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Graham Capital Management Review

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Graham Capital Management, L.P.

Founded by Wall Street leader Kenneth Tropin, Graham Capital Management is an alternative investment manager that follows both quantitative (trend-following) and discretionary (go-anywhere) strategies. Its hedge funds have been in the red in recent years, like many other quant investors.  

In 2008, however, the firm was one of the few to predict the fall of Bear, Stearns & Co. and outperform because of its foresight. Currently, the firm manages $13 billion in assets, according to its website. (Though it reported having more than $26.5 billion in assets under management in its May 2019 SEC filings.) 

Graham Capital Management Background

Tropin started Graham Capital with his own money in 1994, and continues to invest in his firm’s funds. Today, he largely owns the advisory through two entities, while other employees have small stakes. 

The Rowayton, Connecticut headquarters are famously located at “Rock Ledge,” the former home of James Farrell, U.S. Steel president, and birthplace of one of the first business computers. The firm, which employs a total 190 people, also has an office in London and West Palm Beach. 

What Types of Clients Does Graham Capital Management Accept?

Technically, Graham Capital’s clients are its private hedge and liquidity funds. The investors in these funds are generally “accredited investors,” as defined by the Securities Act of 1933, or “qualified purchasers,” as defined in the Investment Company Act of 1940. This means pensions, sovereign wealth funds, endowments, foundations and very wealthy individuals. The firm also advises investment companies. 

Graham Capital Management Minimum Account Sizes

Graham Capital provides its account requirements in each private fund’s offering documents. According to SEC data, fund minimums range from $250,000 to $318 million. The firm may accept a lower amount at its discretion. 

Services Offered by Graham Capital Management

Graham Capital provides investment management to private funds and investment companies. Its hedge fund strategies are quantitative, discretionary or a blend of both and trade in global currency, commodity and other financial markets. 

The firm is also a registered commodity pool operator and commodity trading advisor under the Commodity Exchange Act. 

Graham Capital Management Investing Philosophy

As mentioned earlier, Graham uses quantitative and discretionary strategies. The former uses computerized mathematical models to find trends in technical information that can be profit opportunities. These strategies may involve high-frequency systems, counter-trend systems and non-trend systems. 

On the other hand, the firm’s discretionary strategies generally involve global macro investments that are non-correlated with traditional assets. Primarily, these investments are traded on major futures exchanges, inter-bank currency and swaps markets, equity exchanges and OTC markets. 

According to its website, the firm’s investment philosophy is based on three pillars:

  1. Strategy diversification
  2. Disciplined risk management
  3. Robust portfolio construction

Fees Under Graham Capital Management

Graham Capital collects management fees that are based a percentage of AUM. Depending on the fund, the annual percentage generally ranges from 0% to 3.5%. Additionally, the firm collects a quarterly performance-based fee that ranges from 0% to 30% of realized and unrealized gains (and losses). 

Graham Capital Management Awards and Recognition

The last time Graham Capital appeared on Institutional Investor’s top 100 hedge fund list was 2016, when it ranked #56. 

In 2015, the CME Group and BarclayHedge gave Tropin a lifetime achievement award for his contributions to the managed futures industry.

In 2009, he was No. 15 on Forbes’ list of highest earners on Wall Street. (He reportedly pocketed $120 million from shorting the financial sector.) 

What to Watch Out For

Graham Capital manages assets for accredited investors and investment companies. It does not work with small or inexperienced investors. It also does not provide financial planning or wealth management services. So if you are looking for a financial advisor who can help steer your personal finances, this firm is not the right fit.

Disclosures

In its most recent SEC filings, Graham Capital had no disclosures to report.

Opening an Account With Graham Capital Management

To contact Graham Capital, call its headquarters at (203) 899-3400. Alternately, you can send an email to info@grahamcapital.com.

Where Is Graham Capital Management Located?

Graham Capital has two offices in the U.S.:

40 Highland Avenue, Rowayton, Connecticut 06853

505 S. Flagler Drive, Suite 1505, West Palm Beach, Florida 33401

All information was accurate as of the writing of this article. 

Tips for Finding a Financial Advisor 

  • Ask how advisor candidates get paid. Those whose only compensation is the fees they collect from you will likely have fewer conflicts of interests than those who also receive commissions. That said, if any advisors says they are a fiduciary, that means they will work in your best interests.
  • Use SmartAsset’s pro matching tool. Simply answer questions about your financial situation and preferences, and the program will match you with up to three suitable advisors in your area.

How Many Years $1 Million Lasts in Retirement

SmartAsset's interactive map highlights places where $1 million will last the longest in retirement. Zoom between states and the national map to see the top spots in each region. Also, scroll over any city to learn about cost of living in retirement there.

Least
Most
Rank City Housing Expenses Food Expenses Healthcare Expenses Utilities Expenses Transportation Expenses

Methodology SmartAsset calculated the average cost of living for retirees in the largest U.S. cities. Using that calculation, we determined how many years $1 million would last in retirement in each major city.

First, we looked at data from the Bureau of Labor Statistics (BLS) on the average annual expenditures of seniors throughout the country. We then applied cost of living data from the Council for Community and Economic Research to adjust those national average spending levels based on the costs of each expense category (housing, food, healthcare, utilities, transportation and other) in each city.

We assumed the $1 million would grow at a real return (interest minus inflation) of 2%, reflecting the typical return on a conservative investment portfolio. Finally, we divided $1 million by the sum of each of those annual numbers to determine how long $1 million would last in each of the cities in our study.

Sources: Bureau of Labor Statistics (BLS), Council for Community and Economic Research