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Spark Investment Management Review

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Spark Investment Management LLC

Spark Investment Management is a New York City-based hedge fund manager with three funds totaling $3.25 billion in assets under management (AUM). The 10 advisory employees at the firm manage its funds, which are currently closed to new investors. The firm utilizes trading algorithms and proprietary research to inform its investment decisions for these funds.

Spark and its advisors do not perform financial planning services, as the firm is solely concerned with fund management. If you're looking for a financial advisor who can offer financial planning, use SmartAsset's free advisor matching tool to find suitable options in your area.

Spark Investment Management Background

Spark was founded in 2011, but began operating in 2012. Peter Laventhol currently serves as the manager and majority owner of Spark. The firm employs nine other advisors to help manage the investments of its three funds. These other employees come from a range of investment backgrounds, including quantitative and trade execution. One-third of this staff holds a Ph.D. in various financial topics.

What Types of Clients Does Spark Investment Management Accept?

Spark Investment Management and its funds do not state a specific client base. However, Spark is currently not accepting new investors.

Spark Investment Management Minimum Account Size

Spark does not have a stated minimum investment size for its funds.

Services Offered by Spark Investment Management

Spark's services are limited exclusively to the management of the investments in its three investment funds. As a result, the firm does not provide individualized investment management services, focusing instead on the performance of its funds.

The firm is broken into three structural departments. They respectively focus on the following:

  • Quantitative group: Employees here work to create the investment models that help the firm decide what its funds should invest in. It's also focused on building a framework to make trading accurate and consistent.
  • Technology and execution group: The models that the first group develops are put into practice by this team.
  • General management group: This group sets policies and determines what the company will do next.

Spark Investment Management Investment Philosophy

Spark focuses on quantitative methods of analysis. Since the information that Spark uses to inform its investment decisions is typically public information, the firm develops complex statistical models to provide some proprietary insight. These models include statistical forecast generation, trend following, mean reversion, relative value, arbitrage-oriented methods and more.

Spark invests in equities, equity derivatives, credit and other securities. It utilizes leverage and engages in frequent transactions, which increases trading costs. The firm tends to choose diversified, risk-managed portfolios that are driven by computer models to populate its funds. That said, the firm does take non-diversified positions when it makes sense to do so. Since Spark is a hedge fund, it invests without regard for investor preferences.

Fees Under Spark Investment Management

Spark charges its funds a quarterly management fee of up to 0.50% of their AUM annually. These charges are not negotiable, but they may be reduced or waived under specific circumstances. The funds also incur various other costs, like trading commissions and brokerage fees. A 20% performance-based fee is charged annually as well.

What to Watch Out For

Spark takes performance-based fees from its funds. Although this could be perceived as a potential conflict of interest, the firm states in its Form ADV that "because Spark trades the assets of all of its clients through a common investment vehicle, Spark believes that there are no conflicts of interest based on side-by-side management issues." In any case, the firm is a fiduciary, legally binding it to act in clients' best interests at all times.

It's important to note that Spark Investment Management does not provide financial planning services. If you're looking for a firm that can help with this, try using SmartAsset's free tool to be matched with advisors who fit your personal needs.

Disclosures

Spark Investment Management does not have any legal or regulatory disclosures on its record.

Opening an Account With Spark Investment Management

Spark Investment Management is currently not accepting new investors in its funds. If it does begin taking on new investors, you can reach out over the phone at (212) 826-1900.

Spark's office is located in New York City at 150 East 58th Street on the 26th floor. The firm doesn't operate any additional offices.

Tips for Financial Planning

  • If you're looking for a traditional investment advisor - one that provides individual portfolio management - SmartAsset’s free tool can match you with financial advisors in your area in 5 minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.
  • Wondering how your current investments will grow in value? Use SmartAsset’s investment calculator to help you estimate. And if you're specifically interested in whether you're on pace for a secure retirement, check out our retirement calculator.

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 the cost of living in retirement for that location.

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

Methodology To determine how long a $1 million nest egg would cover retirement costs in cities across America, we analyzed data on average expenditures for seniors, cost of living and investment returns.

First, we looked at data from the Bureau of Labor Statistics (BLS) on the average annual expenditures of seniors. 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. Using this data, SmartAsset calculated the average cost of living for retirees in the largest U.S. cities.

We assumed the $1 million would grow at a real return (interest minus inflation) of 2%. This reflects the typical return on a conservative investment portfolio. Then, we divided $1 million by the sum of each of those annual numbers to determine how long $1 million would cover retirement expenses in each of the cities in our study. Cities where $1 million lasted the longest ranked the highest in the study.

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