T2AM implements its strategy in a unique commingled structure that generates significant benefits for its investors in terms of Liquidity, Transparency, and Control
We stated it in the liquidity component of our strategy: Risk management is hopeless without liquidity. Our structure features liquidity at every level. This provides a great deal of comfort that the portfolio can in fact be sold quickly if needed. Furthermore, T2AM invests its clients’ assets exclusively through separately managed accounts. This means that we can redeem from our underlying traders at any time, with no notice, and without gates, lockups, penalties or other encumbrances. Finally, we pass on this liquidity to our investors by offering some of the best liquidity in the hedge fund industry, even addressing problematic suspensions of redemptions. It is our belief that, if investors want out, they should be able to get out without any problem.
While the hedge fund industry is widely (and often justly) reputed for its being opaque and impenetrable, T2AM offers a stark contrast. Its portfolio of separately managed accounts is fully transparent to T2AM, enabling us to monitor our traders for style drift and misbehavior. As with the rest of these structural benefits, T2AM passes on these benefits to its investors. T2AM’s investors are able to access the portfolio’s full daily positions, daily risk reports, and daily performance estimates online.
T2AM believes that the business of trading is distinct from the business of managing counterparty risk and cash. Our managed account approach embodies this belief by taking the control of our investors’ assets out of the hands of hedge fund managers. This also allows our traders to focus solely on what we hope they are good at: generating alpha through successful trading. T2AM aggressively manages its counterparty risk and utilizes best-practices in independence and checks-and-balances in the management of clients’ cash.