trading and the fund’s derivatives business.

• Co-head of Equities Trading and Global Equity Derivatives at Goldman Sachs through

2004, named a Goldman Sachs Partner in 1998, and served on the firm's Finance

Committee, Equity Division's Risk and Operating Committees

Ryan Caldwell, Co-Founder, Chief Investment Officer • Partner and Chief Investment Officer of Chiron Investment Management, LLC.

• Lead portfolio management decision-making at Waddell & Reed for a suite of funds

totaling $40 billion, including Ivy Asset Strategy, W&R Asset Strategy, and Ivy Funds/VIP

(2000-2014).

• Named to the Institutional Investors list of ‘Rising Stars of Mutual Funds’ (2009) and was

a finalist for Morningstar Manager of the Year (2007). Board adviser to Haymon

Boxing/Premier Boxing Champions and has previously a Director to Delta Topco Group

(Formula One), and board adviser to Legendary Entertainment.

Enrico Gaglioti, Co-Founder, Chief Executive Officer • Former Partner at Goldman Sachs & Co serving as the Global Head of Equity Sales and as

Advisory Director for the Investment Management Division.

• Started at Goldman Sachs in 1998, was named Managing Director in 2001, and became

Partner in 2002. He served on the Firm-wide Business Standards Committee, Securities

Division Executive and Operating Committees, and the Hedge Fund/Private Equity Screening

Committee.

JP Armenio, Chief Administrative Officer • Led Tantalus Capital’s activities as a venture investor, advisor, and co-founder of several

early stage technology companies.

• Former Chairman and Chief Executive Officer of Mizuho Securities Asia Ltd. (2012).

• Served as Managing Director and Global Head of Structured Products for Morgan Stanley

with the Global Wealth Management Division. Formerly Head of Structured Products

Distribution for the Institutional Securities Division and sat on the Promotion and New

Products Committees for the Equity Division.

• Mr. Armenio has an MBA from The Wharton School in Finance, and a BA in Economics and

International Relations from Claremont McKenna College.

Kristen Richards, Managing Director, Chief Compliance Officer • 22 years of experience in the mutual fund/'40 Act industry, most recently as Senior Vice

President, Associate General Counsel and Chief Compliance Officer for Waddell & Reed

Investment Management Company/Ivy Investment Management Company. At Waddell &

Reed/Ivy, she was instrumental in building the Investment Management Compliance

Department. She served as Secretary to the Waddell/Ivy registered companies and was

instrumental in the establishment of the firm’s UCITS fund channel, Ivy Global Investors.

• Ms. Richards earned her law degree from the University of Kansas in 1995 and maintains

her Series 7 and Series 24 FINRA securities licenses.

Shailendra Panchal, Chief Risk Officer • Previously spent 15 years at Goldman, Sachs & Co., including the last 10 years as a

senior risk manager in the Global Securities Services business of the firm.

• Brings extensive experience in risk oversight across multi-asset class portfolios

encompassing a wide variety of strategies.

• Mr. Panchal holds an MBA from the University of Maryland and a Bachelor of Chemical

Engineering (with the highest rank among his graduating class) from the Gujarat

University, India.

Management Biographies


Disclosures

The Chiron Capital Allocation Fund is distributed by SEI Investments Distribution Co. (SIDCo). SIDCo is not affiliated with Chiron Investment Management Company.

Investing involves risk, including possible loss of principal. Bonds and bond funds will decrease in value as interest rates rise. High yield bonds involve greater risks of

default or downgrade and are more volatile than investment grade securities, due to the speculative nature of their investments. The Fund uses investment techniques

that are different from the risks ordinarily associated with equity investments. Such techniques and strategies include REIT risk, derivative risks, foreign investment

and emerging markets risks, which may increase volatility and may increase costs and lower performance.

Chiron Investment Management, LLC is a registered investment adviser.

Chiron Investment Management is an active manager that uses a variety of analytical tools and market “signposts” that inform its investment decision making. The

materials contained herein are provided for illustrative purposes only and are not intended to constitute “investment advice” or an investment recommendation within

the meaning of the federal, state, or local securities laws. These charts contain historical market data only and do not reflect actions that were or might have been

taken by the Chiron Investment Management team if faced with similar data inputs. You are solely responsible for evaluating and acting upon the information

contained in these materials if you choose to act on them without the involvement Chiron Investment Management as your adviser. Chiron Investment Management

will not be liable for any direct or incidental damages or losses resulting from applying any of the information obtained from these materials or from any other source

mentioned. Chiron Investment Management does not render any legal, tax or accounting advice and the educational and market information contained in this material

should not be construed as such. Please consult with a qualified professional for advice in these disciplines.

The variables selected for use in the computations shown are for illustrative and educational purposes only and were selected in the sole opinion of Chiron Investment

Management, LLC and may change without notice at any time.

Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. Forward-looking statements are not guarantees of future

results. They involve risks, uncertainties and assumptions, there can be no assurance that actual results will not differ materially from expectations. Past performance

is no guarantee of future results. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission

from Chiron Investment Management, LLC.

© 2015-2018 Chiron Investment Management, LLC. All rights reserved.

Not a Deposit Not FDIC Insured May Lose Value No Bank Guarantee Not Insured By Any Federal


21

Documents

Chiron Investment Management, · PDF fileAIM TRUE February 2018 For Investment Professional Use Only Chiron (Kai-Ron) In ancient Greece, Chiron tutored heroes on human nature and the