INVESTMENT
PHILOSOPHY
OUR PHILOSOPY
Lucidity Capital and its investment products, are characterized by their multi-strategy, multi-asset portfolios . Lucidity allocates capital exclusively through separately managed accounts, ensuring complete transparency and control while avoiding exposure to side pockets or illiquid investments.
Each individual trading strategy features a dedicated trading team, investment focus, risk management approach, and use of leverage. In unison, these teams hunt the markets for alpha opportunities, akin to a pod of Orca whales.
The firm's strategy is rooted in the goal of delivering consistent returns to investors while preserving capital, even in challenging risk/reward market environments. We accomplish this by employing diverse strategies that prioritize capital preservation while retaining the potential for upside growth. Lucidity places a strong emphasis on high liquidity, with the majority of the firm's positions capable of being liquidated within a single trading day. Additionally, the portfolio is highly diversified, maintaining low net market exposure and focusing on exchange-traded US equities.
Traditional hedge fund investing often presents three significant challenges for investors: limited transparency, constraints on liquidity, and a lack of control. Lucidity has effectively tackled these challenges by developing a proprietary managed account platform, putting control of assets under management in the hands of Lucidity and its investors. This approach provides real-time, daily performance information on underlying hedge fund portfolio holdings, enabling us to make informed decisions promptly and offering us significantly more control over the investment process.
Lucidity's guiding portfolio strategy principles can be summarized by the acronym "TLC"
TRANSPARENCY, LIQUIDITY, AND CONTROL.
INVESTOR ALIGNMENT
Lucidity offers two paths for investors to access our dynamic allocation strategy: They can either invest in a co-mingled vehicle, for a minimum of $1 million investment; or execute the multi-manager strategy via a “Fund of One,” that is, for $10 million, we open an account in the investor’s name and build a bespoke portfolio to their specifications and risk tolerance.
Additionally, we have structured our investment strategy with a cost pass-through design that aligns the interests of management with those of investors. This alignment extends to enhanced transparency across various aspects of our business, including performance analytics, risk reporting, and expenses.
Our strategy is meticulously designed to provide the necessary resources, infrastructure, and support to foster an environment where our investment professionals can maximize their productivity.
At Lucidity, we are committed to providing solutions that not only meet but exceed the expectations of our investors and the managers with whom we collaborate.
INVESTMENT
STRATEGY
Lucidity Capital Partners allocates capital to top trading teams exclusively through separately managed accounts, ensuring total transparency and control while avoiding exposure to side pockets or illiquid investments.
Each individual trading strategy boasts its dedicated trading team, investment focus, risk management approach, and use of leverage. Like a pod of Orca whales, our teams collectively scour the markets in search of alpha opportunities.
Our Fund's strategy is laser-focused on generating consistent returns for investors while safeguarding capital, even in challenging risk/reward market environments. This goal is achieved through the implementation of diverse strategies that prioritize capital preservation while allowing for potential upside growth.
LUCIDITY’S GUIDING PORTFOLIO STRATEGY PRINCIPLES (TLC):
TRANSPARENCY
Nothing is hidden; all positions are known and viewable.
LIQUIDITY
Our portfolios are characterized by a high degree of liquidity, with the majority of positions capable of being liquidated within a single trading day.
CONTROL
We emphasize disciplined risk management processes focused on capital preservation and volatility-weighted capital allocations across a diversified set of Portfolio Manager teams and strategies.
Our management team comprises innovators in the alternatives investment industry, boasting expertise in liquid trading strategies. Lucidity's principals and partners possess decades of experience in operating alternative investment management businesses, having served as registered investment advisers, commodity trading advisors, pool operators, and general securities principals.
Lucidity's broad investment expertise enable our Funds to maintain exposure to highly differentiated strategies that span the globe and encompass multiple asset classes.
We have a preference for niche, fundamental low-net-market-exposure equity long/short strategies with a demonstrable edge in specific sectors or sub-sectors.
Lucidity aims to generate returns independent of market or common factors. Our focus on a bottom-up approach and preference for alpha-oriented strategies is designed to consistently yield results.
CAPITAL ALLOCATION AND DIVERSIFICATION
Capital allocation across managers is meticulously determined by criteria, including investment strategy, expected return profile, capacity, liquidity, and overall portfolio impact. Our strategies span major asset classes across global markets, primarily within liquid asset classes such as equities, futures, foreign exchange, and cryptocurrencies. These strategies typically maintain low-net market exposure and exhibit low levels of correlation with broad market indices.
Lucidity seeks to construct a diversified portfolio with low correlation to traditional and alternative asset classes, consistently delivering attractive risk-adjusted returns. Capital allocation is dynamic and guided by market views and opportunities unique to each investment team.
Many of our strategies are difficult to access through traditional structures, offering a unique set of exposures that tend to be uncorrelated both to each other and to broader markets.
