Spark Investment Management is a New York City-based hedge fund manager with three funds under its care. The small team of advisory employees at the firm manage these funds, which are currently closed to new investors. The firm utilizes trading algorithms and proprietary research to inform its investment decisions for these funds.
Spark and its advisors do not perform financial planning services, as the firm is solely concerned with fund management. If you're looking for a financial advisor who can offer financial planning, use SmartAsset's free advisor matching tool to find suitable options in your area.
Spark Investment Management Background
Spark Investment Management was founded in 2011, but began actually operating in 2012. Peter Laventhol currently serves as the manager and majority owner of Spark. The firm employs a handful of other advisors to help manage the investments of its three funds. These other employees come from a range of investment backgrounds, including quantitative and trade execution. One-third of this staff holds a Ph.D. in various financial topics.
Spark Investment Management Client Types and Minimum Account Size
Spark Investment Management and its funds do not state a specific client base. However, Spark is currently not accepting new investors.
Spark does not have a stated minimum investment size for its funds.
Services Offered by Spark Investment Management
Spark's services are limited exclusively to the management of the investments in its three investment funds. As a result, the firm does not provide individualized investment management services, focusing instead on the performance of its funds.
The firm is broken into three structural departments. They respectively focus on the following:
- Portfolio management group: Employees here work to create the investment models that help the firm decide what its funds should invest in. It's also focused on building a framework to make trading accurate and consistent in terms of prices and other factors.
- Technology and execution group: The models that the first group develops are put into practice by this team.
- General management group: This group sets policies and determines what the company will do next.
Spark Investment Management Investment Philosophy
Spark focuses on quantitative methods of analysis. Since the information that Spark uses to inform its investment decisions is typically public information, the firm develops complex statistical models to provide some proprietary insight. These models include statistical forecast generation, trend following, mean reversion, relative value, arbitrage-oriented methods and more.
Spark invests in equities, equity derivatives, credit, fixed-income and other securities. It utilizes leverage and engages in frequent transactions, which increases trading costs. The firm tends to choose diversified, risk-managed portfolios that are driven by computer models to populate its funds. That said, the firm does take non-diversified positions when it makes sense to do so. Since Spark is a hedge fund, it invests without regard for investor preferences.
Fees Under Spark Investment Management
Spark charges its funds a quarterly management fee of up to 0.50% of their AUM annually. These charges are not negotiable, but they may be reduced or waived under specific circumstances. The funds also incur various other costs, like trading commissions and brokerage fees. A 20% performance-based fee is charged annually as well.
What to Watch Out For
Spark Investment Management does not have any legal or regulatory disclosures on its record.
Spark takes performance-based fees from its funds. Although this could be perceived as a potential conflict of interest, the firm states in its Form ADV that "because Spark trades the assets of all of its clients through a common investment vehicle, Spark believes that there are no conflicts of interest based on side-by-side management issues." In any case, the firm is a fiduciary, legally binding it to act in clients' best interests at all times.
Opening an Account With Spark Investment Management
Spark Investment Management is currently not accepting new investors in its funds. If it does begin taking on new investors, you can reach out over the phone at (212) 826-3709.
All information is accurate as of the writing of this article.
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