Winning Streak Affirms Owners' Confidence
A move by the owners of Wolverine Asset Management to substantially increase their combined stake in their fund appears to have produced results.
After posting sub-par returns in 2014 and 2015, the Chicago firm told investors early last year that managing partners Robert Bellick and Christopher Gust put more of their own money in the Wolverine Flagship Fund effective Jan. 1, 2016. The latest performance report from Wolverine shows the fund returned 14.9% last year — its best showing since 2009 and its third-best annual performance since its inception in 2001. The fund gained another 2% in January, marking 12 straight months of profits.
“Wolverine partners and employees are large investors in the fund, owning [approximately] 20%, better aligning management’s interests with those of other investors in the fund,” the firm noted in the report.
Wolverine runs about $1.8 billion in a mix of portfolios that employ event-driven, relative-value, volatility and other tactics to trade stocks, exchange-traded funds, credit products, commodity futures and derivatives. As of Jan. 31, the flagship fund was showing an annualized return of 8.7% — despite a 0.4% loss in 2015 and 1.3% loss in 2014.
Wolverine’s return compares to annualized gains of 6.8% for the S&P 500 Index and 1.4% for the HFRX Global Hedge Fund Index during the same period.
Notwithstanding its 2016 performance rebound, Wolverine reduced its standard management fee to 1.75% of assets, from 2%, effective Jan. 1. The rate further drops to 1.5% for limited partners investing $50 million or more, and to 1.25% for investors committing $100 million or more. The fund’s performance fee remains unchanged at 20% of investor profits.
“We believe this new fee structure is reflective of changes in the industry, and better aligns our interests with those of our investors,” Asha Olasa, head of marketing and investor relations, wrote in a Feb. 23 email to prospective investors.