A Simplified Approach to Stable & Consistent Income.
Third Lake Partners Alternative Yield Strategy Fund ("PAYS" or the "Fund") opens the door to an opportunity to achieve an enhanced fixed-income-like yield while actively managing underlying equity risk.1
$117M
Cumulative coupon
income
$2.2B+
Traded over the last
five years
98.9%
Of targeted coupons
collected
0
Principal barriers
breached
Built on more than $2.2 billion of notional traded over more than five years, PAYS provides access to a diversified portfolio of custom-negotiated equity-linked yield notes managed within a single registered fund. The strategy seeks to generate consistent income while utilizing contingent downside barriers designed to help mitigate market declines.
Equities are expensive and when valuations are high, yield becomes the primary return driver.
The S&P 500 is currently trading at a forward price-to-earnings ratio of 20x. In environments like this, yield drives outperformance. Historically, this heightened valuation level has led to 10-year annualized returns between 3% and 6%. Asymmetric, defined-downside income solutions can offer a more balanced return.
Diversified access. Enhanced liquidity.
The Fund is able to diversify across major global equity indices and source pricing through competitive auctions, reducing the fee burden typical of brokerage-based structured notes and providing enhanced liquidity.
25% quarterly liquidity.
Distributions are made quarterly from a cash flow stream designed to be continuous and repeatable.
Downside-risk mitigation embedded in each position and across the portfolio; exposure to major global equity indices, not single names; issuer risk diversified across investment-grade global banks.
Laddered, systematic investment with an active overlay to monitor risk, rebalance exposures, and optimize new issuance.
Across indices, initial strike levels, issuers, maturities, and risk mitigation (e.g., barrier) levels; no reliance on any single market, issuer, or payoff path.2
Linked to highly liquid public markets, with clear reporting and continuous monitoring of risk, income, and exposures.
A lead PM with 20+ years of structured derivatives experience, longstanding issuer relationships, and direct competitive-auction purchases that remove brokerage fees and improve pricing & execution.
Each note is a senior unsecured debt obligation of an investment grade issuer whose payout is tied to the performance of broad equity market indices, not a single stock.
The Fund can receive a coupon payment every ~3 trading days.3
A systematic, laddered approach
Laddered exposure to ~24–30 callable yield-enhancement notes promote continuous income generation and diversified call-observation periods.
During falling markets, the Fund can invest in new notes with coupons set at higher levels, improving recovery potential.
Strategically diversified across index baskets, tenors, risk mitigation (e.g., barrier) levels, issuer credits, and initial strikes.2
Facilitates the ability for investors to strategically transact directly with more than 20 issuers, not brokers.
Strategy Volatility Monitoring
Structured Note Issuer Credit Monitoring
Security Greeks Sensitivity Analysis
Index Basket Volatility And Correlation Analysis
Broad issuer and index diversificatioN.2
Enhanced yield. Shorter duration.1
For those seeking enhanced yield and shorter maturities versus the traditional income options.
Duration: ~6.7-month average life.5
Includes corporate bonds, treasury notes, commercial paper and money market investments
Senior to equity in the case of insolvency, and sometimes collateral-backed to improve recovery
Return typically comes from yield, which is a function of default risk, maturity and prevailing market interest rates
Low-risk, low-return potential
Potentially enhanced yield than other debt securities with similar maturities1
Risk mitigation that may keep principal and yield intact through moderate market declines and volatility
Opportunity to achieve above-market yields in an environment where equity is priced at historically high levels
Moderate-risk, moderate-return potential
Includes single equities, stocks, equity mutual funds and ETFs, options and ownership stakes in private companies
Typically, no protection on downside and higher volatility for liquid assets than fixed income
Return can include a dividend or fixed-income component, but largely is driven by price appreciation
Higher-risk, higher return potential
The Fund has a 5-year track record implementing a strategy that is designed to be adaptive and perform well through different economic and market environments.
PAYS Historical Performance
0
(0%)
Principal Barriers Breached
535
(98.9%)
Coupon Payments Collected
6
(1.1%)
Coupon Payments MisseD6
0
(0%)
Principal Barriers
Breached
529
(98.9%)
Coupon Payments
Collected
6
(1.1%)
Coupon Payments
MisseD2
As of July 2026, PAYS has generated ~$117M of coupon income since inception.
Led by a portfolio manager with 20+ years of equity-derivatives and structured-notes experience, supported by Third Lake Partners' investment, trading and risk infrastructure.
Robert Forsythe
Founder & Senior Managing Partner, CPA, CGMA
Nathan Sheldon
Partner & Head of Structured Products, CFA
Case Fell
Partner & Chief Investment Officer of Asset Management Solutions, CFA, CAIA, CIPM
Joshua Apfel
Managing Director of Product & Distribution Strategy
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