BackgroundOur Background, Structure & Philosophy

Nitrogen Fund Managers (Pty) Ltd is an independent alternative investment management firm based in Johannesburg, South Africa, specializing in providing hedge fund management services to institutional clients and high net worth individuals.The firm currently manages the Nitrogen Fund,
a low volatility long short equity fund and the SA Alpha SPC Nitrogen Segregated Offshore Portfolio, a dollar class of the Nitrogen Fund, as well as a number of segregated mandates.
Nitrogen Fund Managers was founded in 1998 by Rowan Williams, originally as i capital fund managers, as part of the i capital group, a niche financial services firm. Nitrogen Fund Managers was originally focused on private equity fund management, successfully managed a closed-end private equity fund.
As an evolution of these activities, Nitrogen Fund Managers launched the Nitrogen Hedge Fund in 2006, leveraging the experience of the team in the areas of proprietary equity trading private equity investing, portfolio management and corporate finance advisory services. The Nitrogen management team acquired the firm in 2011 to establish Nitrogen Fund Managers as a fully independent alternative asset management firm. Nitrogen Fund Managers is 100% held by the management of the firm.

The team uses this combination of investment skills and experience, business acumen and market knowledge to identify risk arbitrage trading and investment opportunities.

Nitrogen Fund Managers has a unique skill set which differentiates it in the market place. The investment team has specific skills and experience in the fields of equity trading, principal investing and corporate finance advice, providing a strong base of fundamental understanding of the operation and workings of the equity markets. These skills provide the team with specific insight into the market and the actions of market articipants. This unique skill set provides the firm with an independent and well-informed approach to fundamental investing.
In the shorter term the team’s proprietary trading skills identifies value in trading situations including company structures, corporate actions and company reorganisations. In the longer term, the team leverages its principal investing skills and experience to identify fundamental investment opportunities to generate superior risk-adjusted returns for its investors.
Nitrogen Fund Managers (NFM) is licensed as a Category II A (Hedge Fund Management) Financial Services Provider in terms Section 8(3) of the South African Financial Advisory and Intermediary Services Act, 2002 (Act No 37 of 2002 – FSP License No. 3983).

Investment approach – Quantitative fundamentals

Fundamental Research

We seek to have a fundamental understanding of the market and the stocks that make up the market and build our trading and investment models on a bottom up basis from first principles.

Systematic Approach

Systematic trading approach to exploit dislocations between fundamentals and prevailing market prices, with increased market volatility increasing the magnitude and frequency of price/value dislocations.

Risk Budgeting

We apply a rigorous riskbudgeting framework based on the Kelly Criterion to manage risk, position size and market exposure to ensure we deliver consistent superior risk adjusted returns.

Trading System

We utilise a proprietary electronic trading execution and portfolio management capability to ensure timely, accurate and efficient trade execution based on a number of predefined parameters.

Portfolio Construction

Trade universe consists of JSE and global stocks with a range of arbitrage driven trading strategies including corporate structures, relative value, corporate actions, special situations and risk arbitrage.

Track Record

We have a proven track record of applying our investment process to a variety of market environments to deliver low risk absolute returns, substantiating our proprietary trading and investment methodology and approach.
 

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