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FREQUENTLY ASKED QUESTIONS
In most commodity trading firms the owner, chief portfolio manager, and risk manager are the same person. Typhon was setup where all these roles, as well as operations, compliance, and business development, are separate in order to provide institutional checks and balances. This separation of duties allows portfolio managers to focus solely on what they do best- trading.
Typhon programs benefit from unified operations, legal, compliance, and risk management, providing solid infrastructure to emerging managers. This allows Typhon to hire managers with defined edges in their product classes and in turn offer these niche strategies to investors. Each Typhon manager has a defined edge, whether from synergies realized from unique information flow to a market structure edge.
Every strategy operated by Typhon is exclusive to the firm. Moreover, each Typhon manager has a revenue share on its group within the firm, so there are never multiple levels of fees like in Fund of Funds.
Typhon has a diverse portfolio of strategies. Currently, it operates a discretionary metals strategy, 3 fundamental discretionary agriculture strategies, and 3 systematic strategies that trade currency, global macro, and VIX.
Typhon has a wealth of industry contacts that provide it a constant stream of emerging managers to evaluate. Typhon does thorough due diligence on prospective managers before hiring. Typhon’s investment team starts with a quantitative screening in which it evaluates the return stream of a strategy as well as its fit within Typhon’s existing stable of managers. Typhon’s also does a thorough operational due diligence and a qualitative evaluation of each manager in order to find humble, grounded managers with disciplined personalities.
Typhon has a Risk Committee which is independent from each of our trading groups. We protect our investors by ensuring that our managers are operating within pre-defined guidelines.
The Risk Committee has the authority to reduce exposure in the event that a manager has breached its risk limits. It is important to draw a distinction between risk management and risk monitoring.
Typhon’s risk criteria is not ad-hoc. The Risk Committee establishes risk guidelines for each manager before it starts trading on our platform.
All strategies are reviewed on a regular basis; not just when there are issues. The Risk Committee is constantly aware of the trading positions. It wants to be aware of any potential issues before they develop and work collaboratively with our managers to help them best position their portfolios.
Because the Risk Committee is comprised of experienced risk managers, we work with our portfolio managers to help them structure positions with the most appropriate risk profile. We strive to be collaborative not solely overseers.
Integrity is Typhon’s core value. Each member of Typhon’s senior management team has at least 20 years experience in the trading industry and provides disciplined and competent oversight of the firm’s trading and operations. Furthermore, Typhon has done as much, if not more, than anyone else in the industry to protect investors. Typhon’s CEO Co-Founded the Commodity Customer Coalition in response to the largest fraud in the history of the industry and represented over 10,000 customers of MF Global pro bono to its successful conclusion of 100% recovery. Typhon’s CEO also served on the Board of Directors of the industry’s self-regulatory organization for 3 years and stood up to its senior management by filing a federal whistleblower case against them for alleged improprietarties (case still in process with the CFTC).
You must be a Qualified Eligible Participant as defined by the Commodity Exchange Act. There are many ways to qualify as a QEP, the most common for individuals is to have a liquid net worth of $2,000,000 or more and to meet a portfolio requirement for assets already invested in securities and/or futures. Our advisory agreements contain a detailed questionnaire with regards to meeting QEP status.
Typhon offers all of its strategies via separately managed accounts which give investors full transparency into positions and daily liquidity. Clients can choose almost any futures broker that accepts trades that are block executed provided the client meets that broker’s minimum account sizes which can vary widely.
Typhon supports accounts at most futures brokerage houses. We currently have relationships with ADM, Advantage, Bank of America-Merrill Lynch, Dorman, GAIN Capital, RJO Brien, Rosenthal Collins, Societe Generale, and Wedbush, but supports most other futures brokers. The two notable exceptions are Interactive Brokers and FCStone.
Typhon does not currently operate any funds or pools directly, but will be launching US and Cayman funds around the Vulcan Metals Strategy in January of 2017. All of Typhon’s strategies are available on Kenmar Olympia’s Clarity Managed Account Platform. Typhon is generally agnostic to fund platforms and can open vehicles on other platforms for client’s who can meet other platforms’ minimum account requirements.
Typhon handles Investor on-boarding across different investment platforms as well as separately managed accounts. Back office operations manages submission of our programs daily transactions to the centralized FCM for allocation, daily balancing and trade reconciliation of customer accounts. Operations controls processing and distributions of all fees and costs for each trading program, account management, redemptions and the servicing of customer inquires,
Typhon handles the legal framework needed to establish an institutional quality fund vehicles across multiple investment platforms and structures for each of the Typhon programs. Typhon facilitates all the legal work needed to provide proper information for any due diligence process, creation of tear sheets, pitch books, compliance reviews, procedure manuals, regulatory filings, all appropriate D-Docs, operating and subscription agreements– tailor made for each vehicle. Typhon’s back office team manages compliance reviews, cyber reviews, complete compliance with National Futures Association rules, regulations and employs best practices.
Typhon provides a robust proprietary institutional quality risk program structure. Typhon’s risk committee aides portfolio managers in the construction of trades and strategies that reflect the goals and parameters required by allocators, while supporting a proactive risk program model that allows interaction between the portfolio manager and the risk committee. This collaborative environment helps formalize the trading process and follows a risk procedure manual that clearly defines trading activities and return structures.
All of Typhon’s strategies are available in separately managed accounts or in a fund vehicle on the KenMar Clarity platform. The Proteus Dynamic Volatility Program is also available on the Hydra Platform. Typhon actively promotes and markets each program and investment vehicle by attending over a dozen trade shows a year along with individually showcasing Portfolio Managers through a variety conferences and private meetings. Each of Typhon’s Portfolio Managers is a principal of Typhon and the head of an internal division within the firm. Typhon never charges layered fees, even for multi-manager products. Typhon’s front office will provides access to all our programs to each of its extensive client base of allocators.
Our CIO, David Klusendorf, has 19 years experience as a floor trader and headed the Timber Hill proprietary trading group where he managed traders. David, or KLU as we call him, works with our portfolio managers on how to improve their trade construction and express trade ideas to optimize their risk vs. reward.
Typhon is always looking for talented portfolio managers, but we have a thorough due diligence process. If you are interested, please email email@example.com to begin our due diligence process which includes track record validation and qualitative and quantitative assessments.