Thursday, 25 August 2016
Last updated 6 hours ago
Jun 22 2010 | 9:54am ET
The Lyford Global Macro Fund gained 7.11% net in May, a month that saw the average hedge fund in the red, and is now up 5.72% year-to-date through May 31. But while those figures are good news for the eight-year-old fund, it is Lyford's recent growth story that is catching investors' attention.
In March of 2009, when Daniel Solomon joined Lyford as president and chief operating officer, the fund had $46 million in assets under management. Since that time—arguably one of the toughest fund raising environments in recent history—the fund has almost doubled in size, now standing at $86 million.
"We've brought in seven new clients and lost zero," says Solomon, who spent 11 years at Goldman Sachs and another six at Drake Management before joining New York-based Lyford. One of those seven new clients includes a coveted ERISA mandate, signifying that the firm's efforts to appeal to institutional investors are paying off.
Lyford employs a discretionary global macro strategy with a focus on liquid tactical trading, and has a medium-term investment horizon—typically two-to-three quarters.
"Because we implement our ideas almost all in futures and currencies, we have the ability to quickly expand or contract risk in the portfolio," says Solomon.
The fund, which was seeded with $10 million by family office in June of 2002, has been managed by Samer Nsouli, director and chief investment officer, since its inception. In mid-2004, the firm created an onshore feeder fund and opened up to outside investors. But it wasn't until last year that Nsouli—who built his career at top tier banks such as Lehman Brothers, UBS, and JPMorgan—decided it was time to expand the SEC-registered fund, which has been producing steady, solid returns (with the exception of 2009 when it was down 4.67%), including gaining 14.6% in 2008, a year that saw most hedge funds battered. That is when Solomon joined the team.
"My mandate coming on board was really twofold. One was to first build an institutional caliber infrastructure...and [second] to get the word out to institutions that what we are doing here has a role in institutional portfolios. It is very liquid, very transparent, it is negatively correlated to lots of things, and our returns are beneficial," says Solomon. "The basic idea is not to have the highest risk/return profile, but to have good capital appreciation and, importantly, no correlation to anything."
And while Solomon is pleased with the firm's capital raising efforts over the past 18 months, he isn't resting on his laurels. He is continuing to beef up operations, and has plans to add another prime brokerage firm to the fund's line-up of top tier, institutional grade service providers. The fund uses Citco Fund Services as its administrator, RiskMetrics for its portfolio risk-calculation engine, JPMorgan for its prime broker, and KPMG as its auditor.