Ionic Capital Management was founded in 2006 by Bart Baum and Dan Stone, having previously worked together for 10 years at Highbridge Capital Management. The strategy is focused on identifying and exploiting relative value arbitrage opportunities across asset classes.

It employs four core arbitrage strategies: convertible bond, equity arbitrage, credit/rates arbitrage and volatility.

Share Class
The performance data shown represents past performance. Past performance is not a guarantee of future results. Current performance may be lower or higher than the performance quoted. The investment return and the principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.

Strategy & Manager

Fund Strategy

The KLS Ionic Relative Value Arbitrage Fund seeks to identify and exploit arbitrage opportunities across multiple asset classes, where a relative pricing or implied volatility discount exists. The Fund focuses on four core arbitrage strategies including Convertible Arbitrage, Equity Arbitrage, Volatility Arbitrage, and Credit Arbitrage. The combination of these contributes to the Fund having a non-correlated return profile relative to traditional asset classes. The flexible mandate and investment process enables the Fund to take advantage of the best opportunities, as well as market dislocations to generate additional alpha. The arbitrage strategies often benefit from increased volatility, while the Fund’s long volatility exposure is designed to provide some downside protection during significant market selloffs.

Key Persons

Bart Baum - Principal and CIO

Bart Baum is one of the co-founders of the Investment Advisor, where he focuses on managing its equity option and warrant arbitrage strategies, convertibles and commodities. He has over 28 years of experience managing these strategies. Previously, Mr. Baum was a Managing Director and Portfolio Manager in the U.S. and European Volatility and Credit Arbitrage Group at Highbridge Capital Management (“Highbridge”) where he focused on equity options, warrants and convertible bonds. Mr. Baum joined Highbridge in 1992 where he developed and implemented many of the equity arbitrage trading strategies and pioneered the firm’s closed-end fund effort. Mr. Baum received an MBA from Fordham University and a BA in Political Science from SUNY Albany.

Daniel Stone - Principal and Portfolio Manager

Dan Stone is one of the co-founders of the Investment Advisor, where he focuses on managing the interest rates, currencies and credit strategies. He has over 24 years of experience managing relative value arbitrage and long volatility strategies across multiple asset classes. Mr. Stone was formerly a Managing Director and Portfolio Manager in the U.S. and European Volatility and Credit Arbitrage Group at Highbridge. He joined Highbridge in 1996 where he managed convertible bonds and equity, interest rate and credit derivatives. Mr. Stone earned an AB in Economics Magna cum Laude from Harvard College.

Doug Fincher - Portfolio Manager

Doug Fincher is a portfolio manager at Ionic Capital Management LLC. Together with the Principals, he is responsible for asset allocation across strategies. Prior to joining Ionic, Mr. Fincher was the president and CEO of Rock Maple Funds LLC, a New York-based fund of hedge funds, from 2008 to 2012. During his tenure, he also was a portfolio manager and served on the firm’s investment committee. From 2002-2008 he worked for CIBC WM Inc., where he managed two departments and served on the bank’s U.S. Executive Management Committee. Earlier in his career, Mr. Fincher held a variety of senior management positions at Lazard Frères, ABN AMRO Bank N.V. and Kidder Peabody. Mr. Fincher graduated from Lafayette College in Easton, PA in 1986 with a BA in History.

Statistics & Commentary

Class Performance

The performance data shown represents past performance. Past performance is not a guarantee of future results. Current performance may be lower or higher than the performance quoted. The investment return and the principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.

Investment Manager’s Commentary – August 2022

Markets moved higher throughout July and early August, catalyzed by the pervading narrative of peak inflation and interest rates. However, market sentiment quickly shifted in mid-August when Fed Chairman Powell voiced a more hawkish outlook, and inflation readings continued to surge, particularly in Europe. Ultimately, the S&P 500 Index fell -4% in August, 10-year Treasury yields rose 55bps to 3.20%, IG credit declined by -3% and the dollar closed at a 20-year high to the Euro. The KLS Ionic Relative Value Arbitrage Fund gained +186bps (gross) in August, with all underlying strategies generating positive performance. Event driven and idiosyncratic exposure in the Convertible and Equity Arbitrage strategies were the primary contributors.


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