Stone House Capital Partners letter to investors for the third quarter ended September 30, 2017.

Dear Partners,

Below are the results of SH Capital Partners, L.P. (the “Partnership”) since inception through Q3 2017:

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Stone House 3q7

Our Partnership returned 207% during the first 9 months of 2017. From our inception in April 2010 through September 2017, the Partnership realized a compounded annual return of 29.0% net of all fees and expenses. $100,000 invested in the Partnership at its inception is worth approximately $675,000 today.

Opportunity comes, but it doesn't come often, so seize it when it does come – Charlie Munger

We claim no competitive advantage in predicting the economy or calling short term market turns. Instead, we work to identify businesses which we can understand and that are priced at a fraction of their true value; invest alongside exceptional, owner-oriented managers; heavily concentrate our capital under the right circumstances; and exercise extreme vigilance and patience.

We continue to be a strong proponent of concentrating our capital in the very best opportunities our research uncovers. Focusing our investments in this manner inevitably produces a “bumpy road,” but we believe that, over the long term, it generates far greater rewards.

This approach is one that I see as largely atypical in the money management industry today; where raising capital and minimizing volatility – not investment results – have become the primary measurement of success for many. Not us.

Rather, I have always been committed to managing the Partnership based solely on what I believe to be in partners’ best interests – not necessarily according to what convention dictates.

We are acutely aware that no investment is without risk. We will continue to study and learn from past experiences, both good and bad, and employ the insights and knowledge we have gained.

I have always believed that an investment partnership can only be as successful as its members allow it to be. I am extremely fortunate to have gathered a truly exceptional group of partners. Your focus on the long-term is critical to our success.

While today the Partnership remains open to additional like-minded investors, I continue to pursue growth primarily through compounding existing partner assets.

With the largest stake in the Partnership, it goes without saying that I am fully invested in our continued success.

As always, thank you for your trust. I do not take it for granted.

Sincerely,

Mark Cohen

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