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EXHIBIT 99.1
[LETTERHEAD OF KENMAR]
Dear Clients and Friends:
We are pleased to inform you of some important performance-driven changes to the
trader portfolio of Kenmar Performance Partners (KPP), which were effective
October 1, 2000. We are excited about these changes and wanted to implement them
quickly, given recent trends in the investment environment. As we write this
letter, equity returns are less robust, reflecting investors' expectations for a
slowdown in the U.S. economy and lower corporate profits. Market forces are
shifting in favor of alternative investments such as KPP that can offer the
potential of performance non-correlated to that of equities. For your benefit,
we provide the following highlights of the portfolio changes to KPP; trader
descriptions are attached.
Probably the most significant change, in terms of allocated assets, is the
elimination of three traders from the portfolio: Dennis Trading Group, Hirst
Investment Management and Computerized Trading Corporation.
With the exit of these traders from the KPP portfolio, we have added three new
ones to the mix (IXORCAP, Clarke Capital Management and Winton Capital
Management), decreased the allocation to one of the existing traders (Crabel
Capital Management) and incorporated an overlay strategy (Stonebrook's
Volatility Hedge Program or VHP) designed to improve risk-adjusted return of the
portfolio's trend followers.
As restructured, KPP is now a more broadly diversified portfolio both in terms
of markets traded and strategy employed. Crabel and IXORCAP focus exclusively on
short-term price movements. At the other end of the time spectrum, Clarke and
Winton look for intermediate and long-term price trends. The VHP overlay
operates as a hedge against trend-following positions which may be at high risk
for a trend reversal.
We believe these changes offer the opportunity for superior risk-adjusted
returns. We thank you for your loyalty during what has been a disappointing
performance stretch.
Sincerely,
/s/ Esther E. Goodman
Esther Eckerling Goodman
Chief Operating Officer and Senior Executive Vice President
Kenmar Advisory Corp.,
General Partner of Kenmar Performance Partners, L.P.
