BAM PLATFORM
BAM's edge comes from the platform of top investment talent, an investment
process of combining sectorized fundamental research & trading, and the dynamic
capital allocation that it has developed over the years. The platform approach
gives BAM the unique ability to be scalable and grow the business and
sustainable by being flexible to generate high returns in all market
environments.
Investment Talent
BAM has been fortunate to attract some of the strongest investment professionals
in the industry to its platform and most teams have been with the firm for a
number of years.
- Over 90 investment professionals in offices around the globe.
- 16 main sector teams and more than 35 distinct P/L
- Mix of fundamental and trading approaches.
- Multiple uncorrelated core strategies
- Centralized trading desk.
- Information sharing encouraged across portfolio teams.
- Multiple products capitalize on strategies/sectors with large capacity and unique areas of expertise.
Investment Process
BAM believes that in the current competitive environment the only way to get
edge is through teams of experienced analysts and portfolio managers organized
by sector with the ability to concentrate their efforts in a given idea.
The impact on idea generation is:
- Ability to generate and monitor multiple ideas across multiple asset classes
- Ability for industry experts to invest more than 100hrs in a single idea
- Focus on misunderstood situations, companies/sectors undergoing turbulent change from different perspectives
- Results in original ideas with attractive risk return
Themes and potential investments are identified from the top down by Dmitry
Balyasny and Senior Portfolio Managers as well as from the bottom up by sector
analysts. We then devote significant resources to drilling down on the idea.
With over 1500 positions, our largest positions typically have over one hundred
working hours of research devoted to them. In addition, we bring all of the
resources of the firm to the most promising situations including our centralized
trading desk, risk management team, and outside relationships.
Through this process and interaction between team members the best risk reward
ideas are developed and executed.
Capital Allocation
Capital is adjusted dynamically on the fund level by the Investment Committee
(IC) and real-time by the portfolio managers.
On the fund level, increases tend to be small and incremental while capital can
be cut quickly if drawdown limits or stop outs are hit. The IC meets formally
on a monthly basis and adjusts capital based on quantitative/qualitative
guidelines as well as opportunistically. The quantitative/qualitative changes
are based upon a business plan put together between the portfolio manager and
the investment committee. The business plan, which is updated annually and
reviewed quarterly, covers everything from starting capital and capital growth
trajectory and goal; return and volatility targets; drawdown and stop out
limits; strategic risk limits (concentration, exposure, etc); team build out and
the ability to scale. The plan is used to set performance and capital
expectations as well as a framework for making changes. Opportunistic changes
are made based on team and IC assessment of current strategy opportunities and
market environments.
The portfolio managers are each allocated notional capital by the IC. The
portfolio manager is not able to exceed their full notional allocation with out
an exception from the IC, however, the manager is not discourage to use less if
the markets are difficult or without opportunities. This adjusts capital real
time on the portfolio manager level.
This allocation process allows capital to flow efficiently to the best
opportunities as well as reduces exposure quickly during difficult market periods.
