The indices above underscore just how well the Caravel Capital Fund Ltd performed during the month of February. As mentioned in our January letter, we were well positioned to profit from the drop in the markets over the past 40 days. When the opportunity to unwind our bearish and contrarian strategies arose, we executed and locked in the well-deserved gains. But that wasn’t all we did.... the fund had abundant liquidity waiting to deploy into merger arbitrage strategies, volatility strategies, credit strategies, and relative value strategies. When investors panicked and valuations were once again attractive or in some cases incredibly so, we deployed our sidelined capital along with the capital from the contrarian strategies aggressively. In basic terms we shorted high, covered low, and went long the bullish trades almost in sequence.
February’s significant contributions came from the following strategies:
Simply put we waited with discipline, we executed when we had clarity & certainty, and we earned “above average returns with below market risk”. This is our mantra and we always repeat it before we consider investing our partner’s capital.
We thank you for your confidence and capital Sincerely,
Jeff & Glen
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