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Overview of Two Worlds Capital
Established with a primary mission to provide diversified investment opportunities in the U.S. financial markets for non-U.S. investors, particularly from Kenya, the fund aims to generate risk-adjusted returns through a variety of investment strategies.
TWC is distinctively positioned to offer Kenyan and other global investors access to global markets, historically difficult within the Kenyan financial environment due to regulatory and logistical barriers.​
Services Offered
Our services are designed to cater to the unique needs of accredited investors by enabling them to diversify their portfolios across global alternative assets. Two Worlds Capital employs efficient investment strategies such as market-neutral approaches, delta hedging, and exploitation of pricing inefficiencies, aimed at achieving sustainable growth and portfolio resilience.
Portfolio Management
Expertly curating and managing a diverse range of investments
Financial Planning
Personalized strategies to help you achieve your long-term financial goals
Tax Strategy
Minimize your tax liability through personalized planning
Investment Philosophy and Strategy
Two Worlds Capital's investment philosophy centers on delivering consistent, risk-adjusted returns while maintaining low correlation to traditional equity markets.
By integrating comprehensive data analytics and advanced investment techniques, our portfolios capitalize on mispricings and yield opportunities across various asset classes.
The strategy is built on a foundation of thorough market analysis, with a focus on long-term value creation and wealth preservation.
Statistical Arbitrage
As a trading strategy, Statistical Arbitrage is a heavily quantitative and computational approach to equity trading. It describes a variety of automated trading systems that commonly make use of data mining, statistical methods, and artificial intelligence techniques. A popular strategy is pairs trading, in which stocks are paired based on fundamental or market-based similarities. One stock in the pair is bought long, and the other is sold short. This hedges risk from whole-market movements. Statistical Arbitrage is any strategy that is bottom-up, beta-neutral in approach, and uses statistical/econometric techniques to provide signals for execution. Signals are often generated through a contrarian mean-reversion principle, but can also be formed by extreme psychological barriers, corporate activity, and short-term momentum.
Options Arbitrage
This derivatives-based strategy seeks to profit from market turbulence (or lack thereof), as reflected in movements in option prices that result either from market volatility or fluctuations. The goal for a portfolio manager in Options Arbitrage is to buy inexpensively priced (i.e., low implied volatility) options whose underlying instruments are historically more volatile, and sell expensively priced (i.e., high implied volatility) options whose underlying instruments are historically less volatile. The strategy may be implemented through options on equity indices, currencies, fixed income securities, or commodities, using either listed or over-the-counter options and other derivatives. Such option combinations include spreads (buying an option to buy or sell an asset while simultaneously selling an option to buy or sell the same asset with a different expiration date or strike price) or straddles (option combinations that will profit from movement in the level of the value of an asset outside of certain bands, or the lack of such movement, without regard to the direction of the movement). The decision process is dependent on fundamental and technical analysis of the underlying instruments. Computer models are often used to enhance the execution of various hedges.
Fixed Income Arbitrage
Fixed income arbitrage is an investment strategy consisting of the discovery and exploitation of inefficiencies in the pricing of bonds, i.e., instruments from either public or private issuers yielding a contractually fixed stream of income. Most arbitrageurs who employ this strategy trade globally. In pursuit of their goal of both steady returns and low volatility, arbitrageurs can focus on interest rate swaps, US and non-US government bond arbitrage, US Treasury securities, forward yield curves, and/or mortgage-backed securities. Two main categories of Fixed Income Arbitrage are relative value and market neutral. Relative value constructs diversified portfolios with the goal of maximizing return and minimizing risk. Market neutral minimizes risk by taking long and short positions and maximizing return by taking advantage of pricing anomalies between sectors in the Fixed Income market.
Capital Structure Arbitrage
An arbitrage strategy exploiting the pricing inefficiency that exists in the capital structure of a single firm. Portfolio managers engaging in this strategy seek to find arbitrage opportunities between (or among) the equity and debt securities of a single issuer; for example, a portfolio manager might take a long position in a high yield bond and simultaneously short the common stock of the bond issuer to capture an overly large discount on the bond vis-à-vis the stock.
Distressed Debt
This strategy involves purchases and sales of debt and quasi-debt securities and obligations of companies perceived by the market as having declining creditworthiness. Portfolio managers engaging in this strategy will often purchase debt obligations of declining or low-quality borrowers at a discount, with the hope or expectation that the company will either improve its performance without the need to enter into bankruptcy or insolvency proceedings, or that the company will seek the protection of bankruptcy and obligations or equity in a healthier, restructured company.
Swap Strategies
Strategies that focus in whole or in part on swap transactions involve the use of bilateral contracts under a master swap or netting agreement. Swap agreements allow parties to assume exposure to risks in ways that generally are not available in existing securities. The two most often used swap instruments are interest rate swaps and credit default swaps. In the classic interest rate swap, two counterparties will enter into an agreement to exchange, or "swap," two or more interest rate payment obligations, generally one side holding a fixed obligation and the other holding a floating obligation. Credit default swaps involve the buying or selling of "protection" with respect to a referenced debt obligation or basket of obligations. The party that "sells the protection" will incur a payment obligation to the counterparty if there is a default under the referenced obligation. The party that "buys the protection" has a periodic payment obligation until such a default occurs or the swap terminates or expires. Credit default swaps can be entered into as a distinct asset class, or as a hedge to the purchase of the referenced debt obligation.
Merger Arbitrage
Arbitrage strategies (also called risk arbitrage and event-driven strategies) are based on announcements of mergers, acquisitions, tender offers, liquidations, spin-offs, and other corporate reorganizations and restructurings. A portfolio manager employing a merger arbitrage strategy will invest in the stock of one or both companies, depending upon the transaction and details, typically purchasing the stock of the target company and selling short the stock of the acquiring company, or will employ derivative instruments to achieve a similar economic result. The value of such an investment is driven by the ability to correctly estimate the spread between the security's then-current price and its value at the transaction's completion, and to gauge the chances of timely completion of the transaction. Success requires in-depth knowledge of merger and acquisition processes, as well as legal and financial requirements.
Convertible Arbitrage
Portfolio managers identify convertible bonds, convertible preferred stocks, or warrants that appear mispriced or undervalued, yet offer a favorable rate of return. By establishing a long position in a convertible security (usually preferred stock or bonds) and a partially offsetting short position in the underlying security into which the convertible security is convertible (usually common stock of the issuer), a portfolio manager invests with the expectation of capturing price or yield differences or to seek to profit from cash flow (e.g., coupon income and stock borrowed rebate). By hedging, the arbitrageur may relinquish some of the upside potential of the long position in order to (a) protect the long position in the event of a price decline, and (b) profit from a possible convergence of prices between long and short sides of the position.
Futures/Currency Arbitrage
After analyzing financial data, recurring patterns are found in both domestic and international markets. These patterns are exploited in computer-based models. The strategy can take outright long/short positions or invest in assets that are undervalued relative to similar assets. Portfolio managers may trade diversified portfolios of futures in U.S. and non-U.S. markets in an effort to capture passive risk premiums and actively profit from anticipated trends in market prices. Portfolio managers may attempt to structure a diversified portfolio of liquid future contracts including, but not limited to, stock index, global currency, interest rate, metals, energy, and agricultural futures markets.
Parcipations, Loans, and Credit
Hedge funds may buy and sell loan participations (i.e., interests in a loan, generally governed by a credit agreement between the original lending syndicate and the borrower) in the secondary market. From time to time, the hedge fund or one of its affiliates may join a lending syndicate or, under some circumstances, originate loans directly.
Private Investments in Public Equities
A private purchase of stock in a company at a discount to the current market value per share for the purpose of raising capital. There are two types of PIPEs - traditional and structured. A traditional PIPE is one in which stock, either common or preferred, is issued at a set price to raise capital for the issuer. A structured PIPE issues convertible debt (common or preferred shares). The benefit of this strategy for smaller issuers is that they provide quick access to capital at a reasonable transaction cost.
Activist
A portfolio manager will take a sizable equity position in an issuer and privately or publicly attempt to improve a company's management, strategy, and operations. This can involve attempts to persuade a company's management to adopt new policies, proxy contests intended to replace a board of directors with a new slate of individuals in whom the portfolio manager has confidence, and tender offers for other shareholders' equity interests in the company.
About us
Two Worlds Capital LLC, includes seasoned professionals registered with the SEC as investment advisers. These individuals bring a wealth of experience and a track record of prudent investment management, underscoring the commitment to achieving its investment objectives through due diligence and a disciplined investment approach.