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Hedge Funds

Dancap allocates between 5% to 15% of its overall portfolio to Hedge Fund investments through third party funds or separately managed accounts.

Dancap’s Hedge Fund portfolio consists of several managers across various strategies including Tactical Trading/Global Macro, Equity Long/Short, Multi-Strategy, Event Driven, and Relative Value/Credit. As a Canadian investor, we look for efficient tax structures will adequate information to comply with Canadian tax reporting requirements or those of other jurisdictions that may be required.

Dancap’s Hedge Fund portfolio aims to protect capital during market downturns, while maximizing returns across various market cycles. Our ideal Hedge Fund consistently outperforms its HFRI/HRFX benchmark, year-after-year, net of fees, and keeps pace with public equity market returns, while minimizing volatility. Our Hedge Fund portfolio is strategy agnostic, but we are sensitive to fees, liquidity, lock-up periods, and large markdowns. Dancap expects to pay market competitive management fees and expects complete transparent information from managers such that we can conduct our comprehensive due diligence. Once invested, we also expect on-going access to information from the fund managers that we’re invested, through regular reporting and calls with managers.

Our average investment size is between US $3M – $5M per strategy.

Our Hedge Fund Criteria

Dancap’s investment parameters for hedge fund investments is summarized opposite:

  • Three-year plus track record with minimum of $300M AUM. If AUM is less than $300M, an exception could be made, if the investment is available through a separately managed account with immediate liquidity
  • We prefer to invest in hedge funds with a USD share class, quarterly redemption or better with no lock-ups
  • We tend to avoid fund-of-funds and funds with side pockets/illiquid private investments

Do you meet the above criteria? Get in touch.

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