LIM offers a SPACs strategy designed to deliver strong absolute returns against low realized volatility. What makes the strategy different is the use of special purpose acquisition companies (SPACs) as both a principal protection and an upside-oriented investment given the unique characteristics of its structure.
While a SPAC broadly has been around for many years, the market has grown since the Great Recession, and the underlying sponsor quality has improved significantly. That combined with large investment management firms partnering with SPAC CEOs provides an enhanced source of deal flow and access to capital that was not present in the space during prior periods. Lastly, the underlying structure has a finite timeline for the sponsor to make an acquisition (24 months or less) along with investors holding a put to redeem for cash in trust (cash invested in T-bills); these factors provide an opportunity to invest leveraged capital against these holdings.
LIM can incorporate different volatility, leverage, and position sizes to accommodate each client's tolerance for risk.
- Low correlation to both the equity and fixed income markets
- Targeted attractive risk-adjusted returns
- Complete transparency
- Experienced team managing low volatility strategies