Harvest Opportunity Partners II, L.P is a long-short equity hedge fund focused on the financial services sector. The fund is managed with low portfolio level risk so that the primary sources of returns are from specific stock selection. The stock selection process is based on exploiting market inefficiency by identifying securities that are temporarily mispriced by the market, typically with an expectation of re-pricing within 6-12 months. Market inefficiencies are exploited by finding proprietary information through a deep network of industry relationships, proprietary analysis and an understanding of how macro risks (interest rate risk, credit risk, liquidity risk and political/regulatory risk) disproportionately affect specific companies within the various financial services sectors. We do not employ pair trades in our investment strategy. We are generally trying to generate alpha in each long and each short position. We do however sometimes hedge a specific risk encompassed in a long or a short by identifying a security that will be disproportionately affected by the realization of a specific risk to an investment thesis. These hedge positions do not necessarily have to be financial services companies. The risks we are sometimes compelled to hedge are generally macro factors we believe could overwhelm our investment thesis on a specific stock. Not coincidentally, these risks are similar to market forces we study to find investment ideas; interest rates, the economy, liquidity and political/regulatory changes.