Key Takeaways
- • Arquitos Capital, led by President and CIO Steven L. Kiel, is offering a dedicated co-investment vehicle, the Liquidia Buyout and Income SPV, to prospective investors who meet the Qualified Purchaser standard.
- • The SPV uses a 50/50 bifurcated structure: a 50% upside sleeve of long-dated calls on Liquidia Corporation (NASDAQ:LQDA) and a 50% income sleeve that harvests elevated implied volatility.
- • Terms include a three-year maximum term, a 0% management fee, and a 10% performance fee payable only upon a distribution or liquidity event.
- • Arquitos cites the resolution of Liquidia's long-standing patent litigation on October 13, 2026, and Yutrepia revenue of $223M in Q3 2026 as catalysts supporting its acquisition thesis.
- • LQDA traded around $34 per share at the time of the letter, down from an August high of $93.61.
Summary
Arquitos Capital Management has launched a co-investment vehicle, the Liquidia Buyout and Income SPV, according to a letter published by Hedge Fund Alpha on October 21, 2026. The firm has held an active position in Liquidia Corporation (NASDAQ:LQDA) since 2022 and argues that the company is positioned as an attractive acquisition candidate. Arquitos points to the resolution of long-standing patent litigation on October 13, 2026, which it says has cleared the company's overhang, and to accelerating commercial execution of Yutrepia, which generated $223M in revenue in Q3 2026.
The stock was trading around $34 per share at the time of the letter, well below its August high of $93.61. The letter's author, Steven L. Kiel, President and Chief Investment Officer of Arquitos, frames the decline as an entry opportunity ahead of a potential buyout or substantial re-rating.
The SPV has a three-year maximum term, a 0% management fee, and a 10% performance fee that is payable only upon a distribution or liquidity event. Capital is split evenly between two sleeves. The 50% upside sleeve would hold long-dated calls designed to produce outsized returns on a corporate buyout or major equity re-rating. The 50% income sleeve would monetize elevated implied volatility to generate quarterly target cash distributions, with an option to reinvest, and to cushion downside if an exit takes longer than expected.
Detailed materials, including a Confidential Investment Overview memo and scenario return analysis, are available only to prospective investors who meet the Qualified Purchaser standard and sign a non-disclosure agreement. The offering is distributed through Hedge Fund Alpha. The letter does not disclose the SPV's target size or minimum investment.
The stock was trading around $34 per share at the time of the letter, well below its August high of $93.61. The letter's author, Steven L. Kiel, President and Chief Investment Officer of Arquitos, frames the decline as an entry opportunity ahead of a potential buyout or substantial re-rating.
The SPV has a three-year maximum term, a 0% management fee, and a 10% performance fee that is payable only upon a distribution or liquidity event. Capital is split evenly between two sleeves. The 50% upside sleeve would hold long-dated calls designed to produce outsized returns on a corporate buyout or major equity re-rating. The 50% income sleeve would monetize elevated implied volatility to generate quarterly target cash distributions, with an option to reinvest, and to cushion downside if an exit takes longer than expected.
Detailed materials, including a Confidential Investment Overview memo and scenario return analysis, are available only to prospective investors who meet the Qualified Purchaser standard and sign a non-disclosure agreement. The offering is distributed through Hedge Fund Alpha. The letter does not disclose the SPV's target size or minimum investment.
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