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TWST: Please start by telling us about Pennsylvania Avenue Advisers and your
Event-Driven Fund.
Mr. Kirchner: The advisory firm manages the Pennsylvania Avenue Event-Driven
Fund, which is the only Fund that we manage at the moment. The Fund was launched
three and a half years ago, and it uses a number of alternative strategies,
primarily merger arbitrage, a bit of distressed securities investing, and also
piggybacking on proxy fight investments. We have the ability to do capital
structure arbitrage, but so far we have not used that strategy.
The idea behind this Fund came from the observation that there is a large number
of hedge funds in the market that are using these strategies, but hedge funds
are not available in the retail markets. A mutual fund would open those
strategies up to retail investors that may not qualify for hedge funds or other
investors who may qualify for hedge funds, but prefer the regulatory scrutiny
that the mutual funds are subjected to, as opposed to hedge funds, which lack
transparency. TWST: How has the Event-Driven Fund performed over the last year? Have you been
growing in assets?
Mr. Kirchner: Yes, we are now at $4.3 million in assets. So we have almost
tripled since when we last spoke. That has primarily been driven by improving
availability through brokerage platforms - we are now available through Fidelity
and E*TRADE. Secondly, we obtained a ticker symbol and Morningstar rating late
last year. Before that, it was very difficult for investors to actually find the
Fund without a ticker and without being in the Morningstar database, so that has
helped the Fund grow as well.
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