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About Us
Efficient Capital Management has a well-defined focus
on delivering the unique benefits of non-directional and leveragable trading
strategies to institutional investors.
Our History
Efficient Capital Management, LLC ("Efficient") was
formed on May 1, 1999. The founders share a strong conviction that
their combined experience and proprietary evaluation and risk management
tools provide the foundation for industry leading Multi-Manager product design
and portfolio management.
The key to any business is the character and the combined strengths of the
people involved. Eleven industry professionals came together with the common
goal of establishing an industry-leading Multi-Manager portfolio management
firm that specializes in providing the unique and beneficial attributes of
trading in cash-efficient and liquid markets.
Four of our founders were also founding partners in some of the most successful
and innovative trading firms ever to trade futures, options and stock:
Chicago Research & Trading Group
Hull Trading Company, LLC
The Philip Group of Companies
Saliba Partners, Inc.
Efficient Capital has grown to a team of 25 full-time professionals and
directs the allocation of over US $500 Million in assets. The dedication,
commitment, and focus have remained unchanged.
Our Objectives
To assemble portfolios of Managers that target
specific investment return objectives while controlling
the volatility and downside risk so as to maximize the adjusted rate
of return.
To consistently achieve a substantial reduction
in the volatility of a combined portfolio of Managers as compared to the
volatility of any individual Manager.
To actively manage portfolios to ensure that the investment objectives are
continuously addressed and the commensurate risks constantly monitored.
To assist institutional investors in the maximization of portfolio efficiencies through
the use of non-directional, non-correlated, alpha-generating
trading strategies.
Our Process
Efficient Capital Management specializes in Multi-Manager
portfolio design and management business. A highly quantitative, proprietary
approach is used to select and monitor portfolios. Proprietary
tools have been developed to statistically measure volatility, return, and drawdown expectations across
various time-frames. Daily return data is utilized for evaluation purposes and multiple
proprietary correlation models are used to assist in achieving
significant composite volatility reductions. These mathematical models
consider correlations from various perspectives with an emphasis on
"stressed" market environments. A parallel back-office updates all
positions and portfolio adjustments intra-day. Traders and their positions
are continuously monitored against expectations for risk and profit.
Our Portfolio Attributes
Because Efficient Capital exclusively utilizes
regulated, exchange-traded instruments and inter-bank foreign exchange,
several critical management/portfolio benefits accrue for our investors:
- Continuous position and risk transparency.
- Daily liquidity.
- The ability to adjust the exposure to individual trading
strategies to optimize risk-adjusted return.
- The ability to target specific investment objectives by
efficiently adjusting exposure to the composite performance.
- "Non-directional" trading strategies that can potentially
benefit during declining stock and bond markets.
- Diversification strategies, that when added to
other investments, often reduce the composite risk.
Our Multi-Manager Selection
The Efficient Capital Manager selection process
includes a number of essential requirements. A few examples are:
- The Manager must have the proper character, background,
experience and business structure.
- The trading methodology must be logical, reasonable, and sound.
- The statistical expectations of return, volatility of returns, and risk
control must qualify the manager as "stand alone" investment grade.
- The correlation relative to other Managers must evidence unique portfolio
benefits over time... especially in stressed global market conditions.
- The Manager must meet rigorous minimum statistical benchmarks.
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