Student Drew is in his ‘happy spot’ running hedge fund
A university student could be one of the youngest hedge fund owners in the UK while still studying for his degree.
Drew Stephens, 20, from Cardiff, started his own investment management firm Alumnus Capital Management with business partner Nick Sarson this year and is running the operation from offices in Great Portland Street in London.
The firm is partnered with Gold Mount Markets’ Adnan Jasrai and registered with the Financial Conduct Authority (FCA).
Having left school with an A* and three As at A-level, Drew began studying business management at Swansea University but his love of trading stocks led him to starting the business an academic year before he is due to graduate.
The former Ysgol Gyfun Gymraeg Glantaf pupil said: “When I was 16 I started trading stocks, equities, FX commodities.
“I used my brother’s name because I wasn’t 18. I have always had an interest in it from a young age, I developed my knowledge and started to understand more.
“I went to university and used the knowledge I had and came to the conclusion that I wanted to run my own business.
“I thought what would suit me most and what would be my happy spot, so it’s a hobby more than a job.
“I reached out to a friend of mine and he said he was looking to do the same thing and we got together and launched the hedge fund.”
Drew described a hedge fund as a “pool of money” a firm’s clients have invested in.
It is the job of the investment manager to trade that money on various stocks and commodities with the aim of making a profit for clients.
Hedge funds are generally only accessible to accredited investors or high net-worth individuals.
In his role, Drew and the companies he is affiliated with are responsible for £34m worth of assets, an intimidating amount for most people but the
Whitchurch resident said he thrives on the pressure.
He said: “It makes me feel excited more than anything, most people would cower to those sort of figures, but I think how can we double or treble that.
“You need that threshold of stress. More than anything it makes me feel proud. It’s something I have always wanted to be involved in.
“The difference with our hedge fund is we’re an alternative hedge fund, we trade debt markets, FX markets and commodity markets. They are very volatile and live markets but we have structures in place to make it safe and our results over the last 16 months have shown we haven’t made a loss.”
You may think that Drew is far from living the typical life of a student, but his lifestyle is more modest than you might think.
“The money we make goes back into our fund. I am trying to live off the interest of the interest in essence.
“The profits are reinvested to make more profit.
“I see it as numbers and not cash to spend.
“The only change to my lifestyle is the entertaining of clients.
“This week I am having cocktails in Soho with clients, now it’s run of the mill, it’s whatever the client wants to do you have to go along and do it, whether that is playing golf at Harrow or walking up a mountain.
“I am not a materialistic sort of person so it hasn’t made a big difference to my life.”
Despite many companies and businesses across the world struggling from the effects of the coronavirus pandemic and the UK’s recent slide into recession, Drew said it has worked in his company’s favour.
He said: “We based our business plan on a recession-proof scenario. We can trade through an economic collapse or boom.
“Coronavirus has been profitable for us because we have made great margins in things like gold, silver and palladium, and that’s made us a nice return.”