2018 January CAD

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6.36% MTD

6.30% YTD

Dear Partners,

In light of the volatile markets, we respectfully provide you a monthly Partners letter in point form. We started to write a cohesive and informative overview for January, however the global markets have completely changed the narrative. So in the interest of relieving possible anxiety regarding your investment in the Caravel funds, we trust you will indulge and hope you will smile.

We have provided an ESTIMATE for January’s performance prior to our Fund Admin signing off on our official audited Net Asset Value. We do not anticipate a material change if any.

For the month of January The Caravel Cad Fund Ltd.:

1. Appreciated 6.30% for the month.
2. Had 22 trading days and did not experience a loss during any of them.
3. Ended the month with roughly 60% of its capital looking for opportunities.
4. Had 90% of January’s returns locked in and turned to cash.
5. Principals committed to increase their investments in the fund by $1.23million for Feb 1st.
6. Shorted Merger arbitrage strategies when instances warranted it.
7. Turned free calls into free puts when given the chance by over shorting stock against warrants.
8. Invested in secured short-term debt with terms that can only be described as Arbitrage.
9. Forecasted the current volatility by not forgetting to keep a watchful eye on bond markets, currency markets, and irrationally exuberant investors.
10. Profited from practicing what we preached by being patient and NOT GREEDY.
11. Marked all investments on Jan 31 very conservatively.

Glen and I could not feel more confident in our investment strategy, which is echoed by the increase in our fund holdings. Trust us when we say we know a good investment when we see it.

By now you will have heard too many professionals explain in retrospect why things are the way they are using complex and convoluted terms. Take comfort in the knowledge that at Caravel Capital our job is not to reflect and critique but rather to be ready when those same professionals go back to work. Glen and I are welcoming with open arms the opportunities February has brought the fund. Stay tuned...

Jeff & Glen