Ddraig Equity Fund is designed to outperform the MSCI World Net Total Return Index. Named after the red Welsh dragon, the fund enhances returns from its core equity investments by employing a market-neutral relative value strategy, receiving income from a covered-call option strategy against the core equity holdings, and invests in protection hedging against steep market declines.
The fund is lead by two seasoned professionals, Chris Jones and Peter McDermott. Chris Jones has managed absolute return and enhanced equity hedge fund assets since 2004, prior to which he has served as both a long-only fund manager on the buy-side with Hill Samuel Asset Management, and a research analyst on the sell-side of the industry with Citigroup. Peter McDermott is a derivatives specialist since 1986. His experience runs from being an options market-maker on the London International Financial Futures Exchange (LIFFE) through to risk management and product development. Together, the long time pals who met on the hockey pitch pepper their responses with a healthy dose of Brit humour and affection.
We are risk-aware. We will be risk-taking if the economics of such risk are considered to be in favour of the fund, yet risk-averse when it is not fully reflected in valuations and such.
1. Swiss-Asia: What does Ddraig Equity Fund mean to you?
Ddraig Equity: Making a living.
2. SA: Why did you start this fund?
DE: When we were looking to invest our own pension savings, we couldn’t find anything that combined long equities and hedge fund techniques.
3. SA: Besides running this fund, what else do you do?
4. SA: Are you risk-averse or risk-taking?
DE: We are risk-aware. We will be risk-taking if the economics of such risk are considered to be in favour of the fund, yet risk-averse when it is not fully reflected in valuations and such. Being risk-aware, our fund risk is sized to deliver the target return of 7% to 10% above benchmark. No more, no less.
5. SA: As seasoned fund managers, how do you manage your emotions?
DE: We try to stick to the numbers, in an attempt to remove the emotions surrounding any decision.
6. SA: Do you have a daily ritual that helps you focus on the fund?
DE: The appeal of fund management is that no two days are the same. A ritual would get in the way of that, although we do roll the overnight P&L each morning to see where things are moving.
7. SA: How do you feel about the markets in the next six months?
8. SA: Why did you choose Swiss-Asia to be your fund’s investment manager?
DE: We like the people.
9. SA: Complete the sentences. To outperform the MSCI World Net Total Return Index…
DE: Is our target investment return.
10. SA: To remain market-neutral…
DE: Is our methodology in Capital Structure Relative Value.
11. SA: In 2017, steep market declines look like…
DE: Trouble for those without protection trades like us.
12. SA: And POTUS…
DE: Will make change happen.
13. SA: Wine or beer?
DE: Beer first, then wine.
14. SA: In Europe, Brexit is going to…
DE: Shake it up.
15. SA: China’s foreign policy will affect…
DE: Those who follow it.