GCM is a fundamental investor a thematic alpha seeker and a dynamic risk budgeter. Isolating other risks such as FX and rates, the flagship strategy invests in the future of a credit (not the present) to seek capital gain opportunities (as opposed to carry) by longing spread compression trades and shorting de-compression ones. The Fund, a commingled Cayman Island vehicle of the strategy, is a relaunch of the GaoTeng EMLS fund with a 6-year track record of 60%+ cumulative net returns which had been low-to-negatively correlated to market indices and other hedge funds.
The strategy thrives on volatility by positioning ahead of crises. The skill to predict and capture selloffs during default rate peaks offers true hedge capability and diversification benefits to investors. This boils down to the essence of a methodical investment process surrounding rigorous 3-pillar trading principles. Furthermore, the product is unique and difficult to replicate as it requires time, resources and intensity to build up credit expertise across markets and importantly harness street relationship to afford high-touch trading liquidity.