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Who We Are
We believe in creating long-term partnerships with
our clients to provide them with innovative solutions.
XA INVESTMENTS
XA Investments LLC (“XAI”) is a Chicago-based registered investment advisor founded by XMS Capital Partners, LLC, (“XMS”) in April, 2016. As of December 31, 2017, XAI advised funds with approximately $120 million in managed assets. The XAI leadership team believes that investors need better access to a broader range of alternative investment strategies and managers. To provide investors with institutional investment expertise, XAI selects and partners with well-established alternative credit managers, hedge fund managers and private debt and equity firms.
Our proprietary Alternative Registered Trust (ART)™ platform represents a differentiated approach to alternatives investing by offering institutional- caliber alternatives in vehicles that are specifically tailored to meet the needs of financial advisors and their clients.
XMS CAPITAL PARTNERS
XMS, established in 2006, is a global, independent financial services firm providing mergers and acquisitions, capital raising and corporate advisory services to clients. The firm focuses on building trusted relationships with its clients, many of whom have been with the firm since inception. XMS has over 40 professionals on its team and offices in Chicago, London and Dublin.
DRIVING INNOVATION
XMS recognizes that individual investors should have more choice when it comes to investing in alternative asset classes. By establishing XAI, XMS is driving innovation by creating better access to institutional-caliber alternative investments for individual investors.
XAI believes that the alternative asset management business will expand as individual investors search beyond their traditional stock and bond investments for more income, reduced volatility in their portfolios and enhanced risk-adjusted returns.
XMS has established relationships with leading alternative investment managers and private equity firms. XAI has leveraged these relationships and partnered with select sub-advisors to manage our funds’ investment portfolios.
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2 | XA Investments
THE MARKET TODAY
Macro Shifts in Asset Management Create Opportunity
Source: XA Investments. Barron’s PENTA as of March 28, 2016. Range of alternative allocation models by leading wealth management firms.
Add Alternatives to Your Traditional Portfolio
Consider an alternative to stocks for total return. Consider an alternative to bonds for income.
40%Bonds
60%Stocks
Traditional
Alternatives
15%-25%
The asset management industry is being transformed by competitive dynamics, regulatory developments and the mainstreaming of alternative investments. Today’s environ-ment of slower growth, low yields, rising interest rates and low expected total returns from traditional stock and bond investments means investors may benefit from seeking new alternative sources of income, growth and diversification.
1. Expansion of the ETF Market
■ Actively managed mutual funds are experiencing net outflows as ETFs gain market share.
■ Financial advisors are combining low-cost beta ETFs with alpha-generating alternatives.
2. Recent Regulatory Developments
■ Given the new DOL fiduciary standards and scrutiny around loaded investment products, firms are seeking to diversify offerings with low/no load alternatives.
■ SEC liquidity rule impacts mutual funds and ETFs and will shine a spotlight on the cost of liquidity.
3. Alternatives Go Mainstream
■ Alternative product sales are expected to outpace traditional investment product sales as investors search for new sources of income and returns.
■ Demand for institutional alternatives exceeds supply and is further intensified by recent disappointment in liquid alternative strategies.
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69% of investors no longer believe a conventional stock
and bond portfolio is enough to generate adequate returns
and preserve capital.*
*Source: Natixis Global Survey of Individual Investors (2015).
4 | XA Investments
XAI’s innovative solutions offer:
� Access to institutional-caliber alternatives
� Demand-focused product design
� Education and insights
� Innovation that seeks to drive better outcomes
XA Investments is transforming the way
financial advisors and their clients access
alternative investments.
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For too long, the marketplace has failed to adapt to changing investor demand, limiting investor choice to a small subset of the alternatives universe. Watered down strategies, “me-too” portfolios, a lack of transparency, high fees ... XA Investments has long recognized that these options do not advance the goals of forward-looking advisors and their clients.
At XA Investments, we believe in “clean-slate” product innovation. We challenge ourselves to rethink conventional wisdom — whether in terms of client preferences, product availability or structural features — to engineer a better solution for today’s investor.
Undiluted Strategy Innovative product design allows us to provide access to alternatives in their purest form without diluting them to meet liquidity and other restrictions.
Unmatched Access We believe in a collaborative relationship with the advisor community, strengthened by freely shared information, fund transparency, and exclusive partnerships with quality portfolio management teams.
Uncorrelated Performance XAI can help advisors achieve effective diversifi-cation for client investment portfolios.
Uncompromising Value Tap into the less liquid alternatives market via a new registered investment vehicle that delivers all the protections of a regulated fund while maintaining reasonable fees for alternative content.
We’re not innovating simply to be different, we’re innovating to be better.
We are committed to building better products with better outcomes.
AN UNCOMMON APPROACH
Innovating to Be Better
6 | XA Investments
ALTERNATIVE REGISTERED TRUST (ART)™ | OVERVIEW
We Build Better Alternatives for Stronger Portfolio Outcomes
DESIGNED FOR ALTERNATIVE INVESTMENTS
The XAI Alternative Registered Trust (ART)™ structure is designed as a new type of closed-end fund that offers less liquid institutional investment strategies and alternative asset classes. The XAI ART Platform™ offers long-term investors (those who are able to hold an illiquid investment for a defined period of time) an alternative strategy that seeks to outperform investment products that offer daily liquidity.
ACCESS TO INSTITUTIONAL-CALIBER ALTERNATIVE
INVESTMENT MANAGERS
XAI works on a selective basis with independent sub-advisers who offer credibility, experience and a well-established specialty in alternative investing. XAI has a long-term approach to partnership and engages single managers to serve as sub-advisers for funds on its ART Platform.™ Our stringent upfront due diligence supports a quality selection of sub-advisers and our ongoing oversight seeks to deliver superior portfolio management over time. XAI continuously monitors sub-adviser investment activities to assess performance and adherence to policies and procedures.
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Liquid premiums drive returns: Investment returns generally increase with the degree of illiquidity
Degree of Illiquidity
Annu
alize
d Re
turn
s
0Liquid
1 2 3 4 5 6Illiquid
3%
5%
7%
9%
11%
13%
15%
17%
CDs
Global Government Bonds
U.S. Fixed Income
Global REITs
High Yield
Small Cap Equity
Real Estate
Hedge Funds
Timber
Private Equity
Venture Capital
Sources: A. Ilmanen, “Expected Returns,” 2011. Average asset returns 1990–2009 on subjective illiquidity estimates. Bloomberg, MSCI, Barra, Ken French’s website, Citigroup, Barclays Capital, JP Morgan, Bank of America Merrill Lynch, S&P GSCI, MIT-CRE, FTSE, Global Property Research, UBS, NCREIF, Hedge Fund Research, Cambridge Associates.
WHY INVEST IN THE ART PLATFORM™?
■ Attractive Income: Monthly distributions
■ Expected Total Return Potential: Compares favorably to traditional investments
■ Fees and Expenses: Improved fee structures for investors
■ Low Correlation: Alternatives are designed to diversify a portfolio
■ Convenient Tax Form: 1099 (rather than the typical limited partnership K-1s). No phantom taxable income
■ True Institutional Strategies: Access to a wider array of alternative strategies than currently available in a “liquid alt” mutual fund format
■ Registered Trust: ART Platform™ offers benefits and conveniences of a registered 1940 Act investment company
XAI believes investors need better access to alternative credit strategies including structured credit, long/short credit and private debt, and to uncorrelated alternative assets such as timberland, farmland and catastrophe bonds. Funds which feature these strategies are not only timely, but uniquely suited to the ART structure and have therefore become the focus of our product development efforts.
The Alternative Registered Trust (ART)™ represents a new category of alternatives with enhanced features and benefits. Enter the next phase in the evolution of alternatives investing.
Rethink traditional
allocations for long-term
investment portfolios.
Consider adding less liquid
investments to enhance
returns and reduce risk.
Our People
EXPERIENCED TEAM WITH EXPERTISE IN PRODUCT
DEVELOPMENT AND DISTRIBUTION
XAI senior leaders have held management roles at large traditional asset management firms.
■ Proven track record in product design and development with a unique combination of in-depth alternatives and registered fund experience
■ Extensive distribution network, an emphasis placed on alternatives education and a distinct ability to offer industry context for individual strategies/fund structures
8 | XA Investments
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Ted BrombachMANAGING PARTNER, XMS CO-CEO, XAI
John “Yogi” SpenceMANAGING PARTNER, XMS CO-CEO, XAI
Kimberly FlynnMANAGING DIRECTOR, ALTERNATIVE INVESTMENTS
XAI Leadership Team
John McGarrityMANAGING DIRECTOR
Jennifer PruettDIRECTOR
Carolyn BurkeFINANCE AND OPERATIONS
David AdlerSENIOR ADVISOR, ECONOMICS
Hank HakewillSENIOR ADVISOR, MARKETING AND COMMUNICATIONS
Paul WilliamsSENIOR ADVISOR, PRODUCT DEVELOPMENT
Bob “Kuppy”KuppenheimerSENIOR ADVISOR, SALES AND MARKETING
Paul MottolaSENIOR ADVISOR, SALES AND SYNDICATION
XAI Senior Advisors
Aaron WismarADVISOR CONSULTANT
10 | XA Investments
Our Mission
By delivering innovative solutions, we help financial
advisors build their business and strengthen client
relationships.
Our Values
CLIENT FOCUS
We work hard to understand the challenges faced by financial advisors and their clients and develop solutions designed to help them succeed.
INTEGRITY
We are reliable and honest in our interactions with partners and clients.
INNOVATION
We develop investment offerings that address market demand and previously unmet needs of our clients.
HIGH QUALITY
A meaningful collaboration with sub-advisers, financial advisors and investors enables us to offer quality alternatives and thoughtful content designed to inform and enhance communication.
TRANSPARENCY
We make it easy for financial advisors to understand the benefits and risks associated with our products.
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Explore the Opportunities at XAInvestments.com
Advance Your Knowledge XAI is influencing the way financial advisors
and their clients view alternatives. See the XAI Knowledge Bank on our
website for our latest insights.
Securities offered through XMS Capital Partners, LLC, a FINRA and SIPC member.
321 North Clark Street, Suite 2430Chicago Illinois 60654
1.888.903.3358 | xainvestments.com