Covenant Capital Management (CCM) is a boutique CTA with a track record greater than ten years and assets under management less than $750M. This distinct combination gives investors the best attributes of both established and emerging managers alike. CCM has an institutional-grade infrastructure and a proven trading model that has endured multiple economic cycles. Furthermore, as a boutique manager, CCM is not impeded by liquidity constraints and can tailor its return stream to meet each client's specific needs.
Founded in 1999, CCM manages approximately $300 million in customer assets for clients around the world. The firm operates out of its headquarters in Nashville, with a fully-redundant branch office in Chicago. CCM was founded on the central belief that freely-traded financial markets exhibit a profound inefficiency. This tendency, technically speaking, is the leptokurtic distribution of price movements. In more common terms, this is referred to as a Non-Normal, or Non-Gaussian bell curve. The peak of the curve is higher, the shoulders are narrower, and the tails of the curve are much larger than they should be. Often times this phenomenon is referred to as the 'fat-tailed' distribution of price moves. CCM relies on statistical expectancy rather than fundamental analysis, and the trading and risk management parameters are algorithmic rather than discretionary. CCM's clients understand that its philosophy is expressed by methodically 'capturing' market moves rather than attempting to 'predict' them.