Best Managed Futures Hedge Fund: Winner

It is refreshing within the financial services industry to find a company that does things differently.

Take the naming of the company: Ion Asset Architecture rather than Asset Management or Capital Management. "We feel this better reflects the process," says manager of the fund and founder of the company Dennis Lohfert.

"The term asset manager suggests someone who simply looks after investors' assets, but what investors want is a company that aims to increase those assets and is creative in its approach, whilst also limiting risk. It is not too dissimilar to what an architect does: building strong, long lasting structures that are of value," he says.

"That aside, trading system engineering really has more in common with traditional engineering science than financial theory," adds Lohfert.

The company's approach to client fees is also  different. There is no management fee. The fund does, however, charge a 30% performance fee. This, believes Ion, aligns manager and client interests.

There are "no hidden charges", Lohfert points out, so the investor is not hit by fund expenses such as audit, legal and administration fees levied on top of management fees. "Not even nominal processing charge on subscriptions or redemption" are charged, says Lohfert.

"This leads to one of the cleanest and most performance-oriented investment products out there and gets back to what hedge funds really should be all about: the total return delivered to investors," says Lohfert.

The Ion Fund is 100% systematic, operating in highly liquid listed instruments. It aims for returns uncorrelated to any individual market or hedge fund peer group.

Its trading systems are designed to exploit price changes in the short and medium term. The system portfolio consists of trend-following, mean reversion and opportunistic trading strategies that have been extensively tested over at least ten years of market data, says Lohfert.

The fund's objective is to provide returns of around 20% annually without showing correlation to any single market.

Established in 2007 Ion Asset Architecture spent 18 months prior to the launch implementing a unique systematic trading platform. "We designed and built everything from the ground up," says Lohfert. This included designing and building a custom computer network "to give us the required computing power that is necessary to execute our strategies".

This combination of technology and market expertise has allowed the fund to create a high reward/risk ratio investment product, according to Ion.

As a result, he adds, in the 30 months since launch, the fund has delivered results that are in line with what the company's historical simulations have shown it should deliver, performing to plan in difficult market conditions where hedge funds as a whole, and in particular managed futures funds, are struggling to deliver results.

Proof of the pudding is in the eating and from initial assets under management of $1 million the fund has attracted considerable interest, growing exponentially to $160 million.

Fund facts: Ion Fund

Full name of fund: Ion Fund
Name of portfolio manager: Dennis Lohfert
Name of investment/management company: Ion Asset Architecture
Contact information: St. Mary Axe, Floor 28, London EC3A 8BF (+44 (0)20 7469 4190; info@ion.fm)
Launch date: 2007
Assets under management: $160 million (at March 31, 2010)
Net cumulative performance since inception: 34.29% (at March 31, 2010)
Annualised return: 14.2% (at March 31, 2010)
Annualised volatility: 8.3% (at March 31, 2010)
Sharpe ratio: 1.71
Strategy: diversified systematic
Share classes: US dollar, euro
Administrator: Capita Financial Administrators
Auditor: Ernst & Young
Prime broker: Fortis Bank Global Clearing
Domicile: British Virgin Islands
Listing: Irish Stock Exchange
Management fee: 0%
Performance fee: 30% with high watermark and equalisation
Minimum investment: €100,000; $100,000
Redemption/liquidity terms: monthly with three days' notice