Marriott Affiliated Capital Partners of Alpine, Utah, is gearing up to launch its latest offering, a long-short fund, later this year. Todd Draney, managing partner of Marriott, said the new offering will be similar to his 32-month-old Ensign Fund, but with less volatility.
“[The Ensign Fund] exploits inefficiencies in markets that are provided by stock style dispersion,” he explained “The new fund is the same model as the Ensign Fund, but it has another trading layer over top which should smooth out the performance curve a little bit.”
The fund, which has yet to be named, will average approximately 40 long and 30 short positions, and it will invest across all sectors and market capitalizations.
“At any given time we may look like a small-cap growth manager or we may look like a large-cap value manager,” Draney explained. He added that the fund will employ the firm’s “quantitative behavioralist” approach, in which the managers use quantitative models to try to find
patterns of human behavior in stock price movements.
“It’s not an absolute return fund, it is a total return fund,” he said. “We are not trying to plug away at 8 or 9% year-in and year-out, that’s not our business…So, you may have a 60% return one year and you may have minus 3% another year.”
The Alpine, Utah-based firm—which was named after co-founders Draney and Jonathan Ferrell’s alma-matter, Marriott School of Business at Brigham Young University—is aiming to launch the new fund with $10 million in assets under management. Fees are 1% for management at 20% for performance. There is a one-year lockup and the minimum investment is $500,000.
PB is Merlin Securities is serving as the prime broker; Rothstein Kass is the auditor; Holme Roberts Owen serves as legal counsel; And Price Meadows is the administrator.