Princeton Fund Advisors, LLC: Best Liquid Alternative Fund – Multi-Strategy Hedge

Spread the love

Princeton Fund Advisors, LLC: Best Liquid Alternative Fund – Multi-Strategy Hedge

Zachary Slater

Princeton Fund Advisors, this year’s winner of the US Best Liquid Alternative Fund – Multi-Strategy Hedge, believe they were chosen as winner of this award due to the consistency of the results they were able to generate in an incredibly volatile time period. 

Greg Anderson, President & Portfolio Manager, Princeton Fund Advisors (Princeton), says: “We believe the risk-adjusted results we were able to produce for our clients, given the market environment, were compelling.”  

Dealing with volatile markets 

Of course, conditions were challenging over this time period, with volatile markets in both equities and fixed income. Princeton’s primary focus during this time was controlling risk in the strategy. “By focusing on the risk of each trade and accepting that they will not all be profitable, we strive to avoid larger losses within any one trade through defensive action,” says Zachary Slater, Senior Vice-President and Portfolio Manager, Princeton Fund Advisors. “With this ‘educated loss’ strategy, over the last 19 months we were able to consistently produce positive monthly results,” he adds.    

A key to Princeton’s performance over the last year has been its discipline with respect to risk management. “The trades we place typically have a six-to-eight-day time horizon,” says Anderson. “This short timeframe allows us to adjust for changing risk levels in the market as we place each new trade.” At the same time, he believes that the elevated levels of volatility that the market experienced over the past year provided an attractive opportunity set for the strategy.

Researching and reflecting 

Princeton is continuously researching ways to improve their investment management strategy. “The primary focus of our research is risk reduction, which we believe is the best way to improve total return for the strategy,” Slater says.

As has been the case for all fund managers, the pandemic has provided an opportunity for Princeton to reflect. Anderson says: “The biggest lesson we’ve learned, or had reinforced, over the past year is how important being willing to accept small losses is for the strategy. In time periods such as January and February 2021, this helped the strategy tactically navigate difficult trading environments,” he adds.

Industry trends

In terms of key industry trends, Princeton is seeing renewed interest in the liquid alternative space. “With fixed income yields close to record lows, and the potential for both rising interest rates and frothy equity markets, we believe clients are looking for new and different tools to add diversification to their investment portfolios,” Slater says, adding that he feels the strategy has the ability to be deployed in a variety of different ways to help diversify both an equity and a fixed income portfolio.

Looking to the future, Anderson concludes: “With continued potential for volatility in financial markets, we see a need for alternative strategies to be available to clients. We look forward to providing potential solutions to our clients in the years to come.” 

Zachary Slater, Senior Vice-President, Portfolio Manager, Princeton Fund Advisors
Zachary Slater joined Princeton Fund Advisors, LLC and its affiliates in 2011 to conduct and oversee research on new investment opportunities. His experience includes evaluating and monitoring traditional, alternative and private investment strategies. Additionally, he has experience transitioning strategies into different investment vehicles. Slater is responsible for sourcing new managers, conducting due diligence on potential managers and ongoing monitoring of current managers and investments. He holds a BSc from the Daniels College of Business, University of Denver.

Author Profile

Related Topics