Rockhaven Capital Management, LLC 132 Rock Haven Lane Pittsburgh, PA /30/12

Transcription

1 Item 1 Cover Page Rockhaven Capital Management, LLC 132 Rock Haven Lane Pittsburgh, PA /30/12 This Brochure provides information about the qualifications and business practices of Rockhaven Capital Management, LLC. If you have any questions about the contents of this Brochure, please contact Chris Wiles at or cwiles@rockhavencapital.com. The information in this Brochure has not been approved or verified by the United States Securities and Exchange Commission or by any state securities authority. Rockhaven Capital Management, LLC is a registered investment adviser. Registration of an Investment Adviser does not imply any level of skill or training. The oral and written communications of an Adviser provide you with information about which you determine to hire or retain an Adviser. Additional information about Rockhaven Capital Management, LLC is also available on the SEC s website at i

2 Item 2 Material Changes There have been no material changes to Form ADV since our last update dated February 9, Pursuant to SEC Rules, we will ensure that you receive a summary of any materials changes to this and subsequent Brochures within 120 days of the close of our business fiscal year. We may further provide other ongoing disclosure information about material changes as necessary. We will further provide you with a new Brochure as necessary based on changes or new information, at any time, without charge. Currently, our Brochure may be requested by contacting Chris Wiles, President at or cwiles@rockhavencapital.com. Our Brochure is also available on our web site also free of charge. Additional information about Rockhaven Capital Management, LLC is also available via the SEC s web site The SEC s web site also provides information about any persons affiliated with Rockhaven Capital Management, LLC, who are registered, or are required to be registered, as investment adviser representatives of Rockhaven Capital Management, LLC. ii

3 Item 3 -Table of Contents Item 1 Cover Page...i Item 2 Material Changes...ii Item 3 - Table of Contents... iii Item 4 Advisory Business...1 Item 5 Fees and Compensation...1 Item 6 Performance- Based Fees and Side- By- Side Management...2 Item 7 Types of Clients...2 Item 8 Methods of Analysis, Investment Strategies and Risk of Loss...3 Item 9 Disciplinary Information...3 Item 10 Other Financial Industry Activities and Affiliations...4 tem 11 Code of Ethics...4 Item 12 Brokerage Practices...5 Item 13 Review of Accounts...6 Item 14 Client Referrals and Other Compensation...6 Item 15 Custody...6 Item 16 Investment Discretion...7 Item 17 Voting Client Securities...7 Item 18 Financial Information...7 Item 19 Requirements for State- Registered Advisers...8 Brochure Supplement(s) iii

4 Item 4 Advisory Business Rockhaven Capital Management, LLC ("Rockhaven" or the "Advisor") offers investment advisory and consulting services to individuals, pension and profit sharing plans, trusts, estates, charitable organizations, corporations and other business entities (each a "Client"). Rockhaven was founded November 16, The principal owner of Rockhaven is Chris Wiles, CFA. Rockhaven provides its Clients with fee- based investment management services. The Advisor provides discretionary asset management of Client portfolios, primarily based on the Advisors Global Tactical Asset Allocation methodology ("GTAA"). Each Client engagement begins with a review of the Client's investment needs and financial situation to determine whether the GTAA is appropriate to assist the Client in achieving their stated goals within their time horizon, tolerance for risk, tax situation and other relevant factors. The Advisor will generally recommend the GTAA, but may provide customized solutions, as defined in an investment policy statement. As of December 31, 2011 Rockhaven had $7,100,000 in discretionary client assets under management, they had no non- discretionary assets under management. Item 5 Fees and Compensation Pursuant to an Investment Advisory Agreement signed by each Client, the Client will pay Rockhaven a quarterly Investment Advisory Fee, payable at the end of each quarter based on the average market value of the account during the quarter. The annual Investment Advisory Fee is 1.0%. For approved 501- C3 organizations, the Advisor shall reduce its Investment Advisory Fee to 0.50% per annum. Investment Advisory fees may be reduced or waived for directors, officers, employees, family members and other related individuals of Rockhaven (collectively "Insiders") at the sole discretion of management. Investment Advisory fees, may be negotiated by Rockhaven at its sole discretion. Investment Advisory fees will generally be deducted automatically from the Client account on behalf of the Advisor, on a quarterly basis by the Custodian, as contractually agreed in the Investment Advisory Agreement. The Advisor shall send a quarterly invoice to the Custodian indicating the amount of the fees to be deducted from the Client Account. Clients will receive independent statements from the Custodian/Broker no less frequently than quarterly. In addition, the Advisor will provide the Client a written invoice itemizing the fee, including the calculation period covered by the fee, the account value and the 1

5 methodology used to calculate the fee. All fees paid to Rockhaven for Investment Advisory services are separate and distinct from the expenses charged by exchange- trade funds or mutual funds to their shareholders, which are described in each fund's prospectus. These fees will generally be used to pay management fees for the mutual funds, other fund expenses, account administration (e.g., custody, brokerage and account reporting), and a possible distribution fee. If the product sponsor also imposes sales charges, a Client may pay an initial or deferred sales or surrender charge. A Client may be able to invest in these products directly, without the services of Rockhaven. In that case, the Client would not receive the services provided by Rockhaven which are designed, among other things, to assist the Client in determining which products or services are most appropriate to each Client's financial condition and objectives. Accordingly, the Client should review both the fees charged by the product sponsor and the fees charged by Rockhaven to fully understand the total fees to be paid. Rockhaven does not provide securities custodial services and will not accept or maintain custody of a Client's funds or securities. The Client is responsible for all custodial and securities execution fees charged by the custodian and executing broker- dealer. The Investment Advisory fee is separate and distinct from the Custodian and execution fees. Clients may request to terminate their Investment Advisory agreement with Rockhaven, in whole or in part, by providing advance written notice. Clients will be responsible for all management fees pro- rated to the date of termination. The Client's Investment Advisory agreement with the Advisor is non- transferable without Client's written approval. Item 6 Performance-Based Fees and Side-By-Side Management Rockhaven does not charge any performance- based fees (fees based on a share of capital gains on or capital appreciation of the assets of a client). Item 7 Types of Clients Rockhaven Capital Management, LLC ("Rockhaven" or the "Advisor") offers investment advisory and consulting services to individuals, pension and profit sharing plans, trusts, estates, charitable organizations, corporations and other business entities (each a "Client"). The minimum account size is $100,000, which may be waived at the sole discretion of the Advisor. 2

6 Item 8 Methods of Analysis, Investment Strategies and Risk of Loss The Advisor will primarily utilize the Global Tactical Asset Allocation (GTAA) strategy to take advantage of certain short- term market inefficiencies and manage risk by allocating assets amongst numerous non- correlated markets. The Advisor utilizes a proprietary quantitative technical process to systematically allocate between markets to accomplish this strategy. The Advisor may include or overweight those markets that meet the Advisor's criteria and underweight or eliminate those from the allocation that are not meeting or expected to meet the guidelines of the Advisor's investment process. As such, the Advisor may rebalance Client accounts frequently. Investing in securities involves risk of loss that clients should be prepared to bear. To implement the strategy, the Advisor will primarily use exchange listed securities, including exchange- traded funds, closed- end mutual funds. The Advisor may also utilize or advise upon over- the- counter securities, foreign securities, corporate debt securities, commercial paper, certificates of deposit, municipal securities, mutual funds, United States government securities, and options on securities to meet Client objectives. The Advisor measures and selects exchange- trade funds and mutual funds by using various criteria, such as the tracking error to a specific market segment, expense ratio of a fund, reputation of a fund's advisor or manager, and/or historical analysis. The Advisor may recommend, on occasion, redistributing investment allocations to diversify the portfolio in an effort to reduce risk and increase performance. The Advisor may recommend specific positions to increase sector weighting and/or dividend potential. The Advisor may recommend employing cash positions as a possible hedge against market movement, which may adversely affect the portfolio. The Advisor may recommend selling positions for reasons that include, but are not limited to, harvesting capital gains or losses, business or sector risk exposure to a specific security or class of securities, overvaluation or overweighting of the position(s) in the portfolio, change in risk tolerance of Client, or any risk deemed unacceptable for the Client's risk tolerance. Item 9 Disciplinary Information Registered investment advisers are required to disclose all material facts regarding any legal or disciplinary events that would be material to your evaluation of Rockhaven or the integrity of Rockhaven s management. Rockhaven has no information applicable to this Item. 3

7 Item 10 Other Financial Industry Activities and Affiliations Rockhaven has no other financial industry activities or affiliations, and does not receive any compensation from non- clients. Item 11 Code of Ethics Rockhaven has adopted a Code of Ethics for all supervised persons of the firm describing its high standard of business conduct, and fiduciary duty to its clients. The Code of Ethics includes provisions relating to the confidentiality of client information, a prohibition on insider trading, a prohibition of rumor mongering, restrictions on the acceptance of significant gifts and the reporting of certain gifts and business entertainment items, and personal securities trading procedures, among other things. All supervised persons at Rockhaven must acknowledge the terms of the Code of Ethics annually, or as amended. Rockhaven anticipates that, in appropriate circumstances, consistent with clients investment objectives, it will cause accounts over which Rockhaven has management authority to effect, and will recommend to investment advisory clients or prospective clients, the purchase or sale of securities in which Rockhaven, its affiliates and/or clients, directly or indirectly, have a position of interest. Rockhaven s employees and persons associated with Rockhaven are required to follow Rockhaven s Code of Ethics. Subject to satisfying this policy and applicable laws, officers, directors and employees of Rockhaven and its affiliates may trade for their own accounts in securities which are recommended to and/or purchased for Rockhaven s clients. The Code of Ethics is designed to assure that the personal securities transactions, activities and interests of the employees of Rockhaven will not interfere with (i) making decisions in the best interest of advisory clients and (ii) implementing such decisions while, at the same time, allowing employees to invest for their own accounts. Under the Code certain classes of securities have been designated as exempt transactions, based upon a determination that these would materially not interfere with the best interest of Rockhaven s clients. In addition, the Code requires pre- clearance of many transactions, and restricts trading in close proximity to client trading activity. Nonetheless, because the Code of Ethics in some circumstances would permit employees to invest in the same securities as clients, there is a possibility that employees might benefit from market activity by a client in a security held by an employee. Employee trading is continually monitored under the Code of Ethics, and to reasonably prevent conflicts of interest between Rockhaven and its clients. 4

8 Certain affiliated accounts may trade in the same securities with client accounts on an aggregated basis when consistent with Rockhaven's obligation of best execution. In such circumstances, the affiliated and client accounts will share commission costs equally and receive securities at a total average price. Rockhaven will retain records of the trade order (specifying each participating account) and its allocation, which will be completed prior to the entry of the aggregated order. Completed orders will be allocated as specified in the initial trade order. Partially filled orders will be allocated on a pro rata basis. Any exceptions will be explained on the Order. Rockhaven s clients or prospective clients may request a copy of the firm's Code of Ethics by contacting Chris Wiles. It is Rockhaven s policy that the firm will not affect any principal or agency cross securities transactions for client accounts. Rockhaven will also not cross trades between client accounts. Principal transactions are generally defined as transactions where an adviser, acting as principal for its own account or the account of an affiliated broker- dealer, buys from or sells any security to any advisory client. A principal transaction may also be deemed to have occurred if a security is crossed between an affiliated hedge fund and another client account. An agency cross transaction is defined as a transaction where a person acts as an investment adviser in relation to a transaction in which the investment adviser, or any person controlled by or under common control with the investment adviser, acts as broker for both the advisory client and for another person on the other side of the transaction. Agency cross transactions may arise where an adviser is dually registered as a broker- dealer or has an affiliated broker- dealer. Item 12 Brokerage Practices Rockhaven does not have discretionary authority to select the broker or dealer for custodial and execution services. The Client will select the broker/dealer to be used and authorize Rockhaven to direct trades to the broker/dealer that is identified in the Investment Advisory Agreement. While Rockhaven does not exercise discretion over the selection of the broker/dealer, it may recommend brokers to Clients for execution and/or custodial services where requested by the Client. Clients are not obligated to use the recommended broker and will not incur any extra fee or cost associated with using a broker not recommended by Rockhaven. Rockhaven may recommend brokers based on criteria such as, but not limited to, reasonableness of commissions charged to the Client, services made available to the 5

9 Client, and location of broker offices. Rockhaven does not receive research services, other products, soft dollar benefits, or compensation as a result of recommending a particular broker that may result in the Client paying higher commissions than those obtainable through other brokers. Item 13 Review of Accounts Accounts are monitored on an ongoing basis by Mr. Wiles. The Client will receive written statements no less than quarterly from the Trustee or Custodian. In addition, the Client will receive other supporting reports from the Custodian and others who are involved with Client accounts. The Client is encouraged to notify the Advisor and Investment Advisor Representative if changes occur in his/her personal financial situation that might adversely affect his/her investment plan. Accounts are re- balanced and re- optimized when deemed necessary by the Advisor. Re- balancing is accomplished by reallocating assets to current asset targets and re- optimizing involves setting new target asset category percentages. Item 14 Client Referrals and Other Compensation Other than the investment advisory fee referenced in Item 5, Rockhaven does not receive any other forms of compensation such as commissions on transactions, or compensation from investment product providers or financial institutions. Rockhaven does not compensate any individuals for client referrals. Item 15 Custody Rockhaven does not provide securities custodial services and will not accept or maintain custody of a Client's funds or securities. Clients should receive at least quarterly statements from the broker dealer, bank or other qualified custodian that holds and maintains client s investment assets. Rockhaven urges you to carefully review such statements and compare such official custodial records to the account statements that we may provide to you. Our statements may vary from custodial 6

10 statements based on accounting procedures, reporting dates, or valuation methodologies of certain securities. Item 16 Investment Discretion Rockhaven generally has discretion over the selection and amount of securities to be bought or sold in Client accounts without obtaining prior consent or approval from the Client. However, these purchases or sales may be subject to specified investment objectives, guidelines, or limitations previously set forth by the Client and agreed to by Rockhaven. Discretionary authority will only be authorized upon full disclosure to the Client. The granting of such authority will be evidenced by the Client's execution of an Investment Advisory Agreement containing all applicable limitations to such authority. All discretionary trades made by Rockhaven will be in accordance with each Client's investment objectives and goals. Item 17 Voting Client Securities Rockhaven generally will not vote proxies for securities held in Client accounts. Upon request, Rockhaven may provide guidance with respect to specific proxies. The Client retains the authority and responsibility for the voting of these proxies as detailed in the Client Investment Advisory Agreement. For accounts subject to the provisions of the Employee Retirement Income Security Act of 1974 ( ERISA ), the plan fiduciary specifically keeps the authority and responsibility for the voting of any proxies for securities held in plan accounts. Also, Rockhaven cannot give any advice or take action with respect to the voting of these proxies. Item 18 Financial Information Rockhaven has no financial commitment that impairs its ability to meet contractual and fiduciary commitments to clients, and has not been the subject of any bankruptcy proceeding. 7

11 Item 19 Requirements for State-Registered Advisers Education and Business Background Christopher H. Wiles, CFA, Principal and Founder of Rockhaven Capital Management, LLC (Since 8/2009) Mr. Wiles has over 27 years of diversified experience as a Portfolio Manager and an Executive in the investment management industry. Mr. Wiles has been a Charted Financial Analyst since Mr. Wiles received his M.B.A. degree from Cleveland State University in 1984, a B.S. degree in Finance from Youngstown State University in 1982, and an Associate degree in Finance from Penn State University in Mr. Wiles lives in Mt. Lebanon, PA with his wife Debbie and two daughters. He is a member of the Board of Trustees for the Baptist Homes Society. Mr. Wiles was born in Work Experience - Managing Senior Director and Portfolio Manager at Allegiant Group (a subsidiary of National City Bank). He had direct responsibility for the management of over $2 billion in Large- cap Growth and Large- cap Core equity portfolios (5/2004-7/2009). - Senior Portfolio Manager at Strong Capital Management, responsible for the management of the Strong Large Company Growth Fund and the Strong Large Company Core Fund. Both funds were in the top 20% of their peer groups over this period (9/2002-4/2004). - Founder and Senior Portfolio Manager at Rockhaven Asset Management, responsible for all aspects of running an investment management firm as well as the management of the Rockhaven Fund, the Rockhaven Premier Dividend Fund, and the AmSouth Equity Income Fund. The Rockhaven Premier Dividend Fund was in the top 5% of its peer group in 1998, 1999, and 2000 (2/1997-9/2002). - Senior Portfolio Manager at Federated Investors, responsible for the management of the Federated Equity- Income Funds, the Federated Utility Funds, and the Federated Convertible Securities Fund. In 1996 Barron's named Wiles the best equity- income manager for the prior five years (5/1990-2/1997). -Senior Trust Investment Officer at Mellon Bank, responsible for the management of over 200 separate accounts with an emphasis on endowments and foundations ( ). -Trust Investment Officer at Mahoning National Bank, responsible for equity and fixed income analysis ( ). Mr. Wiles is not engaged in any other business activity. 8

12 Mr. Wiles and Rockhaven do not accept performance based fees. Mr. Wiles has not been involved in any of the events listed below: 1. An award or otherwise being found liable in an arbitration claim alleging damages in excess of $2,500, involving any of the following: (a) an investment or an investment-related business or activity; (b) fraud, false statement(s), or omissions; (c) theft, embezzlement, or other wrongful taking of property; (d) bribery, forgery, counterfeiting, or extortion; or (e) dishonest, unfair, or unethical practices. 2. An award or otherwise being found liable in a civil, self-regulatory organization, or administrative proceeding involving any of the following: (a) an investment or an investment-related business or activity; (b) fraud, false statement(s), or omissions; (c) theft, embezzlement, or other wrongful taking of property; (d)bribery, forgery, counterfeiting, or extortion; or (e) dishonest, unfair, or unethical practices. Mr. Wiles and Rockhaven have no relationships with issuers of securities. 9