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RiverPark Short Term High Yield Fund

&

RiverPark Strategic Income Fund


FirstQuarter2015
Commentary

Thirtyeightyearsago,theDelawareBayfrozeoverandstayedfrozenfor45
days,arecordthatstandstoday1.Withboyhoodenthusiasm,Itoldmy
parentsIwasgoingtowalkoverthebayfromNewJerseytoDelaware.AsI
sprintedout,Iheardsubtlecrackingsoundsastheiceshiftedfrommyweight
andbrieflystoppedtoreconsidermyactions.Itwasjustenoughtimeformy
fathertocatchupandwarnmethat,whiletheicemaybemileswide,itwas
probablynotthickenoughtosupportmeonmyquest.Thiswasanearly
lessoninweighingriskversusreward.
The2008financialcrisishighlightedsystematicriskswhichpromptedtheU.S.Governmentto
pursueregulationandpoliciestoprotectcitizensfromfuturehazardsandjumpstartarecovery
fromtheGreatRecession.2ThereformsaimedatTooBigtoFail3institutionsand
implementationofQuantitativeEasing4,havedefinitelyrestoredasenseofstability,butnot
withoutunintendedconsequences.InMarch2015,theBankofInternationalSettlementsand
MoodysInvestorServiceshighlightedtheadverseimpactonbondmarketliquidityandthe
consequencesoflowinterestrateswhichencouragecompaniestoleverup.
Theplethoraofnewfinancialregulationshasincreasedcorporatebondmarkettransparency5
andbreadthattheexpenseofmarketdepth.ThefinancialcrisisforcedWallStreetto
deleverageandunwindproprietarytradingpositions.TheVolkerRule6sealedthefateofthe
businessmodel,permanentlycurtailingmarketmakingactivitiesinfavorofagency
transactions.Inotherwords,WallStreetwouldnolongerserveasaproviderofliquidity,but
wouldbemorethanhappytocontinuetotakeanorderandmatchbuyersandsellersonabest
efforts,riskless,basis.

Addressingtheconcernheadon,theBankofInternationalSettlementsdiscussedintheirrecent
quarterlyreviewtheShiftingtidesmarketliquidityandmarketmakinginfixedincome
instruments7:
inmostcorporatebondmarkets,tradingappearstobehighly
concentratedinjustafewliquidissues,andconcentrationappearsto
beincreasinginsomemarketsegmentsInmanyjurisdictions,market
makinghasthusshiftedfromaprincipaltradingmodeltowardsaclient
drivenbrokeragemodel.Asaresult,manymarketmakershavebecome
reluctanttoabsorblargepositionsandconsequentlyneedmoretimeto
executelargetrades.
Despitethebestofintentions,everynewregulationandinterventionhasunintended
consequences.TheFirstLawofThermodynamicsstates:Energycanneitherbecreatednor
destroyed;itmayonlybecontrolled,storedortransferred.Similarly,theVolkerRuledidnot
eliminatesystemicrisk.Instead,theriskwastransferredfromWallStreettoitsinstitutional
clients,theBuySide.Priortothe2008financialcrisis,WallStreettradingdesksactively
engagedinmarketmakingactivitiesandtheirinventoryrepresentedasignificantportionofthe
corporatebondmarket.ArecentGreenwichAssociatessurveyhighlightstheliquidityvoid;38%
ofbuysidefixedincomeparticipantssurveyedfeltthattrading$15MMormore(parvalue)
bondswasextremelydifficult8.
2

BuySideSurvey:AbilitytoTradeCorporateBonds

ParValueofBonds

Over$15mm

$5mm$15mm

Lessthan$5mm

0%

5%

10%

15%

20%

25%

30%

35%

40%

%ofStudyParticipantsWhoResponsed"ExtremelyDifficult"

Thisbegsthequestion:Areinvestorsbeingadequatelycompensatedforthisrisk?Withinterest
ratesathistoriclows,findingyieldwithouttakingonsignificantriskcanbedifficult.Ithaslong
beenourbeliefthatsmallerissuesofmoneygood9,highyieldbondsofferinvestorsahigh
riskadjustedrateofreturn.
Splittingthehighyieldmarketinhalfbyissuesizeillustratesthesignificantyieldpickup10.The
bottom50%ofissueshasanoptionadjustedspread(OAS)overUSTreasuriesof582basis
points(bp)whichis140bpmoreyieldperyearthanthetop50%ofissues.Coincidently,
excludingtheenergysectorbecauseofrecentturmoilandpotentialfuturecreditlosses,the
bottomhalfofissuesstillmaintainanadvantageof140bpOAS:
HighYieldIndexOptionAdjustedSpread(exEnergy)
Top50%
Bottom50%
OAS
(JLRG)

(JLIT)
Difference
31Mar14
349bp
433bp
84bp
31Dec14
419bp
545bp
126bp
31Mar15
398bp
538bp
140bp
Overthepast15years,investinginanindexofthebottomhalfofissuerswouldhave
outperformedthetophalfofissuersbyacumulative50.1%inreturn.
Weknowthereisnofreelunchgeneralconsensusisthatsmallerissuesarelessliquidthan
biggerissues.Thisisnotalwaysthecase.Forinstance,inperiodsofgreatmarketstress,we
haveobservedthatthelargerissuesquicklybecomeasilliquidasthesmallerissues.Belowisa
3

chartillustratingthedifferenceinOASbetweenthetop50%andbottom50%ofhighyield
issuesovertime:

OASDIFFERENCE

200bp

HistoricalOASDifference

100bp
0bp
(100)bp
Financial Crisis

(200)bp

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
JLITJLRG

median

Duringthesellofffromtheinternet/telecombubbleandtherecentfinancialcrisis,theOASof
thetop50%ofissuesexceededthatofthebottom50%ofissues.Inotherwords,theprice
declinewassignificantlygreaterinthetop50%issues.Amultitudeofexplanationsmaybe
provided,butthekeyfactoristhatwhenelephantsstampede,youwanttogetoutoftheway.
WithWallStreetdiminishedandpassiveETFs,aswellasotherbuysideparties,increasingtheir
demandforlargebondissues,thetrademaybealittlecrowded.Unfortunately,largeselloffs
haveawayofconvertingtemporarymarktomarketlossesintopermanentlossesas
redemptionsneedtobemet.
LiketheicedoverBay,therewouldappeartobesafetyintheontherun,largebondissues,but
thatmarginofsafetyisprecariouslythinandcannotbearthefullweightofthemarket.
Weoftenfindvalueinoverlookedandignoredmoneygoodhighyieldbonds.Duringthefirst
quarterof2015,RiverParkStrategicIncomepurchasedtwooffthebeatenpath11bondsthat
metthatcriterion:ConsolidatedTomoka124.5%SeniorUnsecuredConvertibleBondsdue2020
andNathansFamous1310%SeniorSecuredNotesdue2020.
ConsolidatedTomokaLandCompany(CTO),foundedover100yearsago,isaFloridabased
publiclytradedrealestatecompanywithaportfolioofincomeearninginvestmentsandland
assets.WehaveknowntheCEOforyearsandevenpredatinghisarrival,wewerefamiliarwith
thissleepy,longstanding,valueinvestment.Historically,thecompanyhasbeenconsidered
assetrichandcashflowpoor.ThecurrentCEOarrivedin2011andhasbeensuccessfulin

unlockingsomeofCTOsvalue,asreflectedbythestockmorethandoublingtoamarketcapof
over$330million.InMarch,CTOissueda$75millionconvertiblebondwithproceedstobe
usedtorepayitscreditfacilityandforgeneralcorporatepurposes.Purchasingthisbond,we
weregettingthebestofbothworlds:yieldwithequityupside.Sincethedebtisnotcallable,
weassureourselvesareasonableyieldforfiveyearswithstrongassetcoverageandthe
opportunitytoparticipateinequityupsidetiedtocontinuedvaluerealization.Following
issuanceofthebond,ithastradedtoasignificantpremium,asexpected,yetweseepotential
forfurthergainsandcontinuetoholdtheposition.

NathansFamous(NATH)isawellknownbrandnameforhotdogssoldatcompanyowned
andfranchisedrestaurants,throughfoodserviceprogramsandvialicensingactivities.InMarch,
thecompany,newtothebondmarket,issued$135millionseniorsecurednotestopaya
specialdividendtoitsshareholders.Ourresearchshowedarecentlicensingagreementmore
thancoveredthedebtandtheremainingbusinesseswereextracushion.InMarch2014,NATH
signedan18yearlicensingagreementwithasubsidiaryofSmithfieldFoodsrequiringminimum
licensingfeesthatwouldgenerateenoughcashflowtocoverthebondsbeforeanyadditional
revenuesharing.Assumingmanagementdoesntrunamok,NATHbondshaveanimplied
SmithfieldFoodscreditriskfurtherenhancedbycashflowsfromNATHsrestaurantbusinesses.
SmithfieldFoods,whichisratedBB,has5.875%unsecurednotedue2021thatthemarketwas
pricingata4.5%YTM.Hence,thenewNATHbondcomparesveryfavorablywithits10%
couponandsecuredinterests.Moreover,bondholdersareprotectedbyeffectivefinancial
covenants,preventingmanagementfromtakingadditionalshareholderfriendlyactionsthat
mightdegradethecreditinthefuture,incontrasttotypicalcovenantsininvestmentgrade
bonds.

InaMarch2015,MoodysInvestorsServicepublishedareport14entitledMacroeconomicsand
CorporatePolicesErodingCreditQualityin2015,addressingthenegativeimpactoflowinterest
ratesoncorporatebehavior:

InvestmentgradeUScompaniesareincreasinglyreturningcashto
shareholders,andhavelessfreecashflow(FCF)torepaydebttodaythan
theydidbeforetherecessionMeanwhile,prolongedverylowinterestrates
aremakingdividendsmoreimportanttoinvestors,leavingcompanies
increasinglyfixatedondividendgrowthariskforcreditquality,especially
withleveragerising.

Asshownbelow,investmentgradecorporatebondyieldsaresignificantlybelowtheearnings
yields(inverseoftheP/Eratio)ofS&P500stocks.Thishascreatedanenvironmentinwhich
corporationshaveincentivetoissuedebttoeffectuateshareholderfriendlystockbuybacks
anddividends.
5

WhiletheMoodysreporthascreatedsomecommotion,wetooknoteofthisphenomenonin
thefallof2012.Infact,intheNovember29,2013editionofGrantsInterestRateObserver15,
wewerequotedtothiseffect:

Whatinvestmentgradecompaniesaredoingis,theyreleveringupeitherto
trytogrowthroughexpansion,mergersorevenbuildproductline(s).Or
theyrefinancialengineering.But,truthfully,withrevenuesnotbeingso
robust,theyrenotreallygrowingthebusinessasquicklyastheyregrowing
thedebt.

InthearticlewediscussedourobservationofthisbehaviorwithrespecttoCocaColawhich,
sincethattime,hasincreaseditsdebtbyapproximately19%andincreaseditsdividendrateby
nearly8%.

Whilemanycompaniesarecompelledtopursueimmediategratificationviafinancial
engineering,afewcompaniesareusingcheapmoneytopursuelongtermshareholdervalue,
sometimesviastrategicacquisitions.Althoughdebtfinancedacquisitionsmayaddleverage,
whenprudentlyemployedwithanalignmentofinterestsamongbondholdersandstockholders,
growthcanbereignitedthatultimatelybenefitsallfinancialconstituents.Threeinvestments
purchasedbytheFund(s)in1Q15thatillustratethisapproachareCoach16,Southwestern
Energy17andInternationalGameTechnologies18.
6

In2014,Coach,thedesignerandretailerofluxuryleathergoodssawadramaticdeclinein
revenuesanditsstockwasoneoftheworstperformersintheS&P500;downover30%forthe
year.Atthetime,Coachhadnodebt.Ratherthanappeaseshareholderswithanaggressive
stockbuybackordividendpolicy,theyfocusedlongterm.Seekinganewsourceofgrowth
whilesimultaneouslyrefreshingitscorebrands,Coachagreedtopurchaseluxuryfootwearand
accessoriesproducerStuartWeitzmanfor$530million.Tofinancethetransaction,inFebruary
2015,Coachissued$600millionin4.25%seniorunsecuredbondsdue2025.Weviewedthe
financingasanattractiveinvestmentgradeadditiontoRiverParkStrategicIncomeFund.We
thoughtthatthe225bpissuancespreadundulypenalizedCoachforrecentfinancial
performance.WithDebt/EBITDA<1.0x,weencourageCoachtopursuesimilartransactions
andwewouldbehappytoparticipateinfinancingthem.

Sufferingfromsharplydepressednaturalgaspricessince2008thatledtotreacherouslyhigh
leverage,ChesapeakeEnergywasastressedsellerofassets.Takingadvantageofthesituation,
inOctober2014,SouthwesternEnergyagreedtopurchaseChesapeakesoilandgasassetsin
WestVirginiaandsouthwestPennsylvaniaforapproximately$5.4billion.Southwesterntooka
balancedapproachtofundingtheacquisition,utilizingacombinationofdebt,convertible
preferredstockandcommonequity.Althoughnetleverageisanticipatedtoincreasefrom
approximately2.0xatyearend2014to3.3xatyearend2015,wearecomfortedbythe
significantequitycushionbeneaththeconvertiblepreferred.RiverParkStrategicIncome
participatedintheoriginalissuanceofthe6.25%convertiblepreferredshares.Althoughwe
thoughtthenewissuewasattractivefromtheperspectiveofafixedincomeinvestor,equity
andconvertibleinvestorsweremoreoptimistic,drivingthesharesnearly20%abovetheirissue
pricewithinweeksaftertheinitialoffering.Withthesharesexhibitingequitylikebehavior,the
Fundadvantageouslyexitedtheposition.Weexpecttorepurchasetheconvertiblepreferred
shouldthepricedecline.

InJuly2014,GTech,aninternationalproviderofcomputerizedonlinelotteryservicesagreedto
purchaseInternationalGameTechnologies(IGT),aleaderingamingequipment.Facilitatedby
thelowinterestrateenvironment,GTechsawtheopportunitytoexpanditspresenceinthe
worldwidegamingmarketaspartofitsgrowthstrategy.Priortothetransaction,IGTwas
investmentgrade,whileGTechwasahighyieldissuer.However,withthepurchasetobe
fundedwithacombinationofcashandequity,proformaleveragewasexpectedtobe
reasonable.TheindenturesofIGTsthreeoutstandingbondscontainedlanguagethatrequired
thatthecompanyoffertorepurchaseitsbondsatapriceof101uponachangeofcontrol.In
February2015,afterseeingregulatoryapprovalforthedealinanumberofjurisdictionsand
receivingindicationsfromIGTmanagementthatitwouldoffertopurchasetwoofthebond
issuesat101(bondholdersofthethirdissueacceptedaconsentpaymenttoforegotheofferto
purchase),bothRiverParkStrategicIncomeandRiverParkShortTermHighYieldbeganto
purchasebondsinanticipationofachievinganannualizedreturnofapproximately4%.The
7

combinationofthecompanieswascompletedinearlyApril,leadingtoanoffertopurchasethe
IGTbondsthatisexpectedtobecompletedbymidMay.
ItisusefultonotethatbothSouthwesternEnergyandCoachhavebeenholdingsofRiverPark
equityfunds19andcollaborationwiththeirinvestmentteamshasbeenrewarding.
Wehavebeenactivelyengagedinthecorporatebondmarketforover25yearsandare
sensitivetothechanginglandscape.Consequently,weactivelymanagetheportfoliostrategy
accordingly.

4060%oftheholdingsofRiverParkShortTermHighYieldFund(RPHYXandRPHIX)
enjoytheorganicliquidityofshorttermmaturitiesthatrollintocashapproximately
every60days.RiverParkStrategicIncomeFund(RSIIXandRSIVX)similarlyenjoysthis
unaidedliquiditymechanismthrougha1535%overlapwithShortTermFundholdings.
Theportfoliomayexperiencemarktomarketriskasresultofthisnewliquidity
paradigm;however,werelyonourabilitytoselectmoneygoodbondstoenableusto
holdbondstomaturitytoachievetargetedreturns.
Ourcommitmenttolimitcapacityandcloseourfunds,mitigatestheriskofrelianceon
thirdpartyliquidityandavoidstheneedtoinvestinlargerblocksofbondsthathave
becomeincreasinglydifficulttotradeandforwhichinvestorsarenotbeingadequately
compensated.
Cashisanassetclassthatprovidesinvestorswithliquidityandaffords ustheabilityto
add topositionswhenothersmaybebuffetedbymarketilliquidity.
Wefocusonfindingfixedincomeopportunitiesoutsideofthemainstreamthatprovide
ourinvestorswithabovemarketreturnswithouttakingonadditionalcreditrisk.

Intodayslowinterestrateenvironment,centralbanksareencouraginginvestorstofilluptheir
SUVswithcheapgasanddriveonoutontothefrozenbay,ignoringpotentialrisks.Having
heardtheicecrackinginmyyouth,Iwillkeepusclosertoshore.

Sincerely,

DavidShermanandTheCohanzickTeam

JamesE.Salmon,PublicInformationOfficerforDelawareRiverandBayAuthority:Thelongestfreeze
upoccurredin1977,45consecutivedaysbeginningJanuary11ofthatyear.
2
AlthoughtheGreatRecessioniswidelyattributedasoccurringinthelate2000sasthelargesteconomic
declinesincetheGreatDepression,theetymologyisunclear,seeCatherineRampelloftheNewYorkTimesblogon
March11,2009:
http://economix.blogs.nytimes.com/2009/03/11/greatrecessionabriefetymology/

3
TooBigtoFailisgenerallyappliedtothewaveoffinancialregulationadoptedtoreduceandpreventeconomic
damagecausedbythefinancialsystem.Foraninterestinginsight,seeJesseEisingerofNewYorkTimesarticle
datedDecember11,2013entitledSoothingWordsonTooBigtoFail,butWithLittleMeaning:
http://dealbook.nytimes.com/2013/12/11/soothingwordsontoobigtofailbutwithlittlemeaning/

4
QuantitativeEasingisassociatedwithunconventionalpoliciespursuedbyCentralBankerstofightdeflation.
BenBernankehighlightedthearrayofsecretweaponstofloodtheeconomywithmoneyatCentralBankers
disposalinhisNovember2002speechDeflation:MakingSureItDoesntHappenHereinwhichhehighlighted
MiltonFriedmanshelicopterdropsolution.Foramoredetailedexplanation,seeCNBCsQuantitativeEasing:
http://www.cnbc.com/id/43268061

5
Specifically,thefullimplementationofTRACEcompletedin2014requirestimelyelectronicpricereportingof
virtuallyallcorporatebonds.Formorespecificinformationortoaccessthisusefulservice,refertoFINRAs
website:http://www.finra.org/industry/trace/corporatebonddata

6
ForadeeperunderstandingoftheVolkerRule,pleaseseetheSECspressreleasedatedDecember10,2013
providingFactSheetFinalRulestoImplementtheVolkerRule:
http://www.sec.gov/News/PressRelease/Detail/PressRelease/1370540476526
Inaddition,TheDoddFrankWallStreetReformActandConsumerProtectionActcanbereviewedatthewebsite:
http://www.gpo.gov/fdsys/pkg/PLAW111publ203/html/PLAW111publ203.htm

7
AuthoredbyIngoFenderandUlfLewrickinBISQuarterlyReviewdatedMarch2015,pages97103.Theentire
reportcanbefoundhttps://www.bis.org/publ/qtrpdf/r_qt1503.pdf

8
GreenwichAssociates2014TradingDeskOptimizationStudy

AmoneygoodassetisconsideredbymarketparticipantstobeasgoodasmoneyThetermmoneygood
impliesalenderwillberepaidprincipal.Inotherwords,onewillgetahundredcentsonthedollarback.

10

BofAMerrillLynchLynchUSCashPayHighYieldIndex(J0A0)isamostcomprehensiveindexofallcashcoupon
payinghighyieldbondsintheUnitedStateswithanissuesizeof$100MMparvalueormore.AsofMarch31,
2015,thetablebelowrepresentsdividingJ0A0inequalhalfbythenumberissuesinwhichthe50%largestissues
inparvaluecomprisedoftheJLRGindexandthe50%smallestissuesinparvaluearecomprisedoftheJLITindex:

J0A0

JLRG

JLIT

Issues

2,280

1,140

1,140

Issuers

1,078

524

765

ParValue

$1,341B

$1,000B

$341B

MarketValue

$1,343B

$1,008B

$335B

YTW
YTWDuration
YTM
YTMDuration
OAS
MaxIssueSize

6.16%
4.08
6.57%
4.95

5.83%
4.15
6.23%
5.05

7.15%
3.87
7.58%
4.68

477bp

442bp

582bp

$4,249MM

$4,249MM

$450MM

MinIssueSize
$100MM
$450MM
$100MM

OverlapofissuersbetweentheJLRGandJLITis211.Forexample,USSteelhastwoissuesinthelargeindexand
fourissuesinthelittleindex.

11
TheRiverParkStrategicIncomeFunddefinesoffthebeatenpathbondsas:Smallissues,notwidelyfollowed,
orlessliquidthatcanofferbetteryieldswithwhatwebelievetobecomparableorlesscreditriskthanonthe
runissues
12

Asof3/31/2015,ourpositioninConsolidatedTomokaLandbonds,represented1.11%oftheStrategicIncome
portfolio.

13
Asof3/31/2015,ourpositioninNathansFamousInc.,bonds,represented1.29%oftheStrategicIncome
portfolio.

14
AuthoredbyBillWolfe,TomMarshella,PalomaSanValentinandMarkGray,MoodysInvestorsServiceUSNon
FinancialCorporates:MacroeconomicsandCorporatePolicesErodingCreditQualityin2015dated3/27/2015.

15
AuthoredbyJimGrant,GrantsInterestRateObserverdated11/29/2013.Fullreportavailableuponrequest.

16
Asof3/31/2015,ourpositioninCoachbondsrepresented1.91%oftheStrategicIncomeportfolio.

17
Asof3/31/2015,ourpositioninSouthwesternEnergyrepresentedlessthan1%oftheStrategicIncomeportfolio.

18
Asof3/31/2015,ourpositioninInternationalGamingTechnologybonds,represented1.39%oftheShortTerm
portfolioand2.14%oftheStrategicIncomeportfolio.

19
Asof3/31/2015theRiverParkLargeGrowthFundhada3.41%positioninSouthwesternEnergycommonstock,
andtheRiverParkLong/ShortOpportunityFundhada4.30%positioninthesameissue.RiverPark/Wedgewood
Fundhelda5.69%positioninCoachcommonstockasof3/31/2015.

10

RiverPark Short Term High Yield Fund


&

RiverPark Strategic Income Fund


First Quarter 2015

RIVERPARKSHORTTERMHIGHYIELDFUND
MARCH31,2015
RiverPark

BofAMerrill

BofAMerrill

BofAMerrill

ShortTermHighYield

Lynch1Year

Lynch13Yr

Lynch03Yr

FundPerformance

U.S.Treasury

U.S.Corp

U.S.HYIndex

RPHIX

RPHYX

Index1

Index1

ExFinancials1

1Q15

0.70%

0.64%

0.11%

0.83%

1.77%

YTD2015

0.70%

0.64%

0.11%

0.83%

1.77%

OneYear

2.83%

2.38%

0.21%

1.49%

1.61%

Since
Inception*

3.74%

3.44%

0.32%

2.28%

5.40%

* TotalReturnspresentedforperiodslessthan1yeararecumulative,returnsforperiodsoneyear
andgreaterareannualized.FundInceptionDate:September30,2010.
The performance quoted herein represents past performance. Past performance does not
guaranteefutureresults.Theinvestmentreturnandprincipalvalueofaninvestmentwillfluctuate
sothataninvestor'sshares,whenredeemed,maybeworthmoreorlessthantheiroriginalcost,
andcurrentperformancemaybehigherorlowerthantheperformance.
As of the most recent prospectus, dated 1/28/2015, gross expense ratio was 0.90%. Gross
ExpenseRatiodoesnotreflecttheabilityoftheadvisertorecoveralloraportionofpriorwaivers,
which would result in higher expenses for the investor. Please reference the prospectus for
additionalinformation.
1
TheBofAMerrillLynch13YearU.S.CorporateIndexisasubsetoftheBofAMerrillLynchU.S.
CorporateMasterIndextrackingtheperformanceofU.S.dollardenominatedinvestmentgrade
ratedcorporatedebtpubliclyissuedintheU.S.domesticmarket.Thissubsetincludesallsecurities
with a remaining term to maturity of less than 3 years. The BofA Merrill Lynch 1Year U.S.
TreasuriesIndexisanunmanagedindexthattrackstheperformanceofthedirectsovereigndebt
oftheU.S.Governmenthavingamaturityofatleastoneyearandlessthanthreeyears.TheBofA
11

MerrillLynch03YearU.S.HighYieldIndexExcludingFinancialsconsidersallsecuritiesfromthe
BofAMerrillLynchUSHighYieldMasterIIIndexandtheBofAMerrillLynchU.S.HighYield01
YearIndex,andthenappliesthefollowingfilters:securitiesgreaterthanorequaltoonemonth
butlessthan3yearstofinalmaturity,andexcludeallsecuritieswithLevel2sectorclassification
=Financial(FNCL).

AsofMarch31,2015theportfoliowascomprisedofsecuritieswithanaveragematurityof4.8
months.TheaveragematurityisbasedontheWeightedAverageExpectedEffectiveMaturity,
whichmaydifferfromthestatedmaturitybecauseofacorporateactionorevent.

Source:BloombergProfessionalAnalytics

12

At quarterend, 52% of the invested portfolio was comprised of securities with an Expected
Effective Maturity of 30 days or less. Below is a more specific breakdown of the portfolios
holdingsbycreditstrategy:
%OfInvestedPortfolioAsof3/31/15
Expected
Effective
Maturity
030days
3160days
6190days
91180days
181270days
271365days
12years
23years

Redeemed
Debt

Event
Driven

Strategic
Recap

45.6%
0.2%

1.1%
10.2%

3.3%
0.4%

3.9%
3.0%

45.8%

15.2%

6.8%

Cushion
Bonds

ShortTerm
Maturities
1.6%

4.5%
7.4%
2.3%
3.6%
1.6%
19.3%

7.4%
1.8%

51.6%
10.9%
0.0%
8.3%
12.6%
2.3%
11.0%
3.3%

13.0%

08/21/15

2.2%

AsofMarch31,2015theWeightedAverageMarketYieldtoEffectiveMaturitywas5.77%for
EffectiveMaturitiesof31daysormore.Thatcomprised48%oftheinvestedPortfolio.

80%

7.00%

70%

6.00%

60%

5.00%

50%
4.00%
40%
3.00%
30%
2.00%

20%
10%

1.00%

0%

0.00%

%ofInvestedPortfolio

WeightedAverageMarket
YieldtoEffectiveMaturity

%ofInvestedPortfolio

EffectiveMaturites 31DaysorMore

WgtdAvgMktYldtoEffectiveMaturity

13

NewpurchasesmadebytheFundduringthequarterconsistedof52.6%Called/Tendered,
17.7%EventDriven,23.0%StrategicRecap,1.8%CushionBonds,and4.9%ShortTerm
Maturities.CalledandTenderedsecuritiescontinuetobethemostsignificantcomponentof
ourpurchases.Thesupplyofthesebondsremainedampleduringmostoftheperiod.
WhencombiningCalled/TenderedpurchaseswithStrategicRecap(whichrepresentsecurities
thatareintheprocessofbeingrefinancedbuthavenotyetbeenofficiallyredeemed),the
figurereachednearly76%ofourpurchasesduringthequarter.Wewillcontinuetotryfocusing
alargeportionoftheFundinredeemedorsoontoberedeemedsecurities,especiallyintimes
ofmarketweakness,bothtokeeptheFundsdurationshort,andalsotoensurethatadequate
poolsofneartermcashareavailabletotakeadvantageofattractivenewpurchases.

14

RiverPark Short Term High Yield Fund


&

RiverPark Strategic Income Fund


First Quarter 2015

RIVERPARKSTRATEGICINCOMEFUND
MARCH31,2015

1Q15

RiverPark
StrategicIncome
FundPerformance
RSIIX
RSIVX
1.44%
1.38%

Barclay's
Aggregate
Bond
Index1
1.61%

Morningstar
Multisector
Bond
Category2
1.43%

YTD2015

1.44%

1.38%

1.61%

1.43%

OneYear
Since
Inception*

3.00%
5.46%

2.66%
5.23%

5.72%
4.95%

2.50%
4.59%

TotalReturnspresentedforperiodslessthan1yeararecumulative,returnsforperiodsoneyear
*andgreaterareannualized.InceptionDate:September30,2013
The performance quoted herein represents past performance. Past performance does not
guaranteefutureresults.Theinvestmentreturnandprincipalvalueofaninvestmentwillfluctuate
sothataninvestor'sshares,whenredeemed,maybeworthmoreorlessthantheiroriginalcost,
andcurrentperformancemaybehigherorlowerthantheperformance.
As of the most recent prospectus, dated 1/28/2015, gross expense ratio was 0.91%. Gross
ExpenseRatiodoesnotreflecttheabilityoftheadvisertorecoveralloraportionofpriorwaivers,
whichwouldresultinhigherexpensesfortheinvestor.Thisoptionisavailablecontractuallyto
theadvisoruntilJanuary31,2016.Pleasereferencetheprospectusforadditionalinformation.
1
TheBarclaysU.S.AggregateBondIndexisabroadbasedunmanagedindexofinvestmentgrade,
U.S. dollardenominated, fixedrate taxable bond market, including Treasuries, government
relatedandcorporatesecurities,MBS(agencyfixedrateandhybridARMpassthroughs),ABS,and
CMBS.
2
Source:MorningstarPrincipia.TheMorningstarMultisectorBondCategoryisusedforfundsthat
seek income by diversifying their assets among several fixedincome sectors, usually U.S.
governmentobligations,foreignbonds,andhighyielddomesticdebtsecurities.
15

Category
RiverParkShortTermHighYieldOverlap
Buy&HoldMoneyGood
PriorityBased(AbovetheFray)
OffTheBeatenPath
InterestRateResets
Other(ABS,Distressed)
InvestedPortfolio
Cash
TotalPortfolio

Weight
33.1%
35.8%
10.4%
6.3%
2.8%
7.6%
96.0%
4.0%

YTW
4.6%
7.5%
9.8%
8.8%
3.9%
6.9%
6.7%

YTW
Duration
0.57
3.73
2.77
3.78
0.18
3.17
2.39

100.0%

6.4%

2.29

YTM
5.7%
7.6%
10.0%
9.0%
8.5%
7.4%
7.3%

YTM
Duration
1.48
4.20
3.27
3.92
3.11
3.63
3.07

7.0%

2.94

Thefivelargestpositionstotaled13.9%oftheFund.
HC2HoldingsInc.
HuntCosInc.
InforUSInc.
KCGHoldingsInc.
LansingTradeGroup

3.1%
3.0%
2.7%
2.6%
2.5%
13.9%

For the quarter, the five best performing positions outperformed the five worst performing
positions (inclusive of interest) on a net basis by 25 basis points. The five best and worst
performingpositionsforthequarterwereasfollows:
PositiveContribution0.81%
SouthernStatesCoopInc.
LansingTradeGroup
MarsicoHoldingsLLC
HC2HoldingsInc.
ConsolidatedTomokaLandCo.

NegativeContribution(0.56%)
GoodmanNetworksInc.
VertellusSpecialties
USShaleSolutionsInc.
VersoPaperHoldingLLC
HamptonRubberCompany

16

In1Q15,SouthernStatesCoopandMarsicobothrecoveredfromtechnicalsellingpressure.As
discussed earlier in the letter, ConsolidatedTomoka Land Co issued paper that we found
attractive.Thebondsmovedupafterissuance.LansingTradeGroupadvancedastheyreported
abetterthanexpectedfourthquarter.PriceappreciationinHC2Holdingsreflectedenthusiasm
forandbetterunderstandingofrecentacquisitions.
GoodmanNetworkssufferedastheirlargestclient,AT&T,announcedasignificantdeclineintheir
capexbudget.Vertellusbondsmovedlowerastheyreportedworsethanexpectedearnings.US
Shaleisaserviceprovidertotheoilandgasmarketandwerealizedthelossasweexitedthe
position.ConcernarosethatpartofHamptonRubberCompanysdistributionbusinessmaysee
greaterthanexpectedweaknessfromservicingtheenergysector,includingrefinersandmid
streamsegments.Thelosswasrealizedaswechosetoswapoutofthe2ndlienpaperintothe1st
liendebt,allowingus,ultimately,torecapturethedeclineinmarketprice.Versodeclinedon
concernsregardingthelikelihoodofachievingmuchneededsynergiesprojectedtobederived
fromitsrecentmergerwithNewPage.

YTW
EffectiveMaturity
YTM
StatedMaturity
SEC30DayYield
1.

RiverPark
Strategic
IncomeFund
(RSIIX,RSIVX)1
6.39%
1/24/2018
7.01%
4/07/2019
6.95%

Barclays
U.S.Aggregate
BondIndex*

MarkitiBoxx
USDLiquid
HighYieldIndex*

1.53%
6/19/2022
1.53%
7/11/2022
1.87%

5.56%
11/23/2019
5.99%
08/23/2021
5.24%

NumbersrepresentaweightedaverageforRSIIXandRSIVX

Thismaterialmustbeprecededoraccompaniedbyacurrentprospectus.Investorsshouldreaditcarefullybefore
investing.
*TheseindexcharacteristicsarecalculatedbyBloombergProfessionalAnalyticsandarebasedontheiSharesETFs
whicharepassiveETFscomprisedoftheunderlyingsecuritiesoftheseindices.

RiverPark Strategic Income has a much higher YieldtoWorst and YieldtoMaturity than the
indices even though its effective maturity is much shorter. We believe the portfolio is well
positionedanddefensiverelativetotheindices.

17

This material must be preceded or accompanied by a current prospectus. Investors should


read it carefully before investing.
Mutualfundinvestinginvolvesriskincludingpossiblelossofprincipal.Inadditiontothenormal
risksassociatedwithinvesting,internationalinvestmentsmayinvolveriskofcapitallossfrom
unfavorablefluctuationincurrencyvalues,fromdifferencesingenerallyacceptedaccounting
principlesorfromsocial,economicorpoliticalinstabilityinothernations.Bondsandbondfunds
aresubjecttointerestrateriskandwilldeclineinvalueasinterestratesrise.Highyieldbonds
andnoninvestmentgradesecuritiesinvolvegreaterrisksofdefaultordowngradeandaremore
volatilethaninvestmentgradesecurities,duetothespeculativenatureoftheirinvestments.
TheRiverParkStrategicIncomeFundmayinvestinsecuritiesofcompaniesthatareexperiencing
significantfinancialorbusinessdifficulties,includingcompaniesinvolvedinbankruptcyorother
reorganizationandliquidationproceedings.Althoughsuchinvestmentsmayresultinsignificant
returnstotheFund,theyinvolveasubstantialdegreeofrisk.Therecanbenoassurancethatthe
Fundwillachieveitsstatedobjectives.
TheRiverParkStrategicIncomeFundandRiverParkShortTermHighYieldFundaredistributed
bySEIInvestmentsDistributionCo.,OneFreedomValleyDrive,Oaks,PA19456whichisnot
affiliatedwithRiverParkAdvisors,LLC,CohanzickManagement,LLC,ortheiraffiliates.

18