About Clear Waters Capital

ClearWaters Capital is a quiet investment partnership guided by clarity, self-discipline, and simple ideas.

We implement fundamental investment principles, leveraged by in-house developed analysis tools. Our approach is patient, concentrated capital — like water.

Investment Policy Statement (IPS)

1. Executive Summary

Clear Waters Capital is a long-term, value-driven limited partnership (LP) fund with $10 million in committed capital. The fund targets superior risk-adjusted returns through a concentrated portfolio of public equities, following the philosophies of Charlie Munger and Warren Buffett.

2. Investment Objectives and Philosophy

  • Primary Objective: Long-term capital appreciation
  • Target Return: 15% annualized
  • Benchmark: Compare with both S&P 500 and MSCI Global Index
  • Time Horizon: 10+ years
  • Volatility Tolerance: High
  • Moral Mandate: Invest in companies aligned with long-term customer/investor value (Tech, EV, Consumer, Telecom)

3. Investment Constraints

  • No liquidity needs for the first 10 years
  • Tax-agnostic
  • No regulatory constraints beyond LP structure
  • Public equities only, no leverage
  • No FX hedging — assumes long-term USD/CNY/HKD stability

4. Strategic Asset Allocation

100% public equities. Portfolio of 8–10 positions, initially equal-weighted. No cap on position size; winners are allowed to grow.

5. Security Selection Criteria

  • Bottom-up, fundamental value analysis
  • Valuation via DCF, SOTP, or manager discretion
  • Focus on U.S., China, and Hong Kong equities
  • Manager shares intrinsic vs. market value with LPs

6. Rebalancing and Monitoring

  • Review semiannually
  • Cyclical rebalancing based on valuation/geopolitical shifts
  • Dynamic U.S./China weighting

7. Risk Management

  • Margin of safety focus
  • No leverage or derivatives
  • No defined drawdown constraints

8. Performance & Compensation

  • Benchmarked against S&P and MSCI Global
  • Quarterly reporting includes intrinsic value updates
  • Fee: 4% hurdle + 25% performance fee on excess

9. Governance

  • Fiduciary duty to LPs
  • Semiannual disclosure of positions and rationale

Prepared for: Clear Waters Capital LP
Prepared by: Portfolio Management Team
Effective Date: 2025-07-31