The Monterey-based hedge fund founded by Dan Darchuck, CEO, and Greg Stewart, CIO, in 2009 has about $110 million in AUM. Darchuck has spent 30 years in wealth management, including stints with UBS and Merrill Lynch, where Stewart worked as a portfolio manager.
Q: Tell me about your ad.
Dan: It was a two-minute-long video featuring professional surfer Joe Curren. Initially, we just put it on our website. Then we emailed the 40 or so high net worth families that we manage money for, as well as another 150 or so advisors and contacts, and let them know about it. It took off from there.
And you’re sure you were first?
Dan: I have seen some tweets from one disgruntled guy in Chicago who claims he was the first. We’ve let him maintain that as much as he wants.
What was the message of the video?
Dan: Hedge fund materials all look the same. They’re very data-centric. We wanted to give a little bit of the flavor of who we are as a firm, and maybe just as important, who we are as people.
The first step in establishing a relationship.
Greg: Yes. Most people—not the institutional people but the average high net worth investor—probably don’t understand what a hedge fund is. On top of that, they don’t know the people running the money. So part of what we’re doing is humanizing the investment strategy. It’s not some computer in a basement somewhere that’s high-frequency trading.
What is your investment strategy?
Greg: We bring together some very basic asset classes and find the right correlation to control volatility. So part of it is to provide a return that doesn’t correlate with clients’ stock and bond strategies and other things they might have going. But we’re doing it in a straightforward way that they can understand.
What does your approach say about today’s investing climate?
Greg: Bonds today are not attractive. Some investors are saying, let me just throw all the money into the market, but the market is volatile and in our estimation stocks are overvalued by about 20 percent. People need an alternative strategy that isn’t correlated to bonds or stocks—and that’s where high net worth investors are likely to find returns in the next few years.
The ad explores your name. What does topturn mean?
Dan: It’s when a surfer is on a wave and he shoots up and then makes that sharp turn off the top of the wave that gets him back into the momentum of the wave. The idea is: Find momentum and energy, and then keep it.
Other than surfing, why are you based in Monterey?
Dan: I grew up in Santa Monica and Greg was in the central California area, which is where he and I came together. We ended up in Monterey in search of air quality—one of Greg’s children had some health concerns. The interior of central California’s air quality is rather poor but the central coast is quite good.
How has your ad been received?
Dan: It’s generated a lot of favorable attention in the press, among our clients and investors, and with potential clients, who always ask about it. In terms of hiring, it’s helped to define us as a group that’s made of a different bolt of cloth that people want to be a part of.
So why aren’t other hedge funds following your lead?
Dan: Some people are holding back because the [2013] JOBS Act opened the window for private-offering funds to move forward, but there’s still not a lot of clarity from regulators as to exactly how.
Will you do a sequel?
Dan: Stay tuned.
For more information, contact Dan Darchuck ([email protected]) or Greg Stewart ([email protected]), 831.324.0481, topturncapital.com.
