Asymmetric Investments Research

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Asymmetric Investments

Seven investment firms based in the U.S. that utilize an asymmetric investment strategy are (1) Asymmetria Group, (2) Horizon Kinetics Asset Management, (3) Asymmetry Capital Management, (4) AsymMETRIC Capital Management, (5) Asymmetric Advantage Capital Management, (6) Shell Capital Management, and (7) Marathon Asset Management.

Findings

1. Asymmetria Group

  • Asymmetric Group is"a capital investment firm specializing in asymmetric (high reward / low risk) opportunities." The first was established in 2014 and the following year commenced its business operations for clients The firm sources investment opportunities in private capital and debt markets through its expansive network. The sectors that the firm excels in are venture capital, real estate, private financing, and distressed bonds.
  • The first part of the firm's investment philosophy states: "At Asymmetria, we won't invest in something we don't understand . . . ." Part two of the firm's investment philosophy involves only considering opportunities that have managed/lower risk and high returns.
  • Asymmetria Group's assets under management exceed $16 billion.
  • This link is to the firm's website.

2. Horizon Kinetics Asset Management

  • Horizon Kinetics is "an independently owned and operated investment" adviser that was established in 1994. The firm's staff is comprised of 80 employees and maintains its offices in both White Plains, New York, and New York City. The firm also "serves as investment adviser to Kinetics Mutual Funds, Inc., [which is] a series of eight mutual funds."
  • The first part of the firm's investment philosophy states: "Horizon Kinetics was founded on the belief that a short-term investment approach, widely adopted with the modernization of financial markets, ultimately produces sub-optimal returns. We believe that investors are better served not by taking more risk, but by extending their investment time horizon, which affords far wider ranges of opportunity and valuation than are available to time-constrained institutional investors. The startling degree of return possibility ignored by a short-term focus is most easily seen in the Equity Yield Curve, a chart . . . not [found] elsewhere. "
  • The second part of the firm's investment philosophy states: "And while all acknowledge the tremendous power of compounding, practically speaking (and by definition) this benefit simply cannot be harnessed in a short time frame. Our investment strategies supported entirely by our independent, fundamental research typically reflect contrarian views that seek to take advantage of the short-term focus of the marketplace."
  • Horizon's assets under management total about $5.3 billion.
  • This link is to the firm's website.

3. Asymmetry Capital Management

  • Asymmetry Capital Management is an "alternative asset management firm" based in San Francisco, California. The firm was established by Scott Kay in 2012. Scott has 20 years of experience with investing in health care.
  • The firm states that its "differentiated investment process and focus on fundamental shorts seek to produce a return stream for investors that is both unique and repeatable over the long term. Asymmetry seeks to deliver high risk-adjusted returns, low correlations to both broad market and healthcare indices and lower volatility."
  • The firm has a four-part investment philosophy. The first part states: "A structured, rigorous, and iterative process provides both a strong foundation upon which to build and a guiding light from which to navigate forward." Part two states that "[c]ompany fundamentals must, over time, drive asset valuations."
  • The third part of the firm's investment philosophy states: "Portfolio diversification can both enhance returns and mitigate risk. " Lastly, the fourth part states: "Portfolio liquidity offers both a margin of safety if an exit strategy is necessary, as well as the opportunity to capitalize on positive fundamental developments."
  • Asymmetry Capital Management's assets under management exceed $138.67 million.
  • This link is to the firm's website.

4. AsymMETRIC Capital Management

  • AsymMETRIC Capital Management was established in 2016 as "an independent, employee-owned firm" (team of four). The firm was created "to deliver asymmetric risk/returns over the long-term."
  • The firm's office is in Rancho Santa Fe, California. The firm uses "a proprietary active systematic rebalancing (ASR) methodology for its target allocations."
  • The firm's investment philosophy states: "[The firm] establishes positions in some of the most liquid assets with negative correlations, and actively rebalances these assets to monetize short-term volatility. A key objective is to achieve meaningful asymmetrical risk/returns over the long-term. Negative correlations provide significant diversification benefits [and] [t]here are no directional market calls or forecasts[,] as active system rebalancing harvests short-term movements in a disciplined manner."
  • No information was available about the firm's assets under management.
  • This link is to the firm's website.

5. Asymmetric Advantage Capital Management

  • Asymmetric Advantage Capital Management is based in Bellevue, Washington and operates as "a Registered Investment Advisory firm" that is fully managed and owned by its founders. The firm works to development portfolios in which it "minimize[s] the downside volatility and lets the upside run." Services that the firm provides include investment management, financial planning for individuals, and "comprehensive portfolio construction."
  • The first part of firm's investment philosophy states: "[The firm] treat[s] the market as a relatively uncertain dynamic system (a machine). Using analytical and statistical methods together with classic financial models we then make decisions to buy, sell, protect, and optimize."
  • The second part of the firm's investment philosophy states: "Our most important objective is to limit the downside volatility (risk), while letting the upside run. We choose investments by implementing protective layers (filters), which help to contract the universe by excluding unfavorable holdings. A good analogy is to recognize that the best way to find a needle in the haystack is to remove the hay from the stack."
  • The firm's assets under management exceed $26.76 million.
  • This link is to the firm's website.

6. Shell Capital Management

  • Shell Capital Management was established in 2004 by Mike Shell and is "based in Knoxville, Tennessee." The firm operates a program that it calls Asymmetry Investment Program, which can either complement or replace traditional investment and asset allocation strategies.
  • The first part of the firm's investment philosophy states: "The exit, not the entry, always determines the outcome. The second part of that philosophy states: "Shell Capital takes' asset management to the next level by actively managing risk and dynamically adapting to evolving markets. We apply our directional trend systems to rotate between multiple markets; cash, currency, global bonds, global stocks, and commodities via exchange traded securities."
  • No information was available about the firm's assets under management.
  • This link is to the firm's website.

7. Marathon Asset Management

  • In 1998, Marathon Asset Management was established by Louis Hanover and Bruce Richards. The firm invests in real estate and global credit-related markets.
  • The firm's self-described "core competency is opportunistic investing in the global corporate, emerging market and structured credit markets." The firm is headquartered in New York City and has about 165 employees.
  • The firm's investment philosophy states: "Throughout Marathon’s history we have always aimed to maintain a flexible and dynamic investment approach in order to capitalize on different opportunities within the credit markets based on evolving market environments. . . . We seek to identify asymmetrical risk-return situations where Marathon’s investment management team believes that the return potential from a particular investment is greater than the underlying potential risk of that investment."
  • The firm's assets under management total about $16.7 billion.
  • This link is to the firm's website.

Your Research Team Applied the Following Strategy:

The only data points we were unable to find were the assets under management for Shell Capital Management and AsymMETRIC Capital Management. We looked for that information in three different ways. First, we looked on both firms' websites for that information, but such was not listed there. Second, we looked for any articles that might have been published about the firms that discussed such information, which is frequently included in company-specific articles. However, none of the articles that we reviewed mentioned assets under management for either firm whatsoever. As a third strategy, we looked up the firms in company database sites, such as Crunchbase. However, no information about assets under management was provided for either firm. With regard to the information that we were able to find, the vast majority of that information provided above came directly from the firms' websites. Additionally, we used a few outside sources to provide information about a few of the firms' assets under management, as that data wasn't listed on their sites.
Sources
Sources