GENERAL INFORMATION
Acruence Capital, LLC (“Acruence Capital”, the “Firm”, “Us”, “Our”, or “We”) is registered with the
Securities and Exchange Commission (“SEC”) as a Registered Investment Adviser (“RIA”) with our principal
place of business located in Dallas, Texas. The Firm was organized as a Delaware limited liability company
on November 28, 2018. The owner and managing member of the Firm is Robert E. Emrich III. Please see
Form ADV Part 2B Supplement for additional information about Mr. Emrich.
DIRECT ADVISORY SERVICES
We provide investment advisory services in the following ways:
1) Sub-Advisory Services
We provide sub-advisory investment management services by developing and monitoring risk-
based investment models (the "Acruence Models"). We provide the Acruence Models to various
third-party investment advisors (“RIA Clients”) to utilize in the management of the respective RIA
Client’s underlying retail client portfolios.
The primary investment objective of the Acruence Models is to achieve high relative risk-adjusted
returns while attempting to limit volatility and downside risk through non-correlated portfolio
construction and strong risk management. The Firm crafts investment strategies in a variety of
areas, including but not limited to:
• long and short positions in various indices and exchange-traded funds (“ETFs”) designed to
mirror the performance of a well-diversified portfolio in a variety of assets;
• options and futures strategies designed to generate income, maximize returns and limit
risk, including long volatility exposure using options, futures and ETFs;
• hiring and consulting other investment managers to further diversify portfolios; and
• utilizing data science and machine learning to maximize return and reduce volatility.
These strategies require skill to analyze, manage, trade, and source.
We also provide sub-advisory investment management services to RIA Clients in the management
of the RIA Client’s underlying retail client portfolios on a discretionary basis. We conduct research,
assess prevailing economic and market conditions, weigh the RIA Client’s underlying retail clients’
objectives, and then make investment decisions as to securities to be bought and sold, as well as the
timing of such purchases and sales, within the underlying retail client’s portfolio of holdings. We do
not maintain a direct relationship with any of the RIA Clients’ underlying retail clients.
2) Outsourced Chief Investment Officer (“Outsourced CIO”) Services
We serve as an Outsourced CIO to RIA Clients. This service is a blend of developing and monitoring
the Acruence Models for an RIA Client and providing investment management services to portfolios
of the respective RIA Client on a discretionary basis.
3) Acruence Active Hedge U.S. Equity ETF (“XVOL”)
XVOL represents a combination of our sub-advisory services and Outsourced CIO services.
XVOL is an ETF that was created by Acruence Capital expressly for the purpose of allowing
Acruence Capital to provide U.S. investors with an ETF that implements the hedging strategy for
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which XVOL was designed (seeking capital appreciation with reduced volatility [as compared to the
S&P 500 Index]). Acruence Capital serves as sub-adviser to the primary investment adviser of
XVOL, Toroso Investments, LLC (“Toroso”).
XVOL shares are broadly offered. As part of our sub-advisory services, we may recommend shares
of XVOL to RIA Clients for which Acruence Capital provides sub-advisory and Outsourced CIO
services. Offering XVOL shares to RIA Clients allows the respective RIA Clients to purchase, or
recommend purchases of, XVOL shares for the respective RIA Client’s underlying retail client
accounts.
4) Advisor Directed Managed Accounts
We provide investment advisory services to manage the investment portfolios of high-net-worth
individuals (each a “Managed Account Client”). Our investment advisory services are tailored to
the individual needs of Managed Account Clients and are based on the Managed Account Client’s
goals, investment objectives, time horizon, and risk tolerance. In this capacity, we and our
Investment Advisor Representatives (each an “IAR” and collectively “IARs”), act as fiduciaries to
our Managed Account Clients, always acting in the best interest of our Managed Account Clients.
An
Advisor Directed Managed Account is one in which the account and the selected investments are
managed by the IAR. The IAR and the Managed Account Client discuss the Managed Account Client’s
particular financial circumstances and establish goals, investment objectives, time horizons, and
risk tolerance. The IAR reviews and discusses the Managed Account Client’s prior investment
experience, in an effort to properly complete the Risk Tolerance Questionnaire and develop a
personalized Investment Policy Statement, both of which are utilized to manage the Managed
Account Client’s portfolio.
The IAR conducts research, assesses prevailing economic and market conditions, weighs the
Managed Account Client’s objectives, and then makes investment decisions as to securities to be
bought and sold, as well as the timing of such purchases and sales, within the Managed Account
Client portfolio of holdings, on a discretionary basis.
Our IARs utilize a strategy of long and short positions in various indices and ETFs designed to
mirror the performance of a well-diversified portfolio in a variety of assets.
Because each type of investment holding or security involves a varying degree of risk, a particular
security, and the associated weighting to that security, is only selected when it is determined to be
consistent with, and fit into, the overall strategy for achieving the Managed Account Client’s stated
goals, investment objectives, risk tolerance, time horizon, and liquidity needs.
Our Managed Account Clients may impose reasonable restrictions on investing in certain securities,
types of securities, companies, and/or industry sectors. However, Acruence Capital will refuse to
accept or to continue management of the account or program, if we determine that such restrictions
imposed by the Managed Account Client cannot be honored. If the Managed Account Client refuses
to modify or withdraw such restrictions after we have notified the Managed Account Client that the
restrictions cannot be honored and given the Managed Account Client an opportunity to withdraw
or modify the restrictions, then an account will not be opened or, in the case of an existing account,
the account will be closed. We will no longer be responsible for providing investment advice and
implementing investment decisions to manage the account and the Investment Advisory Fee will
cease. At that time, the account will become a non-discretionary, commission-based retail
brokerage account, with each transaction being charged a commission and each transaction being
initiated by the Managed Account Client.
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CUSTODIAN; BROKER/DEALERS
Sub-Advisory Services
When Acruence Capital is engaged to provide sub-advisory services, the Firm may: 1) directly affect
investment transactions through the respective RIA Client’s existing custodian; or 2) indirectly affect
investment transactions by providing transaction recommendations to the RIA Client for the RIA Client to
choose whether to affect the recommended transactions through the respective RIA Client’s existing
custodian.
Outsourced Chief Investment Officer Services
When Acruence Capital is engaged to provide Outsourced CIO services, the Firm provides discretionary
investment advisory services, permitting the RIA Client to direct brokerage. We do not affect transactions
for the RIA Client’s underlying clients. The Firm provides investment transaction recommendations to the
RIA Client for the RIA Client to choose whether to affect the recommended transactions through the
respective RIA Client’s existing custodian.
XVOL
For Acruence Capital’s services to XVOL, the Firm does not affect transactions directly and therefore does
not use a custodian. Rather, the Firm provides investment transaction recommendations to the primary
investment adviser, Toroso.
Advisor Directed Managed Accounts
The Firm uses Interactive Brokers LLC (“Managed Account Custodian”) as custodian and tax reporter for
Managed Account Clients. There is no relationship between the Firm and the Managed Account Custodian,
other than a contractual relationship for the Managed Account Custodian's services. The Firm will use one
or more broker/dealers including, but not limited to, the Managed Account Custodian to route and execute
trades of securities.
CLIENT ASSETS UNDER MANAGEMENT
As of December 31, 2023, we had approximately $150,970,068.00 of Client assets under management
(“AUM”).