generally does not attempt to hedge all market or other risks inherent in a
Multi-Strat Fund's portfolio, and hedges certain risks, if at all, only partially.
General Risks ... Investment and Trading Risks in General
All investments made by a Multi-Strat Fund risk the loss of capital. No guarantee or
representation is made that a Multi-Strat Fund ... time. The past performance of speculative
trading strategies such as those implemented by the Multi-Strat Funds is not necessarily
indicative of their future results.
Leverage Risk
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HUBUS133 Alpha Group Capital
Trading Vehicles
Although the Multi-Strat Master Fund implements its own investing and trading
strategies directly, it also invests through Trading Vehicles, including one or more ... material restrictions on the strategies, leverage or markets which may be
incorporated into the Multi-Strat Funds' portfolio or the percentage of a Multi-Strat
Fund's assets that ... committed to any particular strategy type, market or
instrument. The composition of a Multi-Strat Fund's portfolio, as well as the liquidity
profile and the expected position duration
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clearing, financing and credit
agreements, regulatory investigations and/or proceedings attributable or relating to the
Multi-Strat Funds or any Trading Vehicle, and regulatory reporting and compliance costs
attributable or relating ... Multi-Strat Funds, such as filing fees and expenses relating
to Form PF and Section 13 filings); professional fees and expenses (including, without
limitation, fees and expenses of consultants ... insurance for members, officers
and employees of the general partner/boards of directors of the Multi-Strat Funds, any
Trading Vehicle and Hudson Bay Capital; fees and expenses (including, without
limitation
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HUBUS133 Alpha Group Capital
The Multi-Strat Funds may also buy credit default protection with respect to a referenced
entity if, in the judgment of Hudson Bay Capital, there ... likelihood of credit
deterioration. In such instance, the Multi-Strat Funds will pay a premium regardless of
whether there is a credit event. As a buyer of credit default swaps ... circumstances in
which the Multi-Strat Funds do not own the debt securities that are deliverable under a
credit default swap, the Multi-Strat Funds are exposed to the risk
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HUBUS133 Alpha Group Capital
the company. In addition, such investments could subject the Multi-Strat Fund to certain
additional potential liabilities that may exceed the value of the Multi-Strat ... Fund's original
investment therein.
Directional Trading
Certain of the positions taken by the Multi-Strat Funds may be directional (Le., designed
to profit from forecasting absolute price movements ... fluctuations.
Risks Related to Certain Instruments Traded
Equity Securities
The investment portfolio of the Multi-Strat Funds includes positions in common stocks,
preferred stocks and convertible securities principally ofU.S. issuers
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countries in which the Multi-Strategy Funds may invest. The strategies in which the
Multi-Strat Funds invest are constantly evolving and new strategies may appear within
the Multi-Strat ... Funds' portfolio with some regularity.
Side Letters
The Multi-Strat Funds and, in certain cases, Hudson Bay Capital, have the discretion to
waive or modify the application of, or grant ... favorable rights with respect
to, the terms or provisions applicable to investment in the Multi-Strat Funds to the extent
permitted by applicable law and have done so. Such terms
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Group Capital
Funds' or third-party valuation models. Market disruptions may also force a Multi-Strat
Fund to close out one or more positions. Such disruptions have in the past ... resulted in
substantial losses for funds employing relative value strategies. Even if a Multi-Strat
Fund's relative value investment strategies are successful, they may result in high
portfolio turnover ... unable to, or decide not to, hedge its positions, and, in such event, a Multi-Strat
Fund might sustain a significant risk of loss as a result of changes
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EFTA01384526Set 10
2018-01-311p496w
investors who wish to invest on
a levered basis) (along with their affiliates, the "Multi-Strat Funds"); (ii) Hudson Bay
Cap Structure Arbitrage Enhanced Fund LP (operating primarily ... herein as a "Fund" and collectively,
as the "Funds" or the "Clients." The Multi-Strat Funds are currently open to new
investors; the MLP and Corporate Value Funds ... begin accepting new investors at any time in the future
without notice.
The Multi-Strat Funds
The Multi-Strat Funds are organized in a master-feeder structure, whereby: (i) Hudson
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services from any broker-dealer.
In addition, the Third-Party Ventures in which the Multi-Strat Funds may participate may
make use of "soft dollar" services, and any additional transaction ... dollar" services obtained by
Hudson Bay Capital — would generally constitute incremental expenses to the Multi-Strat
Funds. Such "soft dollar" services may also fall outside of the "safe harbor" provisions ... Section 28(e). Each Multi-Strat investor, as a condition of investing in a Multi-Strat
Fund, consents to such "soft dollar" arrangements and, if applicable, to Hudson Bay
Capital
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Investors in
the Offshore Fund.
PM Tranches
Certain of the Multi-Strat Funds may also issue tranches and/or classes of shares/interests
corresponding to the investment strategy (or a sub-strategy ... Structure Fund overlaps substantially with a comparable portfolio in the Multi-
Swat Funds (the "Multi-Strat Convertible Portfolio"), managed by the same portfolio
manager, albeit on a more highly-leveraged ... basis than the Multi-Strat Convertible
Portfolio. While the Capital Structure Fund is not currently accepting new investors, it
may begin accepting new investors in at any time the future
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Group Capital
As of the date of this Brochure, Hudson Bay Capital categorizes its Multi-Strat Fund
strategies into the following groups in its reports to investors: (i) event-driven ... trading strategies and techniques (including sub-strategies) that
have historically been used for the Multi-Strat Funds are outlined below for illustrative
purposes. The following does not purport ... complete list of all trading strategies
employed, and certain of the Multi-Strat Funds' trades may involve a combination of, or
a departure from, these strategies.
• Event/Merger Arbitrage - involves investing
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will generally review each Client's performance on an ongoing
basis.
Reports to Clients
Multi-Strat, Capital Structure, Corporate Value and MLP Fund investors receive
unaudited performance information at least ... subject to the relevant provisions ofRule 206(4)-2 of the Advisers
Act. Multi-Strat, Capital Structure, Corporate Value and MLP Fund investors do not
receive account statements from
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