COMPANY BACKGROUND
Roubaix Capital, LLC is a Registered Investment Advisor based in Denver, CO. The firm provides discretionary investment management services to privately offered limited partnerships and separate accounts. Christopher Hillary launched Roubaix's fundamental long/short equity strategy focused on small and mid cap U.S. stocks in January 2010. The firm currently has ~$170 million assets under management.

INVESTMENT PHILOSOPHY
Roubaix employs a fundamental long/short equity strategy focused on small and mid cap U.S. stocks. Structural inefficiencies in smaller stocks - greater dispersion of returns, lower sell side coverage, limited buy side crowding - enable higher alpha generation on both the long and short sides of the portfolio. Less diversified small businesses are inherently more affected by the drivers that create or destroy equity value over the investment cycle, enabling an optimal environment for long/short equity investing.

IDEA GENERATION
Roubaix believes the most important drivers of equity value over time are the strength or weakness of the business model itself, the advantages or challenges created by the company’s financial structure, and the quality of the fiduciaries involved. In particular, Roubaix seeks to be long companies that exhibit pricing power, initiate their own demand, or establish a healthy ecosystem amongst themselves, their clients and the end customer. Likewise, they seek short opportunities in those companies that face increasing pressure from new competition or secular/cyclical headwinds.

INVESTMENT PROCESS
Roubaix maintains a dynamic focus list of what they consider to be the best long and short investment stories in the marketplace in terms of the quality of the company's business model, financial structure and fiduciaries. They periodically analyze fundamental factors to determine whether each story is also a compelling investment at a particular point in time. This includes an assessment of the stock’s valuation versus history and peers, the risk/reward profile relative to internal price targets, the potential for catalysts, and investor sentiment. 

PORTFOLIO CONSTRUCTION
Roubaix typically concentrates individual stock positions in 30-50 longs and 30-50 shorts with the most attractive combination of investment story, valuation and downside risk. Roubaix likewise does not utilize ETFs or options to hedge. While the majority of Roubaix's investments encompass company-specific drivers, they also take advantage of thematic trends in the market as well as the cyclical forces that impact the outlook of particular industries. 

PORTFOLIO GUIDELINES
Target Exposure
   Long: 70-100%
   Short: 30-50%
   Gross: 100-150%
   Net: 35-55%
Target Position Concentration
   Opportunistic allocation across all 11 GICS sectors with a particular focus on 
   industries with the lowest intra-stock correlation and highest return dispersion.
   Top 10 Longs: 35-50% of gross long book
   Top 10 Shorts: 25-40% of gross short book

RISK MANAGEMENT
Roubaix requires a minimum margin of safety on all new positions of at least 20%, a hurdle which rises commensurate to the risk of each individual position based on liquidity and volatility. They generally maintain less than 50% net exposure, avoid leverage, invest across a broad set of industries, and remain disciplined with their internal price targets and stop-loss levels.