The finance and investment world appears to many to be an old man’s game, with giants like Warren Buffet managing the largest swaths of assets for global institutions and individuals. People who’ve inherited vast fortunes are “well-bred” in financial circles and work their way up to managing the top firms. Yet, even with their years of experience and massive legacy portfolios, the emergence of COVID-19 and the accompanying financial crisis has hit firms hard. Many economists believe we are already in a domestic, and potentially global recession, and will soon be heading for a depression, with a record 3.3 million Americans filing for unemployment. But one young asset manager has been able to emerge from the pack due to his unique investment strategy which protected it and its clients against the market’s crash.
While the Dow Jones Industrial Average was down as much as 40% from its highs in recent trading, Adam Ibrahim’s 365 fund reported a maximum loss of only 2.6%, despite having significant exposures to the US and Global Equities. Carrying a diversified portfolio of domestic and global assets such as Short Duration Treasuries, US Equities, and High-Yield Corporate Debt, the fund employs risk management strategies that utilize low and no-cost derivative structures that generate outsized value in extreme events. Due to this unique structuring, 365 is able to track gains in most asset markets while mitigating losses in events of extreme economic shocks and disasters. The result is an institutional product that captures market appreciation with less volatility while preserving liquidity for institutions and high net worth individuals during critical periods, such as the current COVID-19 chaos. Similarly to famed Hedgefund Manager Bill Ackman, Ibrahim’s hedges were able to almost completely offset the mark-to-market losses on core assets through the rapid pullback across nearly all asset classes trading.
Ibrahim’s path did not, however, begin in fund management. Born in Great Neck, New York, on September 23, 1992, Adam grew up in a lower middle-class home with his mother, a single teacher in the New York City school system, and his sister. After working on Wall Street as an institutional sales intern in high school, Adam studied economics at Binghamton University while working for a small business law firm as a paralegal and building a property management company on the side. After graduating, Ibrahim purchased, developed, and managed over 50 properties across New York on behalf of himself and a handful of institutional and high net worth clients. His full-service New York real estate firm brings institutional and accredited investors transparent and secure exposure to high-yield multifamily real estate assets in secondary and tertiary markets throughout the Northeast.
Over time, Ibrahim learned that while real estate investments can be stable in appreciation and cash flow long-term, they are also highly illiquid, particularly in times of recession or market distress. This experience helped shape the 365 strategy, which holds a diversified and systematically, risk-managed global portfolio of assets. By employing a strategic and event-driven lens to analyze equities, commodities, fixed income, and rates, 365 has been able to not just brave this recent market crash, but actually come out on top. Risk management is done through the strategic use of derivatives, which provides benefits during times of volatility, while still structuring the portfolio to capture value in times of stability.
Ibrahim, in his late twenties, explained the name behind the fund. “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 economics outcomes, especially the extreme ones that nobody expects”
As the saying goes, “Never let a good crisis go to waste,” and Ibrahim not only has avoided the disastrous financial effects for his clients and their accounts but has begun building positions in the portfolio as stocks continue to fall. When asked what the next move in the market is, Ibrahim said that “It is impossible to predict short term price action, especially in this environment, however certain asset classes are beginning to look cheaper. Moving forward, we will look to add more exposure to viable assets that are priced attractively while attaching robust risk management to our holdings for the event that things deteriorate further.”
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