Traditionally, when clients search for asset managers they base their decision on rates of return—who will grow their money at a significant clip. Most managers pitch high return rates and often focus on short-term or high risk strategies to generate this promised value addition. While sometimes effective, this investment strategy leaves traditional asset management approaches open to massive, and often catastrophic loss in cases of economic turbulence—like the recent Coronavirus-inspired stock market plunge.
The Dow Jones Industrial Average is down as much as 40% from its highs in recent trading, but Adam Ibrahim, an up and coming asset manager, and his 365 fund reported a maximum loss of only 2.6%, despite having significant exposures to the US and Global Equities. This loss of 15 times less than the average stems from 365’s unique investment strategy, which pairs trusted traditional assets with a proactive and systematic risk management strategy.
Ibrahim, in his late twenties, doesn’t swing for the fences with high risk trades,“365 is an all-weather strategy. It is not about trying to predict the future, but rather building and maintaining a portfolio of liquid assets that benefit from the widest variety of potential economic outcomes, especially the extreme ones that nobody expects.”
Ibrahim’s 365 focuses on executing value-added and opportunistic investment strategies designed to mitigate risk and maximize value for his valued clients. The fund carries a diversified portfolio of domestic and global assets such as Short Duration Treasuries, US Equities, and High-Yield Corporate Debt, and employs risk management strategies that utilize low and no-cost derivatives that generate outsized value in extreme events.
After graduating from Binghamton University with an economics degree, Adam began a property management company—purchasing, developing, and managing over 50 properties across New York on behalf of himself and a handful of institutional and high net worth clients.
This experience with property acquisition and management informed his unique investment strategy as he saw how real estate investments are stable in appreciation and cash flow long-term but are also highly illiquid, particularly in times of recession or market distress.
This perspective, paired with an understanding of optionalty, risk management and market traded asset classes, led to the development of the 365 strategy, which tracks gains in most asset markets while mitigating losses in events of extreme economic shocks and disasters. In other words, by focusing less on short-term, high risk gains, Ibrahim has created an institutional product that captures market growth with less volatility while preserving liquidity for institutions and high net worth individuals during critical periods, such as the current Coronavirus chaos and stock market plunge. Ibrahim’s fund demonstrates that one can still grow wealth while protecting it and that substantial risk isn’t always a necessary component for growing assets.
While this strategy certainly isn’t widespread in the asset management world, Ibrahim’s results speak for themselves and his fund’s maximum losses of only 2.6% was not widespread among asset managers either.