A Solid First Nine Months.

Solimar Fund achieved a net return of 3.7% in June compared to the S&P 500’s (SPY) return of 3.2%. Our net Year To Date return stands strong at 15.9% compared to S&P 500’s (SPY) YTD return of 14.2%. The end of June is a big milestone for us in addition to ending the first half of 2024. It’s our ninth month of live trading in the Fund. We’ve had a great start and look forward to continuing this momentum into year end and beyond.

Click on the button below to see the Fund’s monthly, quarterly and YTD returns benchmarked against the S&P 500 (SPY).

Why join us?

At Solimar Fund, our goals are not just ambitious; they are what set us apart. Our commitment to excellence and our unique approach to investment drive us to achieve extraordinary results.

Here’s what makes us different. We aim to:

1. Never have a down year. We are relentless in our pursuit of consistent performance, minimizing the chance our investors ever experience a losing year.

2. Return 2x the S&P 500 each year. Our strategy is designed to outperform the market significantly, with a goal of doubling the annual returns of the S&P 500.

3. Do so with 1/2 the risk over 5 years. We prioritize risk management, aiming to achieve remarkable returns with only half the risk compared to the broader market over a five-year period as measured by Sharpe.

4. Be in the top 1% of private funds. Our dedication to excellence and innovation should take us to the pinnacle of the industry. Our goal is to consistently rank among the top 1% of private funds. To see how Solimar compares favorably to other hedge funds for the first half of 2024, see “Citadel and Millennium..” and “Hedge funds..”.

5. Generate so much wealth for our investors that their giving has a widespread impact. Ultimately, our most important goal is to empower our investors to create lasting change for their families and communities. Wealth generation will create opportunities for significant charitable contributions. Let’s be remembered by our kindness and giving.

As an alternative asset, our goal is to beat the performance of the S&P 500 (we are so far in 2024!) and, very importantly, do so along a different path (low correlation), to enhance your portfolio’s diversification (we do!).

Nerd Alert

Why do we bother to share technical portfolio metrics with you? To demonstrate how we achieve our goals outlined above. Metrics also give you a tangible way to decide where to allocate your funds as you compare Solimar Fund to other opportunities.

R-Squared: A Quick Review

As you may remember, R-squared (R²) measures the difference or correlation between two curves. In the previous newsletter we discussed how we use R² to measure the correlation of our live trading performance to that of our historical backtested hypothetical data. We do that to make sure that our live trading is doing what our backtested strategy says it should do. And we are happy to say that it does!

In this newsletter we’ll be highlighting how R² helps us understand how much of our fund’s movements are explained by movements in the benchmark index (S&P 500). In our case, the lower the better for the purpose of diversification.

When comparing our quantitative long-short fund to the S&P 500, a high R² value (close to 1) would imply that the fund's performance is closely aligned with the S&P’s movements. Conversely, a low R² value (closer to 0) would indicate that our fund’s performance is largely independent of the S&P 500. Solimar Fund’s R² is a very low 0.11, based on a comparison of our strategy’s backtested hypothetical net daily returns since 7/1/2020 vs the S&P 500 (SPY).

Why this Matters

1. Diversification: Our R² value of 0.11 suggests that the fund provides diversification benefits, as it does not move in tandem with the broader market. This can be particularly valuable in volatile market conditions, such as the upcoming elections.

2. Alpha Generation: While a low R² such as ours can highlight diversification, it also underscores our ability to generate alpha through proprietary strategies that are not simply mimicking the market. As a long-short fund, our strategy aims to make money when the market goes up as well as when the market goes down.

Comparing Our Fund to the S&P 500

When comparing our fund to the S&P 500, we look at several key metrics beyond R² to provide a more comprehensive performance analysis:

1. Alpha: This measures the active return on an investment compared to a market index. Positive alpha indicates our fund has outperformed the S&P 500 on a risk-adjusted basis. Solimar Fund’s Alpha = 0.4, based on a comparison of our strategy’s backtested hypothetical net daily returns since 7/1/2020 vs the S&P 500.

2. Beta: This measures the fund's volatility relative to the market. A beta greater than 1 indicates higher volatility than the market, while a beta less than 1 indicates lower volatility. Solimar Fund’s Beta = 0.64, based on a comparison of our strategy’s backtested hypothetical net daily returns since 7/1/2020 vs the S&P 500.

3. Sharpe Ratio: This measures the performance of the fund on a risk-adjusted basis, helping us understand the return generated per unit of risk. We discussed Sharpe in our February 2024 Newsletter.

Performance Analysis

Over the past 9 months of live trading Solimar Fund has maintained a low R² value relative to the S&P 500, highlighting our strategy’s ability to provide portfolio diversification. In addition and more importantly, we have generated positive alpha by outperforming the market through effective equity ETF allocations and risk management.

Performance is important. However, we believe that true success is measured not just by financial gain but by the positive impact we can have on society. At Solimar Fund, we are committed to helping our investors achieve lasting positive impact through financial freedom.

Thank you for being a part of our journey. We look forward to continuing to deliver exceptional results and making a meaningful difference together.

Warm regards,

Geoffrey & Tyler

_{2by2 Capital LLC | [email protected] | www.2by2Capital.com}

_Disclaimer

_{Solimar Fund is a private fund operating under Rule 506(c) of Regulation D, which allows us to engage in general solicitation and advertising to raise an unlimited amount of capital from accredited investors, provided we take reasonable steps to verify their accredited investor status. This fund is exclusively available for investment by accredited investors, as defined by applicable securities laws}

_{This material does not constitute an offer or the solicitation of an offer to purchase an interest in Solimar Fund, LP (the “Fund”), which such offer will only be made via a confidential private placement memorandum. An investment in the Fund is speculative and is subject to a risk of loss, including a risk of loss of principal. There is no secondary market for interests in the Fund and none is expected to develop. No assurance can be given that the Fund will achieve its objective or that an investor will receive a return of all or part of its investment. All statements herein are qualified in their entirety by reference to the Memorandum, and to the extent that this document contradicts the Memorandum, the Memorandum shall govern in all respects.}

_{The hypothetical backtest results presented herein are for illustrative purposes only and do not represent actual trading or future performance. Past performance, whether actual or simulated, is not indicative of future results. The backtest is based on historical data and assumptions that may not be accurate or complete. Investors should not rely solely on this information when making investment decisions and should consult with financial advisors to understand all risks associated with investing in our hedge fund.}

_{Past and simulated performance is not necessarily indicative of future performance. Any performance data prior 10/2023 does not represent the performance of the Solimar Fund. 2023 performance data prior to launching the Fund is taken from actual returns net of fees from a live trading account managed by 2by2 Capital. Data prior to 2023 represent the simulated performance of 2by2 Capital’s long-short algorithm.}

_{Information provided reflects 2by2 Capital’s views as of the date of this document. Such views are subject to change at any point without notice. The information contained herein is for informational purposes only and should not be considered a recommendation to buy or sell any securities. Nothing presented herein is or is intended to constitute investment advice, and no investment decision should be made based on any information provided herein. There is a risk of loss from an investment in securities, including the risk of loss of principal. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will be profitable or suitable for a particular investor’s financial situation or risk tolerance. Asset allocation and portfolio diversification cannot assure or guarantee better performance and cannot eliminate the risk of investment losses. Past performance is not necessarily indicative of future performance. There can be no assurance that the performance achieved above will be achieved at any time in the future. All investments involve risk, including the loss of the entire investment.}