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Cahow Fund (A Distressed Debt Opportunity)

The LOM Solution

In May, LOM created a Special Purpose Segregated Portfolio Company, called the Cahow SPC (the “Cahow Fund”), mandated to buy distressed bonds from investment banks and asset managers that in the opinion of the manager offer above average principal recovery prospects. Investments in Class A included Commercial Mortgage Backed Securities, Home Equity Asset Backed Securities, Whole Loan and Agency Residential Mortgage Backed Securities.

Similar to a P-PIP fund, this high yield bond fund offers qualified clients the opportunity to invest in the distressed US Mortgage Backed Market. A unique feature is its mandate to stay small and buy odd lots while keeping a low minimum that allows more of our clients to participate.

Class A closed its investment period on May 31st and the assets were fully invested before June 30th. Since then, the class has returned over 8%.

The second Class (B) of the LOM Cahow Fund is currently accepting subscriptions.  The Class is expected to close on October 23rd.

Please contact your financial advisor or LOM Asset Management at 441-295-6999 or by clicking on the "Live Advice" button on the left side of this page  

  • In depth reports on Class A are available at the request of LOM Asset Management Limited (cahow@lom.com).
  • A complete description and presentation can be found at the following link  (Cahow SPC Overview).


Risk Profile

This is a high risk investment product that aims to provide high returns.

Expected Cashflow

  • The Fund is a closed end fund hence will not offer optional redemptions.
  • At the beginning of every quarter, the Fund will make both an income distribution to its investors representing any coupons collected over the previous period and it will additionally make a capital distribution reflecting the investors pro rata share of any pay downs or maturities that have occurred over the previous quarter.
  • The Manager has the right to sell underlying assets at any time. At that point, proceeds will be repaid as a capital gain or loss.
  • Once a sufficient number of the Loans have been reimbursed, the Directors will have full discretion to wind up the Fund (likely in years 2012 or 2013).
  • The target return will be between 15% and 20% per annum*.


Links

Cahow SPC Overview

Information Memorandum

Class Supplement

Risk Disclosure


    Fund Information Considerations
    Fund Manager:LOM Asset Management Limted
    Portfolio Manager:Jon Heckscher
    Domiciled:Cayman Islands
    Exchange:N/A
    Inception Date:

    Class A June 1, 2009

    Class B October 23, 2009

    Dealing Terms:Closed End Fund
    Settlement Terms:N/A
    Management Fee:2.00%
    Front / Back End Fees:5%/ None
    ISIN:N/A
    Bloomberg Ticker:N/A
    Benchmark:15% per annum*
    Sub-Custodian:UBS
    Administrator:Lines Overseas Management Limited
    Marketing:

    General:              cahow@lom.com      Bermuda:             441-295-6999      Bahamas:             242-323-0032     Cayman Islands:   345-949-5808

    Investors should consider factors that may be relevant to their circumstances, including tax considerations, before making any investments. Please note that past performance of an investment, is not a guide to future performance. Investment return and principal value may fluctuate with changing market conditions. Products described herein, may involve greater risk. Please meet with your Investment Advisor to discuss your personal situation. Where appropriate, please review a prospectus to obtain a complete outline of the terms and risks associated with mutual fund investments.