Pathfinder SMA, Unique Asset Management Platform, Launches Three More Tactical and Hedged Strategies
New investment strategies provide opportunities in statistical arbitrage, sector rotation and value investing, with no performance fee
MILL VALLEY, Calif.--(BUSINESS WIRE)--#alternatives--Bhatt Innovation Capital LLC, a San Francisco Bay Area-based registered investment advisor, has announced the launch of three additional investment strategies for PATHFINDER SMA, an asset management platform offering features normally available only to institutional and ultra high net worth investors. These strategies include:
Statistical Arbitrage, sometimes referred to as Pairs Trading, takes advantage of temporary misalignments in relative value between similar companies to generate trading opportunities. StatArb identifies misaligned pairs and capitalizes on their statistical tendency towards realignment of relative value to generate returns. Since long and short positions are taken simultaneously in equal dollar amounts, this strategy is beta neutral – meaning, that there is little overall net market risk exposure.
The Value strategy employs a “quantamental” approach to invest in those companies that are trading below their intrinsic values. First, a proprietary screening approach is applied to the universe of approximately 4,000 publicly traded U.S. companies to identify those meeting our value-based quantitative metrics. Then we do in-depth, bottom-up fundamental research to determine if a business has competitive advantages similar to a monopoly, such as barriers to entry (moats). Barriers to entry today may include proprietary technology for manufacturing, patents for highly technical products, and high attach rate mission critical software. These moats are challenging to evaluate, thereby creating an opportunity for experts like our team to capitalize on. Our team has over 18 years of experience in value investing.
Our Rotation strategy employs a proprietary algorithm-based tactical approach to rotate funds into the best performing sectors, industry groups and style factors. The goal is to capitalize on changes in the pace of economic growth or movement through the phases of the economic cycle, from expansion to recession.
Last April, PATHFINDER launched its first strategy, Advance L/S, an equity long/short approach focused on technology, life sciences, and industrial advances. With these four approaches, PATHFINDER can now provide investors equity allocations in both core and alternative styles. Advance L/S and StatArb are “alternative investments,” for which hedge funds typically charge high management and performance fees. PATHFINDER SMA charges a reasonable management fee, with no performance fee.
Fixed-income investments are also managed tactically and allocated through low-cost ETF products.
PATHFINDER assesses investors’ risk capacity and preferences for total return or income strategies, and then an actively managed portfolio is constructed in a separately managed account (SMA) at Charles Schwab. PATHFINDER participation is available at a reasonable investment minimum, and can be customized to meet investors' requirements and adjusted according to market conditions.
Charles Schwab functions as custodian and prime broker. Schwab is a name that clients trust and the Schwab portal gives clients clear transparency to trades and holdings.
Vinit S. Bhatt, PATHFINDER SMA portfolio manager, said, “After running a successful long/short hedge fund for five years, we learned from our clients that they wanted transparency, liquidity and low fees in addition to strong performance. Since hedge funds originated as commingled vehicles for accredited investors, non-accredited investors largely could not access this market. PATHFINDER SMA is democratizing alternative investments for all investors.”
Hilarey Bhatt, MD, PATHFINDER’s life sciences analyst, added, “Since we have in-house skills to do bottom-up fundamental research in complex sectors like technology and life sciences, and to manage complicated alternative strategies such as Advance L/S and StatArb, we can serve our clients at lower fees.”
Learn more at PathfinderSMA.com.
About Bhatt Innovation Capital LLC and PATHFINDER SMA
Bhatt Innovation Capital LLC (BIC) is a registered investment advisor. BIC founded and operated Bhatt Innovation Capital LP, a successful long/short equity hedge fund, for five years prior to launching PATHFINDER SMA. The fund's strategy laid the foundation for PATHFINDER Advance L/S. The BIC team launched PATHFINDER SMA to make alternative asset investing accessible to all investors and provide investors the benefits of separately managed accounts.
Vinit Bhatt, Portfolio Manager
Bhatt Innovation Capital LLC