To clients, industry colleagues, and friends:
It is with a heavy heart that to inform you that we made a decision to close Cervino Capital Management LLC in light of certain events.
Over the past seven years we have strived to make risk management a priority, with the belief that by managing risk, profits will follow provided there is a robust strategy.
We are proud to have remained true to such discipline during “arguably the greatest crisis in the history of finance capitalism,” as described by the Turner Review (2009). Unfortunately, while we were prepared to continue “managing a mountain of risk,” as a CTA we were not structured to handle systemic risk of the kind underlying the MF Global and PFG Best calamities.
We are deeply saddened at the financial pain our clients have endured due to the MF Global and PFG Best bankruptcies. Regarding MF Global, we worked closely with the Commodities Customer Coalition to advocate on behalf of customers. In regards to PFG Best, we stand by to help impacted clients with completing the claims form.
With respect to the future of the futures industry, no doubt the industry is undergoing a paradigm shift. In spite of this, the need for transparent price discovery and hedging of risk will continue. Accordingly, Davide and I maintain a long-term positive outlook.
In closing, to our industry colleagues and friends in the managed futures industry, we would like to stay in contact and hope to work with you again sometime in the future.
Very truly yours,
Michael “Mack” Frankfurter, Managing Director
Davide Accomazzo, Managing Director
