"After receiving many requests at xxx Capital for investments for
smaller accounts (i.e. less than the $1 million xxx minimum), and many
discussions on this forum, it became apparent that there were few
adequate vehicles for investors who wished to invest in commodities or
futures but did not have the requisite $100K to $200K. Further, even
those who might have an account of $200K to $300K do not have sufficient
capital to trade a diversified set of systems across several timeframes
and markets. With this in mind, I approached Yuri Plyam at Castle
Trading several weeks ago about the possibility of our partnering to
form a series of commodities pools targeted at the investor with between
$25K and $1 million. This will allow us to combine my system and trading
expertise with Yuri's systems research, execution, and system trading
management expertise. We have formed a new company called Acceleration
Capital, LLC which will open two new funds over the next several months
and have initiated the NFA registration process for these funds and for
Acceleration Capital, LLC as a Commodity Pool Operator. Our conservative
fund, Acceleration Granite Fund 1X, will target very low drawdowns (i.e.
less than 10%) with after fee returns in the 15% to 20% range. Our
medium aggressive fund, Acceleration Mercury Fund 4X, will target
drawdowns less than 40% with after fee returns of 60% to 75%. These
funds will run very similar investment programs but with different
leverage and risk control levels. The Granite fund will be our baseline
fund."
Curtis Faith
Thu Jul 24, 2003 8:49 pm

***

"As a matter of policy because of our conservative stance with regard to
SEC regulations, we don't disclose the performance of xxx funds except
to prospective clients. As a practical matter this means you need to
have an existing relationship with us or one of our agents and over $1
million to invest. More importantly perhaps, the funds are U.S. Equities
funds that have been benchmarked to compete against liquid
high-capitalization stock indices because we have institutional clients
as investors and that's the way they measure performance. We haven't
traded any futures contracts in them because there was greater demand
for equities funds and we don't want to fall under NFA/CFTC regulation,
so the results won't have any bearing on the Acceleration Capital funds.
Further, the funds have been trading for just over a year, and I have
not been the sole investment advisor, so it would be hard to make any
sort of assessment that will relate in any way to our Acceleration fund,
even if we were to disclose the performance for the xxx funds. This is
the kind of disclosure the NFA would require us to make were the funds
to be open in the disclosure document, it also happens to be the truth.
With the obviously poor performance of the stock market for the last
several years, there is greater opportunity for alternative investments
in futures, so we may start to trade futures at xxx but at the present
moment, our funds do not trade futures. Keep in mind also, that I
retired from trading on May 1988 when Richard Dennis discontinued the
Turtle program to pursue my entrepreneurial interests in software and
high-tech. I only two years ago returned to trading as an interest and
occupation and have spent most of that time doing research since I had
been off the scene for so long. Unfortunately, since I didn't plan on
trading afterword, I never went though the trouble of reconstructing an
NFA approved track record format from my trading results for Richard
when the program ended so I can't give you exact results even for my
trading for Richard Dennis. Our accounts were notionally funded and
profits were not reinvested, so it's hard to reconstruct properly in a
way that makes sense anyway (a proper discussion of this is complicated
enough to warrant its own topic). I do know that: I made something over
$31.5 million for Richard over four years; I traded $2 million, $5
million, $10 million, and $20 million for him over the four years we
traded; each year Richard assigned me the largest account of any of the
Turtles; my performance was in excess of 100% per year before fees (I
think it was 112%?). We can't market our funds publicly but we will
publish our results to the typical places where you see the performance
of other pools and CTAs once we have started trading. The Acceleration
capital funds will be traded using a diverse mix of mechanical systems
and markets. The systems we will trade are as good as or better than the
best of the systems being sold out there (otherwise we'd just trade one
of them right?). So if you modeled a historical test of the top systems
you know of, with a few swing systems, a few medium term systems, and a
few long-term systems you'd approximate our approach. We're a bit cocky
and certainly intend to beat that on a risk adjusted basis but one never
knows what the future will bring. One of the main benefits we intend to
provide to those whomightotherwisetrade system themselves is the lower
risk provided by the pooling of capital which allows for much greater
diversification across markets, timeframes, and systems. We need to be
careful because we cannot market these funds so I don't mind giving out
a bit of information about our plans here in a general sense, and in the
context of a general discussion about trading and trading systems and
how to improve results, but we can't really get more specific,
especially once the funds are up and running. I will be very happy to
answer specific questions as I always have here in the forum about my
view of the world, how to do this, how to do that, as the topics come up
in the general sense. Unfortunately, I won't be able to get into details
about our funds since this might be construed as marketing by the NFA or
CFTC." 
Curtis Faith
Fri Jul 25, 2003 8:47 am

***

"We will keep these funds open indefinitely. There is a limit of 35
unaccredited investors that we can take because of NFA/CFTC regulations
and because we will operate (as most commodity pools) under an exemption
of SEC Regulation D Rule 506. We'll keep them open until they reach
sufficient size that we no longer want new investors, at least the
several hundred million dollar range. As a practical matter, I expect it
will be several years before we close the fund to new investments."
Curtis Faith
Sat Jul 26, 2003 8:36 am

***

"I just wanted to add some specifics to Curtis's comments about the
regulatory aspect of things. Basically, there are two kind of offerings
when it comes to funds. One is an offering that is available to the
general public. This is how mutual funds like Fidelity or Janus are able
to put large advertisments in magazines and TV advertisements. These
funds are available to just about anyone who is interested in investing.
To form this kind of fund you need to register in many states and
qualify under blue sky registraton status. This allows you to advertise
to residents of specific states and allowes each individual state to set
rules and requirements. The other type of fund is a private fund or
private offering. This is how 99.9 percent of all commodity pools and
hedge funds are organanized. You ask the federal government for an
excemption to allow you to bypass the blue sky regulations. In exchange
you promise the government that you will comply with certain
requirements. 1. No public solicitation (a preexisting relationship is
needed) I.E. no tv ads, magazine ads. However if you know the person
prior to soliciting him/her you have a preexisting relationship with
that person. 2. The prospect has to be an "accredited investor" I.E. has
to satisfy specific financial conditions to be accepted. There is an
exception for 35 individuals that are not "accredited investors" per
fund. Once again, most hedge funds and commodity pools are organized as
private partnerships. Acceleration Capital, LLC will be organized as a
private partnership. This is a very general overview of the structure of
these products." 
All the best,
Yuri
Fri Jul 25, 2003 9:11 am