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Pioneer in Systematic Credit Strategies

  • Model-driven approach; proprietary fundamental credit model
  • Targets sustainable, repeatable, uncorrelated alpha
  • Designed to be defensive in high volatility regimes
  • Can be highly additive to investor portfolios

Systematic Approach, Fundamental Credit Model

approach image
  • Pure alpha
    • Aim is uncorrelated excess returns
  • Not factor investing
    • Targets uncorrelated returns to indexes and factors
  • Not harvesting a liquidity premium
    • Focus is on the most liquid issuers
  • No extra beta
    • Betas matched to benchmark; no out of index exposures
approach image  
Pure alpha Aim is uncorrelated excess returns
Not factor investing Targets uncorrelated returns to indexes and factors
Not harvesting a liquidity premium Focus is on the most liquid issuers
No extra beta Betas matched to benchmark; no out of index exposures
 

A Long History of Innovation

Strategies

Asset Class Strategy
Core Fixed Income
  • DCI Global Core Bond Strategy
  • DCI US Core Bond Strategy
Investment Grade Corporate
  • DCI Global Investment Grade Corporate Bond Strategy
  • DCI EUR Short Duration Corporate Bond Strategy
  • DCI US Investment Grade Corporate Bond Strategy
  • DCI US Intermediate Investment Grade Corporate Bond Strategy
  • DCI US Short Duration Corporate Bond Strategy
  • DCI Enhanced Global Credit Strategy
Long-Duration Corporate
  • DCI US Long Duration Corporate Bond LDI Strategy
High Yield Corporate
  • DCI Global High Yield Corporate Bond Strategy
  • DCI Global Short Duration High Yield Corporate Bond Strategy
  • DCI US High Yield Corporate Bond Strategy
  • DCI US Short Duration High Yield Corporate Bond Strategy
Emerging Market Corporate
  • DCI Emerging Market Corporate Bond Strategy
Absolute Return Credit
  • DCI Absolute Return Credit Strategy
  • DCI Market Neutral Credit UCITS Strategy
  • DCI Market Neutral Credit AIF Strategy
Short Credit
  • DCI Short Credit Strategy

Fund Formats

Liquid daily dealing commingled funds (including regulated UCITS V compliant; tax efficient for U.S. taxable and tax-exempt investors), managed accounts and fund-of-one vehicles.

About DCI

DCI is an independent asset management firm specializing in investment grade and high yield corporate credit strategies. The firm manages long-only and long/short strategies for some of the world's largest institutional and private wealth investors. DCI deploys a fundamental based, systematic approach seeking to exploit potential inefficiencies in the corporate credit markets. The firm offers daily dealing funds including regulated UCITS V compliant funds, offshore funds, onshore funds, and managed accounts.

The cofounders' achievements include the creation of the world's first equity index fund at Wells Fargo in 1971, cofounding Dimensional Fund Advisors in 1981, and cofounding KMV in 1989. While at KMV between 1989 and 2002, a group of DCI's founders and principals developed the world's first credit default probability model. This model, which was underpinned by nearly two decades of actual default and bankruptcy data for all publicly traded companies in the U.S., was empirically shown to predict corporate defaults with more precision and accuracy than any previous methods. After selling KMV to Moody's, the rating agency, the team founded DCI in 2004 with the singular objective of applying their model to create well-diversified portfolios that seek to produce consistent, low-volatility alpha.

The firm is headquartered in San Francisco, California and is registered as an investment adviser with the U.S. Securities and Exchange Commission (SEC)*.

*Registration with the SEC does not imply any level of skill or training. DCI's Firm Brochure can be found here: Form ADV Part 2A
(CRD number: 134018; SEC file number: 801-63857)

News and Resources

DCI Featured in The Hedge Fund Journal

DCI was featured in the recent issue of the Hedge Fund Journal. The article covers our history, performance, and future thoughts, specifically focusing on Market Neutral UCITS and AIF.

You can read the full article on their website, or download the PDF version.

Corporate Credit – Market Neutral Best Performing Fund in 2019

DCI was awarded the Hedge Fund Journal's "Corporate Credit - Market Neutral, Best Performing Fund over 2, 3, 4, and 5 Year Periods" for the DCI Market Neutral Credit Fund (UCITS).
 

See the 2019 award winners here.

 

The Strategy offers investors exposure to a long/short credit portfolio with the aim to deliver the following investor benefits:

Corporate Credit – Market Neutral Best Performing Fund in 2018

DCI was awarded the Hedge Fund Journal's "Corporate Credit - Market Neutral, Best Performing Fund in 2017 and over 2 and 3 Year Periods" for the DCI Market Neutral Credit Fund (UCITS).

See the 2018 award winners here.

 

The Strategy offers investors exposure to a long/short credit portfolio with the aim to deliver the following investor benefits:

John "Mac" McQuown receives Innovation Award

Mac McQuown, Co-Founder and Director of DCI, was honored with the CME Group's Melamed-Arditti Innovation Award. He received the award, along with Jack Bogle, as recognition for revolutionizing investment strategy by pioneering index funds in the 1970s. Together, Mac and Jack developed a new a form of passive portfolio management which today account for nearly 30 percent of all U.S. investments.

Corporate Credit – Market Neutral Best Performing Fund in 2017

DCI was awarded the Hedge Fund Journal's "Corporate Credit - Market Neutral, Best Performing Fund in 2016" for the DCI Market Neutral Credit Fund (UCITS).

See the 2017 award winners here.

 

The Strategy offers investors exposure to a long/short credit portfolio with the aim to deliver the following investor benefits:

Bloomberg Markets Magazine Profiles Mac McQuown

Mac McQuown, Co-Founder and Director of DCI, has been featured in an article by Bloomberg Markets.

Meet the 80-Year-Old Whiz Kid Reinventing the Corporate Bond

Read the full article.

Exploiting Mispricings In Credit Markets - Interview with Stephen Kealhofer

Stephen Kealofer, Head of Research and Co-Founder of DCI, was interviewed for "The Hedge Fund Journal".

“People still ask us, ‘why are you so diversified? Why can’t you just pick the winners?’” Kealhofer says. “Well, we think we can pick the winners, but by taking a lot of small bets over time we ensure that no one name can take down the portfolio. And because we’re market neutral, we ensure that our portfolios are never driven by the direction of the market – that is something that we are very rigorous about.”

DCI Leadership

Stephen Kealhofer
  • Stephen Kealhofer
  • Head of Research, Co-Founder and Director

Stephen Kealhofer
Stephen Kealhofer

Head of Research, Co-Founder and Director

Stephen co-founded and served as managing partner of KMV, the leading credit analytics firm, which was acquired by Moody’s in 2002. Prior to founding KMV in 1989, Stephen was Director of Research for Diversified Corporate Loans, LLC. Stephen served as visiting Assistant Professor at the Haas School of Business from 1985–87 and Assistant Professor at the Graduate School of Business, Columbia University, 1981–85.

Tim Kasta
  • Tim Kasta
  • CEO and Director

Tim Kasta
Tim Kasta

CEO and Director

As CEO, Tim is responsible for the firm's overall activities. Previously Tim was President of DCI, responsible for the firm’s client facing activities including investor advisory, marketing, and distribution. Tim is a member of DCI's investment committee and board of directors and continues to be heavily involved with the firm's product development efforts. Tim has been with DCI since its inception in 2004. Prior to DCI, Tim was Partner and Managing Director of KMV where he held a variety of roles since joining the firm in 1996, including designing and leading the development and marketing of the firm's flagship web product – CreditEdge. After the sale of KMV to Moody’s, the credit rating agency, in 2002, Tim became Managing Director of Moody’s KMV, co-head of sales, and responsible for product development and marketing for the asset management sector. Tim began his career in 1993 at Bank of Montreal in Toronto where he was one of the original members of the credit portfolio management team within corporate banking. Tim is a CFA charter holder and received his Bachelor of Arts (HBA) from the Ivey Business School at Western University located in London, Ontario, Canada.

Richard Donick
  • Richard Donick
  • President, Chief Risk Officer and Director

Richard Donick
Richard Donick

President, Chief Risk Officer and Director

Before joining DCI in 2004, Richard was with the Financial Restructuring group of HLHZ, which he joined in 2002. Prior to joining HLHZ, Richard was with UBS AG, where he built and managed the firm’s European FX derivatives business. In 1999, he oversaw the reorganization of UBS’s global securities financing businesses and was made responsible for UBS Warburg’s strategic alliances and investments. In 2001, he served as COO of UBS Capital, UBS’s private equity division. Before joining UBS in 1993, Richard practiced law in the Washington, DC, office of Johnson & Gibbs, PC.

Paul Harrison
  • Paul Harrison
  • Chief Investment Officer

Paul Harrison
Paul Harrison

Chief Investment Officer

Prior to joining DCI in 2016, Paul was a Managing Director at BlackRock, Inc. (formerly BGI) where he served as the Chief Investment Officer and Head of Research for the firm’s systematic Global Macro team and held a variety of firm-wide leadership roles. Paul directly led a 30-person team researching and implementing systematic strategies and funds catering to top-tier institutional clients, including managing very large investment portfolios and building scalable and robust investment processes. Paul also headed up the firm’s Multi-Asset Global Asset Allocation business, responsible for over $30 billion of AUM. He has extensive experience in Fixed Income and has built and managed investment strategies focused on both credit and government bond markets. Before BlackRock/BGI, Paul ran the Capital Markets research team at the Board of Governors of the Federal Reserve System and was responsible for leading the analysis and communication of market and financial conditions to the Board. He began his career as an academic, having served on the faculty at Brandeis University and publishing in academic journals.

Adam Dwinells
  • Adam Dwinells
  • Head of Portfolio Management

Adam Dwinells
Adam Dwinells

Head of Portfolio Management

Adam has been with DCI since 2005 — he has experience in a variety of capacities including client service, performance analysis, and project management. Adam leads the team responsible for day-to-day management of DCI’s credit portfolios with a particular focus on cash corporate bond trading. Prior to joining DCI, Adam spent six years at JP Morgan and predecessor companies as a vice president and senior risk advisor in various risk management and audit capacities—with responsibility for credit and rate markets, and corporate treasury business coverage.

Jon Bailey
  • Jon Bailey
  • Chief Compliance Officer & Head of Operations

Jon Bailey
Jon Bailey

Chief Compliance Officer & Head of Operations

Prior to joining DCI, Jon was the Head of Multi-Asset and Alternatives Portfolio Analytics at BlackRock in San Francisco from 2009 to 2014. From 2006 to 2009, Jon was the Head of Asset Management Operations at Countrywide Alternative Investments in Calabasas, CA. Prior to this time, Jon worked for RBC Capital Markets New York in various roles including as an attorney and as a derivatives middle office manager. Jon holds a J.D. from Brooklyn Law School, a B.A. in English from the University of Delaware and the Chartered Alternative Investment Analyst® designation.

Board and Advisors

David Solo

Co-Founder and Chairman of the Board, DCI. Formerly Chief Executive Officer, GAM

Mac McQuown

Co-Founder and Director, DCI. Formerly Co-Founder and Chairman, KMV; Co-Founder and CEO, Diversified Corporate Loans; Co-Founder and Director, Dimensional Fund Advisors

Lew Coleman

Director, DCI. Formerly Vice Chairman, President & Chief Financial Officer, DreamWorks Animation; Chief Financial Officer, Bank of America

Jack Wadsworth

Director, DCI. Partner, Manitou Ventures; Honorary Chairman, Morgan Stanley Asia

Ian Drew

Chairman of Funds Board, DCI. Formerly Chief Credit Officer, UBS Warburg; Board member, UBS Investment Bank

Paul Collins

Advisor, DCI. Formerly Vice Chairman, Citibank

David Coulter

Advisor, DCI. Partner, Warburg Pincus Private Equity. Formerly Vice Chairman, JP Morgan; Chairman, CEO of Bank of America

Dick Fredericks

Advisor, DCI. Founder, Managing Director, Main Management. Formerly Partner, Montgomery Securities; U.S. Ambassador to Switzerland

Contact

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  • San Francisco
  • info@dci.com
  • +1 415 764 1901