Boothbay Fund Management LLC, is the investment manager for the firm’s flagship fund, a global multi-strategy hedge fund established by Ari Glass in 2014. The Fund seeks to generate strong risk-adjusted returns by allocating capital to idiosyncratic strategies that have minimal correlation to each other and traditional asset classes.
The Fund combines the risk management and investment principals of the large well-known multi-manager hedge funds while also taking advantage of its smaller relative size and investing in niche and less-crowded strategies.
Boothbay has three major components to its strategy and portfolio. First is a ‘traditional’ multi-strategy aspect, which utilises daily data, to determine manager selection and sizing, and then use the lack of correlations amongst the underlying strategies, to create a portfolio that can generate the return benefits of leverage without the linear increase in risk normally associated with leverage.
Second, the firm manages a “First Loss” platform, whereby the managers absorb the first 10 per cent of trading losses. Third, it seeks to combine a mixture of niche and capacity constrained uncorrelated strategies that have become an increasingly larger part of the portfolio.
According to Frederick Richardson, who runs business development for Boothbay: “We believe many of the best risk adjusted opportunities are capacity constrained, which keeps them from being fully exploited by many larger funds who would have the platform to do so.”
To successfully implement this approach, Boothbay had to build out an infrastructure that can handle sourcing of talent, evaluation and diligence, portfolio construction, dynamic risk management, and a robust back office to support it all. “With over 80 strategies it is a significant undertaking,” says Richardson.
Shane Burn, a former statistical arbitrage portfolio manager and hedge fund allocator, heads up quantitative and volatility based strategies for Boothbay.
Glass, Boothbay’s managing member, leverages his previous experience at Soros-seeded Tiger cub, Intrepid Capital, to select fundamental long/short managers. In 2016, Boothbay brought on Peter Bremberg as their Chief Operating Officer to oversee financial operations and help the firm optimise its balance sheet.
To date, Boothbay has achieved risk adjusted returns in the upper echelons in the industry with a Sharpe ratio of higher than two and a Sortino ratio close to 10. They have done so by outperformed many of its multi-strategy peers on an absolute return basis, while also having significantly lower drawdowns.
On winning this year’s award Glass remarks: “This award is really as a result of a consistent team effort. With so many moving parts, it is important we keep a cohesive team. We are proud of the fact that we have not lost a key employee since the inception of the Fund. Our goal is to continue to satisfy our investors’ needs and protect their capital.” n