CLC Managament manages the Global Partners LP, a long/short
equity fund focused on exchange-traded closed-end funds trading
at historical high or low variations from its NAV. The Chicago-based
firm is co-founded by Anthony Cutinelli and Andres Lucas.
- Can you first give us a brief outline on the key individuals
at CLC Management LLC / Global Partners LP?
Tony Cutinelli is the CEO and Chief Portfolio Manager
of CLC Management, the general partnership that runs Global
Partners LP. Andres Lucas is Managing Director and in
charge of operations for the same entity.
- Can you give a brief background of yourself and your
Anthony began his career as a proprietary floor trader
at the Chicago Mercantile Exchange where he gained experience
trading 14 different futures and options markets. His
time there was highlighted by his successful management
of customer and proprietary accounts. Anthony became a
US equity trader with Electronic Trading Group, LLC in
1996 and in 1999, he co-founded CLC Management. Anthony
is a graduate of Miami University in Oxford, Ohio. He
currently resides in Chicago.
R. Andres Lucas
Andres began his career as a junior financial analyst
for Prudential Securities in New York City where he specialised
in the chemical sector. Andres became a US equity trader
with Electronic Trading Group, LLC in 1996 and in 1999,
he co-founded CLC Management. Andres graduated with a
degree in Finance from Arizona State University. He currently
resides in New York City.
Which markets have you find the best returns in 2003
The areas that have provided us with the best returns
over the past 18 months have been in the closed-end funds
focusing on high yield. We have profited in this area
from both the long and short side.
What are the key characteristics of your strategy
and how are you different from your 'peer group'?
The main focus of our strategy is the trading of stock
exchange-traded closed-end funds. The main characteristic
is that we try to take advantage of historical high or
low discounts and/or premiums to NAV in the closed-end
fund sector while hedging out risk. We have done extensive
research and haven't found that we belong to any 'peer
group' per se since there are no funds out there, that
we have seen, that focus as much as we do on this area.
There are activist hedge funds that unwind the discounts,
but they tend to be far more static than the strategy
What are the key themes on the long and short books?
How do you identify them?
On the long side, we are simply looking for stock exchange-traded
closed-funds trading at historical high discounts to their
NAV and whose underlying holdings have a catalyst that
could grow its NAV. The short side is simply the opposite.
We are looking for stock exchange-traded closed-funds
trading at historical high premiums to its NAV and whose
underlying holdings might be susceptible to some downturn
in the market.
- What's your performance been like?
Please refer to the attached spreadsheet.
We also would like to point out that these returns have
been delivered with a Sharpe Ratio over 6, a standard
deviation under 5% and a beta under 0.4.
What risk controls and measures do you have in place?
Our portfolio runs usually 40-50 positions so the risk
is spread out. Also, our fund doesn't exceed Reg-T margin
regulation of 2-1 so this portfolio is never overly leveraged.
In fact, the average leverage used is 1.4-1. Options are
used to hedge out overall market risk and we constantly
evaluate the positions and the hedges to make sure we
have the appropriate asset allocation to limit risk and
- How has the capital raising been for your products
and do you have a 'typical' investor?
The capital raising process started slowly but has picked
up significantly recently. We believe the reasons why
it was so slow to start off with was the bad performance
from the previous strategy and starting up with such a
small amount of capital. But we have found recently that
our strategy isn't one with a lot of competition and coupled
with our returns and lack of volatility, is creating a
demand from the fund of funds space and from other investors
looking for consistency and an "edge".
- Do you run any other products?
We run a couple of managed accounts along with the portfolio.
How do you construct your portfolio?
We do regular screenings of closed-end funds taking into
account the historical high and low discounts and premiums
of each closed-end fund. Once we determine these funds,
we look to initiate positions close to that historical
high or low. After initiating positions, we look for appropriate
hedges to our positions. These hedges can be in the form
of an ETF that tracks an index of the underlying closed-end
fund or a similar closed-end fund trading at a higher
- How extensively have you back-tested your ideas? What
models did you use?
We haven't back-tested our strategy.
- Do you or your team have any plans to visit Asia in
the coming months?
We don't have any plans at this time.
CLC Management LLC
Tel: 1 312 362 3496