Cincinnatus Fund¶

Last updated through CTL6 ch 38 (AUM / carried interest Jan–Apr 1985 + holdings sweep CTL1–CTL6 partial; May 20 Fed cut / F&F Katherine).

Hedge-fund partnership managed by Jonathan Kane (managing partner). Named for Lucius Quinctius Cincinnatus (Ohio/Cincinnati reference); logo described as black-and-white drawing of the Cincinnati statue (CTL6 ch 19). Distinct from Spurgeon Select Fund, Arrow Fund, and Wabash Street Fund (Jonathan may hold personal capital in Select/Millennium as well).

Legal structure and operations¶

Item	Canon detail	Source (approx.)
Domicile	Cayman Islands limited partnership; registered in Jonathan Kane’s name as managing partner	CTL6 ch 5, 11, 32
Control	Noel Spurgeon cannot remove Jonathan as managing partner; compensation flows from fund fees, not Spurgeon payroll alone	CTL6 ch 5
Prime broker	Goldman Sachs (prime broker agreement)	CTL6 ch 5
Custody / correspondent	Cayman Islands banks; relationships are fund-direct, not Spurgeon-owned	CTL6 ch 9, 11
Clermont transition	September 1, 1985 target: same fund/legal structure; Clermont Capital becomes manager address (Hancock 40th floor); phone and suite change only until full spinoff paperwork	CTL6 ch 6, 9, 32
Audit	Eight-quarter audited history prepared for Bank of New York / institutional continuity (CTL6 ch 32)	CTL6
Spurgeon AUM reporting	Through spinoff window, 100% of Cincinnatus AUM (less Helios/Clermont capitalization) remains in Spurgeon reported AUM until transfer completes	CTL6 ch 24
Compliance	Kendall Roy (Head of Compliance, Spurgeon → Clermont); Henry “Hank” Rawlins (second compliance hire, July 15 start — CTL6 ch 37)	Institutions; CTL6

Fee terms and strategy (documented)¶

Term	Detail
Management / incentive	“Two and twenty” with ~8% hurdle (long-term Dow-style hurdle) standard for institutional pitches
Pension / Hart-Lincoln	“One and ten” offered when waiving minimums for pension-style mandates brought to Spurgeon (CTL3 ch 45)
Risk posture	More conservative than Spurgeon Select — trades a portion of upside for loss protection; Jonathan cites ~20% lower expected return vs Select; trailing puts as inexpensive insurance (CTL6 ch 11)
Asset allocation	Written investment strategy / asset allocation guidelines (modified over time — e.g. Nikkei 225 overweight for 1984, higher caps on Japanese index shares and options)
Friends-and-family	Reg D allows 35 non-accredited; Spurgeon caps at 10 slots for Cincinnatus; per-client fixed overhead charged to fund; Marcia Blake redemption does not count as “losing a client” in Jonathan’s view (CTL4 ch 63). Fees and profit share half of normal client terms; no investment minimum / Qualified Investor requirement; manager may defer withdrawals to protect other clients (CTL6 ch 38)
Employee investing	Spurgeon staff may direct deposit paycheck to Cincinnatus Fund (personnel form)
Jonathan capital	Essentially all investable personal funds in Cincinnatus and/or Select; 10% of salary/bonus to main fund and 10% to Cincinnatus when analyst (CTL2 ch 46); mortgage down payment tied to fund value at Spurgeon

Assets under management (timeline)¶

Figures are in-story; many are commitments, mark-to-market, or pipeline — not a single audited NAV table in prose.

Period	AUM / capital (stated or implied)	Notes
Fund launch	Friends-and-family pool; Jeri Lundgren irrevocable trust committed (segregated from unrestricted Cincinnatus capital)	CTL2 ch 27–32
Early 1983	Fund profit ~$400k in a strong period; Spurgeon firm ~$80M context	CTL3 ch 12
Feb 1983	Spurgeon moves $5M cash from Select → Cincinnatus + $50k bonus to Jonathan	CTL3 ch 14
May–Jul 1983	Hart-Lincoln close ~$5.5M; Overland Park police/fire pension ~$18M + benevolence ~$3M (~$21M mandate)	CTL3 ch 51, 66; Institutions
Mid–late 1983	~$11M+ path in Institutions rollup; Jonathan needs ~10× for independent firm dream	CTL4 ch 4
Oct 1983	~$100M AUM cited with trusts incoming	CTL4 ch 16
Dec 1983	~$110M AUM; Brandon Littleton trust ~$9M added; ~39.2% calendar return on “day-one” dollars (adjusted lower after mid-year inflows)	CTL4 ch 25
1984	~$100M+ sustained; ~10% of AUM Noel Spurgeon personal; Chris Roth Kenosha trusts; Hart-Lincoln ~$40M investor commit; Continental Illinois short ~$6.5M net profit	CTL4 ch 28, 54, 64
1984–85	Boys’ club $75k; Jack Clinton deputy era ~$60M inflow cited; Costas / Trevor / Dustin / Archie / Rick invest	CTL5 ch 22, 41
Late 1984	~$335M Cincinnatus before full Arrow client transfers; +$60M from one Arrow block → ~$335M path; additional Arrow investors could bring ~$500M (CTL5 ch 39); pitch cited ~$335M managed (CTL5 ch 52)	CTL5 ch 39, 52
Jan 31, 1985	$467,000,000 AUM (mark-to-market snapshot)	Includes capital formerly in Arrow Fund now managed in Cincinnatus; excludes Sierra Nevada Re corporate mandate (~$100M including YTD gains — pulled Feb 1985, CTL6 ch 12–14). Month +11%; beating S&P/Dow by ~50% (CTL6 ch 12)
Feb 7, 1985	~$450M AUM after Sierra Nevada Re exit; unions / Kenosha retained	CTL6 ch 14–15
Apr 1985	Fund +21.31% YTD (league table); Select +20.95%	CTL6 ch 36
May 1985	Fund ~+20% YTD vs market ~+6% (alternate in-story check-in); S&L short book driver	CTL6 ch 26
Clermont raise	~$450M commitments for spinoff planning; ~$500M AUM language post-split; ~$435M cited on roadshow (CTL6 ch 30); ~$1B projection “unwieldy”	CTL6 ch 5, 14, 16, 22–23, 30
Operating capital (Clermont)	$6,000,000 firm capitalization from Jonathan (carried interest / personal funds)	CTL6 ch 5, 14, 16

Carried interest (Jonathan Kane, Cincinnatus)¶

Unrealized 20% of fund gains above hurdle, held in the partnership until realized (CTL4 prospectus / tax treatment). Figures below are Jonathan’s carried interest in Cincinnatus, not total fund incentive fees.

Date	Balance / action	Notes	Source
Dec 31, 1984	~$12,000,000 accrued	Year-end mark before 1985 withdrawals	CTL6 ch 5, 14–15
Feb 1985	$1,400,000 withdrawn	Fund Helios Analytics + capital gains taxes on realization	CTL6 ch 14
Mar 1985	$6,000,000 withdrawn	Capitalize Clermont Capital (firm buildout / partnership buy-in pool)	CTL6 ch 14 (pledge), ch 16 ($6M firm capitalization)
After withdrawals	~$5,000,000 remaining (order of magnitude)	“Just over half” of Dec 31 balance used for Helios, Clermont, and tax provision	CTL6 ch 30
Residual	Retained in fund for tax treatment; backs mortgages / collateral elsewhere in series	—	CTL4 ch 8, 31; CTL6 ch 5

Investors, clients, and mandates¶

Institutional / fiduciary¶

Client / channel	Role	Status in canon
Overland Park, KS — police/fire pension	Large mandate ~$18M	Won Jul 13, 1983
Overland Park benevolence fund	~$3M	Same presentation
Hart-Lincoln (Thomas Hart, Nelson Boyd)	~$5.5M close; later ~$40M anonymous clients; pension fund pitch	CTL3–4
Brandon Littleton (trustee)	~$9M trust assets	CTL4 ch 25
Chris Roth	Kenosha trusts onboard	CTL4 ch 25
Brandon Littleton / Hart referrals	Word-of-mouth to other unions	CTL4 ch 12
Pension funds (Wisconsin unions, etc.)	Pipeline from Overland Park returns	CTL4 ch 12
Sierra Nevada Re (Lyle Danforth)	Corporate mandate exited (Treasuries in-kind to client custodian — CTL6 ch 15); Lyle personal retained and outperforming. Corporate capital: Lyle open to return after Clermont is established and stable — not before Sept 1985, likely 1986 if at all (CTL6 ch 38). Noel pitched SNR 1/10 with private-terms throwaway (ch 38 — agreement violation)	CTL5–6; CTL6 ch 38
Katherine Hamburg (Miller)	Friends-and-family application; ~$12k saved; half fees; forms to follow	CTL6 ch 38
John Cerone	Clients request redemption from Cincinnatus	CTL6 ch 23
Bank of New York (Andrea Schumann)	Institutional continuity / FX & VC fee discounts	CTL6 ch 32
Dallas / LA roadshow (1985)	Clark Becket commits; Harrington, Westergard expected; Hollywood capital secured; law-firm partners	CTL6 ch 10–12
Gus Schumann	Personal money in	CTL5 ch 41
Noel Spurgeon	~10% of fund AUM (personal)	CTL4 ch 28

Friends, family, trusts, and employees¶

Party	Notes
Jeri Lundgren trust	Segregated; stricter asset rules; lower return than unrestricted fund; ~5% of AUM at one comparison
Violet Clemons	Early friends-and-family investor; later Spurgeon employee → slot accounting changes
Marcia Blake	Redeems (Apr 30 valuation); frees friends-and-family slot
Boys’ investment club	$75k transfer; needs extra slot or $150k aggregate
Debbie Vaughn	Friends-and-family rules discussed (CTL6 ch 9)
Katherine Hamburg	F&F account pending (~$12k); half fees (CTL6 ch 38)
Gary, Nelson, Pete, Karl (Jeri circle)	Cincinnatus interim statements
Spurgeon licensed staff	May allocate to Cincinnatus via payroll
Jonathan Kane	Largest economic interest; REIT plan to capitalize rental flats via selling shares to Cincinnatus

Fund	Relationship to Cincinnatus
Arrow Fund	~$450M Noel-registered; Jonathan Head of Research role (CTL5) — not Cincinnatus
Amaterasu (VC) / Takarabune (FX)	Planned new Clermont funds; capitalization from Cincinnatus “twenty” / fee stream
Spurgeon Millennium Fund	Jonathan puts close friends here instead of small FX accounts
Spurgeon Select	Noel’s main fund; $5M cash moved to Cincinnatus once

Trades, positions, and market themes¶

Listed when chapter text ties them explicitly to Cincinnatus Fund (or Jonathan’s fund orders). FX Desk trades at Spurgeon may parallel analysis but are not always fund positions.

Theme / instrument	Direction / purpose	Outcome or size (if stated)
Bolivar (FX)	Short futures + call insurance	Research-driven (CTL3 open)
Zaïre	Devaluation play	Desk ~$50M; fund share ~$200–350k (CTL4 ch 10)
AUD	Sell / FX book	~$2.5M gain on AUD trades (CTL4 ch 25)
Gold / silver	Plays + Dec gold puts (sometimes uncovered in risk system)	Portfolio risk flags (CTL4 ch 35)
Philippine peso	Puts (Aquino assassination)	CTL4 ch 7
Nikkei 225	Index options then index fund shares; overweight Japan	Bought ~¥7291 area; later ¥9484 close (CTL4 ch 25); sell Nikkei / double JPY (CTL6 ch 36)
U.S. Treasuries	Ladder for liquidity, pension payouts, hurdle beating	Sierra Nevada exit: in-kind Treasury transfer to client custodian (CTL6 ch 15)
Continental Illinois	Short distressed bank	Cover ~9⅞; ~$6.5M net profit (CTL4 ch 64)
Pharmaceutical basket	Basket only; no single experimental drug bet	CTL4 ch 21
S&L / regional banks	Shorts (Maryland Old Court, Ohio list, Home State) → closed after May 20, 1985 Fed 50 bp cut; easy money taken; no further short effort vs clued-in market	CTL6 — Jack; fund ~+20% YTD helped by shorts; ch 38 full cover
Downey / US Bancorp	Remaining banking-sector longs after short book exit; triple-basis price alerts — close if breached; stay out of rest of sector until mess clears	CTL6 ch 38
JPY	Forward + married puts; fund double JPY; close Nikkei	CTL6 ch 36
TWA	Calls (Icahn LBO thesis)	CTL6 ch 35
Protective puts	All positions (Noel war worst case)	CTL6 ch 5
Sandoz GmbH	No trade — compliance caution on MNPI	CTL4 ch 21
S&P index fund	T. Rowe Price — referenced for retail/trust style allocation	CTL4 ch 25 (trust education)
Yūsuke / rental REIT	Plan: REIT owns two- and four-flats; Cincinnatus buys REIT shares	CTL3 ch 66

Long-term equity accumulations¶

Jonathan routes essentially all investable capital through Cincinnatus (plus required Spurgeon Select holdings — CTL4 ch 17, ch 18). Pre-fund personal positions (e.g. CTL1–CTL2) were folded into the partnership when it launched (CTL2 ch 32). Many names below are buy-and-hold or scheduled monthly adds, distinct from tactical FX, index, and short book entries in the table above.

Sleeve rules (canon): Core long-term names grouped with Motorola, Apple, General Foods, and Procter & Gamble — each capped at no more than ~5% of portfolio so multi-year payoffs do not drag reported annual returns (CTL4 ch 17). From 1985, Joel Steinem runs uncovered monthly accumulation on a subset, staggered on the mainframe to avoid program-trade visibility (CTL5 ch 16).

Issuer	Strategy / status (through CTL6 ch 36)	Notable size or trades	Source
3COM	IPO participation; hold through lock-up	5,000 shares full IPO allocation; 90-day lock-up with small penalty if sold early	CTL4 ch 43, 49
Apple Computer	Long-term accumulate; hold through Fed-tightening cycles	Additional shares uncovered (Dec 1983); retained when cyclical tech sold	CTL2 ch 25; CTL3 ch 4; CTL4 ch 23, 43; CTL5 ch 15–16
Best Buy	IPO + ongoing accumulate	IPO request 10,000 shares via Goldman (Wil Waterston); filled 10,000 @ 9¼; Jack plans 2,000 shares/month toward ≥50,000, trailing stop discipline	CTL6 ch 5, 32
Disney	Long-term accumulate	Held for growth (CTL2); continuing accumulate with Hasbro, Apple, Wal-Mart	CTL2 ch 25; CTL5 ch 15–16
Federal Express	Long-term (small position)	Small holding vs Chrysler; volatile ~$5–$9 range; long-term prospects cited — carried from pre-fund portfolio into fund	CTL2 ch 7
General Foods	Long-term sleeve → closed	Joins long-term sleeve (CTL4 ch 17); 100,000 shares @ ≤45; monthly accumulate through CTL5 ch 16; closed with Bethlehem Steel and Teledyne at ~15% overall (circa Jan 1985)	CTL4 ch 17, 23, 39; CTL5 ch 1, 16
Hasbro	Long-term accumulate	Initial fund buy with Wal-Mart (Tony recs); ongoing accumulate	CTL3 ch 4, 15; CTL5 ch 15–16
Home Depot	Long-term	Thesis from hardware/lumberyard experience (CTL1); doubled fund holdings on weakness after two prior 2-for-1 splits	CTL1 ch 58; CTL4 ch 55
Motorola	Long-term accumulate	DynaTAC thesis; new position joins Apple, GF, P&G in capped sleeve; monthly accumulate with Hasbro, Disney, Apple, Wal-Mart, GF	CTL4 ch 17; CTL5 ch 16
Oshkosh	Planned (no fill in narrative through CTL6 ch 36)	Jack flags military/firetruck IPO ~$9–$10, Q3 timing; Jonathan asks ~10,000-share-scale allocation similar to Best Buy	CTL6 ch 5
Procter & Gamble	Long-term (capped sleeve)	Consumer staple in long-term group with Apple, GF, Motorola (≤5% each)	CTL1 ch 55; CTL4 ch 17
Wal-Mart	Long-term accumulate; Sam Walton exit trigger	Fund purchase (CTL3 ch 4); additional shares after International Rectifier exit; hold while Walton in charge	CTL3 ch 4, 15, 54; CTL5 ch 15–16

Medium-term equity holdings (1985)¶

1985 bull-market sleeve: Names Jonathan pre-positions for rate cuts and a Dow/S&P breakout (CTL5 ch 15–16), distinct from the multi-year long-term list. Execution is mostly Cincinnatus Fund orders via Joel Steinem / Jack; hedging uses married puts (Jan 1986) on the core eight and call options on names already accumulated.

Breakout accumulate (target 50,000 shares each): Hormel Foods, McDonald's, US Bancorp, Graco, Gap, Lowe's, Amgen, United Health — 1,000 shares at a time at market over ~90 days (from CTL5 ch 16); Jan 1986 married puts on each; fund as source (trim Nikkei / Treasuries if cash tight, respecting Treasury floor). Noel briefing: slow accumulate from July 1 (CTL5 ch 15). Analyst notes on these plus Mesa Petroleum, Comdisco, Cray Research from July (CTL5 ch 15). McDonald's accumulation continues through San Ysidro shooting — Jonathan expects any hit to be short-lived (CTL5 ch 23).

Quiet block accumulate (Jack, naked long, ≥100,000 each by year-end 1984): Downey Savings & Loan Association, Comdisco, Tonka, Texas International (with Financial Corp. of Santa Barbara, Continental Information Services, Computer Sciences Corporation in the same instruction — CTL5 ch 48). Off-exchange / Joel large blocks OK; cash constrained vs other programs.

Cray Research: 100,000 shares at market (Dec 1984), July 1986 married puts; research note earlier in year (CTL5 ch 70). 10,000 OTM December calls above resistance (CTL6 ch 1).

Issuer	Role in 1985 book	Size / mechanics (if stated)	Source
Amgen	Breakout accumulate + optionality	Toward 50,000 shares (Steinem program); 1,000 ATM October calls (May 1985)	CTL5 ch 15–16; CTL6 ch 36
Comdisco	Quiet accumulate + optionality	≥100,000 shares (Jack, EOY 1984 target); 1,000 ATM October calls	CTL5 ch 15, 48; CTL6 ch 36
Cray Research	Medium-term equity + calls	100,000 shares + puts; 10,000 OTM Dec calls	CTL5 ch 15, 70; CTL6 ch 1
Downey Savings & Loan Assn	“Gold-plated” thrift vs S&L shorts	≥100,000 accumulate; 10,000 OTM Dec calls; hold through crisis — +10,000 if >5% dip (May 6); stops / 200% gain rule vs greed	CTL5 ch 48; CTL6 ch 1, 14, 22, 24, 36
Gap	Breakout accumulate (1985 program)	Toward 50,000 + puts; The Gap also early fund buy (CTL3 ch 4); calls Dec / Oct	CTL3 ch 4; CTL5 ch 16; CTL6 ch 1, 36
Graco	Breakout accumulate	Toward 50,000 + Jan 1986 married puts	CTL5 ch 15–16
Hormel Foods	Breakout accumulate	Toward 50,000 + puts	CTL5 ch 15–16
Lowe's	Breakout accumulate + calls	Toward 50,000 + puts; 1,000 ATM October calls	CTL5 ch 15–16; CTL6 ch 36
McDonald's	Breakout accumulate	Toward 50,000 + puts	CTL5 ch 15–16, 23
Texas International	Quiet accumulate + calls	≥100,000 shares; 10,000 OTM Dec calls; 1,000 ATM October calls	CTL5 ch 48; CTL6 ch 1, 36
Tonka	Quiet accumulate + calls	≥100,000 shares; 10,000 OTM Dec calls; 1,000 ATM October calls	CTL5 ch 48; CTL6 ch 1, 36
Triangle Industries	Medium-term (accumulated pre-1985)	Jonathan cites prior accumulation; 10,000 OTM December calls above resistance (no separate share count on-page)	CTL6 ch 1
United Health	Breakout accumulate + calls	Toward 50,000 + puts; 1,000 ATM October calls	CTL5 ch 15–16; CTL6 ch 36
US Bancorp	Breakout accumulate + “gold-plated” bank	Toward 50,000 + puts; hold with Downey through S&L turmoil; +10,000 each if >5% dip	CTL5 ch 16; CTL6 ch 14, 22, 24, 36

Options overlay (fund): Jan 2, 1985 — 10,000 OTM December calls each on Gap, Texas International, Downey, Triangle, Tonka, Cray (Compliance heads-up — CTL6 ch 1). May 6, 1985 — 1,000 ATM October calls each on Tonka, Texas International, Gap, Comdisco, Amgen, United Health, Lowe's; other accumulations continue (CTL6 ch 36).

Reporting and governance¶

Quarterly report to investors; income statement published January 15 for fee/true-up (CTL4 ch 36).
Kendall Roy / Compliance sign-off on grey trades; Jonathan calls Compliance before unusual options list (CTL6 ch 1).
SEC examination interest: Cincinnatus Fund questions telegraph full audit (CTL4 ch 20); Eric Thiele 1982 trades (Jonathan not licensed then).
Client Services / Legal onboarding ~ten business days for new trust mandates (CTL4 ch 25).

Chronology anchor¶

Date	Event
~Jan 1983	Fund active; Bolivar/Nikkei-era positioning begins
Jul 13, 1983	Overland Park mandates won; engagement/proposal same day
Late 1983	$100M+ AUM; 39%+ return year cited
1984	Head of Research + fund growth; Continental win; Sofía born; Series 30
Jan–May 1985	Noel conflict; Helios / Clermont spinoff; S&L shorts; client retention roadshow
Sept 1, 1985 (target)	Clermont Capital operational home for fund management