Company type | Private |
---|---|
Industry | Investment Management |
Founded | January 2007 |
Founder | Mark Spitznagel |
Headquarters | Miami, Florida, U.S. |
Key people | Mark Spitznagel (President) Nassim Nicholas Taleb (Scientific Advisor) |
Products |
Hedge funds Alternative investments |
AUM | US$19.1 billion (June 30, 2022) [1] |
Number of employees | 18 (2022) |
Website |
universa |
Footnotes / references [2] |
Universa Investments ("Universa") is an American investment management firm headquartered in Miami, Florida. It is known as a Black Swan fund that focuses on risk mitigation to protect investors from sharp market downturns. [3] [4] [5] [6] [7] [8] [9]
Universa Investments was founded in January 2007 by Mark Spitznagel with Nassim Nicholas Taleb acting as its advisor. [4] [5] [7] [8] The two of them previously ran Empirica Capital, a hedge fund that closed in 2004 due to subpar returns. [4] [6] [8] Universa was launched with $300 million under management and traded out of a small office in Santa Monica, California. [4] [5] Software programs were developed to search the options markets for deals. [5]
Universa and Empirica followed the Black swan theory which was about unexpected extreme events that have significant impact on the world and the financial markets. [4] [5] [6] [7] [8] [9] The strategy would be to buy out-of-the-money put options at low prices during periods the financial markets are good to protect the firm's position when there is a market downturn. [4] [5] [6] [7] [8] [9] While this strategy did not work with Empirica due to a period of low volatility, it worked well for Universa due to the 2007–2008 financial crisis. [4] [7] [8] Universa purchased puts related to the S&P 500 Index and financial companies such as Goldman Sachs and American International Group which the firm sold for a significant profit after the prices fell. [4] In 2008, Universa had returns over 100% and its assets grew to $6 billion under management in 2009 as more investors approached Universa to provide protection to their investments. [5] [7] [8]
There was speculation that Universa purchasing large amount of puts options on the S&P 500 Index may have been one of the primary causes of the 2010 flash crash. [10]
In September 2011, Universa was stated to be raising $1 billion to start a Macro fund. [6]
On March 1, 2014, Universa moved its headquarters from Santa Monica, California to Miami, Florida to take advantage of the city's business and tax policies. [11]
During the 2015–2016 stock market selloff, Universa had a return on 20% in August 2015 which resulted in a $1 billion gain. [7] [8]
In 2017, CalPERS hired Universa to provide tail risk hedging protection to its investments. [12] [13] In 2020, CalPERS terminated Universa's role citing it had found cheaper and better alternatives. [12] [13]
In 2018, The Wall Street Journal reported that "a strategy consisting of just a 3.3% position in Universa with the rest invested passively in the S&P 500 index had a compound annual return of 12.3% in the 10 years through February (2018), far better than the S&P 500 itself" (and portfolios with "more traditional hedges"). [14]
In March 2020, Universa, in a letter to investors, estimated it had a return of 3,612% on invested capital in its strategy due to effects caused by the COVID-19 pandemic. [15] [16] [17]
Company type | Private |
---|---|
Industry | Investment Management |
Founded | January 2007 |
Founder | Mark Spitznagel |
Headquarters | Miami, Florida, U.S. |
Key people | Mark Spitznagel (President) Nassim Nicholas Taleb (Scientific Advisor) |
Products |
Hedge funds Alternative investments |
AUM | US$19.1 billion (June 30, 2022) [1] |
Number of employees | 18 (2022) |
Website |
universa |
Footnotes / references [2] |
Universa Investments ("Universa") is an American investment management firm headquartered in Miami, Florida. It is known as a Black Swan fund that focuses on risk mitigation to protect investors from sharp market downturns. [3] [4] [5] [6] [7] [8] [9]
Universa Investments was founded in January 2007 by Mark Spitznagel with Nassim Nicholas Taleb acting as its advisor. [4] [5] [7] [8] The two of them previously ran Empirica Capital, a hedge fund that closed in 2004 due to subpar returns. [4] [6] [8] Universa was launched with $300 million under management and traded out of a small office in Santa Monica, California. [4] [5] Software programs were developed to search the options markets for deals. [5]
Universa and Empirica followed the Black swan theory which was about unexpected extreme events that have significant impact on the world and the financial markets. [4] [5] [6] [7] [8] [9] The strategy would be to buy out-of-the-money put options at low prices during periods the financial markets are good to protect the firm's position when there is a market downturn. [4] [5] [6] [7] [8] [9] While this strategy did not work with Empirica due to a period of low volatility, it worked well for Universa due to the 2007–2008 financial crisis. [4] [7] [8] Universa purchased puts related to the S&P 500 Index and financial companies such as Goldman Sachs and American International Group which the firm sold for a significant profit after the prices fell. [4] In 2008, Universa had returns over 100% and its assets grew to $6 billion under management in 2009 as more investors approached Universa to provide protection to their investments. [5] [7] [8]
There was speculation that Universa purchasing large amount of puts options on the S&P 500 Index may have been one of the primary causes of the 2010 flash crash. [10]
In September 2011, Universa was stated to be raising $1 billion to start a Macro fund. [6]
On March 1, 2014, Universa moved its headquarters from Santa Monica, California to Miami, Florida to take advantage of the city's business and tax policies. [11]
During the 2015–2016 stock market selloff, Universa had a return on 20% in August 2015 which resulted in a $1 billion gain. [7] [8]
In 2017, CalPERS hired Universa to provide tail risk hedging protection to its investments. [12] [13] In 2020, CalPERS terminated Universa's role citing it had found cheaper and better alternatives. [12] [13]
In 2018, The Wall Street Journal reported that "a strategy consisting of just a 3.3% position in Universa with the rest invested passively in the S&P 500 index had a compound annual return of 12.3% in the 10 years through February (2018), far better than the S&P 500 itself" (and portfolios with "more traditional hedges"). [14]
In March 2020, Universa, in a letter to investors, estimated it had a return of 3,612% on invested capital in its strategy due to effects caused by the COVID-19 pandemic. [15] [16] [17]