Stone Ridge Asset Management offers its investment advisory services to private and registered funds, meaning it doesn't advise individuals on their portfolios. The New York-based firm is known for quota share reinsurance investing. Its website says that the firm specializes in “delivering valuable, diversifying return streams sourced from alternative risk exposures – not alpha.” In January 2020, it was reported that the firm had begun managing third-party investor assets for reinsurance and insurance-linked securities separate from its mutual funds.
Stone Ridge Asset Management Background
Stone Ridge Asset Management has been providing services as a registered investment advisor (RIA) since 2012. It formed as a limited liability company (LLC) under laws in the state of Delaware. However, it’s based in New York City and has its financial engineering office in Beijing.
CEO Ross Stevens is the firm's principal owner.
Stone Ridge Asset Management Client Types and Minimum Account Sizes
Stone Ridge’s only current clients are private funds, registered funds, Longtail Holdings and its affiliates. The firm may accept managed account clients in the future.
Because the firm does not currently work with individual clients, the minimum account size requirement is not applicable. For fund minimums, check the fund prospectus.
Services Offered by Stone Ridge Asset Management Review
Stone Ridge serves as an advisor to a range of investment companies through private or registered funds. When working with these clients, Stone Ridge provides a funds document that describes investment objectives, guidelines and requirements. Such information would be outlined in the fund prospectus.
The firm currently sponsors or administers the following private funds:
- Drug Royalties Fund II LLC,
- Drug Royalties Offshore Fund II LLC
- Drug Royalties Cayman Fund II LP
- Stone Ridge Alternative Lending Issuer Trust I
The Drug Royalties Funds are exclusively invested in Oberland Capital Healthcare II LP. As its name suggests, Stone Ridge Alternative invests in alternative lending-related securities.
Stone Ridge can provide eligible investors who wish to invest in these private funds with documentation detailing investment strategies, methods of analysis and material risks.
Stone Ridge Asset Management Investing Philosophy
Stone Ridge utilizes various investment strategies such as reinsurance risk premium, variance risk premium, alternative lending risk premium and factor-based equity risk premium. Generally, though, it takes a passive approach to investing. So it will typically steer away from market timing or buying undervalued securities, believing, as it states, “Competition quickly drives prices to fair value, leaving only risk premium.” Instead, the firm takes on “intentional,” controlled and intelligent risks because “guessing the future is no way to build long-term wealth.”
Fees Under Stone Ridge Asset Management
Stone Ridge’s fees are non-negotiable and are laid out in each fund’s offering documents. (The firm doesn’t make these public.) Funds may also incur other fees and expenses, including custodial fees and expenses, transfer agency fees and more.
What to Watch Out For
The firm reported one disclosure on its Form ADV. It involved an alleged violation of a Chicage Mercantile Exchange rule regarding certain exchange-for-related-position transactions during the first half of 2016. In February 2018, Stone Ridge settled the matter and paid a $40,000 fine.
Opening an Account With Stone Ridge Asset Management
To contact Stone Ridge, send an email or call the firm over the phone at (212) 257-4750.
All information was accurate as of the writing of this article.
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