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Hedge fund founders await all-important first birthday

John Seelmeyer

July can’t come soon enough for the owners of Reno’s GCMD Capital Management LLC.

The company rolled out a hedge fund 10 months ago, but the wealthy individuals and financial managers who will be targeted by the fund’s marketing usually don’t want to consider investments that have less than a year’s track record.

The hedge fund developed by Greg Crawford, Myles Derieg and Chris Andrews has been performing well in its first year. It’s outstripped the S&P 500 by about 8 percent since it was launched, its founders say, with less volatility than the stock-market index.

Crawford says the fund has a seven-figure amount of money under management, mostly from the three founders. The fund is available only to what the Securities and Exchange Commission has defined as “accredited investors.” For individuals, that threshold involves a net worth of more than $1 million or an annual income of more than $200,000 in the past two years.

The fund relies on proprietary software that allocates funds among about 30 high-performing fund managers. The fund-of-funds approach isn’t uncommon, but Derieg says the GCMD Capital product was developed with a lower fee structure than other fund-of-funds products.

Derieg says the fund seeks to stay fully invested, and it’s rebalanced every 90 days or so among fund managers.

When the company begins full-scale marketing, it will rely largely on the professional contacts developed by its three founders.

Crawford previously was a partner in Litchfield Capital Management LLC, a long-short hedge fund headquartered in Connecticut. He also worked as research group leader for healthcare investment at Fox-Pitt, Kelton.

Derieg, who is moving to Reno from New York City, lists on his resume six years experience with J.P. Morgan as well as work with a fixed-income fund and an assets fund.

And Andrews, a graduate of the business school at Robert Morris College, ran sports book operations in northern Nevada for Club Cal Neva for 20 years.

The trio also launched a separate company, Sierra Nevada Wealth Management, in mid-2007.

That company, which recently moved to 10471 Double R. Blvd., provides wealth-management services to high-income families and individuals and offers family-office services.

Crawford said the firm has a particular expertise in hedge funds, private equity and other alternative investments.