2014 End of Year Update

Welcome to HIT Capital’s 2014 end of year update.

The Fund continued to build on its strong 2013 performance by returning 13.58% in 2014; this puts the fund up 66.29% since inception. In 2014 the S&P 500 and the Equity Hedge Index returned 11.38%, and 3.66% respectively. HIT Capital outperformed the S&P 500 by 2.2% and the Hedge Fund Index by 9.92%.

The fund’s objective is to achieve superior after-tax returns relative to the market over the long term. The strategy is not simply to invest in the market but to outperform it. Due to the long term approach, the fund may be susceptible to short and intermediate term underperformance. That being said, HIT Capital has done well over the past two years, averaging a compounded annual growth rate of 29%. This CAGR ranks HIT Capital number 1 in the Long Biased Fund category and 24th out of 910 funds listed on the hedge fund database HedgeCo.

Looking at the bigger picture, only 18% of all managed equity funds outperformed the market from year 1998 to 2013.  Unfortunately for you, the investor, this means that it can be difficult to find fund managers that are worth their fees.  We believe the long term approach in combination with our strategies to gain a mathematical edge is what gives HIT Capital a competitive advantage over other equity investments.

The fund’s performance thus far has solely come through our primary and secondary strategies, beta slippage and contango. In 2015 the fund may employ a third strategy, value investing, in conjunction with beta slippage and contango. Our program to analyze domestic company fundamentals has been completed. We are currently optimizing the trading strategy to maximize after-tax returns. Once this is accomplished, the value investing strategy may begin to complement our primary and secondary strategies. This third strategy should still provide an advantage while also lowering volatility.

The information contained in this report is intended for informational purposes only and is qualified in its entirety by the more detailed information contained in the HIT Capital LLLP Offering Memorandum.  This report is not an offer to sell or a solicitation of an offer to purchase any investment product, which can only be made by the Offering Memorandum.  An investment in the Fund involves significant investment considerations and risks which are described in the Offering Memorandum. The performance information provided herein is historic and should not be taken as any indication of future performance.  Among other things, growth of assets under management of the HIT Investments may adversely affect its investment performance.  Also, future investments will be made under different economic conditions and may be made in different securities using different investment strategies.  The comparison of the Partnership’s performance to a single market index is imperfect because the Partnership’s portfolio may contain options and other derivative securities, may include margin trading and other leverage and is not as diversified as the Standard and Poor’s 500 Index or other indices.  Due to the differences between the Partnership’s investment strategy and the methodology used to compute most indices, the investment adviser cautions potential investors that no indices are directly comparable to the results of the Partners