Interview with a #1 Ranked Hedge Fund Manager; International Balanced Multi-Strategy Asset Class

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The 'mature' traders strike back: Hedge fund managers seem to get younger from year to year. At the other side of the spectrum you may come across a firm like Triumph. Triumph presently has 19 traders whose average age is 52 years. They are mature, successful and experienced traders with an average of more than 26 years experience in the markets. What happens if they get together to form a multi-strategy hedge fund?

The 'mature' traders strike back: Hedge fund managers seem to get younger from year to year. At the other side of the spectrum you may come across a firm like Triumph. Triumph presently has 19 traders whose average age is 52 years. They are mature, successful and experienced traders with an average of more than 26 years experience in the markets. What happens if they get together to form a multi-strategy hedge fund?

The following is an interview with James S. Moore, Managing Member of TIF Fund Management LLC, the Managing Member of Triumph Investment Master Fund Ltd. (Currently ranked among the top performing International Balanced Multi-Strategy Asset class by Nelson’s World’s Best Money Managers for 20 and 40 quarter time frames).

Interview Questions Include the Following:

How does Triumph Fund differ from other hedge funds?

Where are hedge funds heading?

How did you get started in Hedge Funds?

What do you think are the current challenges to hedge funds?

How does Triumph Fund differ from other hedge funds?

Triumph Investment Master Fund Ltd. (“Triumph”) is a multi-strategy, manager of mangers fund. Many people consider it a Fund of Funds, but since there is no duplication of fees, we differentiate Triumph from a Fund of Funds by calling it a Manager of Managers fund. To be precisely accurate, my management company, TIF Fund Management LLC is the MOM and Triumph is the vehicle used.

Triumph’s concept was base on the creation of joint ventures with floor traders on the various exchanges. The idea was that floor-traders that were successful after 20-30 years on the floors of an exchange, they must have refined their risk control to a science and therefore, they should qualify as excellent money managers. I found that risk control was built into their trading methodology and was an essential part of their daily activity.

My personal floor experience taught me what motivated these traders and this concept only works when the motivation of the trader, management and the investor are aligned. Floor-traders are typically complex and requires a thorough understanding of the orientation and fierce entrepreneurial spirit of successful floor traders.

Triumph presently has 19 traders whose average age is 52 years. They are mature, successful and experienced traders with an average of more than 26 years experience in the markets. Obviously, they are not the new kids on the block who have just graduated from business school or from some university math program. More typically, they exhibit the characteristics of trench-fighters who know innately that risk control takes precedent above all things because capital must be preserved to fight another day.

Each trading manager must invest his own capital in the individual account that they manage for Triumph. Their membership is on the line as protection for our investors. In addition, the benefits of their membership are contributed to the fund whenever possible.

Most of Triumph’s strategies involve short-term or intermediate-term time-frame trading. Our transaction costs are very low because of our memberships. Since these costs can be a large part of any fund’s overhead, reducing them clearly improves the Fund’s performance because a significant cost of operation is reduced. In addition, there are no additional cost or hidden fees in Triumph so the expenses, which are clearly outlined in the offering memorandum, are low. In fact, NFA/NASD audits indicate that our fees are actually lower than those stated in our offering memorandum.

Where are hedge funds heading?

That depends upon several factors. It depends upon the industry’s ability to innovate and communicate the benefits of those innovations to investors. It also depends upon governments improving, maintaining and preserving the free market system. Over-regulation is often the sad result of over reaction to inappropriate activity by a few inept managers, but such over-regulation will continue to increase unless the industry can act responsibly and police itself.

Specifically regarding Triumph, I see tremendous opportunity. Triumph presently combines many non-correlated strategies using a variety of proprietary analyses based on measures of randomness, risk, reliability and return, in that order. These have been TIF’s most valuable analytical tools, but in the final analysis, our personnel are the true foundation of our success.

To explain this further, investors too often consider return as their first priority, but analysis of return alone is dangerous because it does not consider the protection of assets. In fact, it actually exposes a portfolio to inadvertent and often unwarranted risk. Our analysis focuses on risk before we ever consider return. I believe that this is the fundamental reason why Triumph has experienced only 5 loosing quarters in 15 years and consistently rates so highly in industry rankings.

If risk control is important then the issue of trading maturity and experience is vital. Investors are often pleasantly surprised to find out how mature and experienced TIF’s managers are. I think they find it a refreshing contrast to many other funds where “twenty-somethings” are in control.

The full Interview:

http://www.opalesque.com/main.php?&act=closeup&show=25

Disclaimer: This information is neither advice nor a recommendation to enter into any investment advisory service. This presentation is not an offer to sell, nor a solicitation of an offer to buy, any investment or investment advisory service.

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Tyler Wood
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