Chesapeake Capital: Platform Profile

Overview

Chesapeake Capital Corporation is a systematic trend-following manager founded by Jerry Parker.

Current regulatory identity:

• Legal manager: Chesapeake Capital Corporation
• CTA: Yes
• CPO: Yes
• SEC registered investment adviser: Yes

Current site programs include:

• Diversified;
• Multi-Asset Trend;
• Pure Trend;
• Trend Following Fixed Income.

May fit better for

• sophisticated trend-following investors;
• QEP/qualified-client investors;
• institutions and family offices;
• investors comfortable with long/short derivatives;
• allocators seeking broad global trend exposure;
• clients able to understand notional funding and incentive fees.

May fit less well for

• investors below the applicable preferred minimums;
• investors who cannot satisfy the current website's eligibility framing;
• clients who want no leverage;
• investors who want fixed low fees with no performance component;
• users who assume a trend strategy protects capital in every crisis;
• investors who do not understand notional-equity fee mechanics.

Current program lineup is broader than one Diversified strategy

Current site:

• Diversified:
• Markets: 100+ global futures markets
• Multi Asset Trend:
• Instruments: up to 500
• Major asset classes: Yes
• Equity allocation: 50%
• Pure Trend:
• Systematic: Yes
• Long short: Yes
• Cash collateral model: U.S. government securities model
• Trend Following Fixed Income:
• Fixed income only focus: Yes

Current disclosure-document preferred minimums differ

Current public CTA disclosure:

• Diversified preferred minimum: $5,000,000
• Multi Asset Trend preferred minimum: $10,000,000
• Pure Trend preferred minimum: $10,000,000

The disclosure uses preferred-minimum language.

Website eligibility is restricted

Current disclosure page says site information is intended exclusively for persons/entities that are:

• QEP: Yes
• Qualified client: Yes

The current CTA disclosure uses a 1% management fee reference

Current disclosure document:

• Management fee: 1.00%
• Management fee base: Net Account Value

Net Account Value can include notional equity.

That matters.

Notional funding can raise the effective fee on cash funded

Illustrative example from current disclosure mechanics:

• Net Account Value: $10M
• Actual funds: $5M
• Management fee on NAV: 1%
• Management fee dollars: $100K
• Effective management fee on actual funds: 2%

At 25% funding:

• Effective management fee on actual funds: approximately 4%

This is not a separate fee.

It is the mathematical result of applying the NAV fee to a partially funded account.

The current incentive fee is 10% of New Trading Profits

Current disclosure:

• Incentive fee: 10%
• Incentive fee frequency: quarterly
• High water mark: Yes
• Interest income excluded: Yes

Past incentive fees are not refunded because of later losses.

Program expenses can sit outside CTA fees

Potential separate expenses can include:

• FCM commissions;
• exchange fees;
• NFA fees;
• financing or cash-management expenses;
• underlying fund/vehicle expenses;
• transaction costs.

Accounts are opened at an FCM selected by the client

Current disclosure:

• Customer opens futures account at registered FCM: Yes
• Client selects FCM: Yes

Chesapeake receives trading authority under the managed-account arrangement.

Systematic does not mean no human governance

Current disclosure states Chesapeake's programs are proprietary/systematic but Chesapeake retains the right to:

• revise strategies;
• conduct research;
• change methods;
• choose not to follow specific system indications under certain circumstances.

Pure Trend launched recently relative to the firm's history

Current disclosure states Pure Trend began being offered to clients in May 2024.

Trend following uses a broad opportunity set

Current Chesapeake site describes exposure across:

• equities;
• fixed income;
• commodities;
• currencies;
• cryptocurrencies;
• futures;
• forwards;
• other instruments.

Program-specific instruments differ.

Assessment

Chesapeake has cleaner current disclosure than many CTA firms, but its fees still require careful math.

The headline:

1% management + 10% incentive

is incomplete without noting:

• the management fee is based on Net Account Value;
• notional funding can make 1% of NAV equal a much higher percentage of actual cash funded;
• incentive fees use a high-water-mark/New Trading Profits framework;
• program preferred minimums differ;
• QEP and qualified-client restrictions apply to the current site;
• FCM/trading costs can be separate.