Investment Philosophy
In commodities, the complexities of physical storage and delivery and the "zero sum" nature of commodity futures trading presents challenges beyond the risks of ordinary hedge fund investing. So, successful commodity investing demands the experience required to build and manage a properly scaled and constructed portfolio.
Single manager allocations can be highly volatile and so called CTA's (Commodity Trading Advisors) often provide little to no real exposure to commodities, in purely systematic strategies. Ordinary "Fund of Hedge Funds" solutions are also problematic. When applied to commodities, the usual FoHF strategy often mutes returns, multiplies risks and/or evolves to an asset gathering exercise where investors pay fees on fees for beta more efficiently achieved via an index.
By contrast, Almanac Capital applies a "hybrid" investment approach for the Almanac Commodity Funds:
- Almanac Capital combines in house expertise and proprietary quantitative analysis, while leveraging a network of merchant-based relationships.
- Like a traditional "Fund of Funds" we allocate to external managers. By outsourcing our investments, we are able to access world class talent who in most cases no longer accept capital from new investors.
- Like a single manager, we apply our own views and expertise to our participation and weightings in the various subsets of the commodity complex.
- Like a multi-strategy firm, we diversify our portfolio by strategy, but concentrate our exposures by trader, while managing risk from a top down, consolidated perspective.
- Strictly limited in capacity, our strategies are designed to generate absolute and uncorrelated performance, not to gather assets.
- By investing alongside our Founders, Almanac Capital investors can easily access and participate in every facet of the commodities and alternative commodity complex, enjoying lower volatility than normally seen in the asset class, while sustaining absolute and genuinely uncorrelated returns.