EX-99.1 WHITEPAPER
How an AI-native
hedge fund works
ABSTRACT
Exhibit 99 is a hedge fund run by 1,204 research agents. They read every public filing, argue each idea for and against, test it against past markets and trade it inside hard limits that only people can change. This paper sets out why we built the fund this way, how it works day to day, and what keeps it safe.
1 Thesis
Every era of quant investing has given machines a bigger job. In the 1980s they read prices. In the 2010s they read alternative data, while people still wrote the strategies.
Language models change the job again. They can read a 10-K the way an analyst does, and agents can run the whole research loop: propose an idea, write the test, judge the result. The fund becomes the swarm.
FIGURE 1 The fund as a swarm of agents around one engine
2 The engine
Every trading day runs the same loop, finished before the market opens. Agents read everything filed overnight. One side argues to buy, the other to sell, and weak ideas drop out. What survives is tested against calm and rough markets. Only then does the fund trade.
Each position keeps the sentence that started it, the argument that won, the case against and the condition that would close it. Investors can read all of it in the portal.
STEP
Read every filing from overnight
Argue for and against each idea
Test what survives
Trade inside the limits
3 Strategy research
Agents keep proposing new ways to spot mispriced companies. Each one has to pass testing before any money goes in, and most do not. Of the 31 proposed so far, 6 trade with real money.
Strategies are switched off as soon as they stop working. Guidance tone, which read how upbeat a company sounded about the year ahead, was retired in August 2026 once others had copied it.
FIGURE 2 Risk-factor drift: a new warning in an annual report, read against its rivals
4 Risk and limits
Four hard limits sit outside the software. The agents work inside them every day and cannot change them. Only the risk committee can, and it reviews them once a month.
LIMIT
Loss floor: the fund cuts risk automatically from its high
Any one company (any one idea: 0.5%)
Any one industry, either way
Share of a stock’s daily trading
FIGURE 3 The loss floor at -8%
5 Governance
Any partner can stop all trading from one screen, at any time, without asking the agents.
Every change to a limit or a model is written down, and any decision can be replayed later. The risk committee’s monthly review is summarised in the quarterly letter to investors.
6 Terms
The first $50M of commitments get the lowest fees the fund will ever charge. After that, two standard classes. The minimum commitment is $1M.
CLASS
Founders: first $50M only, quarterly liquidity
Class A: standard terms, quarterly liquidity
Class B: lower fees, one-year lock
Management fee / performance fee. A summary, not an offer. The full terms are in the offering memorandum.
Questions about this paper go to ir@exhibit99.fund