Competitive Edge
I created the Hirschmann Partnership (the “Fund”) to give clients an investment vehicle with competitive advantages over other actively-managed funds. Such funds have performed poorly: over the last fifteen years, roughly 90 percent have underperformed the S&P 500. (1) This is unsurprising given that most suffer from conflicting incentives, impatient clients, excessive diversification and restrictive strategies.
Incentive Alignment
The Fund is unique because there is no management fee and I only earn a performance allocation when returns exceed a cumulative hurdle rate. Further, I have most of my net worth invested in the Fund. Most managers earn fees based on assets under management, incentivizing them to focus on asset growth rather than returns. Only 16% of mutual fund managers have more than $1mm invested in their funds. (2)
Long Time Horizon
I select only patient individuals as Fund investors and exclude pension funds and other institutions. Pension fund boards have short time horizons, forcing the typical fund manager to focus on short term returns to avoid redemptions.
Concentration
Good investments are rare. Yet the typical fund holds many investments (e.g. a typical mutual fund holds 90 stocks), which dilutes its best ideas and thereby ensures mediocre performance. In contrast, the Fund typically holds only its five to fifteen most attractive investments to maximize returns while maintaining prudent diversification.
Flexible Strategy
The Fund has a flexible strategy that allows it to allocate capital to the most mispriced securities even if they are not part of its typical strategy of buying undervalued equities. In contrast, the typical fund must remain invested in its primary asset class even if the asset class appears overvalued (e.g. bond and US equity funds at present).
(1) Source: S&P Dow Jones Indices' SPIVA (S&P Indices Versus Active) U.S. Scorecard as of April 2, 2026
(2) Source: "Should you invest in a fund where the fund manager is not?" published by Morningstar.com on Dec 11, 2020
This summary is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any security. Any such offer will be made only by means of the Confidential Offering Memorandum for the Hirschmann Partnership (the “Fund”). The summary terms and descriptions of the Fund's competitive advantages provided herein are subject to change and are qualified in their entirety by reference to the Fund's formal governing documents. Statements regarding the Fund's "competitive edge," investment objectives, and macro-economic views represent the subjective opinions of the management team and are forward-looking; there is no guarantee that the Fund will maintain these advantages or achieve its objectives. Furthermore, specialized investment strategies or concentrated portfolios may result in higher volatility and a greater risk of loss compared to broader, diversified market indices.
Only accredited investors and qualified clients will be admitted as limited partners to the Fund. For natural persons, investors must meet SEC requirements including minimum annual income or net worth thresholds.
The Fund is being offered in reliance on an exemption from the registration requirements of the Securities Act of 1933 and is not required to comply with specific disclosure requirements that apply to registration under the Securities Act. The SEC has not given its approval to the Fund, the offering terms, or the accuracy or completeness of any offering materials. A registration statement has not been filed for the Fund with the SEC. Limited partner interests in the Fund are subject to legal restrictions on transfer and resale. Investors should not assume they will be able to resell their securities. Investing in securities involves risk, and investors should be able to bear the loss of their entire investment. Investments in the Fund are not subject to the protections of the Investment Company Act of 1940.
Performance data represents past performance, and past performance is not indicative of future results. Performance data is subject to revision following each monthly reconciliation and annual audit. Current performance may be lower or higher than the performance data presented. The Fund is not required by law to follow any standard methodology when calculating and representing performance data. The performance of the Fund may not be directly comparable to the performance of other private or registered funds. Investors may obtain the most current performance data and Confidential Offering Memorandum for the Fund by sending a request via email to info@hcapital.llc. See the Confidential Offering Memorandum for the Fund for complete information and risk factors.