Iron Rules — Fund A's five constitutional provisions
The five non-negotiable risk and structural rules that govern Fund A — leverage ceiling, reserve floor, concentration cap, permanent HWM, GP co-invest.
TL;DR: Fund A's five Iron Rules are non-negotiable. They are the discipline that makes the DNSA-Engine signals (which are explicitly non-proprietary) into a defensible system: edge is execution, not signals.
Status as of 2026-07-27: public framework description. The 2026-07-15 pre-launch amendment replaced the former 15% name cap. The 2026-07-27 decision changed covered-call timing. Reserve recovery under stress remains unresolved. Fund A is pre-launch; this is not offering material.
Relations
- DRIP-ON — premium reinvestment discipline.
- DNSA Engine — non-proprietary signals.
- T-Bill Float Engine — reserve concept.
- Aloha Flywheel — compounding thesis.
- Five Iron Rules + Five Filters — One-Pager — historical May visual.
- Iron Rules — Five Pillars — amended inline diagram.
- Iron Rules + DRIP-ON — Reference Math — illustrative reference math.
The five rules
1. 1.50× leverage ceiling
Total leverage (cash-margin + options notional + repo) never exceeds 1.50× of NAV. Bright-line. No exceptions for "obvious" trades.
2. 22% T-Bill reserve objective
The proposed rule targets at least 22% of NAV in T-Bills for yield, put collateral, and a safety buffer. Deep-cycle simulations show that assignments can draw the sleeve below the floor for much longer than the proposed 90-day cure. The GP and counsel have not resolved the corrective mechanism; this page does not claim the floor is maintained through stress.
3. FCF/NI-proportional weighting
The former 15% single-name cap was repealed pre-launch on 2026-07-15. The adopted method weights names by projected seven-year absolute free cash flow, or net income for financial businesses and declared exceptions. Name weights are uncapped; factor exposure remains monitored, with a binding factor cap undecided.
4. Permanent High-Water Mark
Incentive allocation only against the all-time-high NAV per LP. No reset on calendar boundaries, no reset on capital additions, no annual reset.
5. 5% GP co-invest, first-in / last-out
GP commits at minimum 5% of fund assets, subscribed first and redeemed last. GP commits first and redeems last if the fund unwinds.
Amendment record: The 2026-07-15 founder decision replaced former Rule 3 before launch. The 2026-07-27 founder decision directs covered calls in every market regime, with sustained weekly RSI above 69 affecting coverage rather than the decision to sell. These are design decisions, not evidence of live trading. Simulations exposed an unresolved gap in restoring the 22% reserve floor within the proposed 90-day cure window.
Why these five and not seven
The temptation in fund design is to add rules until every LP objection is pre-answered. The discipline of exactly five is itself part of the brand: the rules a partner can recite from memory are the rules that actually get enforced. Seven rules become a checklist. Five become a constitution.
How the Iron Rules interact with DNSA signals
The DNSA Engine signals — RSI, VIX, put/call ratios, credit spreads, IV rank, Bollinger position — are non-proprietary discipline tools, not sophisticated indicators. The intended edge is disciplined execution under the stated guardrails. Signals do not change the leverage ceiling, the sizing method, or the reserve objective. Simulations have exposed a reserve-recovery gap; this framework is not proven in stress markets.
What violates the Iron Rules
- A trade that would push leverage above 1.50× — refused, even if it locks in a 30% expected gain.
- Sizing a name without declaring the projected FCF or NI basis — outside the amended Rule 3 method.
- Treating the 22% reserve objective as guaranteed through a deep drawdown — the cure mechanism remains unresolved.
- An incentive computation against a non-permanent HWM — does not exist.
- A GP redemption ahead of LPs — does not exist.
A note on framing
This page describes a framework. It is not, and is not intended to be, a solicitation, an offer, or LP-facing material.
Sources
- Founder amendment record, 2026-07-15 — pre-launch replacement of the 15% single-name cap with declared FCF/NI-proportional weighting.
- Founder amendment record, 2026-07-27 — covered calls in every market regime; stress simulation leaves reserve recovery unresolved.
- Internal Hussh source note — original Iron Rules concept and public framework context.