Keystone Asset Management LLC

Keystone Asset Management LLC manages private investment funds offered to sophisticated investors and provides advisory services to separately managed accounts on a discretionary or non‑discretionary basis. Investors in the Funds are generally required to be accredited investors and qualified purchasers, with the brochure noting a typical minimum initial investment of $1,000,000 (subject to waiver).

The firm employs multi‑strategy, proprietary approaches that combine fundamental research, quantitative analysis, relative value, directional, macro and energy strategies and may use a wide range of instruments, including swaps, options, futures, credit derivatives, distressed and high‑yield securities and convertible instruments. Positions may be leveraged and the Funds frequently invest substantially in sub‑funds managed by the adviser; valuation and risk management are performed in‑house and the brochure describes model and valuation risks as potential sources of loss.

What is notable relative to many peers is the firm’s extensive use of affiliated broker‑dealers and related persons for trade execution, clearing and FCM services, and the fact that certain Funds invest substantially in affiliated broker‑dealers that engage in options and equities market‑making; the brochure also discloses that Funds bear brokerage commissions and may participate in soft‑dollar arrangements, which can create potential conflicts of interest. The brochure further highlights the potential for layered fees and leverage when Funds invest in underlying sub‑funds the adviser manages, and that portions of management fees are used to develop KAM’s intellectual property, with the Funds retaining no ownership interest in that IP.