Overview

Invest Above the Clouds. Our mantra, centers on maintaining a clear and strategic competitive advantage that soars above short-term market noise. This guiding principle reflects our unwavering commitment to our partners to uniquely steward their capital with a deep sense of responsibility.

 

At CDT, we are a long-only hedge fund specializing in decoding insider activity. With unfettered real-time access to their business operations and management, we firmly believe that corporate insiders possess and routinely exploit an asymmetric information advantage over the rest of the market. Our proprietary technology stack is tactfully engineered to continuously tap into and learn from this rich source of information. Harnessing these powerful insider perspectives and integrating their insight into the core of our AI/ML assisted, systematic investing and risk management strategies is what we proudly refer to as the CDT Edge.


Founded in 2017, CDT Capital Management operates out of New York City.

Investment Strategy 

At CDT, we are deeply entrenched in our belief that fundamental investment analysis is the cornerstone of any sound investment operation. In that spirit, extensive due diligence is done on every investment candidate that crosses our desk. We separate ourselves from the rest of the value investing community by embracing the use of technology to facilitate our research. Over the course of the last 5-years, CDT has developed and continues to build upon a proprietary algorithm that leverages the power of insider knowledge. Every day, our Insider Activity Algorithms with unwavering efficiency unearth investment leads based on the identification of extraordinary insider trading patterns. We believe that this is a unique advantage because it allows us to concentrate our research on a vetted pipeline of investment candidates.



Risk Management

CDT’s approach to risk management is rooted in the principles of conventional enterprise risk management strategies employed in the banking and insurance industries. Our proprietary insider activity research in concert with market valuation and economic datapoints drive our probability of risk model that leverages decades of data to support its conclusions. In real time, we update our model to calculate the size of our risk reserve which is capital allocated to cash and cash equivalent securities. The purpose of this reserve is twofold, to anchor returns and opportunistically deploy capital during periods of market turbulence.

 

Our process is akin to the way an insurance company underwrites risk. For example, car insurance in rural Montana costs significantly less than insuring a car on the congested and expensive streets of Manhattan. At a high level, insurance companies investigate several outside factors that influence premium rates in a specific location such as, population density, historical cost of repairs and crime rates among other datapoints. Our quantitative probability of risk model does much of the same by measuring risk (increasing or decreasing our reserve) based on how crowded the market is, the sentiment of the executives and the health of the economy.


Defining an Insider

Definition: According to the Securities and Exchange Commission, the definition of an insider is an umbrella term that refers to a company's executive management, officers and directors, as well as investors with at least 10% ownership


Insider Trading Regulation: With limited exception, insiders must file documentation with the Securities and Exchange commission when they buy/sell stock (Form 3,4,5)

An Insider's Perspective 





"The stock is not the company and the company is not the stock and so as I watched the stock fall from $113 to $6, I was also watching all of our internal business metrics; number of customers, profit per unit everything you can imagine ...Every single thing about the business was getting better and fast and so as the stock price was going the wrong way, everything inside the company was going the right way."