Login & Fees

For clients with privately managed accounts custodied at Goldman Sachs, Tradestation, or J.P. Morgan,  you may access your personal account information via the links below.  Because of the unprecedented fraud perpetrated by Bernie Madoff, it is important for you to know that all your assets will be held by one of  the investment firms below. There is total transparency.  Your account can be accessed daily online for current positions as well as your account value.

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J.P. Morgan







.ecau

 $250,000  Minimum Investment Requested

Expectations

After considerable thought and based on my past experiences, current situation, and future expectations, I have developed a goal for this investment venture.  Darvas Investment Management’s goal is philosophical as well as tangible.  Based on my personal track record over the past 10 years, it is not unreasonable for me to target a 25% rate of return over a 12 month period.  The maximum downside of an account should be no more than 8-10% if I manage the risk correctly.  Drawdowns are going to occur.  The idea is to have enough of a profit that the give back will only be 75% of the profits at worst during any 12 month trailing period, and not have a principal decline of more than 8-10%.  I promise you that you will get my best effort.  While I cannot guarantee any gain whatsoever, nor can I, you can be assurred of my pursuit of excellence in managing your investment account.  From my personal trading history, most of the projected gains will happen in brief periods of time. You just can’t make money every day or for that matter all the time. I will take what the market offers.  There will be many times throughout the year where there is no activity. There will also be frenzied trading at others times. You can expect aggressive trading activity to capture gains and minimize losses.  It is important that you have a 12 month time horizon if the performance of your account is not down more than 8-10%. 

With the above disclaimers in mind, I am going to accept at this time only 14 accounts. I will accept pooled or partnership accounts. That is my cutoff. After achieving a track record with these initial accounts that hire me, I will re-evaluate the goals of my firm.  For prospective clients, I would request that you consider allowing me to manage 10%-20% of your capital that you are allocating to the stock market.  That 10%-20% of your investment capital will be well over a million dollars for some of you.  Others of you will allow me to manage $250,000 to start. Your individual needs will dictate that.  Many of you will have had a relationship and a track record with me as a stockbroker.  An incentive performance fee will be assessed only after a gain of 10% occurs in the client’s account. This is called a hurdle rate.  In other words, there are no performance fees charged until the account has appreciated above a 10% ROI (return on investment ) and reached the hurdle rate.

Once the client’s account has achieved 10% or greater ROI, a performance fee of 20% of the gross profit will be charged.  As an example, if a 25% profit occurs, a 5% investment fee will be charged, leaving a 20% ROI to the investor.  If a 30% return is realized, then the client will earn 24% ROI after fees.  At a 50% return level, then the client will realize a 40% ROI on his investment.. etc.

To further clarify, at 25% ROI:

$500,000 Initial Client Investment earning a 25% ROI

$ 125,000    Gross Profit
<$25,000> Performance Fee (20% of the Gross Profit)
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$100,000 Client Net  Profit or 20% Net gain on invested capital

Return on Investment (ROI) is the ratio of money gained or lost on the money invested and considers the period of time invested. Withdrawals and deposits are considered in computing the real rate of return on the investment. ROI is comprised of both gains and losses in calculating the actual return.

It is very important to note that this fee structure departs from almost all of the common fee structures practiced in the investment industry today. I believe that charging fees based on assets under management despite poor performance is a flawed model and is skewed against investors.  A high water mark will be exercised in calculating fees. This means that at each quarter end, fees will only be charged if the account has appreciated above the last assessed charge. For example, if an account at one quarter end is up 20%, no other quarterly fees will be assessed until the account value exceeds the value in which the last performance fee was deducted. 

To further clarify:  Fees would not be assessed until the high water mark  is exceeded. In the above example, the high water mark is calculated by taking  the Initial Investment ($500,000) minus the Performance Fee (25,000).  $475,000 is the high water mark. Peformance fees would not be assessed until  $475,000 is exceeded in the investment account.

At each quarter end, a full financial performance summary will be disclosed to clients.