Driehaus Event Driven Fund (DEVDX)

  • Overview
  • Performance
  • Characteristics
  • Risks
  • Portfolio Managers
  • Literature

Investment Strategy

The Driehaus Event Driven Fund is a liquid alternative fund that seeks low correlations to major asset classes while providing lower volatility than the S&P 500 Index with superior risk-adjusted returns.

 

Fund Facts

Inception Date: 8/26/2013
Ticker: DEVDX
Assets Under Management as of 9/30/2014: $267 Million
Open to New Investors: Yes
Minimum Initial Investment: $10,000
Minimum Subsequent Investment: $2,000
Minimum IRA Investment: $2,000
Minimum Subsequent IRA Investment: $500
Distributions: Dividends are distributed quarterly
Capital Gains are distributed annually
Investment Vehicles: Mutual Fund

 

 

Growth of $10,000 Since Inception (8/26/2013)

as of 9/30/2014:


 

 


Sources: Driehaus Capital Management, Citigroup, S&P, Lipper Investment Management

Please consider the investment objectives, risks, fees and expenses of the Fund carefully prior to investing. The prospectus and summary prospectus contain this and other important information about the Fund. To obtain a copy of the prospectus/summary prospectus, please call us at (877) 779-0079.  Please read the prospectus and summary prospectus carefully before investing.

Performance Disclosure
The performance data shown above represents past performance and does not guarantee future results. Current performance may be lower or higher than the performance data quoted. Principal value and investment returns will fluctuate so that investors' shares, when redeemed, may be worth more or less than their original cost.

Performance data represents the rate that an investor would have earned (or lost), during the given month, on an investment in the Fund (assuming reinvestment of all dividends and distributions). Average annual total return reflects annualized change.

Since Fund performance is subject to change after the month-end, please call (877) 779-0079 or view our daily NAVs for more current performance information.

1The Citigroup 3-Month T-Bill Index is designed to mirror the performance of the 3-Month U.S. Treasury Bill. The Citigroup 3-Month T-Bill Index is unmanaged and its returns reflect reinvestment of all distributions and changes in market prices.

2 The Standard & Poor’s (“S&P”) 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group. It is a market-weighted index (stock price times number of shares outstanding), with each stock’s weight in the index proportionate to its market value.

Driehaus Securities LLC, Distributor

 

 

Performance Disclosure
The performance data shown below represents past performance and does not guarantee future results. Current performance may be lower or higher than the performance data quoted. Principal value and investment returns will fluctuate so that investors' shares, when redeemed, may be worth more or less than their original cost.

Performance data represents the rate that an investor would have earned (or lost), during the given month, on an investment in the Fund (assuming reinvestment of all dividends and distributions). Average annual total return reflects annualized change.

Since Fund performance is subject to change after the month-end, please call (877) 779-0079 or view our daily NAVs for more current performance information.

Month-End Performance as of 9/30/2014

Fund/Index MTD YTD 1 Year 3 Year 5 Year 10 Year Since Inception*
Driehaus Event Driven Fund -3.44% -3.17% 3.14% n/a n/a n/a 6.22%
S&P 500 Index1 -1.40% 8.34% 19.73% n/a n/a n/a 19.19%
Citigroup 3-Month T-Bill Index2 0.00% 0.03% 0.04% n/a n/a n/a 0.04%

 

Calendar Quarter-End Performance as of 9/30/2014

Fund/Index QTR YTD 1 Year 3 Year 5 Year 10 Year Since Inception*
Driehaus Event Driven Fund -5.97% -3.17% 3.14% n/a n/a n/a 6.22%
S&P 500 Index1 1.13% 8.34% 19.73% n/a n/a n/a 19.19%
Citigroup 3-Month T-Bill Index2 0.01% 0.03% 0.04% n/a n/a n/a 0.04%


Annual Fund Operating Expenses3

 
Management Fee 1.00%
Other Expenses:  
Other Expenses Excluding Dividends and Interest on Short Sales 0.56%
Dividends and Interest on Short Sales n/a
Total Annual Fund Operating Expenses 1.56%

 


Sources: Driehaus Capital Management LLC, Barclays, SS&C Inc.

Please consider the investment objectives, risks, fees and expenses of the Fund carefully prior to investing. The prospectus and summary prospectus contain this and other important information about the Fund. To obtain a copy of the prospectus/summary prospectus, please call us at (877) 779-0079.  Please read the prospectus and summary prospectus carefully before investing.

Average Annual Total Return

*Inception Date: 8/26/2013

1 The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group. It is a market-weighted index (stock price times number of shares outstanding), with each stock's weight in the index proportionate to its market value.

2 The Citigroup 3-Month T-Bill Index is designed to mirror the performance of the 3-Month U.S. Treasury Bill. The Citigroup 3-Month T-Bill Index is unmanaged and its returns reflect reinvestment of all distributions and changes in market prices.

3Represents the estimated Annual Fund Operating Expenses as disclosed in the current prospectus dated April 30, 2014. It is important to understand that a decline in the Fund's average net assets due to unprecedented market volatility or other factors could cause the Fund's expense ratio for the current fiscal year to be higher than the expense information presented. "Other Expenses Excluding Dividends and Interest on Short Sales" are estimated for the current fiscal year. "Dividends and Interest on Short Sales" cannot be estimated and, therefore, actual Fund expenses may be higher than those shown. Because dividends and interest on short positions are not included in the expenses subject to reimbursement, the actual net expenses of the Fund may be higher than those shown.

Driehaus Securities LLC, Distributor

Event Type

as of 9/30/2014 | updated quarterly
Corporate Action
Changes to the company's strategy or capital structure as a result of mergers, acquisitions, spin-offs, lawsuits, etc.
58.0%
Earnings
A trade involving an upside or downside surprise to earnings versus market expectations.
1.1%
Product Cycle
A key change to the company's product/service offering, or a change in customer preferences for the company's product/service.
11.0%
Market Dislocation
Any mispricing of a security for a non-
fundamental reason.
15.3%
Portfolio Hedges
A hedge to an unwanted factor exposure, such as equity, volatility, credit or interest rate risk.
5.2%
Restructuring
A change to the company's capital structure or business prospects as a result of bankruptcy, reorganization or corporate distress.
1.5%
Cash Equivalent1
This figure represents the fund's operating cash plus receivables for investments sold and minus payables for investments purchased.
7.6%


Portfolio Allocations

as of 9/30/2014 | updated quarterly
Equity 78.1%
Fixed Income 14.0%
Cash Equivalent 7.9%

 

Regional Allocations

as of 9/30/2014 | updated quarterly
United States 74.9%
Emerging Markets 12.5%
Developed ex-U.S. 12.6%

 

Sector Allocations (GICS Only)*

as of 9/30/2014 | updated quarterly
GICS2
Consumer Discretionary 37.7%
Consumer Staples 12.1%
Energy 5.8%
Financials 7.4%
Health Care 11.1%
Industrials 1.1%
Information Technology 15.0%
Materials 3.5%
Telecom. Services 6.3%
Total 100.0%

 

*Securities not categorized within the GICS classification system are excluded.

1This figure represents the fund’s operating cash plus receivables for investments sold and minus payables for investments purchased.

2The Global Industry Classification Standard (GICS), a collaboration between Standard & Poor's and Morgan Stanley Capital International, is a system of classification that identifies a company according to its business activity. Securities not recognized within the GICS classification system are excluded.

Driehaus Securities LLC, Distributor

 

Principal Risks

All investments, including those in mutual funds, have risks. No investment is suitable for all investors. The Fund is intended for investors who seek positive returns under a variety of market conditions and can accept the risks involved with its investments, and who can accept the fact that there will be principal fluctuation. Of course, there can be no assurance that the Fund will achieve its objective. You may lose money by investing in the Fund. Below are the main risks of investing in the Fund:

Event Risk
Event-driven opportunities may not occur as anticipated, resulting in potentially reduced returns or losses to the Fund as it unwinds trades where those opportunities do not materialize as anticipated.

Market Risk
The Fund is subject to market risk, which is the possibility that securities prices overall, including both debt and equity securities, will decline over short or even long periods. Securities markets tend to move in cycles, with periods of rising prices and periods of falling prices. These fluctuations are expected to have a substantial influence on the value of the Fund's shares.

Main Risks of Debt Securities
Debt securities may be subject to credit risk, interest rate risk, prepayment and extension risk as well as call risk. Credit risk is the failure of an issuer or borrower to make timely interest or principal payments, or a decline or perception of a decline in the credit quality of a bond or creditworthiness of a borrower, which can cause the security's price to fall, potentially lowering the Fund's share price. Prices of bonds and Senior Loans tend to move inversely with changes in interest rates. Typically, a rise in rates will adversely affect bond and Senior Loan prices
and, accordingly, the Fund's share price. The longer a debt security's effective maturity and duration, the more its price is likely to react to interest rates. Interest rate changes normally have different effects on variable or floating rate securities than they do on securities with fixed interest rates. When interest rates fall, debt securities may be repaid more quickly than expected and the Fund may be required to reinvest the proceeds at a lower interest rate. This is referred to as "prepayment risk." When interest rates rise, debt securities may be repaid more slowly
than expected and the value of the Fund's holdings may fall sharply. This is referred to as "extension risk." If an issuer "calls" its bond before its maturity date during a time of declining interest rates, the Fund might have to reinvest the proceeds in an investment offering a lower yield.

Fixed-Income Market Risks.
Economic and other market developments can adversely affect fixed-income securities markets in the United States, Europe and elsewhere. At times, participants in debt securities markets may develop concerns about the ability of certain issuers of debt securities to make timely principal and interest payments, or they may develop concerns about the ability of financial institutions that make markets in certain debt securities to facilitate an orderly market. Those concerns can cause increased volatility in those debt securities or debt securities markets and the related derivatives markets. Under some circumstances, those concerns could cause reduced liquidity in certain debt securities markets and the related derivative traded securities. A lack of liquidity or other adverse credit market conditions may hamper the Fund's ability to sell the debt securities in which it invests or to find and purchase suitable debt instruments.

High Yield Risk. Junk bonds, while generally offering higher yields than investment grade securities with similar maturities, involve greater risks, including the possibility of default or bankruptcy. They are regarded as speculative with respect to the issuer's capacity to pay interest and to repay principal. The market values of certain of these securities tend to be more sensitive to individual corporate development and changes in economic conditions than higher quality bonds. In addition, junk bonds tend to be less marketable than higher-quality debt securities because the market for them is not as broad or active. The lack of a liquid secondary market may have an adverse effect on market price and the Fund's ability to sell particular securities.

Senior Loan Risk. The Fund may invest in Senior Loans. Senior Loans are business loans made to borrowers that may be corporations, partnerships or other entities (each a "Borrower"). These Borrowers operate in a variety of industries and across geographic regions. Investing in Senior Loans involves investment risk and some Borrowers default on their Senior Loan repayments. The risks associated with Senior Loans are similar to the risks of junk bonds, although Senior Loans typically are senior and secured, whereas junk bonds often are subordinated and unsecured. Investments in Senior Loans typically are below investment grade and are considered speculative because of the credit risks of their Borrowers. Such Borrowers are more likely to default on their payments of interest and principal owed, and such defaults could reduce the Fund's net asset value and income distributions. An economic downturn generally leads to a higher non-payment rate, and a Senior Loan may lose significant value before a default occurs. There is no assurance that the liquidation of the collateral would satisfy the claims of the Borrower's obligations in the event of the non-payment of scheduled interest or principal, or that the collateral could be readily liquidated.

Main Risks of Foreign Securities
The Fund invests in foreign debt and equity securities. To the extent portfolio securities are issued by foreign issuers or denominated in foreign currencies, the Fund's investment performance is affected by the strength or weakness of the U.S. dollar against these currencies. Investing outside the U.S. involves different risks than domestic investments. The following risks may be associated with foreign investments: less liquidity; greater volatility; political instability; restrictions on foreign investment and repatriation of capital; less complete and reliable information about foreign companies; reduced government supervision of some foreign securities markets; lower responsiveness of foreign management to shareholder concerns; economic issues or developments in foreign countries; fluctuation in exchange rates of foreign currencies and risks of devaluation; imposition of foreign withholding and other taxes; dependence of emerging market companies upon commodities which may be subject to economic cycles; and emerging market risk such as limited trading volume, expropriation, devaluation or other adverse political or social developments.

Emerging Market Risk. The Fund will invest in emerging and developing markets and therefore, the risks described above for foreign securities are typically increased. Investments in securities of issuers located in such countries are often speculative and subject to certain special risks. The small size, limited trading volume and relative inexperience of the securities markets in these countries may make the Fund's investments in such countries illiquid and more volatile than investments in more developed countries, and the Fund can be required to establish special custodial or other arrangements before making investments in these countries. There may be less financial or accounting information available with respect to issuers located in these countries, and it may be difficult as a result to assess the value or prospects of an investment in such issuers.

Main Risks of Derivatives
Derivative instruments (such as swaps, options, futures and forwards) often have risks similar to their underlying currency, security or index, in addition to other risks. The use of derivatives also involves risks different from, and possibly greater than, the risks associated with investing directly in the underlying assets. Derivatives can be highly volatile, illiquid and difficult to value, and there is a risk of imperfect correlation between the value of the derivative and the underlying instrument. Derivative instruments may give rise to leverage and losses on derivatives may substantially exceed the initial investment. When used for hedging, the change in value of the derivative may also not correlate specifically with the currency, security or other risk being hedged. Further, since the Fund may invest in derivatives for speculative purposes, losses from speculative positions in a derivative may be much greater than the derivative's original cost and may be substantial. With over-the-counter derivatives, there is the risk that the other party to the transaction could default. Derivatives may be subject to pricing or "basis" risk, which exists when a particular derivative becomes extraordinarily expensive relative to historical prices or the prices of its corresponding instrument.

Foreign Currency Forwards and Options Risk. Foreign currency forward contracts involve the risk that anticipated currency movements will not be accurately predicted, which could result in losses on those contracts and additional transaction costs. The use of forward contracts could reduce performance if there are unanticipated changes in currency prices. Options on foreign currencies are affected by the factors that influence foreign exchange rates and investments generally. The Fund's ability to establish and close out positions on foreign currency options is subject to the maintenance of a liquid secondary market, and there can be no assurance that a liquid secondary market will exist for a particular option at any specific time.

Short Sale Risk
Short sales expose the Fund to the risk that it will be required to buy the security sold short (also known as "covering" the short position) at a time when the security has appreciated in value, thus resulting in a loss to the Fund. The amount the Fund could lose on a short sale is theoretically unlimited (as compared to a long position, where the maximum loss is the amount invested). The use of short sales also may cause the Fund to have higher expenses than those of other funds due to the payment of dividends and interest, if any, in connection with the short positions as well as the cost to borrow the security.

Small- and Medium-Sized Company Risk
The Fund invests in companies that are smaller, less established, with less liquid markets for their securities, and therefore may be riskier investments. While small- and medium-sized companies generally have the potential for rapid growth, the securities of these companies often involve greater risks than investments in larger, more established companies because small- and medium-sized companies may lack the management experience, financial resources, product diversification and competitive strengths of larger companies. In addition, in many instances the frequency and volume of trading in small- and medium-sized companies is substantially less than is typical of larger companies. The value of securities of smaller, less well known issuers can be more volatile than that of larger issues.

Nondiversification
Because the Fund may invest a greater percentage of assets in a particular issuer or a small number of issuers, it may be subject to greater risks and larger losses than diversified funds. The value of the Fund may vary more as a result of changes in the financial condition or the market's assessment of the issuers than a more diversified fund.

Allocation Risk
The Fund's overall risk level will depend on the market sectors and countries in which the Fund is invested and the current interest rate, liquidity and credit quality of such sectors and countries. The Fund may overweight or underweight certain companies, industries, market sectors, or countries, which may cause the Fund's performance to be more or less sensitive to developments affecting those companies, industries, sectors or countries. The Fund may have significant weightings in a particular issuer, country, sector or industry, which may subject the Fund to greater risks than less focused funds.

High Rates of Turnover
The Fund may experience high rates of portfolio turnover, which may result in payment by the Fund of above-average transaction costs and could result in the payment by shareholders of taxes on above-average amounts of realized investment gains, including net short-term capital gains, which are taxed as ordinary income for federal income tax purposes. To the extent the Fund engages in short sales (which are not included in calculating the portfolio turnover rate), the transaction costs incurred by the Fund are likely to be greater than the transaction costs incurred by a mutual fund that does not take short positions and has a similar portfolio turnover rate.

Manager Risk
How the investment adviser manages the Fund will impact the Fund's performance. The Fund may lose money if the investment adviser's investment strategy does not achieve the Fund's objective or if the investment adviser does not implement the strategy successfully.

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Please consider the investment objectives, risks, fees and expenses of the Fund carefully prior to investing. The prospectus and summary prospectus contain this and other important information about the Fund. To obtain a copy of the prospectus/summary prospectus, please call us at (877) 779-0079.  Please read the prospectus and summary prospectus carefully before investing.

Driehaus Securities LLC, Distributor

 


Photo of KC Nelson

K.C. Nelson

Portfolio Manager

K.C. Nelson is the portfolio manager of the Driehaus Long/Short Credit and Event Driven strategies. As portfolio manager of the Driehaus Active Income Fund (LCMAX), the Driehaus Select Credit Fund (DRSLX), and the Driehaus Event Driven Fund (DEVDX) he is responsible for implementing a multi-strategy approach to the credit markets with an emphasis on achieving absolute returns with limited volatility. Mr. Nelson has been quoted in numerous financial publications, including the Wall Street Journal and Bloomberg, and has appeared as a guest contributor on CNBC. In addition to his role as portfolio manager, Mr. Nelson serves on the firm's management committee.

Prior to joining Driehaus Capital Management in 2009, Mr. Nelson was a senior portfolio manager at Lotsoff Capital Management. While at Lotsoff, he managed a credit arbitrage hedge fund and a mutual fund. Mr. Nelson has also held assistant portfolio manager and analyst positions at Akela Capital, Andersen Corporate Finance LLC and J.C. Bradford & Co. He received his B.A. in economics from Vanderbilt University and an MBA from Duke University's Fuqua School of Business, where he was a Keller Scholar.


Photo of Adam Abbas

adam abbas

Assistant Portfolio Manager

Adam Abbas is an assistant portfolio manager for the Driehaus Long/Short Credit and Event Driven strategies. He is responsible for idea generation, portfolio construction, security selection and investment research.

Prior to joining Driehaus Capital Management in 2010, Mr. Abbas was an analyst for Neuberger Berman/Lehman Brothers Asset Management where he focused on high yield bond and loan investments within the information technology, media and telecom space. Prior to this role, Mr. Abbas worked as a consultant for Huron Consulting Group, LLC. He earned a B.S. in industrial engineering from Northwestern University and an MBA from the University of Chicago.


Photo of Elizabeth Cassidy

michael caldwell

Assistant Portfolio Manager

Michael Caldwell is an assistant portfolio manager for the Driehaus Event Driven Fund. In his role as assistant portfolio manager he is responsible for idea generation, portfolio construction, security selection and investment research. Additionally, Mr. Caldwell acts as a senior analyst focusing on developed micro and small cap stocks within the healthcare sector.

Mr. Caldwell began his career as co-founder and managing director of Ivy Concierge, LLC from 2005-2007. He also worked as a graduate research associate for the department of biomedical engineering at Yale University in 2007 prior to joining Driehaus Capital Management in 2008. He received his B.S. in biomedical engineering from Yale University in 2005.

 

 

 

 

Driehaus Securities LLC, Distributor

 

Fund Literature

fund summary icon Fund Fact Sheet
September 30, 2014
Fund Commentary with Attribution
August 31, 2014
Portfolio Holdings
August 31, 2014
fund summary icon Fund Introduction
August 31, 2013
Prospectus
April 30, 2014
Summary Prospectus
April 30, 2014
Statement of Additional Information
April 30, 2014
Annual Shareholder Report
December 31, 2013
Semi-Annual Shareholder Report
June 30, 2014
  XBRL File*
April 30, 2014

 

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Driehaus Securities LLC, Distributor