Big River Report
BIG RIVER CAPITAL MANAGEMENT

Phone: 601.259.3731

Email: wtr3@bigriverfunds.com


INVESTMENT ADVISOR BROCHURE

Big River Capital Management, LLC

2470 Sand Ridge Drive, Jackson, MS 39211

Brochure issue date: January 1, 2017

This brochure provides information about the qualifications and business practices of Big River Capital Management, LLC. If you have any questions about the contents of this brochure, please contact us at (601)259-3731 or email us at address wtr3@bigriverfunds.com. The information in this brochure has not been approved or verified by the State of Mississippi Securities Division, the United States Securities and Exchange Commission or by any other state securities authority. Additional information about Big River Capital Management, LLC is available on the IARD website. You can search the site for registered investment advisors by an identifying number known as a CRD number. The CRD number for Big River Capital Management, LLC is 175134. Please recognize that anywhere you see Big River Capital Management, LLC. identified as a “registered investment advisor” or “registered”, that registration in this context does not imply a certain level of skill or training. 

Material Changes: This updated brochure contains material changes to the underlying investment strategies and investment format.



TABLE OF CONTENTS

Advisory Business ……………………………………………………………………………………………………………………1 

Fees and Compensation ..........................................................................................................................2

Disputes ...................................................................................................................................................3

Performance-Based Fees ………………………………………………………………………………………………………….4

Types of Clients .......................................................................................................................................5

Methods of Analysis, Investment Strategies and Risk of Loss ……………………………………………….........6

Disciplinary Information ………………………………………………………………………………………………………….7 

Other Financial Industry Activities and Affiliations……………………………………….…………………………....8 

Code of Ethics, participation or Interest in Client Transactions and Personal Trading …………............9 

Brokerage Practices …………………………………………………………………………………………………………………10 

Review of Accounts ………………………………………………………………………………………………………………....11

Client Referrals and Other Compensation ………………………………………………………………………………....12

Custody ....................................................................................................................................................13 

Investment Discretion .............................................................................................................................14

Voting Client Securities ……………………………………………………………………………………………………………15

Financial Information ……………………………………………………………………………………………………………..16

Educational Background and Business Experience …………………………………………………………………....17

Client Privacy Policy ………………………………………………………………………………………………………………..18



Advisory Business

Big River Capital Management, LLC (herein BRCM) was formed as a Mississippi Limited Liability Company in June in 2008. The owner of Big River Capital Management, LLC. is William Thomas Robertson, III (Bill Robertson). Big River Capital Management, LLC does not have a parent company or any subsidiaries. The principal place of business is located at 2470 Sand Ridge Drive Jackson, MS 39211. The purpose of the business is to manage accounts consisting of securities for clients who are typically affluent individuals, investment advisors, institutions, hedge funds or funds of hedge funds (fund-of-funds). 

BRCM analyzes, constructs, and manages investment portfolio with a goal of capital appreciation. BRCM offers two strategies through a managed account format. 

Big River Long Only Equity (BRLO)

Big River Long Short Equity (BRLS)

The goal of both strategies is to outperform the benchmark S&P 500 over rolling five year periods. BRCM gives no assurance that the goal will be achieved.

BRLO’s objectives are to buy and hold securities for long periods of time in order to achieve tax efficient capital appreciation. BRLO will at times pro-actively engage with management teams at the companies where we have made investments.

BRLS’s stated objectives are to "keep up" with the S&P 500 during bull markets and "lose less" than the S&P 500 during bear markets. 

Big River Capital Management, LLC is a money manager and not a financial planner. BRCM does not provide tax or legal advice and encourages Prospective Clients to seek the advice of accountants and attorneys regarding their investments. 

BRCM may utilize an array of investment vehicles including, but not limited to: equity securities, debt securities, exchange-traded funds, and United States government securities. BRCM employs a variety of security analysis methods including fundamental and technical analysis. We also consult a wide range of information to analyze and execute investment strategies, such as: financial newspapers and magazines, third-party research materials, internet searches, annual reports, prospectuses, regulatory filings and press releases. 

There currently is no minimum or maximum account size. 

BRCM manages client assets on a discretionary basis. As of March 31, 2017, BRCM managed approximately $3,000,000.00 in assets on a discretionary basis. 

BRCM may participate in the wrap fee programs. 


Fees and Compensation 

BRLO charges a flat 1.5% management fee paid quarterly in arrears.

BRLS charges a flat 1.5% management fee paid quarterly in arrears.

The Client authorizes BRCM to bill the custodian the fees described above and the client authorizes, or will authorize the custodian to pay BRCM directly. The client agrees that the custodian will send, at least quarterly, a statement indicating all amounts disbursed from the Client’s account, including the amount of fees paid directly to BRCM. 

BRCM will provide clients with a separate quarterly fee invoice with account balance.

Any objections to the amounts deducted may be made to wtr3@bigriverfunds.com within 14 days of the date the statement was sent via email. 

Some custodians of broker/dealers for the accounts of clients of BRCM may charge maintenance or transaction fees that are separate from the advisory fees charged by BRCM for its advisory services. The custodian of the client’s account may provide confirmations with each transaction and statements either monthly or quarterly. Any brokerage commissions, margin interest payments, transfer fees, transaction fees, redemption fees, wiring fees, etc. charged against an account are separate from the BRCM management fees, and will be deducted from the account by the custodian. 


Disputes

If a dispute arises out of this Agreement and cannot be settled through direct negotiation between BRCM and the Client, it may then be resolved by entering into a voluntary Mediation, and if the Mediation is unsuccessful, then, to the existent not inconsistent with applicable law, by voluntary Arbitration via the American Arbitration Association. Mediation shall end as soon as (i) the dispute is resolved (ii) the mediator informs the parties that Mediation is unlikely to be successful, or (iii) any party elects, after three days of good faith mediation effort, to end the Mediation. An agreement to arbitrate does not apply to future disputes arising under certain federal or state securities laws. Each party shall be responsible for the cost of its own legal representation at any Mediation or Arbitration proceeding. A Mediation or Arbitration hearing site will not be chosen if traveling to that site would cause undue hardship or expense to the Client or the Advisor. Nothing contained in this Agreement shall constitute a waiver of any rights the Client may have under Federal and State securities laws.    


Types of Clients

Clients invested in BRLO are affluent individuals or institutions. Clients invested in BRLO do not anticipate needing the funds invested in BRLO for at least five years.

Clients invested in BRLS must be accredited investors having a net worth of at least $1,500,000.00. Clients may be high net worth individuals or institutions. 

The strategies deployed at Big River are considered higher risk than investing in a market index.


Methods of Analysis, Investment Strategies and Risk of Loss  

The investment strategy for BRLO is value, plus growth utilizing long term buy and hold with shareholder activism when action is required in order to protect or enhance our investment. BRLO aims for capital appreciation and tax efficiency.

The investment strategy of BRLS is actively managed long and short security positions. The process utilizes Bill Robertson's more than twenty years of investment experience to determine the value of the underlying security. If he views the security as undervalued with a good probability of increasing in value the client's account may purchase the security. Conversely, if he determines that a security is overvalued with a good probability of decreasing in value the client's account may short the security. BRLS is not designed to be tax efficient.

There are certain risks which when making this investment the Client accepts, and it is hereby noted that the investment techniques utilized at BRCM are not permitted by law when investing in a traditional mutual fund. These include, but in no way are limited to the following: short selling, leverage, concentration, market capitalization size and active portfolio turnover.


Investment Risks

Market Risk: The price of a security may abruptly drop in reaction to world events and changes in business conditions or the perception of a change in business conditions. This type of risk is caused by external factors independent of a security’s particular underlying circumstances. For example, political, economic and social conditions may trigger market events. 

Inflation Risk: When any type of inflation is present, a dollar today will not buy as much as a dollar next year, because purchasing power is eroding at the rate of inflation. 

Currency Risk: Companies typically have substantial foreign investments which are subject to fluctuations in the value of the dollar against the currency of the investment’s originating country causing exchange rate risk. 

Reinvestment Risk: This is the risk that future proceeds from investments may have to be reinvested at a potentially lower rates of return.

Business Risk: These risks are associated with a particular industry or a particular company within an industry. For example, oil drilling companies and electric utility companies are both considered energy companies but these two types of companies have different business risks. An oil driller depends on finding oil and the recovering it, a lengthy process, before they can generate a profit. In terms of general risk, excluding the risks associated with technological innovation or change, oil companies typically carry a higher risk of loss than an electric utility company, where prices are regulated and the company generates its income from customers who historically buy electricity in both strong and weak economies. 

Liquidity Risk: Liquidity is the ability to readily convert an investment into cash. Generally, assets are more liquid if there are many active participants accessing a standardized product. For example, Treasury Bills are highly liquid, while real estate properties are not. BRCM may invest in illiquid securities on behalf of BRLS and BRLO.

Financial Risk: Excessive borrowing to finance business operations increases the risk of loss, because the company must meet the terms of its obligations in good times and bad. During periods of financial stress, the inability to meet loan obligations may result in bankruptcy and/or a declining market value. 

Short Selling Risk: Securities sold short have unlimited risk in that there is no limit to how high a security can trade.

Leverage: When BRCM sells a security short the proceeds are typically used to finance a long position. BRCM also utilizes margin debt to enhance returns. Both of these techniques are considered to leverage the portfolio thereby increasing the risk of loss.

Futures: BRLS may utilize equity index and other futures contracts for hedging and speculation. Futures are derivative securities where the value is derived from an underlying asset. Futures are highly leveraged trading vehicles and the use of futures can lead to permanent losses. Futures are considered to be extremely high risk market contracts and the use of futures under any circumstances can be deemed speculative.

Concentration Risk: Portfolios with fewer positions and less diversification are inherently more risky than broadly diversified portfolios. An unexpected problem which results in losses for a particular security will have a larger impact on a concentrated portfolio.

Market Capitalization Risk: Companies with market capitalizations which are considered to be small are generally more risky than larger companies, because small companies are generally more growth oriented and in such capacity are taking on more risks. Also, smaller capitalized companies may have more difficulty finding operating capital during recessions. The securities for smaller capitalized companies have prices that are more volatile and trading volumes which are less liquid. The mark-to-market losses during periods of financial distress are typically more exacerbated than for larger capitalized companies.  

Active Portfolio Turnover Risk: There are higher trading other costs and potentially negative tax consequences associated with active portfolio turnover. 

Account Variance: While BRCM seeks to trade every account the same, in practice, due to the active nature of the strategy, positions vary slightly in the Client accounts. Therefore, the performance reported in the primary tracking account will be different from the performance in the Client's account. The difference could be positive or negative relative to the tracking account and the difference between the Client's account performance and the tracking accounts performance could be material. BRCM bears not duty to match Client account performance to the tracking account.


Operational Risk

BRCM is operated as a solo practice. If Bill Robertson were injured, ill or deceased, your investments would potentially become exposed to greater risk of loss for an indefinite period of time.


Disciplinary Information 

There are no legal or disciplinary actions or outstanding judgments against Big River Capital Management, LLC or William Thomas Robertson, III. He is registered as an investment advisor representative of BRCM. 


Other Financial Industry Activities and Affiliations

Neither BRCM nor Bill Robertson are registered or do they have an application pending as a futures commission merchant, a commodity pool operator, or a commodity-trading advisor. 

Neither BRCM nor Bill Robertson have any material relationships or arrangement with any related person listed below:  A mutual fund, closed-end investment company, unit investment trust; ï Futures commission merchant, commodity pool operator, or commodity trading advisor; ï Accountant or accounting firm; ï Lawyer or law firm; ï Insurance company or agency


Code of Ethics, participation or Interest in Client Transactions and Personal Trading 

BRCM has a duty to exercise its authority and responsibility for the benefit of its Clients, to place the interest of its Clients first, and to disclose outside interests that conflict with the interests of its Clients. BRCM and it's owner(s) may maintain its own accounts and may buy and sell securities for its own account. Due to the differing investment objectives, the actions taken with respect to a client and to BRCM own accounts will differ from the actions taken with respect to the client's account. 

Bill Robertson has other businesses and real properties which require time away from the management of the Client's investments and the Client is hereby being made aware of this inherent conflict of interest. 


Brokerage Practices BRCM has selected Interactive Brokers (IB) as the Clients Broker-Dealer according to the best possible execution and clearance services and commission rates. IB will execute security transactions in such a manner that the Client’s total cost or proceeds in each transaction is the most favorable, under the circumstances, in implementing our overall investment responsibilities to all Clients. BRCM may choose to use another Broker at any time. BRCM will make each of the following disclosures that may apply: 1. Disparity in commission charges 2. Any conflicts of interest arising from brokerage firm referrals. 3. Any soft dollar arrangements with a Broker. BRCM may select or recommend broker dealers for client transactions based in part on the research or other services made available by those broker dealers. 

BRCM is permitted to have soft dollar arrangements with a Broker, but BRCM presently does not have any soft dollar relationships with any broker dealers, vendors of research information, or vendors of equipment or other services. 


Review of Accounts

Capital additions will be immediately invested in an effort to achieve conformity with the other BRCM managed accounts. However, actual results will differ materially between the separate accounts because no two accounts are exactly alike. Each Client is provided with an electronic monthly statement directly from IB, which lists all securities in their account, along with the costs and market value. Each Client is provided a quarterly performance report from Interactive Brokers and a fee invoice from BRCM. Capital gain and loss schedules and income summaries on a 1099 are also provided by IB on an annual basis. Additionally, the custodian may issue periodic statements and reports directly to the Client. 


Client Referrals and Other Compensation 

BRCM may offer remuneration to individuals or organizations that make referrals of potential clients under the following circumstances: BRCM has a written agreement with the person making the referral; A separate written disclosure document is furnished to the referral Client disclosing the relationship between the person making the referral and BRCM, the terms of the compensation arrangement between the person making the referral and BRCM are disclosed to the Client. 


Custody 

Each Client appoints, or will appoint, a separate qualified custodian (Interactive Brokers, the qualified custodian) to take possession of the cash, securities and other assets in the client’s account. As a result, BRCM will have no access to the assets in the account and will not be responsible for any acts or omissions of the qualified custodian. The custodian sends to the client, at least quarterly, a statement indicating all amounts disbursed from the account (including the amount of any fees paid to BRCM pursuant to the Client’s authorization), all transactions occurring in the account during the period covered by the statement, and a summary of the account positions and portfolio value at the end of the period. The custodian will be directed to send copies of the account statements to BRCM along with an indication that the statements have been sent to the client. 


Investment Discretion

By signing the Client Agreement, the client grants BRCM the authority to invest/reinvest the assets under BRCM’s management on the client’s behalf without prior consultation from the Client (discretionary basis). BRCM will invest in the investment types listed in this brochure which include, but are not limited to: cash, cash equivalents, U.S. Government securities, equities, notes, bonds and ETF’s and may sell short any of the above. The Client also authorizes BRCM to take any other necessary action in connection with the opening and maintenance of the Client’s account as well as for the completion and payment of transactions for the account. The Client agrees to promptly inform BRCM if he or she is no longer suitable for this investment, for example, a Client invested in BRLS net worth falls below $1,500,000 or any other adverse action or liability arises which renders this investment unsuitable for the Client. 


Voting Client Securities 

BRCM has no duty to vote client shares. 


Financial Information 

No disclosure of BRCM's financial information (balance sheet) is required, because BRCM does not have direct custody of the Client's funds and does not require prepayment of potential fees. Neither BRCM nor Bill Robertson, have been the subject of a bankruptcy petition at any time during the past Supplemental Information about BRCM's personnel may be found on the IARD website at Finra.org. 


Educational Background and Business Experience

William Thomas Robertson, III (Bill Robertson) is the founder of Big River Capital Management, LLC. He also invests in hedge funds via Big River Risk Managers Fund, LP, a fund of hedge funds launched January 1, 2008 and he invests in real-estate via Big River Real-Estate Partners Fund, LP which was launched June 1, 2009, neither entities have or have ever had outside clients. Prior to launching the Big River Funds, in 2001 Bill founded Robertson Financial Services LLC, a hedge fund consulting and marketing business. During the first five years in operation, Robertson Financial raised nearly $200 million of assets allocated to hedge funds. Bill was registered with the Financial Industry Regulatory Authority (FINRA) and held his Series 7, Series 24, Series 27, Series 65 and Series 66 licenses. Bill is currently registered as a Series 65 investment advisor representative at Big River Capital Management, LLC. He has been active in the real-estate business since 1999 through Robertson Development of MS, LLC and its predecessor Robertson Securities and Property Trading, LLC. He purchased, leased and sold an office building in Ridgeland, MS; developed, operated and sold a retail center in Gulfport, MS; and he owns additional real-estate holdings, none of which have or have ever had outside clients. While attending Mississippi State University, he was inducted into Phi Eta Sigma honor society, received the Bing Scholarship and was presented with a Certificate of Award for academic achievement from Sigma Alpha Epsilon. Bill graduated from MSU in 1995 with a Bachelor of Business Administration. Following his undergraduate degree, he became an exchange member at the Chicago Board of Trade and completed his Masters of Business Administration at DePaul University in 1998. Bill grew up in Indianola, MS where his family has been engaged in farming for over 100 years and banking over 50 years. Bill has been a resident of the Jackson, MS metro area since 1998. He is a licensed pilot, an Eagle Scout, a member of the Rotary Club of Jackson and Christ United Methodist Church.


Client Privacy Policy

According to the Financial Services Modernization Act of 1999, each financial institution with which you have a relationship must notify you on an annual basis of their policies regarding the privacy of your personal information. This document serves as your notification from Big River Capital Management, LLC.

Confidentiality of the information that you provide to BRCM is of utmost importance. The only information that we collect is the executed Client Agreement and the Client Suitability Form. Any additional information you provide BRCM in order to insure that we maintain complete and accurate records for reporting your investment information to you will be kept confidential. BRCM does not gather any other personal information about you and does not disclose any information about you, except as permitted or required by law. We maintain procedural safeguards in order to protect the information that is provided by you to us. If you have additional questions at any time, we invite you to contact our office.