Protea Crawford Lake US Equities Fund

Investment Objective

The fund is a trading-oriented Luxembourg equity fund with the primary objective of investing inequities and options in order to generate strong risk-adjusted returns over time. The Fund utilizes a hybrid approach to investing, combining both fundamental and technical analysis.

Latest Meeting Note

Meeting Note 06 Nov 2019

The research team met with Crawford Lake at a cap-intro conference. The firm was founded in 2006 by Isaac Markowitz (PM) and currently manages about $1.2bn. Crawford Lake utilizes a hybrid approach to investing, combining fundamental and... Read more

The research team met with Crawford Lake at a cap-intro conference. The firm was founded in 2006 by Isaac Markowitz (PM) and currently manages about $1.2bn. Crawford Lake utilizes a hybrid approach to investing, combining fundamental and technical analysis. The investment process focuses on names where technical indicators (primarily price action and volume; chart patterns play a secondary role in the decision-making process) and corporate fundamentals are aligned such that the price movement is deemed sustainable. If so, the manager takes single-name stock positions long and short to profit from a 10 to 30% price move, and generally uses options to maximise the risk-reward profile of each individual trade (single-name stock options represent 20-30% of the fund’s delta adjusted exposure). The typical holding period is 30-90 days. Generally, the manager exits single-name stock positions prior to earnings announcements. This leads to a unique approach to risk management with the fund holding greater than 50% of total exposure in cash. Cash position is meant to be a key characteristic of Crawford Lake’s strategy. Cash works as a ‘passive’ portfolio hedge against adverse market conditions (dampening fund’s volatility) or as an ‘active’ tool to be deployed at times when the opportunity set becomes more favorable (i.e. during market dislocations). As result, the fund doesn't run with a lot of leverage (gross exposure ranges from 20% to 80%; 0-20% gross short). The portfolio holds around 30-60 positions in total, with decent level concentration; up to 7% for longs and up to 3% for shorts. The portfolio has historically exhibited high turnover (above 10x).

Performance

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC YTD
2018 0.8 0.6 0.3 0.8 0.6 0.3 0.5 0.2 0.6 0.5 0.4 0.0 0.1
2017 0.0 0.6 0.0 0.4 0.3 0.3 0.3 0.8 0.9 0.4 0.4 0.6 0.2

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