A New Approach to Hedging
Pack Creek Capital is a money management firm. We are Commodity Trading Advisors registered with the National Futures Association.
What We DoWe trade on our agricultural clients’ behalf in sugar, corn, soybeans, soybean products, wheat, livestock and coffee.In energy we trade power, crude, distillates, natural gas, ethanol and propane.Using a traditional managed account model, Pack Creek Capital created the Managed Hedge Program™. Our clients place a portion or all of their hedging requirements under our management. This management is fist reviewed through Pack Creek Capital Advisory to ensure our clients' needs and risk appetite is properly strategized.Through a simple Advisory Agreement we trade against a highly transparent benchmark. Our performance based compensation is linked to outperforming the benchmark.Sound easy, not really. SP Global reported on June 30, 2017 that 82.38% of large cap funds under performed the S&P 500 for the trailing five year period.Pack Creek Capital's traders utilize their specialized skills in vanilla options, exotic options and power trading to create exposures and overlays that are simply not used by most money managers. As detailed on Our Team page, one of Pack Creek's partners was one of three founders of the ag OTC option market and two other partners trade power on a very profitable basis. Note that power has annualized historical volatility of over 3,000%The Managed Hedge Program™ is highly interactive and transparent. Our traders and sales traders are constantly in touch regarding our view, positions and macro themes. Positions reside in our clients’ listed and OTC accounts. This accompanied by our own risk management reporting provides a realtime view of our performance.
What We Don't DoWe are not brokers. Clients utilize their existing relationships. Hedging is complex and confusing. Our brokers in the past tend to pitch only what they can understand.We are not OTC dealers. We were for many years, but now instead of taking the other side of your trades we put that expertise to work on both our behalves.We do not earn commissions or share in OTC markups: We have our favorites. There are OTC dealers and brokers that do an excellent job for us and we enthusiastically recommend them. Unlike many fiduciaries, we feel that it is a conflict to receive this form of compensation.We are not risk system providers: There are firms that specialize in this, and we are a customer. We do however, spend quite a bit of time with our clients going over output related to their accounts.We are not systematic traders. New systematic programs use hypothetical back-tested results to market their programs. These are often optimized. We are not hypothetical and our markets are far too complex to be machine traded.We are not managed bushels. We are not some grain company's dark pool of faceless traders. We can be used for customer accounts but we will not tell you when you have to come in and out of the program nor wait until the end of the year to give you your results.