It’s been a tough year for investors, to say the least. The major US stock indexes are all down in the double digits, and the tech-heavy NASDAQ Composite alone had lost one-third of its value by October. Meanwhile, mortgage rates have doubled and the Fed’s rate-rising program was crushing the bond market just as Bitcoin and other digital assets entered the so-called “Crypto Winter.”
Indeed, it’s been one of the worst years ever for the traditional 60/40 portfolio, which Bloomberg has declared “smashed” because stocks and bonds have been moving in the same direction all year: down.
But a new asset manager is creating opportunities with innovation and discipline. New York and Tampa, Florida-based Tadrus Capital bills itself as the world’s first private, high-yielding, fixed-income quant hedge fund. The startup is carving a niche in the fiercely competitive business of managing other people’s money by using artificial intelligence-based high-frequency trading models that it says deliver absolute returns- and they are not small. Tadrus Capital is offering its investors returns of 30% a year, paid monthly.
By comparison, the world’s largest hedge fund, Bridgewater Pure Alpha, was up just 6% for the year as of early this month. So, how can Tadrus Capital deliver five times the return of the industry’s biggest name?
“Most hedge fund managers have access to the same information, but they deliver very different performance to their investors,” according to Mina Tadrus, Tadrus Capital’s founder and CEO. “A key differentiator in the quantitative investment management industry is the ability of human talent to analyze the data in a better way and gain better insights than other investors and companies. Our people have a passion for this type of work, which makes it our competitive advantage. The AI autonomously inserts stop losses and take profits with every order, a concept that seems foreign to most US-based funds.”
Tadrus is a former derivatives consultant for JPMorgan and trading desk supervisor with one of the largest prop trading firms in New York City. Both experiences, he says, taught him how both deploying risk management protocols and quantifying a systematic investment strategy would lead to higher investment returns.
“When I was working on Wall Street, I didn’t realize that I was acquiring these skill sets,” Tadrus says, “but stepping back, I realized that it would be possible to create something truly exceptional. Our goal is to change the Wall Street standard using our superior proprietary algorithms built around not only risk management, but also profit management so that we can capture gains before markets turn.”
While Tadrus affirms that his firm cannot control volatility, he says that risk “can be controlled 100%.” Every order is accompanied by a stop loss with the AI crunching as often as twice a day. “By systematically using our AI to quantify risk and profits properly, we are able to consistently be profitable every single day,” he says. All of Tadrus’ investments are exchange-traded, meaning that they are highly liquid.
Tadrus also plans to be exceptional in another respect: philanthropy. “Success in the business world is often defined by growth and expansions and fueled by wanting more,” he observes. “While gaining more is frequently very rewarding, sometimes giving back is even more satisfying.” Out of what he calls “many worthy causes globally,” his company has chosen to support organizations that reflect his own passion: helping kids. “They will manage our finance, and economy, and are the future leaders of tomorrow,” he asserts.
For now, Tadrus is looking for grownups who possess a distinctly childlike trait- curiosity- to fuel his firm’s growth and provide exceptional returns to its investors. “We need problem-solvers who can see data from various perspectives,” he says. Tadrus is also looking for new investors, many of whom are reeling from a punishing 2022. Wary of headwinds like persistent inflation, market volatility, and rising interest rates, new perspectives- and a new standard- may be just what they’re looking for.