This tutorial explains how to mimic the cloaking effect from the Predator movies. I prefer a more subtle displacement in this effect, but you can always add more by playing with the settings in the Abstractionism effect, and by adjusting the track opacity.

Instructions:

It takes two renders, and three layers to complete.

1st render with two layers

Track 1: Clean background without your actor. Effects are vertival stretch, squeeze, and horizontal stretch. Set values on effects to Degree and Offset of 3, and Size of 125.

Track 2: Your actor, keyed out. I did mine by making the actor layer into a mask using color director, which worked well. (Actor white, background blacked out.)

Render.

2nd render takes three layers
Track 1: Just your clean background without the actor.

Track 2: The first render file. Key out the black background on this track (easy if it is that mask-style, as you can just luma out the black.) Apply Abstractionism. Detail is 81, and Color Count is 13.

Track 3: Your actor, masked out just like in the first render. Apply Abstractionism again. Same settings as track 2.

Adjust the transparancy of tracks 2 and 3 to change how much of the effect is visible. Usually, 30% on track 2, and 25-50% on track 3, depending on your chosen background.

Render and you are done!